All You Need To Know Going Into Trade On May 25

Asian stocks opened lower after the cancellation of the U.S.-North Korea summit, which sparked a move to safe-haven assets.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, fluctuated between gains and losses to trade at 10,506.5 as of 6:50 a.m.

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

U.S. Market Check

U.S. stocks partially rebounded from early declines on Thursday sparked by the cancellation of the U.S.-North Korea summit, as investors assessed the broader impact on trade relations and economic growth.

#BQMarketsNow | U.S. stocks claw back losses as geopolitics fears cool.https://t.co/LMJ3cOhaJa pic.twitter.com/ULILPf9PUl

Europe Check

European equities declined as Trump's decision to call off the June summit with North Korea's leader spurred concerns about geopolitical tensions hurting global growth.

Asian Cues

• The MSCI Asia Pacific Index fell 0.3 percent.
• Japan's Topix index fell 0.3 percent.
• South Korea's Kospi index fell 0.6 percent.
• Australia's S&P/ASX 200 Index fell 0.2 percent.
• S&P 500 futures rose 0.2 percent.

Commodities Check

• West Texas Intermediate crude was little changed at $70.68.
• Brent crude traded flat at $78.80 a barrel.
• Gold fell less than 0.05 percent to $1,304.28 an ounce.
• Aluminium ended 0.7 percent higher at $2,292.75 per MT.

Fuel Price Update

State-run oil marketers hiked petrol and diesel prices for the twelfth day in a row.

The price of petrol was hiked by 36 paise today to Rs 85.65 a litre in Mumbai and diesel was raised by 24 paise to Rs 73.20 a litre, according to data released by Indian Oil Corporation Ltd.

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Here are some key events coming up this week:

• At the St. Petersburg Forum today, Russian President Vladimir Putin and French President Emmanuel Macron, IMF Managing Director Christine Lagarde, and Japan Prime Minister Shinzo Abe participate on a panel moderated by Bloomberg News Editor-in-Chief John Micklethwait.
• European Union finance ministers discuss the latest on Brexit talks, in Brussels, today.

Stocks To Watch

• Avenue Supermarts says founder RK Damani has completed the sale of 62.4 lakh shares (1 percent stake) between May 21- 24.
• Neuland Labs to allot 16.75 lakh equity shares at Rs 750 each through QIP.
• Gayatri Projects receives letter of award for highway project in Telangana worth Rs 425 crore.
• Camlin Fine Sciences to raise Rs 250 crore via issue of securities.
• Kaveri Seeds to buy back 29.63 lakh shares at Rs 675 each.

Nifty Earnings To Watch

• Sun Pharma
• Tech Mahindra

Other Earnings To Watch

• Amber Enterprises India
• Bank of Baroda
• BEML
• Cadila Healthcare
• Central Bank of India
• Engineers India
• General Insurance Corporation of India
• India Cements
• Indian Hotels
• Jagran Prakashan
• Karur Vysya Bank
• Lakshmi Vilas Bank
• Lemon Tree Hotels
• Max Financial Services
• NBCC
• NLC India
• Page Industries
• PC Jeweller
• PFC
• Va Tech Wabag
• Waterbase

Earnings Reactions To Watch

United Spirits (Q4, YoY)

• Revenue up 7 percent at Rs 2,173 crore.
• Net profit at Rs 211 crore versus net loss of Rs 104 crore.
• One-time loss of Rs 291 crore in the base quarter.
• Ebitda up 5 percent at Rs 274 crore.
• Margin at 12.6 percent versus 12.9 percent.

MOIL (Q4, YoY)

• Revenue up 57 percent at Rs 398 crore.
• Net profit up 10 percent at Rs 128 crore.
• Ebitda up 42 percent at Rs 173 crore.
• Margin at 43.5 percent versus 48.2 percent.

Camlin Fine Sciences (Q4, YoY)

• Revenue up 54 percent at Rs 232 crore.
• Net loss of Rs 4 crore versus net loss of Rs 7 crore.
• Ebitda at Rs 11 crore versus Ebitda loss of Rs 7 crore.
• Margin at 4.7 percent versus -4.6 percent.

South India Paper Mills (Q4, YoY)

• Revenue up 30 percent at Rs 56 crore.
• Net profit up 50 percent at Rs 3 crore.
• Ebitda up 27 percent at Rs 7 crore.
• Margin at 12.5 percent versus 12.8 percent.

Sudarshan Chemicals (Q4, YoY)

• Revenue up 31 percent at Rs 384 crore.
• Net profit up 32 percent at Rs 22.5 crore.
• Ebitda at Rs 56 crore versus Rs 33 crore.
• Margin at 14.6 percent versus 11.3 percent.

Kaveri Seed Company (Q4, YoY)

• Revenue up 5 percent at Rs 42 crore.
• Net loss of Rs 18 crore versus net loss of Rs 87 crore.
• Ebitda loss at Rs 13 crore versus a loss of Rs 27 crore.

Pidilite Industries (Q4, YoY)

• Revenue up 15 percent at Rs 1,485 crore.
• Net profit at Rs 244 crore versus Rs 157 crore.
• Ebitda up 6 percent at Rs 274 crore versus Rs 258 crore.
• Margin at 18.5 percent versus 19.9 percent.

Sequent Scientific (Q4, YoY)

• Revenue up 18 percent at Rs 233 crore.
• Net profit at Rs 399.5 crore versus Rs 7 crore.
• One-time gain on sale of assets worth Rs 393 crore in current quarter.
• Ebitda up 36 percent at Rs 30.5 crore.
• Margin at 13.1 percent versus 11.4 percent.

Glaxosmithkline Pharmaceuticals (Q4, YoY)

• Revenue down 1 percent at Rs 749 crore.
• Net profit down 6 percent at Rs 106 crore.
• Ebitda up 13 percent at Rs 155 crore.
• Margin at 20.7 percent versus 18.0 percent.

Heritage Foods (Q4, YoY)

• Revenue up 14 percent at Rs 562 crore.
• Net profit down 91 percent at Rs 21 crore.
• Ebitda loss at Rs 4 crore versus Rs 10 crore.

LT Foods (Q4, YoY)

• Revenue up 15.5 percent at Rs 1,071 crore.
• Net profit flat at Rs 32 crore.
• Ebitda up 4 percent at Rs 96.5 crore.
• Margin at 9 percent versus 10 percent.

Cummins India (Q4, YoY)

• Revenue up 4 percent at Rs 1,233 crore.
• Net profit up 2 percent at Rs 161 crore.
• Ebitda flat at Rs 172 crore.
• Margin at 13.9 percent versus 14.4 percent.

Triveni Engineering (Q4, YoY)

• Revenue down 18 percent at Rs 735 crore.
• Net loss of Rs 102 crore versus net profit of Rs 60.5 crore.
• Ebitda loss at Rs 114 crore versus Rs 169.5 crore.

Bulk Deals

Avenue Supermarts

• RK Damani sold 47.30 lakh shares or 0.8 percent equity at Rs 1,360.2 each.
• Axis Capital sole banker to deal.

Shaily Engineering

• HDFC MF bought 1.98 lakh shares or 2.4 percent equity at Rs 1,292 each.
• DSP Blackrock Emerging Stars Fund sold 2 lakh shares or 2.4 percent equity at Rs 1,292 each.

Who's Meeting Whom

• Cipla to meet several fund houses including Blackrock Asset Management, ICICI Prudential Life and others between May 25–30.
• eClerx to meet several fund houses including Motilal Oswal, PI Square Investments and others between May 25–28.
• Inox Leisure to meet Ashmore and Ward Ferry Management on May 25 and May 29.

F&O Cues

• Nifty May futures closed trading at 10,505, a discount of 8.6 points.
• May series: Nifty open interest down 2 percent; Bank Nifty open interest down 1 percent.
• India VIX ended at 13.1, down 7 percent.
• Maximum open interest for May series at 10,800 (open interest at 49.4 lakh, down 11 percent).
• Maximum open interest for May series at 10,500 (open interest at 55.2 lakh, up 20 percent).

F&O Ban

• In ban: BEML, DHFL, Jet Airways, Jain Irrigation, Reliance Communications
• New in ban: Jet Airways, Jain Irrigation

Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty in case of a rollover of these intraday positions

Active Stock Futures

Put Call Ratio

• Nifty PCR at 1.28 versus 1.18
• Nifty Bank PCR at 0.96 versus 0.70

Insider Trades

• Chambal Fertilizers promoter Yashovardhan Investment & Trading bought 1.20 lakh shares on May 22.
• Bajaj Holdings & Investment promoter Jamnalal Sons bought 3.49 lakh shares on May 21–22.
• Balaji Telefilms promoter Ekta Kapoor bought 6.66 lakh shares on May 23.
• Man Infra Construction promoter Vatsal Shah bought 84,348 shares on May 23.

(As reported on May 24)

Rupee

• Rupee closed at 68.35/dollar on Thursday versus 68.43/dollar on Wednesday.

Fund Flows

Brokerage Radar

CLSA On GAIL

• Upgraded to ‘Buy' from ‘Sell', hiked price target to Rs 405 from Rs 337.
• Bunched-up expenses and lower gas trading profit led to 20 percent PAT miss.
• Recent crude price spike not only eliminates U.S. LNG risk but also boosts its core earnings per share.
• China demand and crude spike has turned U.S. LNG from a headwind to a tailwind.
• Several imminent triggers and stock ignoring crude spike gains.

Morgan Stanley On GAIL

• Maintained ‘Overweight' with a price target of Rs 510.
• High imported gas costs were key to the Q4 miss; operationally good quarter.
• GAIL's contracted gas sourcing should shield it from seasonal volatility.
• Oil to gas differentials widen and concerns about contracted LNG diminish.

Morgan Stanley on United Spirits

• Maintained ‘Equal Weight' with a price target of Rs 3,250.
• Strong volume growth will drive 2018-19 consensus estimates.
• Strong volume growth in the 'prestige and above' segment.
• Risk-reward for the next 12 months appears less favorable at current valuations.

CLSA On NCC

• Maintained ‘Buy' with a price target Rs 160.
• Backlog growth robust and reports all–time high Ebitda margin.
• Record inflow driven by AP Capital infrastructure and Delhi government building contracts.
• Buy on improving state capex growth visibility and asset-light model.

Kotak On City Union Bank

• Maintained ‘Add'; hiked price target to Rs 190 from Rs 180.
• Healthy operating profit growth with stable performance on most metrics.
• Return on equity improvement still looks unlikely; FY2015-18 has been at 15 percent.
• Consistent performance maintained, valuing bank at 2.4 times book and 16 times March 2020E EPS.

Deutsche Bank On Jain Irrigation

• Maintained ‘Sell' with a price target of Rs 82.
• Higher polymer costs likely to pressure micro irrigation project margins.
• Net debt/EBITDA remained elevated at 3.8 times (versus guidance of 3 times).
• Margins at risk from higher oil price.

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