All You Need To Know Going Into Trade On May 3

Asian stocks slipped as investors turned their focus to earnings reports and the upcoming U.S. jobs report, and continued to monitor developments in trade talks.

Volumes may be light with markets in China and Japan remaining closed. Shares in Australia declined. Futures pointed to a lower start for stocks in Hong Kong. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, fell fell 0.12 percent to 11,740.50 as of 7:05 a.m.

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BQ Live

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

U.S. Markets

• U.S. stocks fell for a second day and Treasury yields climbed in the wake of the Federal Reserve's latest rate signal, with investors awaiting Friday's jobs report and news on trade talks.

#BQMarketWrap | U.S. stocks, bonds drop as focus turn to trade and jobs.

Read: https://t.co/4icVQs7oxw pic.twitter.com/xF7kgDZkvv

Asian Cues

• Australia's S&P/ASX 200 Index lost 0.2 percent.
• South Korea's Kospi index dipped 0.2 percent.
• Hang Seng futures fell 0.4 percent.
• Futures on the S&P 500 were flat.

Commodity Cues

• Brent crude traded lower for the third day, down 0.23 percent to $70.59 per barrel. The Asian crude benchmark ended 1.9 percent lower yesterday.
• West Texas Intermediate crude sank 0.1 percent to $61.76 a barrel, after sliding 2.8 percent in the previous session.
• Gold was flat at $1,271.22 an ounce.

London Metal Exchange

• Copper ended lower for the second day, down 1.09 percent.
• Aluminium ended marginally higher, up 0.06 percent.
• Nickel ended lower for the fourth consecutive trading session, down 0.29 percent.
• Tin ended lower for the fourth consecutive trading session, down 1.4 percent.
• Lead halted a two-day fall, ended 1.35 percent lower.
• Zinc ended lower for the second consecutive trading session, down 1.4 percent.

Indian ADRs

Stocks To Watch

• DLF: Transferred a retail mall in Noida to one of its subsidiaries for Rs 2,950 crore. The value was derived on the basis of the valuation report of an independent valuer.
• Yes Bank: RBI approved extension of tenure of Brahm Dutt as Part-Time Chairman of the Bank till January 10,2022.
• JSW Steel: NCLAT in its order suggested that the Resolution Plan related to Vardhman Industries as approved by the Committee of Creditors may be implemented subject to final orders to be passed by the Honourable NCLAT in the Appeal. Since the implementation of plan would in effect be on an interim basis and could create wide ranging uncertainties around rights and liabilities of various stakeholders dealing with VIL, the company is evaluating its options which include approaching the Honourable Supreme Court to seek a direction to defer the implementation till the resolution plan is unconditionally approved.
• Adani Enterprises: Carmichael coal project hit with further setback. Queensland government rejects Adani's plan to protect a rare species of finch “because it does not meet the requirements of the company's environmental authority,” the state's department of environment and science said in a statement, according to Bloomberg report.
• Ruchi Soya: Patanjali Resolution plan won lenders' approval.
• HDFC Life Insurance: Promoter Standard Life (Mauritius Holdings) 2006 to sell up to 3.6 crore shares, or 1.78 percent stake in the open market. The floor price is set to Rs 390 per share. Seller proposes to sell these shares on May 3 for non-retail investors and on May 6 for retail investors. The floor price is at a discount of almost 7 percent to the current market prices.
• Ircon International received an order worth $91.27 million from the Sri Lankan Government for upgradation of railway tracks. The contract will be executed for a period of 36 months. Previously, IRCON has successfully executed five high-value Railway Projects in Northern Sri Lanka with a cumulative contract value of over $645 million, as per exchange filings.
• Andhra Bank board approved increasing authorised capital from Rs 3,000 crore to Rs 6,000 crore.
• Persistent Systems joined Siemens partner program to bring industrial digital solutions to the market.
• Grasim said its brownfield expansion of 45 TPD value-added specialty fibre capacity at Gujarat Plant has been fully commissioned and the commercial productions has commenced from May 1.

April Auto Sales

Tata Motors

• Domestic commercial and passenger vehicles sales down 20 percent to 42,577 units.
• Exports down 53 percent to 1,402 units.

Hero MotoCorp

• Two-wheeler sales down 17 percent to 5.74 lakh units.

Catch all the April auto sales updates here.

Nifty Earnings To Watch

• Hindustan Unilever

Other Earnings To Watch

• Godrej Consumer Products
• Aavas Financiers
• Accelya Kale Solutions
• Akzo Nobel India
• Central Depository Services
• Birla Corporation
• Century Textiles & Industries
• Cholamandalam Financial Holdings
• Deepak Nitrite
• HSIL
• Kirloskar Ferrous Industries
• L&T Technology Services
• Tata Chemicals
• Visaka Industries
• VST Industries

Earnings Reaction To Watch

Larsen & Toubro Infotech (Q4, QoQ)

• Revenue up 0.5 percent to Rs 2,486 crore.
• Dollar revenue growth up 2 percent at $353.8 million.
• Net profit up 0.9 percent to Rs 378.9 crore.
• EBIT down 7.4 percent to Rs 436.7 crore.
• EBIT Margin at 17.6 percent versus 19.1 percent.
• Other Income up 2.2 times to Rs 67.4 crore.
• Declares dividend of Rs 15.5 per share.

Blue Star (Q4, YoY)

• Revenue up 18.5 percent to Rs 1,595.8 crore.
• Net profit up 2.5 times to Rs 79.8 crore.
• Ebitda up 81.1 percent to Rs 109.4 crore.
• Margin at 6.9 percent vs 4.5 percent.
• Declares dividend of Rs 10 per share.
• Inventory gain of Rs 147 crore versus Rs 374 crore.
• Deferred tax and MAT credit reversal of Rs 15 crore.
• Electro-mechanical projects and packaged AC systems segment revenue up 21 percent to Rs 842.3 crore.
• Unitary products segment revenue up 19 percent to Rs 703.6 crore.
• Carry forward order book up 21 percent to Rs 2,430 crore.

Tata Power (Q4, YoY)

• Revenue up 0.2 percent to Rs 7,230.2 crore.
• Net profit down 95.5 percent to Rs 57.6 crore.
• Ebitda down 1.5 percent to Rs 1,348.7 crore.
• Margin at 18.7 percent versus 19 percent.
• Other income of Rs 186.7 crore.
• Exceptional gain in base quarter worth Rs 1,886.7 crore due to reversal of impairment of Mundra plant.
• Power business segment revenue up 12 percent to Rs 7,347.7 crore.
• Standalone generation down 4 percent at 2784 MU.
• Standalone Sales down 5 percent at 2677MU versus 2826MU

Laurus Labs (Q4, YoY)

• Revenue up 13.4 percent to Rs 635.2 crore.
• Net profit down 50.6 percent to Rs 93.9 crore.
• Ebitda down 4.1 percent to Rs 112.1 crore.
• Margin at 17.6 percent versus 20.9 percent.
• Raw Material Costs up 30 percent to Rs 333.3 crore.
• Other expenses up 26 percent to Rs 107.2 crore.
• RM as percent of sales at 52 percent versus 46 percent.

Orient Paper (Q4, YoY)

• Revenue up 9.1 percent to Rs 198.1 crore.
• Net profit up 2.1 times to Rs 32.4 crore.
• Ebitda up 7. percent to Rs 36.9 crore.
• Margin at 18.6 percent vs 18.9 percent.
• Tax Reversal of Rs 2.4crore versus tax expense of Rs 9.9 crore.
• RM as percent of sales at 29 percent versus 26 percent.

JM Financials (Q4, YoY)

• Revenue up 6.8 percent to Rs 944.5 crore.
• Net profit down 22.4 percent to Rs 128.6 crore.

Bulk Deals

• Eveready Industries: India Opportunities Growth FUND acquired 6 lakh shares or 0.83 percent equity to Rs 107.5 each.
• Reliance Infrastructure: KBC Equity Fund acquired 13.2 lakh shares or 0.51 percent equity to Rs 111.08 each.

Lakshmi Vilas Bank

• India Opportunities Growth Fund acquired 55.8 lakh shares or 1.74 percent equity to Rs 73.9 each.
• Nomura Singapore sold 55.8 lakh shares or 1.74 percent equity to Rs 73.9 each.

Pledge Share Details

• Nirlon promoter group Shital Trading & Interiors created pledge of 75,000 shares on April 18.
• Zuari Agro Chemicals promoter Zuari Management & Services created pledge of 15.6 lakh shares on April 25.
• Future Lifestyle Fashions promoter Ryka Commercial Ventures croreeated pledge of 40.4 lakh shares on April 27.
• Apollo Hospitals Enterprise promoter group PCRORE Investments revoked pledge of 47.85 lakh shares on April 30.
• Future Retail promoter Future Corporate Resources croreeated pledge of 37.9 lakh shares on April 27.

Trading Tweaks

• Mcleod Russel price band revised to 10 percent.

Stocks Moving Into Short-Term ASM Framework

• Eveready Industries
• Mcleod Russel
• Williamson Magor
• Cox & Kings Financial Services

Who's Meeting Whom

• 5paisa Capital to meet Westbridge Cap on May 3.
• Mahindra & Mahindra Financial Services to meet Asit Mehta Investment Intermediates on May 6.
• TVS Motor to meet Sundaram MF and HSBC Securities on May 3.

Insider Trading

• Mindtree: Larsen & Toubro acquired 29,000 shares from open market on May 2.
• Croreest Ventures promoter Fine Estates acquired 22,500 shares on April 30.

Money Market Update

• The rupee on Thursday strengthened for a third trade session to close at 69.37/$ versus Tuesday's 69.55/$.

F&O Cues

Futures –May Series

Nifty

• Nifty futures closed trading at 11,765.4, premium of 40.7 points versus 43.4 points.
• Nifty open interest down 2.7 percent sheds 5.1 lakh shares in open interest.

Bank Nifty

• Bank Nifty futures closed trading at 29799.3, premium of 90.7 points Vs 126.9 points.
• Bank Nifty open interest down 5 percent, sheds 82,000 shares in open interest.

Options

• Nifty PCR at 1.38 versus 1.48 (across all series).

Nifty Weekly Expiry May 9

• Max open interest concentration at 11,800 Call (16.5 lakh shares), 11,700 Put (13.9 lakh shares) and 11,500 Put (+10.3 lakh shares).
• Max open interest addition seen at 11,800 Call (+11.5 lakh shares) and 11,700 Put (+8.5 lakh shares).

Nifty Monthly Expiry May 30

• Max open interest concentration on Put side at 11,000 (21.8 lakh shares).
• Max open interest on call side at 12,000 (11.9 lakh shares).

Stocks In F&O Ban

• Jet Airways

Brokerage Radar

CLSA on Kansai Nerolac

• Maintained ‘Sell' with a price target of Rs 385.
• March quarter earnings were below estimates.
• Severe pressures in growth rates; Multi-quarter low margins.
• Management cautious on near-term demand outlook.

Macquarie on L&T Infotech

• Maintained ‘Outperform'; hiked price target to Rs 2,368 from Rs 2,240.
• Good revenue growth despite weakness in top client.
• Margin decline due to hiring and investments as expected.
• Deal win momentum remains strong.

Macquarie on Tata Power

• Maintained ‘Neutral' with a price target of Rs 83.
• March quarter results were operationally inline; Sale of non-core assets is key.
• Tariff hike likely to cut Mundra losses close to zero.
• Growth depends on opportunities in renewable and distribution.

UBS on Kajaria Ceramics

• Maintained ‘Buy'; hiked price target to Rs 760 from Rs 640.
• Recent regulatory changes may benefit organized manufacturers.
• Kajaria well placed to gain share.
• Expect December to be strong with volume growth of 15 percent.

UBS on Cognizant Technology

• Cognizant cuts 2019 guidance to 3.6-5.1 percent from 7-9 percent.
• Company reiterated commitment to growing revenue and margins.
• Expect more volatility in earnings ahead.

Goldman Sachs on Embassy Office Part REIT

• Initiated ‘Neutral' with a price target of Rs 318.
• Best in-class portfolio, but risk-reward balanced.
• Strong organic growth and acquisition drivers.
• Expect dividend per unit growth of 9.4 percent in 2020-21.

Jefferies on Britannia

• Maintained ‘Hold'; cut price target to Rs 2,900 from Rs 3,100.
• March quarter review: Steady show amidst weak demand conditions.
• Cut estimates to reflect higher launch pipeline which will keep margin expansion under check.
• Loans receivable increased further to Rs 1200 crore in 2018-19 which is an investor concern.

Investec on Hindustan Zinc

• Maintained ‘Buy'; hiked price target to Rs 329 from Rs 311.
• March quarter review: muted quarter; Conservative guidance.
• Dividend yield play, silver proxy in making.
• With shaft commissioning on track, expect higher volumes and cost.

HSBC on Indian Real Estate

• City-by-city in-depth analysis suggests markets are becoming less fragmented and top developers are taking higher shares.
• Expect this trend to accelerate as the NBFC crisis takes some developers out of race with only the strong surviving.
• DLF: Upgraded to ‘Buy' from ‘Hold'; maintained price target at Rs 216.

On Dabur

Macquarie

• Maintained ‘Neutral'; hiked price target to Rs 430 from Rs 412.
• Aggressiveness on market share had led to near-term margin pressure.
• Remain concerned on higher competition in food and oral care.
• Margins could see further pressure from higher input cost and competition.

UBS on Dabur India

• Maintained ‘Buy' with a price target of Rs 535.
• Trough quarter with lumped one-offs.
• Red toothpaste and healthcare were bright spots despite slowing demand.
• Focus on core brand to continue.

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