Market Outlook
May 10, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open flat tracking global indices and SGX Nifty.
BSE Sensex
0.3
103
35,319
U.S. Stocks showed a notable move to the upside during the trading day on
Nifty
0.2
24
10,742
Wednesday after ending the previous session roughly flat. The strength on Wall
Mid Cap
(0.6)
(105)
16,530
Street was partly due to a sharp increase by the price of crude oil following President
Small Cap
(0.1)
(24)
18,085
Donald Trump's decision to withdraw from the Iran nuclear deal. The Dow Jones
rose to 24,543 and the Nasdaq was up by %1 to 7,340
Bankex
0.2
67
29,432
U.K. shares rose notably on Wednesday as rallying oil prices helped lift energy
Global Indices
Chg (%)
(Pts)
(Close)
stocks and investors remained hopeful that the Iran nuclear deal will remain partially
intact, even without the United States. The benchmark FTSE 100 was up 1.3% at
Dow Jones
0.7
182
24,543
7,663.
Nasdaq
1.0
73
7,340
FTSE
1.3
97
7,663
On domestic front, Indian shares eked out modest gains on Wednesday as investors
remained hopeful that the Iran nuclear deal will remain partially intact, even without
Nikkei
(0.4)
(100)
22,409
the United States. The broader sentiment was not affected after China, Russia,
Hang Seng
0.4
133
30,536
Germany, France and the U.K. said they would stick with the Iranian nuclear deal
Shanghai Com
(0.1)
(2)
3,159
that lasts until 2030. The BSE Sensex ended on a positive of 0.3% at 35,319.
Advances / Declines
BSE
NSE
News Analysis
Advances
1,170
753
M&M CMP - `860 TP - `990 Upside -15%
Declines
1,533
1,019
Detailed analysis on Pg2
Unchanged
125
87
Investor’s Ready Reckoner
Key Domestic & Global Indicators
Volumes (` Cr)
3,188
Stock Watch: Latest investment recommendations on 150+ stocks
BSE
Refer Pg5 onwards
NSE
28,964
Top Picks
CMP
Target
Upside
Company
Sector
Rating
Net Inflows (` Cr)
Net
Mtd
Ytd
(`)
(`)
(%)
Blue Star
Capital Goods Accumulate
782
867
10.8
FII
364
(2,253)
5,144
Dewan Housing Finance
Financials
Buy
625
720
15.2
*MFs
(14)
2,021
47,774
Century Plyboards
Forest Product
Buy
304
400
31.6
Navkar Corporation
Others
Buy
161
265
64.8
Top Gainers
Price (`)
Chg (%)
KEI Industries
Capital Goods Accumulate
440
485
10.2
More Top Picks on Pg4
FSL
72
12.2
SINTEX
18
8.3
Key Upcoming Events
MHRIL
337
6.3
Previous
Consensus
Date
Region
Event Description
ReadingExpectations
LINDEINDIA
456
6.2
May 10, 2018 US
Consumer price index (mom)
(0.10)
0.30
HCL-INSYS
51
5.4
May 10, 2018 US
Initial Jobless claims
211.00
219.00
May 10, 2018 UK
Industrial Production (YoY)
2.20
3.10
Top Losers
Price (`)
Chg (%)
May 10, 2018 India
Industrial Production YoY
7.10
5.70
May 10, 2018 China
Consumer Price Index (YoY)
2.10
1.90
GREAVESCOT
139
-4.1
More Events on Pg7
SHARDACROP
384
-3.8
AEGISLOG
285
-3.6
RNAVAL
18
-3.5
CHOLAFIN
1603
-3.5
As on May 09, 2018
Market Outlook
May 10, 2018
News Analysis
Mahindra & Mahindra: CMP: - `860
Target Price: - `990
Upsides: 15%
About the company: Mahindra & Mahindra Ltd (M&M) is an India-based
company. The company operates in nine segments: automotive segment
comprises sales of automobiles, spare parts and related services; farm
equipment segment comprises sales of tractors, spare parts and related
services; information technology (IT) services comprises services rendered for
IT and telecom; financial services comprises services relating to financing,
leasing and hire purchase of automobiles and tractors; steel trading and
processing; infrastructure comprising operating of commercial complexes,
project management and development; hospitality segment comprises sale of
timeshare; Systech segment comprises automotive components and other
related products and services, and others segment comprises logistics, after-
market, two wheelers and investment.
Outlook and Valuation: We expect Mahindra & Mahindra (M&M) to report net
revenue CAGR of ~15% to ~`62,218cr over FY2018-20E mainly due to
healthy growth in automobile segment like Utility Vehicles (on the back of new
launches and facelift of some models) and strong growth in Tractors segment
driven by strong brand recall and improvement in rural sentiment. Further on
the bottom-line front, we expect CAGR of ~15% to `4,771cr over the same
period on the back of margin improvement. Thus, we recommend BUY rating
on the stock with target price of `990.
Economic and Political News
Govt considering 100% FDI in insurance intermediaries to attract more funds
President Trump's sanctions on Iran could be a sharp blow to India as oil
prices zoom
Chinese airlines sends proposal to spread wings in Indian skies
Corporate News
Walmart buys 77 per cent stake in Flipkart for $16 billion
Jaypee Infratech lenders reject Rs 73.5 bn bid by Lakshwadeep
Tyremakers in India line up aggressive capacity expansion plans
eBay to relaunch in India post Flipkart-Walmart big billion deal
Market Outlook
May 10, 2018
Quarterly Bloomberg Brokers Consensus Estimate
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)
Nestle India Ltd - May 10, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
2,830
2,491
13.6
2,601
8.9
EBIDTA
657
517
27.1
533
23.3
%
23.2
20.8
20.6
PAT
395
306
29.1
311
27.1
Havells Ltd - May 11, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
2,514
1,710
47.1
1,965
27.9
EBIDTA
332
152
118.1
262
26.7
%
13.2
8.9
13.3
PAT
221
94
135.1
194
13.9
Market Outlook
May 10, 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
24,206
2,025
2,441
20.6
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
7,512
782
867
10.8
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
19,608
625
720
15.2
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
1,97,426
307
416
35.5
of NPA would reduce provision cost, which would
help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,448
440
485
10.2
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
2,074
364
475
30.7
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,420
161
265
64.8
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,078
657
851
29.6
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
2,688
451
603
33.8
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
2,63,221
8,714
10,619
21.9
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,248
418
655
56.9
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
6,754
304
400
31.6
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
2,890
90
128
41.7
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
1,406
632
750
18.7
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
2,755
381
510
33.8
operating margin due price hike in container glass
segment, turnaround in consumer business.
Source: Company, Angel Research
Market Outlook
May 10, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
34,645
157
218
38.5
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
2,619
311
333
6.9
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
1,828
805
1,016
26.2
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
5,13,942
1,979
2,315
17.0
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
1,06,921
860
990
15.0
strong growth in Tractors segment coupled by its
strong brand recall and improvement in rural
sentiment
Source: Company, Angel Research
Market Outlook
May 10, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
4,111
309
360
16.5
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
2,505
1,679
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.
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
1,785
2,252
2,500
11.0
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
3,648
298
395
32.8
~`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
1,199
820
861
5.0
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
36,451
183
210
15.0
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
May 10, 2018
Key Upcoming Events
Result Calendar
D ate
C ompany
May 10, 2018
Apollo Tyres, Union Bank, Indian Bank, Nestle, Asian Paints, Mphasis, ITD Ce mentation, Q uick He al
May 11, 2018
Tata Global, Canara Bank, Allahabad Bank, Dena Bank, GlaxoS mith Con, Sun T V Network, Relaxo, Nilkamal
Source: Bloomberg, Angel Research
Global economic events release calendar
Bl oomberg Data
D ate
Time
C ountry
Event Description
Unit
Period
L ast Reporte d
E stimate d
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
219.00
2:00 PMUK
Industrial Production (YoY)
% Change
Mar
2.20
3.10
5:30 PMIndia
Industrial Production YoY
% Change
Mar
7.10
5.70
7:00 AMChina
Consumer Price Index (YoY)
% Change
Apr
2.10
1.90
May 11, 2018
4:30 PMUK
BOE Announce s rate s
% Ratio
May 10
0.50
0.50
May 14, 2018
12: 00 PMIndia
Monthly Wholesale Prices YoY%
% Change
Apr
2.47
2.83
May 15, 2018
2:30 PMEuro Zone Euro-Zone GDP s.a. (QoQ)
% Change
1Q P
0.40
2:00 PMUK
Joble ss 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
6:45 PMUS
Industrial Production
%
Apr
0.51
0.60
Source: Bloomberg, Angel Research
Market Outlook
May 10, 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 10, 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 10, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
C ountry
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
84,265
(0.7)
0.3
27.5
Russia
Micex
4,491
1.4
7.1
11.4
India
Nifty
10,742
4.0
(2.5)
15.7
China
Shanghai Composite
3,159
1.3
(10.0)
0.5
South Africa
Top 40
51,279
4.4
(2.2)
8.9
Mexico
Mexbol
46,294
(3.4)
(8.5)
(7.3)
Indonesia
LQ45
954
(5.3)
(13.8)
1.4
Malaysia
KLCI
1,847
0.6
(0.4)
4.4
Thailand
SET 50
1,159
(0.5)
(2.7)
16.6
USA
Dow Jones
24,543
2.3
(1.5)
17.2
UK
FTSE
7,567
5.1
1.6
2.4
Japan
Nikkei
22,409
5.7
(2.6)
16.7
Germany
DAX
12,943
5.7
2.0
1.5
France
CAC
5,535
5.3
4.7
2.2
Source: Bloomberg, Angel Research 68in4
Market Outlook
May 10, 2018
Exhibit 7: Historical Angel Top Picks/Fundamental Calls
D ate Added
Top Picks/Fundamental
Stocks
Reco Price
Target/Revised Price
Curre nt Status
03-05-2018
Fundamental
L&T Finance Hol ding
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
16-04-2018
Top Picks
Parag Milk F oods Limited
249
333
Open
06-04-2018
Fundamental
GMM Pfaudler Limited
712
861
Open
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
16-02-2018
Top Picks
HSIL Ltd
433
510
Open
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)
28-11-2017
Top Picks
Century Plyboards India
317
400
Open
19-12-2017
Top Picks
LT Foods
85
128
Open
06-11-2017
Top Picks
LT Foods
74
96
16-10-2017
Fundamental
Endurance Technologie s 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 Hol dings 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
04-01-2017
Top Picks
KEI Industrie s
125
485
Open
01-12-2016
Top Picks
Alkem Lab
1700
2441
Open
04-08-2016
Top Picks
TV Today Network
297
603
Open
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, Angel Research
Market Outlook
May 10, 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 Particip ant 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 authorit y 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 sho uld
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 de termine
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