Stocks To Watch: HDFC Bank, Quess Corp, L&T, Tata Motors

Indian equity benchmarks rose in a volatile trading session ahead of the Gujarat and Himachal Pradesh exit polls which were declared later in the day.

The S&P BSE Sensex rose 0.59 percent or 194 points to 33,246.70 and the NSE Nifty 50 Index advanced 0.58 percent or 59 points to 10,252.10.

Back home yesterday, exit polls predicted a victory for the Narendra Modi-led Bharatiya Janata Party in Gujarat, giving it a clear majority in the keenly-contested assembly polls in the state. The polls also showed that the party is set to reclaim Himachal Pradesh.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, rose 0.5 percent to 10,335.50 as of 6:55 a.m.

Here's a lineup of all major corporate meetings over the next few days.https://t.co/CprZzwMw6H pic.twitter.com/HqPIbt4MSj

Here Are The Stocks To Watch Out For In Friday's Session

• HDFC Bank to consider fund raising proposal on Dec. 20.
• HDFC to consider fund raising on Dec. 19; to subscribe securities of HDFC Bank on preferential basis.
• Unichem Laboratories completes sale and transfer of its domestic formulations business to Torrent Pharmaceuticals.
• L&T commissions 225 MW Sikalbaha combined cycle power plant in Bangladesh
• NLC India raises Rs 201.8 crore via QIP.
• Gulf Oil starts commercial production at Chennai plant.
• AstraZeneca to launch XIGDUO XE tablets in India in Q4FY18. The drug is used for the treatment of Type 2 diabetes in adults.
• Mahindra and Mahindra Ltd. to hike prices by up to 3 percent from January 2018.
• McDowell Holdings qualifies as NBFC-CIC, says RBI. Its existing NBFC-ND certificate gets cancelled.
• IDBI Bank brought under rating watch by Fitch saying that an upward viability rating is more likely than a downgrade.
• Union Bank to raise Rs 2,000 crore via QIP by allotting 12.93 crore shares at Rs 514.65.
• Godrej Industries approves merger of promoter group company Vora Soaps with itself.
• Quess Corp acquires 45 percent stake in Simpliance Technologies.
• GE, Tata in a strategic tie up to make aircraft engine components in India.
• Tata Motors to supply 250 Tigor EVs to EESL.
• GMR Group-Megawide consortium emerges as preffered bidder for Clark Airport project in Philippines.

Kotak Securities' Sanjeev Prasad believes that focus will shift to macro, earnings and valuations post elections; more if the BJP loses.#GujaratElection2017 https://t.co/NlGosq2rcP pic.twitter.com/6r8zjlVSVx

IPO Watch

• Astron Paper & Board Mill IPO at Rs 45-50 a share opens. Bid closes on Dec. 20.
• Shalby Ltd. to start trading on BSE/NSE after selling shares at Rs 248 each in IPO that got 2.82 times demand.

Data Watch

• India November trade balance; estimates -$13.25 billion (prior -$14.02 billion).
• Exports; no estimate (prior -1.1 percent).
• Imports; no estimate (prior +7.6 percent).

Bulk Deals

Religare Enterprises

• IDBI Trusteeship sold 1.1crore shares or 6.3 percent stake at Rs 58.5 each.
• India Horizon Fund bought 71.50 lakh shares or 4 percent stake at Rs 58.5 each.
• Bay Capital Advisors bought 21.25 lakh shares or 1.2 percent stake at Rs 58.5 each.

Meghmani Organics gets its formula right.https://t.co/xR6ZZYDUEy pic.twitter.com/PUhLWSZaJT

F&O Setup

• Nifty December Futures closed trade at 10,276, premium of 24 points versus 22 points.
• December Futures: Nifty open interest down 2 percent; Bank Nifty open interest down 9 percent.
• India VIX closed up 2.9 percent at 16.4.
• Max open interest for Dec. series at 10,500 Call (open interest at 69.5 lakh, up 10 percent).
• Max open interest for Dec. series at 10,000 Put (open interest at 96 lakh, up 12 percent).

GE Aviation and Tata Advanced Systems will jointly manufacture, assemble, integrate and test aircraft components. https://t.co/XUF9kvz8N3

F&O Ban

• In ban: Fortis, HDIL, Jain Irrigation, JP Associates, JSW Energy and TV18 Broadcast.
• New in ban: TV18 Broadcast.
• Out of ban: IRB Infrastructure, Jet Airways.

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

Active Stock Futures

Earnings Reactions To Watch

Goodluck India (Q2, YoY)

• Revenue up 23 percent at Rs 312.5 crore.
• Net profit up 39 percent at Rs 5 crore.
• Ebitda up 24 percent at Rs 26 crore.
• Margin unchanged at 8.3 percent.

Sree Rayalaseema Hi-Strength Hypo (Q2, YoY)

• Revenue up 21 percent at Rs 126 crore.
• Net profit up 24 percent at Rs 5.2 crore.
• Ebitda up 4 percent at Rs 12 crore.
• Margin at 9.5 percent from 11.1 percent.

Linc Pens and Plastics (Q2, YoY)

• Revenue down 6 percent at Rs 79 crore.
• Net profit down 62 percent at Rs 1.6 crore.
• Ebitda down 10 percent at Rs 7.8 crore.
• Margin at 9.9 percent from 10.4 percent.

Lovable Lingerie (Q2, YoY)

• Revenue down 11 percent at Rs 47 crore.
• Net profit down 24 percent at Rs 3.2 crore.
• Ebitda down 31 percent at Rs 3.1 crore.
• Margin at 6.6 percent from 8.5 percent.

Disney-Fox deal includes marquee India brands and investments. https://t.co/VgCpgvDo93 pic.twitter.com/HGd2373Aug

Kopran (Q2, YoY)

• Revenue down 7.6 percent at Rs 73 crore.
• Net profit unchanged at Rs 4.5 crore.
• Ebitda up 8 percent at Rs 7 crore.
• Margin at 9.6 percent from 8.2 percent.

Veto Switchgears and Cables (Q2 YoY)

• Revenue up 9 percent to Rs 64 crore.
• Net profit up 58 percent to Rs 8 crore.
• Ebitda up 76 percent to Rs 12 crore.
• Margins at 19 percent versus versus 12 percent.

Renaissance Jewellery (Q2 YoY)

• Revenue up 2.5 percent to Rs 272 crore.
• Net profit up 23 percent to Rs 9.6 crore.
• Ebitda up 19 percent to Rs 16.5 crore.
• Margins at 6.1 percent versus 5.2 percent.

Rollatainer (Q2 YoY)

• Revenue up 10 percent to Rs 35.2 crore.
• Net profit of Rs 18.4 crore versus net loss of Rs 4.4 crore.
• Ebitda loss of Rs 0.33 crore versus Ebitda loss of Rs 0.93 crore.
• Margins at -0.9 percent versus -2.4 percent.
• Exceptional gain of Rs 33.5 crore in previous quarter.

SEBI, bourses enhance vigil after Gujarat Exit Polls. #GujaratElectionhttps://t.co/lxTZi95B1L pic.twitter.com/aMeSF2thL7

Earnings To Watch

• Patel Engineering

Brokerage Radar

Axis Capital on JSW Energy

• Initiated ‘Buy' with price target of Rs 100.
• Lowest capital as well as current replacement cost.
• Strategically located assets result in high plant load factor.
• Declining share of merchant volumes and higher share of PPA to increase earnings visibility.
• To substitute 50 percent of imported coal with cheaper domestic coal.
• Under leveraged balance sheet to aid inorganic growth.
• Balance sheet has capacity to acquire up to 3 GW capacity.
• Electric Vehicle foray – too early to evaluate.

Axis Capital on Mahindra Logistics

• Initiated ‘Buy' with price target of Rs 525.
• Focus on non-automotive and reducing dependence on M&M group to aid margin.
• M&M group contribution to reduce to 38 percent by March 2020, compared to 54 percent clocked in the previous financial year.
• Better client mining and new client additions to drive growth.
• Gross margin to remain largely stable across SCM and PTS business.
• GST to drive clients' focus on improving supply chain efficiency.
• Expect 28% earnings CAGR and firm return ratios given limited capex.
• Expect premium valuations to sustain on MLL's strong positioning.

Jefferies on Voltas

• Maintained ‘Buy' with price target of Rs 660.
• Current quarter likely to see 10-15 percent year-on-year sales growth given demonetisation impact last year.
• Dealers indicated trends should normalize after January.
• Products with new energy rating changes could normalize trend.
• Expect 25 percent year-on-year profit growth for Voltas in the current quarter.
• Any near-term stock price weakness should be a buying opportunity.

Motilal Oswal on Zee Entertainment

• Maintained ‘Buy'; raised price target to Rs 690 from Rs 630.
• Expect higher-than-industry ad revenue growth.
• Subscription revenue growth to remain in healthy mid-teens.
• Strong viewership to steer ad revenue growth.
• Positives: recovery in ad market and improved BARC rating.
• New ventures to begin adding to overall growth by three years.
• Expect compounded annual growth rate of 32-34 percent operating margin and 16 percent in earnings per share by March 2020.
• Zee remains the best play in the media industry.

HDFC Securities on Dr. Reddy's

• Upgraded to ‘Neutral' from ‘Sell'; raised price target to Rs 2,400 from Rs 2,220.
• EIR for Bachupally is positive, recovery hinges on clearance of Duvvada.
• Bachupally crucial for existing business, Duvvada key to the future.
• Degree of dependence on Duvvada prompts us to maintain a Neutral stance.
• Good product opportunities in the near to medium term - Nuvaring, Suboxone and Copaxone.
• Expect revenue and net profit to grow at a compounded rate of 10 percent and 30 percent respectively on annual basis by March 2020 on these opportunities and Duvvada clearance.

Motilal Oswal India Strategy

• Sensex reconstitution to marginally up Sensex earnings per share for the current and next financial year.
• Sensex earnings per share upgrade by 0.2 percent and 0.4 percent for the current and next financial year respectively.
• Now estimate Sensex earnings per share at Rs 1,498 and Rs 1,891 for the current and next financial year respectively.
• Weightage of financials at all-time high; capital goods and telecom at new lows.
• 58 percent of Sensex constituents unchanged over 10 years.

Nomura on Indian Rupee

• Exit polls to improve sentiment towards India and Indian Rupee.
• Exit polls to be viewed as positive for BJP ahead of the 2019 Lok Sabha elections.
• Oil prices pose a risk to Indian Rupee, and should be closely monitored.

Macquarie on Walt Disney - Fox Deal

• Star to provide Disney a significant India market opportunity.
• Zee, Viacom 18 and Sony will benefit if there is slip in India focus by Disney.
• Star's key strengths in India is its senior management team.
• Management churn in the near to medium term should be monitored.
• Need to see impact on Hotstar and minority stake in Tata Sky.

Credit Suisse on Vedanta

• Initiated ‘Outperform' with price target of Rs 345.
• Aluminium business is most important for incremental profits.
• Global supply-demand and surging raw material prices bodes well for Aluminium.
• Zinc prices have peaked and despite planned volume growth, Hindustan Zinc is fully valued.
• Much of the ex-HZL upside is purely execution-dependent.
• Vedanta not expensive even after adjusting for Hindustan Zinc.
• Volume projections are below company guidance, and remains risk to rating.

Credit Suisse on Hindustan Zinc

• Initiated ‘Neutral' with price target of Rs 325.
• Hindustan Zinc to expand volume to 1.2mt mined metal production by March 2020.
• Expect cost moderation as it shifts to 100 percent underground mining.
• Ebitda/tonne likely to stay healthy; Expect decent free cash flow generation.
• Silver prices have and output is expected to grow.
• Zinc prices have peaked and despite planned volume growth, Hindustan Zinc is fully valued.
• Even after recent decline in stock price, Hindustan Zinc trades significantly higher.
• Bull case price target of Rs 380 assuming higher commodity prices.

Going by numbers, states' GST revenue shortfall could rise to Rs 80,000 crore for the financial year, says Amit Mitra.https://t.co/ytuFzeKov1

Media Reports

• Allahabad Bank to sell idle land in Bareilly, Jhansi (Economic Times).
• Cairn India rejigs top deck to drive $1 bn plan (Economic Times).
• Group led by Netmagic founder sole bidder fot Jyoti Structures (Economic Times).
• Mid sized construction firms race ahead in road sector (Mint).
• IPOs so high but fresh capital so low (Mint).
• Gujarat NRE coke RP invites fresh EoI (Financial Express).

HDFC Bank mulls raising funds via preferential allotment, ADRs.https://t.co/4aBvrcuJTY pic.twitter.com/in1WezcMV2

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