Market Outlook
June 04, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open positive tracking global indices and SGX Nifty.
BSE Sensex
(0.3)
(95)
35,227
U.S. Stocks showed a strong move to the upside during trading on Friday as traders
Nifty
(0.4)
(39)
10,696
reacted to upbeat employment data. With the upward move on the day, the tech-
Mid Cap
(0.2)
(39)
16,014
heavy Nasdaq reached its best closing level in well over two months. The Dow Jones
Small Cap
(1.2)
(270)
16,978
increased by 0.9% to 24,635 and the Nasdaq was up by 1.5% to 7,554.
Bankex
(0.8)
(226)
29,780
U.K. stocks opened notably higher on Friday as investors welcomed news on the
formation of a new government in Italy, the euro zone's third-largest economy.
Global Indices
Chg (%)
(Pts)
(Close)
Along with this, pound strengthened after survey data from IHS Markit and
Chartered Institute of Procurement & Supply showed the U.K. manufacturing sector
Dow Jones
0.9
219
24,635
expanded at a faster pace in May. The benchmark FTSE 100 was up by 0.3% at
Nasdaq
1.5
112
7,554
7,702.
FTSE
0.3
24
7,702
On domestic front, Indian shares finished modestly lower in last trading session, as
Nikkei
(0.2)
(30)
22,171
there were mixed tidings as renewed trade war fears offset encouraging GDP data
Hang Seng
0.1
24
30,492
for the March quarter and news on the formation of a new government in Italy, the
Shanghai Com
(0.7)
(20)
3,075
euro zone's third-largest economy. Trade war fears resurfaced after the Trump
administration moved to impose tariffs on steel and aluminum imports from
Advances / Declines
BSE
NSE
Canada, Mexico and the European Union. The BSE Sensex closed down by 0.3% at
35,227.
Advances
677
439
Declines
2,035
1,382
News Analysis
Unchanged
129
71
Binani Cement submits UltraTech plan for NCLT approval
Detailed analysis on Pg2
Volumes (` Cr)
BSE
3,367
Investor’s Ready Reckoner
NSE
29,472
Key Domestic & Global Indicators
Stock Watch: Latest investment recommendations on 150+ stocks
Net Inflows (` Cr)
Net
Mtd
Ytd
Refer Pg5 onwards
FII
(516)
(9,660)
(2,262)
Top Picks
*MFs
365
13,691
59,444
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
Top Gainers
Price (`)
Chg (%)
Blue Star
Capital Goods
Buy
696
867
24.4
Dewan Housing Finance
Financials
Buy
610
720
18.4
BAJAJAUTO
2,893
5.1
Parag Milk Foods
Others
Buy
330
410
24.3
VAKRANGEE
34
4.9
Navkar Corporation
Others
Buy
146
265
81.9
BLUEDART
3,604
4.8
KEI Industries
Capital Goods
Buy
482
589
22.1
More Top Picks on Pg4
FSL
75
3.6
CHOLAFIN
1,578
3.3
Key Upcoming Events
Previous
Consensus
Date
Region
Event Description
Top Losers
Price (`)
Chg (%)
ReadingExpectations
June 05, 2018 UK
PMI Manufacturing
53.90
53.50
RCOM
16
-12.1
June 06, 2018 India
RBI Reverse Repo rate
5.75
5.75
KWALITY
40
-9.9
June 06, 2018 India
RBI Repo rate
6.00
6.00
IBVENTURE
281
-8.1
June 06, 2018 India
RBI Cash Reserve ratio
4.00
4.00
June 07, 2018 Euro Zone Euro-Zone GDP s.a. (QoQ)
0.40
0.40
GMINFRA
16
-7.9
More Events on Pg7
JSWENRGY
75
-7.8
As on June 01, 2018
Market Outlook
June 04, 2018
News Analysis
Binani Cement submits UltraTech plan for NCLT approval
After the resolution professional (RP) of Binani Cement submitted the resolution
plan of UltraTech Cement’s Rs 79.60 billion offer for approval from the Kolkata
bench of the NCLT on Friday, Dalmia Bharat Cement also geared up for battle by
deciding to challenge it in the tribunal on the very day it will be up for discussion.
In its previous order, the NCLT had directed various stakeholders involved in the
takeover of Binani Cement case to apprise it on Monday, and it is expected that
UltraTech’s plan will be up for discussion on that day itself.Dalmia Bharat had
sought a 10-day timeframe from the CoC to consult its other consortium partner
India Resurgence Fund, when asked to revise its bid. It said that the “consortium
partners are often out of the country and both Dalmia Bharat and India
Resurgence Fund have to seek multiple approvals before taking any decision.”
However, the CoC had asked it to revert by May 23.
Economic and Political News
To keep fuel rate in check, ONGC may get dividend waiver for price freeze
NGT sends show cause notice to Centre, NHAI for not maintaining green
cover
Russian, Chinese cos keen to invest in Odisha NIMZ at Kalinganagar
9 public banks under PCA submit two-year recovery plan to govt
Public banks losses have wiped out govt's $13-bn capital infusion
Corporate News
Global firms line up for buying Power Finance Corp's stressed assets
Power NPAs get Allahabad HC relief for a month
Warburg Pincus acquires Legal & General’s 26% stake in IndiaFirst
Binani Cement submits UltraTech plan for NCLT approval
PNB to raise Rs.130 bn via stake sale in subsidiaries, bad loans' recovery
Market Outlook
June 04, 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
696
867
24.4
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
610
720
18.4
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
289
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
333
475
42.6
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
621
851
37.8
boost growth going ahead. Stock currently trades at
an inexpensive valuation.
GST regime and the Gujarat plant are expected to
Maruti
2,57,824
8,792
10,619
20.8
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,112
385
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
67
115
71.6
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
611
750
22.9
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 04, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
32,292
144
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
330
410
24.3
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
769
1,016
32.7
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
2,109
2,315
9.7
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 04, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
4,007
294
360
22.5
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
1,683
2,178
29.2
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
1,994
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
254
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
821
920
12.1
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 04, 2018
Key Upcoming Events
Global economic events release calendar
Bloomberg Data
Date
Time Country
Event Description
Unit
Period
Last Reported
Estimated
Jun 05, 2018
2:00 PMUK
PMI Manufacturing
Value
May
53.90
53.50
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
0.40
Jun 08, 2018
China
Exports YoY%
% Change
May
12.70
Jun 09, 2018
7:00 AMChina
Consumer Price Index (YoY)
% Change
May
1.80
Jun 11, 2018
2:00 PMUK
Industrial Production (YoY)
% Change
Apr
2.90
Jun 12, 2018
2:00 PMUK
Jobless claims change
% Change
May
31.20
5:30 PMIndia
Industrial Production YoY
% Change
Apr
4.40
2:00 PMUK
CPI (YoY)
% Change
May
2.40
Jun 13, 2018
6:00 PMUS
Consumer price index (mom)
% Change
May
0.20
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
2:30 PMEuro Zone
Euro-Zone CPI (YoY)
%
May F
1.90
6:45 PMUS
Industrial Production
%
May
0.72
India
Imports YoY%
% Change
May
4.60
6:00 PMUS
Housing Starts
Thousands
May
1,287.00
Jun 19, 2018
6:00 PMUS
Building permits
Thousands
May
1,364.00
0-Jan-00US
Existing home sales
Million
May
5.46
Jun 20, 2018
India
Exports YoY%
% Change
May
5.17
Source: Bloomberg, Angel Research
Market Outlook
June 04, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
8.5
10.0
9.0
9.1
7.3
7.4
8.0
7.0
9.0
8.0
8.1
7.6
7.6
7.7
7.0
8.0
7.2
7.0
6.0
6.8
4.8
4.4
7.0
6.3
5.0
4.1
6.1
5.6
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
4.6
52.0
5.0
4.4
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 04, 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 04, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
77,240
(10.3)
(9.5)
22.2
Russia
Micex
4,459
1.4
7.1
11.4
India
Nifty
10,696
(0.2)
1.3
11.1
China
Shanghai Composite
3,075
(0.6)
(5.4)
0.6
South Africa
Top 40
50,875
(1.3)
(1.9)
7.9
Mexico
Mexbol
45,013
(5.8)
(6.2)
(8.3)
Indonesia
LQ45
954
1.6
(13.0)
2.1
Malaysia
KLCI
1,756
(5.2)
(5.6)
(0.7)
Thailand
SET 50
1,130
(4.0)
(4.5)
13.9
USA
Dow Jones
24,635
2.2
0.1
16.2
UK
FTSE
7,702
2.6
5.8
2.3
Japan
Nikkei
22,171
(1.3)
(1.0)
11.9
Germany
DAX
12,724
0.9
1.9
0.5
France
CAC
5,466
(1.2)
2.7
3.8
Source: Bloomberg, Angel Research
Market Outlook
June 04, 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 04, 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 04, 2018
Research Team Tel: 022 - 39357800
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offering of securities of the company covered by Analyst during the past twelve months.
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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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companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine
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trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
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