Sensex, Nifty Clock Worst Week In Nearly Four Months

Bharat Dynamics

• Stock rose as much as 17.1 percent to Rs 263.80.
• Trading volume was more than 30-times its 20-day average.

Glenmark Pharma

• Stock fell as much as 9.1 percent to Rs 554.
• Trading volume was more than nine times its 20-day average.

Dilip Buildcon

• Stock rose as much as 13.1 percent to Rs 464.60.
• Trading volume was almost six times its 20-day average.

Redington India

• Stock rose as much as 10.3 percent to Rs 82.20.
• Trading volume was triple its 20-day average.

Ashok Leyland

• Stock fell as much as 7.6 percent to Rs 78.
• Trading volume was more than double its 20-day average.

Shares of Alembic Pharmaceuticals extended gains for the second day and rose as much as 2 percent to Rs 542.

The pharmaceutical company received a green signal form the U.S. drug regulator Moxifloxacin Ophthalmic Solution used for the treatment of conjunctivitis, according to its stock exchange filing. The stock traded at 18 times its estimated earnings per share for the coming year, Bloomberg data showed.

J Kumar Infraprojects received an order worth Rs 445 crore for Mumbai Metro Rail project, according to its stock exchange filing.

Shares of the company erased gains and were trading 1.6 percent lower at Rs 122.70. The stock had declined 64 percent in the past 12 months compare to an 3.8 percent advance in the Sensex.

Nifty’s 10,700 put option contract was among the most active Nifty option contracts on National Stock Exchange.

Premium on the contract jumped 102.22 percent to Rs 100. Over 4.59 lakh shares were added to the open interest which stood at over 8.09 lakh shares.

Here’s what analysts had to say after the company announced its quarterly results:

UBS

• Maintained ‘Buy’ with a price target of Rs 240.
• Lower opex drives Ebitda beat; higher other income drives earnings beat.
• No subsidy burden so far should allay concerns.
• Expect investors to react positively.

Deutsche Bank Research

• Maintained ‘Buy’; cut price target to Rs 187 from Rs 216.
• December quarter review: Benefits from higher realization.
• Beat due to lower other expenses and higher-than-expected other income.
• Cut FY19-20 earnings estimates due to lower oil prices.

Shares of Nestle India resumed declines after a one-day rally. The stock fell as much as 2.1 percent to Rs 10,401 after its operating margin contracted in the three months ended December.

Key Earnings Highlights (Q3, YoY)

• Revenue up 11.4 percent to Rs 2,897 crore.
• Net profit up 9.6 percent to Rs 342 crore.
• Ebitda up 3.2 percent to Rs 550 crore.
• Margin at 19 percent versus 20.5 percent.
• Other expenses up 31 percent to Rs 809 crore.
• Declares interim dividend of Rs 25 per share.
• Share’s what analysts had to say about Nestle after the company announced its quarterly results.

CLSA

• Maintained ‘Outperform’; cut price target to Rs 11,500 from Rs 11,950.
• December quarter earnings were below estimates; displayed modest growth.
• Step up in A&P should be a good strategy, but disclosure can improve.
• Cut CY18-20 estimates by 4-5 percent on lower revenue and margin forecasts.

Macquarie

• Maintained ‘Outperform’ with a price target of Rs 12,994.
• December quarter earnings were below estimates on account of lower margin.
• Domestic revenue growth was in line with estimates.
• Believe higher A&P spend reflects confidence in demand environment, which is encouraging.

SBICAP

• Maintained ‘Sell’; hiked price target to Rs 9,000 from Rs 8,525.
• Quest to generate demand drives 16 percent earnings miss.
• High base and margin headwinds to limit earnings show over the current and next year.
• Price target hiked as rolled forward to March 2021.

F&O Cues

• Nifty February futures closed trading at 10780, premium of 34 points.
• Max open interest for Feb. 28 series at 10,900 Call, (open interest at 30.9 lakh shares)
• Max open interest for Feb. 28 series at 10,800 Put, (open interest at 42.7 lakh shares)

Stocks In F&O Ban

In Ban

• Adani Enterpises
• IDBI
• Jain Irrigation
• Jet Airways
• Reliance Power

New in Ban

• CG Power
• PC Jeweller

Out of Ban

• Reliance Capital

Put-Call Ratio

• Nifty PCR at 1.35 versus 1.29.
• Bank Nifty PCR at 1.2 versus 0.72.

On Nestle

CLSA

• Maintained ‘Outperform’; cut price target to Rs 11,500 from Rs 11,950.
• December quarter earnings were below estimates; displayed modest growth.
• Step up in A&P should be a good strategy, but disclosure can improve.
• Cut CY18-20 estimates by 4-5 percent on lower revenue and margin forecasts.

Macquarie

• Maintained ‘Outperform’ with a price target of Rs 12,994.
• December quarter earnings were below estimates on account of lower margin.
• Domestic revenue growth was in line with estimates.
• Believe higher A&P spend reflects confidence in demand environment, which is encouraging.

SBICAP

• Maintained ‘Sell’; hiked price target to Rs 9,000 from Rs 8,525.
• Quest to generate demand drives 16 percent earnings miss.
• High base and margin headwinds to limit earnings show over the current and next year.
• Price target hiked as rolled forward to March 2021.

On ONGC

UBS

• Maintained ‘Buy’ with a price target of Rs 240.
• Lower opex drives Ebitda beat; higher other income drives earnings beat.
• No subsidy burden so far should allay concerns.
• Expect investors to react positively.

Deutsche Bank Research

• Maintained ‘Buy’; cut price target to Rs 187 from Rs 216.
• December quarter review: Benefits from higher realization.
• Beat due to lower other expenses and higher-than-expected other income.
• Cut FY19-20 earnings estimates due to lower oil prices.

More Calls

JPMorgan on Lemon Tree

• Maintained ‘Overweight’ with a price target of Rs 87.
• Flat Revenue per room in December quarter’s due to new commissioning on new inventory.
• Cost control drives strong margin performance.
• Capacity addition plans broadly on track; Mumbai hotel delayed by couple of months.

Nomura on Ashok Leyland

• Maintained ‘Neutral’ with a price target of Rs 123.
• Financials benefited from merger of subsidiaries; benefit higher at net profit level due to lower tax rate.
• Margin beat was a positive driven largely by a sharp improvement in gross margins.
• Outlook remains weak as we expect the medium and heavy commercial industry to peak out in 2019-20.

Kotak on Capital Goods

• Early signs of an inflection point visible in defence sector.
• Defence is a long-term game; investors must be patient.
• BEL: Initiated ‘Buy’ with a price target of Rs 100.
• Cochin Shipyard: Initiated ‘Buy’ with a price target of Rs 555.

Goldman Sachs of Vodafone Idea

• Downgraded to ‘Sell’ from ‘Neutral’; cut price target to Rs 20 from Rs 33.
• Market share to remain at risk.
• Elevated leverage to hinder its ability to invest in capex.

Nestle India (Q4, YoY)

• Revenue up 11.4 percent to Rs 2,897 crore.
• Net profit up 9.6 percent to Rs 342 crore.
• Ebitda up 3.2 percent to Rs 550 crore.
• Margin at 19 percent versus 20.5 percent.
• Other expenses up 31 percent to Rs 809 crore.
• Declares interim dividend of Rs 25 per share.

JK Tyre & Industries (Q3, YoY)

• Revenue up 28.6 percent to Rs 2,730.8 crore.
• Net profit up 2.5 times to Rs 26.7 crore.
• Ebitda up 24.5 percent to Rs 265.1 crore.
• Margin at 9.7 percent versus 10 percent.
• Exceptional losses to Rs 20.5 crore.
• Approves raising Rs 200 crore via preferential issue.

National Peroxide (Q3, YoY)

• Revenue up 40.9 percent to Rs 98.2 crore.
• Net profit up 79.2 percent to Rs 37.1 crore.
• Ebitda up 74.5 percent to Rs 54.6 crore.
• Margin at 55.6 percent versus 44.9 percent.

Deepak Fertilizers and Petrochemicals (Q3, YoY)

• Revenue down 11.6 percent to Rs 1,453.4 crore.
• Net profit down 77.6 percent to Rs 12.2 crore.
• Ebitda down 29.1 percent to Rs 107.8 crore.
• Margin at 7.4 percent versus 9.2 percent.
• Finance Cost up 62 percent to Rs 57.2 crore.

Infibeam Avenues (Q3, YoY)

• Revenue up 2 times to Rs 150.3 crore.
• Net profit of Rs 26.6 crore versus Rs 1.9 crore.
• Ebitda up 2.6 times to Rs 43.9 crore.
• Margin at 29.2 percent versus 22.8 percent.

Mcleod Russel (Q3, YoY)

• Revenue down 18 percent to Rs 456.2 crore.
• Net profit down 20.6 percent to Rs 53.6 crore.
• Ebitda down 88.9 percent to Rs 5.8 crore.
• Margin at 1.3 percent versus 9.4 percent.
• Decrease in inventory of Rs 180.8 crore.
• Deferred tax reversal of Rs 33.2 crore.

Mishra Dhatu Nigam (Q3, YoY)

• Revenue up 4.1 percent to Rs 153.2 crore.
• Net profit down 36.2 percent to Rs 16.9 crore.
• Ebitda down 43.4 percent to Rs 17.1 crore.
• Margin at 11.2 percent versus 20.5 percent.
• Raw Material Costs up 2.5 times to Rs 803.4 crore.

Glenmark Pharma (Q3, YoY)

• Revenue up 15.9 percent to Rs 2,555 crore.
• Net profit up 15.2 percent to Rs 107.7 crore.
• Ebitda up 34.7 percent to Rs 434.6 crore.
• Margin at 17 percent versus 14.6 percent.

Voltas (Q3, YoY)

• Revenue up 8.5 percent to Rs 1,491.8 crore.
• Net profit down 18.7 percent to Rs 80.9 crore.
• Ebitda up 1.24 percent to Rs 115.7 crore.
• Margin at 7.8 percent versus 8.3 percent.
• Other Income up 2.6 times to Rs 54.8 crore.
• Exceptional loss of Rs 12 crore.

MTNL (Q3, QoQ)

• Revenue up 15.9 percent to Rs 514.5 crore.
• Net loss of Rs 832.3 crore versus net loss of Rs 859.1 crore
• Ebitda loss of Rs 330.2 crore.

Indiabulls Real Estate (Q3, YoY)

• Revenue up 5.3 times to Rs 1,271.1 crore.
• Net profit of Rs 202.5 crore versus Rs 6 crore.
• Ebitda up 4.4 times to Rs 387.8 crore.
• Margin at 30.5 percent versus 36.3 percent.

GSK Consumer Healthcare (Q3, YoY)

• Revenue up 7.4 percent to Rs 1,116.8 crore.
• Net profit up 35.1 percent to Rs 221.1 crore.
• Ebitda up 14.8 percent to Rs 238.5 crore.
• Margin at 21.4 percent versus 20 percent.

Kitex Garments (Q3, YoY)

• Revenue down 7.6 percent to Rs 136.1 crore.
• Net profit down 29.5 percent to Rs 12.4 crore.
• Ebitda down 26.3 percent to Rs 25.5 crore.
• Margin at 18.7 percent versus 23.5 percent.

Cox & Kings (Q3, YoY)

• Revenue up 16.3 percent to Rs 1,331.1 crore.
• Net profit down 69.6 percent to Rs 28.9 crore.
• Ebitda down 8.8 percent to Rs 141.5 crore.
• Margin at 10.6 percent versus 13.6 percent.
• Other expenses up 91 percent to Rs 216.7 crore.

Shree Renuka Sugars (Q3, YoY)

• Revenue down 37.9 percent to Rs 1,092.6 crore.
• Net profit of Rs 68.6 crore versus net loss of Rs 2,294 crore.
• Ebitda up 2.3 times to Rs 119.9 crore.
• Margin at 11 percent versus 3 percent.
• Exceptional loss of Rs 2,410 crore in base quarter.
• Forex gain of Rs 86.8 crore.

GMR Infra (Q3, YoY)

• Revenue down 5.5 percent to Rs 1,958 crore.
• Net loss of Rs 561 crore versus Rs 578 crore.
• Ebitda up 2 percent to Rs 487 crore.
• Margin at 24.9 percent vs 23 percent.
• Finance cost up 14 percent to Rs 719 crore.

Simplex Infra (Q3, YoY)

• Revenue up 3 percent to Rs 1,403 crore.
• Net profit up 17 percent to Rs 36.3 crore.
• Ebitda up 2.5 percent to Rs 179 crore.
• Margin at 12.7 percent versus 12.8 percent.

• Jet Airways agreed to give lenders a majority stake in the airline company by converting part of their debt to equity as the airline battles a cash crunch. The board, as part of a provisional resolution plan, agreed to allot 11.4 crore shares at an aggregate value of Re 1 to the lenders’ consortium led by State Bank of India.
• CG Power Industrial Solutions board in principal has approved the proposal of the merger of arm ‘CG Power Solutions’ with the company. Final proposal will be provided in due course of time says the company.
• Minda Industries approved the merger of Harita Seatings with company. Harita shareholders will get 152 Minda shares for every 100 shares held or four fully paid up preference shares of Rs 121.25 for every one equity share held.
• Comcast, Sony in race to buy stake in Zee Entertainment. The companies might bid between Rs 540-Rs 560 per share for stake in the company. (Bloomberg News)
• J Kumar Infra received order worth Rs 445 crore for Mumbai Metro Rail Project.
• Siemens India said it will sell its leasehold interest in Gujarat property for Rs 193.5 crore to LM Wind Power Blades. The company said that this proposal in subject to receipt of statutory and regulatory approvals and signing of form agreements between both parties.
• PNC Infratech arm received financial closure from NHAI for HAM Project in Uttar Pradesh whose bid cost was Rs 2,159 crore. The company said that after this financial closure (the seventh), no other financial closures were pending as on date.
• Mangalore Chemicals and Fertilizers shut down Ammonia, Urea and ABC plants from Feb. 13 after reassessing capacity of Urea production for financial year 2019 as per Department of Fertilizers.
• Kridhan Infra’s Singapore arm received construction order worth Rs 187 crore for a sports centre.
• Glenmark Pharma approved to spin off the innovation business into a new company in the USA. This new company will focus on the areas of immunology, oncology and pain management.
• EID Parry, Balrampur Chini, Dhampur Sugar: Government raised the minimum selling price of sugar by 6.9 percent to Rs 31 per kg from Rs 29 per kg with immediate effect. (Bloomberg News)

• India January trade balance, estimates at $13.5 billion deficit, prior $13.1 billion deficit.
• India January exports YoY, prior 0.3 percent.
• India January imports YoY, prior -2.4 percent.

• Copper ended higher for the second day, up 0.2 percent.
• Aluminium ended lower for the seventh day, down 0.54 percent.
• Nickel ended lower for the fifth day, down 1.65 percent.
• Lead halted a three-day decline, ended 0.84 percent higher.
• Tin resumed declines after a one-day rally, ended 0.95 percent lower.
• Zinc ended lower for the fifth day, down 0.23 percent.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fluctuated between gains and losses to trade a little changed at 8:20 a.m.

Asian stocks retreated from their highest levels since October as global economic growth concerns resurfaced and investors questioned the potential for progress on the U.S.-China trade dispute.

Shares in Japan and Korea bore the brunt of the losses as Hong Kong stocks retreated and futures on the S&P 500 Index dipped. Chinese equities slipped as weak factory prices highlighted the tough environment for industrial profitability.

Short on time? well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.