Stocks To Watch: Aarti Drugs, Bharti Airtel, NMDC, Sutlej Textiles

• Government to sell 1.5 percent stake in NMDC through an offer for sale at a floor price of Rs 153.50 per share.
  
• Bharti Airtel says its payments bank has terminated some retailers.
  
• Sun Pharma hikes stake in Ranbaxy Malaysia to 85.9 percent from 79.55 percent.
  

Indian equity benchmarks rose to fresh record highs for the second straight day led by gains in IT and pharma shares amid strong global cues. The gains in Monday's session were broad based as the mid-cap and small-cap indices also surged to fresh records.

The S&P BSE Sensex rose 0.58 percent or 199 points to 34,353 and the NSE Nifty 50 Index advanced 0.61 percent or 65 points to 10,624.

The Singapore traded SGX Nifty, an early indicator of Nifty 50's performance in India, rose 0.2 percent to 10,651 as of 7:05 a.m.

Technical indicator suggests Nifty has more room left on the upside.https://t.co/OljE0FqUht pic.twitter.com/KiIMvV9gcU

Here Are The Stocks To Watch Out For In Tuesday's Trade

• Tata Motors' Jaguar Land Rover sales in December rose 0.6 percent to 55,697 units. Full year sales up 6.5 percent to 6.2 lakh units.
• Government to sell 1.5 percent stake in NMDC through an offer for sale at floor price of Rs 153.50 per share.
• Aarti Drugs to buyback 2.75 lakh shares (1.15 percent) at Rs 875 per share.
• Bharti Airtel says its payments bank has terminated some retailers.
• Sutlej Textiles and Industries to set up a plant in Jammu and Kashmir to manufacture polyester staple fibre. It also deferred plans of expanding its Baddi facility due to uncertain markets conditions in the yarn segment.
• Deep Industries incorporated subsidiary Deep International DMCC in Dubai on Jan. 7.
• Sun Pharma hikes stake in Ranbaxy Malaysia to 85.9 percent from 79.55 percent.

Government plans to sell 1.5% stake in NMDC through offer for sale. https://t.co/s9RVTgmcwg pic.twitter.com/e2Qqyg59on

F&O Setup

• Nifty January futures trading at 10,631, premium of 8.5 points versus 14 points.
• January Series: Nifty open interest up 4 percent; Bank Nifty open interest up 18 percent.
• India VIX ended at 13.7, up 4.7 percent.
• Max open interest for Jan series at 11,000 Call (open interest at 45.2 lakh, up 4 percent).
• Max open interest for Jan series at 10,400 Put (open interest at 64.4 lakh, up 6 percent).

F&O Ban

• In ban: Fortis, GMR Infrastructure, HDIL, IFCI, Jindal Steel and Power, Jain Irrigation, JP Associates, Reliance Communications, Reliance Capital, Reliance Power, Wockhardt
• New in ban: Reliance Capital, Wockhardt
• Out of ban: Reliance Power

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

Active Stock Futures

Jaguar Land Rover sold a record number of cars in 2017 with sales tripling since Tata buyout. https://t.co/C5tkfAMZCK pic.twitter.com/QCvcqVOPKs

Bulk Deals

• Gitanjali Gems: Russell Investment Co PLC bought 9.18 lakh shares or 0.8 percent equity at Rs 77.27 each.
• Snowman Logistics: Norwest Venture Partners VII A Mauritius sold 42 lakh shares or 2.5 percent equity at an average of Rs 61.6 each.
• Sobha Ltd: Adawi Investments Holdings Ltd sold 41.60 lakh shares or 4.3 percent equity at an average of Rs 599.85 each.
• Sangam Industries: Mentor Capital bought 2 lakh shares or 0.5 percent equity at Rs 190 each.
• Monnet Ispat: Oswal Greentech sold 16.29 lakh shares or 0.8 percent equity at Rs 33.62 each.
• Coral India Finance: India Max Investment sold 6.75 lakh shares or 1.4 percent equity at Rs 44.1 each.
• Shah Alloys: United India Insurance sold 1 lakh shares or 0.5 percent equity at Rs 22.12 each.

Pennar Engineered Building Systems

• Crest Capital & Investment bought 2.72 lakh shares or 0.8 percent equity at Rs 110.1 each.
• Ganesh Trading Investment bought 3 lakh shares or 0.9 percent equity at Rs 110.1 each.
• Zephyr Peacock India Fund sold 8.87 lakh shares or 2.6 percent equity at an average of Rs 110.2 each.

Menon Bearings

• Promoter Sucheta Menon sold 22.42 lakh shares or 4 percent equity at Rs 100.5 each.
• Astute Investments bought 22.16 lakh shares or 4 percent equity at Rs 100.5 each.

LP Securities

• New Berry Advisors sold 4.23 lakh shares or 0.6 percent equity at Rs 24.45 each.
• LKP Panday bought 7.48 lakh shares or 1 percent equity at Rs 24.45 each.

Tata Sons vs Mistry battle continues at NCLT. @shivanisaxena91 reports.https://t.co/BVVpITl6BX pic.twitter.com/rlwkenO2nh

Earnings To Watch

• Shalby
• South Indian Bank

Brokerage Radar

Macquarie on ICICI Lombard General Insurance

• Initiated ‘Underperform' with price target of Rs 565; implying a potential downside of 33 percent from yesterday's close.
• A float business with unfathomable valuations.
• Large opportunity, but competition a big pain point.
• Suffers underwriting losses due to intense price competition.
• Industry has growth tailwinds.
• Large float of 3.5-4 times, coupled with high interest rates, make it to make profits.
• Float profits cross-subsidise underwriting losses.
• Expect growth in premium at a compounded rate of 21 percent over the financial years through March 2020; improving quality to be challenging.
• Proposed Motor Vehicle Act to boost underwriting profitability.
• Current valuations leave no upside.

Macquarie on Suprajit Engineering

• Aims to sustain revenue growth at 5-10 percent above auto industry production growth for next 5-10 years.
• Positives: rising share of business in India and globally, market share gains in aftermarket.
• Positives: entry into new non-automotive segments and expansion of its product portfolio.
• Management strategy: De-risk and grow profitably.
• Exports, aftermarket and non-auto are key growth drivers.
• High and steady profitability, return ratios across cycles.
• Management guiding for dividend payout ratio of 20-25 percent.

Macquarie on Endurance Tech

• Management focused on diversifying customer mix in India.
• Focus also on growing content in scooters and growing European business profitably.
• Technology content is increasing across product portfolio.
• Focused on customer diversification and growing content.
• Pursuing profitable revenue growth in European operations.
• Track record of prudent investments and high return on capital employed.
• Endurance to pursue strategic alliances and inorganic growth opportunities.

Jefferies on Oil & Gas

• Auto fuel prices up sharply but more needed to normalise marketing margins.
• Elevated Brent and busy political calendar to keep marketing margins under pressure.
• Lower marketing margins and softer refining margins to weigh on earnings.
• Like cheaper and more resilient Indian Oil to Bharat Petroleum or Hindustan Petroleum.

IDBI Capital on Larsen & Toubro Infotech

• Initiated ‘Buy' with price target of Rs 1,300, implying a potential upside of 16.7 percent from yesterday's close.
• LTI has all the ingredients of being a sustainable growth engines.
• Has strong presence in high growth digital solutions.
• Expect LTI to continue to outperform the sector.
• LTI to become more aggressive than before; To be most feared competitor.
• Momentum across – large clients + large deal wins + large deal pipeline to continue.
• Expect revenue in dollar terms and earnings per share to grow at a compounded rate of 14 percent and 13 percent respectively over the financial years through March 2020.
• Strong growth performance warrants premium valuation.

Prabhudas Lilladher on Zensar Technologies

• Initiated ‘Buy' with price target of Rs 1,000, implying a potential upside of 13.6 percent from yesterday's close.
• Increasing proportion of revenues from Digital SBU coupled with deal wins to revive revenue growth trajectory.
• Expect gradual recovery on the margin front.
• Revival in growth to drive SG&A leverage and margin expansion over the financial years through March 2020.
• Strong expertise in Oracle offerings remains the key proposition.
• Zensar now positioned to address complete value chain in Retail eCommerce
• EPS estimates for the current and next two financial years are Rs 52, Rs 65 and Rs 80 respectively.
• Dollar Revenue growth for the current and next two financial years estimated at 3.7 percent, 10.3 percent and 11 percent respectively.
• Valuations remain reasonable; Room for re-rating over two-year period.

Edelweiss Investment on Deepak Nitrate

• Initiated ‘Buy' with a price target of Rs 360, implying a potential upside of 31 percent from yesterday's close.
• New plant to revitalise business dynamics from April 2019 onwards
• Positives: improving product mix, efficiency to drive performance products business.
• Company set to reap benefits of capacities as well as performance products
• Expect spectacular revenue and margin spurt with higher utilisation levels and business expansion
• Revenue is expected to double and margins quadruple; Net profit to grow at a compounded rate of 38 percent over the financial years through March 2020.
• Debt funded capex to generate healthy returns.
• Debt-to-equity expected to soar two times; return on capital employed to expand to 17 percent by March 2020.
• Free cash flows from April 2019 with scope for forward integration.
• Low valuations for a strong cash flow generating business.
• Bull case price target of Rs 414.

JPMorgan on Maruti Suzuki

• Maintained ‘Overweight'; raised price target to Rs 10,200 from Rs 9,350.
• Valuations to continue to re-rate going into the next financial year.
• Passenger vehicle market should recover back to double-digit growth over next two years.
• Maruti has enough levers to offset commodity cost increases.
• Expect cycle high margins of 11.5 percent and market share of 50 percent to sustain over next two years.
• Expect launch of compact SUV in 2018 with new refreshed Swift/Wagon R/Alto.

#ChartOfTheDay by @iYashUpadhyaya | These 5 stocks have become analysts' favourite in a period of just one year. https://t.co/pyvsQBqPKJ pic.twitter.com/q5mFl7yU47

Media Reports

• JSW Infra-SREI to buy Sterling Port in Dahej (Mint).
• Govt to begin 1.5% stake sale of NMDC today (PTI).
• Rural indicators point to worsening farm distress (Mint).
• Banks may sell loans in second list to ARCs in absence of bidders (Mint).
• Turmeric Prices To Remain Low Due To higher Supply (Financial Express).
• Jewellery Sector Still feels the pinch of demonetisation (Financial Express).
• SC Stays Karntaka HC Order On package Health Warnings (Financial Express).
• Vedanta leads Electrosteel Steels race with highest offer; ahead of a Tata group bid; Vedanta bid was said to be worth Rs 4,500 crore (Economic Times).
• Radiant looks to buy Max Healthcare stake; talks at early stage for Life Healthcare's 9.7% stake in Analjit Singh's hospital chain (Economic Times).

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