All You Need To Know Going Into Trade On Oct. 26 

Asian stocks began Friday mixed at the end of a torrid week that dragged the region's equities deeper into a bear market.

Japan's Topix index climbed, though it's still on track for a slide of almost 5 percent this week. South Korean shares slipped and in Australia, stocks were flat. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, fell 0.1 percent to 10,172.50 as of 7:10 a.m.

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BQ Live

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

U.S. Market Check

• U.S. stocks surged back into positive territory, with the Nasdaq Composite Index registering its biggest increase since March, a day after a broad-based rout sent equities negative for the year.
• The yield on 10-year Treasuries slid two basis points to 3.10 percent.

#BQMarketWrap | U.S. stocks roar back, erasing most of yesterday's loss.

Read: https://t.co/DNaSTOre6q pic.twitter.com/yl69ZaTHqi

Europe Market Check

• European stocks ended higher, as U.S. stocks rebounded after a sharp sell-off on Wednesday.

Asian Cues

• Japan's Topix index rose 0.6 percent.
• FTSE China A50 index futures added 0.8 percent.
• Australia's S&P/ASX 200 Index gained less than 0.1 percent.
• Futures on Hong Kong's Hang Seng rose 1 percent.
• Futures on the S&P 500 fell 0.7 percent. Futures on the Nasdaq 100 lost 0.9 percent.

Commodity Cues

• West Texas Intermediate crude slid 0.7 percent to $66.89 a barrel.
• Brent crude traded 0.5 percent lower at $76.50 per barrel.
• Gold was steady at $1,231.84 an ounce.

Shanghai Exchange:

• Copper snapped a two-day decline, up 0.5 percent.
• Zinc snapped a three-day winning streak, down 0.9 percent.
• Steel traded higher for the second day, up 1 percent.
• Aluminium traded lower for the second day, down 0.2 percent.
• Rubber snapped a three-day losing streak, up 0.6 percent.

Indian ADRs

Stocks To Watch

• RBI clarified that Ujjivan Financial and Equitas Holdings must list small finance bank separately.
• Ruia family offered to pay all creditors to retain ownership of Essar Steel.
• Shalimar Paints to issue 3.37 crore equity shares via rights issue at a price of Rs 64.50 per share. Rights entitlement ratio fixed at 3:2.
• ArcelorMittal said that the law did not permit Ruia's offer to withdraw Essar Steel from insolvency.
• Kridhan Infra arm received construction order worth Rs 167 crore.
• Tata Teleservices Board said it was considering an extension of redeemable preference shares on Nov. 15.
• JSW Steel's board approved raising Rs 5,000 crore through a rights issue. Also, it will merge four subsidiaries with itself.
• IDFC Bank said that only NCLT approval pending for Capital First merger.
• Jubilant Industries said it will offer up to 18 lakh equity share and up to 13 lakh convertible warrants to the promoters/ members of promoter group on a preferential basis.
• IL&FS Transportation said it was considering selling some road projects stakes: Bloomberg News.

Nifty Earnings To Watch

• ICICI Bank
• ITC
• UPL
• Dr. Reddy's Lab

Other Earnings To Watch

• Bharat Electronics
• Capital First
• Kokuyo Camlin
• Mahindra Lifespace Developers
• Nestle India
• Nucleus Software Exports
• PI Industries
• Shoppers Stop
• Shriram Asset Management

Earnings Reactions To Watch

Yes Bank (YoY)

• Net Interest Income up 27 percent at Rs 2,407 crore.
• Net profit down 4 percent at Rs 965 crore.
• Provisions up 50 percent at Rs 940 crore.
• GNPA at 1.60 percent versus 1.31 percent (QoQ).
• NNPA at 0.84 percent versus 0.59 percent (QoQ).

Bharti Airtel (QoQ)

• Revenue up 2 percent at Rs 20,423 crore.
• Net Profit up 22 percent at Rs 119 crore.
• Ebitda down 7 percent at Rs 6,244 crore.
• Margin at 30.6 percent versus 33.5 percent.
• India ARPU at Rs 101 versus Rs 105.

Biocon (YoY)

• Revenue up 36 percent at Rs 1,321 crore.
• Net profit up 5.1 times at Rs 355 crore.
• Ebitda up 86 percent at Rs 340 crore.
• Margin at 25.7 percent versus 18.9 percent.
• Exceptional gain of Rs 189 crore.

Liberty Shoes (YoY)

• Revenue up 32.6 percent to Rs 166.9 crore.
• Ebitda up 17.8 percent to Rs 10.9 crore.
• Margin at 6.5 percent versus 7.3 percent.
• Profit at Rs 2.02 crore versus Rs 1.2 crore.

L&T Technologies (YoY)

• Revenue up 40.6 percent at Rs 1,226.1 crore.
• Ebitda up 66.5 percent at Rs 228.8 crore.
• Ebitda Margin at 18.1 percent.
• Profit up 55.7 percent at Rs 191 crore.

Tata Coffee (YoY)

• Revenue up 19.3 percent at Rs 455.9 crore.
• Net profit up 11.4 percent at Rs 25.4 crore.
• Ebitda down by 18 percent at Rs 58.8 crore.
• Margin at 12.8 percent versus 18.7 percent.

Ceat (YoY)

• Revenue up 15 percent to Rs 1,755 crore.
• Ebitda down 9 percent to Rs 159 crore.
• Ebitda Margin at 9.1 percent versus 11.5 percent.
• Net profit down 18 percent to Rs 63.2 crore.

Gujarat Mineral Development Corporation (YoY)

• Revenue down 12 percent to Rs 332 crore.
• Ebitda down 14 percent to Rs 114 crore.
• Margin at 34.2 percent versus 35 percent.
• Net Loss of Rs 222 crore.

JM Financial (YoY)

• Revenue up 27 percent to Rs 960 crore.
• Net profit up 14 percent to Rs 240 crore.
• GNPA at 0.5 percent versus 0.6 percent (QoQ).
• NNPA at 0.4 percent versus 0.5 percent (QoQ).

Kewal Kiran Clothing (Standalone; YoY)

• Revenue down 9 percent to Rs 152 crore.
• Ebitda down 2 percent to Rs 48 crore.
• Margin at 31.4 percent versus 29.2 percent.
• Net Profit down 4.6 percent to Rs 34 crore.

Crompton Greaves Consumer Electricals (YoY)

• Revenue up 8 percent at Rs 1,038 crore.
• Net profit up 8.5 percent at Rs 77 crore.
• Ebitda up 2.5 percent at Rs 124 crore.
• Margin at 11.9 percent versus 12.6 percent.

Shriram City Union Finance (YoY)

• Net Interest Income up 17 percent at Rs 1,020 crore.
• Net profit up 6 percent at Rs 249 crore.

Raymond (YoY)

• Revenue up 16 percent at Rs 1,848 crore.
• Net profit up 5 percent at Rs 63 crore.
• Ebitda up 35 percent at Rs 186 crore.
• Margin at 10.1 percent versus 8.6 percent.

Shriram Transport Finance (Q2, YoY)

• NII up 24.6 percent at Rs 2,055 crore.
• Net profit up 22.6 percent at Rs 609 crore.
• NIM on AUM at 7.52 percent versus 7.44 percent.
• Core operating profit was above 23.5 percent.
• Provisions at Rs 683 crore versus Rs 523 crore (QoQ).

Insider Trades

• Electrosteel Castings Ltd promoters acquired 3.14 lakh shares from Oct. 19 – 24.
• Centrum Capital Ltd promoter BG Advisory Services LLP acquired 1.13 lakh shares from Oct. 19 – 22.
• Mayur Uniquoters Ltd promoter kiran poddar acquired 200 shares on Oct. 24.
• Dhunseri Petrochem Ltd promoter Dhunseri Investments Ltd acquired 13,967 shares from Oct. 22 – 23.
• NRB Bearings promoter Harshbeena Sahney Zaveri acquired 10,034 shares on Oct. 24.
• Axis Bank promoter Life Insurance Corporation Of India sold 18.65 lakh shares on Oct. 24.
• RPG Life Sciences Ltd promoter Ektara Enterprises LLP acquired 23,671 shares on Oct. 23.
• Cox & Kings promoter Sneh Sadan Traders & Agents Ltd. acquired 49,144 shares on Oct. 23.
• PSP Projects promoter Prahaladbhai Patel acquired 5,010 shares from Oct. 23 – 24.

(As reported on Oct. 25)

Bulk Deals

• Bharat Financial Inclusion: Route One Fund buys 8 lakh shares or 0.6 percent equity at Rs 914.17 each.
• Mastek Ltd: KIFS Enterprises sold 2 lakh shares or 0.8 percent equity at Rs 405.25 each.

Money Market Update

• Rupee closed at 73.28/$ on Thursday from 73.16/$ on Wednesday.

F&O Cues

• Nifty November futures closed trading at 10174, premium of 50 points.
• Nifty November open interest up 28 percent; Nifty Bank October open interest up 68 percent.
• Max open interest for October series at 11,000 Call (open interest at 19.9 lakh shares).
• Max open interest for October series at 10,000 Put (open interest at 30.7 lakh shares).

Put Call Ratio

• Nifty PCR at 0.97 from 1.1.
• Nifty Bank PCR at 0.85 from 0.82.

Brokerage Radar

On Yes Bank

CLSA

• Maintained ‘Buy'; cut price target to Rs 300 from Rs 450, implying a potential upside of 51 percent from the last regular trade.
• Earnings miss on higher provisioning.
• Cut earnings estimates to build-in higher credit costs and slower top-line.
• Succession clarity key; Capital will force consolidation near term.

Macquarie

• Maintained ‘Outperform'; cut price target to Rs 310 from Rs 416, implying a potential upside of 56 percent from the last regular trade.
• GNPA rose led by lumpy slippages.
• Cut estimates largely due to cut in growth and an increase in credit costs.
• Ruling out chances of near term capital raise.

JPMorgan

• Maintained ‘Neutral'; cut price target to Rs 225 from Rs 260, implying a potential upside of 13 percent from the last regular trade.
• September quarter review: Earnings miss on bond provisions.
• Loan growth remains solid; Slippages increased sharply almost doubling on a sequential basis.
• Leadership and capital two key constraints on valuations.

On JSW Steel

CLSA

• Downgraded to ‘Underperform' from ‘Buy'; cut price target to Rs 375 from Rs 410, implying a potential upside of 6 percent from the last regular trade.
• Ebitda beat estimates, margins soften sequentially.
• Steel spread contracting from recent highs; expect softer margins in the second half of the current financial year.
• High-priced acquisition and potential iron ore constraints post March 2020 pose risk.

Macquarie

• Maintained ‘Neutral'; cut price target to Rs 362 from Rs 411, implying a potential upside of 2 percent from the last regular trade.
• September quarter's Ebitda was ahead led by better realisation with higher domestic sales mix.
• See margin headwinds ahead with higher raw material and stagnant steel prices.
• Cut price target on lower target multiple, uncertainty around inorganic growth and equity dilution.

On Maruti Suzuki

CLSA

• Maintained ‘Buy' with a price target of Rs 9,200, implying a potential upside of 37 percent from the last regular trade.
• September quarter's Ebitda and net profit were broadly inline.
• Do not see much risk to Maruti's volume.
• Near-term pressures but valuations more conducive.

Macquarie

• Maintained ‘Outperform' with a price target of Rs 9,000, implying a potential upside of 34 percent from the last regular trade.
• Solid fundamentals outweigh near-term risks.
• Multiple levers to mitigate cost inflation medium-term.
• Expect Maruti to grow ahead of industry given its strong rural network.

Morgan Stanley

• Maintained ‘Overweight' with a price target of Rs 8,725, implying a potential upside of 30 percent from the last regular trade.
• Reported inline results; Management maintained 2018-19 outlook.
• Expect Maruti to continue to get engineering payout from Suzuki due to new launches.
• Company expects volumes to recover and maintained double-digit volume growth outlook for the current financial year.

On BHEL

Jefferies

• Maintained ‘Underperform' with a price target of Rs 70, implying a potential downside of 0.5 percent from the last regular trade.
• September quarter results came in below expectations led by higher raw material expenses.
• Remain negative on BHEL as there is no change in the outlook.
• Announced equity buyback at Rs 86 does not move the needle.

Deutsche Bank Research

• Maintained ‘Buy'; cut price target to Rs 99 from Rs 110, implying a potential upside of 41 percent from the last regular trade.
• Negative operating leverage, amidst rising power demand and tariffs.
• Medium-term thesis intact, though near-term transition pains.
• Find valuation support due to buyback at premium.

More Calls

Macquarie on Ujjivan Financial

• Maintained ‘Outperform' with a price target of Rs 460, implying a potential upside of 109 percent from the last regular trade.
• RBI denied IPO exemption for small finance bank.
• Negative for Ujjivan Financial as an IPO of SFB will result in dual listing and attract a Hold Co. discount.
• Due date for this for Ujjivan is January 2020 and for Equitas is September 2019.
• Stock could fail to attract new buyers if SFB lists separately.
• Stock now suitable only for truly long-horizon investors willing to ride out this hoopla.

Credit Suisse on Bharti Airtel

• Maintained ‘Neutral' with a price target of Rs 400, implying a potential upside of 35 percent from the last regular trade.
• See further sharp slide in India business metrics.
• Deferred tax benefits helped return to profit.
• See an upside risk to capex, which does not bode well for leverage.

CLSA on PVR

• Maintained ‘Buy'; cut price target to Rs 1,540 from Rs 1,690, implying a potential upside of 20 percent from the last regular trade.
• Strong all-round performance; Cost pressure a bit concerning.
• SPI Cinema acquisition, online platform deal fortifies leadership position.
• Cut EPS estimates by 2-3 percent to account for higher capex and SPI acquisition.

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