A visitor watches stock movements displayed on large video screens inside the Saudi Stock Exchange in Riyadh, Saudi Arabia. (Photographer: Simon Dawson/Bloomberg)
Stocks To Watch: Biocon, BSE, Ceat, CG Power, Titan, Vedanta, Zee Entertainment
Asian stocks dropped after the U.S. threat of higher tariffs on imports from China pushed American equities down the most since March. The yen held near a six-week high.
The brunt of equity declines was in Japan, with losses also seen in Australia and South Korea. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell fell 0.65 percent to 11,464.50 as of 7:05 a.m.
Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.
Indian ADR
Stocks To Watch
- Alembic Pharma entered into a joint venture contract with SPH Group and Adia to promote and sell pharma products for the Chinese markets. Subsequently, the JV plans to set up a manufacturing facility in China. The pharma company has a 44 percent stake in this arrangement.
- Biocon retained economic interest in global commercialization of Hulio, a biosimilar drug which is licensed by Mylan and will gain a share of profits from global markets.
- Essel Group said Zee Entertainment stake sale at advanced stage, according to a Bloomberg report.
- BSE board approved a buyback of 67.6 lakh shares, or 13.06 percent of total capital of the company at a price of Rs 680 per share aggregating to Rs 460 crore and appointed Justice Vikramjit Sen as the Chairman.
- IDBI Bank board to consider passing enabling resolution for equity issue on May 13.
- Dewan Housing Finance received the National Housing Bank’s nod to sell entire stake of 9.15 percent in Aadhar Housing Finance to Blackstone’s arm.
- India Grid Trust: Investment Manager approved preferential issue and allots 30 crore units at price of Rs 83.89 per unit aggregating to Rs 2,514 crore, to institutional investors.
- Hindustan Unilever: NCLT ordered meeting of shareholders and unsecured creditors on June 29 to consider and approve the amalgamation of the company and GlaxoSmithKline Consumer Healthcare.
- Mcleod Russel: ICRA revised the long term rating from ‘A’ to ‘BBB-‘
- FDC said that a fire incident occurred in its Maharashtra plant on May 3. The company said production was disrupted for a few hours and there will not be any significant impact on the operations of the company and it also has adequate insurance coverage.
- Bank of Maharashtra revised its MCLR across various tenors with effect from May 7. Base rate remains unchanged at 9.5 percent. One-month rate at 8.25 percent and one-year rate at 8.7 percent.
- Vakrangee announced alliance with Dish TV for distribution of subscription recharge and providing collection services.
New Listing
- Neogen Chemicals shares to start trading on exchnages after IPO gets oversubscribed 41.2 times at Rs 215 apiece.
Nifty Earnings To Watch
- Titan
Other Earnings To Watch
- Rain Industries
- Procter & Gamble Hygiene and Health Care
- Alembic Pharmaceuticals
- Axiscades Engineering Technologies
- Tata Communications
- Chennai Petroleum Corporation
- KEC International
- CroreeditAccess Grameen
- Dhanlaxmi Bank
- JMC Projects
- JK Paper
- JSW Holdings
- Dishman Carbogen Amcis
- EID Parry India
- Shree Renuka Sugars
- Emami Paper Mills
- Gillette India
- Indraprastha Medical Corporation
- Kokuyo Camlin
- KSB
- MAS Financial Services
- Saregama India
- Satin Creditcare Network
- Shriram Asset Management
- Shriram Transport Finance
- Srikalahasthi Pipes
- Kopran
Earnings Reaction To Watch
Vedanta (Q4 Consolidated, YoY)
- Revenue down 15 percent to Rs 23,468 crore.
- Net Profit down 46 percent to Rs 2615 crore.
- Ebitda down 20 percent to Rs 6,135 crore.
- Margin at 26.1 percent versus 27.8 percent.
- Exceptional gain of Rs 2,869 crore in base quarter.
Ceat (Q4 Consolidated, YoY)
- Revenue up 4.4 percent to Rs 1,760.5 crore.
- Net profit down 16.6 percent to Rs 64.3 crore.
- Ebitda down 17.8 percent to Rs 162.4 crore.
- Margin at 9.2 percent versus 11.7 percent.
- Exceptional loss of Rs 40.5 crore versus exceptional loss of Rs 24.6 crore.
- Other income up 4.4 times to Rs 30.6 crore.
- Declares dividend of Rs 12 per share.
ABB India (Q1 Calendar year 2019, YoY)
- Revenue up 18.1 percent to Rs 1,850.3 crore.
- Net profit up 13.4 percent to Rs 116.2 crore.
- Ebitda up 62.6 percent to Rs 145.5 crore.
- Margin at 7.9 percent versus 5.7 percent.
- Finance cost down 87 percent to Rs 2.6 crore.
Essel Propack (Q4 Consolidated, YoY)
- Revenue up 10.4 percent to Rs 693.7 crore.
- Net profit up 17 percent to Rs 52.4 crore.
- Ebitda up 13 percent to Rs 131.5 crore.
- Margin at 19 percent versus 18.5 percent.
BSE (Q4 Consolidated, YoY)
- Revenue down 20 percent to Rs 115.7 crore.
- Net profit down 16.4 percent to Rs 51.9 crore.
- Ebitda loss to Rs 0.1 crore versus ebitda gain of Rs 34.6 crore.
- Declares dividend of Rs 25 per share.
Brigade Enterprises (Q4 Consolidated, YoY)
- Revenue up 75.3 percent to Rs 760 crore.
- Net profit up 3.3 times to Rs 59.7 crore.
- Ebitda up 59.9 percent to Rs 215.4 crore.
- Margin at 28.3 percent versus 31.1 percent.
- Exceptional loss of Rs 11.5 crore in base quarter.
- Deferred tax payable to Rs 49.1 crore versus deferred tax reversal of Rs 13.2 crore.
- Real-estate segment revenue up 2 times to Rs 593.3 crore.
- Hospitality segment revenue up 37 percent to Rs 89.6 crore.
- Leasing segment revenue up 12 percent to Rs 86.5 crore.
Mahindra Logistics (Q4 Consolidated, YoY)
- Revenue up 13.7 percent to Rs 1,014.7 crore.
- Net profit up 14.4 percent to Rs 23.9 crore.
- Ebitda up 8.2 percent to Rs 40.9 crore.
- Margin at 4 percent versus 4.2 percent.
- Employee expenses up 19 percent to Rs 71.4 crore.
Gujarat Borosil (Q4, YoY)
- Revenue up 13.3 percent to Rs 62.1 crore.
- Net profit down 71 percent to Rs 0.9 crore.
- Ebitda up 11.3 percent to Rs 7.9 crore.
- Margin at 12.7 percent versus 13 percent.
- Exceptional loss of Rs 2 crore in base quarter.
- Deferred tax reversal at Rs 1.8 crore versus Rs 4 crore.
Bulk Deals
CG Power & Industrial Solutions
- Bharti SBM Holdings acquired 65.1 lakh shares (1.04 percent) to Rs 36.5 each.
Prime Focus
- Marina IV LP acquired 41.8 lakh shares (1.4 percent) to Rs 60.62 each.
- Standard Chartered Private Equity (Mauritius) sold 41.8 lakh shares (1.4 percent) to Rs 60.62 each.
Pledge Share Details
- Emami promoters created a pledge of 44 lakh shares on April 30.
- Jubilant FoodWorks promoter Jubilant Consumer revoked a pledge of 39.72 lakh shares from May 2-3.
- Mcleod Russel promoter Woodside Parks invoked pledge of 21.42 lakh shares from April 30-May 3.
- Mercator promoter & director Harish Kumar Mittal invoked pledge of 17.5 lakh shares from April 30-May 3.
Trading Tweaks
- Neogen Chemicals to be listed on the bourses.
- Uniply Industries to move into short term ASM Framework.
- KPIT Technologies price band revised to 20 percent.
- Uniply Industries price band revised to 10 percent.
- Mcleod Russel price band revised to 5 percent.
Who’s Meeting Whom
- MCX to meet SBI MF on May 8.
- Tata Steel to meet Myriad Asset Management on May 15.
- IRB InvIT Fund to meet Birla Sunlife, HDFC Life and other investors on May 8.
Insider Trading
- Mindtree: L&T acquired 14.7 lakh shares on May 7.
- RPG Lifesciences promoter Ektara Enterprises acquired 14,000 shares from May 3-6.
Money Market Update
- The rupee on Tuesday weakened for the second straight day to close at 69.43/$ versus Monday’s closing of 69.41/$.
F&O Cues
Futures –May series
Nifty
- Nifty futures closed trading at 11,541.9, premium of 44 points versus 58 points.
- Nifty open interest down 1 percent sheds 1.5 lakh shares in open interest.
Bank Nifty
- Bank Nifty futures closed trading at 29,418.4, premium of 130 points versus 190 points.
- Bank Nifty open interest up 6 percent, adds 1 lakh shares in open interest.
Options
- Nifty PCR at 1.13 versus 1.30 (across all series).
Nifty Weekly Expiry, 9 May
- Max open interest on call side at 11,800 (28.1 lakh shares).
- Max open interest at Put side at 11,500 (12 lakh shares).
- Max open interest addition seen at 11,600 Call (+16.6 lakh shares), 11,550 Call (+9 lakh shares).
- Max open interest shedding seen at 11,600 Put (-5.8 lakh shares), 11,700 Put (-3.4 lakh shares).
Nifty Monthly Expiry, 30 May
- Max open interest on call side at 12,000 (15.8 lakh shares).
- Max open interest on Put side at 11,000 (23.2 lakh shares).
Brokerage Radar
On Vedanta CLSA
- Maintained ‘Sell’; cut target price to Rs 135 from Rs 170.
- Q4 Ebitda ahead due to lower aluminium and zinc cost and higher zinc volume.
- Slow volume ramp-up in zinc & oil and increased costs in HZL are concerns.
- Zinc and oil businesses benefiting from recent uptick in commodity prices.
- Concerns on related party transaction and future use of cash to overshadow earnings outlook.
JPMorgan
- Maintained ‘Overweight’ with target price of Rs 300.
- Positive Q4 brings a tough FY19 to an end.
- For FY20, see more positive as key projects coming through.
- Zinc India and Zinc International—volume growth to pick up from here.
Morgan Stanley
- Maintained ‘Equal-weight’ with target price of Rs 176.
- Core Ebitda inline with estimates.
- Management focus remains on growth projects.
- Improved domestic coal availability and bauxite lend improved cost visibility.
JPMorgan on Embassy Office Parks
- Maintained ‘Overweight’ with target price of Rs 360.
- Steady low-risk compounding; yield+growth offers attractive internal rate of return setup.
- REIT structure can deliver outperformance versus index.
- Expect dividend per share growth of 6 percent over FY20-23.
CLSA on Kansai Nerolac
- Industrial under severe pressure; outlook subdued at least for next two quarters.
- Decorative on good footing; management confident of double-digit volume growth in FY20.
- Volatility in crude and exchange rates remain a concern.
CLSA on Indian Media
- Zee network gains viewership share in April under new TRAI regime.
- Sun TV share has declined driven by lower share in Tamil.
- Pay channel viewership in rural markets is rising which could drive subscription revenues.
- Near-term ad revenue for broadcasters will likely be impacted, in longer run the new subscription regime will be beneficial.
CLSA on India Oil & Gas
- If current government comes back to power, expect it to take forward some unfinished policies.
- Expect policies to slash LPG subsidies further.
- Big reforms – gas pricing hub, GST and unified tariff – possible in gas sector.
- More PSU M&As, stake sales and excise duty hikes are possible overhangs.
- ONGC, Oil India and Gail are likely gainers from further reform.