Market Outlook
May 09, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
0.0
8
35,216
U.S. stocks saw a negative bias throughout much of the previous trading session.
Nifty
0.0
2
10,718
The lackluster close by the major averages came following President Donald Trump's
Mid Cap
(0.1)
(17)
16,635
announcement of his controversial but widely expected decision to withdraw from an
Small Cap
0.1
18
18,109
international agreement intended to limit Iran's nuclear program. The Dow Jones
rose to 24,360 and the Nasdaq was flat at 0.0% percent to 7,267.
Bankex
1.3
382
29,365
U.K. shares held steady on Tuesday, with a weaker pound and deal-making news
Global Indices
Chg (%)
(Pts)
(Close)
offering some support ahead of an announcement by U.S. President Donald Trump
on whether he would withdraw from a landmark nuclear deal with Iran.The FTSE
Dow Jones
0.0
3
24,360
100 was flat at 7,566.
Nasdaq
0.0
2
7,267
FTSE
(0.0)
(1)
7,566
On domestic front, Indian shares ended largely unchanged on Tuesday, tracking
mixed global cues as investors awaited an announcement by U.S. President Donald
Nikkei
0.2
42
22,509
Trump on whether he would withdraw from a landmark nuclear deal with Iran. The
Hang Seng
1.4
409
30,403
BSE Sensex ended on a flat 0.0% at 35,216.
Shanghai Com
0.8
25
3,161
News Analysis
Advances / Declines
BSE
NSE
India opens biggest CGD round, expects investments to the tune of Rs 800bn
Advances
1,167
770
Detailed analysis on Pg2
Declines
1,532
1,014
Investor’s Ready Reckoner
Unchanged
129
73
Key Domestic & Global Indicators
Volumes (` Cr)
Stock Watch: Latest investment recommendations on 150+ stocks
4,571
Refer Pg5 onwards
BSE
NSE
34,184
Top Picks
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
Net Inflows (` Cr)
Net
Mtd
Ytd
Blue Star
Capital Goods Accumulate
790
867
9.7
Dewan Housing Finance
Financials
Buy
623
720
15.6
FII
(602)
(2,617)
4,780
Century Plyboards
Forest Product
Buy
308
400
29.8
*MFs
294
534
46,287
Navkar Corporation
Others
Buy
164
265
61.5
KEI Industries
Capital Goods Accumulate
445
485
8.9
Top Gainers
Price (`)
Chg (%)
More Top Picks on Pg4
ICICIBANK
309
6.9
Key Upcoming Events
INDIANB
341
6.3
Previous
Consensus
Date
Region
Event Description
ReadingExpectations
GRUH
707
5.6
May 09, 2018 US
Producer Price Index (mom)
0.20
INOXLEISUR
298
5.5
May 10, 2018 US
Consumer price index (mom)
(0.10)
0.30
BEML
1,117
4.9
May 10, 2018 US
Initial Jobless claims
211.00
218.00
May 10, 2018 UK
Industrial Production (YoY)
2.20
3.10
Top Losers
Price (`)
Chg (%)
May 10, 2018 India
Industrial Production YoY
7.10
More Events on Pg7
PCJEWELLER
203
-15.8
PNBHOUSING
1264
-8.1
TRIDENT
64
-6.6
SYNGENE
619
-3.4
SUZLON
10
-3.4
As on May 08, 2018
Market Outlook
May 09, 2018
News Analysis
India opens biggest CGD round, expects investments to the tune of Rs
800bn
The government has launched its biggest city gas licensing round on Tuesday
offering 86 geographical areas covering 174 districts, that may see an investment
to the tune of around Rs 600-800 billion. In each of these 86 areas on offer,
covering 22 states, the government expects an approximate investment of Rs 7-10
billion in a span of eight years. The bidders will get permits to sell compressed
natural gas (CNG) and piped cooking gas in the areas under offer. Through these
measures, the government expects to raise the share of natural gas in India's
energy mix from 6 per cent to 15 per cent. Prior to this, only 91 geographical
areas were covered in the previous eight rounds.
The current round will be covering 29 per cent of India's population and 24 per
cent of the country's geographical area. The last date of submission of bids is July
10. "By October this year, contracts for the areas will be awarded and by April
2019, gas distribution is likely to start," said D K Sarraf, chairman of PNGRB.
Economic and Political News
India opens biggest CGD round, expects investments to the tune of Rs 800bn
Karnataka farm sector gets 6 hours of power daily, least in India
Govt mulls action against bank officials whose names cropped up in frauds
Trai mulls fine on telecom operators not meeting new quality norms for Q3
Corporate News
Telecom dept to examine proposal for sale of Tata Teleservices’ enterprise
business
Dalmia Bharat moves SC on NCLT's Binani Cement order, hearing on May
10
Bank of India starts proceedings to recover Rs 2bn stuck in PNB scam
SBI General Insurance's net profit swells 150% to Rs 4 bn in FY18
Market Outlook
May 09, 2018
Quarterly Bloomberg Brokers Consensus Estimate
Eicher Motors Ltd - May 09, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
2,508
1,888
32.8
2,269
10.5
EBIDTA
800
584
36.9
707
13.2
%
31.8
30.9
31.2
PAT
630
459
37.3
520
21.2
Federal Bank Ltd - May 09, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
PAT
271
256
5.8
260
3.8
Titan Ltd - May 10, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
4,005
3,257
22.9
4,274
(6.3)
EBIDTA
333
253
31.6
422
(21.1)
%
8.3
7.2
9.9
PAT
250
178
40.4
281
(11.1)
Asian Paints Ltd - May 10, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
4,420
3,908
13.1
4,260
3.8
EBIDTA
834
707
17.9
891
(6.4)
%
18.9
18.1
20.9
PAT
541
479
12.9
567
(4.6)
Market Outlook
May 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
23,913
2,000
2,441
22.1
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
7,588
790
867
9.7
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
19,539
623
720
15.6
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
1,98,808
309
416
34.5
of NPA would reduce provision cost, which would
help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,490
445
485
8.9
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
2,081
365
475
30.3
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,469
164
265
61.5
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,059
653
851
30.4
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
2,732
458
603
31.7
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
2,65,080
8,775
10,619
21.0
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,266
421
655
55.7
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
6,848
308
400
29.8
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
2,883
90
128
42.0
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
1,397
628
750
19.4
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
2,757
381
510
33.8
operating margin due price hike in container glass
segment, turnaround in consumer business.
Source: Company, Angel Research
Market Outlook
May 09, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
35,272
160
218
36.0
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
2,677
318
335
5.2
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
813
984
21.1
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
5,10,721
1,967
2,315
17.7
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.
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
5,10,721
1,967
2,315
17.7
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 09, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
4,117
309
360
16.3
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
2,508
1,681
2,178
29.6
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
1,809
2,282
2,500
9.5
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
3,759
307
395
28.9
~`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
1,215
831
880
5.9
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
36,072
181
210
16.2
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
May 09, 2018
Key Upcoming Events
Result Calendar
Date
Company
May 09, 2018
Federal Bank, Jindal Steel
May 10, 2018
Apollo Tyres, Union Bank, Indian Bank, Nestle, Asian Paints, Mphasis, ITD Cementation, Quick Heal
Source: Bloomberg, Angel Research
Global economic events release calendar
Bloomberg Data
Date
Time
Country
Event Description
Unit
Period
Last Reported
Estimated
May 09, 2018
US
Producer Price Index (mom)
% Change
Apr
0.20
May 10, 2018
6:00 PMUS
Consumer price index (mom)
% Change
Apr
(0.10)
0.30
6:00 PMUS
Initial Jobless claims
Thousands
May 5
211.00
218.00
2:00 PMUK
Industrial Production (YoY)
% Change
Mar
2.20
3.10
5:30 PMIndia
Industrial Production YoY
% Change
Mar
7.10
7:00 AMChina
Consumer Price Index (YoY)
% Change
Apr
2.10
1.90
May 11, 2018
4:30 PMUK
BOE Announces rates
% Ratio
May 10
0.50
0.50
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)
11:30 AMGermany GDP nsa (YoY)
% Change
1Q P
2.30
May 16, 2018
2:30 PMEuro Zone Euro-Zone CPI (YoY)
%
Apr F
1.20
Source: Bloomberg, Angel Research
Market Outlook
May 09, 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 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
May 09, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
82,956
(2.6)
(3.0)
24.3
Russia
Micex
4,491
1.4
7.1
11.4
India
Nifty
10,718
3.8
(2.8)
14.5
China
Shanghai Composite
3,161
0.5
(11.4)
0.0
South Africa
Top 40
51,003
6.1
(3.1)
8.5
Mexico
Mexbol
46,720
(2.6)
(7.4)
(5.6)
Indonesia
LQ45
921
(9.0)
(17.1)
(2.5)
Malaysia
KLCI
1,847
0.6
(0.4)
4.4
Thailand
SET 50
1,161
(0.2)
(2.4)
17.0
USA
Dow Jones
24,360
1.8
0.1
16.1
UK
FTSE
7,567
5.1
1.6
2.4
Japan
Nikkei
22,509
5.7
(2.6)
16.7
Germany
DAX
12,912
4.9
1.0
1.3
France
CAC
5,522
4.6
2.9
2.2
Source: Bloomberg, Angel Research 68in4
Market Outlook
May 09, 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 09, 2018
Research Team Tel: 022 - 39357800
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