Market Outlook
January 09, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open positive tracking global indices and SGX Nifty.
BSE Sensex
0.6
199
34,353
US stocks turned in a relatively lackluster performance during the trading. The major
Nifty
0.6
65
10,624
averages spent much of the day lingering near the unchanged line before closing
Mid Cap
1.0
178
18,248
mixed. The Dow Jones edged down to 0.1% to close at 25,283 and the Nasdaq
Small Cap
1.0
191
19,896
Composite edged up to 0.3%, to 7,157.
Bankex
0.3
100
29,037
U.K. shares were marginally lower on last trading day as weak earnings
overshadowed a positive trend across Asia and Europe. The FTSE 100 was down by
Global Indices
Chg (%)
(Pts)
(Close)
0.4% to close at 7,697.
Dow Jones
(0.1)
(13)
25,283
Nasdaq
0.3
21
7,157
On domestic front, Indian shares rose to close at a fresh record high for the second
straight session, helped by positive global cues and earnings optimism, heading into
FTSE
(0.4)
(28)
7,697
the Q3 earnings season. The Sensex ended on an upside front of 0.6% at 34,353
Nikkei
0.4
91
23,805
while the Nifty ended at 10,624 with an upside of 0.6%.
Hang Seng
0.2
68
30,968
Shanghai Com
0.0
1
3,411
News Analysis
L&T Construction Bags Rs 2,265cr Worth Of Orders
Advances / Declines
BSE
NSE
Detailed analysis on Pg2
Advances
1,838
1,107
Investor’s Ready Reckoner
Declines
1,182
729
Unchanged
122
54
Key Domestic & Global Indicators
Stock Watch: Latest investment recommendations on 150+ stocks
Refer Pg5 onwards
Volumes (` Cr)
BSE
6,008
Top Picks
NSE
37,693
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
Blue Star
Capital Goods Accumulate
813
867
6.7
Net Inflows (` Cr)
Net
Mtd
Ytd
Dewan Housing Finance
Financials
Accumulate
621
712
14.7
FII
892
1,978
1,978
Asian Granito
Other
Accumulate
583
639
9.7
Navkar Corporation
Other
Buy
213
265
24.2
*MFs
1,209
8,333 1,18,571
KEI Industries
Capital Goods Accumulate
381
436
14.6
More Top Picks on Pg4
Top Gainers
Price (`)
Chg (%)
Rain
461
9.5
Key Upcoming Events
Previous
Consensus
Idfcbank
63
8.8
Date
Region
Event Description
Reading
Expectations
Jindalstel
257
7.2
Jan10
UK
Industrial Production (YoY)
3.60
1.80
Rcf
110
6.6
Jan10
China
Consumer Price Index (YoY)
1.70
1.90
Jan10
India
Imports YoY%
19.60
Bfutilitie
555
6.6
Jan11
US
Initial Jobless claims
250.00
245.00
Jan11
US
Consumer price index (mom)
0.40
0.10
Top Losers
Price (`)
Chg (%)
More Events on Pg7
Idea
110
(5.3)
Religare
66
(4.9)
Bhartiartl
516
(4.4)
Ttkprestig
7,956
(2.3)
Il&Fstrans
92
(2.1)
As on January 08 2018
Market Outlook
January 09, 2018
News Analysis
L&T Construction Bags Rs 2,265cr Worth of Orders
Larsen & Toubro Ltd. won orders worth Rs 2,265cr from Andhra Pradesh Capital
Region Development Authority. Last week, the Infrastructure major won an Rs
2,100cr contract from oil marketer Hindustan Petroleum Corporation Ltd. and
billionaire Mukesh Ambani-led Reliance Industries Ltd., which involves
engineering, procurement, construction and commissioning.
The project will provide state-of-the-art infrastructure to the city of Amaravati
including wide trunk roads with flexible and rigid pavements, along with multiple
facilities like cycle track, sidewalks & smart street lighting, ICT, etc.
Economic and Political News
India to consider talks with Sri Lanka, Bangladesh to export sugar
US Department of Telecom to discuss call drops with telcos, Trai on Jan 10.
Eight Chinese pharma firms may get blacklisted over low quality materials
SBI to raise up to $2bn through overseas bonds to fund expansion
Corporate News
World Bank-assisted 'SANKALP project' worth $675 mn to be implemented.
US Department of Telecom to discuss call drops with telcos, Trai on Jan 10.
Eight Chinese pharma firms may get blacklisted over low quality materials
Videocon Industries Q2 net loss at Rs 10.33 billion
Nalco to foray into bauxite mining; eyes Rs 312 bn turnover by 2032
Market Outlook
January 09, 2018
Top Picks HHHHH
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
Strong growth in domestic business due to its leade`hip
in acute therapeutic segment. Alkem expects to launch
Alkem Laboratories
26,519
2,218
2,341
5.5
more products in USA, which bodes for its international
business.
We expect the company would report strong profitability
Asian Granito
1,753
583
639
9.7
owing to better product mix, higher B2C sales and
amalgamation synergy.
Favorable outlook for the AC industry to augur well for
Cooling products business which is out pacing the
Blue Star
7,795
813
867
6.7
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
19,477
621
712
14.7
presence in tier-II & III cities where the growth
opportunity is immense.
Loan growth is likely to pick up after a sluggish FY17.
Lower credit cost will help in strong bottom-line growth.
Karur Vysya Bank
8,880
123
160
30.0
Increasing share of CASA will help in NIM
improvement.
High order book execution in EPC segment, rising B2C
KEI Industries
2,982
381
436
14.6
sales and higher exports to boost the revenues and
profitability
Expected to benefit from the lower capex requirement
Music Broadcast
2,282
400
434
8.5
and 15 year long radio broadcast licensing.
Massive capacity expansion along with rail advantage
Navkar Corporation
3,211
213
265
24.2
at ICD as well CFS augur well for the company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,556
759
813
7.2
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 the
TV Today Network
2,637
442
500
13.1
radio business, and anticipated growth in ad spends by
corporate to benefit the stock.
After GST, the company is expected to see higher
volumes along with improving product mix. The Gujarat
Maruti Suzuki
2,85,442
9,449
10,619
12.4
plant will also enable higher operating leverage which
will be margin accretive.
We expect loan book to grow at 24.3% over next two
GIC Housing
2,535
471
655
39.2
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 healthy
7,744
349
400
14.8
growth in plywood & lamination business, forayed into
Century Plyboards India
MDF & Particle boards on back of strong brand &
distribution network.
We expect sales/PAT to grow at 13.5%/20% over next
LT Foods
3,488
109
128
17.4
two years on the back of strong distribution network &
addition of new products in portfolio.
We expect sales/PAT to grow at 13%/16% over next two
years on the back of strong healthy demand in writing
Ruchira Papers
459
205
244
19.3
& printing paper and Kraft paper. Further, China had
banned making paper from waste pulp which would
benefit Indian paper companies.
Source: Company, Angel Research
Market Outlook
January 09, 2018
Key Upcoming Events
Global economic events release calendar
Bl oomberg Data
D ate
Time
C ountry
Event Description
Unit
Period
L ast Reporte d
E stimate d
Jan 10, 2018
3:00 PM UK
Industrial Production (YoY)
% Change
Nov
3.60
1.80
7:00 AM China
Consumer Price Index (YoY)
% Change
Dec
1.70
1.90
India
Imports YoY%
% Change
Dec
19.60
Jan 11, 2018
7:00 PM US
Initial Jobless claims
Thousands
Jan 6
250.00
245.00
7:00 PM US
Consumer price index (mom)
% Change
Dec
0.40
0.10
Jan 12, 2018
US
Producer Price Index (mom)
% Change
Dec
1.40
China
Exports YoY%
% Change
Dec
12.30
10.60
5:30 PM India
Industrial Production YoY
% Change
Nov
2.20
Jan 15, 2018
India
Exports YoY%
% Change
Dec
30.60
12: 00 PM India
Monthly Wholesale Prices YoY%
% Change
Dec
3.93
Jan 16, 2018
3:00 PM UK
CPI (YoY)
% Change
Dec
3.10
Jan 17, 2018
3:30 PM Euro Zone
Euro-Zone CPI (YoY)
%
Dec F
1.40
7:45 PM US
Industrial Production
%
Dec
0.20
0.30
Jan 18, 2018
7:00 PM US
Housi ng Starts
Thousands
Dec
1,297.00
1,270.00
7:00 PM US
Building permits
Thousands
Dec
1,303.00
1,290.00
7:30 AM China
Industrial Production (YoY)
% Change
Dec
6.10
6.10
2:00 PM Germany
PMI Services
Value
Jan P
55.80
Jan 24, 2018
7:30 AM China
Real GDP (YoY)
% Change
4Q
6.80
6.70
2:00 PM Germany
PMI Manufacturing
Value
Jan P
63.30
8:30 PM US
Existing home sales
Million
Dec
5.81
3:00 PM UK
Joble ss claims change
% Change
Dec
5.90
Jan 25, 2018
8:30 PM US
New home sales
Thousands
Dec
733.00
6:15 PM Euro Zone
ECB announces interest rates
%
Jan 25
-
Jan 26, 2018
3:00 PM UK
GDP (YoY)
% Change
4Q A
1.70
Source: Bloomberg, Angel Research
Market Outlook
January 09, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
10.0
5.0
4.5
9.1
4.4
4.1
9.0
8.0
7.9
4.0
3.5
7.6
7.5
3.2
8.0
7.3
7.2
2.9
7.0
3.0
2.4
7.0
6.3
2.2
6.1
6.1
5.7
2.0
6.0
1.2
1.0
5.0
1.0
4.0
-
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
4.9
52.0
5.0
3.9
50.0
4.0
3.7
3.6
3.4
3.3
3.3
3.2
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
January 09, 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
January 09, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
C ountry
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
79,379
8.6
6.8
31.8
Russia
Micex
2,207
4.2
6.3
(0.3)
India
Nifty
10,624
5.8
6.5
29.7
China
Shanghai Composite
3,409
4.3
0.8
10.2
South Africa
Top 40
53,132
0.1
4.6
21.6
Mexico
Mexbol
49,996
6.0
(1.2)
8.5
Indonesia
LQ45
1,086
7.0
10.2
26.1
Malaysia
KLCI
1,832
6.2
4.0
12.4
Thailand
SET 50
1,164
6.8
8.9
23.0
USA
Dow Jones
25,283
4.6
11.0
27.1
UK
FTSE
7,697
4.9
2.5
5.8
Japan
Nikkei
23,715
3.9
16.5
22.2
Germany
DAX
13,368
2.4
3.1
15.6
France
CAC
5,487
1.8
2.0
12.8
Source: Bloomberg, Angel Research p68in4
Market Outlook
January 09, 2018
Research Team Tel: 022 - 39357800
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