Market Outlook
March 21, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open flat tracking global indices and SGX Nifty.
BSE Sensex
0.2
74
32,997
U.S. stocks are higher during the last trading session despite another rough session
Nifty
0.3
30
10,124
for Facebook. The Dow Jones tumbled to 1.3% to close at 24,611. The NASDAQ
Mid Cap
0.2
33
15,996
dropped down by 1.8% to close at 7,344.
Small Cap
(0.2)
(36)
17,192
U.K. stocks rose on Tuesday as a technology selloff faded and investors welcomed a
Bankex
(0.4)
(115)
27,194
preliminary deal on a transitional agreement that will lead to the orderly withdrawal
of the U.K. Traders also looked ahead to the Fed and BoE meetings due this week
Global Indices
Chg (%)
(Pts)
(Close)
for further direction. The FTSE 100 was down by 1.7% to end at 7,043.
Dow Jones
0.5
116
24,727
On domestic front, Indian shares fluctuated before finishing modestly higher on
Nasdaq
0.3
20
7,364
Tuesday as traders covered short positions after recent string of losses. The BSE
FTSE
0.3
18
7,061
Sensex ended up by 0.2% at 32,997.
Nikkei
(0.5)
(100)
21,381
News Analysis
Hang Seng
1.2
378
31,928
IOCL to commission Rs 30bn polypropylene facility in six months
Shanghai Com
0.6
19
3,310
Detailed analysis on Pg2
Advances / Declines
BSE
NSE
Investor’s Ready Reckoner
Advances
1,050
691
Key Domestic & Global Indicators
Declines
1,662
1,124
Stock Watch: Latest investment recommendations on 150+ stocks
Unchanged
165
51
Refer Pg5 onwards
Top Picks
Volumes (` Cr)
CMP
Target
Upside
Company
Sector
Rating
BSE
3,552
(`)
(`)
(%)
Blue Star
Capital Goods Accumulate
764
867
13.5
NSE
27,610
Dewan Housing Finance
Financials
Buy
504
720
43.0
Century Plyboards
Forest Product
Buy
320
400
24.9
Net Inflows (` Cr)
Net
Mtd
Ytd
Navkar Corporation
Others
Buy
152
265
73.9
FII
513
9,663
10,155
KEI Industries
Capital Goods
Buy
361
436
20.8
*MFs
(1,076)
2,087
27,291
More Top Picks on Pg4
Key Upcoming Events
Top Gainers
Price (`)
Chg (%)
Previous
Consensus
Date
Region
Event Description
Reading
Expectations
RELINFRA
453
6.9
Mar 21
UK
Jobless claims change
(7.20)
JINDALSTEL
234
5.8
Mar 21
US
Existing home sales
5.38
5.40
BALRAMCHIN
86
5.5
Mar 21
US
FOMC rate decision
1.50
1.75
Mar 22
Germany PMI Manufacturing
60.60
59.80
MARICO
318
5.2
Mar 22
US
Initial Jobless claims
226.00
225.00
VAKRANGEE
273
4.8
More Events on Pg7
Top Losers
Price (`)
Chg (%)
GSPL
177
-4.9
CENTRALBK
74
-4.0
CANBK
254
-3.8
SINTEX
20
-3.7
GET&D
383
-3.4
As on March 20, 2018
Market Outlook
March 21, 2018
News Analysis
IOCL to commission Rs 30bn polypropylene facility in six months
Indian Oil Corporation Ltd (IOCL) aims to commission the polypropylene facility
coming up near its Paradip oil refinery within the next six months. "The new
polypropylene unit in Paradip, which will be commissioned in around next six
months, can catalyse a host of downstream industries in the (eastern) region
besides opening of new markets in Myanmar and Bangladesh, in consistency with
the Government's look east policy".
The unit is estimated to cost Rs 31.5 billion. The plant would make use of
Spheripol Technology from Basell, Italy, and will be capable of producing different
grades of polypropylene. However, it will commence with the production of homo
grade initially. The major facilities envisaged under the project are cooker LPG
treater unit, warehouse for polypropylene storage and other associated facilities
such as flare and cooling tower.
Economic and Political News
Delhi HC asks DGCA to file affidavit on airworthiness of A320 Neos
UGC grants 62 higher educational institutions full autonomy
35 blocks of iron ore among other minerals to be auctioned in April, May
Corporate News
RInfra arm moves Delhi HC over arbitration award against DMRC, stocks up
5%
Tata steel to speed up acquisition of Subarnarkeha port in North Odisha
Mahindra bets big on new UV launches, EVs to make a strong comeback
Market Outlook
March 21, 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
25,158
2,104
2,441
16.0
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 the
Blue Star
7,329
764
867
13.5
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
15,797
504
720
43.0
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 of
ICICI Bank
1,87,470
292
416
42.6
NPA would reduce provision cost, which would help to
report better ROE.
High order book execution in EPC segment, rising B2C
KEI Industries
2,828
361
436
20.8
sales and higher exports to boost the revenues and
profitability
Expected to benefit from the lower capex requirement
Music Broadcast Limited
2,147
376
475
26.2
and 15 year long radio broadcast licensing.
Massive capacity expansion along with rail advantage
Navkar Corporation
2,293
152
265
73.9
at ICD as well CFS augur well for the company
Strong brands and distribution network would boost
Siyaram Silk Mills
2,967
633
851
34.4
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 the
TV Today Network
2,799
469
552
17.6
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
2,65,782
8,798
10,619
20.7
Gujarat plant will also enable higher operating
leverage which will be margin accretive.
We expect loan book to grow at 24.3% over next two
GIC Housing
2,007
373
655
75.8
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 healthy
Century Plyboards
7,114
320
400
24.9
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 next
LT Foods
2,736
86
128
49.6
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 distribution network is
Safari Industries
1,160
522
650
24.6
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 operating
HSIL Ltd
2,809
389
510
31.3
margin due price hike in container glass segment,
turnaround in consumer business.
We expect financialisation of savings and increasing
Aditya Birla Capital
33728
146
218
49.5
penetration in Insurance & Mutual fund would ensure
steady growth.
Source: Company, Angel Research
Market Outlook
March 21, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,833
288
360
24.9
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
2,388
1,600
2,178
36.1
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
5,768
115
160
39.6
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
1,602
2,020
2,500
23.7
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
4,023
328
395
20.4
~`2,478cr over FY2017-20E mainly due to healthy
growth in plywood & lamination business on the back
of strong brand and distribution network
Source: Company, Angel Research
