All You Need To Know Going Into Trade On May 31 

Stocks and Treasury yields fell after President Donald Trump opened a new front in the trade war, threatening to place escalating import tariffs on Mexico in an effort to curb illegal immigration.

Futures on the S&P 500 Index slumped 0.9 percent, heading for the worst week since the global market rout in December, while Japanese shares opened 1 percent lower. Korean and Australian stocks also fell. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, rose 0.1 percent to 11,987.50 as of 7:20 a.m.

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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 rebounded from a slump that took them to a 12-week low, while Treasuries resumed a rally that pinned yields at 20-month lows amid concern that the trade spat with China could derail global growth. Oil tumbled.

#BQMarketWrap | U.S. stocks snap slide; Treasury rally continues.

Read: https://t.co/x2whrSWmHt pic.twitter.com/hWdKuc6XCn

Asian Cues

• Japan's Topix Index fell 1 percent.
• Australia's S&P/ASX 200 Index dropped 0.4 percent.
• Kospi Index dropped 0.4 percent.
• Futures on the S&P 500 fell 0.9 percent

Commodity Cues

• Brent crude fell for the third consecutive trading session, traded 0.93 percent lower at $66.25 a barrel.
• West Texas Intermediate crude fell 1.5 percent to $55.74 a barrel.
• Gold rose 0.2% to $1,290.81 an ounce.

London Metal Exchange

• Copper ended lower for the second day, down 0.53 percent.
• Zinc ended 0.79 percent higher.
• Nickel halted a two-day fall, closed 1 percent higher.
• Lead closed 1.6 percent lower.
• Aluminium ended lower for the second day, closed 0.72 percent lower.
• Tin snapped a three-day decline, closed 0.32 percent higher.

Key Data To Watch

• India fiscal deficit in for April-March period
• India eight infrastructure industries index for April (prior 4.7 percent)
• 5:30pm: India GDP for March quarter; Bloomberg estimates at 6.3 percent (prior 6.6 percent)
• 5:30pm: India GDP 2018-19 estimate YoY; Bloomberg estimates at 6.9 percent (prior 7.0 percent)
• 5:30pm: India GVA for March quarter; Bloomberg estimates at 6 percent (prior 6.3 percent)

Indian ADRs

Stocks To Watch

• Jet Airways said it's not in position to approve its financial results. This is in view of on-going bidding process undertaken by the domestic lenders for management change and resignation by members of board of directors also to be blamed for the said action.
• Bharti Airtel: (Q4FY19 ARPU increased 18.3 percent QoQ) to Rs 123 – the biggest jump since its listing. Company says that India customer base declined by only 16 lakh to 28.26 crore.
• Sonata Software: Prasanna Oke resigned from CFO's post with effect from June 30.
• Ujjivan Financial Services: Deepak Khaitan resigned from the post of CFO with effect Aug. 2 and Barun Agarwal has been appointed in his place. Statutory Auditors Price Waterhouse CA LLP resign as company is desirous of having same network of firms as auditors for the company and its arm Ujjivan Small Finance Bank.
• Shemaroo clarified that neither the company nor the directors/employees have received any formal communication from the Police or any copy of FIR. This clarification comes from the news that FIR was registered against management and directors of Viacom 18 Media Private Limited and the company itself.
• AstraZeneca said that it has opened a new development operations centre in Bengaluru to support expansion of its clinical research footprint in India. (Press Trust of India)

Earnings Reaction To Watch

Coal India (Q4, YoY)

• Revenue up 7.5 percent to Rs 28,546.26 crore.
• Net profit at Rs 6,024.16 crore versus Rs 1,302.51 crore.
• Reported Ebitda at Rs 8,212.2 crore versus Rs 193.34 crore.
• Reported Margin at 28.7 percent versus 0.7 percent.

ONGC (Q4, QoQ)

• Revenue down 3.4 percent to Rs 26,758 crore.
• Net profit down 51 percent to Rs 4044.6 crore.
• Ebitda down 25.3 percent to Rs 12,371 crore.
• Margin at 46.2 percent versus 59.8 percent.
• Net realisation at $61.29/bbl versus $66.38/bbl.

SAIL (Q4, YoY)

• Revenue up 8.6 percent to Rs 18,506.3 crore.
• Net profit down 42.6 percent to Rs 468.4 crore.
• Ebitda down 5.7 percent to Rs 2,214.5 crore.
• Margin at 12 percent versus 13.8 percent.
• Exceptional Gain of Rs 377.4 crore in base quarter.

Jain Irrigation (Q4, YoY)

• Revenue down 6 percent to Rs 2,583.1 crore.
• Net profit down 44.8 percent to Rs 53.8 crore.
• Ebitda down 32.8 percent to Rs 249 crore.
• Margin at 9.6 percent versus 13.5 percent.

IDBI Bank (Q4, YoY)

• Net Interest Income up 75.8 percent to Rs 1,609.3 crore.
• Net loss at Rs 4918.4 crore versus net loss of Rs 5,662.8 crore.
• Provisions at Rs 7,233.3 crore versus Rs 10,773.3 crore. (Rs 5,074.8 crore QoQ)
• GNPA at 27.47 percent versus 29.67 percent. (QoQ)
• NNPA at 10.11 percent versus 14.01 percent. (QoQ)

Ujjivan Financial Services (Q4, YoY)

• Net interest income up 17.8 percent to Rs 319.7 crore.
• Net profit down 2.2 percent to Rs 63.7 crore.
• Disbursement up 68 percent to Rs 3728 crore.
• GNPA at 0.9 percent versus 1.4 percent.(QoQ)
• NNPA at 0.3 percent versus 0.3 percent. (QoQ)

NLC India (Q4,YoY)

• Revenue down 25.2 percent to Rs 1,902.3 crore.
• Net profit down 67.4 percent to Rs 290.1 crore.
• Ebitda down 74.4 percent to Rs 224.52 crore.
• Margin at 11.8 percent versus 34.5 percent.

Munjal Showa (Q4, YoY)

• Revenue down 9.9 percent to Rs 377.3 crore.
• Net profit down 51.3 percent to Rs 13.9 crore.
• Ebitda down 55.8 percent to Rs 16.21 crore.
• Margin at 4.3 percent versus 8.7 percent.

Mirza International (Q4, YoY)

• Revenue up 27.2 percent to Rs 287 crore.
• Net profit down 59.7 percent to Rs 7.14 crore.
• Ebitda down 31.6 percent to Rs 28.3 crore.
• Margin at 9.8 percent versus 18.3 percent.
  

KNR Construction (Q4, YoY)

• Revenue up 14.6 percent to Rs 715.7 crore.
• Net profit up 15.5 percent to Rs 92.5 crore.
• Ebitda up 21.4 percent to Rs 144.09 crore.
• Margin at 20.1 percent versus 19 percent.

Dredging Corporation (Q4, YoY)

• Revenue down 65.5 percent to Rs 238.5 crore.
• Net profit rose 2.5 times to Rs 111.1 crore.
• Ebitda down 14.7 percent to Rs 146.01 crore.
• Margin at 61.2 percent versus 24.7 percent.

Ahluwalia Contracts (Q4, YoY)

• Revenue up 9.1 percent to Rs 487.41 crore.
• Net profit remained flat at Rs 31 crore.
• Ebitda up 6.2 percent to Rs 56.7 crore.
• Margin at 11.6 percent versus 11.9 percent.

Panacea Biotec (Q4, YoY)

• Revenue down 54.3 percent to Rs 29.3 crore.
• Net profit at Rs 216.1 crore versus net loss of Rs 30.1 crore.
• Ebitda loss at Rs 111.4 crore versus Ebitda loss of Rs 4.5 crore.
• Exceptional gain of Rs 360.9 crore.
• Other expenses up 3.5 times to Rs 88.1 crore.

Suzlon Energy (Q4, YoY)

• Revenue down 33.5 percent to Rs 1,444.9 crore.
• Net loss at Rs 292.6 crore versus net loss of Rs 466.2 crore.
• Ebitda down 95.3 percent to Rs 14.9 crore.
• Margin at 1 percent versus 14.7 percent.
• Employee costs rise up 23 percent to Rs 249 crore.
• RM as percent of sales at 59 percent versus 46 percent.

GMM Pfaudler (Q4, YoY)

• Revenue up 37.3 percent to Rs 120.7 crore.
• Net profit up 28.6 percent to Rs 10.8 crore.
• Ebitda up 18.2 percent to Rs 16.9 crore versus.
• Margin at 14 percent versus 16.3 percent.

Sundaram Finance (Q4, YoY)

• Net interest income up 21.5 percent to Rs 323.2 crore.
• Net profit up 4.9 times to Rs 674.8 crore.

Simplex Infrastructures (Q4, YoY)

• Revenue down 4.5 percent to Rs 1,575 crore.
• Ebitda up 32 percent to Rs 183 crore.
• Margin at 11.6 percent versus 8.4 percent.
• Net profit up 14.5 percent to Rs 33.6 crore.
• Lower material cost and lower sub-contractor cost aided numbers.

Cox & Kings (Q4, YoY)

• Revenue up 6.4 percent to Rs 1,256 crore.
• Ebitda up 68 percent to Rs 183 crore.
• Margin at 14.5 percent versus 9.2 percent.
• Net profit at Rs 823.6 crore versus net loss of Rs 46.1 crore.
• Exceptional gain of Rs 1341 crore on profit on sale of education business.

Bulk Deals

• Just Dial: Emerging Markets Sudan Free Equity Index Fund acquired 3.55 lakh or 0.55 percent equity shares at Rs 716.96 each.
• Ducon Infratech: Nomura Singapore acquired 6 lakh shares or 0.57 percent equity at Rs 16.5 each.

Ramco Systems

• Reliance MF acquired 6 lakh shares or 1.96 percent equity at Rs 208.25 each.
• Goldman Sachs India Fund sold 8.1 lakh shares or 2.65 percent equity at Rs 208.2 each.

Essar Shipping

• Citoc Investment acquired 50 lakh equity or 2.42 percent equity at Rs 10.15 each.
• Aquarius India Opportunities Fund sold 15.5 lakh shares or 0.75 percent equity at Rs 10.05 each.
• Indiaman Fund Mauritius sold 13 lakh or 0.63 percent equity at Rs 10.05 each.

Trading Tweaks

• DCM record date for demerger.
• IIFL Holdings record date for spinoff.
• Navkar Corporation, Bajaj Healthcare to move into short term ASM Framework.
• Tata Teleservices (Maharashtra) price band revised to 10 percent.

Who's Meeting Whom

• Eicher Motors to meet Abu Dhabi Investment Authority on May 31.

Insider Trading

• Carborundum Universal promoter group MV Seethah Subbiah sold 28,000 shares on May 24.
• Cholamandalam Financial Holdings promoter group sold 29,000 shares from May 24-28.
• Alembic promoter group Nirayu acquired 80,000 shares from May 28-29.

Money Market Update

The Indian rupee depreciated 0.06 percent lower yesterday against the U.S. dollar to close at 69.87.

The home currency is likely to open stronger today. The implied opening from forwards suggest rupee may start trading at 69.74 to the dollar. Traders will await fiscal deficit data due in the afternoon.

Bond traders will keep an eye on reverse repo, term repo, five government bond auctions today. The yield on the benchmark 2029 government debt rose one basis point to 7.14 percent yesterday.

F&O Cues

• Nifty June futures at 11946, premium of 32 points.
• Nifty Bank June futures at 31600, premium of 63 points
• Nifty rollovers at 70.4 percent, Nifty Bank rollovers at 82 percent.
• Nifty put-call ratio at 1.3 versus 1.15.

Brokerage Radar

On Coal India

Edelweiss

• Maintained ‘Hold'; hiked price target to Rs 263 from Rs 243.
• Record Ebitda riding robust FSA realisation.
• Volume ramp up at key subsidiaries encouraging.
• Expect e-auction realization to come off resulting in muted earnings growth.

CLSA

• Maintained ‘Buy'; hiked price target to Rs 290 from Rs 275.
• Decent March quarter results.
• Volume growth was patchy but some improvement in recent months.
• Muted earnings outlook but reasonable valuation and a high dividend yield.

Citi

• Maintained ‘Buy'; hiked price target to Rs 320 from Rs 300.
• March quarter was in line; E-Auction prices resilient, Volumes muted.
• Believe valuations discount uncertainty on likely volume trends.
• Coal India offers an attractive dividend yield.

On Glenmark Pharma

Macquarie

• Maintained ‘Neutral'; cut price target to Rs 600 from Rs 620.
• Margin expansion and debt reduction hinge largely on U.S. recovery.
• Performing well in India, Europe and Rest of World.
• Cut EPS estimates for the current and the next financial year by 12 percent and 9 percent respectively on lower margins and higher interest cost

CLSA

• Downgraded to ‘Sell' from ‘Buy'; cut price target to Rs 500 from Rs 740.
• March quarter results were significantly below estimate.
• 2019-20 revenue guidance was weaker than expected.
• High investment phase to keep earnings subdued.

Macquarie on Hero Moto

• Maintained ‘Outperform' with a price target of Rs 3,000.
• Strong growth prospects over mid to long term.
• Confident of maintaining dominance in motorcycle.
• Targeting enhanced presence in scooters and premium motorcyles.

CLSA on ONGC

• Maintained ‘Buy'; hiked price target to Rs 285 from Rs 240.
• Slew of one-offs cause a big miss in March quarter.
• Subsidy exemption confirmation.
• Stock at compelling valuations and higher dividend yield.

CLSA on IPCA

• Maintained ‘Sell'; hiked price target to Rs 780 from Rs 730.
• Operating leverage benefit drives Ebitda growth.
• Revenue guidance for the current financial year is in line but margin guidance higher than estimate.
• Valuation not factoring-in slower EPS growth ahead.

Nomura on Alkem Lab

• Upgraded to ‘Buy' from ‘Neutral'; hiked price target to Rs 2,230 from Rs 1,965.
• March quarter results were below estimates.
• Management commentary suggests improved outlook.
• Hike EPS estimates on the back of lower material costs and lower tax rate.

Nomura on Ujjivan Financial

• Maintained ‘Reduce' with a price target of Rs 315.
• Stable March quarter, strong growth; opex recovery lags.
• Stable margins but pre-provisioning operating profit miss on higher opex.
• Asset quality performance steady.

Macquarie on Jagran Prakashan

• Maintained ‘Outperform'; cut price target to Rs 146 from Rs 150.
• Ad growth aided by higher government spend ahead of election.
• Expect recovery in margins aided by lower newsprint cost.
• Cut EPS estimates for the current and the next financial year on lower ad growth and delayed RM cost benefit.

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