Market Outlook
April 26, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Cl ose)
Indian markets are likely to open flat tracking global indices and SGX Nifty.
BSE Sensex
(0.3)
(115)
34,501
U.S. Stocks showed a lack of direction over the course of the trading day. The major
Nifty
(0.4)
(44)
10,571
averages spent the day bouncing back and forth across the unchanged line before
Mid Cap
(0.5)
(88)
16,789
closing mixed. The Dow Jones ended up by 0.3 percent to 24,083 and the Nasdaq
Small Cap
(0.7)
(131)
18,119
fell by 0.1 percent to 7,003.
Bankex
(1.1)
(302)
27,733
U.K. stocks fell after Wall Street stocks sold off overnight on concerns over rising
bond yields amid expectations of more Fed rate hikes this year. The FTSE 100 was
Global Indices
Chg (%)
(Pts)
(Cl ose)
down by 0.7% to end at 7,377.
Dow Jones
0.3
60
24,083
On domestic front, Indian shares fell modestly during the last trading session due to
Nasdaq
(0.1)
(4)
7,003
amid fears of rising oil prices and a falling rupee that can hurt India's growth
FTSE
(0.7)
(47)
7,377
prospects. Other than that weak global cues also dented sentiment. The BSE Sensex
Nikkei
(0.3)
(63)
22,215
ended down by 0.3% at 34,501.
Hang Seng
(1.0)
(308)
30,328
News Analysis
Shanghai Com
(0.4)
(11)
3,118
India, World Bank sign $210 mn deal to improve Madhya Pradesh rural roads
Detailed analysis on Pg2
A dvances / Declines
BSE
NSE
Advances
915
789
Investor’s Ready Reckoner
Declines
1,755
1,020
Key Domestic & Global Indicators
Unchanged
144
65
Stock Watch: Latest investment recommendations on 150+ stocks
Refer Pg5 onwards
Volumes (` Cr)
Top Picks
BSE
3,380
C MP
Target
U psi de
C ompany
Sector
R ating
(`)
(`)
(%)
NSE
32,815
Blue Star
Capital Goods Accumulate
797
867
8.9
Dewan Housi ng Finance
Financials
Buy
609
720
18.2
Net Inflows (` Cr)
Ne t
Mtd
Ytd
Century Plyboards
Forest Product
Buy
338
400
18.4
FII
(257)
(4,305)
9,303
Navkar Corporation
Others
Buy
175
265
51.7
*MFs
409
8,173
42,632
KEI Industrie s
Capital Goods Accumulate
428
485
13.2
More Top Picks on Pg4
Top Gainers
Price (`)
Chg (%)
Key Upcoming Events
Previous
C onsensus
LTI
1,717
11.6
D ate
Region
Event Description
ReadingExpectations
IBVENTUREPP
254
10.0
Apr 26, 2018 US
Initial Jobless claims
232.00
230.00
IBVENTURES
470
9.7
Apr 26, 2018 Euro Zone ECB announces interest rates
-
-
Apr 27, 2018 US
GDP Qoq (Annualise d)
2.90
2.00
NIITTECH
1,081
8.3
Apr 27, 2018 Euro Zone Euro-Zone Consumer Confidence
0.40
RAYMOND
1,132
6.3
Apr 27, 2018 Germany Unempl oyment change (000's)
(19.00)
(15.00)
More Events on Pg7
Top Losers
Price (`)
Chg (%)
PCJEWELLER
244
-15.6
HATHWAY
32
-8.6
TIMETECHNO
165
-5.8
BAJAJCORP
465
-5.5
WELCORP
138
-5.3
As on April 25, 2018
Market Outlook
April 26, 2018
News Analysis
India, World Bank sign $210mn deal to improve Madhya Pradesh rural roads. The
Government of India, the Government of Madhya Pradesh and the World
210 million dollar loan agreement for the Madhya
durability, resilience, and safety of the gravel-surfaced rural roads and enhance
the capacity of the state to manage its rural roads network.
The new joint project will cover 10,510 km stretch of rural roads in Madhya
Pradesh that fall under the Chief Minister's Gram Sadak Yojana (CMGSY)
programme. Of this, 10,000 km will be upgraded from existing gravel to
bituminous surface roads, while 510 km of new roads will be built to the same
bituminous surface standard. "This project will leverage resources to support
innovations in road construction, improve road safety, and reduce carbon footprint
design and construction," added Hisham Abdo, Acting Country Director, World
Economic and Political News
7th Pay Commission: Bonanza for J&K government employees; April pay to
Corporate News
Infosys, Wipro, 5 other firms see 43% drop in H1-B approvals in past 3 yrs
Capri Global to float $150-mn distressed asset fund for SMEs facing IBC
KWAN Entertainment and Ravi Krishnan partner to launch KWANAbler
Bharti Infratel, Indus merge, create world's largest non-Chinese tower firm
IDBI Federal Life Insurance's FY18 net profit soars by 94% to Rs 1 billion
Market Outlook
April 26, 2018
Quarterly Bloomberg Brokers Consensus Estimate
YES Bank Ltd - April 26, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
PAT
1,085
914
19
1,077
1
Axis Bank Ltd - April 26, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
PAT
662
1,125
(46)
726
(9)
Market Outlook
April 26, 2018
Top Picks
Market Cap
C MP
Target
Upside
C ompany
R ationale
(` Cr)
(`)
(`)
(%)
Strong growth in domestic business due to its
leadership in acute therapeutic segment. Alkem
Alkem Laboratories
23,132
1,935
2,441
26.2
expects to launch more products in USA, which
bode s for its internati onal business.
Favorable outlook for the AC industry to augur well
for Cooling products business which is out pacing
Blue Star
7,647
797
867
8.9
the market growth. EMPPAC division's profitability
to improve once oper ating environme nt turns
around.
With a focus on the low and me dium income (LMI)
consumer se gment, the company has increase d its
Dewan Housi ng Finance
19,107
609
720
18.2
presence in tier-II & III cities where the growth
opportunity i s immense.
Well capitalized with CAR of 18.1% which give s
sufficient room to grow asset base. F aster re solution
ICICI Bank
1,79,280
279
416
49.2
of NPA would reduce provi sion cost, which would
help to re port better ROE.
High order book execution in EPC segment, rising
KEI Industrie s
3,357
428
485
13.2
B2C sales and hi gher exports to boost the revenue s
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
2,200
386
475
23.2
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,629
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
3,154
673
851
26.4
growth goi ng ahe ad. 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
2,804
470
603
28.3
the radio busine ss, and anticipated growth in ad
spends by corporate to benefit the stock.
After GST, the company is expected to see higher
volume s along with improving product mix. The
Maruti
2,70,004
8,938
10,619
18.8
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
2,260
420
655
56.1
two year; change in borrowing mix will help in NIM
improve ment
We expect CPIL to report net Revenue/PAT CAGR of
~17%/ 16% over FY2017-20E mainly due to
Century Plyboards
7,507
338
400
18.4
healthy growth in plywood & lamination busine ss,
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
2,973
93
128
37.7
next two years on the back of strong di stribution
network & addition of new products in portfolio.
Third large st brand play in luggage segment
Increase d product offerings and improvi ng
Safari Industries
1,502
675
750
11.1
distribution network is leading to strong growth in
busine ss. 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 improve ment in
HSIL Ltd
2,792
386
510
32.1
operating margi n due price hi ke in container glass
segment, turnaround in consumer busine ss.
Source: Company, Angel Research
Market Outlook
April 26, 2018
Top Picks
Market Cap
C MP
Target
Upside
C ompany
R ationale
(` Cr)
(`)
(`)
(%)
We expect financi alisation of savings and
Aditya Birla Capital
33,840
154
230
31.33
increasing penetration in Insurance & Mutual fund
would ensure steady growth.
One of the leading Indi an dairy products
companie s in India create d strong brands in dairy
products. Rising revenue share of hi gh-margin
Parag Milk F oods
2,520
300
333
12.1
Value Added Products and reduction in interest cost
is likely to boost margins and e arnings 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 & marriage
Matrimony.com Ltd
1,928
849
984
15.9
related services. On the bottom-line front, we
expect a CAGR of ~28% to `82cr over the same
period on the back margin improve ment.
Source: Company, Angel Research
Fundamental Call
Market Cap
C MP
Target
Upside
C ompany
R ationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,940
296
360
21.6
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
2,504
1,678
2,178
29.8
healthy demand growth in plastic divi sion. On the
bottom-line front, we esti mate
~10% CAGR to
`162cr owing to improve ment in volumes.
The prism has diversified exposure in the different
segment such as Ceme nt, Tile & ready mix concrete.
Prism Cement
5,824
116
160
38.3
Thus we believe, PCL is in the right place to capture
ongoing government spendi ng on affordable
housing and infrastructure projects.
Elantas Beck India is the Indian market leader in
liquid insulation segment used in electrical
equipme nts like motors, transformers etc. It derives
Elantas Beck India Ltd
1,765
2,226
2,500
12.3
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 me dium density fibreboards
(MDF). GIL to report net revenue CAGR of ~14% to
Greenply Industries
3,767
307
395
28.6
~`2,478cr over FY2017-20E mainly due to healthy
growth in plyw ood & lamination busine ss on the
back of strong brand and di stribution network
Ashok Leyland Ltd (ALL) i s the flagship company of
the Hinduja Group, and one of the largest
commercial vehicle manufacturers in India. Ashok
Ashok Leyland
48,051
164
-
-
Leyland expected to report net Profit (reporte d)
CAGR of ~19% to ~`2,075cr over FY2017-20E
mainly due to improve ment in re placeme nt de mand.
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
1,126
770
861
12
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.
Market Outlook
April 26, 2018
Key Upcoming Events
Result Calendar
D ate
C ompany
April 26, 2018
Rallis, Ye s Bank
April 27, 2018
Axis Bank, Shriram Trans, Reliance Industries
Source: Bloomberg, Angel Research
Global economic events release calendar
Bl oomberg Data
D ate
Time
C ountry
Event Description
Unit
Period
L ast Reporte d
E stimate d
Apr 26, 2018
6:00 PMUS
Initial Jobless claims
Thousands
Apr 21
232.00
230.00
5:15 PMEuro Zone ECB announces interest rates
%
Apr 26
-
-
Apr 27, 2018
6:00 PMUS
GDP Qoq (Annualise d)
% Change
1Q A
2.90
2.00
2:30 PMEuro Zone Euro-Zone Consumer Confidence
Value
Apr F
0.40
1:25 PMGermany Unempl oyment change (000's)
Thousands
Apr
(19.00)
(15.00)
2:00 PMUK
PMI Manufacturing
Value
Apr
55.10
Apr 30, 2018
2:00 PMUK
GDP (YoY)
% Change
1Q A
1.40
1.40
May 01, 2018
6:30 AMChina
PMI Manufacturing
Value
Apr
51.50
51.20
May 02, 2018
1:25 PMGermany PMI Manufacturing
Value
Apr F
58.10
11: 30 PMUS
FOMC rate decision
%
May 2
1.75
1.75
2:30 PMEuro Zone Euro-Zone GDP s.a. (QoQ)
% Change
1Q A
0.70
May 04, 2018
1:25 PMGermany PMI Services
Value
Apr F
54.10
6:00 PMUS
Change in N onfarm payrolls
Thousands
Apr
103.00
185.00
6:00 PMUS
Unnemployment rate
%
Apr
4.10
4.00
May 08, 2018
China
Exports YoY%
% Change
Apr
(2.70)
Source: Bloomberg, Angel Research
Market Outlook
April 26, 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 26, 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 as on 25 April, 2018
Market Outlook
April 26, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
C ountry
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
85,824
2.3
7.6
33.4
Russia
Micex
4,382
1.4
7.1
11.4
India
Nifty
10,565
4.7
(1.7)
16.0
China
Shanghai Composite
3,117
(6.3)
(10.3)
(6.2)
South Africa
Top 40
50,729
(1.3)
(6.2)
10.8
Mexico
Mexbol
48,745
1.9
(1.3)
(0.3)
Indonesia
LQ45
1,040
0.7
(5.9)
10.0
Malaysia
KLCI
1,895
2.1
3.8
9.2
Thailand
SET 50
1,189
0.2
0.7
19.2
USA
Dow Jones
24,665
0.2
(5.6)
19.9
UK
FTSE
7,329
2.3
(5.1)
3.0
Japan
Nikkei
22,191
3.3
(7.0)
19.6
Germany
DAX
12,567
2.9
(5.3)
4.4
France
CAC
5,392
3.7
(1.4)
2.4
Source: Bloomberg, Angel Research as on 25 April, 2018 68in4
