Market Outlook
June 07, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open positive tracking global indices and SGX Nifty.
BSE Sensex
0.8
276
35,179
U.S. Stocks mostly higher over the course of the trading session yesterday after
Nifty
0.9
91
10,685
initially showing a lack of direction. The strength on the day lifted the Nasdaq to
Mid Cap
1.3
200
15,734
another new record closing high, while the Dow and the S&P 500 both rose to their
Small Cap
1.5
248
16,467
best closing levels in nearly three months. The Dow Jones surged by 1.4% to 25,146
and the Nasdaq climbed up by 0.7% to 7,689.
Bankex
0.6
168
29,460
U.K. stocks rose on Wednesday as higher oil and copper prices helped lift resource
Global Indices
Chg (%)
(Pts)
(Close)
stocks and Smurfit Kappa said it expects full-year earnings to be materially better
than last year. Miners Anglo American and Antofagasta as well as energy major
Dow Jones
1.4
346
25,146
Tullow Oil jumped around 2 percent each. The benchmark FTSE 100 was up by
Nasdaq
0.7
51
7,689
0.3% at 7,712.
FTSE
0.3
26
7,712
On domestic front, Indian finished sharply higher yesterday as investors took the RBI
Nikkei
0.4
86
22,626
rate hike decision in their stride. After maintaining status quo for four straight
Hang Seng
0.5
166
31,259
meetings, the Monetary Policy Committee of the Reserve Bank of India lifted the repo
Shanghai Com
0.0
1
3,115
rate by a quarter percentage point to 6.25 percent from 6.00 percent, while
maintaining its neutral stance The BSE Sensex was up by 0.8% at 35,179.
Advances / Declines
BSE
NSE
News Analysis
Advances
1,647
308
No rollback of decontrol in diesel and petrol pricing: Dharmendra Pradhan
Declines
1,001
1,533
Unchanged
123
50
Detailed analysis on Pg2
Investor’s Ready Reckoner
Volumes (` Cr)
Key Domestic & Global Indicators
BSE
3,737
Stock Watch: Latest investment recommendations on 150+ stocks
NSE
27,088
Refer Pg5 onwards
Net Inflows (` Cr)
Net
Mtd
Ytd
Top Picks
CMP
Target
Upside
FII
2,979
3,104
842
Company
Sector
Rating
(`)
(`)
(%)
*MFs
112
112
59,484
Blue Star
Capital Goods
Buy
668
867
29.7
Dewan Housing Finance
Financials
Buy
605
720
19.0
Top Gainers
Price (`)
Chg (%)
Parag Milk Foods
Others
Buy
314
410
30.7
Navkar Corporation
Others
Buy
142
230
61.5
AVANTI
1,623
19.9
KEI Industries
Capital Goods
Buy
413
589
42.7
RCOM
16
10.3
More Top Picks on Pg4
ALBK
43
8.8
Key Upcoming Events
HFCL
28
8.7
Previous
Consensus
Date
Region
Event Description
BAJAJELEC
534
8.5
ReadingExpectations
Jun 07, 2018 US
Initial Jobless claims
221.00
220.70
Jun 07, 2018 China
Consumer Price Index (YoY)
1.80
1.80
Top Losers
Price (`)
Chg (%)
Jun 08, 2018 Euro Zone Euro-Zone GDP s.a. (QoQ)
0.40
0.40
BALRAMCHIN
67
-6.9
Jun 09, 2018 China
Exports YoY%
12.70
11.30
KWALITY
33
-5.0
Jun 11, 2018 UK
Industrial Production (YoY)
2.90
More Events on Pg7
VAKRANGEE
32
-5.0
HDIL
21
-4.4
AEGISLOG
230
-3.6
As on June 06, 2018
Market Outlook
June 07, 2018
News Analysis
No rollback of decontrol in diesel and petrol pricing:
Dharmendra Pradhan
Union petroleum minister Dharmendra Pradhan ruled out any rollback in
deregulation of petrol and diesel prices. However, he said the government would
protect the interest of common people and not let petroleum price go very high.
Speaking to reporters on his government’s four years’ achievements, Pradhan
said, “We cannot go on reforms (in the sector). There is no question of rollback on
deregulation.” The government would take a holistic view on retail fuel pricing.
Besides global oil prices, tax and volatility in exchange rates played a role in fuel
pricing.
Pradhan said the government was in favour of including all petroleum products
under the goods and service tax (GST) ambit but a view would need to be taken by
the GST Council. Currently, five products, petrol, diesel, ATF, crude oil and natural
gas, are outside the GST purview which leaves the oil companies with a
disadvantage on input tax credit.
Economic and Political News
NBFCs get RBI green signal to invest in InvITs
MCA quizzes auditors who quit assignments; explanations sought in 15 cases
Cabinet gives nod for Isro's projects worth over Rs 100 billion
Centre okays Rs 70 billion sugar package, MSP set at Rs 29 per kg
Government okays revised guidelines on time-bound closure of sick PSUs
Corporate News
NCLT admits Videocon Industries for bankruptcy proceedings of Rs 210 bn
Essar Steel to clock its best-ever performance as bidding picks up pace
UK regulator slaps Rs8 crore fine on London branch of Canara Bank
Cooperative banks could soon get a tag of small finance bank
Sebi lens on Rajiv Kochhar's Avista Advisory clients in ICICI loan case
Adani wins power transmission bid for Uttar Pradesh power plant
Market Outlook
June 07, 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
6,426
668
867
29.7
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
18,972
605
720
19.0
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
1,82,483
284
416
46.6
resolution of NPA would reduce provision cost,
which would help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,235
413
589
42.7
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
1,860
326
475
45.7
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,144
142
230
61.5
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would
Siyaram Silk Mills
2,901
619
851
37.5
boost growth going ahead. Stock currently trades at
an inexpensive valuation.
GST regime and the Gujarat plant are expected to
Maruti
2,67,975
8,871
10,619
19.7
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,049
381
655
72.1
two year; change in borrowing mix will help in NIM
improvement
We expect sales/PAT to grow at 13.5%/20% over
LT Foods
2,188
68
128
87.1
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
1,324
595
720
21.0
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 07, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
30,751
140
218
56.0
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
2,639
314
410
30.7
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
1,637
721
1,016
41.0
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
5,36,059
2,059
2,315
12.4
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
1,13,715
915
1,016
8.2
strong growth in Tractors segment coupled by its
strong brand recall and improvement in rural
sentiment
Source: Company, Angel Research
Market Outlook
June 07, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,803
286
360
25.9
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
2,473
1,657
2,178
31.4
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
1,575
1,987
2,500
25.8
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
2,965
242
395
63.4
~`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
1,194
817
920
12.6
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
33,309
167
210
25.8
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
June 07, 2018
Key Upcoming Events
Global economic events release calendar
Bloomberg Data
Date
Time Country
Event Description
Unit
Period
Last Reported
Estimated
Jun 07, 2018
6:00 PMUS
Initial Jobless claims
Thousands
Jun 2
221.00
220.70
7:00 AMChina
Consumer Price Index (YoY)
% Change
May
1.80
1.80
Jun 08, 2018
2:30 PMEuro Zone
Euro-Zone GDP s.a. (QoQ)
% Change
1Q F
0.40
0.40
Jun 09, 2018
China
Exports YoY%
% Change
May
12.70
11.30
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
12:00 PMIndia
Monthly Wholesale Prices YoY%
% Change
May
3.18
2:30 PMEuro Zone
Euro-Zone CPI (YoY)
%
May F
1.90
Jun 15, 2018
5:15 PMEuro Zone
ECB announces interest rates
%
Jun 14
-
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
1,318.00
6:00 PMUS
Building permits
Thousands
May
1,364.00
1,345.00
Jun 20, 2018
7:30 PMUS
Existing home sales
Million
May
5.46
5.65
Jun 21, 2018
7:30 PMEuro Zone
Euro-Zone Consumer Confidence
Value
Jun A
0.20
4:30 PMUK
BOE Announces rates
% Ratio
Jun 21
0.50
Jun 22, 2018
1:00 PMGermany
PMI Manufacturing
Value
Jun P
56.90
Source: Bloomberg, Angel Research
Market Outlook
June 07, 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 07, 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 07, 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 as on 6 June,2018
Market Outlook
June 07, 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 07, 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 07, 2018
Research Team Tel: 022 - 39357800
DISCLAIMER
Angel Broking Private Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India
Limited,Bombay Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with
CDSL and Portfolio Manager with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking Private Limited is
a registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number
INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing
/dealing in securities Market. Angel or its associates/analyst has not received any compensation / managed or co-managed public
offering of securities of the company covered by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should
make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the
companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine
the merits and risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the
contrary view, if any.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannot
testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.
While Angel Broking Pvt. Limited endeavors to update on a reasonable basis the information discussed in this material, there may be
regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from
or in connection with the use of this information.
