Sensex, Nifty Fail To Hold Gains As IT Stocks Drag

• 8K Miles Software: The Chennai-based software developer rose as much as 10 percent to Rs 75. Trading volume was 20 times its 20-day average.
• Hindustan Aeronautics: The Bengaluru-based aircraft maker fell as much as 0.8 percent to Rs 755. Trading volume was 13.3 times its 20-day average.
• Bajaj Holdings: The Pune-based investment company fell as much as 2 percent to Rs 2,752. Trading volume was 21.2 times its 20-day average.
• Kalpataru Power: The Mumbai-based transmission tower maker rose as much as 11 percent to Rs 360.20. Trading volume was 13 times its 20-day average.

Earnings growth is seen coming back and stock performance will be strong next year, Sandeep Bhatia, managing director and head of India equities, commodities and global markets at Macquarie Capital Securities told BloombergQuint in an interview.

Key earnings highlights:

• U.S. bond yields could touch 4 percent
• U.S. growth seen slowing in the second half of next year
• Fed rate going up bad for emerging markets (EMs)
• Earnings growth is seen coming back
• Earnings and stock performance to be strong next year
• Expect foreign flows to be muted
• Seeing indications of worst being behind for industrials
• Oil demand should cool off by second half of next year
• Oil prices and union elections key events
• Like Maruti Suzuki, ICICI Bank, Axis Bank among other names
• Have a positive view on auto companies

Shares of the country's largest car maker rose 1.4 percent to Rs 6,708 after its reported October sales numbers.

Key sales highlights:

• Alto and WagonR sales rose 1.1 percent to 32,835 units
• Swift, Celerio, Ignis, Baleno and Dzire sales rose 3.7 percent to 64,789 units
• Ciaz sales fell 5.2 percent to 3,892 units
• Total passenger car sales up 2.5 percent at 101,516 units
• S-Cross, Vitara Brezza, Ertiga and Gypsy sales fell 11.2 percent to 20,764 units
• Total domestic sales up 1.5 percent at 138,100 units
• Total export sales down 17 percent at 8,666 units

Shares of the Mumbai-based automobile company rose as much as 2.74 percent to Rs 184 despite reporting a loss in the September quarter.

Net loss stood at Rs 1,049 crore compared with a profit of Rs 2,482.8 crore in the corresponding quarter last year, according to its exchange filing. That’s more than the Rs 874 crore loss estimated by analysts tracked by Bloomberg.

Key earnings highlights:

• Tata Motors (Q2, Consolidated YoY)
• Revenue up 3.3 percent at Rs 72,112.1 crore.
• Ebitda down 16.4 percent At Rs 6,757.6 crore.
• Net loss at Rs 1,049 crore versus net profit at Rs 2,482.8 crore.
• Margin at 9.4 percent versus 11.5 percent.

Shares of the country's largest infrastructure developer rose as much as 6.23 percent, its biggest single day jump since Aug. 20, to Rs 1,379.25 after its net profit rose for 11th quarter in a row, surpassing most optimistic estimate compiled by Bloomberg.

Net profit rose 22 percent on a yearly basis to Rs 2,230 crore in the July-September period, L&T said in an exchange filing. It was higher than the most optimistic analyst estimate of Rs 1,775 crore tracked by Bloomberg.

Key earnings highlights:

• Revenue up 21 percent at Rs 32,081 crore.
• Net profit up 22 percent at Rs 2,230 crore.
• Ebitda up 27 percent at Rs 3,770 crore.
• Margin at 11.7 percent versus 11.2 percent.
• Exceptional gain of Rs 295 crore versus Rs 137 crore.

Meanwhile, brokerages have maintained their bullish stance on the stock with Macquarie expecting a potential upside of 45 percent from yesterday's closing price.

- IOCL raises jet fuel prices by 5.2% compared to last prices.
- IOCL raises ATF prices by on an average Rs 3,838/Kl.
- ATF price were cut by on average Rs 2,000/Kl due to excise duty cut.

Read: https://t.co/qCtvgFCE3i pic.twitter.com/AoxWZMgX9S

— BloombergQuint (@BloombergQuint) November 1, 2018

• Nifty October futures closed trading at 10,398,  premium of 12 points.
• Nifty November open interest down 5.5 percent; Nifty Bank November OI up 1.7 percent.
• Max open interest for November series at 10,700 strike value call option (Open interest at 22.2 lakh shares).
• Max open interest for November series at 10,000 strike value put option (open interest at 44.9 lakh shares).

Put Call Ratio

• Nifty PCR at 1.56 from 1.49.
• Nifty Bank PCR 1.27 at from 0.89.

On L&T

CLSA

• Maintained ‘Buy’ with a price target of Rs 1,730, implying a potential upside of 33 percent from the last regular trade.
• September quarter was a stellar quarter, surpassing estimates in all front.
• Execution pickup without balance-sheet sacrifice was commendable.
• Hydrocarbon remains star business; RoE crosses 15 percent after six years.

Investec

• Maintained ‘Buy’; hiked price target to Rs 1,725 from Rs 1,620, implying a potential upside of 33 percent from the last regular trade.
• Stellar quarter; ticks all boxes.
• Improved execution environment; large order pipeline.
• Guidance likely to be met on all fronts.

Macquarie

• Maintained ‘Outperform’; raised price target to Rs 1,880 from Rs 1,825, implying a potential upside of 45 percent from the last regular trade.
• L&T delivered spotless set of numbers; handsome beat on all fronts.
• Revenue growth shifted into next gear, led by sharply better infrastructure order execution.
• Margins and order inflows have potential to surprise positively on guidance.

JPMorgan

• Maintained ‘Overweight’ with a price target of Rs 1,570, implying a potential upside of 21 percent from the last regular trade.
• Large topline beat led by strong execution in flagship Infra segment and core business overall.
• Working capital not deteriorated, despite strong pick-up in execution.
• After H1 see upside risks to estimates.

On Tata Motors

CLSA

• Maintained ‘Sell’; cut price target to Rs 170 from Rs 200, implying a potential downside of 5 percent from the last regular trade.
• Weak September quarter: JLR reported loss for second consecutive quarter.
• India business better but risk of the truck cycle turning.
• Cut FY19-21 EPS estimates by 10-28 percent on lower volume and margin estimates for JLR.

Macquarie

• Maintained ‘Outperform’; cut price target to Rs 325 from Rs 485, implying a potential upside of 82 percent from the last regular trade.
• India business delivered strong performance, JLR reported an EBIT loss.
• Shift in focus to profitability and cash-flows as a positive development.
• Price target cut on reduced operating income estimates for the current and the next financial year.

On Vedanta

Macquarie

• Maintained ‘Outperform’; cut price target to Rs 254 from Rs 272, implying a potential upside of 20 percent from the last regular trade.
• September quarter’s operating income was below consensus led by higher costs in aluminium and zinc international division.
• Negative: Higher cost guidance for aluminium and lower volume guidance for oil.
• High upstream capex to limit deleveraging; Dividend the only positive should restrict downside.

JPMorgan

• Maintained ‘Overweight’ with a price target of Rs 345, implying a potential upside of 63 percent from the last regular trade.
• In weak quarter, lower net debt and large dividend positive.
• Expect second half to see meaningful pickup in earnings led by volume growth, lower cost and weaker rupee.
• Overall macro sentiment and environment remain challenging for metal stocks.

On United Spirits

Macquarie

• Maintained ‘Underperform’ with a price target of Rs 443, implying a potential downside of 23 percent from the last regular trade.
• September quarter results were significantly ahead on account of higher volume growth and margin.
• Operating margin boosted by lower-than-expected other expenses and employee cost.
• Believe cost savings program is yielding results, but surprised by quarterly variations.

JPMorgan

• Maintained ‘Overweight’ with a price target of Rs 550, implying a potential downside of 4 percent from the last regular trade.
• Strong all-around performance in second quarter; multi-quarter high margins.
• Strong margin delivery led by gross margin expansion, lower staff costs and productivity gains.
• Debt and Interest costs moderate further.

On Lupin

Nomura

• Maintained ‘Buy’ with a price target of Rs 997, implying a potential upside of 12 percent from the last regular trade.
• September quarter was muted but operationally inline quarter.
• Expect revival in the U.S. in the second half due to seasonality and launch of key products.
• Ramp-up in Solosec to have positive impact on margins.

CLSA

• Maintained ‘Sell’ with a price target of Rs 780, implying a potential downside of 12 percent from the last regular trade.
• Despite favourable currency, margin pressure continued.
• U.S. revival depends on approval/ramp-up of certain big products.
• See downside risk to FY20 EPS if the U.S. business does not revive

Macquarie

• Maintained ‘Underperform’; cut price target to Rs 775 from Rs 788, implying a potential downside of 13 percent from the last regular trade.
• Lacklustre show despite forex tailwind.
• Expect medium-term U.S. sales to remain muted, with a laborious road to recovery.
• Even with improved traction in the second half, valuations are expensive.

On Dabur

Jefferies

• Maintained ‘Buy’; cut price target to Rs 460 from Rs 520, implying a potential upside of 19 percent from the last regular trade.
• September quarter was a muted quarter as margins below par.
• Shift in festive season impacted domestic volume growth.
• Cut estimates to factor in lower margins.

CLSA

• Maintained ‘Buy’; cut price target to Rs 500 from Rs 570, implying a potential upside of 30 percent from the last regular trade.
• September quarter’s Ebitda missed but earnings came inline.
• Domestic stable but international under pressure.
• Management retained double-digit volume growth guidance but sounded cautious.

More Calls

Macquarie on HEG

• Maintained ‘Outperform’; hiked price target to Rs 5,823 from Rs 5,200, implying a potential upside of 37 percent from the last regular trade.
• September quarter’s Ebitda was above estimates led by higher realisation.
• Higher needle coke costs from the second half to impact margins marginally.
• With higher availability of needle coke, expect 90 percent utilisation in the second half.

Nomura on Reliance Nippon

• Maintained ‘Neutral’ with a price target of Rs 210, implying a potential upside of 26 percent from the last regular trade.
• September quarter was inline, but uncertain times ahead.
• Lower opex due to reducing new business drag supporting core EBIT.
• TER cuts change the entire business model; Would wait and see if flows remain stable.

Deutsche Bank Research on Castrol India

• Maintained ‘Buy’; cut price target to Rs 195 from Rs 217, implying a potential upside of 31 percent from the last regular trade.
• September quarter reported a steady volume growth and margins.
• Gross margins impacted by higher crude and weaker rupee.
• Expect robust margins and volume growth led by auto and industries.

L&T (Q2, YoY)

• Revenue up 21 percent at Rs 32,081 crore.
• Net profit up 22 percent at Rs 2,230 crore.
• Ebitda up 27 percent at Rs 3,770 crore.
• Margin at 11.7 percent versus 11.2 percent.
• Exceptional gain of Rs 295 crore versus Rs 137 crore.

Also Read: Q2 Results: L&T’s Profit Beats Highest Estimate, Retains FY19 Revenue Forecast

Tata Motors (Q2, Consolidated YoY)

• Revenue up 3.3 percent at Rs 72,112.1 crore.
• Ebitda down 16.4 percent At Rs 6,757.6 crore.
• Net loss at Rs 1,049 crore versus net profit at Rs 2,482.8 crore.
• Margin at 9.4 percent versus 11.5 percent.

JLR Earnings

• Net revenue down 11 percent to £5.6 billion.
• Ebitda margin at 9.1 percent versus 11.8 percent.
• Loss at £100 million versus £253 million.

Also Read: Q2 Results: China Roadblocks Force Tata Motors To Launch Turnaround Plan For JLR

Vedanta (Q2, Consolidated YoY)

• Revenue up 5.16 percent at Rs 22,705 crore.
• Net profit down 34.3 percent at Rs 1,343 crore.
• Ebitda down 8.15 percent at Rs 5,208 crore.
• Margin at 22.9 percent versus 26.3 percent.
• Interim dividend at Rs 17 per share.

Also Read: Q2 Results: Vedanta’s Profit Declines On Lower Margins

Adani Power (Q2, Consolidated YoY)

• Revenue up 16.6 percent at Rs 7,181.5 crore.
• Net profit up 22.1 percent at Rs 3,86.9 crore.
• Ebitda up 9.7 percent at Rs 2,330.3 crore.
• Margin at 32.4 percent versus 34.5 percent.
• Other income at Rs 475.7 crore versus Rs 255.6 crore.
• Additional relief of claims worth Rs 1136.3 crore in current quarter.

Canara Bank (Q2, YoY)

• Net interest income up 17.9 percent at Rs 3281.3 crore.
• Net profit up 15.1 percent at Rs 299.5 crore.
• Provisions at Rs 2403.1 crore versus Rs 2,466.2 crore. (QoQ)
• GNPA at 10.56 percent versus 11.05 percent. (QoQ)
• NNP at 6.54 percent versus 6.91 percent. (QoQ)

Castrol India (Q3 Calendar Year 2018, YoY)

• Revenue up 7.6 percent at Rs 926.9 crore.
• Net profit down 15.6 percent at Rs 150.4 crore.
• Ebitda down 10.3 percent at Rs 227.4 crore.
• Margin at 24.5 percent versus 29.4 percent.
• Cost of raw materials at Rs 455.3 crore versus Rs 351.6 crore.

Sanofi India (Q3 Calendar Year 2018, YoY)

• Revenue up 11.4 percent at Rs 743.8 crore.
• Net profit up 2.5 percent at Rs 119.2 crore.
• Ebitda up 2 percent at Rs 187.3 crore.
• Margin at 25.2 percent versus 27.5 percent.

HEG (Q2, YoY)

• Revenue up 4.4 times at Rs 1,793.8 crore.
• Net profit up 7.8 times at Rs 8,88.9 crore.
• Ebitda up 7.2 times at Rs 1368.8 crore.
• Margin at 76.3 percent versus 46.3 percent.
• Interim dividend at Rs 30 per share.

Syndicate Bank (Q2, YoY)

• Net interest income down 4.7 percent at Rs 1,572.3 crore.
• Net loss at Rs 1,542.5 crore versus net profit at Rs 105.2 crore.
• Other Income at Rs 489.6 crore versus Rs 860.2 crore.
• Provisions at Rs 1,622.5 crore versus Rs 1,774.1 crore. (QoQ)
• GNPA at 12.98 percent versus 12.59 percent. (QoQ)
• NNPA at 6.83 percent versus 6.67 percent. (QoQ)

United Spirits (Q2, Standalone YoY)

• Revenue up 14.2 percent at Rs 2,228.1 crore.
• Net profit up 69 percent at Rs 258.7 crore.
• Ebitda up 36.1 percent at Rs 432.4 crore.
• Margin at 19.4 percent versus 16.3 percent.

Narayana Hrudalaya (Q2, Consolidated YoY)

• Revenue up 27.2 percent at Rs 711.3 crore.
• Net profit down 17.6 percent at Rs 13.6 crore.
• Ebitda up 25.6 percent at Rs 73 crore.
• Margin at 10.3 percent versus 10.4 percent.

Dixon Technologies (Q2, YoY)

• Revenue down 16 percent at Rs 739 crore.
• Net profit down 21 percent at Rs 16.4 crore.
• Ebitda down 6 percent at Rs 33 crore.
• Margin at 4.5 percent versus 4 percent.
• Revenue lower due to fall in mobile segment; Net profit lower due to lower other income and higher tax rate.

ITD Cementation (Q2, YoY)

• Revenue up 31 percent at Rs 620 crore.
• Ebitda up 26 percent at Rs 78 crore.
• Margin at 12.6 percent versus 13.2 percent.
• Net profit up 42 percent to Rs 27.4 crore.
• Net profit growth aided by higher other income and lower tax rate.

IndoStar Capital (Q2, YoY)

• NII up 47 percent at Rs 184 crore.
• Net profit down 8 percent at Rs 64 crore.
• Impairment of financial instruments impacted September quarter.
• Impairment loss stood at Rs 11 crore versus Impairment gain stood at Rs 12 crore in the base quarter.
• Net Interest Margin rose 220 basis points QoQ and stood at 8.6 percent, says company.
• Positive ALM, month on month, for the next 18 months, says company.
• Cost to Income ratio has declined 650 basis points QoQ to 37.6 percent, says company.

KEI Industries (Q2, YoY)

• Revenue up 33 percent at Rs 997 crore.
• Net profit up 45 percent at Rs 41.4 crore.
• Ebitda up 32 percent at Rs 101 crore.
• Margin at 10.1 percent versus 10.2 percent.

Nifty Earnings To Watch

• Hindustan Petroleum Corporation
• HDFC

Other Earnings To Watch

• Aarti Industries
• Arvind
• Berger Paints
• DLF
• GlaxoSmithKline Consumer Healthcare
• Godrej Properties
• ICRA
• IIFL Holdings
• Marico
• Mahindra Logistics
• Parag Milk
• SRF
• Tata Communications
• Trent
• Welspun Corp
• Zuari Agro Chemicals

• 10:30 a.m: Nikkei India Manufacturing PMI for October, prior 52.2.
• Earnings season includes: Macquarie, Apple, Alibaba, Credit Suisse, Exxon Mobil, and Shell.
• A monetary policy decision is due in the U.K. Thursday
• On Friday, the final U.S. jobs report before the November midterm elections may show hiring improved and that the unemployment rate held at a 48-year low.

• West Texas Intermediate crude dropped 0.5 percent to $64.99 a barrel, on track for a fourth consecutive decline.
• Brent crude traded lower for the fourth day, down 1 percent at $74.71 a barrel.
• Gold futures added 0.1 percent to $1,215.84 an ounce.

Shanghai Exchange:

• Copper traded lower for the fourth day, down 0.7 percent.
• Zinc traded lower for the third day, down 0.9 percent.
• Steel snapped a three-day losing streak, up 0.1 percent.
• Aluminium traded lower for the sixth day and is set for its longest losing streak in nearly two months, down 0.8 percent.
• Rubber snapped its three-day losing streak, up 0.5 percent.