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Asian stocks were mixed as the yen pared some of its gains after the Bank of Japan offered to buy bonds at the first fixed-rate operation since February, in a sign the central bank was trying to rein yields.
Equity benchmarks declined in Australia and South Korea. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded a little changed at 11,020.50 as of 7:30 a.m.
Short on time? Well, then listen to this podcast for all you need to know before the opening bell!
Here Are The Stocks To Watch Out For In Today’s Trade
- UPL Ltd. to acquire Arysta Lifescience in an all cash deal worth $4.2 billion.
- Wipro guided for IT services revenues to be in range of $2,009 million to $2,049 million in the second quarter. The company will acquire U.S.-based Alight Solutions' India operations for $117 million.
- Just Dial approved buyback of 27.5 lakh shares, or 24.26 percent equity, at Rs 800 each. The buyback amount to not exceed Rs 220 crore.
- Havells to merge all India-based subsidiaries with self.
- Hathway Cable to raise Rs 100 crore via preferential allotment of equity shares to promoter.
- Muthoot Finance received primary SEBI nod for AMC business.
- IMP Powers started production of Kinetic Energy Turbine in Silvassa.
- Sintex Plastics clarified that change in auditors has been effected only post audit and not abruptly.
- Lyka Labs board accepted in-principle approval received from Dena Bank for compromise settlement of their account.
- Alok Industries said that their liquidation application has been withdrawn.
- Cadila Healthcare’s Zydus received final approval from the U.S. FDA for Acetylcysteine injection.
- BPCL’s board approved transfer of gas business division to subsidiary Bharat Gas Resources Limited. The transaction to be completed in three-four months.
- Alok Industries: Says liquidation application withdrawn.
- Corporation Bank: Approved raising Rs 2,555 crore via shares allotment preferentially to government.
- Jubilant Foodworks: Says received a report from anti-profiteering body saying Jubilant didn’t pass GST benefit.
- SpiceJet: Says Tribunal rejects Maran’s damage claim on warrants
- Tata Motors: Said to restart talks to sell engineering unit stake
Earnings To Watch
- Delta Corp
- Granules India
- Hindustan Zinc
- ICICI Securities
- Indiabulls Ventures
- L&T Infotech
- L&T Technology Services
- Lakshmi Machine
- Linde India
- Tejas Networks
- United Spirits
- V-Mart Retail
- Vijaya Bank
- Welspun Corp
Earnings Reaction To Watch
Wipro (Q1, QoQ)
- Revenues up 3.4 percent to Rs 14,231 crore.
- Net Profit up 16.3 percent to Rs 2,094 crore.
- EBIT up 19.7 percent to Rs 2,254 crore.
- Margins at 15.8 percent versus 13.7 percent.
HDFC Bank (Q1, YoY)
- Net profit up 18.2 percent to Rs 4,601 crore.
- Net interest income up 15.4 percent to Rs 10,813 crore.
- Net interest margins at 4.2 percent versus 4.3 percent.
- GNPA at 1.33 percent versus 1.30 percent (QoQ).
- NNPA at 0.41 percent versus 0.40 percent (QoQ).
L&T Finance Holdings (Q1, YoY)
- Income from operations up 32 percent to Rs 3,041 crore.
- Net Profit grew 59 percent to Rs 540 crore.
MCX (Q1, YoY)
- Revenues up 24 percent to Rs 73 crore.
- Net profit down 77 percent to Rs 6 crore.
- Exceptional loss of Rs 24 crore in current quarter.
- EBITDA doubled to Rs 26 crore.
- Margins at 35.6 percent versus 22 percent.
Bata India (Q1, YoY)
- Revenue grew 7.3 percent to Rs 797.3 crore.
- EBITDA grew 38 percent to Rs 131.8 crore.
- Margin at 16.5 percent versus 13 percent.
- Net Profit grew 36.7 percent to Rs 82.5 crore.
Just Dial (Q1, YoY)
- Revenue up 11.3 percent to Rs 211.4 crore.
- EBITDA up 76.9 percent to Rs 57.4 crore.
- Margin at 27.2 percent versus 17.1 percent.
- Net Profit up 1 percent to Rs 38.5 crore.
VST Industries (Q1, YoY)
- Revenue down 53.2 percent to Rs 263 crore.
- EBITDA up 48 percent to Rs 96.7 crore.
- Margin at 39.8 percent versus 31.1 percent.
- Net Profit up 54 percent to Rs 61.2 crore.
South Indian Bank (Q1, YoY)
- NII grew 7.3 percent to Rs 494.3 crore.
- Net Profit down 77 percent to Rs 23 crore.
- Other Income at Rs 146 crore versus Rs 219 crore.
- GNPA at 4.54 percent versus 3.59 percent.
- NNPA at 3.27 percent versus 2.60 percent.
- TCNS Clothing IPO gets demand for 5.3 times shares offered.
- Bharat Forge promoter Sundaram Trading & Investment Pvt Ltd acquired 16,000 shares from July 18–19.
- Sequent Scientific promoter Rajitha Gopalakrishnan acquired 50,000 shares on July 18.
- GTPL Hathway promoter Gujarat Digi Com Private Limited acquired 53,000 shares on July 19.
- Rupee ended at 68.85/$ on Friday versus 69.05/$ on Thursday.
- Nifty July Futures closed trading at 11,024.8, premium of 14.6 points versus 16.4 points.
- July series-Nifty Open Interest up 1 percent and Bank Nifty Open Interest down 1.4 percent.
- India VIX ended at 13.5, down 0.4 percent.
- Maximum Open Interest for July series at 11,100 call, Open Interest at 37.8 lakh, Open Interest unchanged
- Maximum Open Interest for July series at 10,800 Put, Open Interest at 47.7 lakh, Open Interest up 3 percent.
In Ban: Adani Enterprises, Adani Power
(Alert: Only intraday positions can be taken in stocks which are in F&O ban, incase of rollover of these intraday positions there is a penalty.)
Active Stock Futures
ICICI Direct on ABB India
- Initiated ‘Buy’ with a price target of Rs 1,400
- Capex in power T&D, smart grid solutions, railways gives strong visibility
- Industry solutions, renewables, E-cars to bring new growth opportunities
- Positives: strong competencies and technology leadership, proven expertise in execution, healthy balance sheet and large anticipated capex spends
- Expect revenue, Ebitda and net profit to compound at 14 percent, 20.5 percent and 21 percent over 2017-2019.
- ABB trades at premium multiples due to its strong technical capabilities.
Angel Broking on Yes Bank
- Initiated ‘Buy’ with a price target of Rs 435.
- CASA growth and rating improvement to support NIM.
- Expect asset quality to improve and minimal impact of stress resolution.
- Expect YES Bank’s advances to grow at a CAGR of 32 percent over FY18-20.
- YES trades attractive valuations considering growth prospects.
UBS on Petronet LNG
- Upgraded to ‘Buy’ from ‘Sell’; raised price target to Rs 245 from Rs 235.
- Strong LNG imports driving the short-term outlook.
- Lower utilisation due to higher regas capacity additions is priced in.
- Strong utilisation rates and a 5 percent increase in regas tariffs to drive 2018-19 earnings.
- Triggers: Mundra terminal delay and Kochi-Mangalore pipeline commissioning.
Credit Suisse on Havells
- Maintained ‘Outperform’; raised price target to Rs 725 from Rs 670.
- June quarter was very strong on the back of good revenue growth and margin expansion.
- Main positive was the strong pick-up in switchgears.
- Lloyd growth positive, especially weak air conditioner season.
JPMorgan on L&T Finance Holding
- Maintained ‘Neutral’ with a price target of Rs 170.
- June quarter’s net profit sharply ahead expectations.
- Rural and housing continue to report strong growth and ROEs.
- Believe with transition to INDAS, infrastructure book drag is now behind.
CLSA on Kansai Nerolac
- Maintained ‘Buy’ with a price target of Rs 550.
- June quarter’s Ebitda was slightly ahead of estimates; Revenue growth momentum continued .
- Expect higher input prices to keep margins under pressure.
- Company continues to negotiate product price hikes in auto and industrial segments.
Nomura on Justdial
- Maintained ‘Buy’ with a price target of Rs 730.
- June quarter’s revenue and margin came in ahead.
- Momentum in paid listings alongside improving realisations is positive.
- Traffic trends continue to be positive despite lower Ad spend in last two quarters.
- Expect a positive reaction in the stock.
Kotak Securities on Asian Paints
- Maintained ‘Reduce’; raised price target to Rs 1,275 from Rs 1,100.
- GST rate cut - definitive kicker to earnings growth for paints companies.
- Expect higher volume growth as pricing gap versus unorganized segment reduces.
- Expect likely acceleration in pace of premiumisation.
- Raise volume, realization and margin assumptions.
Kotak Securities on CDSL
- Initiated ‘Buy’ with a price target of Rs 320.
- Repeat business in multiple offerings provides stability to operating income.
- Strong operating activities and limited capex to keep FCF strong.
- Positives: stable growth in annual issuer charges, increased market traction, higher number of IPO and inflow in MFs.
- Expect revenue, Ebitda and earnings per share to compound at 11 percent. 11 percent and 10 percent over FY18-20.
Brokerages On GST Changes
- Expect boost to consumption demand propelled by a fall in prices.
- Companies will pass on lower GST rate and thereby not see benefit in form of margins.
- Sectors which saw tax rate cut have big share of unorganised players.
- Move should help them come under tax net.
- Expect paint companies, P&G hygiene, footwear manufacturers, Whirlpool, Dixon, Havells, Voltas and select hotels to be key beneficiaries.
- GST rate cuts should be meaningful earnings kicker for paints companies.
- Indirect benefits market share gains and premiumisation to boost earnings.
- ITC: No revision would normally be seen as a positive.
- United Spirits: Could bounce back on non-inclusion of ENA.
Brokerages On UPL
- Maintained ‘Outperformer’ with a price target of Rs 982.
- Positive on Arysta transaction on the back of potential meaningful upsides.
- Deal valued at 9.9 times EV/EBITDA, excluding synergies.
- Expect significant cost/revenue synergies.
- Significant performa cash flows to take care of leverage ratio.
- Maintained ‘Buy’ with a price target of Rs 940.
- Arysta acquisition offers scale benefits and discovery capabilities.
- Complementary portfolio; UPL to get scale benefits.
- Acquisition valued at 10 times EV/EBITDA and is EPS accretive.
Brokerages On HDFC Bank
- Maintained ‘Outperform’ with a price target of Rs 2,515.
- Margins and asset quality were soft in June quarter.
- Pressure on NIMs driven by lower yields and higher cost of funds.
- Key Reasons For Miss: higher than expected agri-slippage and decline in NIMs.
- Expect these to improve through the year.
- Maintained ‘Buy’; raised price target to Rs 2,613 from Rs 2,487.
- In-line core operating profit growth.
- Positives: Efficiency gains, strong fee income and robust retail lending growth.
- Negatives: marginal blip in asset quality and slower growth in NII.
- Expect NIMs to improve significantly in second half of the current financial year.
Brokerages On Bajaj Auto
- Maintained ‘Neutral’ with a price target of Rs 2,800.
- Reported lower-than-expected margins and net profit in June quarter.
- Cut in prices hurting profitability.
- Struggling to balance growth and profitability.
- Exports growth to continue in the near-term.
- Maintained ‘Hold’ with a price target of Rs 3,000.
- June quarter’s operating results below estimates despite strong volume performance.
- Bajaj paying the price for market-share gains.
- Company is willing to use pricing as a lever to gain market-share.
- Expect margin pressures due to competitive intensity and elevated commodity prices.
Brokerages On Wipro
- Maintained ‘Neutral’ with a price target of Rs 300.
- June quarter missed estimates at margin level; revenue at higher end range.
- Struggle in verticals extended from healthcare to manufacturing; BFSI remains strong.
- Expect Wipro to post weakest growth amongst large cap Indian IT names in 2018-19.
- Wipro is cheap; triggers for re-rating remain amiss.
- Maintained ‘Neutral’ with a price target of Rs 260.
- June quarter’s margins and guidance miss expectations.
- Guidance for September quarter suggests flattish growth at midpoint of the range.
- Except for BFSI, none of the other segments provide comfort.
- Expect stock to react negative on results.
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