Nifty Snaps Five-Day Record Breaking Spree

Shares of the Mumbai-based parent of luxury car maker fell as much as 2.2 percent to Rs 252.15 after Jaguar Land Rover sales fell 24 percent in July.

• Jaguar Land Rover sales declined 24 percent to 25,152 units (YoY)
• Land Rover sales fell 15.2 percent to 10,992 units (YoY)
• Jaguar sales fell 21.6 percent to 36,144 units (YoY)

Shares of the Karnal-based shoe maker rose as much as 5.3 percent to Rs 217 after its profit doubled in June quarter.

Key earnings highlights:

• Revenue up 19.9 percent at Rs 146.2 crore
• Net profit at Rs 2.3 crore versus Rs 1.1 crore
• Ebitda up 17 percent at Rs 10.3 crore
• Margin at 7 percent versus 7.2 percent

• IDFC Bank has 32.5 lakh shares change hands in a block. Stock up 1 percent a Rs 43.25.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Royal Enfield bike maker rose as much as 4.3 percent to Rs 28,620 after it met Bloomberg estimates in June quarter.

Key earnings highlights:

• Revenue up 27 percent at Rs 2,547 crore versus Rs 2,001 crore (YoY); Estimate of Rs 2,525 crore
• Net profit up 25 percent at Rs 576 crore versus Rs 460 crore (YoY); Estimate of Rs 606 crore
• Ebitda up 30 percent at Rs 809 crore versus Rs 621 crore (YoY); Estimate of Rs 805 crore
• Margin at 31.8 percent versus 31.1 percent (YoY); Estimate of 31.8 percent

Jet Airways Under Pressure From India’s Budget Flight Boom

Indian equity benchmarks edged lower weighed down by weakness in heavyweights like HDFC, Reliance Industries, State Bank of India and HDFC Bank.

The S&P BSE Sensex fell as much as 0.28 percent to 37,918 and the NSE Nifty 50 index declined 0.25 percent to 11,442.

Eight out of 11 sector gauges compiled by National Stock Exchange were trading lower led by the Nifty PSU Bank index’s 1.7 percent drop. On the other hand, the Nifty Auto index was top gainer, up 0.3 percent.

Brokerages On Eicher Motors

Credit Suisse

• Upgraded to ‘Neutral’ from ‘Underperform’; raised price target to Rs 27,000 from Rs 26,200.
• June quarterly results were largely in line with estimates and pretty similar to previous quarter.
• Eicher has reached peak penetration; growth to depend on overall two wheeler demand.
• Upgrade post underperformance; valuations are now reasonable.
• Stock could react positively in near term to better monthly sales.

Macquarie

• Maintained ‘Outperform’ with a price target of Rs 37,000.
• June quarter’s operating income was ahead of estimates.
• Despite rise in volume, market share still low in large states.
• Expect Eicher’s growth momentum to continue.
• Expect compounded annual growth rate of 22 percent in net profit over FY18-21.
• Royal Enfield sales volumes and margin improvement to aid growth.

CLSA

• Maintained ‘Buy’; cut price target to Rs 36,150 from Rs 39,300.
• June quarter’s operating income was inline; Royal Enfield margins expand despite commodity price pressures.
• Royal Enfield waiting list comfort has faded but structural story intact.
• Cut FY19-20 EPS by 4 percent factoring in slightly lower margins & financial income.

Brokerages On Bharat Forge

Credit Suisse

• Maintained ‘Outperform’ with a price target of Rs 750.
• June quarter results were a little better than expectations on strong top-line growth.
• Beat was driven by India business with CVs and others segment reporting better numbers.
• Continue to like Bharat Forge as the US CV traction is likely to continue into the next financial year.

CLSA

• Downgraded to ‘Outperform’ from ‘Buy’; cut price target to Rs 735 from Rs 915.
• Good growth in June quarter.
• Industrial exports still doing well but unlikely to drive stock performance alone.
• U.S. truck orders & Indian truck sales in the second half of upcycle going by history.
• Cut FY19-20 EPS by 4-6 percent on slightly lower industrial growth and margins.
• Like structural growth story but cyclicality of businesses cannot be overlooked.

Brokerages On Gujarat Pipavav

Deutsche Bank

• Maintained ‘Buy’; cut price target to Rs 135 from Rs 145.
• Volumes remain strong, but margins disappoint.
• Tariff and margin under pressure given surplus container capacity on West Coast of India.
• Retain Buy given debt free company and 3 percent dividend yield.
• Strong parentage to support volume growth.

Citi

• Maintained ‘Buy’ with a price target of Rs 170.
• June quarter earnings came marginally below on adverse cargo mix.
• Container volume was broadly in line.
• Bulk volume was strong but liquid and roll-on/roll-off volume were weak.
• Positive: Strong underlying cash and high dividend payout.

Brokerages On Thermax

Deutsche Bank

• Maintained ‘Buy’; cut price target to Rs 1,310 from Rs 1,350.
• Standalone results strong, but EU subsidiaries weak.
• Order run-rate above expectations; Energy business sees erosion in profitability.
• Concerned with consistent provisions in overseas entities and order growth in the second half of 2018-19 due to elections.
• Retain Buy as margins are better in H2 and improved enquiry flow.

Citi

• Maintained ‘Sell’ with a price target of Rs 802.
• June quarter reported weak earnings.
• Order inflows decline on high base.
• Order inflow outlook for 2018-19 estimates remains modest.
• Thermax is one of the most expensive industrial stocks despite low RoE.

Jefferies on Natco Pharma

• Maintained ‘Buy’ with a price target of Rs 1,020.
• June quarter missed, led by deferred revenues and lower profit share.
• Key positive was strong growth in India business.
• Key for Natco remains Copaxone market share ramp-up.
• Expect earnings to improve from April 2020.

Morgan Stanley on TCS

• Maintained ‘Overweight’ with a price target of Rs 2,100.
• Believe products and platforms are becoming a key differentiator for TCS.
• These platforms will reinforce TCS brand as an innovative and next generation services provider.
• Ignio has seen strong adoption within large enterprises.

Morgan Stanley on Cummins India

• Maintained ‘Underweight’ with a price target of Rs 620.
• June quarter reported a muted revenue growth; margin surprises.
• Key positive surprise was 235 basis points sequential improvement in material margin.
• Domestic revenues declined implying a subdued growth trajectory.
• Export revenue improved but below estimate.

Macquarie on Phoenix Mills

• Maintained ‘Outperform’ with a price target of Rs 732.
• June quarter was strong as rent growth seen across malls.
• Limited impact of IND-AS 115 accounting standard.
• Debt profile remains good.
• Expect rent growth to remain strong for next two-to-three years.
• Phoenix is on track to double mall space under management over the next five years.
• Maintain Phoenix as one of the top picks in Indian real estate space.

Macquarie on NALCO

• Upgraded to ‘Outperform’ from ‘Neutral’; raised price target to Rs 82 from Rs 77.
• Strong Alumina prices drive June quarter’s growth.
• Only Indian proxy to growing supply disruption risk in Alumina.
• Upgrade to Outperform given attractive valuation, dividend support and upside risks to alumina price.
• Alumina market remains vulnerable to supply disruptions.

Citi on JSPL

• Maintained ‘Buy’ with a price target of Rs 401
• Strong Ebitda and cash generation in June quarter.
• Steel business did well in June quarter.
• Angul facility reach its optimum utilisation with better efficiencies.
• Improving cash flows and Ebitda appear quite attractive.

Credit Suisse on Page Industries

• Maintained ‘Underperform’; raised price target to Rs 26,000 from Rs 21,300.
• June quarter’s net profit was significantly ahead of estimates.
• Quality of results was not strong, with volume and revenue growth being weaker than expected.
• Continue to like the structural story of Page, driven by market share gains.
• Maintain Underperform due to stretched valuations.

CLSA on Varun Beverages

• Maintained ‘Buy’; raise price target to Rs 930 from Rs 885.
• June quarter results were ahead of estimates.
• Strong organic volume growth of 13 percent in India.
• Gross margins expanded benefitting from lower sugar prices partially negated by higher resin prices.
• Guidance for capex remains at elevated levels, which is a slight disappointment.

Deutsche Bank on Whirlpool India

• Maintained ‘Sell’; raised target to Rs 1,390 from Rs 1,230.
• Good interims in a challenging summer.
• Gross margins expand due to better mix of lower AC and increased washing machine sales.
• Expect significant competition to offset gains from GST cuts in the festive season during the second half of the current financial year.
• Valuations as steep leaving no margin for error.

Nifty Earnings To Watch

• GAIL
• Hindalco
• SBI

Other Earnings To Watch

• Aditya Birla Capital
• Alkem Laboratories
• Allcargo Logistics
• Andhra Bank
• Apollo Hospitals
• Bosch India
• CG Power
• Dhanuka Agritech
• DLF
• Dr. Lal PathLabs
• Elgi Equipments
• Endurance Technologies
• Glenmark Pharmaceuticals
• Great Eastern Shipping
• Gujarat Mineral
• Indian Hotels
• Indraprastha Gas
• JB Chemicals
• Kirloskar Oil Engines
• KNR Constructions
• LUX Industries
• Max India
• Mishra Dhatu Nigam
• NCC
• NHPC
• PC Jeweller
• Sheela Foam
• Sun TV Networks
• Tamil Nadu Newsprint
• Timken India
• UCO Bank
• Uflex
• Union Bank of India
• United Breweries
• Voltas

Earnings Reactions To Watch

Taro Pharma (Sun Pharma’s subsidiary) Q1 (YoY)

• Net sales down 4 percent at $155 million.
• Net profit up 24 percent at $67 million.
• Ebitda down 19 percent at $63 million.
• Margin at 40.6 percent versus 47.8 percent.

Jindal Steel & Power (Q1, YoY)

• Revenue up 70.5 percent at Rs 9,665.4 crore.
• Net profit at Rs 180.8 crore versus net loss at Rs 387.1 crore.
• Ebitda up 68.3 percent at Rs 2,276.5 crore.
• Margin at 23.5 percent versus 23.9 percent.

Liberty Shoes (Q1, YoY)

• Revenue up 19.9 percent at Rs 146.2 crore
• Net profit at Rs 2.3 crore versus Rs 1.1 crore
• Ebitda up 17 percent at Rs 10.3 crore
• Margin at 7 percent versus 7.2 percent

AIA Engineering (Q1, YoY)

• Revenue up 25.5 percent at Rs 715.2 crore.
• Net profit up 18.6 percent at Rs 105 crore.
• Ebitda up 19.7 percent at Rs 155.5 crore.
• Margin at 21.7 percent versus 22.8 percent.

Zensar Technologies (Q1, QoQ)

• Revenue up 11 percent at Rs 904.7 crore.
• Net profit up 13.1 percent at Rs 82.2 crore.
• EBIT up 19.4 percent at Rs 92.3 crore.
• Margin at 10.2 percent versus 9.5 percent.

Eicher Motors (Q1, YoY)

• Revenue up 27 percent at Rs 2,547 crore.
• Net profit up 25 percent at Rs 576 crore.
• Ebitda up 30 percent at Rs 809 crore.
• Margin at 31.8 percent versus 31.1 percent.

Coffee Day Enterprises (Q1, YoY)

• Revenue up 20.2 percent at Rs 979.1 crore.
• Net profit up 12.6 percent at Rs 17 crore.
• Ebitda up 3.4 percent at Rs 153.4 crore.
• Margin at 15.7 percent versus 18.2 percent.

Himatsingka Seide (Q1, YoY)

• Revenue up 13.9 percent at Rs 582.6 crore.
• Net profit down 11.9 percent at Rs 44.6 crore.
• Ebitda up 6.5 percent at Rs 115.6 crore.
• Margin at 19.8 percent versus 21.2 percent.

Eris Lifesciences (Q1, YoY)

• Revenue up 35.4 percent at Rs 250.8 crore.
• Net profit flat at Rs 71.2 crore.
• Ebitda up 24.1 percent at Rs 88.6 crore.
• Margin at 35.3 percent versus 38.6 percent.

Aurobindo Pharma (Q1, YoY)

• Revenue up 15.5 percent at Rs 4,250.3 crore.
• Net profit down 12.1 percent at Rs 455.6 crore.
• Ebitda down 7.4 percent at Rs 779.2 crore.
• Margin at 18.3 percent versus 22.9 percent.

PNB Housing Finance (Q1, YoY)

• Net interest income up 28 percent at Rs 432.8 crore.
• Net profit up 38.2 percent at Rs 235.1 crore.

VA Tech Wabag (Q1, YoY)

• Revenue up 2.9 percent at Rs 687.9 crore.
• Net profit at Rs 13 crore versus Rs 8.4 crore.
• Ebitda down 1.4 percent at Rs 41.2 crore.
• Margin at 6 percent versus 6.3 percent.

• SEBI directed Vakrangee’s promoter to make open offer within 45 days for violations of takeover norms.
• Auditors gave four qualifications to Fortis Healthcare’s quarterly report.
• Vikas WSP received order worth Rs 219.36 crore from its MNC clients.
• HSIL started commercial production of its first phase of pipes and fittings plant in Telangana.
• SBI committee approved divestment of 4 percent stake in SBI General Insurance to non-promoter entity.
• Zensar Technologies’ record date for 1:5 stock split is September 10.
• India’s serious frauds agency arrested former Bhushan Steel MD Neeraj Singhal.
• GMR Infra issued LOIA to L&T for Rs 3028 crore for expanding Hyderabad airport.
• IDBI Bank sold 12.5 lakh shares (2.5 percent) of Clearing Corporation of India Ltd.