Market Outlook
February 28, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
(0.3)
(99)
34,346
US stocks came under pressure over the course of the trading day after initially
Nifty
(0.3)
(28)
10,554
showing a lack of direction. The pullback on the day came after the major averages
Mid Cap
(0.5)
(84)
16,601
moved sharply higher over the two previous sessions. The Dow Jones ended on a
Small Cap
(0.4)
(64)
18,090
downside front of 1.2% to close at 25,410 and the Nasdaq Composite edged down
Bankex
(1.4)
(414)
28,587
to 1.2%, to 7,330.
U.K. shares were modestly higher after house builder Persimmon delivered an
Global Indices
Chg (%)
(Pts)
(Close)
"excellent" performance in 2017 and Comcast Corp, the biggest cable operator in
Dow Jones
(1.2)
(299)
25,410
the United States, offered to pay $31 billion to buy Sky Plc. The FTSE 100 was ended
Nasdaq
(1.2)
(91)
7,330
on a downside front of 0.1% at 7,282.
FTSE
(0.1)
(7)
7,282
On domestic front, Indian shares opened higher as investors kept an eye on the
Nikkei
(0.4)
(97)
22,293
GDP data for December quarter due on Wednesday and new Fed Chairman Jerome
Hang Seng
(1.1)
(349)
30,919
Powell's congressional hearings. The Sensex ended on a downside front of 0.3% at
Shanghai Com
(0.8)
(28)
3,264
34,346 while the Nifty ended at 10,554 with a downside of 0.3%.
News Analysis
Advances / Declines
BSE
NSE
GIC to pick 40% stake in Prestige's Exora Business Park for Rs 26bn
Advances
997
620
Declines
1,768
1,177
Detailed analysis on Pg2
Unchanged
135
57
Investor’s Ready Reckoner
Key Domestic & Global Indicators
Volumes (` Cr)
Stock Watch: Latest investment recommendations on 150+ stocks
BSE
3,234
Refer Pg5 onwards
NSE
28,193
Top Picks
CMP
Target
Upside
Net Inflows (` Cr)
Net
Mtd
Ytd
Company
Sector
Rating
(`)
(`)
(%)
FII
(1,115)
(9,898)
3,086
Blue Star
Capital Goods
Buy
742
867
16.9
Dewan Housing Finance
Financials
Buy
582
712
22.3
*MFs
1,466
11,572
20,595
Century Plyboards
Forest Products
Buy
326
400
22.8
Navkar Corporation
Other
Buy
169
265
56.8
Top Gainers
Price (`)
Chg (%)
KEI Industries
Capital Goods Accumulate
380
436
14.7
ASTRAL
870
7.4
More Top Picks on Pg4
SYMPHONY
1787
5.8
Key Upcoming Events
DMART
1354
5.0
Previous
Consensus
Date
Region
Event Description
Reading
Expectations
INDHOTEL
139
4.5
Feb27
Euro Zone Euro-Zone Consumer Confidence
0.10
0.10
WABCOINDIA
7796
4.0
Feb27
Germany Unemployment change (000's)
(24.00)
(15.00)
Feb28
US
Consumer Confidence
125.40
126.40
Top Losers
Price (`)
Chg (%)
Feb28
China
PMI Manufacturing
51.30
51.20
Feb28
Germany
PMI Manufacturing
60.30
60.30
PNB
98
-12.1
More Events on Pg7
BANKINDIA
118
-7.2
IDBI
74
-6.8
RNAVAL
41
-6.3
OBEROIRLTY
527
-5.8
As on February 27 2018
Market Outlook
February 28, 2018
News Analysis
GIC to pick 40% stake in Prestige's Exora Business Park for Rs 26bn
Singaporean sovereign wealth fund GIC has agreed to invest around Rs 26 billion
in real estate firm Prestige Estates' subsidiary Exora Business Park for a
consideration of up to 40 per cent stake.
The Bengaluru-based developer entered into a preliminary term sheet with GIC's
subsidiary Reco Jade Ind (Reco) to sell a minority stake in its subsidiary. Exora
Business Park owns, directly or indirectly, many operating and under-construction
office properties of the developer. It has a portfolio of five projects with over 8.5
million sqft of development, of which 5.5 million sqft is completed and under-
construction.
Economic and Political News
Yogi Adityanath to revive sick industrial units to boost investment in UP
AIIB approves $1.5-bn in loans to India for infrastructure projects
FinMin gives nod to scrap vehicles over 15 yrs, policy to go to GST Council
India-South Korea bilateral trade touched $20bn in 2017
Corporate News
India, Japan major contributors to 0.8% rise in world steel output
Reliance, Samsung to bring 4G connectivity to 99% of population by Diwali
Trai to order Aircel to maintain service quality, grant codes for port outs
Airtel, Google partner to offer low-cost 4G smartphones, to take on Jio
Market Outlook
February 28, 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 to launch
Alkem Laboratories
26,442
2,232
2,441
9.4
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
7,119
733
867
18.3
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
18,267
563
712
26.5
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 growth.
Karur Vysya Bank
8,020
109
160
44.9
Increasing share of CASA will help in NIM
improvement.
High order book execution in EPC segment, rising B2C
KEI Industries
2,980
383
436
13.8
sales and higher exports to boost the revenues and
profitability
Expected to benefit from the lower capex requirement
Music Broadcast
2,179
383
475
24.3
and 15 year long radio broadcast licensing.
Massive capacity expansion along with rail advantage
Navkar Corporation
2,544
169
265
56.8
at ICD as well CFS augur well for the company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,047
654
851
30.1
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
2,716
446
508
13.9
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 Gujarat
Maruti Suzuki
2,71,926
8,891
10,619
19.4
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
2,185
401
655
63.3
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
7,237
329
400
21.5
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
3,045
95
128
34.5
two years on the back of strong distribution network &
addition of new products in portfolio.
We expect financialisation of savings and increasing
Aditya Birla Capital
36118
167
230
37.7
penetration in Insurance & Mutual fund would ensure
steady growth.
Third largest brand play in luggage segment Increased
product offerings and improving distribution network is
Safari Industries
1180
530
650
22.4
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
3094
436
510
16.9
margin due price hike in container glass segment,
turnaround in consumer business.
Source: Company, Angel Research
Market Outlook
February 28, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,911
298
360
20.1
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
2,529
1,699
2,178
28.2
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
222
158
247
56.3
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
6,410
122
160
31.2
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
February 28, 2018
Key Upcoming Events
Global economic events release calendar
Bloomberg Data
Date
Time Country
Event Description
Unit
Period
Last Reported
Estimated
Feb 28, 2018
8:30 PMUS
Consumer Confidence
S.A./ 1985=100
Feb
125.40
126.40
6:30 AMChina
PMI Manufacturing
Value
Feb
51.30
51.20
2:25 PMGermany
PMI Manufacturing
Value
Feb F
60.30
60.30
Mar 01, 2018
7:00 PMUS
GDP Qoq (Annualised)
% Change
4Q S
2.60
2.50
7:00 PMUS
Initial Jobless claims
Thousands
Feb 24
222.00
226.00
3:00 PMUK
PMI Manufacturing
Value
Feb
55.30
55.00
Mar 05, 2018
2:25 PMGermany
PMI Services
Value
Feb F
55.30
Mar 07, 2018
3:30 PMEuro Zone
Euro-Zone GDP s.a. (QoQ)
% Change
4Q F
0.60
Mar 08, 2018
China
Exports YoY%
% Change
Feb
11.10
6:15 PMEuro Zone
ECB announces interest rates
%
Mar 8
-
Mar 09, 2018
3:00 PMUK
Industrial Production (YoY)
% Change
Jan
-
7:00 AMChina
Consumer Price Index (YoY)
% Change
Feb
1.50
7:00 PMUS
Change in Nonfarm payrolls
Thousands
Feb
200.00
195.00
7:00 PMUS
Unnemployment rate
%
Feb
4.10
4.00
Mar 12, 2018
6:00 PMUS
Consumer price index (mom)
% Change
Feb
0.50
Mar 13, 2018
5:30 PMIndia
Industrial Production YoY
% Change
Jan
7.10
Mar 14, 2018
12:00 PMIndia
Monthly Wholesale Prices YoY%
% Change
Feb
2.84
US
Producer Price Index (mom)
% Change
Feb
0.70
Mar 15, 2018
India
Imports YoY%
% Change
Feb
26.10
India
Exports YoY%
% Change
Feb
9.10
Mar 16, 2018
3:30 PMEuro Zone
Euro-Zone CPI (YoY)
%
Feb F
1.30
6:45 PMUS
Industrial Production
%
Feb
(0.05)
6:00 PMUS
Housing Starts
Thousands
Feb
1,326.00
6:00 PMUS
Building permits
Thousands
Feb
1,396.00
Source: Bloomberg, Angel Research
Market Outlook
February 28, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
10.0
10.0
9.1
8.8
9.0
8.0
7.1
8.0
7.9
7.6
7.5
8.0
7.3
7.2
7.0
6.0
4.8
7.0
6.3
4.4
4.1
6.1
6.1
5.7
4.0
3.2
2.9
6.0
2.0
5.0
2.0
1.2
1.0
4.0
-
3.0
(0.3)
(2.0)
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
3.9
50.0
3.7
3.6
4.0
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
February 28, 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
February 28, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
86,935
7.8
16.5
28.2
Russia
Micex
2,342
0.9
9.0
13.9
India
Nifty
10,554
(4.8)
1.6
18.2
China
Shanghai Composite
3,292
(6.8)
(4.8)
0.8
South Africa
Top 40
52,034
(4.6)
(3.6)
16.7
Mexico
Mexbol
47,970
(5.5)
(0.3)
1.3
Indonesia
LQ45
1,104
(2.6)
8.0
22.7
Malaysia
KLCI
1,871
1.8
8.8
9.6
Thailand
SET 50
1,206
1.4
10.6
21.8
USA
Dow Jones
25,410
(3.7)
8.0
22.1
UK
FTSE
7,282
(5.0)
(1.7)
(1.4)
Japan
Nikkei
22,390
(5.4)
(0.1)
16.3
Germany
DAX
12,491
(6.4)
(4.4)
5.5
France
CAC
5,344
(3.3)
(0.9)
7.0
Source: Bloomberg, Angel Research p68in4
Market Outlook
February 28, 2018
Research Team Tel: 022 - 39357800
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