Market Outlook
June 25, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
0.7
257
35,690
U.S. Stocks moved mostly higher during trading on Friday, although the tech-heavy
Nifty
0.8
81
10,822
Nasdaq ended the day modestly below the unchanged line. The advance by the
Mid Cap
0.5
72
15,840
Dow allowed the blue chip index to avoid its longest losing streak in over forty years.
Small Cap
0.1
12
16,540
The Dow Jones rises by 0.5% to 24,580 and the Nasdaq slid by 0.3% to 7,692.
Bankex
1.0
300
29,897
U.K. stocks rose notably on Friday even as the pound continued to push higher
following a slightly hawkish tilt from the Bank of England. Oil prices rose more than
Global Indices
Chg (%)
(Pts)
(Close)
1 percent as investors await the OPEC meet outcome. The benchmark FTSE 100 was
up by 0.7% to 7,609.
Dow Jones
0.5
120
24,580
Nasdaq
(0.3)
(20)
7,692
On domestic front, Indian shares mirroring firm cues from global markets as better-
FTSE
0.7
50
7,609
than-expected Eurozone PMI data as well as easing worries over Italy and Greece
helped improve investors' appetite for risk. The BSE Sensex ended up by 0.7% to
Nikkei
(0.8)
(176)
22,517
35,690.
Hang Seng
0.1
43
29,339
Shanghai Com
0.5
14
2,890
News Analysis
JSW Steel to invest up to $500mn to acquire, upgrade Acero Junction Inc
Advances / Declines
BSE
NSE
Detailed analysis on Pg2
Advances
1,139
470
Declines
1,444
1,308
Investor’s Ready Reckoner
Unchanged
141
86
Key Domestic & Global Indicators
Stock Watch: Latest investment recommendations on 150+ stocks
Volumes (` Cr)
Refer Pg5 onwards
BSE
2,344
Top Picks
NSE
24,972
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
Blue Star
Capital Goods
Buy
649
867
33.6
Net Inflows (` Cr)
Net
Mtd
Ytd
Dewan Housing Finance
Financials
Accumulate
637
720
13.1
FII
175
432
-1,830
Parag Milk Foods
Others
Buy
335
410
22.6
*MFs
98
1,953
61,325
Navkar Corporation
Others
Buy
134
230
71.1
KEI Industries
Capital Goods
Buy
430
589
36.8
More Top Picks on Pg4
Top Gainers
Price (`)
Chg (%)
ADANITRANS
165
6.4
Key Upcoming Events
Previous
Consensus
VAKRANGEE
53
5.0
Date
Region
Event Description
ReadingExpectations
INOXWIND
92
5.0
Jun 25, 2018 Germany PMI Manufacturing
55.90
56.30
FRETAIL
576
4.5
Jun 26, 2018 US
Consumer Confidence
128.00
127.50
INDIACEM
112
4.5
Jun 28, 2018 US
GDP Qoq (Annualised)
2.20
2.20
Jun 28, 2018 US
Initial Jobless claims
218.00
Jun 28, 2018 Euro Zone Euro-Zone Consumer Confidence
(0.50)
(0.50)
Top Losers
Price (`)
Chg (%)
More Events on Pg7
RENUKA
14
-6.2
SRF
1671
-6.1
HCC
12
-5.1
KWALITY
27
-4.9
MAHLIFE
608
-4.4
As on June 23, 2018
Market Outlook
June 25, 2018
News Analysis
JSW Steel to invest up to $500mn to acquire, upgrade Acero
Junction Inc
JSW Steel will invest up to USD 500 million (about Rs 3,390 crore) to acquire,
upgrade and enhance US-based integrated steel manufacturing unit Acero
Junction Inc in phases. Acero Junction Inc, an integrated steel manufacturing unit
with a potential capacity of 3 MTPA (million tonne per annum), is located in Ohio.
The proposed investment will be made in two phases. "This investment takes JSW's
overall investment blueprint for the US market, to produce American melt and
manufactured steel, to up to USD 1 billion," the company said in a regulatory
filing.
In phase 1, JSW will revamp and restart the electric arc furnace and the slab
caster, and modernise the hot strip mill. The proposed investment, including the
cost of acquisition, is expected to be approximately USD 250 million. JSW
Steel said in phase 2, depending upon the economic viability and prevailing
market conditions, the company will evaluate the possibility of adding another
electric arc furnace as well as additional manufacturing equipment at the hot strip
mill to make the Ohio facility a fully integrated unit with 3 MTPA capacity.
Economic and Political News
Corporate News
Market Outlook
June 25, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
Favorable outlook for the AC industry to augur well
for Cooling products business which is out pacing
Blue Star
6,239
649
867
33.6
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
19,975
637
720
13.1
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
193,462
301
416
38.3
of NPA would reduce provision cost, which would
help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,373
430
589
36.8
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
1,801
316
475
50.5
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,024
134
230
71.1
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would boost
Siyaram Silk Mills
2,586
552
851
54.3
growth going ahead. Stock currently trades at an
inexpensive valuation.
GST regime and the Gujarat plant are expected to
Maruti
268,540
8,890
10,619
19.5
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,032
377
655
73.6
two year; change in borrowing mix will help in NIM
improvement
Third largest brand play in luggage segment
Increased product offerings and improving
Safari Industries
1,367
613
720
17.4
distribution network is leading to strong growth in
business. Likely to post robust growth for next 3-4
years
Source: Company, Angel Research
Market Outlook
June 25, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
30,146
137
218
59.2
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
2,814
335
410
22.6
Value Added Products and reduction in interest
cost is likely to boost margins and earnings in next
few years.
We expect MCL to report net revenue CAGR of
~15% to ~`450cr over FY2018-20E mainly due
to strong growth in online matchmaking &
Matrimony.com Ltd
1,645
724
1,016
40.4
marriage related services. On the bottom-line
front, we expect a CAGR of ~28% to `82cr over
the same period on the back margin
improvement.
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
HDFC Bank
541,955
2,082
2,315
11.2
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.
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
M&M
1,13,130
910
1,050
15.4
strong growth in Tractors segment coupled by its
strong brand recall and improvement in rural
sentiment
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
Amber Enterprises
3,069
977
1230
25.9
provider for the major brands in the RAC industry
and currently serves eight out of the 10 top RAC
brands in India
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
Bata India
10,697
834
896
7.4
~`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
SHTF is in the sweet spot with benefits from
stronger CV volumes, NIMs unaffected by rising
Shriram Transport Finance
33,786
1,489
1,764
18.5
bond yields on the back of stronger pricing power
and an enhancing ROE by 750bps over FY18-
20E, supported by decline in credit cost.
Source: Company, Angel Research
Market Outlook
June 25, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,587
270
360
33.5
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
Nilkamal
2,538
1,701
2,178
28.0
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 is the Indian market leader in
liquid insulation segment used in electrical
equipments like motors, transformers etc. It derives
Elantas Beck India Ltd
1,605
2,025
2,500
23.4
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
2,993
244
395
61.9
~`2,478cr over FY2017-20E mainly due to healthy
growth in plywood & lamination business on the
back of strong brand and distribution network
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
GMM Pfaudler Ltd
1,227
840
920
9.6
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.
L&T Fin’s new management is on track to achieve
L&T Finance Holding
32,271
162
210
29.9
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
June 25, 2018
Key Upcoming Events
Global economic events release calendar
Bloomberg Data
Date
Time Country
Event Description
Unit
Period
Last Reported
Estimated
Jun 25, 2018
1:00 PMGermany
PMI Manufacturing
Value
Jun P
55.90
56.30
Jun 26, 2018
7:30 PMUS
Consumer Confidence
S.A./ 1985=100
Jun
128.00
127.50
Jun 28, 2018
6:00 PMUS
GDP Qoq (Annualised)
% Change
1Q T
2.20
2.20
6:00 PMUS
Initial Jobless claims
Thousands
Jun 23
218.00
2:30 PMEuro Zone
Euro-Zone Consumer Confidence
Value
Jun F
(0.50)
(0.50)
Jun 29, 2018
1:25 PMGermany
Unemployment change (000's)
Thousands
Jun
(12.00)
(10.00)
2:00 PMUK
GDP (YoY)
% Change
1Q F
1.20
1.20
Jun 30, 2018
6:30 AMChina
PMI Manufacturing
Value
Jun
51.90
51.80
Jul 02, 2018
2:00 PMUK
PMI Manufacturing
Value
Jun
54.40
Jul 06, 2018
6:00 PMUS
Change in Nonfarm payrolls
Thousands
Jun
223.00
193.00
6:00 PMUS
Unnemployment rate
%
Jun
3.80
3.80
Jul 10, 2018
2:00 PMUK
Industrial Production (YoY)
% Change
May
1.80
7:00 AMChina
Consumer Price Index (YoY)
% Change
Jun
1.80
Jul 11, 2018
US
Producer Price Index (mom)
% Change
Jun
1.00
Jul 12, 2018
India
Exports YoY%
% Change
Jun
20.18
India
Imports YoY%
% Change
Jun
14.85
5:30 PMIndia
Industrial Production YoY
% Change
May
4.90
6:00 PMUS
Consumer price index (mom)
% Change
Jun
0.20
Jul 13, 2018
China
Exports YoY%
% Change
Jun
12.60
Jul 16, 2018
7:30 AMChina
Industrial Production (YoY)
% Change
Jun
6.80
12:00 PMIndia
Monthly Wholesale Prices YoY%
% Change
Jun
4.43
7:30 AMChina
Real GDP (YoY)
% Change
2Q
6.80
Jul 17, 2018
6:45 PMUS
Industrial Production
%
Jun
(0.09)
2:00 PMUK
Jobless claims change
% Change
Jun
(7.70)
Source: Bloomberg, Angel Research
Market Outlook
June 25, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
8.5
10.0
9.0
9.1
7.3
7.5
8.0
7.0
9.0
8.0
8.1
7.6
7.6
7.7
7.0
8.0
7.2
7.0
6.0
6.8
4.8
4.6
4.9
7.0
6.3
5.0
4.1
6.1
5.6
4.0
6.0
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
4.9
52.0
5.0
4.4
4.6
4.3
50.0
4.0
3.6
3.3
3.3
48.0
3.0
2.4
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
35.0
6.50
30.0
6.00
25.0
5.50
20.0
5.00
15.0
4.50
10.0
4.00
5.0
3.50
0.0
(5.0)
3.00
Source: Bloomberg, Angel Research
Source: RBI, Angel Research
Market Outlook
June 25, 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)
25.0
20.0
15.0
10.0
5.0
-
Source: IMF, Angel Research As on June 22, 2018
Market Outlook
June 25, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
70,075
(14.3)
(16.7)
13.2
Russia
Micex
4,393
1.4
7.1
11.4
India
Nifty
10,741
3.8
6.6
12.1
China
Shanghai Composite
2,876
(10.1)
(11.9)
(7.7)
South Africa
Top 40
50,024
(0.2)
(1.8)
12.3
Mexico
Mexbol
46,457
1.9
(1.3)
(5.2)
Indonesia
LQ45
951
(4.7)
(14.9)
(4.2)
Malaysia
KLCI
1,692
(8.7)
(8.3)
(5.2)
Thailand
SET 50
1,069
(8.1)
(9.6)
7.9
USA
Dow Jones
24,462
(2.2)
(0.9)
14.3
UK
FTSE
7,556
(3.9)
7.3
1.8
Japan
Nikkei
22,693
(1.2)
5.6
14.1
Germany
DAX
12,512
(3.1)
2.1
(1.3)
France
CAC
5,316
(3.8)
2.2
2.0
Source: Bloomberg, Angel Research As on June 22, 2018
Market Outlook
June 25, 2018
Exhibit 7: Historical Angel Top Picks/Fundamental Calls
Date Added
Top Picks/Fundamental
Stocks
Reco Price
Target/Revised Price
Current Status
14-06-2018
Top Picks
Amber Enterprises
1,026
1,230
Open
07-06-2018
Top Picks
M&M
918
1050
Open
04-05-2018
Top Picks
M&M
860
990
03-05-2018
Fundamental
L&T Finance Holding
171
210
Open
02-05-2018
Top Picks
HDFC Bank
1944
2315
Open
04-05-2018
Top Picks
Matrimony.com Ltd
810
1016
Open
20-04-2018
Top Picks
Matrimony.com Ltd
781
984
15-05-2018
Top Picks
Parag Milk Foods Limited
310
410
Open
16-04-2018
Top Picks
Parag Milk Foods Limited
249
333
29-05-2018
Fundamental
GMM Pfaudler Limited
932
1,020
Open
14-05-2018
Fundamental
GMM Pfaudler Limited
818
900
06-04-2018
Fundamental
GMM Pfaudler Limited
712
861
07-03-2018
Fundamental
Ashok Leyland Ltd
139
163
Closed (26/04/2018)
03-03-2018
Fundamental
Greenply Industries
340
395
Open
16-04-2018
Top Picks
Safari Industries
651
750
Open
21-02-2018
Top Picks
Safari Industries
532
650
31-05-2018
Top Picks
HSIL Ltd
348
Closed (31/05/2018)
16-02-2018
Top Picks
HSIL Ltd
433
510
07-02-2018
Fundamental
Elantas Beck India Ltd.
2155
2500
Open
01-02-2018
Top Picks
ICICI Bank
352
416
Open
01-02-2018
Top Picks
Aditya Birla Capital
167
218
Open
04-01-2018
Fundamental
CCL Products
278
360
Open
03-01-2018
Fundamental
Nilkamal Ltd
1880
2178
Open
01-01-2018
Fundamental
Capital First Ltd
693
850
Closed (15/01/2018)
30-12-2017
Fundamental
Shreyans Industries Ltd
205
247
Closed
Fundamental
Prism Cement Ltd
160
Closed (09/05/2018)
21-12-2017
Fundamental
Prism Cement Ltd
118
131
18-12-2017
Fundamental
Menon Bearings Limited
92
114
Closed (17/01/2018)
14-12-2017
Top Picks
Ruchira Papers Ltd.
188
244
Closed (09/02/2018)
17-05-2018
Top Picks
Century Plyboards India
280
Closed(17/05/2018)
28-11-2017
Top Picks
Century Plyboards India
317
400
19-12-2017
Top Picks
LT Foods
85
128
Open
06-11-2017
Top Picks
LT Foods
74
96
16-10-2017
Fundamental
Endurance Technologies Ltd
1111
1277
Closed (01/12/2017)
11-09-2017
Top Picks
GIC Housing
533
655
Open
10-10-2017
Top Picks
Music Broadcast Limited
404
475
Open
20-07-2017
Top Picks
Music Broadcast Limited
368
434
07-07-2017
Fundamental
L&T Finance Holdings Ltd
149
179
Closed (28/8/2017)
06-07-2017
Fundamental
Syngene International
478
564
Closed (1/3/2018)
05-07-2017
Top Picks
Maruti
7371
10619
Open
05-06-2017
Top Picks
Karur Vysya Bank
127
100
Closed (12/03/2018)
23-05-2018
Top Picks
KEI Industries
481
589
Open
Source: Company, Angel Research
Market Outlook
June 25, 2018
Exhibit 8: Historical Angel Top Picks/Fundamental Calls
Date Added
Top Picks/Fundamental
Stocks
Reco Price
Target/Revised Price
Current Status
04-01-2017
Top Picks
KEI Industries
125
485
31-05-2018
Top Picks
Alkem Lab
1978
Closed (31/05/2018)
01-12-2016
Top Picks
Alkem Lab
1700
2441
17-10-2016
Top Picks
Asian Granito
267
534
Closed (18/02/2018)
17-05-2018
Top Picks
TV Today Network
460
Closed (17/05/2018)
04-08-2016
Top Picks
TV Today Network
297
603
05-04-2016
Top Picks
DHFL
189
720
Open
05-01-2016
Top Picks
Navkar Corporation
207
265
Open
08-12-2015
Top Picks
Blue Star
357
867
Open
30-10-2015
Top Picks
Siyaram Silk Mills
186
851
Open
Source: Company
Market Outlook
June 25, 2018
Research Team Tel: 022 - 39357800
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