Market Outlook
March 05, 2019
Domestic Indices
Chg (%)
(Pts)
(Close)
Market Cues
BSE Sensex
0.6
196
36,064
Indian markets are likely to open negative tracking global indices and SGX Nifty.
Nifty
0.7
71
10,864
US stocks turned lower over the course of the trading session on Monday after
Mid Cap
1.3
185
14,503
failing to sustain an initial upward movement. The major averages all ended in
Small Cap
2.1
292
13,982
negative territory with the Dow fell by 0.8% to 25,820 and the Nasdaq low by 0.2%
Bankex
1
295
30,322
at 7,578.
U.K. stocks rose modestly on Monday amid signs the United States and China were
Global Indices
Chg (%)
(Pts)
(Close)
close to striking a trade deal. The FTSE 100 increased by 0.4% to 7,134.
Dow Jones
(0.8)
(207)
25,820
On domestic front, Indian stock markets were closed on Monday on account of
Nasdaq
(0.2)
(18)
7,578
Mahashivratri. On Friday, shares rose to snap a three-day losing streak as firm cues
FTSE
0.4
28
7,134
from Asia and Europe as well as signs of de-escalation of tensions at the border
Nikkei
(0.8)
(171)
21,385
helped investors shrug off weak GDP data. The benchmark BSE Sensex went up by
Hang Seng
(0.4)
(124)
28,633
0.6% to 36,064.
Shanghai Com
(0.4)
(13)
2,941
Investor’s Ready Reckoner
Key Domestic & Global Indicators
Advances / Declines
BSE
NSE
Stock Watch: Latest investment recommendations on 150+ stocks
Advances
1,900
1,430
Refer Pg5 onwards
Declines
681
377
Unchanged
125
80
Top Picks
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
Volumes (` Cr)
Blue Star
Capital Goods
Buy
626
867
38.6
BSE
7,751
ICICI Bank
Financials
Buy
354
416
17.7
NSE
31,273
Parag Milk Foods
Others
Buy
235
330
40.7
Bata India
Others
Accumulate
1,282
1,479
15.4
KEI Industries
Capital Goods
Buy
350
486
39.0
Net Inflows (` Cr)
Net
Mtd
Ytd
More Top Picks on Pg4
FII
864
20,323
17,175
*MFs
(355)
5,424
12,245
Key Upcoming Events
Previous
Consensus
Date
Region
Event Description
ReadingExpectations
Top Gainers
Price (`)
Chg (%)
Feb 16, 2019
TU Central Bank Inflation Report
FORCEMOT
1600
15.5
Feb 17, 2019
TH Exports YoY
0.06
--
RPOWER
12
14.7
Feb 17, 2019
TH Exports
$22380m
--
Feb 20, 2019
TH Imports YoY
0.24
--
CGPOWER
37
13.5
Feb 20, 2019
TH Imports
$21776m
--
GUJALKALI
498
12.6
More Events on Pg7
ORIENTBANK
92
10.9
Top Losers
Price (`)
Chg (%)
BHARTIARTL
307
-3.4
SWANENERGY
114
-3.3
WABCOINDIA
6541
-3.2
ICIL
36
-2.7
NAVKARCORP
40
-1.9
As on Mar 01, 2019
Market Outlook
March 05, 2019
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
6,025
626
867
38.6
the market growth. EMPPAC division's profitability
to improve once operating environment turns
around.
Well capitalized with CAR of 18.1% which gives
sufficient room to grow asset base. Faster
ICICI Bank
2,27,775
354
416
17.7
resolution of NPA would reduce provision cost,
which would help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
2,759
350
486
39.0
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
1,511
54
95
77.6
requirement and 15 year long radio broadcast
licensing.
Strong brands and distribution network would
Siyaram Silk Mills
1,604
342
606
77.1
boost growth going ahead. Stock currently trades
at an inexpensive valuation.
GST regime and the Gujarat plant are expected to
Maruti Suzuki
2,09,438
6,933
10,820
56.1
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
1,303
242
424
75.2
two year; change in borrowing mix will help in NIM
improvement
Third largest brand play in luggage segment
Increased product offerings and improving
Safari Industries
1,618
725
1,000
38.0
distribution network is leading to strong growth in
business. Likely to post robust growth for next 3-4
years
We expect financialisation of savings and
Aditya Birla Capital
21,078
96
151
57.7
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
1,973
235
330
40.7
Value Added Products and reduction in interest cost
is likely to boost margins and earnings in next few
years.
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
5,67,036
2,083
2,500
20.0
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.
Market Outlook
March 05, 2019
Continued...
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect strong PAT growth on back of
healthy growth in automobile segment (on back
of new launches and facelifts in some of the
M&M
80,727
649
1,050
61.7
model ) and strong growth in Tractors segment
coupled by its strong brand recall and
improvement in rural sentiment
Market leader in the room air conditioner (RAC)
outsourced manufacturing space in India with a
market share of
55.4%. It is a one-stop
Amber Enterprises
2,183
694
1,135
63.5
solutions provider for the major brands in the
RAC industry and currently serves eight out of
the 10 top RAC brands in India
BIL is the largest footwear retailer in India,
offering footwear, accessories and bags across
brands. We expect BIL to report net PAT CAGR
of
~16% to
~`3115cr over FY2018-20E
Bata India
16,475
1,282
1,479
15.4
mainly due to new product launches, higher
number of stores addition and focus on
women’s high growth segment and margin
improvement
SHTF is in the sweet spot with benefits from
stronger CV volumes, NIMs unaffected by rising
Shriram Transport Finance
26,331
1,161
1,764
52.0
bond yields on the back of stronger pricing
power and an enhancing ROE by 750bps over
FY18-20E, supported by decline in credit cost.
We expect JSPL’s top line to grow at 27% CAGR
over FY19-FY20 on the back of strong steel
demand and capacity addition. On the bottom
Jindal Steel & Power Limited
15,627
161
327
102.5
line front, we expect JSPL to turn in to profit by
FY19 on back of strong operating margin
improvement.
GMM Pfaudler Limited (GMM) is the Indian
market leader in glass-lined (GL) steel
equipment. GMM is expected to cross CAGR
GMM Pfaudler Ltd
1,733
1,185
1,287
8.6
15%+ in revenue over the 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.
Aurobindo Pharmaceuticals, amongst the
Indian Pharmaceutical companies, is well
placed to face the challenging generic markets,
given its focus on achieving growth through
Aurobindo Pharmaceuticals
42,382
723
890
23.0
productivity. Aurobindo will report net revenue
& net profit CAGR of ~13% & ~8% resp.
during FY2018-20E. Valuations are cheap V/s
its peers and own fair multiples of 17-18x.
We believe advance to grow at a healthy CAGR
of 35% over FY18-20E. Below peers level ROA
RBL Bank
25,335
595
690
16.0
(1.2% FY18) to expand led by margin
expansion and lower credit cost.
TTK Prestige has emerged as one of the leading
brands in kitchen appliances in India after its
successful transformation from a single product
TTK Prestige
9,233
7,993
8,200
2.6
company to offering an entire gamut of home
and kitchen appliances. We are expecting a
CAGR of 18% in revenue and 25% in PAT over
FY2018-20.
Source: Company, Angel Research
Market Outlook
March 05, 2019
Continued...
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect Inox Wind to report exponential
growth in top-line and bottom-line over FY19-
20E. The growth would be led by changing
renewable energy industry dynamics in favor of
Inox Winds
1,590
72
120
67.5
wind energy segment viz. changes in auction
regime from Feed-In-Tariff (FIT) to reverse
auction regime and Government’s guidance for
10GW auction in FY19 and FY20 each.
Considering the strong CV demand due to
change in BS-VI emission norms (will trigger
pre-buying activities), pick up in construction
Ashok Leyland
25,407
87
156
80.2
activities and no significant impact on industry
due to recent axle load norms, we recommend
BUY on Ashok Leyland at current valuations.
Source: Company, Angel Research
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth
CCL Products
3,718
280
360
28.8
trajectory 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
1,946
1,304
2,178
67.0
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
1,808
2,279
2,500
9.7
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
1,753
143
256
79.1
~`2,478cr over FY2017-20E mainly due to healthy
growth in plywood & lamination business on the
back of strong brand and distribution network
L&T Fin’s new management is on track to achieve
L&T Finance Holding
25,585
128
210
64.1
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Well planned strategy to grow small business loans
and cross-selling would propel fees income. We
Yes Bank
54,930
237
290
22.2
expect YES to grow its advance much higher than
industry and improvement in asset quality to
support profitability.
