Stocks To Watch: Aurobindo Pharma, Cipla, Eicher Motors, Hero MotoCorp

• Bajaj Electricals gets order worth $4.1 million in Zambia.
  
• Government raises import duty on sugar to 100 percent.

• Nifty earnings today: Aurobindo Pharma, Cipla, Eicher Motors
• Hero Motocorp Q3 profit up 4.3 percent at Rs 805 crore.
  

Asian equity markets recovered some of the losses sustained in the global rout after U.S. shares rallied amid a welter of calls to “buy the dip.”

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, snaps six-day losing streak and rose 1.1 percent to 10,613.50 as of 6:50 a.m.

Here's why the Monetary Policy Committee is unlikely to cut interest rates tomorrow. @dugalira explains. https://t.co/Vth1s9RpOO pic.twitter.com/InLOmJPLpC

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

• KEC International gets orders worth Rs 2,035 crore.
• Canara Bank Board approves raising Rs 4,870 crore via preferential issue to the government.
• Max Financial Board approves raising Rs 4,870 crore via preferential issue to the government.
• Bajaj Electricals gets order worth $4.1 million in Zambia.
• Praj Industries gets letter of acceptance for Rs 16.75 crore BPCL order.
• Mcnally Bharat gets orders worth Rs 68.3 crore.
• Government raises import duty on sugar to 100 percent.
• Ashapura Intimates Board approves plan for expansion of Indian Ethnic Nightwear in Southern parts of India.
• Orient Press starts commercial production of Flexible Packaging Material at its Noida unit.

Income Tax department issues notices to cryptocurrency investors.https://t.co/OvCrMcNQ7H pic.twitter.com/U0EIQrzKeW

F&O Setup

• Nifty February futures trade at 10,513 premium of 15 points from 18 points.
• February series: Nifty open interest down 1 percent; Bank Nifty open interest down 2 percent.
• India VIX ended at 20, up 24.6 percent.
• Max open interest for February series at 11,500 call strike (open interest at 57.7 lakh, down 7 percent).
• Max open interest for February series shifts to 10,000 put from 10,500 strike (open interest for 10,000 put strike at 49.5 lakh, up 28 percent).

F&O Ban

• In ban: Fortis Healthcare, HDIL, Jain Irrigation
• New in ban: Jain Irrigation
• Out of ban: India Cement, Wockhardt

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

SEBI, exchanges have beefed up their risk management and surveillance systems.https://t.co/WBf2zZc8ej pic.twitter.com/RYPsxUikKU

Bulk Deals

• Veto Switchgear Cable: Reliance Wealth Mgmt ltd sold 1 lakh shares (0.5 percent) at RS 190.21 each.

Hedge fund SSG Capital buys Rs 2,500-crore Bhushan Steel loans, reports @visshy_it.https://t.co/NdDa6LLD8O pic.twitter.com/ksHdwFd3q0

Earnings Reactions To Watch

KEC International Q3 (YoY)

• Revenue up 26 percent at Rs 2,405 crore.
• Net profit up 79 percent at Rs 112 crore.
• EBITDA up 34 percent at Rs 244 crore.
• Margin at 10.1 percent versus 9.5 percent.

Ashapura Intimates Q3 (YoY)

• Revenue up 116 percent at Rs 78 crore.
• Net profit up 14.5 times at Rs 37.8 crore.
• Other income of Rs 38 crore versus Rs 0.3 crore.
• EBITDA up 117 percent at Rs 13 crore.
• Margin flat at 16.7 percent.

Gandhi Special Tubes Q3 (YoY)

• Revenue up 27 percent at Rs 28 crore.
• Net profit up 22 percent at Rs 9.3 crore.
• EBITDA up 50 percent at Rs 10.5 crore.
• Margin at 37.5 percent versus 31.8 percent.

Gujarat Alkalies and Chemicals Q3 (YoY)

• Revenue up 27 percent at Rs 618 crore.
• Net profit up 138 percent at Rs 112 crore.
• EBITDA up 112 percent at Rs 180 crore.
• Margin at 29.1 percent versus 17.5 percent.

Shanthi Gears Q3 (YoY)

• Revenue up 17 percent at Rs 54 crore.
• Net profit up 43 percent at Rs 6.7 crore.
• EBITDA up 28 percent at Rs 11 crore.
• Margin at 20.4 percent versus 18.7 percent.

Vidhya Telelinks Q3 (YoY)

• Revenue up 55 percent at Rs 320.5 crore.
• Net profit up 54.5 percent at Rs 17 crore.
• EBITDA up 48 percent at Rs 41.5 crore.
• Margin at 12.9 percent versus 13.5 percent.

Ramco Industries Q3 (YoY)

• Revenue up 24 percent at Rs 181 crore.
• Net profit at Rs 12 crore versus Rs 5 crore.
• EBITDA at Rs 18.5 crore versus Rs 7.5 crore.
• Margin at 10.2 percent versus 5.1 percent.

Hero Motocorp Q3 (YoY)

• Revenue up 15 percent at Rs 7,305 crore.
• Profit up 4.3 percent at Rs 805 crore.
• EBITDA up 7.2 percent at Rs 1,158 crore.
• Margin at 15.9 percent versus 17 percent.

Thermax Q3 (YoY)

• Revenue up 18 percent at Rs 1,117 crore.
• Net profit up 6.5 percent at Rs 58.6 crore.
• EBITDA up 8.5 percent at Rs 95.5 crore.
• Margin at 8.5 percent versus 9.3 percent.

Heritage Foods Q3 (YoY)

• Revenue up 27 percent at Rs 579 crore.
• Net profit down 20 percent at Rs 16 crore.
• EBITDA up 27 percent at Rs 35.5 crore.
• Margin flat at 6.1 percent.

Tasty Bites Q3 (YoY)

• Revenue up 12 percent at Rs 73 crore.
• Net profit up 45 percent at Rs 6.8 crore.
• EBITDA unchanged at Rs 10 crore.
• Margin at 13.7 percent versus 15.4 percent.

REC Q3 (YoY)

• Net Interest Income down 9 percent at Rs 2,064.5 crore.
• Net profit down 26 percent at Rs 1,296 crore.

Dish TV Q3 (YoY)

• Revenue down 1 percent at Rs 741 crore.
• Net loss of Rs 0.75 crore versus net profit of Rs 10 crore.
• EBITDA down 15 percent at Rs 201 crore.
• Margin at 27.1 percent versus 31.8 percent.

DIC India Q3 (YoY)

• Revenue up 11 percent at Rs 199.5 crore.
• Net loss of Rs 3.5 crore versus net profit of Rs 5 crore.
• EBITDA down 10 percent at Rs 4.5 crore.
• Margin at 2.3 percent versus 2.8 percent.

Cupid Q3 (YoY)

• Revenue down 25 percent at Rs 21 crore.
• Net profit down 37.5 percent at Rs 4 crore.
• EBITDA down 38 percent at Rs 6.5 crore.
• Margin at 31 percent versus 37.5 percent.

Nifty Earnings To Watch

• Aurobindo Pharma
• Cipla
• Eicher Motors

Other Earnings To Watch

• BEML
• ICRA
• Indraprastha Gas
• Ipca Laboratories
• IRB Infra
• Kaveri Seed Company
• Polaris
• Prestige Estates
• Reliance Home Finance
• SRF
• Torrent Power
• Voltas

New India exchange-traded fund will let investors bet on bonds of state companies.https://t.co/ZlskZHLMvt pic.twitter.com/68r5nMQke0

Brokerage Radar

Jefferies on Engineering and Construction

• Sharp downside has given good entry opportunities.
• Expect capex announcement driven cycle recovery over the next 12-18 months.
• December quarter's order flows and rise in budgetary infra outlay are encouraging.
• BEL: Upgraded to ‘Buy'.
• L&T, ABB, Voltas, KEI are top picks.
• BHEL/Thermax are ‘Underperformers'

Jefferies on BEL

• Upgraded to ‘Buy' from ‘Hold'; maintained price target at Rs 190.
• Recent correction provides a good entry point.
• Double-digit revenue growth to continue.
• Macro defence story – still in BEL's favour.
• Remain positive on company's momentum in order flow and execution.

JPMorgan on Siemens India

• Maintained ‘Underweight' with price target of Rs 1,000.
• December quarter's operating income beat compensates for topline miss.
• Order inflow growth sedate at 2 percent.
• Estimate revenue to grow 15 percent over the financial years through March 2019.
• Estimate earnings per share growth at 16 percent and 24 percent for the current and the next financial year respectively.

Axis Capital on Punjab National Bank

• Maintained ‘Hold' with price target of Rs 175.
• Higher provisions dent profitability.
• Asset quality improved optically with GNPA ratio declining.
• Lower slippages and improved loan growth are key positives.
• Earnings to remain under pressure given higher provisions.

JPMorgan on Punjab National Bank

• Maintained ‘Neutral' with price target of Rs 195.
• December quarter missed estimates on higher treasury losses.
• Asset quality improved but stayed weak with slippages.
• Credit costs trended higher, but was sequentially in line.
• Opex growth picked-up sequentially but stayed under control.
• Expect asset quality pressures to continue in coming quarters.

Porinju Veliyath (@porinju) wants investors to focus more on microeconomic fundamentals and not global macroeconomic developments.https://t.co/WEC7ZU6Cdr

Credit Suisse on Hero MotoCorp

• Maintained ‘Neutral' with price target of Rs 3,560.
• December quarter was slightly better than expected operationally.
• Marginal beat on higher spare part sales.
• Management expects double-digit growth for the industry in the next financial year.
• Hero can gain market share led by multiple launches planned.
• Management to pass on higher acquisition and commodities costs.

Deutsche Bank on Hero MotoCorp

• Maintained ‘Hold' with price target of Rs 4,100.
• December quarter results were broadly in line.
• Building in robust volume growth of 8 percent over the financial years through March 2020.
• Cautious on margins due to raw material inflation.
• Management expects demand uptick to continue in near-term.

CLSA on Lupin

• Maintained ‘Buy'; cut price target to Rs 1,000 from Rs 1,060.
• U.S. sales increased 5 percent on a sequential basis, but margins were weak.
• Key U.S. launches on track in next fiscal; Solosec launch on track in mid-2018
• Lupin expects to resolve USFDA warning letter on two plants in 2018.
• Lupin expects U.S. price erosion to bottom out over the next few quarters.
• Remain constructive as stock is trading at an attractive valuation.

Credit Suisse on Lupin

• Maintained ‘Neutral' with price target of Rs 850.
• December quarter reported weak margins results in significant miss.
• Operating margin (pre R&D) was the lowest in past five years.
• Positive in December quarter was no negative surprise in the U.S. sales.
• Japan sale finally starts growing again.

Deutsche Bank on Castrol

• Maintained ‘Buy' with price target of Rs 235.
• December quarter was significantly above estimates.
• Strong volume growth post GST.
• Market share grew in commercial vehicle segment.
• Despite higher raw material costs margins improved.
• Expect robust margins and volume growth.

CLSA on JSW Energy

• Maintained ‘Sell'; raised price target to Rs 69 from Rs 66.
• Net profit aided by treasury income and lower interest cost.
• Regulated business disappoints, dark spreads continue to contract.
• Core business weakens, risks to return on equity deterioration limits upside.

CLSA on Dish TV

• Maintained ‘Buy' with price target of Rs 108.
• December quarter subscription revenues were in line.
• Subscriber addition to continue.
• Dish to be a beneficiary of government's growing investments to boost rural incomes.
• Merger with Vd2H to be effective Feb-18.
• Merged company to deliver 13 percent compounded growth rate in operating income over the financial years through March 2020.

Media Reports

• Essar Steel: Ravi Ruia's son to lead $6 billion all-cash offer for family steel; consortium will have Russian bank as major shareholder (Times of India).
• Wipro rejigs leadership roles ahead of new fiscal plan (Times of India).
• HDFC could move to acquire controlling stake in CanFin Homes (Economic Times).
• Vodafone in final talks to sell its 42 percent stake in Indus Towers (Economic Times).

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