All You Need To Know Going Into Trade On August 12

Asian markets are drifting lower on Wednesday after a subdued session on Wall Street. Doubts persist over the timing of a new spending package in the U.S.

Gold prices fell the most in seven years overnight, falling below the mark of $2,000/Oz.

The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 0.9% to 11,241 as of 7:50 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.

Let's take a look at the factors that may influence equities in today's session:

• Benchmark indices have opened higher in Japan while they are fluctuating in South Korea and Australia.
• Futures on the Dow Jones are trading higher by 80 points. The index ended 0.4% lower on Tuesday - its first decline in eight sessions.
• Senate majority leader Mitch McConnell said that stimulus talks are at a stalemate.
• New Zealand reported its first Covid-19 case in over 100 days, causing a decline in local benchmark indices.
• Yield on the 10-year treasuries stood at 0.63% after rising over six basis points on Tuesday.
• West Texas Intermediate crude was little changed at $41.69 per barrel. Gold prices were up 0.3% at $1,918/Oz.

Get your daily fix of the global markets here.

Earnings Fineprint: Adani Ports Q1FY21

• Revenue down 18% to Rs 2,292.7 crore
• Net profit down 26% to Rs 758 crore
• Ebitda down 28% to Rs 1,328.6 crore
• Ebitda margin at 57.9% from 65.9%
• Higher other expenses and employee costs impact margins
• Cargo Throughput at 41.4 MMT from 56.75 MMT
• All numbers are consolidated and compared on a year-on-year basis

Stocks To Watch

• Adani Ports & SEZ: Board approves raising Rs 3,000 crore through NCDs. Gets approval from the Competition Commission of India for the acquisition of Krishnapatnam Port. Deal likely to be completed in Q2FY21. With regards to the deal with Snowman Logistics, the company said that both parties mutually agreed to not pursue the deal further. A settlement agreement has been signed. Adani Logistics will continue to be a minority shareholder in Snowman Logistics.
• Eicher Motors: Shareholders approve splitting one equity share of Rs 10 each into ten equity shares of Re 1 each. The expected time of the split is 2-3 months from August 11. Issued, subscribed and paid-up share capital of the company will rise to 27.3 crore shares from 2.73 crore shares.
• HDFC: Completes capital raise through its QUIP and issue of NCDs, aggregating to Rs 13,693 crore. It will receive an additional Rs 3,690 crore through securities premium it all warrants are exercised by the investors. Accordingly, maximum equity dilution would be up to 4.26% of enhanced equity share capital.
• Covid-19 Impact On Petronet LNG: Demand for regasified LNG has seen gradual recovery since the first week of June. The Dahej terminal operating at full capacity since lifting of the lockdown. Constrained to invoke Force Majeure for nine long-term cargos with its suppliers and discussions on the same are ongoing. The company also received requests under regasification contracts for deferment of third-party cargos to subsequent months.
• Orissa Mineral Development: Supreme Court has passed orders for the company to resume mining operations subject to necessary clearances and allowed the sale of undisposed stock following due procedure.
• MT Educare: Promoter Mahesh Shetty has offered to sell up to 17.83 lakh shares (2.47% equity) at a floor price of Rs 13.5 per share. The Offer For Sale for non-retail investors, shall open on August 12 and for retail investors on August 13.
• Muthoot Finance: Board to seek shareholders nod to increase borrowing limit to Rs 75,000 crore from Rs 50,000 crore on August 19.
• Chalet Hotels: Board approved amalgamation of its wholly owned arms Belaire Hotels and Seapearl Hotels with itself. Proposed opening of Westin Hotel at Hyderabad has been pushed back to 2021. All other projects have been put on hold. All hotel and retail properties in Mumbai, Bengaluru, Hyderabad and Pune are fully operational.
• Wipro: Completed the acquisition salesforce partner 4C.
• Hexaware Technologies: Announces strategic partnership with Freshworks for digital solutions.
• ONGC: Allotted NCDs worth Rs 1,000 crore.
• Vadilal Enterprises: India Ratings and Research has downgraded the company’s long-term issuer rating to ‘IND BBB’ from ‘IND BBB+’ while resolving rating watch negative.
• Gujarat Alkalies and Chemicals: Revised the caustic soda plant project (project implemented by GACL and NALCO) to Rs 2,300 crore from Rs 2,000 crore. Additional project cost will be funded by lenders and promoters in the debt-equity ratio of 70:30.
• Embassy Office Parks REIT: To consider raising debt on August 14.
• MPS: Board approves share buyback of up to 5.67 lakh shares or 3.04% of total equity. The buyback price of Rs 600 per share is a 51% premium to Tuesday's closing price. The record date for the Rs 34 crore buyback is set at August 24.
• KRBL: Board has discussed the potential hiving off of the company’s energy business into a newly formed legal entity. A draft restructuring proposal will be made in the due course of time.
• Covid-19 Impact On Bharat Road Networks: Some Special Purpose Vehicles (SPVs) have applied for and availed moratorium on term-loans. The SPVs are taking appropriate measures including invoking the Force Majeure conditions to combat the impact of the pandemic.
• JMC Projects: Received EPC orders worth Rs 1,363 crore.
• Sequent Scientific: CA Harbor Investments makes an open offer to acquire 6.45 crore shares or 26% of the expanded voting share capital of the company from public shareholders. The open offer will run from August 25 - September 7.
• Non-Nifty Earnings Today: Aarti Industries, Aavas Financiers, Ashok Leyland, Aster DM Healthcare, Aurobindo Pharma, Bharat Forge, Brigade Enterprises, Cholamandalam Financial, Cummins India, eClerx, Graphite India, Gulf Oil, Kalpataru Power, SH Kelkar, NCC, Natco Pharma, MAS Financial, Tata Power

Earnings Reported After Market Hours

Prataap Snacks Q1FY21

• Revenue down 40.8% to Rs 196 crore
• Net loss of Rs 6 crore from net profit of Rs 9.7 crore
• Ebitda down 68.9% to Rs 8.5 crore
• Ebitda margin at 4.3% from 8.2%
• All numbers are consolidated and compared on a year-on-year basis

Rashtriya Chemicals & Fertilisers Q1FY21

• Revenue down 32.7% to Rs 1,621.1 crore
• Net profit more than doubles to Rs 19.2 crore
• Ebitda up 22.7% to Rs 98 crore
• Ebitda margin at 6% from 3.3%
• Lower power, freight and raw material costs aid margin expansion
• All numbers are consolidated and compared on a year-on-year basis

KRBL Q1FY21

• Revenue down 37.3% to Rs 764 crore
• Net profit down 7.6% to Rs 125.7 crore
• Ebitda down 23% to Rs 183.2 crore
• Ebitda margin at 24% from 19.5%
• Lower raw material costs aid margin expansion
• All numbers are consolidated and compared on a year-on-year basis

Shriram City Union Finance Q1FY21

• Net Interest Income down 8.4% to Rs 874.2 crore
• Net profit down 24.1% to Rs 192.3 crore
• Covid-19 related provisions at Rs 180 crore this quarter
• Moratorium 2.0 has slowed down securitisation of deals
• Collection efficiency at the end of June at 71%
• All numbers are standalone and compared on a year-on-year basis

Somany Ceramics Q1FY21

• Revenue down 57.2% to Rs 169.4 crore
• Net loss of Rs 22 crore from net profit of Rs 7.4 crore
• Ebitda loss of Rs 11.7 crore from Ebitda gain of Rs 30.3 crore
• Tiles volumes down 56% to 5.17 MSM
• All numbers are consolidated and compared on a year-on-year basis

Metropolis Healthcare Q1FY21

• Revenue down 29.6% to Rs 143.1 crore
• Net profit down 89.2% to Rs 2.9 crore
• Ebitda down 78% to Rs 12.1 crore
• Ebitda margin at 8.46% from 27.1%
• All numbers are consolidated and compared on a year-on-year basis

Chalet Hotels Q1FY21

• Revenue down 78.1% to Rs 52.6 crore
• Net loss of Rs 39.4 crore from net profit of Rs 16.3 crore
• Ebitda loss at Rs 6 crore from Ebitda gain of Rs 79.5 crore
• All numbers are consolidated and compared on a year-on-year basis

Godawari Power & Ispat Q1FY21

• Revenue down 14.7% to Rs 711.3 crore
• Net profit down 14.5% to Rs 46.5 crore
• Ebitda down 9.8% to Rs 157.8 crore
• Ebitda margin at 22.2% from 21%
• Lower raw material costs aid margins
• All numbers are consolidated and compared on a year-on-year basis

Brokerage Radar

Bernstein On India

• Expect a macro rebound but not a multi-year bull cycle
• India is not building capabilities but just inviting foreign companies to set up basis and provide jobs to the population
• Gains from foreign corporates are important but not large enough to become drivers of a cycle
• For irrigation, its not about allocation of funds but execution of projects which is more important
• Real estate is a cycle which can reappear but we do not see a large price-led value growth
• Private sector, barring a few companies have interest in infra investments
• Consumer spends will have to be enhanced only through leverage
• Expect macro to revive on a low base in FY22

Antique Stock Broking On Adani Ports

• Buy rating maintained
• Price target of Rs 385
• Management tone mildly positive on volume trajectory
• Land issues remain critical to evaluate bid for CONCOR
• Broadly maintain Ebitda estimates for FY21/FY22E
• Await completion of Krishnapatnam and Dighi port acquisition before incorporation of financials

CLSA On Motherson Sumi

• Outperform rating maintained
• Price target raised to Rs 120 from Rs 110
• Debt levels remain manageable as company continues to control working capital and investments
• Cut FY21CL EPS estimates by 10%
• Revenue recovery should lead to free cash flow generation and reduction in leverage

UBS On Bosch

• Buy rating maintained
• Price target of Rs 17,000
• Q1FY21 was a miss
• Aims to be free cash flow positive in FY21
• Restructuring expenses may continue for another 1-2 quarters

CLSA On Adani Ports

• Outperform rating maintained
• Price target of Rs 386
• Need to see if July volume growth of 6% is sustainable
• See 29% growth in port Ebitda over FY20-23 CL
• Trades at a 31-50% discount to peers on FY22CL EPS, although it trades at a premium on an EV/Ebitda basis
• Recent rally calls for a pause till EXIM headwinds clear

HSBC On Equitas

• Buy rating maintained
• Price target of Rs 75
• Broadly stable trends in the first quarter
• Share of loan book under moratorium moderating but at a high level
• Credit costs may remain elevated
• Capital and liquidity comfortable amid volatile external climate

Nomura On KEC International

• Buy rating maintained
• Price target raised to Rs 360 from Rs 300
• Strong execution and cash generation in Q1
• Revival in execution to pre-Covid levels to lead to strong sales visibility
• Tendering pipeline remains strong in T&D globally and in railways as well
• Raise FY21/FY22F EPS estimates by 29% and 9% respectively

Pledged Share Details

• Sequent Scientific: Promoters released pledge of 34 lakh shares on August 4
• Max Financial Services: Promoter Max Ventures Investment released pledge of 61 lakh shares between August 7-10.
• Eveready Industries: Promoter Williamson Magor invoked pledge of 56.83 lakh shares on August 7

(As Reported On August 11)

Who’s Meeting Whom

• Rallis India: To meet Abakkus Asset Manager on August 12
• Titan: To meet Macquarie Capital Securities on August 12

Bulk Deals

• Inox Leisure: HDFC Mutual Fund acquired 23.14 lakh shares (2.25%) at Rs 233 per share, Skale Master Fund acquired 8.55 lakh shares (0.83%) at Rs 233 per share and Abu Dhabi Investment Authority acquired 11.25 lakh shares (1.09%) at Rs 233 per share. Inox Benefit Trust sold 43.5 lakh shares (4.23%) at Rs 233 per share. Inox Benefit Trust is not a part of the promoter / promoter group.
• La Opala RG: Plutus Wealth Management (U.K.) acquired 23.5 lakh shares (2.12%) at Rs 185.98 per share and Westbridge Crossover Fund sold 23 lakh shares (2.07%) at Rs 201.73 per share.

Trading Tweaks

• AGM Date: Apollo Tyres, Cadila Healthcare, Hero MotoCorp, Balkrishna Industries, Lupin, Raymond, Thermax, Ultratech Cement, V-Guard.
• Fund Raising: Brigade Enterprises, NACL Industries
• Price Band Revised From 10% To 5%: GVK Power & Infrastructure, Mangalam Timber Products
• Price Band Revised From 20% To 10%: Allsec Technologies, DFM Foods, GMM Pfaudler, PPAP Automotive
• Move Into ASM Framework: Tanla Solutions, Bharat Gears, Shreyas Shipping & Logistics, HDIL, Digjam
• Move Into Short Term ASM Framework: Datamatics Global Services, KPIT Technologies, Jindal Stainless (Hisar), Surya Roshni, Ramco Systems
• Move Out Of Short Term ASM Framework: Weizmann, MPS

Insider Trades

• Nava Bharat Ventures: Promoters acquired 90,000 shares between August 7-10.
• PVR: Promoters Ajay Bijli and Sanjeev Kumar acquired 8.17 lakh shares on August 8 (via rights issue)
• Dr. Lal Pathlabs: Promoter Dr. Vandana Lal sold 1.12 lakh shares between August 7-11

(As Reported On August 11)

Money Market Update

• The rupee ended higher for the second straight day at 74.78 against the U.S. Dollar as compared to Monday's close of 74.90.
• The currency was the fourth best performer in Asia on Tuesday.

F&O Cues

• Nifty August futures closed at 11,348; premium of 25.5 points from 24 points
• Nifty August futures shed 0.6% and 56,500 shares in Open Interest
• Nifty Bank August futures closed at 22,310; premium of 83 points from 72 points
• Nifty Bank August futures add 14% and 1.85 lakh shares in Open Interest
• Nifty Put-Call Ratio at 1.52
• Enter F&O Ban: Bata, Glenmark, Indiabulls Housing Finance, SAIL
• Stocks In F&O Ban: Bata, Canara Bank, Century Textile, Glenmark, Indiabulls Housing, Vodafone Idea, Muthoot Finance, SAIL, Vedanta

Nifty Weekly Expiry: August 13

• Maximum Open Interest on Call side at 11,500 strike (33.4 lakh shares)
• Maximum Open Interest on Put side at 11,000 strike (28.7 lakh shares)
• Active Options: 11,300 Put (9.2 lakh shares) and 11,400 Call (10.5 lakh shares)

Nifty Monthly Expiry: August 27

• Maximum Open Interest on Call side at 11,500 strike (21.2 lakh shares)
• Maximum Open Interest on Put side at 11,000 strike (30.7 lakh shares)