Market Outlook
April 17, 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
113
34,305
U.S. stocks moved notably higher over the course of the last trading session. The
Nifty
0.5
48
10,528
major averages added to the strong gains posted last week. The Dow Jones ended
Mid Cap
0.3
57
16,734
up by 0.9% to close at 24,573. The NASDAQ ended up by 0.7% to close at 7,156.
Small Cap
0.6
100
18,082
U.K. shares fell slightly on yesterday as Sage extended Friday's losses and WPP's
Bankex
0.3
84
28,386
CEO Martin Sorrell resigned in the face of a probe. The FTSE 100 was closed down
by 0.3% to end at 7,240.
Global Indices
Chg (%)
(Pts)
(Close)
On domestic front, Indian shares rose for an eighth straight session on Monday as
Dow Jones
0.9
212
24,573
fears of a wider escalation in the Middle East faded following the weekend's U.S.-led
Nasdaq
0.7
50
7,156
strike. The BSE Sensex ended up by 0.3% at 34,305.
FTSE
(0.3)
(25)
7,240
News Analysis
Nikkei
0.3
57
21,836
NCLT lets insolvency proceedings against debt-ridden Essar Power Jharkhand
Hang Seng
(1.6)
(493)
30,316
Shanghai Com
(1.5)
(48)
3,111
Detailed analysis on Pg2
Investor’s Ready Reckoner
Advances / Declines
BSE
NSE
Key Domestic & Global Indicators
Advances
1,232
881
Stock Watch: Latest investment recommendations on 150+ stocks
Declines
1,477
926
Refer Pg5 onwards
Unchanged
187
81
Picks
CMP
Target
Upside
Volumes (` Cr)
Company
Sector
Rating
(`)
(`)
(%)
BSE
3,064
Blue Star
Capital Goods Accumulate
791
867
9.6
Dewan Housing Finance
Financials
Buy
572
720
25.9
NSE
27,754
Century Plyboards
Forest Product
Buy
338
400
18.2
Navkar Corporation
Others
Buy
175
265
51.7
Net Inflows (` Cr)
Net
Mtd
Ytd
KEI Industries
Capital Goods Accumulate
457
485
6.2
FII
470
(826)
12,781
More Top Picks on Pg4
*MFs
(6)
3,764
38,224
Key Upcoming Events
Previous
Consensus
Date
Region
Event Description
Top Gainers
Price (`)
Chg (%)
ReadingExpectations
Apr 17, 2018 UK
Jobless claims change
9.20
IBVENTUREPP
172
20.0
Apr 17, 2018 US
Housing Starts
1,236.00
1,266.00
IBVENTURES
380
19.8
Apr 17, 2018 US
Industrial Production
0.95
0.35
JAICORPLTD
162
6.4
Apr 17, 2018 US
Building permits
1,321.00
1,325.00
Apr 17, 2018 UK
CPI (YoY)
2.70
2.70
IBREALEST
192
6.1
More Events on Pg7
DCBBANK
190
6.0
Top Losers
Price (`)
Chg (%)
UCOBANK
21
-6.5
RCOM
21
-5.4
VAKRANGEE
126
-5.0
TATAMOTORS
339
-5.0
CHAMBLFERT
178
-4.7
As on April 13, 2018
Market Outlook
April 17, 2018
News Analysis
NCLT lets insolvency proceedings against debt-ridden Essar Power
Jharkhand
The National Company Law Tribunal (NCLT) has allowed insolvency proceedings
against debt-ridden Essar Power Jharkhand Ltd (EPJL).The decision has come on a
plea filed by the company's lender ICICI Bank. The principal bench of NCLT has
appointed an interim resolution professional (IRP) to manage the affairs of the
company, according to an order.The tribunal has also imposed various restrictions
on EPJL, including ban on transfer, alienate or dispose of the property, under
the Insolvency and Bankruptcy Code (IBC).
Further, NCLT said all the personnel connected with EPJL or its promoters or any
other person associated with the management are under legal obligation to extend
every assistance and cooperation to IRP as may be required by him while
managing the affairs of the company. In case there is any violation by EPJL's ex-
management or ex-directors, IRP would be at liberty to make appropriate
application to this tribunal with a prayer for passing an appropriate order, the
tribunal said in the order.
Economic and Political News
FDI threshold set at $20 million for merchant banking, asset management
Three oil PSU cos to distribute 70,000 LPG connections in Gujarat on Apr 20
Investment projects worth Rs 550 billion to be rolled out in April
Corporate News
NCLT lets insolvency proceedings against debt-ridden Essar Power
Jharkhand
Flipkart's Myntra acquires Bengaluru-based wearable startup Witworks
Fin Min looking at BBB member Pradeep Kumar's role at Avista in ICICI
proceedings
Market Outlook
April 17, 2018
Quarterly Bloomberg Brokers Consensus Estimate
ACC Ltd - April 18, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
3,990
3,174
25.8
3,494
14.2
EBIDTA
503
416
20.9
442
13.8
%
12.6
13.2
12.7
PAT
364
211
72.5
205
77.5
Indusind Bank - April 19, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
PAT
963
751
28.2
936
2.9
TCS Ltd - April 19, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
31,663
29,642
6.8
30,904
2.5
EBIDTA
8,645
8,132
6.3
8,287
4.3
%
27.3
27.5
26.9
PAT
6,813
6,622
2.8
6,545
4.1
Market Outlook
April 17, 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
21,082
1,763
2,441
38.4
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
7,594
791
867
9.6
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
17,941
572
720
25.9
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
1,84,740
287
416
44.7
of NPA would reduce provision cost, which would
help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,579
457
485
6.2
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
2,206
387
475
22.8
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,630
175
265
51.7
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,218
687
851
23.9
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
2,727
457
603
31.9
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
2,78,889
9,232
10,619
15.0
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
2,209
410
655
59.7
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
7,517
338
400
18.2
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
3,007
94
128
36.2
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
1,450
652
720
10.5
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
2,905
402
510
26.9
operating margin due price hike in container glass
segment, turnaround in consumer business.
Source: Company, Angel Research
Market Outlook
April 17, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
34974
159
230
44.7
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
2092
250
333
34.0
Value Added Products and reduction in interest cost
is likely to boost margins and earnings in next few
years.
Source: Company, Angel Research
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,911
294
360
22.4
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
2,613
1,751
2,178
24.4
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
5,952
118
160
35.3
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
1,673
2,110
2,500
18.5
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
3,863
315
395
25.4
~`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
44,226
151
163
8.0
expected to report net Profit (reported) CAGR of ~19%
to
~`2,075cr over FY2017-20E mainly due to
improvement in replacement demand.
Market Outlook
April 17, 2018
Key Upcoming Events
Result Calendar
Date
Company
April 18, 2018
ACC Cement, Mindtree
April 19, 2018
TCS, Indusind Bank, Infotech Enterprises, Reliance Power
Source: Bloomberg, Angel Research
Global economic events release calendar
Bloomberg Data
Date
Time
Country
Event Description
Unit
Period
Last Reported
Estimated
Apr 17, 2018
2:00 PMUK
Jobless claims change
% Change
Mar
9.20
6:00 PMUS
Housing Starts
Thousands
Mar
1,236.00
1,266.00
6:45 PMUS
Industrial Production
%
Mar
0.95
0.35
6:00 PMUS
Building permits
Thousands
Mar
1,321.00
1,325.00
2:00 PMUK
CPI (YoY)
% Change
Mar
2.70
2.70
7:30 AMChina
Industrial Production (YoY)
% Change
Mar
6.20
6.30
Apr 18, 2018
7:30 AMChina
Real GDP (YoY)
% Change
1Q
6.80
6.80
2:30 PMEuro Zone Euro-Zone CPI (YoY)
%
Mar F
1.40
1.40
Apr 19, 2018
6:00 PMUS
Initial Jobless claims
Thousands
Apr 14
233.00
230.00
Apr 20, 2018
7:30 PMEuro Zone Euro-Zone Consumer Confidence
Value
Apr A
0.10
(0.10)
Apr 23, 2018
1:00 PMGermany PMI Services
Value
Apr P
53.90
1:00 PMGermany PMI Manufacturing
Value
Apr P
58.20
7:30 PMUS
Existing home sales
Million
Mar
5.54
5.55
Apr 24, 2018
7:30 PMUS
Consumer Confidence
S.A./ 1985=100
Apr
127.70
126.00
7:30 PMUS
New home sales
Thousands
Mar
618.00
630.00
Source: Bloomberg, Angel Research
Market Outlook
April 17, 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
April 17, 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)
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
-
Source: IMF, Angel Research refer as on 13 April, 2018
Market Outlook
April 17, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
84,334
(2.4)
6.9
30.2
Russia
Micex
4,206
1.4
7.1
11.4
India
Nifty
10,481
1.0
(1.0)
14.0
China
Shanghai Composite
3,159
(6.0)
(8.3)
(5.2)
South Africa
Top 40
49,883
(4.7)
(5.4)
6.9
Mexico
Mexbol
48,768
0.4
(1.9)
(1.8)
Indonesia
LQ45
1,023
(2.3)
(5.1)
10.4
Malaysia
KLCI
1,868
0.6
2.5
7.1
Thailand
SET 50
1,166
(2.0)
0.1
16.7
USA
Dow Jones
24,360
(2.6)
(4.0)
19.1
UK
FTSE
7,265
0.7
(6.4)
(0.9)
Japan
Nikkei
21,779
(0.9)
(8.1)
17.1
Germany
DAX
12,442
1.8
(6.1)
2.7
France
CAC
5,315
1.4
(3.7)
4.7
Source: Bloomberg, Angel Research refer as on 13 April, 201868in4
