All You Need To Know Going Into Trade On November 23

Asian markets have begun the new trading week with modest gains as investors monitor progress on a potential vaccine for Covid-19.

Benchmark indices in South Korea and Australia are edging higher with those in Japan shut on account of a holiday. Treasuries will not trade until London open.

Global equities continue to trade near an all-time high set earlier this month.

The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index's performance in India, rose 0.5% to 12,947 as of 6:55 a.m.

Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.

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Let's take a look at the factors that may influence equities in today's session:

• Futures on the Dow Jones aer currently trading higher by 70 points. The index ended 0.7% lower on Friday.
• The public spat that emerged last week between the Trump administration and the Federal Reserve over emergency lending facilities has unnerved investors.
• “The problem, from our perspective, is we first have to get through winter and this is setting us up for some downside economic surprises,” Brian Jacobsen, multi-asset strategist at Wells Fargo Asset Management told Bloomberg TV.
• Yield on the 10-year treasuries ended at 0.82% on Friday.
• West Texas Intermediate crude was little changed at $42.44 per barrel.

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Stocks To Watch

• Banking Stocks: RBI's internal working group has recommended significant changes across the banking sector. Large corporate or industrial houses may be allowed as promoters, but only after necessary amendments to the Banking Regulation Act, 1949. The cap on promoters' stake in the long run, over 15 years, may be raised from the current level of 15% to 26% of the paid-up voting equity share capital of the bank. Large NBFCs with an asset size of Rs 50,000 crore, including those owned by corporate houses, may be allowed to convert to private banks, subject to conditions.
• Motherson Sumi: Guides for $36 billion in consolidated revenue and 40% RoCE by 2024-25 under its 'Vision 2025' program. Aims for no country, customer or component contributing to more than 10% of overall revenue. To use 40% of consolidated profit as dividend. Fell short of the 2020 targets due to Covid-19. Funds for growth would come from internal accruals as a large part of the capex is behind it, debt (not exceeding 2.5x net debt-Ebitda) and equity issue if required.
• BEML: Wins orders worth Rs 501 crore from the DMRC for additional 12 trainsets of six cars each to operate on line 2B and 7 of the Mumbai Metro project. The total contract value now stands at Rs 4,318 crore from Rs 3,817 crore. The orders are for supplies before August 2023.
• Reliance Industries: CCI has approved acquisition of retail, wholesale, logistics and warehousing businesses of the Future Group by Reliance Retail Ventures and Reliance Retail and Fashion Lifestyle.
• Bharti Airtel: Enters into an agreement to acquire stake in Avaada MHBuldhana Pvt. Ltd. - a Special Purpose Vehicle formed for the purpose of owning and operating the Captive Power Plants. The company will acquire 5.2% stake for an overall consideration of Rs 4.55 crore.
• JSPL: Standalone sales up 10% year-on-year in October to 6 lakh MT. Exports contributed 28% of the overall sales volume in October. Exports grew at the rate of 37% year-on-year in October. Reports highest ever pellet production of 7,01,500 MT and highest ever wire rod production of 49,062 MT in October 2020.
• IIFL Securities: Board approves buyback of 1.67 crore shares or 5.21% of the total equity, aggregating to a sum of Rs 90 crore. The buyback price of Rs 54 per share is an 18.3% premium to Friday's closing price.
• Petronet LNG: Signs on-binding MoU with the Ministry of Petroleum & Natural Gas with an objective to foray into 'Green Energy and Bio Fuels' and for setting up of compressed Bio Gas plants under Sustainable Alternative Towards Affordable Transportation (SATAT) initiative of the Government of India.
• Hatsun Agro: The Industries and Commerce ministry of the Government of Telangana has agreed to provide various subsidies for an amount not exceeding Rs 25 crores to the company for setting up an Ice Cream plant in Govindapur.
• Fineotex Chemicals: Completes the acquisition of a 4 acre plant in Ambernath in Maharashtra. The facility will cater to customer demands in the existing textile specialties business as well as customer demands in the new businesses such as home care, cleaning, hygiene and drilling specialty chemicals.
• Lemon Tree Hotels: Opens 61-room hotel in Jhansi.
• Bharat Dynamics: First heavy weight Torpedo - Varunastra was delivered to the Indian Navy. The company is also the production agency for the Astra air-to-air missile system and has commenced manufacturing of these missiles.
• Zee Media: Promoter ARM Infra & Utilities reduced stake to 9.06% from 11.71% on November 18.
• Punjab National Bank: The Reserve Bank of India has imposed a penalty of Rs 1 crore as an ATM network operator for non-compliance with payments and settlement norms. The central bank has also penalised five other entities including Delhi Metro Rail Corporation, Sodexo SVC India, PhonePe among others.
• SREI Infra Finance: RBI has appointed auditor to conduct special audit into the books of of the company and it's arm SREI Equipment Finance.
• Future Consumer: Board allotted 4.95 crore shares to International Finance Corporation and 1.64 crore shares to Verlinvest SA, consequent to conversion of Compulsorily Convertible Debentures and outstanding coupons thereon. The paid-up share capital of the company now stands at Rs 1,192.2 crore.
• Tube Investment: CG Power, Tube Investments and lenders of CG Power have executed the requisite binding agreements for one-time settlement and restructuring of funded facilities and guaranteed debt of CG Power. The settlement agreement includes - Compromise settlement by making an upfront payment of Rs 650 crore to lenders, conversion of Rs 200 crore out of the balance fund-based facilities into unrated, unsecured, unlisted NCDs, having a tenure of five years to be issued by CG power to the lenders, payment to the lenders out of the proceeds from sale of CG House property on best efforts and as is where is basis, within a period of five years from the date of agreement.
• Punjab & Sind Bank: Board approves offering, issuing, creating and allotting equity shares of up to Rs 5,500 crore to the Government of India on a preferential basis.
• Fortis Healthcare: SEBI issues showcause notice to the company with respect to the matter relating to alleged diversion of funds from the company by its erstwhile promoters.
• Canara Bank: The lender's Basel-III, tier-II bonds worth Rs 7,900 crore rating has been reaffirmed as ICRA AA+. Outlook has been revised to stable from watch with developing implications. The lender's Basel-III AT-1 bonds worth Rs 1,500 crore have been upgraded to ICRA AA from ICRA AA- and outlook is revised to stable from watch with developing implications.
• Indiabulls Housing Finance: Dinabandhu Mohapatra, former MD & CEO of Bank of India has been appointed as an independent director on the company's board.

Brokerage Radar

Macquarie On IWG Recommendations On Banks

• Skeptical about realistic implementation of these rules
• Timing of the report is surprising, coming amidst a spate of bank failures
• Ultimate power of fit and proper criteria and due diligence rests with the RBI
• If promoters allowed to raise stake, will be positive for Kotak Mahindra Bank & IndusInd Bank
• Banks currently under NOFHC may be allowed to exit from such a structure if they do not have any other group entities in their fold. This could benefit Ujjivan Financial Services.
• Continue to believe HDFC Bank and ICICI Bank will be long-term winners

Emkay On Motherson Sumi

• Buy rating maintained
• Price target raised to Rs 155 from Rs 139
• Positive view underpinned by strong management capabilities and expectations of a gradual pick-up in underlying segments
• Business situation continues to improve with a healthy order book
• Raise FY22/23E EPS by 13% and 12% respectively led by higher SMP margin assumptions, better scale and aggressive cost savings
• Ebitda / earnings CAGR likely to be robust at 15% and 28% respectively over FY20-23E
• Key Risks: Demand contraction in key markets, weak performance of large clients, adverse currency rates

Motilal Oswal On Motherson Sumi

• Buy rating maintained
• Price target raised to Rs 160 from Rs 150
• Vision 2025, along with ongoing group restructuring will help shape up for next phase of growth
• Content increase and ramp-up in non-PVs to drive growth
• Focus on wiring harness, composite parts, metal/structural parts
• Stabilisation of SMP's greenfield plants critical to drive earnings recovery
• Execution of strong order book and limited capex at SMPBV and India business augur well
• Best proxy to a global automotive recovery

Nomura On Motherson Sumi

• Buy rating maintained
• Price target of Rs 162
• Restructuring likely to be EPS-accretive
• To benefit from strong recovery in PV demand
• Healthy PV order book in SMRP and CV recovery in PKC to drive overall revenue
• Revenue estimate of $10.3 billion by FY23F could have a lot of upside
• Maintain Motherson Sumi as our long-term pick among auto parts suppliers
• Valuations are attractive

Antique Stock Broking On Firstsource Solutions

• Initiating coverage with buy rating
• Price target of Rs 100
• Revamping its leadership team
• Better cost control, favourable revenue mix, onshore to offshore effort shift and higher onsite revenue to drive margin improvement
• Expect 8-10% earnings growth in medium to long-term
• Key risks include high client concentration and any unfavourable currency moves

Investec On Wipro

• Hold rating maintained
• Price target of Rs 360
• Focus remains on execution post bold decisions
• Recovery more likely to be an FY23 story
• Stock likely to be available at a better entry point post buyback
• Will remain on the sidelines

Pledge Share Details

• Astron Paper and Board Mill: Promoter Asian Granito released pledge of 10 lakh shares on November 19
• Sun Pharma: Promoter Shanghvi Finance created pledge of 41 lakh shares on November 12.
• Uflex: Promoter Flex International released pledge of 1.75 lakh shares on November 19.

(As reported on November 20)

Bulk Deals

• Himadri Speciality Chemicals: Promoter Himadri Credit and Finance sold 24 lakh shares (0.57%) at Rs 39.44 per share.
• TD Power Systems: ICICI Prudential AMC sold 1.74 lakh shares (0.56%) at Rs 131.3 per share.

Who's Meeting Whom

• Tata Steel: To meet Jefferies and Macquarie Capital Securities on November 24.
• CG Consumer Electricals: To meet Alliance Bernstein, IDFC Mutual Fund and TT International between November 23-26.
• Cipla: To meet ICICI Prudential Life Insurance, AIA and other investors between November 23-27.
• Endurance Technologies: To meet Duro Capital on November 23.
• HFCL: To meet Carnelian Asset Management on November 23.
• Mahindra Lifespace Developers: To meet IIFL Capital, Solidarity Advisors and other investors between November 23-25.
• Mahindra & Mahindra: To meet Invesco AMC and Fidelity Management Research on November 24.
• Asian Paints: To meet Soros Capital, Invesco and other investors between November 24-26.

Trading Tweaks

• Record Date For Share Buyback: NMDC
• Price Band Revised From 20% To 10%: Inox Wind, Texmo Pipes and Products.
• Price Band Revised From 10% To 5%: Axiscades Engineering Tech, Nagarjuna Fertilizers and Chemicals, Mukand Engineers.
• Move Into ASM Framework: IVP, Sicagen, Nagarjuna Fertilizers and Chemicals, Future Enterprises.
• Move Into Short Term ASM Framework: Lakshmi Vilas Bank, Snowman Logistics, Texmo Pipes and Products, Inox Wind.
• Move Out Of Short Term ASM Framework: Hitech Corporation.

Insider Trades

• HFCL: Promoter MN Ventures acquired 5 lakh shares on November 20.

(As reported on November 20)

Money Market Update

• The currency ended stronger at 74.16 against the U.S. Dollar, as compared to Thursday's close of 74.27.
• The rupee ended as the fifth best performing currency in Asia, for the truncated week.

F&O Cues

• Nifty November futures end at 12,854; discount of 5 points from premium of 5 points
• Nifty November futures shed 2.4% and 2.7 lakh shares in Open Interest
• Nifty Bank November futures end at 29,155; discount of 81 points from 45 points
• Nifty Bank November futures shed 13.5% and 2.3 lakh shares in Open Interest
• Nifty Put-Call Ratio at 1.3
• Enters F&O Ban: Nalco
• Out of F&O Ban: SAIL, Sun TV
• Stocks In F&O Ban: Bank of Baroda, BHEL, Canara Bank, DLF, Indiabulls Housing Finance, L&T Finance Holdings, Nalco, Punjab National Bank, RBL Bank, Vodafone Idea

Nifty: November 26 Expiry

• Maximum Open Interest on Call side at 13,000 strike (36 lakh shares)
• Maximum Open Interest on Put side at 12,000 strike (44 lakh shares)
• Active Options: 12,800 Put (+17 lakh shares) and 13,200 Call (+6.3 lakh shares)