Opening Bell July 21, 2020 Market Outlook Today’s Highlights Indian markets are likely to open in the green on the back of Results: Mahindra CIE, Bajaj Finserv, firm global cues amid positive outcomes of potential Covid- Syngene, Tata Elxsi, HUL, SBI Life, HDFC Life 19 vaccines trials. However, global news flows and earnings Insurance, Axis Bank, Bajaj Finance, outcomes of domestic companies would be key Heidelberg Cement, Hindustan Zinc, Polycab, monitorables. Himadri Specialty Chemicals Index Movement Markets Yesterday 39600 11800 . Domestic markets ended higher tracking gains in the IT 37600 sector and amid strong corporate earnings 11000 35600 . US markets ended higher led by gains in tech heavyweights 10200 and positive news flows about the Covid-19 vaccine 33600 31600 9400 8-Jul 11-Jul 14-Jul 17-Jul 20-Jul Key Developments BSE (LHS) NSE (RHS) . For Bajaj Finance, moratorium has come down from 27% C lose Previous C hg (%) MTD(%) YTD(%) P/E (1yrfwd) to 15%. Credit growth was reported at 7% YoY, down 6% S ensex 37,419 36,472 2.6 7.2 -9.3 23.1 QoQ to | 138000 crore, lowest ever in the last several Nifty 11,022 10,740 2.6 7.0 -9.4 22.4 years due to lockdown. New loan addition also slowed to 50 lakh from 60 lakh QoQ. Lower growth would impact Institutional Activity NIM negatively. NII is seen declining to | 4025 crore, down C Y18 C Y19 YTD C Y20 Yesterday Last 5 Days 15% YoY but provisions may surge to | 1500 crore (| 1940 F II (| cr) -68,503 40,893 -72,730 1,710 -1,960 crore in Q4FY20) as the management is planning to raise D II (| cr) 107,388 44,478 91,590 -1,522 -1,584 provisions for Covid and build higher PCR. Asset quality expected to see some shocks accordingly. PAT is World Indices – Monthly performance estimated to decline 29% YoY to | 851 crore S hanghai Nasdaq BSE NSE G ermany . As per media sources, the government is mulling 3,314 10,767 37,419 11,022 13,047 privatising more than half of its state-run PSU banks to 11.7% 8.3% 7.7% 7.6% 5.8% keep only five PSBs, going forward. As part of this plan, D ow Jones K ospi F rance Nikkei U .K . the government plans to sell stakes in Bank of India, 26,681 2,198 5,093 22,717 6,262 3.1% 2.7% 2.3% 1.1% -0.5% Central Bank of India, Indian Overseas Bank, Uco Bank, Bank of Maharashtra, Punjab & Sind Bank. Also, the government has clarified it would disclose the full plan under privatisation policy currently being formulated . Nifty. Heat Map Britanni 3,983 Bajaj 3,442 H C l 649 Bajaj 6,620 454 UPL a 5.2% F inance 4.2% T ech 4.1% F inserv 4.1% 3.9% 623 271 H ero 2,860 934 H D F C 1,133 T echM Wipro Infosys 3.9% 3.6% Moto 3.5% 3.4% Bank 3.1% IC IC I 363 Bharti 203 19,188 Asian 1,752 G rasim 603 E icher Bank 2.6% Infratel 2.5% 2.0% P aints 2.0% Ind 1.9% Markets Today (ADR sata updated till yesterday) C oal 133 88 Bharti 576 Indusind 529 Adani 317 IO C Commodities C lose Previous C hng (%) MTD(%) YTD(%) India 1.8% 1.6% Airtel 1.6% Bank 1.5% P orts 1.4% G old (|/10 gm) 49,032 48,967 0.1 0.3 25.1 191 594 R elianc 1,920 T ata 352 1,002 SBI M&M T itan Silver (|/kg) 53,930 52,899 2.0 6.8 13.6 1.4% 0.9% e Ind. 0.4% S teel 0.4% 0.4% Crude ($/barrel) 43.4 43.28 0.4 4.0 -35.2 2,208 Bajaj 3,003 Axis 434 P ower 164 17,247 C opper ($/tonne) 6,488 6,448 0.6 7.5 5.0 TCS Nestle 0.3% Auto 0.3% Bank 0.2% G rid 0.1% 0.1% C urrency U S D /INR 74.9 74.8 0.1 0.8 -4.7 U ltratec 3,865 JS W 207 H D F C 1,806 80 S hree 22,236 ONGC E U R /U S D 1.1 1.1 0.7 2.0 2.2 h 0.1% S teel 0.0% Ltd 0.0% -0.1% C ement -0.2% U S D /Y E N 107.2 107.4 -0.2 0.7 1.3 2,331 K otak 1,319 920 100 4,092 ADR s HUL L&T G AIL D r R eddy -0.2% Bank -0.6% -0.6% -0.6% -0.6% H D F C Bank 47.3 46.7 1.2 4.0 -25.4 IC IC I Bank 9.4 9.4 0.1 1.2 -37.7 193 161 5,868 108 T ata 105 IT C H indalco Maruti V edanta T ata Motors 7.0 7.0 -1.0 5.8 -46.2 -0.7% -0.8% -0.9% -1.0% Motors -1.3% Infosys 12.3 11.9 3.0 27.0 18.9 87 437 155 674 S un 484 NTPC BPCL Z ee E nt. C ipla Dr Reddys Labs 55.0 53.7 2.4 3.7 35.5 P harma -1.3% -1.5% -1.7% -2.1% -3.9% Wipro 3.8 3.9 -1.0 15.1 1.6 Opening Bell ICICI Direct Research Key Data Points Exchange Cash Turnover (| crore) Key Econom ic Indicator Pe rio d L ate s t Prior Values 100000 RBI Cash Reserve Ratio N/A 3.00% 4.00% 64,037 61,250 58,667 56,333 54,109 RBI Repo Rate N/A 4.00% 4.40% 52,355 RBI Reverse Repo Rate N/A 3.35% 3.75% 50000 CPI Y Y Jun 6.09% 5.84% 3,735 3,583 3,420 3,346 3,193 3,093 Current Account Balance Q1 -0.6bln $ -1.4bln $ 0 Exports - USD May 19.05 bln$ 10.36 bln$ 13-Jul 14-Jul 15-Jul 16-Jul 17-Jul 20-Jul FX Reserves, USD Final Jun 506.8 bln$ 493.5 bln$ BSE Cash NSE Cash GDP Quarterly yy Q1 3.10% 4.70% GDP Annual FY 20 4.20% 6.10% Imports - USD May 22.2 bln $ 17.1 bln $ NSE Derivative Turnover (| crore) 4000000 Industrial Output yy May -34.70% -55.50% Manufacturing Output May -39.30% -64.30% Bell Opening 3000000 Trade Deficit Govt - USD May 3.15 bln $ 6.8 bln $ 3,650,219 2,150,273 WPI Food yy May 1.10% 2.60% 2000000 1,510,279 1,187,373 1,167,813 1,075,163 WPI Fuel yy May -19.83% -10.12% 1000000 WPI Inflation yy May -3.12% - WPI Manuf Inflation yy May -0.42% - 0 13-Jul 14-Jul 15-Jul 16-Jul 17-Jul 20-Jul NSE Derivative Corporate Action Tracker Sectoral Performance – Monthly Returns (%) Security nam e Actio n Ex Date Record Date Statu s Price (|) IT 19.9 Sun Pharma Buyback O ngoing 425.00 FMCG 8.4 Sterlite Technologies Buyback O ngoing 150.00 Auto 8.2 BSE Midcap 6.6 eClerx Buyback O ngoing 550.00 Metals 5.6 PV R Rights Issue O ngoing 784.00 BSE Small Cap 5.2 Balrampur Chini Buyback O ngoing 180.00 Healthcare 4.9 Consumer Durables 4.6 O riental Hotels Dividend 20-Jul-20 - 0.20 Banks 4.0 V ST Industries Dividend 20-Jul-20 - 103.00 Oil & Gas 3.4 Asian Paints Dividend 23-Jul-20 - 1.50 Capital Goods 2.7 PSU 1.9 Research Equity Retail HCL Tech Dividend 23-Jul-20 25-Jul-20 2.00 Power -1.9 – Sobha Ltd Dividend 23-Jul-20 - 7.00 Real Estate -5.6 Tech Mahindra Dividend 23-Jul-20 - 5.00 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 Timken India Dividend 23-Jul-20 - 50.00 (%) Trent Ltd Dividend 24-Jul-20 - 1.00 ICICI Securities Key News for Today Company/ News View Impact Industry ACC ACC reported healthy margin expansion of While volume got affected due to lockdown over ~313bps YoY to 20.2% during Q2CY20 impact, a demand recovery in the later half despite weak sales volume for the quarter. along with the benign cost environment had Revenue for the quarter declined 35.9% a positive impact on margins and YoY to | 2602 crore. This remained broadly profitability for the quarter. The company in line with our estimates. However, healthy has debt free status and strong liquidity margins led the company to report net profit position, which is a key positive of | 271 crore. This remained ahead of our expected PAT of | 167 crore for the quarter ICICI Securities | Retail Research Opening Bell ICICI Direct Research Banking The IL&FS Board of Directors led by Uday In terms of exposure, SBI, Bank of India and sector Kotak plan to close | 50500 crore of its debt Indusind Bank have a substantial exposure by March 2021 while an additional | 6600 to the debt laden IL&FS Group. Complete crore of debt would be addressed beyond implementation of the debt resolution plan FY21. IL&FS has a total debt of | 99000 crore would address ~| 57000 crore of debt, which would entail a haircut of 42%.