Market Outlook
June 01, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open flat tracking global indices and SGX Nifty.
BSE Sensex
1.2
416
35,322
U.S. Stocks moved mostly lower during the last trading session amid renewed trade
Nifty
1.1
122
10,736
concerns. The major averages fluctuated as the day progressed before closing firmly
Mid Cap
(0.2)
(39)
16,014
in negative territory. The Dow Jones slipped down by 1.0% to 24,416 and the
Small Cap
(0.6)
(98)
17,249
Nasdaq closed down by 0.3% to 7,442.
Bankex
1.9
563
30,007
U.K. stocks rose modestly on Thursday and the pound climbed on dollar weakness
as investors hoped that Italy would be able to avoid a new round of elections. The
Global Indices
Chg (%)
(Pts)
(Close)
benchmark FTSE 100 was down by 0.1% at 7,678.
Dow Jones
(1.0)
(252)
24,416
On domestic front, Indian shares closed sharply higher on Thursday on eve of expiry
Nasdaq
(0.3)
(20)
7,442
of May series derivative contracts. Encouraging cues from global markets amid
FTSE
(0.1)
(11)
7,678
easing Italian worries and a rally in HDFC Bank shares supported sentiment ahead
of fourth-quarter GDP data as well as fiscal deficit figures due out later in the day.
Nikkei
0.4
80
22,281
The BSE Sensex closed up by 1.2% at 35,322.
Hang Seng
0.2
69
30,538
Shanghai Com
(0.2)
(6)
3,090
News Analysis
GDP grows 7.7% in Q4; India retains world's fastest growing economy tag
Advances / Declines
BSE
NSE
Detailed analysis on Pg2
Advances
984
646
Declines
1,692
1,146
Investor’s Ready Reckoner
Unchanged
131
59
Key Domestic & Global Indicators
Stock Watch: Latest investment recommendations on 150+ stocks
Volumes (` Cr)
Refer Pg5 onwards
BSE
4,107
Top Picks
NSE
59,237
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
Blue Star
Capital Goods
Buy
702
867
23.4
Net Inflows (` Cr)
Net
Mtd
Ytd
Dewan Housing Finance
Financials
Buy
613
720
17.4
FII
(1,081)
(9,144)
(1,747)
Parag Milk Foods
Others
Buy
341
410
20.3
*MFs
365
13,691
59,444
Navkar Corporation
Others
Buy
146
265
81.9
KEI Industries
Capital Goods
Buy
482
589
22.1
More Top Picks on Pg4
Top Gainers
Price (`)
Chg (%)
SUNDRMFAST
632
7.9
Key Upcoming Events
Previous
Consensus
CUB
197
7.3
Date
Region
Event Description
ReadingExpectations
RCOM
19
6.9
June 01, 2018 China
PMI Manufacturing
51.40
51.40
OFSS
4,000
5.9
June 01, 2018 Germany PMI Manufacturing
56.80
56.80
TORNTPHARM
1,410
5.7
June 01, 2018 US
Unnemployment rate
3.90
3.90
June 01, 2018 UK
PMI Manufacturing
53.90
53.50
June 05, 2018 Germany
PMI Services
52.10
Top Losers
Price (`)
Chg (%)
More Events on Pg7
CGPOWER
62
-19.5
BOMDYEING
241
-11.3
CRISIL
1707
-10.6
DBL
834
-9.1
HATHWAY
27
-7.9
As on May 31, 2018
Market Outlook
June 01, 2018
News Analysis
GDP grows 7.7% in Q4; India retains world's fastest growing
economy tag
Backed by government spending and investment, the economy grew at a seven-
quarter high of 7.7 per cent in January-March. But this did not prevent GDP
growth, at 6.7 per cent in 2017-18, from falling to its lowest rate in four years of
the Narendra Modi government. The fourth-quarter growth rate prompted the
finance ministry to say the economy would clock 7.5 per cent growth in 2018-19.
The growth rate for 2017-18 was higher than the government's first and second
advance estimates — at 6.5 per cent and 6.6 per cent — and in sync with what the
International Monetary Fund, the World Bank and the Economic Survey had
estimated. This is the last piece of macroeconomic data before the Reserve Bank
of India reviews the monetary policy in June. The 9.1 per cent growth rate of net
indirect taxes (taxes less of subsidies) took GDP ahead of the gross value added
(GVA) at basic prices, which stood at 6.5 per cent during the fiscal year, against
7.1 per cent a year ago.
Economic and Political News
Corporate News
Market Outlook
June 01, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
Favorable outlook for the AC industry to augur well
for Cooling products business which is out pacing
Blue Star
6,745
702
867
23.4
the market growth. EMPPAC division's profitability
to improve once operating environment turns
around.
With a focus on the low and medium income (LMI)
consumer segment, the company has increased its
Dewan Housing Finance
19,232
613
720
17.4
presence in tier-II & III cities where the growth
opportunity is immense.
Well capitalized with CAR of 18.1% which gives
sufficient room to grow asset base. Faster
ICICI Bank
1,83,638
286
416
45.7
resolution of NPA would reduce provision cost,
which would help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,779
482
589
22.1
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
1,934
339
475
40.1
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,192
146
265
81.9
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would
Siyaram Silk Mills
3,004
641
851
32.8
boost growth going ahead. Stock currently trades at
an inexpensive valuation.
GST regime and the Gujarat plant are expected to
Maruti
2,57,824
8,535
10,619
24.4
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,112
392
655
67.0
two year; change in borrowing mix will help in NIM
improvement
We expect sales/PAT to grow at 13.5%/20% over
LT Foods
2,287
72
128
79.0
next two years on the back of strong distribution
network & addition of new products in portfolio.
Third largest brand play in luggage segment
Increased product offerings and improving
Safari Industries
1,347
605
750
23.9
distribution network is leading to strong growth in
business. Likely to post robust growth for next 3-4
years
Source: Company, Angel Research
Market Outlook
June 01, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
32,292
147
218
48.6
increasing penetration in Insurance & Mutual fund
would ensure steady growth.
One of the leading Indian dairy products
companies in India created strong brands in dairy
products. Rising revenue share of high-margin
Parag Milk Foods
2,868
341
410
20.3
Value Added Products and reduction in interest cost
is likely to boost margins and earnings in next few
years.
We expect MCL to report net revenue CAGR of
~15% to ~`450cr over FY2018-20E mainly due to
strong growth in online matchmaking & marriage
Matrimony.com Ltd
1,713
754
1,016
34.7
related services. On the bottom-line front, we
expect a CAGR of ~28% to `82cr over the same
period on the back margin improvement.
HDFC Bank maintained its steady growth in the
4QFY18. The bank’s net profit grew by 20.3%.
Steady growth in interest income and other income
HDFC Bank
5,54,753
2,136
2,315
8.4
aided PAT growth. The Strong liability franchise
and healthy capitalisation provides strong earning
visibility. At the current market price, the bank is
trading at 3.2x FY20E ABV.
We expect strong PAT growth on back of healthy
growth in automobile segment (on back of new
launches and facelifts in some of the model ) and
M&M
11340
896
990
10.5
strong growth in Tractors segment coupled by its
strong brand recall and improvement in rural
sentiment
Source: Company, Angel Research
Market Outlook
June 01, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
4,007
301
360
19.5
over FY18-20 backed by capacity expansion and
new geographical foray
We forecast Nilkamal to report top-line CAGR of
~9% to `2,635cr over FY17-20E on the back of
Nilkamal
2,555
1,712
2,178
27.2
healthy demand growth in plastic division. On the
bottom-line front, we estimate
~10% CAGR to
`162cr owing to improvement in volumes.
Elantas Beck India is the Indian market leader in
liquid insulation segment used in electrical
equipments like motors, transformers etc. It derives
Elantas Beck India Ltd
1,578
1,991
2,500
25.6
demand from several industries which are expected
to register 10%+ CAGR in demand in the coming
years.
Greenply Industries Ltd (GIL) manufactures plywood
& allied products and medium density fibreboards
(MDF). GIL to report net revenue CAGR of ~14% to
Greenply Industries
3,177
259
395
52.5
~`2,478cr over FY2017-20E mainly due to healthy
growth in plywood & lamination business on the
back of strong brand and distribution network
GMM Pfaudler Limited (GMM) is the Indian market
leader in glass-lined (GL) steel equipment. GMM is
expected to cross CAGR 15%+ in revenue over the
GMM Pfaudler Ltd
1,259
861
920
6.8
next few years mainly led by uptick in demand from
user industries and it is also expecting to increase its
share of non-GL business to 50% by 2020.
L&T Fin’s new management is on track to achieve
L&T Finance Holding
33,898
170
210
23.6
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
June 01, 2018
Key Upcoming Events
Global economic events release calendar
Bloomberg Data
Date
Time Country
Event Description
Unit
Period
Last Reported
Estimated
Jun 01, 2018
6:30 AMChina
PMI Manufacturing
Value
May
51.40
51.40
1:25 PMGermany
PMI Manufacturing
Value
May F
56.80
56.80
6:00 PMUS
Unnemployment rate
%
May
3.90
3.90
2:00 PMUK
PMI Manufacturing
Value
May
53.90
53.50
Jun 05, 2018
1:25 PMGermany
PMI Services
Value
May F
52.10
Jun 06, 2018
2:30 PMIndia
RBI Reverse Repo rate
%
Jun 6
5.75
5.75
2:30 PMIndia
RBI Repo rate
%
Jun 6
6.00
6.00
2:30 PMIndia
RBI Cash Reserve ratio
%
Jun 6
4.00
4.00
Jun 07, 2018
2:30 PMEuro Zone
Euro-Zone GDP s.a. (QoQ)
% Change
1Q F
0.40
Jun 08, 2018
China
Exports YoY%
% Change
Mar
12.70
Jun 09, 2018
7:00 AMChina
Consumer Price Index (YoY)
% Change
May
1.80
Jun 11, 2018
2:00 PMUK
Jobless claims change
% Change
May
31.20
Jun 12, 2018
2:00 PMUK
Industrial Production (YoY)
% Change
Apr
2.90
5:30 PMIndia
Industrial Production YoY
% Change
Apr
4.40
6:00 PMUS
Consumer price index (mom)
% Change
May
0.20
Jun 13, 2018
2:00 PMUK
CPI (YoY)
% Change
May
2.40
US
Producer Price Index (mom)
% Change
May
(0.10)
11:30 PMUS
FOMC rate decision
%
Jun 13
1.75
2.00
Jun 14, 2018
7:30 AMChina
Industrial Production (YoY)
% Change
May
7.00
12:00 PMIndia
Monthly Wholesale Prices YoY%
% Change
May
3.18
5:15 PMEuro Zone
ECB announces interest rates
%
Jun 14
-
Jun 15, 2018
6:45 PMUS
Industrial Production
%
May
0.72
India
Imports YoY%
% Change
May
4.60
India
Exports YoY%
% Change
May
5.17
Source: Bloomberg, Angel Research
Market Outlook
June 01, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
8.5
10.0
9.0
9.1
7.3
7.4
9.0
8.0
7.0
8.0
8.1
7.0
7.6
7.6
8.0
7.3
7.2
7.2
6.0
6.8
4.8
6.5
4.4
7.0
5.0
4.1
6.1
5.7
4.0
6.0
2.9
3.0
1.8
5.0
2.0
1.0
4.0
1.0
-
3.0
(1.0)
(0.3)
Source: CSO, Angel Research
Source: MOSPI, Angel Research
Exhibit 3: Monthly CPI inflation trends
Exhibit 4: Manufacturing and services PMI
56.0
Mfg. PMI
Services PMI
(%)
6.0
54.0
5.2
5.1
4.9
52.0
5.0
4.4
4.6
4.3
50.0
4.0
3.6
3.3
3.3
48.0
3.0
2.4
2.2
46.0
2.0
1.5
44.0
1.0
42.0
40.0
-
Source: Market, Angel Research; Note: Level above 50 indicates expansion
Source: MOSPI, Angel Research
Exhibit 5: Exports and imports growth trends
Exhibit 6: Key policy rates
(%)
Exports yoy growth
Imports yoy growth
(%)
Repo rate
Reverse Repo rate
CRR
35.0
6.50
30.0
6.00
25.0
5.50
20.0
5.00
15.0
4.50
10.0
4.00
5.0
0.0
3.50
(5.0)
3.00
Source: Bloomberg, Angel Research as on 30 May, 2018
Source: RBI, Angel Research
Market Outlook
June 01, 2018
Global watch
Exhibit 1: Latest quarterly GDP Growth (%, yoy) across select developing and developed countries
(%)
8.0
6.9
7.0
5.8
6.0
5.3
5.0
5.0
1.1
3.7
4.0
2.5
3.0
2.2
1.8
2.0
1.5
1.4
0.8
1.0
0.3
-
Source: Bloomberg, Angel Research
Exhibit 2: 2017 GDP Growth projection by IMF (%, yoy) across select developing and developed countries
(%)
6.7
6.8
7.0
6.0
5.4
5.2
5.0
3.7
4.0
3.0
1.8
2.2
2.0
1.7
1.6
2.0
0.7
1.5
0.7
1.0
-
Source: IMF, Angel Research
Exhibit 3: One year forward P-E ratio across select developing and developed countries
(x)
25.0
20.0
15.0
10.0
5.0
-
Source: IMF, Angel Research
Market Outlook
June 01, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
76,754
(11.2)
(11.7)
21.3
Russia
Micex
4,453
1.4
7.1
11.4
India
Nifty
10,736
(0.0)
1.5
11.8
China
Shanghai Composite
3,095
0.4
(6.1)
1.0
South Africa
Top 40
49,784
(3.1)
(3.8)
4.4
Mexico
Mexbol
44,663
(7.6)
(7.8)
(8.5)
Indonesia
LQ45
954
1.1
(12.7)
2.1
Malaysia
KLCI
1,741
(6.7)
(6.5)
(1.5)
Thailand
SET 50
1,135
(3.6)
(3.1)
14.5
USA
Dow Jones
24,416
1.0
(2.5)
15.5
UK
FTSE
7,678
2.3
5.3
1.7
Japan
Nikkei
22,202
(0.5)
0.2
12.5
Germany
DAX
12,605
0.2
0.6
(0.1)
France
CAC
5,398
(2.2)
1.0
2.5
Source: Bloomberg, Angel Research
Market Outlook
June 01, 2018
Exhibit 7: Historical Angel Top Picks/Fundamental Calls
Date Added
Top Picks/Fundamental
Stocks
Reco Price
Target/Revised Price
Current Status
04-05-2018
Top Picks
M&M
860
990
Open
03-05-2018
Fundamental
L&T Finance Holding
171
210
Open
02-05-2018
Top Picks
HDFC Bank
1944
2315
Open
04-05-2018
Top Picks
Matrimony.com Ltd
810
1016
Open
20-04-2018
Top Picks
Matrimony.com Ltd
781
984
15-05-2018
Top Picks
Parag Milk Foods Limited
310
410
Open
16-04-2018
Top Picks
Parag Milk Foods Limited
249
333
29-05-2018
Fundamental
GMM Pfaudler Limited
932
1,020
Open
14-05-2018
Fundamental
GMM Pfaudler Limited
818
900
06-04-2018
Fundamental
GMM Pfaudler Limited
712
861
07-03-2018
Fundamental
Ashok Leyland Ltd
139
163
Closed (26/04/2018)
03-03-2018
Fundamental
Greenply Industries
340
395
Open
16-04-2018
Top Picks
Safari Industries
651
750
Open
21-02-2018
Top Picks
Safari Industries
532
650
31-05-2018
Top Picks
HSIL Ltd
348
Closed (31/05/2018)
16-02-2018
Top Picks
HSIL Ltd
433
510
07-02-2018
Fundamental
Elantas Beck India Ltd.
2155
2500
Open
01-02-2018
Top Picks
ICICI Bank
352
416
Open
01-02-2018
Top Picks
Aditya Birla Capital
167
218
Open
04-01-2018
Fundamental
CCL Products
278
360
Open
03-01-2018
Fundamental
Nilkamal Ltd
1880
2178
Open
01-01-2018
Fundamental
Capital First Ltd
693
850
Closed (15/01/2018)
30-12-2017
Fundamental
Shreyans Industries Ltd
205
247
Closed
Fundamental
Prism Cement Ltd
160
Closed (09/05/2018)
21-12-2017
Fundamental
Prism Cement Ltd
118
131
18-12-2017
Fundamental
Menon Bearings Limited
92
114
Closed (17/01/2018)
14-12-2017
Top Picks
Ruchira Papers Ltd.
188
244
Closed (09/02/2018)
17-05-2018
Top Picks
Century Plyboards India
280
Closed(17/05/2018)
28-11-2017
Top Picks
Century Plyboards India
317
400
19-12-2017
Top Picks
LT Foods
85
128
Open
06-11-2017
Top Picks
LT Foods
74
96
16-10-2017
Fundamental
Endurance Technologies Ltd
1111
1277
Closed (01/12/2017)
11-09-2017
Top Picks
GIC Housing
533
655
Open
10-10-2017
Top Picks
Music Broadcast Limited
404
475
Open
20-07-2017
Top Picks
Music Broadcast Limited
368
434
07-07-2017
Fundamental
L&T Finance Holdings Ltd
149
179
Closed (28/8/2017)
06-07-2017
Fundamental
Syngene International
478
564
Closed (1/3/2018)
05-07-2017
Top Picks
Maruti
7371
10619
Open
05-06-2017
Top Picks
Karur Vysya Bank
127
100
Closed (12/03/2018)
23-05-2018
Top Picks
KEI Industries
481
589
Open
Source: Company, Angel Research
Market Outlook
June 01, 2018
Exhibit 8: Historical Angel Top Picks/Fundamental Calls
Date Added
Top Picks/Fundamental
Stocks
Reco Price
Target/Revised Price
Current Status
04-01-2017
Top Picks
KEI Industries
125
485
31-05-2018
Top Picks
Alkem Lab
1978
Closed (31/05/2018)
01-12-2016
Top Picks
Alkem Lab
1700
2441
17-10-2016
Top Picks
Asian Granito
267
534
Closed (18/02/2018)
17-05-2018
Top Picks
TV Today Network
460
Closed (17/05/2018)
04-08-2016
Top Picks
TV Today Network
297
603
05-04-2016
Top Picks
DHFL
189
720
Open
05-01-2016
Top Picks
Navkar Corporation
207
265
Open
08-12-2015
Top Picks
Blue Star
357
867
Open
30-10-2015
Top Picks
Siyaram Silk Mills
186
851
Open
Source: Company
Market Outlook
June 01, 2018
Research Team Tel: 022 - 39357800
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decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should
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