Market Outlook
April 11, 2019
Domestic Indices
Chg (%)
(Pts)
(Close)
Market Cues
BSE Sensex
(0.9)
(354)
38,585
Indian markets are likely to open flat tracking global indices and SGX Nifty.
Nifty
(0.8)
(88)
11,584
US Stocks moved mostly higher over the course of the trading day on Wednesday.
Mid Cap
0.2
23
15,420
With the upward move, the tech-heavy Nasdaq ended the session at its best closing
Small Cap
(0.1)
(16)
14,971
level in over six months. The Dow ended up 0.01 percent to 26,157 and the Nasdaq
Bankex
1.1
366
33,868
up by 0.7 percent to 7,964.
U.K. markets rose on Tuesday and the pound edged higher for a second straight
Global Indices
Chg (%)
(Pts)
(Close)
session, as British Prime Minister Theresa May holds last-minute Brexit talks with the
Dow Jones
0.01
7
26,157
leaders of Germany and France, to urge them to back her request to delay Brexit
Nasdaq
0.7
55
7,964
again until 30 June. The FTSE 100 was up by 0.3% to 7,473.
FTSE
0.3
21
7,473
On domestic front, Indian shares fell on Wednesday on growth worries after the
Nikkei
0.4
83
21,806
International Monetary Fund (IMF) cut its growth forecast for India and the
Hang Seng
(0.2)
(50)
29,936
global economy, citing heightened trade tensions. The benchmark BSE Sensex was
Shanghai Com
0.9
30
3,247
ended down by 0.9% to 38,585 at the end of trading session.
Advances / Declines
BSE
NSE
News Analysis
1,511
1,145
Advances
JSW Steel raises $500mn via international bond issue
1,072
638
Declines
155
118
Detailed analysis on Pg2
Unchanged
Investor’s Ready Reckoner
Volumes (` Cr)
Key Domestic & Global Indicators
BSE
2,709
Stock Watch: Latest investment recommendations on 150+ stocks
NSE
30,164
Refer Pg5 onwards
Top Picks
Net Inflows (` Cr)
Net
Mtd
Ytd
CMP
Target
Upside
Company
Sector
Rating
FII
(895)
822
(199)
(`)
(`)
(%)
Blue Star
Capital Goods
Buy
685
867
26.6
*MFs
(518)
5,097
6,274
ICICI Bank
Financials
Buy
394
460
16.8
Parag Milk Foods
Others
Buy
249
330
32.7
Top Gainers
Price (`)
Chg (%)
Bata India
Others
Accumulate
1,392
1,479
6.2
109
12.2
KEI Industries
Capital Goods
Buy
400
486
21.5
510
8.1
More Top Picks on Pg4
FSL
51
5.7
Key Upcoming Events
ITI
104
5.6
Previous
Consensus
Date
Region
Event Description
ReadingExpectations
91
4.9
Mar 26, 2019
TU Central Bank Inflation Report
Mar 27, 2019
TH Exports YoY
0.06
--
Top Losers
Price (`)
Chg (%)
Mar 27, 2019
TH Exports
$22380m
--
LAKSHVILAS
93
-4.9
Mar 30, 2019
TH Imports YoY
0.24
--
RCOM
3
-4.8
Mar 30, 2019
TH Imports
$21776m
--
More Events on Pg7
209
-3.6
247
-3.5
1,443
-3.5
As on Apr 09, 2019
Market Outlook
April 11, 2019
News Analysis
JSW Steel raises $500mn via international bond issue
The country's largest private sector steel-maker JSW Steel Wednesday raised $500
high demand from investors across Europe and Asia, and had attracted bids worth
$1.75 billion, merchant banking sources said. The company, which is rated one
notch below the investment grade, managed a coupon of 5.95 per cent, they said.
The issue had received Ba2 rating with a positive outlook by global ratings agency
Moody's.
The fund raising was in line with a May 2017 board resolution to raise up to $1
billion in one or more tranches of international bond sales, the company informed
the exchanges. The company, which has an installed capacity of 18 million tonne,
is intending to use the proceeds to retire debt and also for capital expenditure,
according to Moody's.
Economic and Political News
India's weak electricity demand signals more slowdown pain ahead
IMF flags concern over India's high stock of bad bank loans
UP cane arrears of Rs 10,000 crore to ease by 40% as polling nears
IMF scales down India's growth projection for current fiscal to 7.3%
India delays May order for Iran oil, awaits clarity on US sanctions: Report
Corporate News
PE funds, hospital groups eye regional chains with a sizable footprint
Federation of Automobile Dealers Associations see green shoots of recovery
Jet saga: Lenders delay stake sale to make room for more potential bidders
Wipro board to consider equity share buyback proposal on April 16
Indiabulls merger with bank will lead to CAGR of 25%: MD Lakshmi Vilas
Bank
Market Outlook
April 11, 2019
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
Favorable outlook for the AC industry to augur well
for Cooling products business which is out pacing
Blue Star
6,598
685
867
26.6
the market growth. EMPPAC division's profitability
to improve once operating environment turns
around.
Well capitalized with CAR of 18.1% which gives
sufficient room to grow asset base. Faster
ICICI Bank
2,53,795
394
460
16.8
resolution of NPA would reduce provision cost,
which would help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,157
400
486
21.5
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
1,654
59
95
62.3
requirement and 15 year long radio broadcast
licensing.
Strong brands and distribution network would
Siyaram Silk Mills
2,012
429
606
41.1
boost growth going ahead. Stock currently trades
at an inexpensive valuation.
GST regime and the Gujarat plant are expected to
Maruti Suzuki
2,17,017
7,184
10,820
50.6
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
1,431
266
424
59.5
two year; change in borrowing mix will help in NIM
improvement
Third largest brand play in luggage segment
Increased product offerings and improving
Safari Industries
1,648
738
1,000
35.5
distribution network is leading to strong growth in
business. Likely to post robust growth for next 3-4
years
We expect financialisation of savings and
Aditya Birla Capital
21,266
97
151
56.3
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
2,091
249
330
32.7
Value Added Products and reduction in interest cost
is likely to boost margins and earnings in next few
years.
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
6,10,756
2,243
2,500
11.5
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.
Market Outlook
April 11, 2019
Continued...
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect strong PAT growth on back of
healthy growth in automobile segment (on back
of new launches and facelifts in some of the
M&M
83,070
668
1,050
57.1
model ) and strong growth in Tractors segment
coupled by its strong brand recall and
improvement in rural sentiment
Market leader in the room air conditioner (RAC)
outsourced manufacturing space in India with a
market share of
55.4%. It is a one-stop
Amber Enterprises
2,622
834
984
18.0
solutions provider for the major brands in the
RAC industry and currently serves eight out of
the 10 top RAC brands in India
BIL is the largest footwear retailer in India,
offering footwear, accessories and bags across
brands. We expect BIL to report net PAT CAGR
of
~16% to
~`3115cr over FY2018-20E
Bata India
17,892
1,392
1,479
6.2
mainly due to new product launches, higher
number of stores addition and focus on
women’s high growth segment and margin
improvement
SHTF is in the sweet spot with benefits from
stronger CV volumes, NIMs unaffected by rising
Shriram Transport Finance
27,147
1,197
1,764
47.4
bond yields on the back of stronger pricing
power and an enhancing ROE by 750bps over
FY18-20E, supported by decline in credit cost.
We expect JSPL’s top line to grow at 27% CAGR
over FY19-FY20 on the back of strong steel
demand and capacity addition. On the bottom
Jindal Steel & Power Limited
17,704
183
327
78.8
line front, we expect JSPL to turn in to profit by
FY19 on back of strong operating margin
improvement.
GMM Pfaudler Limited (GMM) is the Indian
market leader in glass-lined (GL) steel
equipment. GMM is expected to cross CAGR
GMM Pfaudler Ltd
1,740
1,190
1,400
17.6
15%+ in revenue over the 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.
Aurobindo Pharmaceuticals, amongst the
Indian Pharmaceutical companies, is well
placed to face the challenging generic markets,
given its focus on achieving growth through
Aurobindo Pharmaceuticals
46,270
790
890
12.7
productivity. Aurobindo will report net revenue
& net profit CAGR of ~13% & ~8% resp.
during FY2018-20E. Valuations are cheap V/s
its peers and own fair multiples of 17-18x.
We believe advance to grow at a healthy CAGR
of 35% over FY18-20E. Below peers level ROA
RBL Bank
28,743
674
763
13.3
(1.2% FY18) to expand led by margin
expansion and lower credit cost.
TTK Prestige has emerged as one of the leading
brands in kitchen appliances in India after its
successful transformation from a single product
TTK Prestige
9,760
8,449
9,250
9.5
company to offering an entire gamut of home
and kitchen appliances. We are expecting a
CAGR of 18% in revenue and 25% in PAT over
FY2018-20.
Maintain Hold.
Source: Company, Angel Research
Market Outlook
April 11, 2019
Continued...
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect Inox Wind to report exponential
growth in top-line and bottom-line over FY19-
20E. The growth would be led by changing
renewable energy industry dynamics in favor of
Inox Winds
1,515
68
120
75.8
wind energy segment viz. changes in auction
regime from Feed-In-Tariff (FIT) to reverse
auction regime and Government’s guidance for
10GW auction in FY19 and FY20 each.
Considering the strong CV demand due to
change in BS-VI emission norms (will trigger
pre-buying activities), pick up in construction
Ashok Leyland
26,816
91
156
70.8
activities and no significant impact on industry
due to recent axle load norms, we recommend
BUY on Ashok Leyland at current valuations.
Source: Company, Angel Research
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth
CCL Products
3,691
277
360
29.8
trajectory 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
2,073
1,389
2,178
56.8
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
1,824
2,300
2,500
8.7
demand from several industries which are expected
to register 10%+ CAGR in demand in the coming
years. We can book out from the stock with 16%
profit at Rs. 2500 TP.
Greenply Industries Ltd (GIL) manufactures plywood
& allied products and medium density fibreboards
(MDF). GIL to report net revenue CAGR of ~14% to
Greenply Industries
2,065
168
256
52.0
~`2,478cr over FY2017-20E mainly due to healthy
growth in plywood & lamination business on the
back of strong brand and distribution network
L&T Fin’s new management is on track to achieve
L&T Finance Holding
29,073
145
210
44.4
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Well planned strategy to grow small business loans
and cross-selling would propel fees income. We
Yes Bank
62,112
268
290
8.1
expect YES to grow its advance much higher than
industry and improvement in asset quality to
support profitability.
