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Market Outlook
September 11, 2019
www.angelbroking.com
Market Cues
Indian markets are likely to open positive tracking global indices and SGX Nifty.
US stocks experienced another lackluster performance during trading on Tuesday,
eventually closing mixed for the third consecutive session. The major averages
recovered from an early move to the downside but still ended the day roughly flat.
The Dow rose 0.3 percent to 26,909 while the Nasdaq edged down less than a
tenth of a percent to 8,084.
The UK stocks declined on Tuesday as investors digested weak producer price
inflation data from China and a mixed jobs report on the domestic front. The FTSE
100 was down by 0.3 percent to 7,212.
On domestic front, Indian remain shut on Tuesday on account of Muharram. During
the last trading session the benchmark BSE Sensex was surged up by 0.4 percent to
37,145.
News Analysis
L&T Construction bags Rs 5,000-7,000-cr Navi Mumbai residential project
Detailed analysis on Pg2
Investor’s Ready Reckoner
Key Domestic & Global Indicators
Stock Watch: Latest investment recommendations on 150+ stocks
Refer Pg5 onwards
Top Picks
Company
Rating
CMP
(`)
Target
(`)
Upside
(%)
Blue Star
Buy
741
867
17.1
ICICI Bank
Buy
394
490
24.2
Parag Milk Foods
Buy
148
306
106.8
Bata India
Accumulate
1,541
1,643
6.6
KEI Industries
Accumulate
1,560
1,643
5.3
More Top Picks on Pg4
Domestic Indices
Chg (%)
(Pts)
(Close)
BSE Sensex
0.4
164
37,145
Nifty
0.6
57
11,003
Mid Cap
0.9
130
13,494
Small Cap
0.9
116
12,709
Bankex
0.9
290
30,928
Global Indices
Chg (%)
(Pts)
(Close)
Dow Jones
0.3
74
26,909
Nasdaq
(0.1)
(4)
8,084
FTSE
(0.3)
(23)
7,212
Nikkei
0.6
119
21,318
Hang Seng
(0.1)
(9)
26,681
Shanghai Com
0.9
25
3,024
Advances / Declines
BSE
NSE
Advances
1,605
1,167
Declines
933
608
Unchanged
181
358
Volumes (` Cr)
BSE
1,943
NSE
26,182
Net Inflows (` Cr)
Net
Mtd
Ytd
FII
(416)
(4,839)
(2,52,222)
*MFs
464
2,576
40,127
Top Gainers
Price (
`
)
Chg (%)
TARMAT
25
20.0
GOACARBON
270
19.9
GEECEE
98
19.8
MOSCHIP
16
19.7
GUJAPOLLO
157
18.4
Top Losers
Price (
`
)
Chg (%)
SOMANYCERA
229
-19.9
SUZLON
3
-12.2
HATHWAY
26
-9.3
JPASSOCIAT
3
-7.1
BSELINFRA
2
-6.9
As on Sept 09, 2019
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Market Outlook
September 11, 2019
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News Analysis
L&T Construction bags Rs 5,000-7,000-cr Navi Mumbai
residential project
Infrastructure company Larsen & Toubro (L&T) on Monday said its construction
arm has bagged contract from the City and Industrial Development Corporation of
Maharashtra Ltd (CIDCO) to construct 23,432 dwelling units at various locations
in Navi Mumbai. The company did not provide the value of the contract, but said
the order falls under the 'major' category, which ranges between Rs 5,000 crore
and Rs 7,000 crore according to the classification of contracts.
"The Buildings & Factories business of L&T Construction has secured a
prestigious residential project from the City and Industrial Development
Corporation of Maharashtra Limited (CIDCO) to construct 23,432 dwelling units
with on-site infrastructure works at various locations in Navi Mumbai," L&T said in
a regulatory filing. L&T said the project, being part of the Pradhan Mantri Awas
Yojana (PMAY), envisages construction of Economically Weaker Section (EWS) and
Low-Income Group (LIG) type of dwelling units. The building configurations vary
from 13 to 20 storeys. This is a fast track project to be completed within stringent
timelines, the company added.
Economic and Political News
Govt's big plan to push EVs: Rs 40,000-crore subsidies in the works
Finance ministry clears NITI Aayog's artificial intelligence proposal
NHAI pause on contracts likely to hurt construction firms' revenue
Amalgamation of 10 public sector banks likely to take place on April 1
Corporate News
YES Bank's co-founder Rana Kapoor likely to sell his stake to Paytm
Reliance Capital to sell 3.15% stake in Nippon Life, raise over Rs 505 cr
CPPIB plans to invest $115 million in logistics provider Delhivery
L&T Construction bags Rs 5,000-7,000-cr Navi Mumbai residential project
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Market Outlook
September 11, 2019
www.angelbroking.com
Top Picks
Company
Market Cap
(` Cr)
CMP
(`)
Target
(`)
Upside
(%)
Rationale
Blue Star
7,133
741
867
17.1
Favorable outlook for the AC industry to augur well
for Cooling products business which is out pacing
the market growth. EMPPAC division's profitability
to improve once operating environment turns
around.
ICICI Bank
2,54,728
394
490
24.2
Well capitalized with CAR of 18.1% which gives
sufficient room to grow asset base. Faster
resolution of NPA would reduce provision cost,
which would help to report better ROE.
KEI Industries
3,635
461
612
32.9
High order book execution in EPC segment, rising
B2C sales and higher exports to boost the revenues
and profitability
Maruti Suzuki
1,91,322
6,334
8,552
35.0
GST regime and the Gujarat plant are expected to
improve the company’s sales volume and margins,
respectively.
Safari Industries
1,267
567
1,000
76.4
Third largest brand play in luggage segment
Increased product offerings and improving
distribution network is leading to strong growth in
business. Likely to post robust growth for next 3-4
years
Parag Milk Foods
1,245
148
306
106.8
One of the leading Indian dairy products
companies in India created strong brands in dairy
products. Rising revenue share of high-margin
Value Added Products and reduction in interest cost
is likely to boost margins and earnings in next few
years.
HDFC Bank
6,14,969
2,248
2,620
16.5
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
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.
M&M
66,244
533
724
35.9
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
strong growth in Tractors segment coupled by its
strong brand recall and improvement in rural
sentiment
Amber Enterprises
2,604
828
910
9.9
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 solutions
provider for the major brands in the RAC industry
and currently serves eight out of the 10 top RAC
brands in India
Bata India
20,047
1,560
1,643
5.3
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 mainly due to new
product launches, higher number of stores addition
and focus on women’s high growth segment and
margin improvement
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Market Outlook
September 11, 2019
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Continued...
Company
Market Cap
(` Cr)
CMP
(`)
Target
(`)
Upside
(%)
Rationale
Shriram Transport Finance
22,953
1,012
1,385
36.9
SHTF is in the sweet spot with benefits from
stronger CV volumes, NIMs unaffected by
rising bond yields on the back of stronger
pricing power and an enhancing ROE by
750bps over FY18-20E, supported by decline
in credit cost.
Jindal Steel & Power Limited
9,726
95
250
162.2
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 line front, we expect JSPL to turn in to
profit by FY19 on back of strong operating
margin improvement.
GMM Pfaudler Ltd
2,063
1,411
1,570
11.2
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 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
36,659
626
890
42.3
Aurobindo Pharmaceuticals, amongst the
Indian Pharmaceutical companies, is well
placed to face the challenging generic
markets, given its focus on achieving growth
through 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.
RBL Bank
15,509
360
540
49.9
We believe advance to grow at a healthy
CAGR of 35% over FY18-20E. Below peers
level ROA (1.2% FY18) to expand led by
margin expansion and lower credit cost.
TTK Prestige
7,905
5,703
7,708
35.2
TTK Prestige has emerged as one of the
leading brands in kitchen appliances in India
after its successful transformation from a
single product 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
5
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Market Outlook
September 11, 2019
www.angelbroking.com
Fundamental Call
Company
Market Cap
(` Cr)
CMP
(`)
Target
(`)
Upside
(%)
Rationale
CCL Products
3,193
240
360
50.0
CCL is likely to maintain the strong growth
trajectory over FY18-20 backed by capacity
expansion and new geographical foray
Nilkamal
1,478
991
2,178
119.8
We forecast Nilkamal to report top-line CAGR of
~9% to `2,635cr over FY17-20E on the back of
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 Ltd
1,681
2,120
2,500
18.0
Elantas Beck India is the Indian market leader in
liquid insulation segment used in electrical
equipments like motors, transformers etc. It derives
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
1,863
152
256
68.5
Greenply Industries Ltd (GIL) manufactures plywood
& allied products and medium density fibreboards
(MDF). GIL to report net revenue CAGR of ~14% to
~`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 Finance Holding
18,584
93
150
61.5
L&T Fin’s new management is on track to achieve
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Siyaram Silk Mills
1,037
221
549
148.1
Strong brands and distribution network would boost
growth going ahead. Stock currently trades at an
inexpensive valuation.
Music Broadcast Limited
1,065
39
95
146.8
Expected to benefit from the lower capex
requirement and 15 year long radio broadcast
licensing.
Inox Winds
748
34
120
256.1
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 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.
Ashok Leyland
18,464
63
156
148.0
Considering the strong CV demand due to change
in BS-VI emission norms (will trigger pre-buying
activities), pick up in construction activities and no
significant impact on industry due to recent axle
load norms, we recommend BUY on Ashok Leyland
at current valuations.
Aditya Birla Capital
20,818
95
118
24.8
We expect financialisation of savings and
increasing penetration in Insurance & Mutual fund
would ensure steady growth.
Yes Bank
16,092
63
NA
NA
Well planned strategy to grow small business loans
and cross-selling would propel fees income. We
expect YES to grow its advance much higher than
industry and improvement in asset quality to
support profitability.
GIC Housing
937
174
NA
NA
We expect loan book to grow at 24.3% over next
two year; change in borrowing mix will help in NIM
improvement