All You Need To Know Going Into Trade On Oct. 30

Asian stocks erased early declines to nudge higher as investors shrugged off the prospect of U.S. tariffs on all Chinese imports that had weighed on American equities.

Equities rose in Japan as the yen dipped and also in South Korea as S&P 500 Index futures climbed. Australian shares slipped, while futures in China and Hong Kong tipped a muted open. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, fell 0.3 percent to 10,241 as of 7 a.m.

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

U.S. Market Check

• U.S. stocks fell, with the S&P 500 flirting with a correction as technology shares tumbled after a report the Trump administration was set to press its trade war with China.
• The yield on 10-year Treasuries rose one basis point to 3.09 percent.

#BQMarketWrap | U.S. Tech stocks sink on trade angst.

Read: https://t.co/rxyUsgEeqb pic.twitter.com/KqBV3GcJoW

October 30, 2018

Europe Market Check

• European shares closed higher, reversing Friday's decline, led by automobile stocks amid hopes that China could cut its purchasing tax on cars by as much as 50 percent.

Asian Cues

• Japan's Topix index rose 0.7 percent.
• Australia's S&P/ASX 200 Index lost 0.2 percent.
• South Korea's Kospi index gained 0.6 percent.
• Hong Kong's Hang Seng Index futures were little changed as were the FTSE China A50 contracts.
• S&P 500 futures rose 0.4 percent.

Commodity Cues

• West Texas Intermediate crude decreased 0.3 percent to $66.86 a barrel Monday.
• Brent crude traded lower for the second day, down 0.6 percent.
• Gold was steady at $1,229.21 an ounce after sliding 0.3 percent.

Shanghai Exchange:

• Copper traded lower for the second day, down 0.5 percent.
• Zinc traded 1.8 percent lower.
• Steel traded lower for the second day, down 0.3 percent.
• Aluminium traded lower for the fourth day, down 0.7 percent.
• Rubber traded lower for the second day, down 2.1 percent.

Indian ADRs

Stocks To Watch

• BHEL board approved buyback of 18.93 crore shares at Rs 86 apiece, aggregating to Rs 1,628.3 crore. The record date is set for Nov. 6.
• Jet Airways clarified that it had not defaulted on lease rentals and was continuously updating its partners on efforts undertaken by the company to improve its liquidity.
• Bharti Airtel clarified that Airtel Africa IPO preparations were proceeding as per plan and there was no change in plans. The new board is in place with new investor's representatives.
• Redington proposed buyback of 1.1 crore equity shares at Rs 125 each, aggregating to Rs 139 crore.
• The Reserve Bank of India approved reappointment of Aditya Puri as MD and CEO of HDFC Bank till October 2020.
• Rane Holdings approved divestment of 48.97 percent stake in its JV ‘JMA Rane Marketing.'
• Cadila Healthcare acquired 51 percent stake in Windlas Healthcare.
• Biocon along with its partner Mylan received a positive CHMP opinion from European Medicines Agency's Committee for recommending approval of Ogivri. This opinion will be considered by the European Commision with decision expected at the end of the year.
• Allahabad Bank increased its MCLR by five basis points across all tenors. Overnight MCLR at 8.05 percent and one year MCLR at 8.55 percent.
• HSIL signed a distribution agreement with Formenti E Giovenzana of Italy, giving exclusive distribution rights to the company for India and other territories as may be mutually agreed, for distribution of kitchen and furniture functional hardware fitting products manufactured by the Italian company.

Nifty Earnings To Watch

• Tech Mahindra

Other Earnings To Watch

• Bank of Baroda
• ABB, Container Corporation of India
• Cummins India
• Dalmia Bharat
• Info Edge
• IRB Infrastructure Developers
• Manpasand Beverages
• Pidilite Industries
• Prestige Estates Projects
• Tata Global Beverages
• TeamLease Services
• Ramco Cements
• Torrent Power
• Unichem Laboratories

Earnings Reactions To Watch

BPCL (Q2, QoQ)

• Revenue up 0.9 percent at Rs 72345.8 crore.
• Net profit down 46.9 percent at Rs 1218.7 crore.
• Ebitda down 37.6 percent at Rs 2419.5 crore.
• Margins at 3.3 percent versus 5.4 percent.

LIC Housing Finance (Q2 ,YoY)

• Net interest income up 9.2 percent at Rs 1059.9 crore.
• Net profit up 11.5 percent at Rs 573.2 crore.

Union Bank of India (Q2, YoY)

• Net interest income up 7.4 percent at Rs 2493.1 crore.
• Net profit at Rs 139 crore versus Net loss at Rs 1530.7 crore.
• Net NPA at 8.42 percent versus 8.70 percent (QoQ).
• Provisions for NPAs At Rs 1710 Crore versus Rs 1803.2 crore (QoQ).
• Gross NPA at 15.74 percent Versus 16 percent. (QoQ).

Just Dial (Q2, YoY)

• Revenue up 13.6 percent at Rs 221 crore.
• Net profit up 29 percent at Rs 48.4 crore.
• Ebitda up 44.9 percent at Rs 57.4 crore.
• Margin at 26 percent versus 20.4 percent.

Thirumalai Chemicals (Q2, Consolidated YoY)

• Revenue up 16.7 percent at Rs 363.4 crore.
• Net profit up 14.7 percent at Rs 53.1 crore.
• Ebitda up 12.2 percent at Rs 88 crore versus Rs 78.4 crore.
• Margin at 24.2 percent versus 25.2 percent.

DCM Shriram (Q2, Consolidated YoY)

• Revenue up 5.9 percent at Rs 1700.1 crore.
• Net profit down 1.9 percent at Rs 168.7 crore.
• Ebitda up 2.1 percent at Rs 296.3 crore.
• Margin at 17.4 percent versus 18.1 percent.

HDFC AMC (Q2, YoY)

• Revenue up 11.7 percent at Rs 480.4 crore.
• Net profit up 14.5 percent at Rs 205.9 crore.
• EBIT up 10.9 percent at Rs 262.4 crore.
• Margin at 54.6 percent versus 55 percent.

Granules India Consolidated (Q2, YoY)

• Revenue up 48 percent at Rs 580.9 crore.
• Net profit up 49.6 percent at Rs 60.3 crore.
• Ebitda up 30.7 percent at Rs 100.5 crore.
• Margin at 17.3 percent versus 19.6 percent.

Nilkamal Standalone (Q2, YoY)

• Revenue up 32.1 percent at Rs 613.7 crore.
• Net profit down 10.4 percent at Rs 24.9 crore.
• Ebitda down 14.5 percent at Rs 49 crore.
• Margin at 8 percent versus 12.3 percent.
• Cost of material up 72.7 percent at Rs 251.6 crore.

Mahindra Holiday & Resorts (Q2, Standalone YoY)

• Revenue down 12.8 percent at Rs 209.4 crore.
• Net profit down 54.3 percent at Rs 14.5 crore.
• EBITDA down 57.5 percent at Rs 23.1 crore.
• Margin at 11 percent versus 22.6 percent.

Sun Pharma Advanced Research (Q2, YoY)

• Revenue up 4 times at Rs 61.4 crore.
• Net loss at Rs 2.6 crore versus Net loss at Rs 62.6 crore
• Ebitda loss at Rs 5.1 crore versus Ebitda loss at Rs 61.4 crore

HSIL (Q2, Standalone YoY)

• Revenue up 17.2 percent at Rs 622.7 crore.
• Net profit down 80 percent at Rs 4.7 crore.
• Ebitda down 28.6 percent at Rs 51.5 crore.
• Margins at 8.3 percent versus 13.6 percent.
• Cost Material at Rs 147.2 crore versus Rs 103.8 crore.

Bulk Deals

• Ujjivan Financial Services: Franklin Templeton MF acquired 10.5 lakh shares (0.87 percent) at Rs 184.44 each.

Who's Meeting Whom

• Shriram Transport Finance to meet Marshall Wace, Wardferry and other investors from Oct. 30 to Nov. 2.

Insider Trades

• Axis Bank promoter LIC sold 13.2 lakh shares on Oct. 26.
• Sobha promoter group sold 4,500 shares on Oct. 26.

(As reported on Oct. 29)

Trading Tweaks

• Motherson Sumi Systems ex-date for 1:2 bonus issue.
• Cochin Shipyard ex-date to determine buyback eligibility.

Money Market Update

• Rupee ended at 73.45/$ on Monday versus 73.47/$ on Friday.

F&O Cues

• Nifty October futures closed trading at 10284, premium of 24 points
• Nifty Nov open interest down 0.3 percent; Nifty Bank Nov open interest down 5.6 percent
• Max open interest for November series at 10,800 strike value call option, (open interest at 18.8 lakh shares)
• Max open interest for November series at 10,000 strike value put option, (open interest at 38.8 lakh shares)

Stocks In F&O Ban

• Adani Power

Put Call Ratio

• Nifty PCR at 1.51 from 1.44.
• Nifty Bank PCR at 1.26 from 0.66.

Brokerage Radar

Jefferies on Colgate

• Maintained ‘Hold' with a price target of Rs 1,225.
• September quarter result review: Inline quarter; volumes show pick-up.
• Volume growth better than expected due to rural growth and market share stabilising.
• Concerned on high competitive intensity in oral care and margins peaking out.

Motilal Oswal on BPCL

• Maintained ‘Buy' with a price target of Rs 397.
• Adjusted Ebitda below estimates due to lower GRMs and higher opex.
• Core GRM was lower at both Kochi and Mumbai refineries.
• Kochi expansion in next few quarters to expand GRM by $2 a barrel.

Citi on Tata Power

• Maintained ‘Neutral' with a price target of Rs 77.
• September quarter's results were average; Supreme Court order is positive.
• Believe CERC decision will be subject to being contested in the APTEL and Supreme Court.
• Do not build in any positive impact in our numbers currently.

Citi on Cipla

• Maintained ‘Buy' with a price target of Rs 690.
• Toprol XL – Another good approval.
• Company has received several approval in last few months which would lead to earnings growth.
• Cipla's U.S. business is at inflection point; ramp up to be a key catalyst .

On PI Industries

Investec

• Maintained ‘Buy'; raised price target to Rs 950 from Rs 880.
• September quarter's net profit was inline.
• Encouraging to see strong revenue momentum across businesses.
• Not overly concerned on margins as raw material pass through to come in.

Citi

• Maintained ‘Buy'; cut price target to Rs 989 from Rs 1,000.
• September quarter as healthy as demand improves.
• Revenue growth aided by recovery in both domestic and exports business.
• Price target cut to factor in margin pressure due to higher crude and weaker rupee.

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