Stocks To Watch: Eicher, L&T, Maruti Suzuki, Tata Motors 

Indian equity benchmarks rose for the third straight day on Monday led by private sector lenders, information technology and consumer goods shares, to their highest level in nearly three months.

Earnings from the country's largest mortgage lender HDFC beat Bloomberg consensus estimates while the second largest private sector lender by market cap Kotak Mahindra Bank reported stable asset quality in March quarter.

The S&P BSE Sensex rose 0.55 percent or 190.66 points to 35,160 and the NSE Nifty 50 index climbed 0.44 percent or 47 points to 10.739.

Foreign investors can invest in t-bills, says RBI.https://t.co/H454zju48g pic.twitter.com/aHjDT7qONW

May 1, 2018

Here Are The Stocks To Watch In Wednesday's Trade

• Maruti Suzuki sales rose 14.4 percent to 1.72 lakh units.
• Tata Motors sales grew 86 percent to 53,511 units.
• Mahindra & Mahindra sales were 22 percent higher at 48,097 units.
• Eicher Motors sales jumped 27 percent at 76,187 units.
• TVS Motor Company sales grew 24 percent to 3.04 lakh units.
• Escorts sales rose 26.3 percent at 6,186 units.
• IHH raises Fortis Healthcare bid to Rs 175 per share.
• Munjals-Burmans increase Fortis offer to Rs 1,800 crore.
• M&M to acquire up to 10 percent equity in Canada's Resson Aerospace Corp for about Rs 34.5 crore.
• Max, Exide Life shortlisted for IDBI Federal Life Insurance stake sale; valuation likely to be over Rs 6,000 crore: Economic Times.
• L&T will sell electrical and automation division to Schneider for Rs 14,000 crore.
• BHEL gets 900 MW Nepal Hydropower project orders.
• Mahindra Lifespaces joint venture gets multi-product notification for its special economic zones.
• Lakshmi Vilas Bank sets one-year MCLR at 9.45 percent from May 1.
• Mastek wins contract for U.K. Home Office Biometrics.
• Maithan Alloys to set up 1.2 lakh tonne per annum ferro alloy plant in West Bengal.
• Grasim Industries partially commissioned its expanded Vilayat facility.
• MOIL says Ferro grade & fines prices have been reduced by 15 percent in Q1. 5 percent discount on 4 specific grade and prices of chemical grades of ore decreased by 7.5 percent.
• Sudhir Valia to infuse Rs 3,510 crore into Jaypee Infra projects in Noida: Financial Express.

Did Aditya Ghosh quit due to turf wars? IndiGo co-founder says the airline has reached a scale where it needs more talent.https://t.co/v6XecGmSov pic.twitter.com/8bL87w27Bz

May 1, 2018

F&O Setup

• Nifty May futures closed at 10,780.3 with premium of 41 points versus 31.8 points
• May Series: Nifty open interest up 2 percent, Bank Nifty open interest down 3 percent
• India VIX ended at 12.36, up 2.8 percent
• Max open interest for May series at 11,000 (open interest at 56.8 lakh, up 11 percent)
• Max open interest for May series at 10,500 (open interest unchanged at 37.5 lakh)

Government picks Subhash Chandra Khuntia as new IRDAI chief.https://t.co/hxNdLFyTDd pic.twitter.com/xyqThCqTtZ

May 1, 2018

F&O Ban

• In ban: PC Jeweller
• New in ban: PC Jeweller

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.

Active Stock Futures

Bharti Airtel was the only operator to report lower earnings before interest, tax, depreciation and amortisation compared to Q3. https://t.co/HqykmGG8Qo pic.twitter.com/5buktRgkjA

May 1, 2018

Earnings Reaction To Watch

Hindustan Zinc (Q4, YoY)

• Revenue flat at Rs 6,277 crore
• Net profit down 18 percent at Rs 2,505 crore
• Ebitda down 3 percent at Rs 3,620 crore
• Margin at 57.7 percent versus 59.8 percent

CEAT (Q4, YoY)

• Revenue up 14 percent at Rs 1,674 crore
• Net profit up 17 percent at Rs 77 crore
• Ebitda up 50 percent at Rs 198 crore
• Margin at 11.8 percent versus 9 percent

Alicon Castalloy (Q4, YoY)

• Revenue up 43 percent at Rs 298 crore
• Net profit at Rs 13 crore versus Rs 8 crore
• Ebitda at Rs 37 crore versus Rs 25.5 crore
• Margin at 12.4 percent versus 12.3 percent

KPR Mills (Q4, YoY)

• Revenue up 5 percent at Rs 820.5 crore
• Net profit up 1 percent at Rs 73 crore
• Ebitda up 7.5 percent at Rs 150.5 crore
• Margin at 18.3 percent versus 17.9 percent

Government brings relief to 2,500 MW thermal power stations with pilot scheme. https://t.co/lS0VOqoT7Q

May 1, 2018

Earnings To Watch

• Ajanta Pharma
• Astec Lifesciences
• Century Textiles & Industries
• HT Media
• InterGlobe Aviation
• International Paper APPM
• JM Financial
• Kansai Nerolac Paints
• Marico
• Siemens
• Tata Power
• Welspun Corp

Brokerage Radar

Credit Suisse On Indian Packaged Food Sector

• Branded foods market to grow five times to $200 billion in next ten years.
• Catalysts in place to drive sustained inflection in packaged foods.
• Affordability of packaged foods has improved significantly.
• Large incumbents now investing to grow the category.
• Nestle and Britannia equally well placed.
• Nestle: Maintained ‘Outperform'; hiked price target to Rs 10,500 from Rs 9,600.
• Britannia: Maintained ‘Outperform'; hiked price target to Rs 5,850 from Rs 5,550.
• GSK Consumer: Maintained ‘Outperform' with a price target of Rs 7,100.

CLSA On Kotak Mahindra Bank

• Maintained ‘Outperform'; hiked price target to Rs 1,360 from Rs 1,210.
• March quarter's net profit below estimates due to higher investment provisions.
• Healthy CASA growth, but topline lagged due to NIM pressure.
• Asset quality stable; would watch out for unsecured lending.
• Expect 24 percent compounded growth rate in net profit over the fiscal 2018-2021, led by topline rise and stable credit costs.

Citi On Kotak Mahindra Bank

• Maintained ‘Buy'; hiked price target to Rs 1,430 from Rs 1,230.
• March quarter earnings reported strong growth trends across bank and subsidiaries.
• Subsidiaries on strong footing.
• Kotak is steadily gaining market share in main banking business.
• Kotak is one of the better diversified financial services play.

Macquarie On HDFC

• Maintained ‘Outperform' with price target of Rs 2,305
• March quarter's net profit was inline with estimates adjusted for one-offs.
• HDFC going down the market chain to deliver growth.
• Catalyst: HDFC AMC IPO and increase in stake in HDFC Bank.
• Return of AUM growth could only drive core-book value re-rating.

Credit Suisse On HDFC

• Maintained ‘Outperform' with a price target of Rs 2,250.
• March quarter results were inline on the back of healthy assets under management and strong loan growth.
• Retail loan growth picking up; Core profitability remains strong.
• Steady AUM growth; stable spreads.
• Asset quality trends remained benign.

HSBC On Hindustan Zinc

• Maintained ‘Buy'; hiked price target to Rs 390 from Rs 370.
• Operating income during March quarter was broadly in-line.
• Tightening Zinc market and rising silver output support robust outlook.
• Raise operating income estimates for the current and the next financial year to factor in higher silver guidance and weak Indian rupee.

Investec On Hindustan Zinc

• Maintained ‘Buy'; cut price target to Rs 409 from Rs 413.
• March quarter's operating income was in-line; volume guidance increased till March 2020.
• No final dividend was a disappointment.
• Expect strong volume growth, lower cost and ramp-up in silver production.
• Silver business to surprise and drive re-rating.

CLSA On Tata Motors

• Maintained ‘Sell' with a price target of Rs 330.
• JLR's German peers are raising their R&D spends to decade highs.
• JLR needs to invest rapidly to keep pace with peers.
• Investment pressures coming in weak demand and product cycle.
• Cashflows to remain weak even in the current and the next financial year.

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