All You Need To Know Going Into Trade On November 7

Asian stocks were mixed at the open, trading near recent highs. Japan's equity gauges fluctuated, while Australia's benchmark advanced after the S&P 500 Index chalked up another record close. The U.S. dollar was little changed after declining against all G10 peers Monday.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, rose 0.2 percent to 10,498 as of 7:00 a.m.

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DayBreak

Global Cues

• U.S. stocks climbed as President Donald Trump tried to tackle trade on his Asia tour.
• Equities posted broad gains despite weakness in telephone shares following the collapse of merger talks between Sprint Corp. and T-Mobile U.S. Inc.
• Technology stocks rose as Broadcom Ltd. geared up for a hostile bid for Qualcomm Inc., in what would be the largest tech deal ever.

#BQMarketsNow | U.S. stocks rise as Trump talks Asia trade.https://t.co/CTzkQ2F3g0 pic.twitter.com/dTzihcuLUd

• The Stoxx Europe 600 Index climbed after a European purchasing managers index indicated strong momentum at the start of the fourth quarter.

Asian Cues

• The Topix index rose 0.2 percent
• The S&P/ASX 200 Index added 0.8 percent.
• South Korea's Kospi index was little changed.
• Futures contracts on Hong Kong's Hang Seng Index were up 0.1 percent.
• Futures on the S&P 500 Index also were little changed.

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.

Trump's policies have done nothing for stocks, writes @RenMacLLC.https://t.co/BlbpNakNZP pic.twitter.com/JDwtyBpadP

Commodity Cues

• West Texas Intermediate crude gained 3.1 percent to $57.34 a barrel, the highest since June 2015.
• Gold increased 0.9 percent to $1,281.04 an ounce.
• ICE sugar ended higher for second day at 14.56 cents a pound; up 1.25 percent.

Shanghai Exchange

• Steel trades higher for sixth consecutive session; up 0.90 percent
• Aluminium trades lower for fourth day; down 0.25 percent
• Zinc snaps three-day losing streak; up 0.12 percent
• Copper trades higher; up 0.74 percent
• Rubber trades higher for second day; up 0.80 percent

Indian ADRs

Nifty Results Today

• Cipla

Other Results Today

• Aditya Birla Capital
• Alembic Pharmaceuticals
• Bharat Heavy Electricals
• Castrol India
• Dalmia Bharat
• Future Retail
• Himatsingka Seide
• Jyothy Laboratories
• L&T Technology Services
• Liberty Shoes
• Manappuram Finance
• Prestige Estates Projects
• Tata Coffee
• Tata Investment Corporation
• Teamlease Services
• Thermax
• VIP Industries

Results Announced

Torrent Power (Q2FY18, YoY)

• Revenue up 9 percent at Rs 2915 crore.
• Net profit up 125 percent at Rs 317.6 crore.
• EBITDA up 27 percent at Rs 838 crore.
• Margin at 28.7 percent versus 24.6 percent.

Just Dial (Q2FY18, QoQ)

• Revenue up 2.4 percent at Rs 194.5 crore.
• Net profit down 1.8 percent at Rs 37.5 crore.
• EBIT up 19.7 percent at Rs 39.5 crore.
• Margin at 20.3 percent versus 17.4 percent.

L&T Infotech (Q2FY18, QoQ)

• Revenue from operations up 4.8 percent at Rs 1,751 crore.
• Net profit up 2.2 percent at Rs 273 crore.
• EBIT up 5.1 percent at Rs 286 crore.
• Margin flat at 16.3 percent.

KEC International (Q2FY18, YoY)

• Revenue up 3 percent at Rs 2,132 crore.
• Net profit up 37.5 percent At Rs 89.4 crore.
• EBITDA up 16.5 percent at Rs 215.8 crore.
• Margin at 10.1 percent versus 8.9 percent.

NRB Bearings (Q2FY18, YoY)

• Revenue up 16 percent at Rs 208 crore.
• Net profit up 24 percent at Rs 21 crore.
• EBITDA up 18.5 percent at Rs 41.7 crore.
• Margin at 20 percent versus 19.6 percent.

Gujarat Industries (Q2FY18, YoY)

• Revenue up 2.6 percent at Rs 323.7 crore.
• Net profit up 5.5 percent at Rs 53.3 crore.
• EBITDA up 26.7 percent at Rs 119.6 crore.
• Margin at 36.9 percent versus 29.9 percent.

Gulf Oil Lubricants (Q2FY18, YoY)

• Revenue up 22.3 percent at Rs 323 crore.
• Net profit up 37.9 percent at Rs 40 crore.
• EBITDA up 40.9 percent at Rs 62 crore.
• Margin at 19.2 percent versus 16.67 percent.

Jaiprakash Power Ventures (Q2FY18, YoY)

• Revenue up 24.6 percent at Rs 826 crore.
• Net loss of Rs 157 crore from a loss of Rs 162 crore.
• EBITDA up 8.6 percent at Rs 303 crore.
• Margin at 36.7 percent versus 42.1 percent.

Thomas Cook (Q2FY18, YoY)

• Revenue up 27.9 percent at Rs 2,676 crore.
• Net profit up 166.67 percent at Rs 24 crore.
• EBITDA down 2.2 percent at Rs 66.5 crore.
• Margin at 2.5 percent versus 3.3 percent.

Gujarat Gas (Q2FY18, YoY)

• Revenue up 12 percent at Rs 1391.4 crore.
• Net profit down 12 percent at Rs 61 crore.
• EBITDA down 3.2 percent at Rs 202.6 crore.
• Margin at 14.6 percent versus 16.9 percent.

TRF Ltd (Q2FY18, YoY)

• Revenue up 7.3 percent at Rs 219 crore.
• Net loss of Rs 32 crore from a loss of Rs 16 crore.
• EBITDA loss at Rs 37 crore from Rs 0.5 crore
• Margin at -17 percent from 0.2 percent

Stocks To Watch

• Reliance Communications inked pact with Veecon Media & TV to sell Reliance Big TV's DTH operations across India.
• Bank of Maharashtra set one-Year MCLR at 8.65 percent, effective from today.
• Axiscades Engineering Technologies to acquire Mistral solutions for Rs 175 crore.
• Shreyas Shipping sold its vessel M.V.SSL Sagarmala for a consideration of $1.24 million.
• Sagar Cement Cement production up 15.5 percent in October at 195,066 million tonne.
• Narayana Hrudayalaya to acquire 71.4 percent stake in Health City Cayman Islands through its subsidiary for $32.26 million.
• Muthoot Capital Services: Launched QIP to raise Rs 200 crore. Price band at Rs 601-610 per share as per term sheet.
• Mercator launches QIP. Floor price at Rs 44.65 per share.
• Sun Pharma's subsidiary Taro to report results tonight.
• Tata Chemicals sells its Phosphatic Fertilisers business, to IRC Agrochemicals Private Ltd. for Rs. 375 crore.

Bulk Deals

• Parag Milk Foods: Abu Dhabi Investment Authority sold 4.96 lakh shares or 0.6 percent equity stake at Rs 282.5 each.

Circuit Revisions

• Circuit filter revised to 10 percent: STCI, Hindustan Copper, ILFS Engineering.

IPO

• Khadim India IPO closed with a final subscription of 1.9 times.
• HDFC Standard Life Insurance IPO opened with an issue price Rs 275-290 per share.

Who's Meeting Whom?

• Shriram Transport to meet Lazard, BofA ML, MS, UBS from Nov. 7-17.
• MCX to meet ICICI Securities and Axis Capital on Nov. 9-10.
• TVS Motor to meet capital world advisors from Nov. 8-10.
• Crompton Greaves consumer to meet several funds from Nov. 8-21.
• M&M Financial to meet investor groups on Nov. 7.

Insider Trades

• Kalpataru Power promoter revokes pledge of over 34 lakh shares on Nov. 3.
• Autoline Industries promoter purchased over 7 lakh shares via preferential allotment on Nov. 3-4.
• Shree Pushkar Chem promoter purchased 40,000 shares from open market on Oct. 16.

Rupee

• Rupee closed at 64.68/$ on Monday from 64.55/$ on Friday.

Top Gainers And Losers

Index Trends

F&O Cues

• Nifty November futures closed at 10,489.5, premium of 37.7 points versus 34 points.
• November contracts: Nifty open interest up 1 percent; Bank Nifty open interest up 7 percent.
• India VIX closed at 9.3 percent higher at 13.
• Max open interest for November series at 10,500 Call (Open interest at 32.8 lakh, up 8 percent).
• Max open interest for November series at 10,000 Put (Open interest at 62.5 lakh, up 1 percent).

F&O Ban

• In ban: DHFL, HDIL , Indiabulls Real Estate, Infibeam, JSW Energy, Reliance Communications, Wockhardt.
• New in ban: DHFL, Infibeam, Wockhardt.

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

Put-Call Ratio

• Nifty PCR at 1.55 from 1.54.
• Nifty Bank PCR at 1.20 from 1.36.

Stocks Seeing High Open Interest Change

Fund Flows

Brokerage Radar

Nomura on Cummins India

• Maintained ‘Neutral'; Cut price target to Rs 898 from Rs 909.
• Growth in the first half of current financial year has likely bottomed out; Revival unlikely to be speedy.
• Cut EPS estimates for the current and next financial year by 18-21 percent on weak exports and margins.
• Recent slowdown in domestic segments on account of GST is likely to be temporary.
• AIA Engineering is preferred pick.

Credit Suisse on Nestle India

• Maintained ‘Outperform'; Hiked price target to Rs 8,200 from Rs 7,700.
• Nestle India has seen volume turnaround after seven years of flat volumes.
• Operating margins at near ten-year low, due to higher ad spends higher depreciation.
• Guidance of 150-250 basis points margin expansion over four years lift target price.
• Expect Nestle to have cost savings from GST.

Deutsche Bank on Rural Electrification

• Maintained ‘Buy' with price target of Rs 200.
• Weak margins were reported during the previous quarter, but asset quality was stable
• Growth trajectory is steady, asset quality is holding up well.
• Return on equity to be at 17 percent and 5 percent dividend yield make stock attractive.
• REC to benefit from UDAY and limited system wide appetite for power sector lending.

UBS on Rural Electrification

• Maintained ‘Buy' with price target of Rs 235.
• Margins declined sharply during the previous quarter; Return on equity below 15 percent.
• Earnings per share cut likely to happen in the current or the next financial year; Await more clarity on loan re-pricing.
• Asset quality was stable with provisions maintained.
• Buy given in-expensive valuations, strong capital and return ratios and dividend yields.

Deutsche Bank on Gujarat Gas

• Maintained ‘Buy' with a price target of Rs 1,055.
• Previous quarter was below estimates due to lower margins on account of higher gas cost and other expenses.
• Higher other expenses partly due to flood relief efforts and unrecoverable GST related impact.
• Cut earnings per share estimates for the current and the next financial year by 9 percent and 2 percent respectively to factor lower volumes and margins reported in the September quarter.
• Expect earnings per share estimates to grow at a compound annual growth rate of 71 percent over till March 2019, led by growth in volumes and margins.
• Expect volumes to bounce back in the current quarter due to ramp-up of new areas.

JM Financial on DCB Bank

• Initiated ‘Buy' with price target of Rs 230; Potential upside of 27 percent
• Increased synergies and efficiencies to drive better fee income accretion.
• Expect cost ratios to improve; Expect earnings CAGR of 25 percent over the next five years.
• Return on equity and asset to improve to 15 percent and 1.24 percent respectively by March 2020.
• Positives: consistent growth, healthy net interest margins, improving operating costs and strong asset quality.

JM Financials on Federal Bank

• Initiated ‘Buy' with price target of Rs 140; Potential upside of 21 percent.
• Federal Bank's focus remains on sweating existing assets; Return on asset to turnaround.
• Tapering of operating and credit costs to boost return profile.
• Return on equity and asset to improve to 13 percent and 1.02 percent respectively by March 2020.
• Net interest margins to remain range bound 3.06-3.14 percent for the financial years till March 2020.

JM Financials on City Union Bank

• Initiated ‘Buy' with a price target of Rs 185; Potential upside of 13 percent.
• Expect margins to come off slightly driven by competition.
• Deposit accretion to remain stable; CASA unlikely to show meaningful upside.
• Asset quality within control; Credit costs to taper off by March 2020.
• Improvement in credit costs to keep earnings on an improving track.
• Expect Bank to continue on its steady growth path.
• City Union is a healthy compounding play with greater bottomline visbility over the medium term.

CLSA on Westlife Development

• Maintained ‘Buy'; hiked price target to Rs 320 from Rs 300.
• Higher footfalls and internal measures are helping to deliver high growth rates and strong margin expansion.
• Management confident of sustaining growth momentum and guides for high-single-digit same store sales growth for the current financial year.
• Raised operating income estimates by 10-14 percent to factor in the previous quarter results.
• Westlife is an interesting play on recovery in urban discretionary consumption.

Macquarie on Just Dial

• Previous quarter results were ahead of estimates due to stringent cost controls.
• Remain wary of the muted topline growth and believe company continues to face structural headwinds.

Morgan Stanley on Just Dial

• Maintained ‘Underweight' with price target of Rs 360.
• Revenue growth didn't show signs of pickup .
• Volume growth remained muted.
• Sales headcount declined for second consecutive quarter.
• Margin beat was primarily cost-led.

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