Market Outlook
January 23, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open positive tracking global indices and SGX Nifty.
BSE Sensex
0.8
286
35,798
US stocks moved mostly higher over the course of the trading session extending the
Nifty
0.7
71
10,966
strong upward move seen last week. With the gains, all three of the major averages
Mid Cap
0.6
111
17,877
reached new record closing highs. The Dow Jones ended on an upside front of 0.5%
Small Cap
0.8
152
19,608
at 26,215 and the Nasdaq Composite edged up to 7,408.
Bankex
0.5
144
30,618
U.K. shares were little changed in lackluster trade as investors digested the
implications of the U.S. government shutdown and bookmakers' shares fell sharply
Global Indices
Chg (%)
(Pts)
(Close)
on fears of regulatory clampdown. The FTSE 100 was down by 0.2% to close at
Dow Jones
0.5
143
26,215
7,715.
Nasdaq
1.0
72
7,408
On domestic front, Indian shares hit fresh record highs for the fourth consecutive
FTSE
(0.2)
(15)
7,715
session with underlying sentiment helped by strong earnings results from Reliance
Nikkei
0.9
221
24,038
Industries and optimism about an improving economy. The Sensex edged up to
Hang Seng
0.7
240
32,633
0.8% at 35,798 while the Nifty ended at 10,966 with an upside of 0.7%.
Shanghai Com
0.6
21
3,522
News Analysis
Advances / Declines
BSE
NSE
Book Profit on Apollo Micro System
Advances
1,609
983
Detailed analysis on Pg2
Declines
1,346
799
Investor’s Ready Reckoner
Unchanged
143
70
Key Domestic & Global Indicators
Stock Watch: Latest investment recommendations on 150+ stocks
Volumes (` Cr)
Refer Pg5 onwards
BSE
4,923
NSE
35,905
Top Picks
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
Net Inflows (` Cr)
Net
Mtd
Ytd
Blue Star
Capital Goods Accumulate
778
867
11.4
FII
1,088
6,323
6,323
Dewan Housing Finance
Financials
Buy
631
712
12.8
Asian Granito
Other
Accumulate
596
651
9.2
*MFs
168
4,412
4,412
Navkar Corporation
Other
Buy
201
265
31.6
KEI Industries
Capital Goods Accumulate
397
436
9.9
Top Gainers
Price (`)
Chg (%)
More Top Picks on Pg4
Sobha
599
11.8
Key Upcoming Events
Godrejprop
903
9.8
Previous
Consensus
Date
Region
Event Description
Justdial
603
8.5
Reading
Expectations
Jublfood
2,269
8.5
Jan23
Euro Zone Euro-Zone Consumer Confidence
0.50
0.60
Jan24
Germany PMI Services
55.80
55.50
Mindtree
756
7.7
Jan24
US
Existing home sales
5.81
5.70
Jan24
Germany PMI Manufacturing
63.30
63.00
Top Losers
Price (`)
Chg (%)
Jan24
UK
Jobless claims change
5.90
More Events on Pg7
Gruh
592
(14.3)
Videoind
21
(4.8)
Chennpetro
427
(4.1)
Hindpetro
402
(3.6)
Kansainer
509
(3.6)
As on January 22, 2018
Market Outlook
January 23, 2018
News Analysis
Booked the profit on Apollo micro systems (Returns generated ~65%)
Apollo micro systems shown strong listing gain (the company has generated ~65%
returns today). Considering the listing gain and valuation, investor should the
booked the profit on this stock.
About company: Incorporated in 1997, Apollo Micro Systems Limited (AMSL) is a
Hyderabad based company engaged in the business of electronic, electro-
mechanical, engineering designs, manufacturing and supply. Company designs,
develops and sell high performance, mission and time critical solutions to Defense,
Space and Home Land Security for Ministry of Defense, government controlled
public sector undertakings and private sectors. AMSL’s manufacturing facility is
located at Hyderabad.
Economic and Political News
NIIF's first investment: A $3bn fund for logistics biz with UAE's DP World
Port operator DP World, India's NIF to invest up to $3bn in sea projects
India set to become food exhibition, distribution hub with 'Indus Foods'
Corporate News
Siemens Gamesa wins
326Mw wind power orders from independent
producers
Tata Sons should consider buying Shapoorji Pallonji's stake
Larsen & Toubro launches second offshore patrol vessel for Indian Navy
Ashok Leyland eyes 5-fold increase in light CVs' export; to invest Rs 4bn
Market Outlook
January 23, 2018
Quarterly Bloomberg Brokers Consensus Estimate
Indiabulls Housing Finance - Jan 23, 2018
Particulars ( ` cr)
3QFY18E
3QFY17
y-o-y (%)
2QFY18
q-o-q (%)
PAT
895
753
18.9
796
12.4
Crompton - Jan 23, 2018
Particulars ( ` cr)
3QFY18E
3QFY17
y-o-y (%)
2QFY18
q-o-q (%)
Sales
996
888.9
12
959.7
3.8
EBIDTA
120.7
99.3
21.5
120.7
0
%
12.1
11.1
12.5
PAT
110.3
57.4
92.2
70.8
55.8
Market Outlook
January 23, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
Strong growth in domestic business due to its
leade`hip in acute therapeutic segment. Alkem expects
Alkem Laboratories
26,818
2,243
2,441
8.8
to launch more products in USA, which bodes for its
international business.
We expect the company would report strong
Asian Granito
1,793
596
651
9.2
profitability owing to better product mix, higher B2C
sales and amalgamation synergy.
Favorable outlook for the AC industry to augur well for
Cooling products business which is out pacing the
Blue Star
7,463
778
867
11.4
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
19,793
631
712
12.8
presence in tier-II & III cities where the growth
opportunity is immense.
Loan growth is likely to pick up after a sluggish FY17.
Lower credit cost will help in strong bottom-line
Karur Vysya Bank
8,569
118
160
35.7
growth. Increasing share of CASA will help in NIM
improvement.
High order book execution in EPC segment, rising B2C
KEI Industries
3,107
397
436
9.9
sales and higher exports to boost the revenues and
profitability
Expected to benefit from the lower capex requirement
Music Broadcast
2,314
406
475
17.1
and 15 year long radio broadcast licensing.
Massive capacity expansion along with rail advantage
Navkar Corporation
3,031
201
265
31.6
at ICD as well CFS augur well for the company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,403
726
851
17.2
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
2,694
452
500
10.7
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 Suzuki
2,81,135
9,307
10,619
14.1
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
2,452
455
655
43.8
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
7,536
339
400
17.9
growth in plywood & lamination business, forayed into
Century Plyboards India
MDF & Particle boards on back of strong brand &
distribution network.
We expect sales/PAT to grow at 13.5%/20% over next
LT Foods
2,979
93
128
37.4
two years on the back of strong distribution network &
addition of new products in portfolio.
We expect sales/PAT to grow at 13%/16% over next
two years on the back of strong healthy demand in
Ruchira Papers
444
198
244
23.2
writing & printing paper and Kraft paper. Further,
China had banned making paper from waste pulp
which would benefit Indian paper companies.
We expect financialisation of savings and increasing
Aditya Birla Capital
39253
178
230
29
penetration in Insurance & Mutual fund would ensure
steady growth.
Source: Company, Angel Research
Market Outlook
January 23, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,925
295
360
22.0
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
2,870
1,923
2,178
13.3
demand growth in plastic division. On the bottom-line
front, we estimate ~10% CAGR to `162cr owing to
improvement in volumes.
We expect sales/PAT to grow at 9%/14% over next two
years on the back of healthy demand growth in
Shreyans Industries
278
201
247
22.9
printing. Further, China had banned making paper
from waste pulp which would benefit Indian paper
companies.
The prism has diversified exposure in the different
segment such as Cement, Tile & ready mix concrete.
Prism Cement
7,178
143
160
12.2
Thus we believe, PCL is in the right place to capture
ongoing government spending on affordable housing
and infrastructure projects.
Source: Company, Angel Research
Market Outlook
January 23, 2018
Key Upcoming Events
Result Calendar
Date
Company
January 23, 2018
NIIT
January 24, 2018
Canara Bank, Vijaya Bank, Mphasis, KPIT Cummins, Radico Khaitan, Interglobe Aviation
Source: Bloomberg, Angel Research
Global economic events release calendar
Bloomberg Data
Date
Time
Country
Event Description
Unit
Period
Last Reported
Estimated
Jan 23, 2018
8:30 PMEuro Zone Euro-Zone Consumer Confidence
Value
Jan A
0.50
0.60
Jan 24, 2018
2:00 PMGermany PMI Services
Value
Jan P
55.80
55.50
8:30 PMUS
Existing home sales
Million
Dec
5.81
5.70
2:00 PMGermany PMI Manufacturing
Value
Jan P
63.30
63.00
3:00 PMUK
Jobless claims change
% Change
Dec
5.90
Jan 25, 2018
6:15 PMEuro Zone ECB announces interest rates
%
Jan 25
-
-
7:00 PMUS
Initial Jobless claims
Thousands
Jan 20
220.00
235.00
8:30 PMUS
New home sales
Thousands
Dec
733.00
675.00
Jan 26, 2018
3:00 PMUK
GDP (YoY)
% Change
4Q A
1.70
1.40
7:00 PMUS
GDP Qoq (Annualised)
% Change
4Q A
3.20
3.00
Jan 30, 2018
8:30 PMUS
Consumer Confidence
S.A./ 1985=100
Jan
122.10
123.00
3:30 PMEuro Zone Euro-Zone GDP s.a. (QoQ)
% Change
4Q A
0.70
Jan 31, 2018
2:25 PMGermany Unemployment change (000's)
Thousands
Jan
(29.00)
6:30 AMChina
PMI Manufacturing
Value
Jan
51.60
51.50
Feb 01, 2018
3:00 PMUK
PMI Manufacturing
Value
Jan
56.30
Source: Bloomberg, Angel Research
Market Outlook
January 23, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
10.0
9.0
8.4
9.1
9.0
8.0
8.0
7.9
7.0
7.6
7.5
8.0
7.3
7.2
7.0
6.0
4.8
7.0
6.3
5.0
4.4
4.1
6.1
6.1
5.7
3.5
3.2
6.0
4.0
2.9
3.0
2.0
5.0
2.0
1.2
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
4.9
52.0
5.0
3.9
50.0
3.7
3.6
4.0
3.3
3.3
3.2
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
January 23, 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
Market Outlook
January 23, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
81,675
11.7
6.2
28.3
Russia
Micex
2,309
8.2
10.2
6.9
India
Nifty
10,966
5.0
7.7
30.3
China
Shanghai Composite
3,501
6.8
4.0
13.2
South Africa
Top 40
54,166
6.2
5.1
17.5
Mexico
Mexbol
49,974
3.2
(0.3)
7.9
Indonesia
LQ45
1,102
6.8
13.5
24.0
Malaysia
KLCI
1,833
5.5
5.1
9.3
Thailand
SET 50
1,186
5.7
7.3
21.1
USA
Dow Jones
26,215
5.7
13.2
32.4
UK
FTSE
7,715
2.4
2.6
7.9
Japan
Nikkei
23,816
5.6
12.0
24.7
Germany
DAX
13,464
1.1
3.2
16.6
France
CAC
5,542
2.2
3.2
13.9
Source: Bloomberg, Angel Research p68in4
Market Outlook
January 23, 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 Participant 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 authority 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 should 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 determine the merits and
risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the
contrary view, if any.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannot
testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.
While Angel Broking Pvt. Limited endeavors to update on a reasonable basis the information discussed in this material, there may be
regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from
or in connection with the use of this information.
