Pre-market Trade Suggests Tepid Start; Rupee Opens Lower

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Your Complete F&O Trade Setup

F&O Cues

  • Nifty March Futures closed trading at 11,571, premium of 38 points.
  • Max open interest for March 28 series at 11,500 Call, (open interest at 26 lakh shares)
  • Max open interest for March 28 series at 11,000 Put, (open interest at 38.1 lakh shares)

Stocks In F&O Ban

  • Adani Enterprises
  • BEML
  • IDBI Bank
  • Just Dial
  • Jet Airways
  • Reliance Power
  • Reliance Capital

Put-Call Ratio

  • Nifty PCR at 1.77 versus 1.66.

Brokerage Radar: Torrent Power, Mindtree, L&T

Morgan Stanley on Oil and Gas

  • Transport fuel demand grew 4 percent despite slowing auto demand and challenges in aviation sector.
  • Industrial fuel demand grew 5 percent despite competition from lower LNG prices.
  • Fuel prices remain in sweet spot supporting demand growth.

Citi on UltraTech

  • Maintained ‘Buy’ with a price target of Rs 4,450.
  • Cement industry in sweet spot with improving demand, rising prices and falling costs.
  • Management expects Ebitda margin to revert to the highs of the first quarter of current financial year.
  • Focus area: profitable market share, deleveraging, efficiency gains and use of alternative fuels.

HSBC on Hero MotoCorp

  • Maintained ‘Buy’; cut price target to Rs 3,500 from Rs 4,000.
  • Volumes are likely to remain volatile led by high inventory channel and regulatory changes.
  • Cut EPS estimates by 5 percent and 7 percent led by lower volume and margin estimates.
  • Valuation remains undemanding and downside limited.

CLSA on Jubilant Food

  • Maintained ‘Buy’ with a price target of Rs 1,600.
  • Channel checks indicate that Domino’s has introduced 10 new pizzas ahead of sporting events.
  • Focus is also on reducing delivery time; some stores targeting 20 mins.
  • Efficiency and cost savings too continue; expect strong of above 25 percent EPS CAGR over FY20-21.

HDFC Securities on Broking Industry

  • Market share moving towards discount brokers.
  • Among traditional brokers Axis securities has done better than peers.
  • Cash delivery business will become intensely more competitive.
  • Motilal Oswal: Maintained ‘Neutral’ with a price target of Rs 611.
  • ICICI Securities: Maintained ’Neutral’ with a price target of Rs 298.

HDFC Securities on Subros

  • Maintained ‘Buy’ with a price target of Rs 309.
  • Increased commitment by Denso ensures that Subros will benefit from technology shifts.
  • Relationship scope will be confined to the thermal products domain.
  • Mgmt. intends to deleverage the balance sheet further.

ICICI Direct on Hikal

  • Initiated ‘Buy’ with a price target of Rs 200.
  • Expertise in APIs to drive pharma growth..
  • Crop protection growth to piggyback on client relationship
  • Expect revenue, Ebitda and net profit to grow at a compounded annual growth rate of 15 percent, 18 percent and 30 percent respectively.
  • Compelling risk-reward proposition considering future growth prospects.

Motilal Oswal on Torrent Power

  • Initiated ‘Buy’ with a price target of Rs 315.
  • Strong Positioning and healthy balance sheet provide strong base for growth.
  • Volatility in earnings to reduce on accrual accounting in distribution.
  • Expect Ebitda and net profit to grow at a compounded annual growth rate of 12 percent over FY19-21.
  • Growth driven by regulated electricity and franchisee-based distribution business.

Motilal Oswal on Mindtree

  • Downgraded to ‘Neutral’ from ‘Buy’; maintained price target at Rs 1,000.
  • A distraction Mindtree could have done without.
  • Turn of events may be unsettling for some employees/clients.
  • Development may consume a substantial bandwidth of the founders.

On L&T

Nomura

  • Maintained ‘Buy’ with a price target of Rs 1,670.
  • Mindtree acquisition to add value; See EPS gains from FY21.
  • Acquisition rules out large near-term dividend.
  • Client/senior management attrition is the major risk.

Investec

  • Maintained ‘Buy’ with a price target of Rs 1,805.
  • Unclear about potential synergies that can be extracted.
  • Raises concern on potential employee attrition and distrust at Mindtree.
  • Makes us wonder on how L&T intends to utilise its cash over the next few years.

Trading Tweaks: Stocks Added To Short-Term ASM Framework

  • NTPC record date for bonus share at 1:5.
  • Advanced Enzymes Technologies, Dilip Buildcon, Coromandel Engineering, Khadim India to move into short term ASM Framework.

Pledge Share Details: Sun Pharma, Granules India

  • Sun Pharma promoter group Shanghvi Finance creates a pledge of 40 lakh shares in March 15.
  • Granules India promoters revoke 1.4 crore shares on March 15.

(As reported on March 19)

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