Market Outlook
April 09, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
0.9
30
33,627
U.S. stocks moved sharply lower over the course of the trading session, as trade war
Nifty
0.1
7
10,331
concerns once again resurfaced. After closing higher for three straight days, the
Mid Cap
0.7
106
16,596
major averages showed a substantial move back to the downside. The Dow Jones
Small Cap
0.6
108
17,882
closes down by 2.3% to close at 23,932. The NASDAQ ended down by 2.3% to
close at 6,915.
Bankex
0.6
162
27,855
U.K. stocks opened on a subdued note after U.S. President Donald Trump vowed an
Global Indices
Chg (%)
(Pts)
(Close)
additional $100 billion in tit-for-tat tariffs on Chinese imports, dashing hopes for a
cooling of trade tensions. The FTSE 100 was down by 0.2% to end at 7,189.
Dow Jones
(2.3)
(572)
23,933
Nasdaq
(2.3)
(161)
6,915
On domestic front, Indian shares ended a lackluster session on a flat note as fears
FTSE
(0.2)
(16)
7,184
of a global trade war persisted and investors exercised some caution after strong
gains in the previous session. The BSE Sensex ended up by 0.1% at 33,626.
Nikkei
0.1
13
21,580
Hang Seng
0.7
194
30,039
News Analysis
Shanghai Com
(0.1)
(4)
3,127
Dabur acquires 2 personal care products firm in South Africa for Rs 250mn
Detailed analysis on Pg2
Advances / Declines
BSE
NSE
Advances
1,642
1,099
Investor’s Ready Reckoner
Declines
1,071
699
Key Domestic & Global Indicators
Unchanged
117
70
Stock Watch: Latest investment recommendations on 150+ stocks
Refer Pg5 onwards
Volumes (` Cr)
Top Picks
BSE
4,134
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
NSE
28,539
Blue Star
Capital Goods Accumulate
793
867
9.3
Dewan Housing Finance
Financials
Buy
540
720
33.3
Net Inflows (` Cr)
Net
Mtd
Ytd
Century Plyboards
Forest Product Accumulate
354
400
11.5
FII
536
353
13,960
Navkar Corporation
Others
Buy
172
265
54.1
*MFs
42
749
35,209
KEI Industries
Capital Goods Accumulate
413
470
13.8
More Top Picks on Pg4
Top Gainers
Price (`)
Chg (%)
Key Upcoming Events
Previous
Consensus
IBVENTUREPP
122
11
Date
Region
Event Description
ReadingExpectations
VIDEOIND
15
9.4
Apr 10, 2018 US
Unnemployment rate
(0.30)
SOBHA
548
7.8
Apr 10, 2018 US
Consumer price index (mom)
313.00
185.00
GMRINFRA
20
6.9
Apr 11, 2018 UK
Industrial Production (YoY)
4.10
4.00
Apr 11, 2018 China
Consumer Price Index (YoY)
0.20
-
JAICORPLTD
159
6.8
Apr 12, 2018 India
Imports YoY%
1.60
3.10
More Events on Pg7
Top Losers
Price (`)
Chg (%)
VAKRANGEE
171
-5
AIAENG
1,400
3.3
VIPIND
360
3
KWALITY
55
-2.9
INOXLEISUR
263
2.8
As on April 06, 2018
Market Outlook
April 09, 2018
News Analysis
Dabur acquires 2 personal care products firm in South Africa for Rs
250mn
FMCG major Dabur India has completed acquisition of two South Africa-
based companies — D&A Cosmetics Proprietary Ltd and Atlanta Body & Health
Products Proprietary Ltd — through its subsidiary. The company had last year
announced that it will acquire the two personal care products companies in South
Africa for a total cash consideration of 50 million rands (about Rs 250 million).
This is not Dabur's first acquisition in South Africa. In 2016, it had earlier acquired
a South Africa-based Discaria Trading (PTY) Ltd. In April last year, the company
had announced completion of acquisition of personal, hair care and creams
businesses of South Africa based-CTL group of companies valued at $1.5 million
(Rs 100 million).
Economic and Political News
Wind power tariff firms at Rs 2.5/unit in Solar Energy Corporation auction
Govt bans imports of hormone oxytocin to halt misuse in livestock industry
Govt starts process to procure 111 fighter jets, issues request for info
Corporate News
Wipro sells 63% stake in airport IT services JV to Antariksh Softtech
Dabur acquires 2 personal care products firm in South Africa for Rs 250mn
Walmart close to shelling out $10-12bn for 51% stake in Flipkart
Blue Star to begin production at Sri City plant by 2021 with Rs 2.3bn fund
HCL Tech buys life sciences and consumer services provider for $60mn
Market Outlook
April 09, 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
22,035
1,843
2,441
32.4
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
7,608
793
867
9.3
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
16,939
540
720
33.3
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
1,80,369
281
416
48.0
of NPA would reduce provision cost, which would
help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,238
413
470
13.8
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
2,236
392
475
21.2
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,582
172
265
54.1
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,111
664
851
28.2
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
TV Today Network
2,966
497
603
21.3
the 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
Maruti
2,78,150
9,208
10,619
15.3
Gujarat plant will also enable higher operating
leverage which will be margin accretive.
We expect loan book to grow at 24.3% over next
GIC Housing
2,087
388
655
68.8
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 healthy
Century Plyboards
7,857
354
400
12.9
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
3,043
95
128
34.7
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
1,383
622
650
4.5
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
2,611
395
510
29.1
operating margin due price hike in container glass
segment, turnaround in consumer business.
We expect financialisation of savings and increasing
Aditya Birla Capital
34,611
157
230
46.5
penetration in Insurance & Mutual fund would
ensure steady growth.
Source: Company, Angel Research
Market Outlook
April 09, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,841
288
360
25
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 healthy
Nilkamal
2,410
1,615
2,178
34.9
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
5,849
116
160
37.9
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
Elantas Beck India Ltd
1,661
2,096
2,500
19.3
motors, transformers etc. It derives 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
3,915
319
395
23.8
~`2,478cr over FY2017-20E mainly due to healthy
growth in plywood & lamination business on the back
of strong brand and distribution network
Ashok Leyland Ltd (ALL) is the flagship company of the
Hinduja Group, and one of the largest commercial
vehicle manufacturers in India. Ashok Leyland
Ashok Leyland
42,852
146
163
11.6
expected to report net Profit (reported) CAGR of ~19%
to
~`2,075cr over FY2017-20E mainly due to
improvement in replacement demand.
Source: Company, Angel Research
