Market Outlook
May 30, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
(0.6)
(216)
34,949
U.S. Stocks moved sharply lower during trading on Tuesday. The major averages
Nifty
(0.5)
(55)
10,633
moved lower early in the session and saw further downside as the day progressed.
Mid Cap
(0.4)
(72)
16,047
The Dow Jones dipped by 1.6% to 24,361 and the Nasdaq ended down by 0.5% to
Small Cap
(0.3)
(45)
17,380
7,397.
Bankex
(1.6)
(480)
29,411
U.K. stocks fell sharply as investors weighed political uncertainty in Spain and the
prospect of fresh elections in Italy, which could serve as a referendum on its euro
Global Indices
Chg (%)
(Pts)
(Close)
membership. The benchmark FTSE 100 was down by 1.3% at 7,633.
Dow Jones
(1.6)
(392)
24,361
On domestic front, Indian shares fell notably during the last trading session as weak
Nasdaq
(0.5)
(37)
7,397
cues from Asia and Europe prompted traders to book some profits after three days
FTSE
(1.3)
(98)
7,633
of gains. The BSE Sensex closed down by 0.6% at 34,949.
Nikkei
(1.8)
(400)
21,958
News Analysis
Hang Seng
(1.6)
(481)
30,003
Tata Steel's deliveries up 10.7% in FY18 against market average of 8%
Shanghai Com
(1.8)
(57)
3,064
Detailed analysis on Pg2
Advances / Declines
BSE
NSE
Investor’s Ready Reckoner
Advances
1,223
832
Key Domestic & Global Indicators
Declines
1,474
967
Stock Watch: Latest investment recommendations on 150+ stocks
Unchanged
163
70
Refer Pg5 onwards
Volumes (` Cr)
Top Picks
CMP
Target
Upside
BSE
3,010
Company
Sector
Rating
(`)
(`)
(%)
NSE
30,346
Blue Star
Capital Goods
Buy
703
867
23.3
Dewan Housing Finance
Financials
Buy
624
720
15.3
Parag Milk Foods
Others
Buy
332
410
23.5
Net Inflows (` Cr)
Net
Mtd
Ytd
Navkar Corporation
Others
Buy
155
265
71.3
FII
379
(8,571)
(1,173)
KEI Industries
Capital Goods
Buy
478
589
23.3
*MFs
774
12,510
58,263
More Top Picks on Pg4
Key Upcoming Events
Top Gainers
Price (`)
Chg (%)
Previous
Consensus
Date
Region
Event Description
ReadingExpectations
UFLEX
317
10.5
May 30, 2018 US
GDP Qoq (Annualised)
2.30
2.30
IBVENTUREPP
284
9.9
May 30, 2018 Euro Zone Euro-Zone Consumer Confidence
0.20
0.20
ADVENZYMES
240
8.8
May 30, 2018 Germany Unemployment change (000's)
(7.00)
(10.00)
UCOBANK
20
7.4
May 31, 2018 Germany PMI Manufacturing
56.80
56.80
RADICO
470
6.8
May 31, 2018 US
Initial Jobless claims
234.00
229.50
More Events on Pg7
Top Losers
Price (`)
Chg (%)
BANKINDIA
102
-5.8
JUBLFOOD
2576
-5.5
M&MFIN
475
-5.2
GODFRYPHLP
757
-5.1
HATHWAY
30
-4.8
As on May 29, 2018
Market Outlook
May 30, 2018
News Analysis
Tata Steel's deliveries up 10.7% in FY18 against market average
of 8%
Tata Steel outpaced the industry average in crude steel supplies in FY18, clocking
deliveries of 12.5 million tonnes of crude steel. The steelmaker registered 10.7 per
cent growth in sales, bettering the market average of 7.9 per cent. Deliveries to the
automotive sector recorded sharp growth of 22.9 per cent, rising from 1.58 million
tonnes (mt) at the end of 2016-17 to 1.94 mt in FY18. Tata Steel logged 16 per
cent growth in transfer to downstream units in the same period. In branded
products & retail solutions segment, the growth was 9.5 per cent.
The branded portfolio contributes 46 per cent to the steel company's total sales,
touching 2.5 million customers across the country. Also, 68 per cent of its delivery
volumes came from enriched or value-added products. Tata Steel's crude steel
output expanded by
6.8% in FY19 to
12.48 mt, aided by ramp-up
at Kalinganagar. The company expects steel demand to grow six per cent in the
current fiscal with healthy growth in segments such as auto, railway, engineering,
construction, LPG, tubers and galvanizers.
Economic and Political News
Rising crude prices, falling rupee posing some challenges
Corporate News
Market Outlook
May 30, 2018
Quarterly Bloomberg Brokers Consensus Estimate
ONGC Ltd - May 30, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
24674
21714
13.6
22966
7.4
EBIDTA
13183
4542
190.2
10919
20.7
%
53.4
20.9
47.5
PAT
6540
4340
50.7
5015
30.4
Apollo Hospital Ltd - May 30, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
2005
1662
20.6
1896
5.7
EBIDTA
219
170
28.8
221
(0.9)
%
10.9
18.7
11.7
PAT
61
48
27.0
67
(8.9)
Market Outlook
May 30, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
Strong growth in domestic business due to its
leadership in acute therapeutic segment. Alkem
Alkem Laboratories
24,487
2,048
2,441
19.2
expects to launch 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
Blue Star
6,753
703
867
23.3
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
19,582
624
720
15.3
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
ICICI Bank
186,877
291
416
43.1
resolution of NPA would reduce provision cost,
which would help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,743
478
589
23.3
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
1,906
334
475
42.2
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,329
155
265
71.3
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would
Siyaram Silk Mills
2,960
631
851
34.8
boost growth going ahead. Stock currently trades at
an inexpensive valuation.
GST regime and the Gujarat plant are expected to
Maruti
262,236
8,681
10,619
22.3
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,178
404
655
61.9
two year; change in borrowing mix will help in NIM
improvement
We expect sales/PAT to grow at 13.5%/20% over
LT Foods
2,461
77
128
66.3
next two years on the back of strong distribution
network & addition of new products in portfolio.
Third largest brand play in luggage segment
Increased product offerings and improving
Safari Industries
1,378
620
750
21.1
distribution network is 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
HSIL Ltd
2,520
349
510
46.3
operating margin due price hike in container glass
segment, turnaround in consumer business.
Source: Company, Angel Research
Market Outlook
May 30, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
32,818
149
218
46.2
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
2,793
332
410
23.5
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 & marriage
Matrimony.com Ltd
1,724
759
1,016
33.9
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
527,900
2,033
2,315
13.9
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
32,818
149
218
46.2
strong growth in Tractors segment coupled by its
strong brand recall and improvement in rural
sentiment
Source: Company, Angel Research
Market Outlook
May 30, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
4,145
312
360
15.5
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
2,564
1,718
2,178
26.8
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
1,606
2,026
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
3,283
268
395
47.5
~`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
1,327
908
1020
12.3
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
34,297
172
210
22.2
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
May 30, 2018
Key Upcoming Events
Result Calendar
Date
Company
May 30, 2018
Crompton Greaves, BGR Energy , J & K Bank, SAIL, Monnet Ispat, ONGC, Tree House, HSIL, Banco, Tide Water Oil
India, Indoco Remedies, HDIL, Anant Raj, Competent Automobile
Source: Bloomberg, Angel Research
Global economic events release calendar
Bloomberg Data
Date
Time
Country
Event Description
Unit
Period
Last Reported
Estimated
May 25, 2018
2:00 PMUK
GDP (YoY)
% Change
1Q P
1.20
1.20
May 29, 2018
7:30 PMUS
Consumer Confidence
S.A./ 1985=100
May
128.70
128.00
May 30, 2018
6:00 PMUS
GDP Qoq (Annualised)
% Change
1Q S
2.30
2.30
1:25 PMGermany Unemployment change (000's)
Thousands
May
(7.00)
May 31, 2018
6:30 AMChina
PMI Manufacturing
Value
May
51.40
Jun 01, 2018
6:00 PMUS
Change in Nonfarm payrolls
Thousands
May
164.00
195.00
6:00 PMUS
Unnemployment rate
%
May
3.90
3.90
2:00 PMUK
PMI Manufacturing
Value
May
53.90
Jun 06, 2018
2:30 PMIndia
RBI Repo rate
%
Jun 6
6.00
2:30 PMIndia
RBI Reverse Repo rate
%
Jun 6
5.75
2:30 PMIndia
RBI Cash Reserve ratio
%
Jun 6
4.00
Jun 07, 2018
2:30 PMEuro Zone Euro-Zone GDP s.a. (QoQ)
% Change
1Q F
0.40
Jun 08, 2018
China
Exports YoY%
% Change
May
12.90
Jun 09, 2018
7:00 AMChina
Consumer Price Index (YoY)
% Change
May
1.80
Jun 11, 2018
2:00 PMUK
Industrial Production (YoY)
% Change
Apr
2.90
Source: Bloomberg, Angel Research
Market Outlook
May 30, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
8.5
10.0
9.0
9.1
7.3
7.4
9.0
8.0
7.0
8.0
8.1
7.0
7.6
7.6
8.0
7.3
7.2
7.2
6.0
6.8
4.8
6.5
4.4
7.0
5.0
4.1
6.1
5.7
4.0
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
4.6
4.3
50.0
4.0
3.6
3.3
3.3
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
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
0.0
3.50
(5.0)
3.00
Source: Bloomberg, Angel Research as on 29 May, 2018
Source: RBI, Angel Research
Market Outlook
May 30, 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 29 May, 2018
Market Outlook
May 30, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
75,356
(11.4)
(13.7)
22.2
Russia
Micex
4312
1.4
7.1
11.4
India
Nifty
10,689
0.1
2.4
11.8
China
Shanghai Composite
3,135
0.1
(4.5)
1.0
South Africa
Top 40
50,551
(1.0)
(3.8)
4.7
Mexico
Mexbol
44,851
(6.7)
(7.6)
(9.7)
Indonesia
LQ45
978
(3.3)
(11.5)
2.6
Malaysia
KLCI
1,776
(5.9)
(4.4)
(0.1)
Thailand
SET 50
1,141
(3.0)
(2.4)
16.1
USA
Dow Jones
24,753
2.8
(2.2)
17.4
UK
FTSE
7,730
4.1
6.2
2.7
Japan
Nikkei
22,481
1.8
2.3
14.8
Germany
DAX
12,863
2.1
1.8
0.5
France
CAC
5,509
(0.5)
2.0
1.6
Source: Bloomberg, Angel Research as on 29 May, 2018
Market Outlook
May 30, 2018
Exhibit 7: Historical Angel Top Picks/Fundamental Calls
Date Added
Top Picks/Fundamental
Stocks
Reco Price
Target/Revised Price
Current Status
04-05-2018
Top Picks
M&M
860
990
Open
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
16-02-2018
Top Picks
HSIL Ltd
433
510
Open
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
04-01-2017
Top Picks
KEI Industries
125
485
01-12-2016
Top Picks
Alkem Lab
1700
2441
Open
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
Market Outlook
May 30, 2018
Source: Company, Angel Research
Research Team Tel: 022 - 39357800
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