Stocks To Watch: Allahabad Bank, IDBI Bank, India Grid Trust, SBI, Union Bank

• SBI and Union Bank are said to be exposed to $1.8 billion PNB fraud case: Bloomberg.
  
• IDBI Bank sells entire 30 percent stake in NSDL e-Governance infrastructure.
  
• India Grid Trust acquired three power transmission assets for Rs 1,410 crore.
  
• IPO watch: Aster DM Healthcare IPO subscribed 1.2 times.

Indian equity benchmarks closed higher for the second time this week, steadying after a decline that followed a 5.6 percent gain in January and a 28 percent advance in 2017.

The S&P BSE Sensex Index closed 0.4 percent higher at 34,297, while the NSE Nifty 50 Index also closed 0.4 percent higher at 10,545.

Japanese stocks extended a rally in global equities and the yen retreated from a 15-month high, with trading muted due to holiday closures across Asia.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, rose 0.3 percent to 10,586.50 as of 6:50 a.m.

• UCAS appointed Infosys as its core technology partner up to 2021.
• HDFC allots 2.49 crore shares to investors at Rs 1,726.05/share on a preferential basis.
• SBI and Union Bank are said to be exposed to $1.8 billion PNB fraud case: Bloomberg.
• Allahabad Bank's exposure at about Rs 4,000 crore in PNB fraud case: Bloomberg.
• Union Bank's exposure at about Rs 1,000-2,000 crore in PNB fraud case: Bloomberg.
• Axis Bank's exposure at about Rs 2,000-3,000 crore in the PNB fraud case: Bloomberg.
• IDBI Bank sells entire 30 percent stake in NSDL e-Governance infrastructure.
• Indoco Remedies gets European GMP certification for manufacturing facility in Goa.
• Prakash Industries to raise Rs 208 crore from promoters by issuing 1 crore convertible warrants.
• India Grid Trust acquired three power transmission assets for Rs 1,410 crore.
• 8K miles launched proprietary Blockchain platform 8K Health Edge.
• Mahindra and Mahindra to invest Rs 176 crore in Zoomcar India
• Idea Cellular board meeting on Feb. 21, 2018 to approve QIP issue price.

IPO Watch

• Aster DM Healthcare IPO closes. The issue was subscribed 1.2 times.

H.G. Infra looking to raise Rs 462 crore via IPO.https://t.co/N2mZwWxURm pic.twitter.com/2ipfQ7T5Pn

F&O Setup

• Nifty February futures traded at 10,551, a premium of 5.7 points.
• February series: Nifty open interest down 2 percent, Bank Nifty OI unchanged.
• India VIX ended at 16.3, down 5 percent.
• Maximum open interest for February series at 11,100 call strike (open interest at 52.7 lakh, down 2.2 percent)
• Maximum OI for February series at 10,500 Put (open interest at 64 lakh, up 1 percent)

F&O Ban

• In ban: Balrampur Chini, Dish TV, GMR Infra, HDIL, Jain Irrigation, JP Associates, Oriental Bank
• New in ban: Jain Irrigation

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

Bulk Deals

• City Union Bank: Lavender Investments sold 60 lakh shares or 0.9 percent equity at Rs 166 each.

Praxis Home Retail

• Aadi Financial Advisors LLP acquired 6.26 lakh shares at Rs 161.81 each.
• Pensionskasse Des Bundes Publica sold 1.63 lakh shares at Rs 167.82 each.

Brokerage Radar

Macquarie on Punjab National Bank

• Maintained ‘Underperform' with price target of Rs 128.
• Yet another example of poor risk management practices at PSU banks.
• Funded exposure of Rs 1,700 crore and non-funded exposure of Rs 11,000 crore.
• If held liable, this would translate to 27 percent of net worth and 43 percent of market cap.
• If held liable, would wipe out profits made between April 2012 and March 2017.
• Frauds a periodic occurrence because of poor systems, checks & balances.

JPMorgan on Punjab National Bank

• Maintained ‘Neutral' with price target of Rs 195.
• Fraud detected; Large potential writedown.
• Expect this event to remain an overhang on stock price in the near term.
• May be too late to sell but recommend avoiding entering the stock.
• If liability of Rs 11,300 crore booked, then 15 percent hit to the next fiscal's estimated book value per share.
• May also lead to slower revenue growth along with higher funding costs.
• Total liability nearly represents entire deposit accretion of December quarter.
• Possible incremental recap from the government.
• PNB could divest its 33 percent stake in PNB Housing Finance.

Morgan Stanley on Zee Entertainment

• Maintained ‘Overweight' with price target of Rs 610.
• Zee launched its new OTT platform - Zee5.
• Some content available for free.
• For premium content there will be monthly subscription.
• Expect aggressive advertising of this platform over the next several months.

HSBC on SKF India

• Maintained ‘Buy'; raised price target to Rs 2,300 from Rs 2,000.
• December quarter's earnings strong.
• Automotive business continues to do well.
• Slower industrial sales negatively impacted earnings.
• New initiatives and new product lines to support market share driven growth.
• New distribution centre to allow the company to gain market share for industrial products.

Deutsche Bank on India Equity Strategy

• Following the sell-off we see attractive risk reward for rural reflation beneficiaries and high growth, high CASA banks.
• Rural Reflation thrust to gain momentum.
• RBI's latest guidelines turn risk-reward firmly in favor of retail-oriented lenders.
• Strong liabilities franchise emerge as a key differentiator in tightening liquidity scenario.
• Preferred stocks: HUL, Dabur, M&M, Dalmia Bharat and Shree Cement.
• Preferred banks: HDFC Bank, IndusInd Bank and Kotak Mahindra Bank.
• Preferred NBFCs: Shriram Transport Finance, HDFC and M&M Financial Services.

Motilal Oswal on Zee Entertainment

• Maintained ‘Buy' with price target of Rs 705.
• Zee launches digital app – Zee5.
• Focusing on original content to benefit from shift toward OTT.
• Offering original content at initial price of Rs 99 per month.
• Incremental operating cost toward Zee5 could be Rs 50-70 crore.
• Expect 80 – 100 basis point impact on the operating margin.
• Expect 24 percent compounded growth rate in earnings per share over the financial years through March 2020, with RoIC of over 30 percent.

Credit Suisse on Apollo Hospitals

• Upgraded to ‘Outperform' from ‘Neutral'; raised price target to Rs 1,450 from Rs 1,075.
• Margins bottoming out; strong growth ahead.
• Margins for mature hospitals stabilising now.
• Strong 20 percent compounded growth rate in operating income over the financial years through March 2020.
• New hospitals show improvement in utilisation and operating income.
• Pharmacy margins better than expected.
• Apollo Hospital turnaround pushed out to the financial years ending March 2020.

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