Nifty Ends At Record High After Two-Day Decline

Shares of the Ahmedabad-based drug maker rose as much as 7 percent to record high of Rs 1,524 after it reported June quarter earnings.

Key earnings highlights:

• Revenues up 12.7 percent at Rs 143.1 crore versus Rs 127 crore
• Net profit up 1.6 percent at Rs 25.7 crore versus Rs 25.3 crore
• Ebitda down 13.7 percent at Rs 22.1 crore versus Rs 25.6 crore
• Margins at 15.4 percent versus 20.2 percent

Shares of Nestle India Ltd. fell as much as 3.7 percent to Rs 10,359.95, after the reported its quarterly earnings for April-June period.

Key earnings highlights (Q1, YoY):

• Net profit up 50 percent at Rs 395 crore.
• Net sales up 12.3 percent at Rs 2,698.4 crore.
• Ebtda up 39.8 percent at Rs 645.1 crore.
• Margin at Rs 23.9 percent versus 19.2 percent.

Shares of the Bengaluru-based gold jewellery exporter and manufacturer rose as much as 5.36 percent to Rs 603.95 after it won an order worth Rs 892 crore for gold and diamond jewellery from a Middle-East-based wholesaler.

Shares of the Chennai-based non-wood building products maker rose as much as 6.2 percent to Rs 392.70 after its June quarter profit rose over 50 percent.

Key earnings highlights:

• Revenue up 16 percent at Rs 625.79 crore versus Rs 512.35 crore (YoY)
• Net profit up 56 percent at Rs 62.86 crore versus Rs 40.16 crore (YoY)
• Margin at 16.9 percent versus 19.2 percent (YoY)
• Ebitda up 7.8 percent At Rs 107.4 crore versus Rs 99.6 crore (YoY)

Tata Group may have to pay around 90 billion rupees ($1.3 billion) in dues to the Indian government to rescue the proposed sale of its mobile-phone business to Bharti Airtel Ltd., people familiar with the matter said. (more details here)

• Sheela Foam: The Ghaziabad-based mattress maker fell as much as 2 percent to Rs 1,461.35. Trading volume was 102.6 times its 20-day average.
• Laurus Labs: The Hyderabad-based drug maker rose as much as 1.23 percent to Rs 472.95. Trading volume was 13.6 times its 20-day average.
• Dixon Technologies: The Noida-based electronic products maker rose as much as 2 percent to Rs 2,720. Trading volume was 15.3 times its 20-day average.
• Brigade Enterprises: The Bengaluru-based real estate developer rose as much as 1.58 percent to Rs 195.55. Trading volume was 8.8 times its 20-day average.

National Highways Authority of India (NHAI) is planning to raise more funds for Bharatmala Project by issuing more Masala Bonds, NHAI's Ashish Sharma said in New Delhi.

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Shares of the Bengaluru-based jewellery and watch retailer fell 0.3 percent to Rs 918.40 ahead of its June quarter earnings. Below are Bloomberg consensus estimates of June quarter earnings:

• Net sales seen up 7 percent at Rs 4,182 crore versus Rs 3,910 crore
• Ebitda seen up 13 percent at Rs 439 crore versus Rs 388 crore
• Margin seen at 10.5 percent versus 9.9 percent
• Net profit seen up 11.6 percent at Rs 298 crore versus Rs 267 crore

Shares of the Hyderabad-based hotel chain operator rose as much as 5.17 percent to Rs 252.20 after its profit in June quarter jumped manifold in June quarter.

Key earnings highlights:

• Net profit at Rs 3.92 crore versus Rs 14 lakh (YoY)
• Revenue up 22 percent at Rs 72.6 crore versus Rs 59.4 crore (YoY)

• Vedanta has 11.3 lakh shares change hands in a block on the National Stock Exchange. Stock up 3.4 percent at Rs 221.40.

Buyers and sellers were not immediately known

Source: Bloomberg

Key earnings highlights:

• Average ticket size for loans is Rs 20-25 lakhs currently.
• The bulk of what we do falls under the low-cost housing segment.
• To focus on growth in mid-income loan segment.
• On macro demand, growth continues to remain strong.
• Last 2-3 years asset quality has remained stable across categories.
• The transition from IGAAP to IND AS accounting has been smooth.
• Will take into consideration the recent rate hike by RBI in the upcoming meet.
• Residual stake in Oak North Bank valued at Rs 2600 crore at present.

Key highlights from the conversation:

• Have seen revenue growth of 21 percent in June quarter.
• Margins have been able to maintain margins on better efficiencies.
• Would be comfortable if margins stay in the 19-21 percent range.
• Current operating at 75 percent capacity utilisation.
• New Facilities of Tamil Nadu, Gujarat to be streamlined this year.
• Would look at growing faster than the industry.

Key highlights from the conversation:

• Have not had any quarter where our SME book asset quality has bothered us.
• Not seeing any problems with our SME portfolio.
• Expect marginal dip in NIMs.
• Expect RoA and RoE to continue to improve.
• Expect all approvals for IDFC Bank merger by December.
• Always looking for opportunities to tie-up.

Key highlights from the conversation:

• From April, there have been price cuts announced.
• Despite price cuts, sales volumes have been good.
• Expect further price cuts in the Southern Market.
• Currently, there is excess capacity in the industry.
• MDF capacity utilisation at 65-66 percent.
• Seeing good growth in the plywood and laminates segment.
• Have passed on the higher input costs to customers.
• Don't see MDF margins going up due to the pricing pressure.
• Plywood and laminates segment to cover up for it.

Here’s how foreign and local funds played the market on Thursday.https://t.co/yZbwdEnvUM pic.twitter.com/XABJbj9gQy

— BloombergQuint (@BloombergQuint) August 3, 2018

F&O Cues

• Nifty August futures closed trading at 11,282.3 premium of 37 points versus 28 points.
• August series: Nifty open interest down 2 percent; Bank Nifty open interest down 2 percent.
• India VIX ended at 12.5, up 0.2 percent.
• Max open interest for August series at 11,500 Call (open interest at 35.7 lakh, up 20 percent).
• Max open interest for August series at 11,000 Put (open interest at 46.3 lakh, down 9 percent).

F&O Ban

• In ban: Adani Power

Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty in case of a rollover of these intraday positions.

Put Call Ratio

• Nifty PCR at 1.64 versus 1.71.
• Nifty Bank PCR at 0.89 versus 0.96.

Macquarie on Tata Motors

• Maintained ‘Outperform’ with a price target of Rs 485.
• JLR U.S. sales declined 11 percent in July 2018.
• Average incentives increased 18 percent YoY and 24 percent MoM.
• Expect JLR's dollar average selling price improved by 3 percent YoY in July 2018 led by better model mix.
• Maintain Outperform given attractive valuations.

Morgan Stanley on Coal India

• Maintained ‘Equalweight’ with a price target of Rs 306.
• Jul-18: volume momentum strong, but lags target.
• Volume growth should moderate as base normalizes.
• Management has guided for 9 percent growth in 2018-19.

CLSA on Torrent Pharma

• Maintained ‘Buy’; raised price target to Rs 1,860 from Rs 1,610.
• June quarter’s net profit was ahead of expectation.
• U.S. revenues on an uptrend and worst of pricing pressure is over.
• EU going strong; Brazil weak; India outlook gets stronger.
• Unichem integration progressing well.

Brokerages On ONGC

JP Morgan

• Maintained ‘Overweight’ with a price target of Rs 265.
• Second-highest net realisation drives Ebitda beat.
• Net profit impacted by lower other income and higher tax.
• Debt for acquisitions has declined and should fall further.
• Expect sequential pickup in crude production and full benefit of rupee depreciation to flow.

CLSA

• Maintained ‘Buy’ with a price target of Rs 240.
• Higher-than-expected sales volumes and realisations drove a beat on revenues.
• Ebitda above estimates; net profit below due to higher tax rates.
• ONGC is now the cheapest among global large-cap E&P.
• Buy for attractive risk-reward.
• Expect clarity on subsidy in three months which could be huge rerating trigger.

Motilal Oswal

• Maintained ‘Buy’ with a price target of Rs 219.
• In-line Ebitda; no subsidy burden yet.
• Gas production and sales up; expect gas production to increase 10 percent annually.
• Expect lower opex and higher realisations in absence of subsidy burden.
• ONGC is on a strong footing, in our view.

Nomura

• Maintained ‘Neutral’ with a price target of Rs 185
• In line Q1; adjusted Ebitda ahead of estimates
• June quarter was hit by lower other income and higher tax
• Expect higher oil prices to drive 43 percent EPS growth in 2018-19.

Brokerages On Indiabulls Housing

CLSA

• Maintained ‘Buy’; raised price target to Rs 1,700 from Rs 1,650.
• Key positive was healthy growth in AUMs and QoQ expansion in spreads.
• Healthy growth to drive compounding-led returns.
• IndAS transition lifts net worth by 18 percent and accretive to earnings.

Macquarie

• Maintained ‘Outperform’ with a price target of Rs 1,599.
• June quarter’s net profit was in line with expectations.
• AUM grew 33 percent with retail loans growing more than two times industry average.
• Revaluation of stake in Oak North Bank under IndAS adds significantly to net worth and CET-1.

JP Morgan

• Maintained ‘Overweight’ with a price target of Rs 1,600.
• Earnings beat on lower credit cost under IND-AS.
• Book value goes up 15 percent; loan growth remains solid.
• Growth in 2018-19 should remain strong and sees no major stress build-up.

Brokerages On Ramco Cement

Deutsche Bank

• Maintained ‘Hold’; cut price target to Rs 715 from Rs 755.
• June quarter’s Ebitda missed estimates due to weaker cement margins.
• Weaker margin to offset strong volume growth.
• Cut EPS estimates to factor in lower margins as cost inflation continues.
• Prefer Shree Cement and Dalmia Bharat in cement sector.

CLSA

• Maintained ‘Buy’ with a price target of Rs 960.
• June quarter results were below our estimates.
• Weak pricing and cost inflation impact earnings.
• Strong volumes, but weak realisations.
• Unit Ebitda falls to 14-quarter low.

Brokerages On Marico

UBS

• Maintained ‘Buy’ with a price target of Rs 425.
• Solid volumes given the sharp price increases necessitated.
• Strong revenue growth; raw material inflation impact remains.
• Parachute remains the brand of choice.

BofAML

• Maintained ‘Buy’ with a price target of Rs 420.
• Better-than-expected quarter; Rural growth strong.
• Revival in global business with GST-led market-share gains in coconut oil to boost earnings.
• Comforting valuation vs peers; earnings revival ahead.

Also Read: Q1 Results: Marico’s Profit Meets Estimates On Strong Rural Growth

Brokerages On Cognizant

UBS

• Revenue miss raises concerns on impact of margin strategy.
• 2018 revenue guidance maintained at 8.4-10 percent.

Citi

• Margin and EPS above estimates, but Revenue modestly below estimates.
• Demand trends turning positive is a consistent theme in the sector.

Also Read: Q2 Results: Cognizant’s Profit Falls To $456 Million

• Talwalkar’s Lifestyles: Visa Capital Partners acquired 1.62 lakh shares or 0.50 percent equity at Rs 166.38 each.
• Manpasand Beverages: Amundi Funds Equity India sold 6 lakh shares or 0.50 percent equity at Rs 129.56 each.
• Rushil Décor: Victory Expedition EM Small Cap Fund sold 80,000 shares or 0.50 percent equity at Rs 629.77 each.

Shriram City Union Finance:

• East Bridge Capital Master Fund acquired 13.3 lakh shares or 2 percent equity at Rs 1,922.25 each.
• Morgan Stanley Asia or Singapore sold 13.2 lakh shares or 2 percent equity at Rs 1,922.25 each.

Vaibhav Gems

• Malabar India Fund acquired 1.73 lakh shares or 0.50 percent equity at Rs 680 each.
• Rahim Ullah sold 1.8 lakh shares or 0.60 percent equity at Rs 680.12 each.

Indiabulls Housing Finance (Q1, YoY)

• Net interest income up 22.1 percent at Rs 1,690 crore.
• Net profit up 30.3 percent at Rs 1,054.7 crore.
• Loan growth at 33.4 percent.
• Gross NPA at 0.78 percent versus 0.80 percent.

Also Read: Q1 Results: Indiabulls Housing Finance’s Profit Meets Estimates

Torrent Pharma (Q1, YoY)

• Revenue up 37.4 percent at Rs 1,872 crore.
• Net profit down 13.3 percent at Rs 163 crore.
• Ebitda up 60.6 percent at Rs 477 crore.
• Margin at 25.5 percent versus 21.8 percent.

Capital First (Q1, YoY)

• Net interest income up 51 percent at Rs 528 crore.
• Net profit up 55 percent at Rs 101.5 crore.
• Gross NPA at 1.57 percent versus 1.72 percent.
• Net NPA at 1 percent versus 1.04 percent.

Moil (Q1, YoY)

• Revenue down 7.6 percent at Rs 313.5 crore.
• Net profit up 16.1 percent at Rs 113.4 crore.
• Ebitda up 12.8 percent at Rs 136.7 crore.
• Margin at 43.6 percent versus 35.7 percent.

Deepak Nitrite (Q1, YoY)

• Revenue up 24.9 percent at Rs 421 crore.
• Net profit up 8.5 percent at Rs 21.8 crore.
• Ebitda up 11.1 percent at Rs 56 crore.
• Margin at 13.3 percent versus 14.9 percent.

ONGC (Q1, QoQ)

• Revenue up 13.5 percent at Rs 27,212.8 crore.
• Net profit up 3.9 percent at Rs 6,143.9 crore.
• Ebitda up 29.4 percent at Rs 14,732 crore.
• Margin at 54.1 percent versus 47.5 percent.
• Net realisations $74.2 per barrel versus $66.71 per barrel.

Also Read: Q1 Results: ONGC’s Profit Misses Estimates Despite High Oil Prices

JK Lakshmi Cement (Q1, YoY)

• Revenue up 2.5 percent at Rs 923.4 crore.
• Net profit down 51.2 percent at Rs 13.8 crore.
• Ebitda down 22.1 percent at Rs 93.8 crore.
• Margin at 10.2 percent versus 13.4 percent.

Shakti Pumps (Q1, YoY)

• Revenue up 6.8 percent at Rs 96 crore.
• Net profit up 32 percent at Rs 6.6 crore.
• Ebitda up 3.1 percent at Rs 13.1 crore.
• Margin at 13.6 percent versus 14.1 percent.

Narayana Hrudayalaya (Q1, YoY)

• Revenue up 25.2 percent at Rs 652.3 crore.
• Net loss at Rs 4.2 crore versus net profit at Rs 10.9 crore.
• Ebitda down 6 percent at Rs 47.4 crore.
• Margin at 7.3 percent versus 9.7 percent.

Nifty Earnings To Watch

• Titan

Other Earnings To Watch

• Bank of Maharashtra
• Berger Paints
• BSE
• CG Power and Industrial Solutions
• ENIL
• Gujarat Alkalies
• Indo Count Industries
• KEC International
• Laurus Labs
• Nilkamal
• Nestle India
• Shipping Corp.
• SJVN
• Steel Authority of India
• VIP Industries
• Zydus Wellness

• 10:30am: Nikkei India Services PMI for July, prior 52.6
• 10:30am: Nikkei India Composite PMI for July, prior 53.3

• Larsen to exercise oversubscription option on L&T Tech OFS; sale now for 59 lakh shares.

• SBI and Reliance Jio collaborate on digital transaction for SBI customers.
• HDFC raised its retail prime lending rate by 20 basis points from August 1.
• JK Paper acquired 76.37 percent stake in Sirpur Paper Mills for Rs 371 crore.
• VS Tillers July sales: Tractors sold 769 units versus 760; power tillers 2,598 units versus 2,405.
• JK Paper acquired 76.37 percent stake in Sirpur Paper Mills for Rs 371 crore.
• Indiabulls Housing Finance: To pay Rs 10 a share as mid-year dividend, approves raising up to Rs 26,000 crore via bonds.
• DCB Bank hiked MCLR by 10 basis points across various tenors.
• Mphasis India to consider buyback of shares on August 7.
• Tata Motors’ JLR sales in U.S. down 11 percent at 8,089 units.
• NBCC India: Wins Rs 400 crore deal for India Pavilion at Dubai World Expo.
• Reliance Naval: ONGC terminates a contract for vessels. (Bloomberg)

• Kohli’s gritty 149 keeps India in the hunt on day 2 versus England.
• Coal clogs up Indian ports as rail car shortage slows deliveries.
• The DNA Bill: another invasive, imperfect database!
• The optical illusion of 0 percent GST on sanitary napkins.
• Expect over Rs 1 lakh crore in recoveries from top 12 bad loan accounts, Sanjeev Sanyal says.
• Bitcoin needs to hit $213,000 to replace money supply, UBS says.
• Pakistan to decide on $12 billion bailout in six weeks
• Disney is seeking ‘Star Wars’ rights back from TBS, TNT.
• Burberry is changing its logo for first time in two decades.
• Russian billionaire sued in fight over Fish with former partner.

• The Bloomberg Commodity Index added 0.3 percent, recouping some of Wednesday’s 1.3 percent slide.
• West Texas Intermediate crude was at $68.88 a barrel.
• Brent crude traded 0.2 percent lower at $73.29 a barrel.
• Gold was flat at $1,208.74 an ounce.

Shanghai Exchange

• Steel traded higher; up 1.1 percent.
• Aluminium traded higher; up 0.1 percent.
• Zinc traded higher; up 0.5 percent.
• Copper traded higher; up 0.1 percent.
• Rubber traded lower for fourth day; down 0.5 percent.

Here are the key events to watch out for this week:

• Earnings season continues with Berkshire Hathaway and Toyota among companies reporting results.
• The U.S. jobs report is on Friday, and is predicted to show a healthy labor market, with 193,000 new jobs.