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Stocks To Watch: Dalmia Bharat, Godrej Consumer, Infosys, L&T

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Asian equities open mixed Monday as traders look for clues from earnings reports, developments in the trade war and a meeting of central bankers in Jackson Hole later in the week to gauge the outlook for markets.

Japan’s shares were off to a muted start, while South Korea’s equities rose and futures indicated Hong Kong shares may open with small declines. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India traded 0.4 percent higher at 11,518.

Short on time? Well, then listen to this podcast for a quick summary before the opening bell.

Here Are The Stocks To Watch Out For In Today’s Trade

  • Infosys’ CFO MD Ranganath resigned.
  • L&T to consider share buyback on Aug. 23.
  • Goa Carbon’s Goa unit resumed operations after maintenance.
  • IHH Group makes open offer to acquire 19.7 crore shares of Fortis Healthcare at Rs 170 each.
  • CG Power & Industrial Solutions entered into agreement with Malaysia based Tenaga Switchgear.
  • Jet Airways clarified that it will keep evaluating alternatives for fleet utilisation.
  • Prism Johnson awarded LOI for 5 captive solar power projects, to invest Rs 8 crore for 26 percent stake in JV.
  • Mangalore Chemicals & Fertilizers received environmental clearance for expansion of a fertiliser plant.
  • Navin Fluorochemicals MD Shekhar Khanlokar resigned.
  • Alibaba has revived talks with Reliance, Tata on India push (Economic Times).
  • BSE, NSE may suspend nine firms’ trading from Sept. 10. (PTI).
  • BPCL Hydrocracker unit may stay shut for at least two months (Reuters).
  • SJVN seen as possible selloff candidate by Government, NHPC likely suitor (Times of India).
  • Amazon along with Goldman Sachs and Samara Capital to form a consortium to acquire Aditya Birla Group's More at an enterprise valuation of Rs 4,500 - Rs 5,000 crore (Economic Times).

Bulk Deals

  • Hatsun Agro Product: Promoter Chandramorgan RG acquired 10 lakh shares or 0.66 percent equity at Rs 719.99 each.

Who’s Meeting Whom

  • Great Eastern Shipping to meet ULJK on Aug. 20.
  • Wipro to meet investors on Aug. 20.
  • DCM Shriram to meet Ambit Capital on Aug. 20.
  • Lemon Tree Hotels to meet investors on Aug. 20.

Insider Trades

  • Chambal Fertilisers & Chemicals promoter acquired 10,000 shares on Aug. 16.
  • Nava Bharat Ventures promoter acquired 10,000 shares on Aug. 16.
  • R Systems International promoter acquired 26,600 shares from Aug. 14-16.
  • Page Industries promoters sold 9,000 shares from Aug. 14-16.
  • Skipper promoters acquired 56,200 shares on Aug. 16.

(As reported on Aug.17)

Trading Tweaks

  • Stocks added to ASM list: Responsive Industries, International Paper APPM, Tamil Nadu Newsprint & Papers, Lincoln Pharmaceuticals and WPIL.

F&O Cues

  • Nifty August futures closed trading at 11,488.4 premium of 17.7 points versus 25.9 points.
  • August series-Nifty OI up 3 percent and Bank Nifty OI up 3 percent.
  • India VIX ended at 13.1, down 3.5 percent
  • Max OI for Aug series at 11,500 Call, OI at 36.5 lakh, OI down 20 percent.
  • Max OI for Aug series at 11,000 Put OI at 46.1 lakh, OI down 4 percent.

F&O Ban

  • In Ban: Adani Enterprises, Adani Power, Jet Airways, Jain Irrigation, Raymond.
  • New in Ban: Raymond.
  • Out of Ban: None.

Put-Call Ratio

  • Nifty PCR at 1.66 versus 1.60.
  • Nifty Bank PCR at 1.38 versus 0.81.

Active Stock Futures

Brokerage Radar

BofAML on Dalmia Bharat

  • Initiated ‘Buy’ with a price target of Rs 3,335.
  • Best placed for 'Housing for All' on higher share in east.
  • Cost controls to keep profitability above average of peers.
  • Premiumisation, acquisitions to spur EPS growth and return on equity.
  • Ongoing litigation for Binani Cement acquisition remain an overhang.

ICICI Direct on Elgi Equipments

  • Initiated ‘Buy’ with a price target of Rs 350.
  • Aspiring market leader with solid fundamentals.
  • Indian manufacturing cycle uptick to strongly benefit Elgi.
  • Sustained turnaround in foreign subsidiaries remains key.
  • Expect revenue, operating income and net profit to grow at a compounded annual growth rate of 18 percent, 22 percent and 29 percent over FY18-20.

Deutsche Bank on BHEL

  • Maintained ‘Buy’ with a price target of Rs 112.
  • Fructification of FGD orders has just started; Rs 17,000 crore potential in 2018-19.
  • Elections could delay finalization to 5.6GW in 2018-19 out of 14GW opportunity.
  • Rising power tariffs on demand recovery - indicator for new investments.
  • Buy on compelling valuations and expected recovery of capital cycle in power.

Nomura on AIA Engineering

  • Maintained ‘Neutral’; raised price target to Rs 1,955 from Rs 1,585.
  • Strong recovery in volumes and margin stabilisation visible from the second half of the current financial year.
  • Stabilising ferro-chrome prices and rising volumes key drivers.
  • Rupee depreciation to further increase competitiveness.
  • Stock rally appears to price in growth; Valuation turning expensive.

BofAML on Infosys

  • Infosys announced the resignation of its CFO.
  • Resignation is unlikely to have parallels with resignation of prior CFO and others in October 2015.
  • Triggers: Pace of improvement in US, financial services business and dollar-rupee.

Brokerages On Godrej Consumer

Macquarie

  • Maintained ‘Outperform’ with a price target of Rs 1,465.
  • The current financial year can be a turnaround year led by HI recovery and distribution expansion.
  • Lower competitive intensity and new product launches to drive recovery in HI segment.
  • Doubling sales in general trade by March 2021 can be a game changer.

CLSA

  • Fairly impressed with strategy and execution in Indonesia.
  • June quarter showed pick-up with festive season witnessing expansion after a few years.
  • Strong launch pipeline with disruptive products to aid distribution expansion.
  • Double-digit growth and sustaining its margin are its targets for the current financial year.

CLSA on Indian Pharma

  • June quarter was the second-consecutive stable quarter for Indian pharma.
  • Pace of earnings downgrades eases significantly.
  • U.S. sales decline on a sequential basis, but likely to pick-up in the second half of the current financial year; commentary improving.
  • Redesign of cost structure continues.
  • Remain positive on pharma; Sun and Cipla best ideas.

JPMorgan on Life Insurance Sector

  • Believe low penetration and rapid growth justify premium over China’s peers.
  • SBI Life and ICICI Prudential Life are most attractive.
  • New India Assurance: Moderation of underwriting cycle and new IFRS accounting to benefit.
  • General Insurance Corp: Product mix limits underwriting margin improvement potential.
  • HDFC Standard Life and ICICI Lombard: Outstanding insurers, but their strong positives look priced in.
  • SBI Life: Initiated ‘Overweight’ with a price target of Rs 1,000.
  • ICICI Prudential: Maintained ‘Overweight’; raised price target to Rs 560 from Rs 520.
  • HDFC Life: Initiated ‘Neutral’ with a price target of Rs 520.
  • New India: Initiated ‘Overweight’ with a price target of Rs 360.
  • ICICI Lombard: Initiated ‘Neutral’ with a price target of Rs 710.
  • General Insurance Corp: Initiated ‘Neutral’ with a price target of Rs 390.

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