Market Outlook
May 08, 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
293
35,208
U.S. Stocks showed After an early move to the upside, stocks gave back ground in
Nifty
0.9
97
10,716
afternoon trading on Monday but managed to end the day higher. With the gains
Mid Cap
0.6
91
16,652
on the day, the major averages extended the rally seen in the previous session. The
Small Cap
0.6
100
18,092
Dow Jones rose to 24,357 and the Nasdaq was up by 0.8 percent to 7,265.
Bankex
1.1
321
28,983
U.K. stock market was closed on Monday on account of a bank holiday.
On domestic front, Indian shares rose sharply on Monday as mixed U.S. jobs data
Global Indices
Chg (%)
(Pts)
(Close)
helped ease fears of faster rate hikes by the Federal Reserve amid a caution ahead
Dow Jones
0.4
95
24,357
of Karnataka state elections scheduled to be held on May 12. The BSE Sensex
Nasdaq
0.8
56
7,265
ended on a positive of 0.8% at 35,208.
FTSE
0.9
64
7,567
News Analysis
Nikkei
(0.0)
(6)
22,467
ICICI Bank Q4 net profit halves to Rs 10.2 bn, loan provisions surge
Hang Seng
0.2
68
29,994
Shanghai Com
1.5
46
3,137
Detailed analysis on Pg2
Investor’s Ready Reckoner
Advances / Declines
BSE
NSE
Key Domestic & Global Indicators
Advances
1,427
970
Stock Watch: Latest investment recommendations on 150+ stocks
Declines
1,288
834
Refer Pg5 onwards
Unchanged
145
86
Top Picks
CMP
Target
Upside
Volumes (` Cr)
Company
Sector
Rating
(`)
(`)
(%)
BSE
3,363
Blue Star
Capital Goods Accumulate
796
867
8.9
Dewan Housing Finance
Financials
Accumulate
628
720
14.7
NSE
28,640
Century Plyboards
Forest Product
Buy
309
400
29.4
Navkar Corporation
Others
Buy
170
265
56.2
Net Inflows (` Cr)
Net
Mtd
Ytd
KEI Industries
Capital Goods Accumulate
428
485
13.4
FII
(1,579)
(2,015)
5,383
More Top Picks on Pg4
*MFs
294
534
46,287
Key Upcoming Events
Previous
Consensus
Date
Region
Event Description
Top Gainers
Price (`)
Chg (%)
ReadingExpectations
May 08, 2018 US
Unnemployment rate
4.10
4.00
VIDEOIND
11
10.0
May 09, 2018 US
Producer Price Index (mom)
0.20
IBVENTUREPP
328
9.6
May 10, 2018 UK
Industrial Production (YoY)
2.20
3.10
LAKSHVILAS
95
6.5
May 10, 2018 US
Initial Jobless claims
211.00
May 10, 2018 US
Consumer price index (mom)
(0.10)
0.30
EQUITAS
165
6.4
More Events on Pg7
IBVENTURES
512
6.2
Top Losers
Price (`)
Chg (%)
WOCKPHARMA
740
-7.8
ICIL
84
-7.3
UJJIVAN
395
-5.9
STAR
558
-4.8
RAJESHEXPO
668
-4.2
As on May 07, 2018
Market Outlook
May 08, 2018
News Analysis
ICICI Bank Q4 net profit halves to Rs 10.2 bn, loan provisions surge
ICICI Bank Ltd reported a 50% drop in its fiscal-fourth quarter profit as it set aside
cash to cover a surge in bad loans, a fallout of the central bank’s revised scheme
on resolution of stressed assets. The bank posted a net profit of Rs 10.2 billion for
the quarter ended March 2018, against Rs 20.2 billion a year agoThe bank’s
profit was boosted by a one-time income arising from the sale of shares in its
capital market arm, ICICI Securities, to the tune of Rs 33.20 billion.Additionally,
three loan accounts in the gems and jewellery sector with fund-based outstanding
of Rs 7.95 billion were classified as fraud and non-performing, and during the
fourth quarter, the bank made a provision of Rs 2.89 billion through its profit and
loss account, and Rs 5.05 billion by debiting reserves and surplus as permitted by
the Reserve Bank of India (RBI.
The March-quarter profit is the lowest for the bank in the last eight quarters. he
bank's asset quality deteriorated sharply as gross non-performing assets (NPAs), as
a percentage of gross advances, stood at 9.9 per cent during the January-March
quarter, against 8.55 per cent in the previous quarter. Slippages grew four-fold to
Rs 157.37 billion, the highest ever for the bank, during the quarter, compared to
Rs 43.8 billion in the previous quarter.
Economic and Political News
Rupee plunges to 67 per dollar as crude oil spikes
Power surplus Odisha buys from external sources to meet summer demand
Hyperloop Technologies proposes 700-800 km project for AP in three phases
PM reviews launch preparations for health scheme covering
100 mn
households
Corporate News
ICICI Bank Q4 net profit halves to Rs 10.2 bn, loan provisions surge
DSP parts ways with BlackRock, to buy 40% stake in MF venture
ONGC gas output up 6.3% in FY18, looks to double production by 2022
Reliance to invest Rs 600 bn in Jio this year, may borrow Rs 1 trn more
Market Outlook
May 08, 2018
Quarterly Bloomberg Brokers Consensus Estimate
ABB Ltd - May 08, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
2,702
2,166
24.7
2,799
(3.4)
EBIDTA
233
160
45.6
293
(20.5)
%
8.6
7.4
10.5
PAT
128
89
43.8
171
(25.2)
Godrej Products Ltd - May 08, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
2,620
2,389
9.6
2,630
(0.3)
EBIDTA
619
541
14.4
586
5.6
%
23.6
22.6
22.3
PAT
445
387
14.9
429
3.7
Market Outlook
May 08, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
Strong growth in domestic business due to its
leadership in acute therapeutic segment. Alkem
Alkem Laboratories
23,770
1,988
2,441
22.8
expects to launch more products in USA, which
bodes for its international business.
Favorable outlook for the AC industry to augur well
for Cooling products business which is out pacing
Blue Star
7,643
796
867
8.9
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
19,682
628
720
14.7
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 resolution
ICICI Bank
1,86,047
289
416
43.7
of NPA would reduce provision cost, which would
help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,351
428
485
13.4
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
2,110
370
475
28.4
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,554
170
265
56.2
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,066
654
851
30.1
growth going ahead. Stock currently trades at an
inexpensive valuation.
Market leadership in Hindi news genre and no. 2
viewership ranking in English news genre, exit from
TV Today Network
2,693
452
603
33.6
the radio business, and anticipated growth in ad
spends by corporate to benefit the stock.
GST regime and the Gujarat plant are expected to
Maruti
2,64,091
8,742
10,619
21.5
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,269
421
655
55.5
two year; change in borrowing mix will help in NIM
improvement
We expect CPIL to report net Revenue/PAT CAGR of
~17%/16% over FY2017-20E mainly due to
Century Plyboards
6,866
309
400
29.4
healthy growth in plywood & lamination business,
forayed into MDF & Particle boards on back of
strong brand & distribution network.
We expect sales/PAT to grow at 13.5%/20% over
LT Foods
2,927
92
128
39.9
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
1,355
609
750
23.2
distribution network is leading to strong growth in
business. Likely to post robust growth for next 3-4
years
We expect HSIL to report PAT CAGR of ~15% over
FY2017-20E owing to better improvement in
HSIL Ltd
2,734
378
510
34.9
operating margin due price hike in container glass
segment, turnaround in consumer business.
Source: Company, Angel Research
Market Outlook
May 08, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
34,964
157
218
37.1
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
2,531
315
333
5.7
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
1,930
831
984
18.8
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
5,15,032
1,977
2,315
17.1
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.
Source: Company, Angel Research
Market Outlook
May 08, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
4,123
310
360
16.2
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
2,504
1,678
2,178
29.8
healthy demand growth in plastic division. On the
bottom-line front, we estimate
~10% CAGR to
`162cr owing to improvement in volumes.
The prism has diversified exposure in the different
segment such as Cement, Tile & ready mix concrete.
Prism Cement
5,969
119
160
34.5
Thus we believe, PCL is in the right place to capture
ongoing government spending on affordable
housing and infrastructure projects.
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
1,804
2,276
2,500
9.9
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
3,789
309
395
27.9
~`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
1,133
802
861
7.3
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
35,173
176
210
16.2
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
May 08, 2018
Key Upcoming Events
Result Calendar
Date
Company
May 08, 2018
Automotive Axle, ABB, Godrej Consumer, Vesuvius India, Aventis
May 09, 2018
Oriental Bank, Federal Bank, Jindal Steel
Source: Bloomberg, Angel Research
Global economic events release calendar
Bloomberg Data
Date
Time
Country
Event Description
Unit
Period
Last Reported
Estimated
May 08, 2018
6:00 PMUS
Unnemployment rate
%
Apr
4.10
4.00
May 09, 2018
US
Producer Price Index (mom)
% Change
Apr
0.20
May 10, 2018
2:00 PMUK
Industrial Production (YoY)
% Change
Mar
2.20
3.10
6:00 PMUS
Initial Jobless claims
Thousands
May 5
211.00
6:00 PMUS
Consumer price index (mom)
% Change
Apr
(0.10)
0.30
7:00 AMChina
Consumer Price Index (YoY)
% Change
Apr
2.10
1.90
4:30 PMUK
BOE Announces rates
% Ratio
May 10
0.50
0.50
May 11, 2018
5:30 PMIndia
Industrial Production YoY
% Change
Mar
7.10
May 14, 2018
12:00 PMIndia
Monthly Wholesale Prices YoY%
% Change
Apr
2.47
May 15, 2018
2:30 PMEuro Zone Euro-Zone GDP s.a. (QoQ)
% Change
1Q P
0.40
2:00 PMUK
Jobless claims change
% Change
Apr
11.60
7:30 AMChina
Industrial Production (YoY)
% Change
Apr
6.00
6.40
India
Imports YoY%
% Change
Apr
7.15
India
Exports YoY%
% Change
Apr
(0.66)
2:30 PMEuro Zone Euro-Zone CPI (YoY)
%
Apr F
1.20
Source: Bloomberg, Angel Research
Market Outlook
May 08, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
8.5
10.0
9.0
9.1
7.4
9.0
8.0
7.1
7.1
8.0
8.1
7.0
7.6
7.6
8.0
7.3
7.2
7.2
6.0
6.8
4.8
7.0
6.5
5.0
4.1
6.1
5.7
4.0
3.2
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
4.3
50.0
4.0
3.6
3.3
3.3
3.0
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
60.0
6.50
50.0
6.00
40.0
5.50
30.0
5.00
20.0
4.50
10.0
4.00
0.0
3.50
(10.0)
3.00
Source: Bloomberg, Angel Research
Source: RBI, Angel Research
Market Outlook
May 08, 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 as on 07 May, 2018
Market Outlook
May 08, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
83,118
(2.0)
(2.6)
26.5
Russia
Micex
4,515
1.4
7.1
11.4
India
Nifty
10,618
5.8
(3.0)
15.1
China
Shanghai Composite
3,091
(0.4)
(11.2)
0.3
South Africa
Top 40
50,874
6.2
(2.9)
9.4
Mexico
Mexbol
46,992
(2.1)
(7.8)
(6.1)
Indonesia
LQ45
920
(9.0)
(17.5)
(2.2)
Malaysia
KLCI
1,842
(0.5)
(1.4)
4.3
Thailand
SET 50
1,176
0.4
(0.8)
18.0
USA
Dow Jones
24,263
(0.6)
(4.6)
15.9
UK
FTSE
7,567
7.6
1.0
3.1
Japan
Nikkei
22,473
4.7
(4.9)
19.1
Germany
DAX
12,820
8.3
(0.4)
2.0
France
CAC
5,516
7.6
1.4
2.7
Source: Bloomberg, Angel Research as on 07 May, 2018 68in4
Market Outlook
May 08, 2018
Exhibit 7: Historical Angel Top Picks/Fundamental Calls
Date Added
Top Picks/Fundamental
Stocks
Current Status
02-05-2018
Top Picks
HDFC Bank
Open
20-04-2018
Top Picks
Matrimony.com Ltd
Open
16-04-2018
Top Picks
Parag Milk Foods Limited
Open
06-04-2018
Fundamental
GMM Pfaudler Limited
Open
07-03-2018
Fundamental
Ashok Leyland Ltd
Closed (26/04/2018)
03-03-2018
Fundamental
Greenply Industries
Open
21-02-2018
Top Picks
Safari Industries
Open
16-02-2018
Top Picks
HSIL Ltd
Open
07-02-2018
Fundamental
Elantas Beck India Ltd.
Open
01-02-2018
Top Picks
ICICI Bank
Open
01-02-2018
Top Picks
Aditya Birla Capital
Open
04-01-2018
Fundamental
CCL Products
Open
03-01-2018
Fundamental
Nilkamal Ltd
Open
01-01-2018
Fundamental
Capital First Ltd
Closed (15/01/2018)
30-12-2017
Fundamental
Shreyans Industries Ltd
Closed
21-12-2017
Fundamental
Prism Cement Ltd
Open
18-12-2017
Fundamental
Menon Bearings Limited
Closed (17/01/2018)
14-12-2017
Top Picks
Ruchira Papers Ltd.
Closed (09/02/2018)
28-11-2017
Top Picks
Century Plyboards India
Open
06-11-2017
Top Picks
LT Foods
Open
16-10-2017
Fundamental
Endurance Technologies Ltd
Closed (01/12/2017)
11-Sep-17
Top Picks
GIC Housing
Open
20-07-2017
Top Picks
Music Broadcast Limited
Open
07-07-2017
Fundamental
L&T Finance Holdings Ltd
Closed (28/8/2017)
06-07-2017
Fundamental
Syngene International
Closed (1/3/2018)
05-07-2017
Top Picks
Maruti
Open
03-01-2017
Top Picks
Alkem Lab
Open
30-12-2016
Top Picks
KEI Industries
Open
04-08-2016
Top Picks
TV Today Network
Open
05-04-2016
Top Picks
DHFL
Open
05-01-2016
Top Picks
Navkar Corporation
Open
08-12-2015
Top Picks
Blue Star
Open
06-11-2015
Top Picks
Siyaram Silk Mills
Open
Source: Company, Angel Research
Market Outlook
May 08, 2018
Research Team Tel: 022 - 39357800
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