All You Need To Know Going Into Trade On Jan. 24

rajtamilSeptember 6, 202407 views

The rally in Asian stocks stalled Wednesday even after U.S. stocks rose for a third day. The yen strengthened as the dollar resumed its decline.

Traders will be turning their attention toward Thursday’s European Central Bank meeting, as well as keeping an eye on Davos, Switzerland, where the world’s business and political elites have gathered for an annual conference.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.1 percent to 11,072 as of 7:10 a.m.

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

Global Cues

U.S. stocks rose a third day, while emerging-market equities hit the highest in a decade as synchronised global growth boosts corporate profits.
Tech shares lifted the Nasdaq 100 Index to a fifth straight gain and the MSCI Emerging Markets Index powered to an eighth day of advances.
The 10-year Treasury yield fell for a second session, while the dollar dropped toward lows of the year.
Investors have focused on a positive start to earnings season, mostly brushing off fears of protectionism after U.S. President Donald Trump slapped tariffs on imported solar panels and washing machines.

#BQMarketsNow | Stocks rise on earnings as tech Rallies; oil gains.https://t.co/kpsNiO4UlBpic.twitter.com/4azIlpwQoO

— BloombergQuint (@BloombergQuint) January 24, 2018

Europe Check

European stocks closed higher for a fourth day as gains in travel and leisure companies offset declines in the basic-resources sector.

U.S. slaps tariffs on solar equipment, washing machines. Here's who comes out as the winner. https://t.co/Pl01V7N2dF

— BloombergQuint (@BloombergQuint) January 24, 2018

Asian Cues

The MSCI Asia Pacific Index declined 0.1 percent.
Japan’s Topix index sank 0.3 percent.
Kospi index climbed 0.1 percent, touching the highest in two months.
Australia’s S&P/ASX 200 Index advanced 0.1 percent to the highest in more than a week.
Futures on the S&P 500 Index were little changed after the underlying gauge closed at the highest on record Tuesday.

Here are some of the key events scheduled for this week:

Earnings season is in full swing: Novartis, General Electric, Intel, LVMH Moet Hennessy Louis Vuitton, Starbucks and Hyundai Motor all come later in the week.
Barring any last minute changes in Washington, President Donald Trump will join world leaders and senior executives in Davos for the annual World Economic Forum.
The European Central Bank announces its rate decision on Thursday
The U.K. House of Lords is considering Prime Minister Theresa May’s Brexit bill this week.

Goldman Sachs risk appetite is now at its highest level on record.https://t.co/voidH0ForIpic.twitter.com/iVHosI0q21

— BloombergQuint (@BloombergQuint) January 24, 2018

Commodity Cues

West Texas Intermediate crude was little changed at $64.45 a barrel.
Brent ended higher at $69.96 per barrel, up 1.4 percent.
Gold was little changed at $1,341.72 an ounce, near the highest since September.
Sugar ended higher at 13.19 cents per pound; up 0.2 percent.

Shanghai Exchange

Steel trades higher; up 0.1 percent.
Aluminium trades lower for third day; down 0.2 percent.
Zinc trades higher; up 0.02 percent.
Copper trades lower; down 2 percent.
Rubber trades lower for fourth day; down 1.2 percent.

IOC has a multi-billion dollar headache.https://t.co/FOZOFKn21Ypic.twitter.com/pxQcd7EepD

— BloombergQuint (@BloombergQuint) January 23, 2018

Indian ADRs

Earnings To Watch

Idea Cellular
Biocon
Canara Bank
Capital First
Container Corporation Of India
HEG
InterGlobe Aviation
KEI Industries
KPIT Technologies
L&T Infotech
Mahindra & Mahindra Financial Services
MAS Financial Services
Motilal Oswal Financial Services
Mphasis
Pfizer
Pidilite Industries
Quess Corp
Raymond
Sagar Cements
Vijaya Bank

Earnings Reaction To Watch

Indiabulls Housing Finance Q3 (YoY)

Income from operations grew 29.5 percent to Rs 3,349 crore.
Core NII up 23.6 percent at Rs 1,410 crore.
Net profit grew 55.4 percent to Rs 1,167.7 crore.
Provisions for loan assets/bad debt at Rs 262 crore.

RBL Bank Q3 (YoY)

NII up 45.3 percent at Rs 467 crore.
Net profit up 28.5 percent at Rs 163.5 crore.
Provisions at Rs 82.3 crore.
GNPA at 1.56 percent from 1.44 percent (QoQ).
NNPA at 0.97 percent from 0.78 percent (QoQ).

Nucleus Software Q3 (QoQ)

Revenue up 6 percent at Rs 106 crore.
Net profit up 15 percent at Rs 18 crore.
EBIT up 48 percent at Rs 17 crore.
Margin at 16 percent from 11.5 percent.
Other income down 34 percent at Rs 5.4 crore.

L&T Technology Services Q3 (QoQ)

Revenue up 7.5 percent at Rs 969 crore.
Net profit up 2 percent at Rs 126 crore.
EBIT up 8.5 percent at Rs 134 crore.
Margin at 13.8 percent from 13.7 percent.

Crompton Greaves Consumer Electricals Q3 (YoY)

Revenue up 6.6 percent at Rs 938 crore.
Net profit up 28 percent at Rs 69.5 crore.
EBITDA up 18.4 percent at Rs 116 crore.
Margin at 12.4 percent from 11.1 percent.

Indiabulls Real Estate Q3 (YoY)

Revenue multiplied six-folds to Rs 2,100 crore.
Net profit up 45 percent at Rs 85 crore.
EBITDA up 710.5 percent at Rs 231 crore.
Margin at 11 percent from 9.5 percent.

Wabco India Q3 (YoY)

Revenue up 33 percent at Rs 650 crore.
Net profit up 45.5 percent at Rs 64 crore.
EBITDA up 29 percent at Rs 100 crore.
Margin at 15.4 percent from 15.8 percent.

Syngene International Q3 (YoY)

Revenue up 17 percent at Rs 388 crore.
Net profit up 11 percent at Rs 82 crore.
EBITDA up 11.5 percent at Rs 126 crore.
Margin at 32.5 percent from 34 percent.

United Spirits Q3 (YoY)

Revenue down 8 percent at Rs 2,263 crore.
Net profit down 9 percent at Rs 135 crore.
EBITDA down 7 percent at Rs 272.5 crore.
Margin flat at 12 percent.

Shemaroo Q3 (YoY)

Revenue up 17 percent at Rs 133 crore.
Net profit up 29 percent at Rs 18 crore.
EBITDA up 22 percent at Rs 36 crore.
Margin at 27.1 percent from 26 percent.

PNB Housing Finance Q3 (YoY)

Revenue from operations up 44 percent at Rs 1,438.5 crore.
Net profit up 58 percent at Rs 217.5 crore.
GNPA at 0.42 percent from 0.37 percent (QoQ).
NPA at 0.33 percent from 0.27 percent (QoQ).

Alembic Q3 (YoY)

Revenue up 11 percent at Rs 30 crore.
Net profit up 700 percent at Rs 5.6 crore.
EBITDA up 567 percent at Rs 5 crore.
Margin at 16.7 percent from 2.8 percent.

Indiabulls Housing Finance’s net profit rose 55.4% year-on-year. #Q3WithBQhttps://t.co/ZqkilUq7Pt

— BloombergQuint (@BloombergQuint) January 23, 2018

Stocks To Watch

Manappuram Finance board authorised managing director to scout for investment opportunity.
Godrej Agrovet clarified stake in Maxximilk less than 51 percent.
Quickheal Technologies received order from tax authorities demanding Rs 37.7 crore. Company will appeal against the order with CESTAT.
Aurionpro Solutions’ arm Cyberinc partnered with ECS to distribute Isla Malware Isolation Platform across Asia Pacific.
Shriram EPC bags order worth Rs 84 crore from Jharkhand to set up drinking water and Sanitation facilities.
Wipro bags multi-year business process services contract from Nilfisk.
Majesco QIP opens with a floor price of Rs 532 per share.
Genus Papers leased manufacturing facility for 5 years for production of Kraft paper.
Alembic to buyback 1.02 crore shares (3.84 percent equity) at Rs 80 per share.
Savita Oil Technologies to buyback 2.8 lakh shares (1.92 percent equity) at Rs 1,605 per share.
Sanghi Industries QIP closes with the issue price fixed at Rs 129 per share, at a discount of 4.78 percent to the floor price.
ONGC signed loan pact worth Rs 18,060 crore with Punjab National Bank, Bank Of India, Axis Bank to fund HPCL stake buy.

JSW eyes Monnet Ispat, Bhushan Steel, but not majority stake. #BQatWEF
Read | https://t.co/wYmEhHL0nY
Watch | https://t.co/1zWYeNQED3pic.twitter.com/bchiSUskaW

— BloombergQuint (@BloombergQuint) January 23, 2018

Bulk Deals

Oriental Hotels: Reliance MF – Mid & Small Cap Fund sold 1.19crore shares or 7.1 percent equity at Rs 61.5 each.
Zee Entertainment: Essel Holdings sold 1.38crore shares or 1.4 percent equity at Rs 595.13 each.

Varun Beverages

Reliance MF – Growth Fund bought 11.50 lakh shares or 0.6 percent equity at Rs 700 each.
Reliance MF – Top 200 Fund bought 10 lakh shares or 0.5 percent equity at Rs 700 each.
AION Investments II Singapore Pte sold 40 lakh shares or 2.2 percent equity at Rs 700.26 each.

Sellers want to sell, buyers want to buy – that's what the emerging bond boom is all about.https://t.co/hALjnFhty0pic.twitter.com/XrxVky31wg

— BloombergQuint (@BloombergQuint) January 23, 2018

Corporate Action

Circuit filter revised to 10 percent: Oriental Hotels, Som Distilleries and Omax Autos.
Apollo Micro Systems added to BSE IPO Index.
SE Investments name changed to Paisalo Digital Limited.
Orient Paper & Industries last trading day under T group, to be shifted to B group tomorrow.
Samtel Color, Orchid Pharma and Value Industries last trading day before being shifted to Z group.

Who’s Meeting Whom

Ultratech Cement to meet several fund houses including ICICI Pru MF, DSP Blackrock, SBI Life Insurance on Jan. 24.
GMR Infrastructure to meet Sundaram Asset Management and Franklin Templeton Asset Management on Jan. 24.
Gokaldas Exports to meet several fund houses including Sundaram MF, SBI MF, DSP Blackrock etc in Chennai and Mumbai on Jan. 24.
TNPL to meet Pabrai Investment on Jan. 24.
Jyothy Labs to meet Morgan Stanley AMC on Jan. 25.

PM Modi pitched India's soft power at #Davos, @anandmahindra tells @menakadoshi. #BQatWEF#IndiaMeansBusinesshttps://t.co/u0fqJKxhHupic.twitter.com/82bUtjA3tn

— BloombergQuint (@BloombergQuint) January 23, 2018

Insider Trades

Vardhman Textiles promoter Paras Syndicate acquired 32,345 shares on Jan. 19.
Gujarat Apollo industries promoter Dhruv Patel sold 10,000 shares on Jan. 22.
ICSA (India) promoter Gopu Velangini Mary sold 16,023 shares on Jan. 4.

Rupee

Rupee closed at 63.78/$ on Tuesday from 63.87/$ on Monday.

Top Gainers And Losers

Index Trends

F&O Cues

Nifty January futures trading at 11,085, premium of 1.7 points from a premium of 1.8 points.
Nifty January futures trade at 11,108, premium of 24 points.
Across series: Nifty open interest up 3 percent, Bank Nifty open interest up 8 percent.
India VIX ended at 16.2, up 5.5 percent.
Rollover: Nifty at 31 percent, Bank Nifty at 35 percent.
Max open interest for February series at 10,800 Call (open interest at 20.5 lakh, up 1 percent).
Max open interest for February series at 10,500 Put (open interest at 39.6 lakh, up 4 percent).

Petrol, diesel prices jump; oil ministry seeks excise duty cuts.https://t.co/G4z8ob6Jtfpic.twitter.com/GZbnMYFGJh

— BloombergQuint (@BloombergQuint) January 23, 2018

F&O Ban

In ban: Dewan Housing, HDIL, IFCI, Jet Airways, Jindal Steel, JP Associates, Kaveri Seed, Reliance Communication.
New in ban: Jet Airways, Jindal Steel, Reliance Communication.
Out of ban: Balrampur Chini , DLF, Fortis, HCC, Just Dial.

Only intraday positions can be taken in stocks which are in ban. In case of a rollover of these intraday positions, there is a penalty.

Put-Call Ratio

Nifty PCR at 1.89 from 1.79.
Nifty Bank PCR at 1.41 from 1.30.

Stocks Seeing High Open Interest Change

Fund Flows

Brokerage Radar

Citi on RBL Bank

Maintained ‘Neutral’ with price target of Rs 560.
Operationally strong earnings were reported in December quarter.
Asset quality: slight NPL increase.
RBL seeing healthy growth momentum.
Stock is fairly valued.

Morgan Stanley on RBL Bank

Maintained ‘Equal-weight’ with price target of Rs 500.
December quarter showed strong revenue growth; Miss on asset quality.
Core PPoP was in line, as higher revenues were offset by higher opex.
Revenue growth helped by loan growth, high margins and strong fee income.
Valuation fully prices in strong loan growth and improving profitability.

JPMorgan on Indiabulls Housing

Maintained ‘Overweight’ with price target of Rs 1,500.
Previous quarter was a steady quarter.
Steady loan growth and stable margin.
NPAs stable while core credit costs lower.
Cost-income continues to trend lower.
Relatively cautious on HFCs due to rate environment.
Rating upgrade and strong distribution makes Indiabulls growth durable.

Nomura on Indiabulls Housing

Maintained ‘Neutral’ with price target of Rs 1,400.
Stable Q3 performance, especially on spreads.
Flat spreads (QoQ) is positive surprise in context of challenging rate environment.
Strong AUM growth continues; Asset quality remains stable.
Recent rating upgrade to AAA to aid cost of funds.
Remain concerned on incremental mortgage spreads.

Morgan Stanley on United Spirits

Maintained ‘Equal-weight’ with price target of Rs 4,000.
Third quarter results were a miss on most counts.
Maintains equal-weight due to low visibility of pricing growth.
Revenues affected by route-to-market changes.
Residual effect of the highway liquor ban seen.
Key positive was gross margin expansion of 530 basis points.
Increases in ad spend and other expenditure is the key disappointment.
Above expenses highlight inherent volatility in the business and industry construct.

Macquarie on United Spirits

Maintained ‘Underperform’ with price target of Rs 2,383.
Previous quarter results were below estimates led by volume decline.
P&A volume decline of 3 percent YoY.
Big miss on operating income even normalising for higher A&P.
Maharashtra gained volumes on account of beer supply issues.
Street ignoring potential risk to the Alcobev industry.

Kotak on United Spirits

Maintained ‘Reduce’ with price target of Rs 3,751
December quarter earnings were disappointing.
September quarter smashed analyst estimates while December quarter was a major miss.
Net profit was aided by reduction in net debt.
State mix of volumes likely worsened.
Doubt if street has skill-set to numbers for such volatile business.

Kotak on PNB Housing Finance

Maintained ‘Sell’ with price target of Rs 1,250.
Strong loan growth continues.
Previous quarter was in line with expectations.
Loan growth trajectory remains high.

JPMorgan on PNB Housing Finance

Maintained ‘Neutral’ with price target of Rs 1,600.
Previous quarter displayed a solid loan growth momentum.
Asset quality remained healthy, but gross NPA saw an uptick.
Cost-income inched higher QoQ.

Macquarie on Crompton Greaves Consumer

Revenue big miss as electrical consumer durables segment witnessed tepid growth.
Revenue growth lagged peers.
Margins expansion on track.
New product launch much needed to support revenue growth.

Edelweiss on Monte Carlo

Initiated ‘Buy’ with price target of Rs 800.
Unrivalled winter wear brand.
Successful diversification into cotton wear, new territories.
Macro challenges hit two years of financial performance; Turnaround in sight.
Strong expected growth from branded apparel industry to boost Monte Carlo.
Near-term visibility remains robust.
Expect strong growth in upcoming quarter with improved profitability.
Performance over next two quarters to give clear view on long-term visibility.
At current valuations, all negatives have been priced in.
Bull case price target of Rs 1,080.

Morgan Stanley on Edelweiss

Maintained ‘Overweight’ with price target of Rs 380.
Previosu quarter showed a strong growth across segments.
Overall credit book growth was strong.
Retailisation continued with retail loan growth stronger.
Asset quality stable, with GNPL ratio at 1.74 percent

HSBC on General Insurance Corp

Initiated ‘Hold’ with price target of 860.
GIC is the leader in the Indian reinsurance market.
Growth story in domestic market remains intact.
Expect improvement in group profitability.
Lower primary loss ratios and lower operating expenses to boost profit.
Improvement in profitability offset by risks.
Heavy exposure to agriculture and equities key concern.
Expect net profit and book value to compound at 9 percent and 13 percent respectively over the financial years through March 2020.
Expect solvency of 241 percent by March 2020; Dividend payout of 30 percent for the next three years.
Stock is fairly valued.

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