Market Outlook
April 24, 2017
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open positive tracking the SGX Nifty.
BSE Sensex
(0.2)
(57)
29,365
U.S. Markets closed lower in choppy trade Friday as investors looked ahead to the
Nifty
(0.2)
(17)
9,119
French election. Wall Street also digested falling oil prices and comments from the
Mid Cap
(0.0)
(2)
14,488
Trump administration on tax reform.
Small Cap
0.3
138
15,166
The European markets ended Friday's session with mixed results. Investors were in a
Bankex
(0.6)
(6)
24,438
cautious mood due to the upcoming French election. Recent polls have suggested
that Sunday's race is too close to call amid questions about the impact of yesterday's
terrorist attack that left one French police officer dead and two other people
Global Indices
Chg (%)
(Pts)
(Close)
wounded.
Dow Jones
(0.15)
131
20,548
Indian shares erased early gains to end a tad lower on Friday ahead of this
Nasdaq
(0.11)
57
2,349
weekend's French presidential election. The benchmark BSE Sensex ended down 57
FTSE
(0.6)
4
7,115
points or 0.19% at 29,365, while the broader Nifty index dropped 17 points or
Nikkei
(1.0)
190
18,621
0.19% to 9,119.
Hang Seng
0.6
215
24,042
Shanghai Com
0.0
1
3,174
News Analysis
Sun Pharmaceutical Industries
Detailed analysis on Pg2
Advances / Declines
BSE
NSE
Advances
1,449
1,827
Investor’s Ready Reckoner
Declines
1,422
857
Key Domestic & Global Indicators
Unchanged
143
80
Stock Watch: Latest investment recommendations on 150+ stocks
Refer Pg6 onwards
Volumes (` Cr)
Top Picks
BSE
4,029
CMP
Target
Upside
Company
Sector
Rating
NSE
25,406
(`)
(`)
(%)
Blue Star
Capital Goods
Accumulate
686
760
10.8
Dewan Housing Fin. Financials
Accumulate
415
460
10.9
#Net Inflows (` Cr)
Net
Mtd
Ytd
Mahindra Lifespace
Real Estate
Buy
410
522
27.3
FII
(978)
(3,227)
40,994
Navkar Corporation Others
Buy
207
265
28.2
MFs
1,132
6,027
15,465
KEI Industries
Capital Goods
Accumulate
212
239
12.7
More Top Picks on Pg4
Top Gainers
Price (`)
Chg (%)
Key Upcoming Events
Network18
190
9.4
Previous
Consensus
Date
Region
Event Description
Reading
Expectations
SCI
84
8.5
Apr 25, 2017 Euro Zone ECB announces interest rates
0.00
Religare
209
6.8
Apr 25, 2017 US
Consumer Confidence
125.60
123.90
Gmrinfra
18
6.7
Apr 27, 2017 US
New home sales
592.00
590.00
Southbank
24
6.2
Apr 28, 2017 US
GDP QoQ (Annualised)
2.10
1.00
Apr 28, 2017 UK
GDP (YoY)
1.90
2.30
Apr 30, 2017 China
PMI Manufacturing
51.80
--
Top Losers
Price (`)
Chg (%)
More Events on Pg5
Hindzinc
274
(3.4)
Mfsl
630
(3.2)
Gsfc
120
(2.8)
Corpbank
54
(2.5)
Bankbaroda
175
(2.4)
#As on April 21, 2017
Market Outlook
April 24, 2017
News Analysis
Sun Pharmaceutical Industries
Sun Pharmaceutical Industries is reported to have received 11 observations from
the US health regulator for its Dadra unit. While inspecting the plant, the US Food
& Drug Administration found incomplete lab records at the Pharmaceutical major's
Dadra plant. These observations include failure to produce appropriate master or
control record for each batch of drugs and failure to properly investigate batches
that don't meet specifications.
Inspection of the plant by USFDA was concluded in the first week of this month.
Dadra site is the biggest unit for the company after Halol plant, for supplying drug
in the United States. The problem for the company may aggravate as its Halol
plant has already been under import alert. In FY2016, Halol contributed ~7-9% of
total sales and >15% of US sales for the company.
While currently these are only observations and will not lead to any negative
impact on the earnings of the company. Though if not rectified could let to
significant impact on US numbers. Apart from these two facilities, the company has
only one facility in Gujarat in India, which is for API and formulation both. Also,
recently the company got its Mohali facility, came out of the US import Alert.
Currently, we maintain our buy on the stock with target price of `847.
Economic and Political News
India's growth projected to bounce back in 2018: IMF
Finance Ministry approves 8.65% interest rate on EPF for 2016-17
Imposing GST on low-value imports doesn't level the playing field
Corporate News
ACC Q1 net drops 9% at `211cr
KKR sells 5.6% in Dalmia Bharat for `575cr
Narayana Hrudayalaya to acquire Panacea arm for `180cr
Market Outlook
April 24, 2017
Quarterly Bloomberg Brokers Consensus Estimate
Ultratech Cement Ltd - Apr 24, 2017
Particulars ( ` cr)
4QFY17E
4QFY16
y-o-y (%)
3QFY17
q-o-q (%)
Net sales
6,493
6,436
0.9
5,540
17.2
EBITDA
1,249
1,353
(7.7)
1,113
12.2
EBITDA margin (%)
19.2
21.0
20.1
Net profit
673
681
(1.2)
563
19.5
Wipro Ltd Consol - Apr 25, 2017
Particulars ( ` cr)
4QFY17E
4QFY16
y-o-y (%)
3QFY17
q-o-q (%)
Net sales
13,865
13,632
1.7
13,688
1.3
EBITDA
2,827
2,805
0.8
2,788
1.4
EBITDA margin (%)
20.4
20.6
20.4
Net profit
2,109
2,235
(5.6)
2,110
(0.0)
Axis Bank Ltd - Apr 25, 2017
Particulars ( ` cr)
4QFY17E
4QFY16
y-o-y (%)
3QFY17
q-o-q (%)
Net profit
803
2,154
(62.7)
580
38.6
Mahindra & Mahindra Financial Services L - Apr 25, 2017
Particulars ( ` cr)
4QFY17E
4QFY16
y-o-y (%)
3QFY17
q-o-q (%)
Net profit
338
370
(8.8)
(16)
0.0
Market Outlook
April 24, 2017
Top Picks ★★★★★
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
Strong growth in domestic business due to its leadership in
Alkem Laboratories
24,606
2,058
2,257
9.7
acute therapeutic segment. Alkem expects to launch more
products in USA, which bodes for its international business.
We expect the company would report strong profitability
Asian Granito
1,153
383
405
5.7
owing to better product mix, higher B2C sales and
amalgamation synergy..
Among the top 4 players in the consumer durables segment.
Bajaj Electricals
3,545
350
395
12.9
Improved profitability backed by turn around in E&P segment.
Strong order book lends earnings visibility.
Favourable outlook for the AC industry to augur well for
Cooling products business which is out pacing the market
Blue Star
6,556
686
760
10.8
growth. EMPPAC division's profitability to improve once
operating environment turns around..
With a focus on the low and medium income (LMI) consumer
Dewan Housing Finance
12,986
415
460
10.9
segment, the company has increased its presence in tier-II &
III cities where the growth opportunity is immense.
Strong loan growth backed by diversified loan portfolio and
Equitas Holdings
5,794
172
235
37.0
adequate CAR. ROE & ROA likely to remain decent as risk of
dilution remains low. Attractive valuations considering growth.
Economic recovery to have favourable impact on advertising
& circulation revenue growth. Further, the acquisition of a
Jagran Prakashan
6,505
196
225
14.8
radio business (Radio City) would also boost the company's
revenue growth.
High order book execution in EPC segment, rising B2C sales
KEI Industries
1,647
212
239
12.7
and higher exports to boost the revenues and profitability
Speedier execution and speedier sales, strong revenue visibilty
Mahindra Lifespace
1,803
410
522
27.3
in short-to-long run, attractive valuations
Higher growth in domestic branded sales and healthy export
Mirza International
1,096
91
107
17.5
to boost the profitability.
Massive capacity expansion along with rail advantage at ICD
Navkar Corporation
2,947
207
265
28.2
as well CFS augurs well for the company
Strong brands and distribution network would boost growth
Siyaram Silk Mills
1,594
1,700
1,872
10.1
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 radio business,
TV Today Network
1,626
273
344
26.2
and anticipated growth in ad spends by corporates to benefit
the stock.
Source: Company, Angel Research
Market Outlook
April 24, 2017
Key Upcoming Events
Result Calendar
Date
Company
April 24, 2017
Rallis, UltraTech Cement, Hexaware
April 25, 2017
Wipro, Persistent
April 26, 2017
KPIT Cummins
April 27, 2017
Maruti, TVS Motor, Kotak Mah. Bank
Source: Bloomberg, Angel Research
Global economic events release calendar
Bloomberg Data
Date
Time
Country
Event Description
Unit
Period
Last Reported
Estimated
Apr 25, 2017
5:15 PM Euro Zone ECB announces interest rates
%
Apr 27
0.00
7:30 PM US
Consumer Confidence
S.A./ 1985=100
Apr
125.60
123.90
Apr 27, 2017
7:30 PM US
New home sales
Thousands
Mar
592.00
590.00
Apr 28, 2017
6:00 PM US
GDP Qoq (Annualised)
% Change
1Q A
2.10
1.00
2:00 PM UK
GDP (YoY)
% Change
1Q A
1.90
2.30
Apr 30, 2017
6:30 AM China
PMI Manufacturing
Value
Apr
51.80
May 02, 2017
2:00 PM UK
PMI Manufacturing
Value
Apr
54.20
May 03, 2017
1:25 PM Germany Unemployment change (000's)
Thousands
Apr
-30.00
11:30 PM US
FOMC rate decision
%
May 3
1.00
1.00
2:30 PM Euro Zone Euro-Zone GDP s.a. (QoQ)
% Change
1Q A
0.50
May 05, 2017
6:00 PM US
Change in Nonfarm payrolls
Thousands
Apr
98.00
6:00 PM US
Unnemployment rate
%
Apr
4.50
May 08, 2017
7:00 AM China
Consumer Price Index (YoY)
% Change
Apr
0.90
May 10, 2017
China
Exports YoY%
% Change
Apr
16.40
India
Imports YoY%
% Change
Apr
45.30
Source: Bloomberg, Angel Research
Market Outlook
April 24, 2017
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
8.6
9.0
8.3
8.4
7.0
5.6
7.7
7.8
6.0
8.0
7.4
7.2
5.0
6.9
7.0
6.8
4.0
3.3
7.0
6.0
3.0
2.2
6.0
5.6
1.3
2.0
0.7
1.0
5.0
-
4.0
(1.0)
(0.1)
(0.7)
(2.0)
(1.3)
(1.2)
3.0
(3.0)
(1.9)
(2.5)
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
(%)
7.0
54.0
6.1
5.8
5.8
6.0
5.5
5.1
52.0
5.0
4.3
4.2
3.8
50.0
3.6
3.7
4.0
3.4
3.2
48.0
3.0
46.0
2.0
1.0
44.0
-
42.0
Source: MOSPI, Angel Research
Source: Market, Angel Research; Note: Level above 50 indicates expansion
Exhibit 5: Exports and imports growth trends
Exhibit 6: Key policy rates
(%)
Exports yoy growth
Imports yoy growth
(%)
Repo rate
Reverse Repo rate
CRR
50.0
7.00
40.0
6.50
30.0
6.00
20.0
5.50
10.0
5.00
0.0
4.50
(10.0)
4.00
(20.0)
3.50
(30.0)
3.00
Source: Bloomberg, Angel Research
Source: RBI, Angel Research
Market Outlook
April 24, 2017
Global watch
Exhibit 1: Latest quarterly GDP Growth (%, yoy) across select developing and developed countries
(%)
8.0
6.9
0.7
5.3
6.0
4.9
4.5
4.0
3.0
0.3
1.9
2.0
1.2
1.6
1.1
2.0
-
(2.0)
(2.5)
(4.0)
Source: Bloomberg, Angel Research
Exhibit 2: 2016 GDP Growth projection by IMF (%, yoy) across select developing and developed countries
(%)
7.2
7.0
6.6
6.0
5.1
5.0
4.5
4.0
3.0
3.0
2.3
2.0
1.4
1.6
2.0
1.4
1.2
0.2
0.8
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
April 24, 2017
Research Team Tel: 022 - 39357800
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