All You Need To Know Going Into Trade On November 6

Asian stocks opened mixed after U.S. equities capped the longest string of weekly gains since 2013 and as traders keep an eye on President Donald Trump's first trip to the region.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, fell 0.15 percent to 10,470 as of 7:00 a.m.

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DayBreak

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

Global Cues

• U.S. stocks capped the longest string of weekly gains since 2013 as Apple Inc. results and strong services sector data added to optimism in the economy.
• Payrolls data provided a mixed picture of the strength of the labour market, though distortions from the hurricanes in August made it difficult to draw firm conclusions.

#BQMarketsNow | U.S. equities capped the longest string of weekly gains since 2013.https://t.co/qRcKlDJPpS pic.twitter.com/VkrcPcrbUS

Asian Cues

• Futures on the S&P 500 were little changed. The main gauge rose 0.3 percent on Friday.
• Contracts on the Nikkei 225 Stock Average were up 0.2 percent in Singapore.
• Australia's S&P/ASX 200 Index was little changed.
• Futures on the Hang Seng Index were down 0.2 percent.
• The VIX dropped 8 percent to 9.14 on Friday.

Here are some key upcoming events this week:

• The Reserve Bank of Australia is expected to keep interest rates on hold at a policy-setting meeting on Tuesday.
• Other central banks setting monetary policy this week include: Argentina, Mexico, New Zealand, Peru, Malaysia, Poland, Serbia and Thailand.
• BOJ releases minutes of Sept. 20-21 meeting.
• Japan updates on October services PMI.
• China releases third-quarter current account; October foreign-exchange reserves and October CPI and PPI this week.
• Indonesia's third-quarter GDP probably accelerated to 5.18 percent year-on-year in the third quarter from 5.01 percent in the second, a report on Monday is expected to show.
• U.S. consumer sentiment probably cooled in early November from a more than 13-year high. The University of Michigan's report on Friday wraps up a light week for U.S. economic data that also includes figures on job openings in September.
• New York Fed's Dudley gives a speech on “Lessons from the Financial Crisis” at an Economic Club of New York luncheon on Monday.
• Bank of Japan Governor Haruhiko Kuroda will give a speech in Nagoya, followed by a news conference, on Monday.
• OPEC releases its World Oil Outlook.
• Earnings season continues with announcements from Toyota Motor Corp., BMW AG, Walt Disney Co., Adidas AG, and Siemens AG.
• Also this week, the European Central Bank publishes its economic bulletin and the European Commission updates its economic projections for the euro area.

Commodities Cues

• West Texas Intermediate crude rose 0.4 percent to $55.85 a barrel on Friday, the highest since mid-2015. It jumped 2 percent on Friday.
• Gold futures were flat at $1,269.07 an ounce.
• ICE Sugar ended higher at 14.38 cents a pound; up 1.05 percent.

Shanghai Exchange

• Steel trades higher for fifth consecutive session; up 0.92 percent.
• Aluminium trades higher; up 0.18 percent.
• Zinc trades lower for third day; down 0.66 percent .
• Copper trades lower; down 0.92 percent.
• Rubber trades higher; up 0.18 percent.

Indian American Depositary Receipts

Earnings To Watch

• Century Textiles & Industries
• Fortis Malar Hospitals
• GTPL Hathway
• Gujarat Gas
• Gulf Oil Lubricants India
• Housing & Urban Development Corporation
• Indian Bank
• Jaiprakash Power Ventures
• Just Dial
• KEC International
• Larsen & Toubro Infotech
• NRB Bearing
• Parag Milk Foods
• Piramal Enterprises
• Raunaq EPC International
• Rural Electrification Corporation
• Thomas Cook
• Torrent Power
• TRF
• Triveni Turbine
• Welspun Corp.

Earnings Reaction To Watch

BSE Q2 (YoY)

• Revenue up 22 percent at Rs 111 crore.
• Net profit up 4.7 percent at Rs 67 crore.
• EBITDA up 132 percent at Rs 26.4 crore.
• Margin at 23.8 percent from 12.5 percent.

Sheela Foam Q2 (YoY)

• Revenue up 18.2 percent at Rs 486 crore.
• Net profit up 13.3 percent at Rs 34 crore.
• EBITDA up 9.5 percent at Rs 57.5 crore.
• Margin at 11.8 percent from 12.8 percent.

Titan Q2 (YoY)

• Revenue up 29.6 percent at Rs 3473 crore.
• Net profit up 68 percent at Rs 284 crore.
• EBITDA up 50.75 percent at Rs 398 crore.
• Margin at 11.45 percent from 9.85 percent.

VRL Logistics Q2 (YoY)

• Revenue up 0.4 percent at Rs 452 crore.
• Net profit up 57.14 percent at Rs 22 crore.
• EBITDA up 8.9 percent at Rs 55 crore.
• Margin at 12.2 percent from 11.2 percent.

Zensar Technologies Q2 (QoQ)

• Revenue up 3.5 percent at Rs 763 crore.
• Net profit up 34 percent at Rs 63 crore.
• EBITDA up 17.3 percent at Rs 88 crore.
• Margin at 11.56 percent from 10.2 percent.

Siti Networks Q2 (YoY)

• Revenue up 21.8 percent at Rs 352 crore.
• Net loss of Rs 52 crore from net loss of Rs 38 crore.
• EBITDA up 41.5 percent at Rs 66.5 crore.
• Margin at 18.9 percent from 16.3 percent.

Selan Exploration Technology Q2 (YoY)

• Revenue up 42 percent at Rs 17 crore.
• Net profit up 97 percent at Rs 4.6 crore.
• EBITDA up 161 percent at Rs 5.8 crore.
• Margin at 33.6 percent from 18.3 percent.

India Nippon Electricals Q2 (YoY)

• Revenue up 9.4 percent at Rs 117.7 crore.
• Net profit up 4.5 percent at Rs 11.2 crore.
• EBITDA up 52 percent at Rs 17.5 crore.
• Margin at 15 percent from 12 percent.

Kitex Garments Q2 (YoY)

• Revenue up 39 percent at Rs 148.6 crore.
• Net profit up 84.5 percent at Rs 24.1 crore.
• EBITDA up 35 percent at Rs 43 crore.
• Margin at 29 percent from 29.8 percent.

Lumax Industries Q2 (YoY)

• Revenue up 11 percent at Rs 379.6 crore.
• Net profit up 22 percent at Rs 20.8 crore.
• EBITDA up 18 percent at Rs 30.2 crore.
• Margin at 8 percent from 8.4 percent.

Sarda Energy & Minerals Q2 (YoY)

• Revenue up 23 percent at Rs 347.4 crore.
• Net profit up 200 percent at Rs 37.6 crore.
• EBITDA up 7.9 percent at Rs 63.71 crore.
• Margin at 18.3 percent from 20.8 percent.

Motilal Oswal Financial Services Q2 (YoY)

• Revenue up 40 percent at Rs 704.5 crore.
• Net profit up 42 percent at Rs 143.8 crore.

Relaxo Footwears Q2 (YoY)

• Revenue up 16.4 percent at Rs 460 crore.
• Net profit up 19 percent at Rs 32.1 crore.
• EBITDA up 17.2 percent at Rs 61.5 crore.
• Margin at 13.4 percent from 13.5 percent.

Torrent Pharma Q2 (YoY)

• Revenue unchanged at Rs 1429 crore.
• Net profit down 1.4 percent at Rs 204 crore.
• EBITDA down 0.3 percent at Rs 329 crore.
• Margin at 23.02 percent from 23.09 percent.

Godrej Agrovet Q2 (YoY)

• Revenue up 0.8 percent at Rs 1426 crore.
• Net profit up 14.1 percent at Rs 81 crore.
• EBITDA down 5.2 percent at Rs 146 crore.
• Margin at 10.2 percent from 10.9 percent.

Sical Logistics Q2 (YoY)

• Revenue up 25.25 percent at Rs 248 crore.
• Net profit down 14.3 percent at Rs 6 crore.
• EBITDA up 18.75 percent at Rs 38 crore.
• Margin at 15.3 percent from 16.2 percent.

Shipping Corporation of India Q2 (YoY)

• Revenue up 6.6 percent at Rs 808 crore.
• Net loss of Rs 76 crore from net loss of Rs 18 crore.
• EBITDA down 7.1 percent at Rs 125 crore.
• Margin at 15.5 percent from 17.7 percent.

UCO Bank Q2

• Net Interest Income down 47.5 percent at Rs 655 crore.
• Net loss of Rs 623 crore from net loss of Rs 385 crore.
• Provisions up 10 percent at Rs 1,323 crore from 1,204 crore (QoQ).
• GNPA at 19.74 percent from 19.87 percent (QoQ).
• NNPA at 9.98 percent from 10.63 percent (QoQ).

Union Bank Q2

• NII up 2 percent at Rs 2,321 crore.
• Net loss of Rs 1531 crore from net profit of Rs 177 crore.
• Provisions up 85 percent at Rs 3,465 crore.
• GNPA at 12.35 percent from 12.63 percent (QoQ).
• NNPA at 6.7 percent from 7.47 percent (QoQ).

EPC Industries Q2 (YoY)

• Revenue down 66.7 percent at Rs 15 crore.
• Net loss of Rs 5 crore from net loss of Rs 1 crore.
• EBITDA at Rs -6 crore from Rs -0.4 crore.
• Margin at -40 percent from -0.9 percent.

Pennar Engineered Building Systems Q2 (YoY)

• Revenues up 2 percent at Rs 132.5 crore from Rs 130 crore.
• Net profit down 40 percent at Rs 3.6 crore from Rs 6 crore.
• EBITDA down 33 percent at Rs 8.9 crore from Rs 13.3 crore.
• Margin at 6.7 percent from 11.1 percent.

Stocks To Watch

• NHAI may bar 20 firms, including HCC and L&T, from bidding for road projects
• M&M to consider issuance of bonus shares on Nov. 10.
• Torrent Pharma acquires the Indian formulations business of Unichem Laboratories for Rs 3,600 crore
• SBI AMC gets RBI nod to buy 10 percent stake in AU Small Finance Bank
• KSB Pumps begins commercial production of Energy Pump Division at its Satara unit
• Manoranjan Roy, chairman of Pincon Spirits, arrested in Rs 56 crore scam (Times Of India)
• NTPC says Unchahar plant shutdown not material to the company
• V2 Retail closed three operational retail stores in Bahraich (Uttar Pradesh), Haridwar (Uttarakhand) and Kishanganj (Bihar)
• Natco Pharma bought 7.5 percent stake at Rs 7.5 crore in OMRV Hospitals
• Oricon Enterprises To sell 51 percent stake in packaging unit for an enterprise value of Rs 419.40 crore t Pelliconi & C.S.P.A
• Jayaswal Neco Industries recommended debt restructuring plan to joint lender's forum
• Sadbhav Infra achieves financial closer for all seven hybrid annuity projects
• VRL Logistics to buyback 9 lakh equity shares (0.99 percent) at a price of Rs 460 per share; a 23 percent premium to Friday's closing price
• United Spirits obtained RBI approval to sell stake in Nepal subsidiary
• Southern Petrochemical Industries entered into an agreement with Keight Gas India to develop and supply re-gasified LNG
• GE T&D sold its global financial shared services business for Rs 6.5 crore in a slump sale
• Mercator to sell its vessel Harsha Prem for $3.42 million. Proceeds of the sale would be used to repay debt
• Reliance Comm: Brookfield calls of $200 million RCom deal for buying stake in its tower assets

Bulk Deals

Bharti Airtel

• Bharti Telecom bought 18.4 Crore shares or 4.6 percent equity stake at Rs 544.2 each.
• Indian Continent Investment Ltd sold 18.4 Crore shares or 4.6 percent equity stake at Rs 544.2 each.

Momai Apparels

• DSP Blackrock MF bought 4.99 lakh shares at Rs 140 each.
• Ashapura apparels Pvt Ltd sold 14.22 lakh shares at Rs 141.53 each.

Infibeam

• Amrapali Capital and Finance services bought 34.35 lakh shares or 0.6 percent equity stake at Rs 168.04 each.

Ruchi Soya

• Capston Capital Partners sold 20 lakh shares or 0.6 percent equity stake at Rs 28.01 each.

Ashapurapura Minechem

• Promoter Fizza S Lakdawala sold 9.4 lakh shares or 1.1 percent equity stake at Rs 62.47 each.

Soril Holding

• Anil Bansilal Lodha sold 6.75 lakh shares or 1.3 percent equity stake at Rs 110.45 each.
• ABL Infrastructure sold 5.95 lakh shares or 1.2 percent equity stake at Rs 110.45 each.
• Riddhi Portfolio bought 8.62 lakh shares or 1.7 percent equity stake at Rs 110.44 each.

Circuit Revisions

• PTL Enterprises, Aksh Optifibre, Rain Industries circuit filter revised to 10 percent.

IPO Watch

• Reliance Nippon Life Asset Management to make stock market debut after IPO. Gets 81 times demand. Base price of Rs 252 per share
• New India Assurance IPO day closes. Issue subscribed 1.2 times overall.
• Khadim India IPO day 3. Issue subscribed 0.45 times at end of day 2.

Who's Meeting Whom?

• ACC to meet RWC Partners in Mumbai on Nov. 6.
• Syngene Int to meet series of investors from Nov. 2 to Nov. 14.

Insider Trades

• Eicher Motors promoters buy over 4 lakh shares from open market on Nov. 1.
• Zee Entertainment promoter creates pledge of over 10 lakh shares on Oct. 31.
• Balasore Alloys sold around 1.25 lakh shares from Oct. 30-Nov. 1.
• JP Associates sold around 4.5 lakh shares from Oct. 31-Nov. 1.

(As reported on Nov. 3)

Index Trends

Top Movers & Shakers Last Week

F&O Cues

• Nifty Nov. Futures closed at 10,486 -- premium of 34 points versus 31 points
• November contracts: Nifty open interest up 2 percent; Bank Nifty open interest up 7 percent
• India Volatility Index closed at 11.9, down 0.7 percent
• Max OI for Nov. series at 10,500 call (at 30.5 lakh), down 6 percent
• Max OI for Nov. series at 10,000 put, (at 62.2 lakh), up 17 percent

F&O Ban

• In Ban: HDIL, Indiabulls Real Estate, JSW Energy.
• New in Ban: Reliance Communications.
• Out of Ban: Wockhardt.

Alert: Only intraday positions can be taken in stocks under F&O ban. There will be a penalty in case these intraday positions are rolled over.

Put Call Ratio

• Nifty PCR at 1.54 versus 1.52.
• Nifty Bank PCR at 1.36 versus 1.05.

Brokerage Radar

CLSA on Tata Power

• Maintained ‘Buy' with a price target of Rs 100.
• Previous quarter was uneventful; Await strategic divestiture in the second half of the current financial year.
• Expect earnings turnaround led by de-leveraging plan and net long-coal position.
• Multiple options of de-leveraging: Tata group buying back a part of the intra-group/defence stake, IPO of renewable assets and sale of 30 percent stake in Arutmin.
• Tata group will be under pressure to relieve Tata Power of intra-group investments, Deal possible in the second half of the current financial year.

CLSA on Union Bank

• Maintained ‘Buy'; hiked price target to Rs 210 from Rs 160.
• September quarter saw stabilising asset quality; Moderation in slippages encouraging.
• Though profitability levels are low, improvement in asset quality trends are encouraging.
• Earnings cut to factor non-provisioning loans; Resolution of some larger NPLs will be key to freeing capital.
• Expect some additional capital support from government.

CLSA on Torrent Pharmaceuticals

• Maintained ‘Buy'; Cut price target to Rs 1,640 from Rs 1,660.
• Acquisition valuation of Unichem's domestic business in-line with past deals.
• Acquisition to be earnings per share accretive by March 2021 which hinges on its ability to accelerate the sales growth of key Unichem brands.
• September Quarter highlights: India and Europe strong; Brazil, U.S. and CRAMS weak.
• Cut target to factor lower U.S. and Brazil sales.

Credit Suisse on Torrent Pharmaceuticals

• Maintained ‘Outperform'; hiked price target to Rs 1,600 from Rs 1,370.
• Synergies from Unichem's acquisition are double the expectations; 60 percent of synergies are cost-driven.
• Acquisition depresses immediate return on capital employed.
• Deal value accretive by 5 percent; Internal rate of return at 17 percent; Payback of nine years.
• Cut EPS estimates for the current and next financial years by 14 percent and 28 percent respectivcely due to high amortisation cost.

Nomura on Torrent Pharmaceuticals

• Maintained ‘Buy' with a price target of Rs 1,396.
• Unichem acquisition: a good deal.
• Despite adverse impact on near-term earnings, Expect deal to be value-accretive by Rs 150-250/share.
• Operational margin of acquired business can expand substantially through synergy benefits to 30-40 percent from 20 percent.
• Company's balance sheet is healthy and expect net debt to equity at just above 0.5 in the next financial year.

Credit Suisse on Titan

• Maintained Outperform; hiked price target to Rs 760 from Rs 635
• Previous quarter's jewellery margins surpassed massively- the highest ever clocked by the business.
• Market share gains to continue for Titan as local players on the back foot.
• Revenue guidance in the current financial year for jewellery maintained at 25 percent Which now needs only 11 percent growth in the second half.

Macquarie on Titan

• Maintained ‘Outperform'; Hiked price target to Rs 907 from Rs 700.
• Margin expansion of 260 basis points in jewellery more structural.
• Expect 30 percent growth in the current the current financial year, which requires 19 percent growth in the second half.
• Positives: higher momentum in wedding, high value diamond jewellery and favourable base.
• Raised earnings estimate for the financial years till March 2020 by 17-18 percent on account of higher jewellery sales and margin.

UBS on Titan

• Maintained ‘Buy'; Hiked price target to Rs 810 from Rs 750.
• Strong jewellery volumes in the previous quarter; Operational margin de-coupling from studded growth.
• Success of higher value gold designs is a key change.
• Titan can re-rate given superior volume growth potential, higher revenue growth visibility and renewed strategy to emphasise on regional wedding jewellery.
• Previous quarter also showed indicative of improved trajectory from other business segments and allay concerns of them being a drag on the core business.

BofA-ML on ICICI Lombard

• Initiated ‘Buy' rating and price target of Rs 810; Potential upside of 20 percent.
• Strong potential for profitable growth; Market not pricing under penetration and regulatory catalyst.
• Indian motor vehicle bill may act as significant catalyst for the motor insurance segment.
• Third party motor insurance may positively impact earnings per share forecasts by 30-45 percent.
• Premium valuations may sustain as investment yields and return ratios are superior to peers.
• Positives: Strong fundamentals, solid financial metrics, penetrated distribution provide edge.

Emkay on APL Apollo Tubes

• Initiated ‘Buy' with a price target of Rs 2,812; Potential Upside of 52 percent.
• Company has presence in sectors that are growing at higher pace than economy
• Market share to expand to 17 percent by March 2020 versus 13 percent in the financial year ended- March 2017.
• Expect Revenue, Operating income and earnings per share to grow at a compound annual growth rate of 17 percent, 23 percent and 31 percent respectively, over the three financial years till March 2020.
• Return on equity, capital employed to improve to 27 percent and 31 percent respectively by March 2020, compared to 23 percent and 21 percent respectively in the financial year ending March 2017.
• EBITDA/tonne to rise to Rs 3,741 by March 2020, versus Rs 3,375 in the financial year ended - March 2017, led by value added products
• Expect outperformance to sustain on robust earnings performance and return profile expansion.
• Valuations still attractive despite the run-up in past one year.

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