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All You Need To Know Going Into Trade On July 30BQ Researcht @bloombergquint
Published: Jul 30 2018, 1:48 AMLast Updated: Jul 30 2018, 1:49 AM
Asian stocks opened on a soft note on Monday as the ongoing reporting season raised concerns about lofty expectations
for earnings and traders prepare for key policy meetings from the world’s biggest central banks.
Equity benchmarks in Japan, Australia and South Korea edged lower, while futures indicated modest declines in Hong
Kong. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, swung between
gains and losses. It was trading little changed at 11,325 as of 7:15 a.m.
Short on time? Well, then listen to this podcast for a quick summary of the article!
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U.S. stocks ended lower Friday after tech shares took another beating, as Twitter followed Facebook in delivering
disappointing results and Intel said a key new chip technology wouldn’t be out until late next year.
The yield on 10-year Treasuries ticked higher to near 2.96 percent.
Also Read: Mnuchin Outlook for Sustained 3% Growth at Odds With Forecasters
Europe Market Check
European equities ended higher, capping the best week in more than four months, after the region and the U.S.
reached a cease-fire over tariffs.
Also Read: Italy Offers May Brexit Olive Branch as Grassroots Tories Revolt
Asian Cues
Also Read: The $500 Billion Market the World Never Thought It Would See
Commodity Cues
Also Read: Iran Oil Ministry Limits Senior Managers to Serving Four Years
Stories That You Might’ve Missed
Japan’s Topix index fell 0.3 percent.
Australia’s S&P/ASX 200 Index lost 0.6 percent.
South Korea’s Kospi index fell 0.2 percent.
Futures on Hong Kong’s Hang Seng Index retreated 0.3 percent.
Futures on the S&P 500 were down less than 0.1 percent.
The yen rose 0.1 percent to 110.94 per dollar.
The offshore yuan was steady at 6.8235 per dollar.
Australia’s 10-year bond yield was steady at 2.64 percent.
West Texas Intermediate crude increased 0.4 percent to $69 a barrel.
Brent crude traded lower for the second day, down 0.1 percent.
Gold was little changed at $1,222.71 an ounce.
Aluminium ended 0.3 percent higher at $2,058.50 per metric tonne.
Understanding the men and women of India’s Monetary Policy Committee.
Can AI read emotions? This startup says it can.
Data Protection Bill: missed opportunity for surveillance reform.
Here are the key events to watch out for this week:
#SaveOurPrivacy: Apar Gupta explains the seven principles of Indian Privacy Code.
Finance Ministry suggests forming panel to tackle stressed power assets.
Three reasons a ‘khichdi’ coalition in 2019 could be a political delicacy.
Why Imran Khan is unlikely to break the India-Pakistan stalemate.
Forgotten photos from the space shuttle’s glory days.
Major car exporters said to plan meeting amid U.S. tariff threat.
Trump and son at legal risk if found lying about Russia meeting.
Trump’s threats are the least of Iran’s worries.
Jeff Bezos wants to send you to space, too.
A trillion dollars is buying tech investors a lot of headaches.
Can Imran Khan create a new Pakistan?
Earnings season continues with Apple, Berkshire Hathaway, Barclays, Tesla, Toyota, BMW, and Rio Tinto among
companies reporting results.
Central banks in the U.S., Japan, the U.K., Brazil and India all meet this week. The BOJ may tweak its yield-curve control
policy and cut its CPI forecasts, while the Bank of England is expected to hike even amid Brexit gloom. The Fed is seen
standing pat, as is Brazil’s central bank. The RBI will probably raise its benchmark.
U.S. personal spending and income data for June -- coming Tuesday -- may be steady. Then it’s the jobs report on
Friday, which is predicted to show a healthy labour market, with 193,000 new jobs, and an unemployment rate slipping
back to 3.9 percent.
Also Read: Time Is Ripe for Second India Rate Hike as Inflation Risks Mount
Nifty Earnings To Watch
Other Earnings To Watch
China’s PMIs probably edged down in July, analysts say, buffeted by a deleveraging agenda and a trade war.
Axis Bank
HDFC
Tech Mahindra
Aban Offshore
Avenue Supermarts
Can Fin Homes
Central Bank of India
Century Textiles & Industries
Chennai Petroleum Corporation
Escorts
General Insurance Corporation Of India
Godrej Consumer Products
Gujarat Gas
GSPL
Idea Cellular
Earnings Reactions To Watch
RIL (Q1, QoQ)
Reliance Jio (Q1, QoQ)
IDFC
IDFC Bank
InterGlobe Aviation
Jaiprakash Associates
Oberoi Realty
Piramal Enterprises
RITES
Shree Cement
Revenue up 8.5 percent at Rs 91,159 crore.
Net profit up 1.4 percent at Rs 8,820 crore.
Ebitda up 13 percent at Rs 15,154 crore.
Margin at 16.6 percent versus 16 percent.
Revenue up 14 percent at Rs 8,109 crore.
Net Profit up 20 percent at Rs 612 crore.
Ebitda up 17 percent at Rs 3,147 crore.
Margin at 38.8 percent versus 37.8 percent.
Also Read: Q1 Results: Petrochemicals Drive Surprise Profit Growth For Reliance Industries
HCL Tech (Q1, QoQ)
ICICI Bank (Q1, YoY)
Also Read: Q1 Results: ICICI Bank Reports Its First Net Loss Since 2001
NTPC (Q1, YoY)
ARPU at Rs 134.5 versus Rs 137.
$ revenue up 0.8 percent at $2,055 million.
Net profit up 7.9 percent at Rs 2403 crore.
Income from operations up 5.3 percent at Rs 13,878 crore.
EBIT up 5.7 percent at Rs 2729 crore.
EBIT margin at 19.7 percent versus 19.6 percent.
NII up 9 percent at Rs 6,101.5 crore.
Net loss of Rs 120 crore versus net profit of Rs 2,049 crore.
Provisions down 10 percent at Rs 5,971 crore (QoQ).
GNPA at 9.65 percent versus 9.9 percent (QoQ).
NNPA at 4.67 percent versus 5.43 percent (QoQ).
Revenue up 14.2 percent at Rs 22,704 crore.
Net Profit down 1.1 percent at R 2,588.1 crore.
Coromandel International (Q1, YoY)
Bank of Baroda (Q1, YoY)
Excel Crop Care (Q1, YoY)
Lumax Industries (Q1, YoY)
Ebitda up 18.1 percent at Rs 5,954.8 crore.
Margin at 26.2 percent versus 25.4 percent.
Revenue up 12 percent at Rs 2,528.5 crore.
Net profit up 23 percent at Rs 90 crore.
Ebitda up 27 percent at Rs 214 crore.
Margin at 8.5 percent versus 7.5 percent.
NII up 28.7 percent at Rs 4,381 crore.
Net profit up 160 percent at Rs 528 crore.
Provision at Rs 1,760 crore versus Rs 7052 crore (QoQ).
GNPA at 12.46 percent versus 12.26 percent (QoQ).
NNPA at 5.40 percent versus 5.49 percent (QoQ).
Revenue up 35 percent at Rs 400 crore.
Net profit up 60 percent at Rs 38.5 crore.
Ebitda up 61.5 percent at Rs 63 crore.
Margin at 15.75 percent versus 13.2 percent.
Ramkrishna Forgings (Q1, YoY)
Persistent Systems (Q1, QoQ)
JK Cement (Q1 YoY)
Net sales up 45.8 percent at Rs 496 crore.
Net profit up 33 percent at Rs 20 crore.
Ebitda up 65 percent at Rs 40.5 crore.
Margin at 8.2 percent versus 7.2 percent.
Net sales up 59 percent at Rs 410 crore.
Net profit up 204 percent at Rs 27.7 crore.
Ebitda up 95 percent at Rs 60 crore.
Margin at 14.6 percent versus 11.9 percent.
Revenue up 10.9 percent at Rs 834.2 crore.
Net profit up 18.5 percent at Rs 87.3 crore.
EBIT up 50.7 percent at Rs 100 crore.
EBIT margin at 12 percent versus 8.8 percent.
Net sales up 7.1 percent at Rs 1,115 crore.
Net profit down 38 percent at Rs 49.3 crore.
Ebitda down 24 percent at Rs 150.3 crore.
Margin at 13.5 percent versus 19 percent.
Johnson Controls-Hitachi (Q1, YoY)
Prestige Estates (Q1, YoY)
Also Read: How Much Should You Read Into Canara Bank’s Quarterly Earnings: QuickTake
Stocks To Watch
Bulk Deals
Revenue down 8 percent at Rs 794 crore.
Net profit down 18 percent at Rs 51 crore.
Ebitda down 21 percent at Rs 84 crore.
Margin at 10.6 percent versus 12.3 percent.
Revenue down 33 percent at Rs 861 crore.
Net profit up 30 percent at Rs 122 crore.
Exceptional gain of Rs 89 crore during the quarter
Ebitda down 19 percent at Rs 255 crore.
Margin at 29.6 percent versus 24.5 percent.
Pioneer Distilleries received order from Maharashtra Pollution Control Board to stop all manufacturing activity at one
of its units.
Select Energy Systems partnered with U.S. based Zero Mass water to provide drinking water solution.
Godrej Consumer to consider a proposal for issue of bonus shares.
TVS Logistics in talks to acquire Gati for Rs 1,500 cr ; agreement likely in a few weeks (Economic Times).
Indian ADRs
Max India: WF Asian Reconnaissance Fund bought 39.41 lakh shares or 1.5 percent at Rs 82.4 each.
Mahindra CIE: Prudential Management & Services Pvt. Ltd sold 47.84 lakh shares or 1.3 percent equity at Rs 258 each.
JBF Industries: ECL Finance sold 4.98 lakh shares or 0.6 percent at Rs 32.15 each.
Shilpi Cable: Emerging Markets Opportunities Fund sold 6 lakh shares or 0.5 percent at Rs 3.05 each.
Offerings/Listing
HDFC AMC IPO issue subscribed 83.05 times on last day. Final offer price at Rs 1,100 a share.
Who’s Meeting Whom
Insider Trades
As reported on July 27
Trading Tweaks
Rupee
Top Gainers And Losers
TCNS Clothing to start trading on BSE/NSE after IPO. gets 5.2 times demand at Rs 716 a share.
Jubilant Life Sciences’ unit Jubilant Pharma to consider raising funds via IPO. May offer up to 5 percent stake for sale.
PNB MetLife India Insurance filed IPO papers with SEBI.
Hindalco to meet GIC, Nomura and other investors on July 30.
Leel Electricals promoter Fedders Sales acquired 43,566 on July 25 – 26.
Man Infra promoter Vatsal Shah acquired 17,884 shares on July 26.
GTPL Hathway promoter Gujarat Digi Com Private Limited acquired 40,000 shares on July 26.
The rupee dollar weekly F&O to be introduced on BSE.
Shilpi Cable and Seamec placed under ASM framework.
JMT Auto circuit filter revised to 10 percent.
Rupee ended at 68.66 per U.S. dollar on Friday versus 68.67 a dollar on Thursday.
Top Gainers And Losers% Change (Month-To-Date)
Adani Power
Indo Count Industries
GATI
Granules India
L&T Technology Services
Kwality
8k Miles Software Services
PC Jeweller
Den Networks
JBF Industries
61.92
31.93
28.24
25.39
25.19
-47.82
-46.79
-38.17
-37.77
-36.93
F&O Cues
Nifty August Futures closed trading at 11,306.7 premium of 28 points versus 34 points.
August series-Nifty OI up 10 percent and Bank Nifty OI up 11 percent.
India VIX ended at 12.3, up 2.3 percent.
Max OI for August series at 11,500 Call, OI at 27.5 lakh, OI up 15 percent.
Max OI for August series at 11,000 Put OI at 38.5 lakh, OI up 19 percent.
F&O Ban
Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty in case of a rollover of these intraday positions.
Put-Call Ratio
Active Stock Futures
In Ban: None
New in Ban: None
Out of Ban: Adani Enterprises
Nifty PCR at 1.71 versus 1.72
Nifty Bank PCR at 1.49 versus 1.36
Fresh Longs
Fresh Shorts
Short Covering
Stock Futures-OI Change August Series
% OI Change %Price Change
Ajanta Pharma
BPCL
Hindalco
Escorts
KPIT
19 5
17 2.1
15 3.3
13 3.6
12 3.8
% OI Change %Price Change
Cholamandalam Investment and Finance 21 -5.2
% OI Change %Price Change
Hero MotoCorp -8 2.1
Fund Flows
Brokerage Radar
Edelweiss on Bank of Baroda
JPMorgan on NTPC
JPMorgan on M&M Financial Services
CLSA on JSW Energy
Maintained ‘Buy’ with a price target of Rs 180.
Impressive June quarter with improvement in asset quality and stable core.
Revenue build-up on track; Sustenance key.
Expect growth with quality momentum to gain traction.
Expect stock to rerate as visibility on earnings delivery improves.
Maintained ‘Overweight’ with a price target of Rs 190
June quarter’s net profit was below analyst estimates
Expect healthy EPS growth in 2018-19 off the reported base of 2017-18.
Lower under-recovery of capacity charge and partial absorption of wage hike provisions to boost EPS.
Maintained ‘Underweight’ with a price target of Rs 435
June quarter reported a higher loan growth offset on credit cost increase
Ind-AS shift increases F18 net income by above 20 percent.
Reduction in credit losses will be key towards improving ROA.
Remain underweight as valuations are at a sharp premium.
Maintained ‘Sell’; cut price target to Rs 63 from Rs 69.
Low water levels in Satluj river hurt Hydro generation in peak season.
CLSA on Westlife Development
Brokerages On Reliance Industries
Edelweiss
Motilal Oswal
Dark spreads contract on rising coal and U.S. dollar.
Weak core and risk to ROE from long-gestation capex to cap valuation.
Maintained ‘Buy’; raised price target to Rs 550 from Rs 475.
Strong SSSG leading to double-digit operating margins.
Gross margin expansion led by menu innovations and better mix.
Key beneficiary of recovery in urban discretionary consumption.
Maintained ‘Buy’; raised price target to Rs 1,457 from Rs 1,201.
Another robust petchem show; Gasifier stabilization underway.
Jio – Surprisingly steady ARPUs; Retail - revenue & margins surge.
With commissioning of mega core projects, expect FCF to turnaround.
At current price, stock trades at an undemanding.
Maintained ‘Buy’; raised price target to Rs 1,301 from Rs 1,211.
Petchem drives standalone profitability; Jio surprises again.
Consolidated Ebitda exceeded estimates on the back of Jio and retail operational performance.
Positively surprised by Jio’s stellar ARPU despite aggressive pricing.
Nomura
Brokerages On ICICI Bank
Kotak
Goldman Sachs
Maintained ‘Buy’ with a price target of Rs 1,220.
Strong June quarter results – Petchem/Jio/Retail gets better; Refining in line
Jio continues to surprise with strong numbers.
Expect consolidated operating income and net profit to grow at a compounded annual growth rate of 34 percent and
27 percent respectively over FY18-20.
Expect pace of capex to slow in coming quarters.
Maintained ‘Buy’ with a price target of Rs 400.
Most metrics show improving trends.
Internals of results broadly suggest a gradual recovery.
No new negative surprises under new management.
High provisions result in a loss; New disclosures not too worrisome.
Maintained ‘Buy’ with a price target of Rs 375.
Bank reported pick-up in core operating profit growth.
Accelerated balance sheet clean up by increasing provisioning charge.
Fresh NPL slippages were much lower than expectations.
Brokerages On HCL Technologies
Investec
Goldman Sachs
BloombergQuint
Stay Updated With
Multiple catalysts to drive stock performance.
Maintained ‘Buy’; raised price target to Rs 1,100 from Rs 1,048.
June quarter was disappointing with an organic revenue growth of 0.7 percent.
See negligible impact to EPS estimates for the current financial year.
Buyback and lower ETR offset lower revenue growth impact.
Large deal wins drive visibility.
Maintained ‘Neutral’; raised price target to Rs 1,039 from Rs 1,025.
June quarter’s revenue and EBIT margins below estimates.
Expect renewal rates in IMS (36 percent of revenues) remain under pressure.
See limited visibility on pick-up in organic growth in medium to longer term.
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Gopal 25 points
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Very clear perspective
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