Market Outlook
June 06, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open flat tracking global indices and SGX Nifty.
BSE Sensex
(0.3)
(109)
34,903
U.S. Stocks showed a lack of direction over the course of the trading day on
Nifty
(0.3)
(35)
10,593
Tuesday. Despite the choppy trading, the tech-heavy Nasdaq reached another new
Mid Cap
(1.2)
(188)
15,535
record closing high. The Dow Jones edged down by 0.1% to 24,800 and the
Small Cap
(2.4)
(404)
16,220
Nasdaq climbed up by 0.4% to 7,638.
Bankex
(0.2)
(66)
29,292
U.K. stocks fell on the last trading day as the pound rose sharply against the dollar
and euro in response to the latest IHS Markit services data showing that British
Global Indices
Chg (%)
(Pts)
(Close)
service sector activity expanded at the fastest pace in three months in May.
Investors
also awaited the government's decision on the proposed takeover of Sky by 21st
Dow Jones
(0.1)
(14)
24,800
Century Fox The benchmark FTSE 100 was up by 0.7% at 7,687.
Nasdaq
0.4
31
7,638
FTSE
(0.7)
(54)
7,687
On domestic front, Indian shares fell for a second consecutive session on Tuesday as
services sector data disappointed and investors adopted a cautious stance ahead of
Nikkei
0.3
64
22,540
the Reserve Bank of India's monetary policy statement due Wednesday. India's
Hang Seng
0.3
95
31,093
service sector activity deteriorated for the first time in three months in May, survey
Shanghai Com
0.7
23
3,114
data from IHS Markit showed. The BSE Sensex closed down by 0.3% at 34,903.
Advances / Declines
BSE
NSE
News Analysis
Advances
489
308
India, China fails to resolve differences on trade tariffs
Declines
2,230
1,533
Detailed analysis on Pg2
Unchanged
106
50
Investor’s Ready Reckoner
Volumes (` Cr)
Key Domestic & Global Indicators
BSE
3,737
Stock Watch: Latest investment recommendations on 150+ stocks
Refer Pg5 onwards
NSE
27,802
Top Picks
Net Inflows (` Cr)
Net
Mtd
Ytd
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
FII
2,979
3,104
842
Blue Star
Capital Goods
Buy
681
867
27.4
*MFs
112
112
59,484
Dewan Housing Finance
Financials
Buy
604
720
19.1
Parag Milk Foods
Others
Buy
295
410
38.8
Top Gainers
Price (`)
Chg (%)
Navkar Corporation
Others
Buy
139
230
66.0
KEI Industries
Capital Goods
Buy
388
589
51.8
LAKSHVILAS
111
4.9
More Top Picks on Pg4
CIPLA
541
4.0
INTELLECT
183
3.5
Key Upcoming Events
Previous
Consensus
Date
Region
Event Description
HATHWAY
28
3.2
ReadingExpectations
BALRAMCHIN
72
3.1
Jun 06, 2018 India
RBI Repo rate
6.00
6.00
Jun 06, 2018 India
RBI Reverse Repo rate
5.75
5.75
Jun 06, 2018 India
RBI Cash Reserve ratio
4.00
4.00
Top Losers
Price (`)
Chg (%)
Jun 07, 2018 China
Exports YoY%
12.70
11.50
HDIL
22
-11.1
Jun 07, 2018 US
Initial Jobless claims
221.00
221.00
More Events on Pg7
IBVENTUREPP
247
-10.0
IDEA
57
-10.0
AVANTI
1354
-9.1
STRTECH
283
-8.3
As on June 05, 2018
Market Outlook
June 06, 2018
News Analysis
India, China fails to resolve differences on trade tariffs
India and China failed to resolve their differences on tariff liberalization under the
proposed Regional Comprehensive Economic Partnership (RCEP) free trade
agreement after two days of talks in New Delhi. Ahead of the July RCEP ministerial
in Tokyo, China demanded tariff elimination in more than 90% of traded goods
for granting non-reciprocal market access to India. India’s current offer is of tariff
elimination in 73% of traded goods to China.
In addition, many countries negotiating the terms of the RCEP want India to open
up its market for 92% of traded goods, while India is only ready to offer market
access for up to a maximum of 85% items with deviations to countries like China,
Australia and New Zealand with whom it does not have a free trade agreement.
On India’s request to help it secure an ambitious services deal under the RCEP
which includes movement of professionals, the Chinese side said that it is the
Asean countries of South-East Asia who have a problem with the proposal and that
China doesn’t have a problem with it.
Economic and Political News
India to go ahead with S-400 deal with Russia amid US sanctions
RBI monetary policy calm bond market suggests status quo on rates
Direct tax panel may suggest single tax on capital market investments
Reserve Bank of India to hold rates, but August hike now close call
Corporate News
Air India fails to find another bidder
Share sale plans of shrimp exporters face headwinds
Patanjali, Adani asked to submit updated bids for Ruchi Soya
Vedanta's realisations from iron ore fall 20.6% over fragile demand
Market Outlook
June 06, 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
6,545
681
867
27.4
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
18,958
604
720
19.1
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
1,82,548
284
416
46.5
resolution of NPA would reduce provision cost,
which would help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,040
388
589
51.8
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
1,803
316
475
50.3
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,085
139
230
66.0
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would
Siyaram Silk Mills
2,905
620
851
37.3
boost growth going ahead. Stock currently trades at
an inexpensive valuation.
GST regime and the Gujarat plant are expected to
Maruti
2,66,143
8,810
10,619
20.5
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,016
374
655
74.9
two year; change in borrowing mix will help in NIM
improvement
We expect sales/PAT to grow at 13.5%/20% over
LT Foods
2,170
68
128
88.7
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
1,317
592
750
26.7
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 06, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
30,421
138
218
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
2,485
295
410
38.8
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
1,659
730
1,016
39.2
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
5,36,423
2,061
2,315
12.3
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
1,12,124
910
990
8.8
strong growth in Tractors segment coupled by its
strong brand recall and improvement in rural
sentiment
Source: Company, Angel Research
Market Outlook
June 06, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,771
283
360
27.0
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
2,466
1,653
2,178
31.8
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
1,546
1,950
2,500
28.2
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
2,943
240
395
64.6
~`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
1,128
772
920
19.2
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
32,720
164
210
28.1
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
June 06, 2018
Key Upcoming Events
Global economic events release calendar
Bloomberg Data
Date
Time Country
Event Description
Unit
Period
Last Reported
Estimated
Jun 06, 2018
2:30 PMIndia
RBI Repo rate
%
Jun 6
6.00
6.00
2:30 PMIndia
RBI Reverse Repo rate
%
Jun 6
5.75
5.75
2:30 PMIndia
RBI Cash Reserve ratio
%
Jun 6
4.00
4.00
Jun 07, 2018
China
Exports YoY%
% Change
May
12.70
11.50
6:00 PMUS
Initial Jobless claims
Thousands
Jun 2
221.00
221.00
Jun 08, 2018
2:30 PMEuro Zone
Euro-Zone GDP s.a. (QoQ)
% Change
1Q F
0.40
0.40
Jun 09, 2018
7:00 AMChina
Consumer Price Index (YoY)
% Change
May
1.80
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
6:00 PMUS
Consumer price index (mom)
% Change
May
0.20
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
6.90
5:15 PMEuro Zone
ECB announces interest rates
%
Jun 14
-
12:00 PMIndia
Monthly Wholesale Prices YoY%
% Change
May
3.18
Jun 15, 2018
2:30 PMEuro Zone
Euro-Zone CPI (YoY)
%
May F
1.90
6:45 PMUS
Industrial Production
%
May
0.72
0.30
India
Imports YoY%
% Change
May
4.60
India
Exports YoY%
% Change
May
5.17
Jun 19, 2018
6:00 PMUS
Housing Starts
Thousands
May
1,287.00
1,305.00
6:00 PMUS
Building permits
Thousands
May
1,364.00
1,355.00
Jun 20, 2018
7:30 PMUS
Existing home sales
Million
May
5.46
5.65
Source: Bloomberg, Angel Research
Market Outlook
June 06, 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
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
Source: RBI, Angel Research
Market Outlook
June 06, 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)
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
-
Source: IMF, Angel Research
Market Outlook
June 06, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
76,642
(8.0)
(10.6)
20.2
Russia
Micex
4,461
1.4
7.1
11.4
India
Nifty
10,593
(0.2)
1.3
10.2
China
Shanghai Composite
3,114
(0.7)
(4.3)
0.2
South Africa
Top 40
51,414
1.1
0.1
10.5
Mexico
Mexbol
45,131
(4.0)
(5.2)
(9.0)
Indonesia
LQ45
974
0.7
(11.9)
1.0
Malaysia
KLCI
1,755
(5.8)
(5.4)
(0.7)
Thailand
SET 50
1,141
(3.6)
(5.3)
15.1
USA
Dow Jones
24,800
3.6
(0.3)
17.3
UK
FTSE
7,687
1.9
7.1
2.8
Japan
Nikkei
22,540
0.3
3.8
14.5
Germany
DAX
12,787
0.8
4.9
0.8
France
CAC
5,461
(1.0)
6.3
3.0
Source: Bloomberg, Angel Research
Market Outlook
June 06, 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 06, 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 06, 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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