All You Need To Know Going Into Trade On Jan. 31

Stocks in Asia followed their U.S. and emerging-market counterparts higher as the Federal Reserve signaled it is putting further interest-rate increases on hold, sending the dollar lower with Treasury yields.

Japanese shares led regional gains, indicating a strong end to a stellar month for equities in Asia. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.6 percent to 10,699.20 as of 7:10 a.m.

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BQ Live

Here’s a quick look at all that could influence equities today.

U.S. Market Check

• U.S. stocks surged and the dollar tumbled after the Federal Reserve signalled a stark dovish turn in its latest policy statement.
• The yield on 10-year Treasuries held at 2.68 percent.

Asian Cues

• The MSCI Asia Pacific Index gained 1 percent.
• Nasdaq futures added 0.2 percent.
• Japan’s Nikkei 225 advanced 1.5 percent.
• Australia’s S&P/ASX 200 Index gained 0.2 percent.
• The MSCI Emerging Market Index earlier rose 0.7 percent to a four-month high.
• Hang Seng Index futures earlier climbed 0.1 percent.

Commodity Cues

• West Texas Intermediate crude rose 0.5 percent to $54.48 a barrel.
• Brent crude extended gains for the second day, ended 0.5 percent higher at $61.65 a barrel.
• Gold held at $1,320.34 an ounce.

London Metal Exchange

• Aluminium ended 0.9 percent higher.
• Nickel ended 1.9 percent higher.
• Tin ended higher for the second day, up 0.48 percent.
• Lead halted a two-day decline, ended 0.7 percent higher.
• Zinc resumed rally after a one-day blip, ended 1.13 percent higher.

Key Data To Watch

• 4:30pm: India fiscal deficit for April-December period.
• 5:30pm: India revised annual GDP estimate for FY18 YoY (prior 7.2 percent).
• 5:30pm: Eight Infrastructure Industries Index for December (Prior +3.5 percent).

Indian ADRs

Nifty Earnings To Watch

• Bharti Airtel
• Hero MotoCorp
• United Phosphorus Ltd.
• Vedanta
• Power Grid Corporation of India

Other Earning To Watch

• Accelya Kale Solutions
• Aegis Logistic
• Apollo Micro Systems
• Ballarpur Industries
• Chambal Fertilizers & Chemicals
• CL Educate
• CreditAccess Grameen
• Dabur
• Dena Bank
• eClerx Services
• Emami
• Essar Shipping
• GTL Infrastructure
• Gujarat Alkalies and Chemicals
• IFB Industries
• Jamna Auto Industries
• JBF Industries
• JMC Projects
• Jubilant Industries
• L.G.Balakrishnan
• Laurus Labs
• LGB Forge
• Mafatlal Industries
• Magma Fincorp
• Mold-Tek Packaging
• Narayana Hrudayalaya
• NMDC
• Oriental Carbon & Chemicals
• Petronet LNG
• Selan Exploration Technology
• Solar Industries
• Solara Active Pharma Sciences
• Srikalahasthi Pipes
• Sundaram Finance
• TD Power Systems
• V-Guard Industries
• Uniphos Enterprises
• Menon Bearings
• Mahanivesh
• Kennametal
• HSIL
• Enkei Wheels
• EIH Associated Hotels
• Datamatics Global Services

Earnings Reaction To Watch

ICICI Bank (Q3, YoY)

• Net interest income up 20.5 percent at Rs 6,875.2 crore.
• Net profit down 2.75 percent at Rs 1,604.9 crore.
• Provisions at Rs 4,244.2 crore versus Rs 3,569.2 crore.
• GNPA at 7.75 percent versus 8.54 percent (QoQ)
• NNPA at 2.58 percent versus 3.65 percent (QoQ)

NTPC (Q3 Standalone, YoY)

• Revenue up 16.1 percent at Rs 2,4120.4 crore.
• Net profit up 1 percent at Rs 2,385.4 crore.
• Ebitda up 24.7 percent at Rs 6,579.9 crore.
• Margin at 27.3 percent versus 25.4 percent.
• Board recommends bonus issue in the ratio of 1:5.

Hexaware Technologies (Q4CY18, QoQ)

• Revenue up 3.5 percent at Rs 1,252 crore.
• Net profit down 28 percent at Rs 123 crore.
• EBIT down 6.4 percent at Rs 175 crore.
• EBIT margin at 14 percent versus 15.5 percent.

BEL (Q3 Standalone, YoY)

• Revenue up 8.4 percent at Rs 2.716.5 crore.
• Net profit up 67.6 percent at Rs 507.6 crore.
• Ebitda up 72.5 percent at Rs 768.1 crore.
• Margin at 28.3 percent versus 17.8 percent.

Ajanta Pharma (Q3, YoY)

• Revenue down 17.4 percent at Rs 485.1 crore.
• Net profit down 54.6 percent at Rs 66.9 crore.
• Ebitda down 45.7 percent at Rs 107.3 crore.
• Margin at 22.1 percent versus 33.6 percent.
• Export down 27 percent at Rs 304 crore.

Dixon Technologies (Q3, YoY)

• Revenue up 16.7 percent at Rs 794 crore.
• Net profit up 15.8 percent at Rs 17.6 crore.
• Ebitda up 36.2 percent at Rs 39.1 crore.
• Margin at 4.9 percent versus 4.2 percent.

Torrent Pharma (Q3)

• Revenue up 40 percent at Rs 2,051 crore.
• Net profit up 4.2 times at Rs 246 crore.
• Ebitda up 56 percent at Rs 561 crore.
• Margin at 27.3 percent versus 24.5 percent.
• Declares dividend of Rs 13 per share.

LIC Housing Finance (Q3, YoY)

• Net interest income up 42 percent at Rs 1,084.3 crore.
• Net profit up 25.5 percent at Rs 596.3 crore.

Castrol (Q4CY18, YoY)

• Revenue up 6.5 percent at Rs 1,033.4 crore.
• Net profit up 40.9 percent at Rs 211.9 crore.
• Ebitda up 3.5 percent at Rs 317.4 crore.
• Margin at 30.7 percent versus 31.6 percent.

Tata Communications (Q3, QoQ) (Adjusted For Incomes Not Pertaining To Q3)

• Revenue up 2.7 percent at Rs 4,179.5 crore.
• Net profit at Rs 173 crore vs Rs 1.65 crore
• Ebitda down 21.6 percent at Rs 493.8 crore.
• Margin at 11.8 percent versus 15.5 percent.
• Other Income up 2.2 times at Rs 19.2 crore.
• Deferred Tax Credit reversal of Rs 29.6 crore in Q3
• Company recorded a revenue of Rs 90 crore and recovery of cost worth Rs 259 crore in Q3 due to favourable court ruling.

Bulk Deals

Geojit Financial Services

• Copthall Mauritius Investment acquired 22.5 lakh shares or 0.95 percent equity at Rs 35.5 each.
• HSBC Global Investment Funds sold 24.8 lakh shares or 1.04 percent equity at Rs 35.59 each.

Trading Tweaks

• R System International ex-date for share buyback.
• Leel Electricals price band revised to 10 percent.
• Tanla Solutions price band revised to 5 percent.

Insider Trading

• Deepak Fertilisers and Petrochemicals promoter group Robust Marketing Services acquired 50,000 shares on Jan. 25.
• Kitex Garments promoter Sabu Jacob acquired 1.12 lakh shares on Jan. 28.
• Action Construction Equipment promoter Mona Agarwal acquired 5 lakh shares on Jan. 28.
• Cox & Kings promoter Liz Traders and Agents acquired 45,800 shares on Jan. 28.
• Fineotex Chemical promoters sold 8 lakh shares between Jan. 28-29.

Money Market Update

• The rupee on Wednesday ended at 71.12/$ versus Tuesday’s closing of 71.11/$.

F&O Cues

• Nifty January futures closed trading at 10,642, discount of 9 points.
• Max open interest for January series at 10,800 Call, (open interest at 41.1 lakh shares).
• Max open interest for January series at 10,500 Put, (open interest at 26.4 lakh shares).

Stocks In F&O Ban

In Ban:

• Adani Enterprises Ltd
• Adani Power
• Bank Of India
• DHFL

Out Of Ban:

• Jain Irrigation

Put-Call Ratio

• Nifty PCR at 1.21 versus 1.22.
• Nifty Bank PCR at 0.96 versus 0.77.

Brokerage Radar

Macquarie on Hexaware

• Maintained ‘Outperform’; cut price target to Rs 440 from Rs 500
• Good execution in December quarter despite furloughs
• Deal wins sets stage for revenue acceleration in 2019.
• Cut 2019 and 2020 EPS estimates by 4 percent and 2.5 percent respectively due to lower margins and reduce target multiple.

On NTPC

CLSA

• Maintained ‘Buy’ with a price target of Rs 180.
• Marked improvement in operations and availability.
• Management guided for a much better December quarter on lower under-recoveries.
• Enough steam left in its lofty December quarter project starts.

Macquarie

• Maintained ‘Outperform’ with a price target of Rs 186.
• Adjusted net profit miss expectation.
• May miss commissioning target; equity base set to rise.
• Mgmt. expects to reduce under-recoveries which would be higher than earlier guidance.

On ICICI Bank

CLSA

• Maintained ‘Buy’; hiked price target to Rs 470 from Rs 450.
• Lower slippages and rise in coverage increase visibility of earnings turnaround.
• December quarter’s topline included some one-offs; CASA growth key to market-share gains.
• Watch out for investigations on conflict of interest.

Morgan Stanley

• Maintained ‘Buy’; hiked price target to Rs 525 from Rs 510.
• Provisioning catchup is done, implying normalised earnings from the first quarter of the next financial year.
• Core profit was strong; Top pick in Asian banks.
• Enquiry report on ex-CEO's conflict has no implications on bank's published numbers.

Macquarie

• Maintained ‘Outperform’; hiked price target to Rs 460 from Rs 416.
• Strong asset quality performance, other operational parameters are stable.
• Current price implies market is not assigning any value to subsidiaries.
• ICICI is preferred play on normalisation of credit costs theme as Axis Bank has already run up.

On Bajaj Auto

CLSA

• Maintained ‘Sell’; cut price target to Rs 2,225 from Rs 2,450.
• 3W and export growth likely to taper; pressures in domestic two wheelers.
• Gaining share in domestic two wheelers but at cost of margins.
• Regulatory changes in the next financial year will push up two wheeler prices and impact demand/margins.

Macquarie

• Maintain Underperform with price target of Rs 2,200
• Realisations and profitability miss expectations
• See significant cost headwinds over next 2 years due to safety regulations and BS-VI emission norms
• Despite discounting led market share gains, continue to see structural challenges

Investec

• Maintained ‘Buy’; cut price target to Rs 3,200 from Rs 3,485.
• Operational miss due to increase in cost, higher exports and lower rupee realisation.
• Believe Bajaj’s aggression should help raise EPS growth from April.
• Africa & Asia to drive double digit growth in exports in the next financial year.

On Jubilant Food

CLSA

• Maintained ‘Buy’ with a price target of Rs 1,600.
• Strong SSSG with a seven-year high margin.
• Worst of the man power issue has passed.
• Aggressive competition from food aggregators is the key risk.

UBS

• Maintained ‘Neutral’ with a price target of Rs 1,475.
• Strong SSSG; base getting tougher moving ahead.
• Believe going forward SSSG could be comparatively muted.
• Competitors are increasing prices; Domino’s pizza available at a discount.

On Indian Oil Corp

Macquarie

• Maintained ‘Neutral’ with a price target of Rs 140.
• Net income was about breakeven due to significant inventory losses and weak refining environment.
• Inventory losses in refining and marketing hurts performance.
• Risk of subsidies or marketing margin cuts is not relevant in current crude environment.

Emkay

• Maintained ‘Buy’; cut price target to Rs 170 from Rs 180.
• Strong core earnings amid heavy inventory losses.
• Macro commodity outlook is cloudy due to weak GRMs and oil price/currency volatility.
• Marketing pricing power should be steady after elections .

SBICAP

• Maintained ‘Buy’; cut price target to Rs 184 from Rs 199.
• Core GRM strong but marketing and petchem margin subdued.
• Lower GRM assumption but raise marketing margin assumption.
• Trading at attractive valuation.