All You Need To Know Going Into Trade On May 23

Asian stocks declined early Thursday after ongoing trade-war tensions dragged U.S. equities and sovereign bond yields lower.

Japanese shares retreated along with those in South Korea and Australia. U.S. equity futures slid following weakness in the S&P 500 Index Wednesday. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, fell 0.22 percent to 11,754 as of 6:55 a.m.

Investors will be keenly watching the outcome of Lok Sabha election today. The Election Commission will start counting of votes for general elections that were held between April 11 and May 19.

Counting of votes for 542 seats to begin at 8 a.m. today and the results are expected later today.

The exit polls, in which the unanimity in forecasts was underscored by four polls forecasting that the NDA will return to power with over 300 of the 542 Lok Sabha seats.

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BQ Live

Here's a quick look at all that could influence equities today.

U.S. Market Update

• U.S. stocks fell Wednesday as trade tensions simmered, with the White House said to be preparing to blacklist more Chinese technology companies.
• The yield on 10-year Treasuries held at 2.38 percent after falling four basis points.

#BQMarketWrap | U.S. stocks finish lower as trade tensions simmer.

Read: https://t.co/Is3iXj1NAR pic.twitter.com/dF5NRU2piT

Asian Cues

• Japan's Topix index fell 0.4 percent.
• Contracts on the Hang Seng Index earlier slid 0.3 percent.
• Australia's S&P/ASX 200 Index dipped 0.2 percent.
• South Korea's Kospi fell 0.5 percent.
• Futures on the S&P 500 Index slid 0.2 percent.

Commodity Cues

• Brent crude rose 0.06 percent to 70.87 per barrel.
• West Texas Intermediate crude sank 0.1 percent to $61.34 a barrel.
• Gold gained 0.1 percent to $1,274.34 an ounce.

London Metal Exchange

• Copper ended down 1.13 percent.
• Aluminium down 0.95 percent.
• Nickel closed 0.75 percent lower.
• Lead closed 0.39 percent lower.
• Tin ended 0.77 percent lower.
• Zinc ended 1.36 percent lower.

Indian ADRs

Stocks To Watch

• HDFC Bank: Board approved share split of each share into two. Expected time of completion within three-four months from shareholder's approval in AGM (to be held on July 12). The Bank said the move was undertaken to augment the affordability of the bank's equity shares and participation of the retail investors.
• Quess Corp acquired additional 30 percent stake in Golden Star Facilities and Services with an investment up to Rs 35 crore. With this action, the target company becomes wholly owned arm of the company.
• Adani Power: Mundra Unit reported profit of Rs 820 crore for the six months ended March 31 compared to a loss of Rs 1440 crore a year earlier. Revenue from operations more than doubled to Rs 8130 crore. Mundra Plant's turnaround follows regulator's tariff relief on imported coal. (Bloomberg News)
• Tata Motors Group's business remained well capitalized and consolidated net automotive debt-to-equity is at 0.47 times, Tata Sons said in a clarification sent via emailed statement. It is also stated that maturities of debt have been spread out till 2027 and has Rs 19,000 crore of undrawn revolving credit facilities, with generating operating cash flows of Rs 21,500 crore after interest. In the press release it was also mentioned that net automotive debt, which is gross debt less cash on hand without considering the group's financing arm, remains at comfortable levels. (Tata Sons Press Release)
• Emami: SEBI approved Emami Cement's IPO which could hit the market in the next six months. The company is looking to raise Rs 1,000 crore through the IPO, which comprises fresh issuance of shares worth Rs 500 crore, and the rest as offer for sale from existing promoters. (Press Trust of India)
• SH Kelkar & Company: Board to consider acquiring remaining 49 percent stake in Creative Flavours & Fragrances S.P.A and share buyback on June 10
• Bodal Chemicals plans to acquire 80 percent stake in Turkey based Sener Boya Kimya for Rs 32 crore. The target company deals in the marketing and sale of dyestuff and chemicals. Acquisition to be completed within the next five months.
• Fairchem Speciality: Board approved demerger of specialty oleo chemicals and nutraceuticals business segments into a new wholly owned subsidiary company. The resulting company Fairchem Organics will issue one share for every three shares held by the demerged company.
• ITI inked an MoU with Department of Telecommunications for financial year 2020 for manufacturing of telecom equipment and digital products.
• Biocon: Health Canada approved company's and Mylan's biosimilar product Ogivro. Mylan plans to launch the product this quarter in Canada. The product is used to treat breast and gastric cancer.
• Wipro developed a block-chain based payment solution for Travacoin in the airline industry.
• Vaibhav Global to consider share buyback on May 30.
• Can Fin Homes: Board sought to raise Rs 6000 crore via issue of NCDs and Rs 1000 crore vie further issue of equity on July 17.
• Eclerx Services: Share buy-back opens on May 31 and closes on June 14.
• Adani Ports & SEZ: To consider raising Rs 1,500 crore via NCDS and $1 billion by issuance of dollar-denominated foreign currency bonds on May 27.

DGCA April Update

• IndiGo's passenger growth stood at 20 percent.
• SpiceJet's passenger growth stood at 1 percent - lowest in last 42 months.
• IndiGo's market share increased to 50 percent.
• SpiceJet's market share declined to 13.1 percent.

Earnings To Watch

• Indraprastha Gas
• Sun TV Network
• A2Z Infra Engineering
• Amrutanjan Health Care
• Dwarikesh Sugar Industries
• eClerx Services
• Eros International Media
• General Insurance Corporation of India
• Goldiam International
• Healthcare Global Enterprises
• Industrial Investment Trust
• MEP Infrastructure Developers
• Ramco Industries
• Rane (Madras)
• Religare Enterprises
• Sanghvi Movers
• Southern Petrochemicals Industries
• Sundaram Multi Pap
• TVERSUS Srichakra
• Sterling Tools
• S. P. Apparels
• Novartis India
• Praxis Home Retail

Earnings Reaction To Watch

Bank of Baroda (Q4, YoY)

• Net interest income up 26.6 percent to Rs 5,066.96.
• Net loss at Rs 991 crore versus net loss of Rs 3,102 crore.
• Gross NPAs 9.61 percent versus 11.01 percent. (QoQ)
• Net NPAs 3.33 percent versus 4.26 percent. (QoQ)
• Provisions at Rs 5,500 crore versus Rs 6,672 crore.

Thermax (Q4, YoY)

• Revenue up 43.7 percent to Rs 2,073.7 crore.
• Net profit up 67.6 percent to Rs 126.9 crore.
• Ebitda up 23.7 percent to Rs 170.8 crore.
• Margin at 8.2 percent versus 9.6 percent.
• Share of joint venture loss at Rs 17.2 crore in base quarter.
• Group CFO Amitabha Mukhopadhyay resigned from the post of CFO.

Cummins India (Q4, YoY)

• Revenue up 8.7 percent to Rs 1340.4 crore.
• Net profit down 12.6 percent to Rs 140.9 crore.
• Ebitda down 0.7 percent to Rs 171.8 crore.
• Margin at 12.8 percent versus 14 percent.
• Board declares dividend of Rs 10 per share.
• Employee expenses up 14 percent to Rs 134.6 crore.
• Other income up 4 percent to Rs 69.2 crore.

TCI Express (Q4, YoY)

• Revenue up 6.8 percent to Rs 267 crore.
• Net profit up 22.5 percent to Rs 21.8 crore.
• Ebitda up 20.7 percent to Rs 35 crore.
• Margin at 13.1 percent versus 11.6 percent.

TD Power Systems (Q4, YoY)

• Revenue up 25.7 percent to Rs 200.8 crore.
• Net profit up 4.2 times to Rs 15.4 crore.
• Ebitda up 2.1 times to Rs 28.5 crore.
• Margin at 14.2 percent versus 8.7 percent.
• Manufacturing segment revenue up 36 percent to Rs 188.9 crore.
• Project business segment revenue up 58 percent to Rs 49.5 crore.

JK Lakshmi Cement (Q4, YoY)

• Revenue up 30.7 percent to Rs 1172.5 crore.
• Net profit up 28.1 percent to Rs 43.3 crore.
• Ebitda up 29.5 percent to Rs 131.2 crore.
• Margin at 11.2 percent versus 11.3 percent.

Gujarat State Fertilizers & Chemicals (Q4, YoY)

• Revenue up 4 percent to Rs 2138.4 crore.
• Net profit down 36.2 percent to Rs 99.8 crore.
• Ebitda down 28 percent to Rs 163.5 crore.
• Margin at 7.6 percent versus 11 percent.
• Employee benefit expenses up 20 percent to Rs 138.6 crore.
• Power and fuel expenses up 14 percent to Rs 180 crore.
• Inventory gain of Rs 266.6 crore.

Ashoka Buildcon (Q4, YoY)

• Revenue up 86.2 percent to Rs 1,307.4 crore.
• Net profit down 47.2 percent to Rs 98 crore.
• Ebitda up 2.3 times to Rs 181.6 crore.
• Margin at 13.9 percent versus 11.5 percent.
• Current tax expenses up 5.6 times to Rs 44.5 crore.
• Finance costs up 3.3 times to Rs 36.7 crore.
• Raw materials cost up 2.1 times to Rs 465.7 crore.
• Other income down 38 percent to Rs 38 crore.

Jindal Saw (Q4, YoY)

• Revenue up 15.8 percent to Rs 2,844.3 crore.
• Net profit down 7.7 percent to Rs 152.6 crore.
• Ebitda down 7.9 percent to Rs 372.5 crore.
• Margin at 13.1 percent versus 16.5 percent.
• Inventory loss at Rs 119 crore versus Rs 57.9 crore.

Man Infraconstruction (Q4, YoY)

• Revenue down 39.5 percent to Rs 134.5 crore.
• Net profit down 69 percent to Rs 13.8 crore.
• Ebitda down 78.3 percent to Rs 18.8 crore.
• Margin at 14 percent versus 39.1 percent.

SH Kelkar & Company (Q4, YoY)

• Revenue down 5.3 percent to Rs 268.9 crore.
• Net profit up 2.5 percent to Rs 20.2 crore.
• Ebitda down 6.9 percent to Rs 24.1 crore.
• Margin at 9 percent versus 9.1 percent.
• RM as percent of sales at 63 percent versus 49.6 percent.
• Inventory gain of Rs 13 crore.

Quess Corp (Q4, YoY)

• Revenue up 21.4 percent to Rs 2,294.8 crore.
• Net profit down 0.5 percent to Rs 76.1 crore.
• Ebitda up 20.4 percent to Rs 131.8 crore.
• Margin at 5.7 percent versus 5.8 percent.
• Other expenses up 32 percent to Rs 299.3 crore.

Munjal Auto Industries (Q4, YoY)

• Revenue up 0.6 percent to Rs 269.5 crore.
• Net profit down 7.5 percent to Rs 9.8 crore.
• Ebitda down 22.7 percent to Rs 15 crore.
• Margin at 5.6 percent versus 7.2 percent.
• RM as percent of sales at 88 percent versus 76 percent.
• Inventory gain of Rs 26.8 crore

Indo Count Industries (Q4, YoY)

• Revenue down 2.2 percent to Rs 397 crore.
• Net profit down 93 percent to Rs 2 crore.
• Ebitda down 62.6 percent to Rs 15.6 crore.
• Margin at 3.9 percent versus 10.3 percent.
• Higher inventory cost led to fall in Ebitda.

Allcargo Logistics (Q4, YoY)

• Revenue up 12.4 percent to Rs 1,727.3 crore.
• Net profit up 6.8 times to Rs 79.4 crore.
• Ebitda up 43.6 percent to Rs 107.2 crore.
• Margin at 6.2 percent versus 4.9 percent.
• Net profit jumped due to tax refund in March quarter and exceptional loss in the base quarter.
• Lower other expenses aided Ebitda.

ITD Cementation (Q4, YoY)

• Revenue down 8.5 percent to Rs 599 crore.
• Net loss of Rs 35.3 crore versus net profit of Rs 28.4 crore.
• Ebitda down 86 percent to Rs 8.6 crore.
• Margin at 1.4 percent versus 9.3 percent.
• Higher subcontracting cost impacted financials.

IG Petrochemicals (Q4, YoY)

• Revenue flat at Rs 313 crore versus Rs 312.8 crore.
• Net profit down 45.5 percent to Rs 18.2 crore.
• Ebitda down 42.5 percent to Rs 36.7 crore.
• Margin at 11.7 percent versus 20.4 percent.
• Higher raw material cost impacted financials.

Ramco Systems (Q4, YoY)

• Revenue down 1.5 percent to Rs 141 crore.
• Net profit of Rs 8.7 crore versus net loss of Rs 3 crore.
• EBIT up six times to Rs 12.8 crore versus Rs 2.2 crore.
• EBIT Margins at 9.1 percent versus 1.5 percent.
• Lower employee cost and other expenses aided financials.

Bulk Deals

• Dish TV: T. Rowe Price International Discovery Fund sold 1.2 crore shares or 0.73 percent equity at Rs 28.73 each.
• Cox & Kings Financial Services Abu Dhabi Investment Investment Authority sold 4.92 lakh shares at Rs 16.75 each (No ownership details given).

Vishal Fabrics

• Veena Investments acquired 4.74 lakh shares or 1.08 percent equity at Rs 286 each.
• Asia Investment Corporation Mauritius sold 4.44 lakh shares or 1.01 percent equity at Rs 286 each.

Pledge Share Details

• Mangalam Cement promoter groups revoked pledge of 6.3 lakh shares on May 17.
• Emami promoter groups pledged 23,000 shares on May 16.
• Max Financial Services promoter group Max Ventures Investment Holdings pledged 6.02 lakh shares on May 17.
• Max India promoter group Max Ventures Investment Holdings pledged 16 lakh shares on May 17.
• Sun Pharma promoter group Shanghvi Finance revoked pledge of 41.6 lakh shares on May 21.

Trading Tweaks

• Kellton Tech Solutions to move out of short term ASM Framework.
• UFO Moviez India price band revised to 10 percent.

Who's Meeting Whom

• Vedanta to meet HSBC Global Asset Management (U.K.) and Legal & General Investment Management on May 23.

Insider Trading

• Mangalam Cement promoter groups Manav Investment sold 6.3 lakh shares and promoter group Vidula Consultancy Services acquired 7.58 lakh shares on May 17.
• Jubilant Lifesciences promoter group Torino Overseas sold 7.7 lakh shares and promoter Miller Holdings acquired 7.7 lakh shares on May 21.
• LT Foods promoter group Raghuvesh Holdings acquired 36,000 shares on May 21.

As reported on May 22.

Money Market Update

• The rupee strengthened for the third straight day to close at 69.67/$ versus Tuesday's 69.72/$.

F&O Cues

Futures –May series

Nifty

• Nifty futures closed trading at 11,781.6, premium of 43 points versus 6 points
• Nifty open interest up 6 percent, adds 9.8 lakh shares in open interest.

Bank Nifty

• Bank Nifty futures closed trading at 30,606, premium of 79 points versus 80 points.
• Bank Nifty open interest up 3 percent adds 40,000 shares in open interest.

Options

• Nifty PCR at 1.12 versus 1.19 (across all series).

Nifty Weekly Expiry 23 May

• Max open interest on call side at 12,500 (16.8 lakh shares) followed by 12,000 (14.8 lakh shares).
• Max open interest at Put side at 11,000 (10.6 lakh shares).
• Max open interest addition seen at 12,500 (+5.5 lakh shares), 12,400C (+4 lakh shares).

Nifty Monthly Expiry 30 May

• Max open interest on call side at 12,500 (38.3 lakh shares) followed by 12,000 (37.8 lakh shares).
• Max open interest on Put side at 11,000 (39.2 lakh shares).
• Max open interest addition seen at 12,500C (+8.9 lakh shares), 10,800P (+5.3 lakh shares).

Stocks In F&O Ban

• In Ban: Adani Power, IDBI Bank and Reliance Capital
• Out of Ban: Jet Airways

Brokerage Radar

On IndusInd Bank

CLSA

• Maintained ‘Buy'; hiked price target to Rs 2,160 from Rs 2,120.
• Slippages high due to IL&FS but manageable exposure to stressed groups.
• Casa growth key to support core loan growth.
• Clarity on succession is key.

UBS

• Maintained ‘Neutral'; cut price target to Rs 1,700 from Rs 1,800.
• Clean up quarter.
• Weak earnings; GNPL increases sharply.
• Expect increase of 100 bps in credit cost vs guidance of 60 basis points.

CLSA on Bank of Baroda

• Maintained ‘Buy'; hiked price target to Rs 150 from Rs 140.
• Slippage remain elevated but high coverage will ease credit costs.
• Retail lending is growing well but uptick in CASA will be key.
• Expect synergy from the Dena-Vijaya merger over the next two years.

CLSA on Cipla

• Maintained ‘Outperform'; hiked price target to Rs 600 from Rs 560.
• March quarter review: Results boosted by one-off U.S. sales
• Core business getting back on track.
• Double digit growth guidance for 2019-20.

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