Market Outlook
August 3, 2015
Dealer’s Diary
Domestic Indices
Chg (%)
(Pts)
(Close)
BSE Sensex
1.5
409
28,115
Indian markets are expected to open in green tracking SGX Nifty.
Nifty
1.3
111
8,533
U.S. markets ended on a sour note on Friday as drop in energy prices eclipsed wage
MID CAP
1.0
115
11,273
data that supported expectations that Fed might hold off interest rates. Exxon Mobil
SMALL CAP
0.9
107
11,831
and Chevron shares were down over 4% after they reported poor earnings due to
BSE HC
2.0
333
17,048
weak oil prices.
BSE PSU
1.4
109
7,719
FTSE 100 again held its ground on Friday with narrow gains after it felt the influence
BANKEX
1.7
354
21,499
of Greek debt crisis. IMF said they are cautious about contributing to Greece’s
AUTO
1.8
338
19,108
current bailout plan and said that current debt needs to be restructured.
METAL
1.7
146
8,668
OIL & GAS
(0.3)
(27)
9,902
Capital infusion in banks, some clarity on retrospective tax on capital gains cheered
BSE IT
1.3
145
11,073
investors and led to over 1% rally in Indian equity markets on Friday.
Global Indices
Chg (%)
(Pts)
(Close)
News & Result Analysis
Dow Jones
(0.3)
(56)
17,690
July 2014 Auto sales update
NASDAQ
(0.0)
(5)
5,128
Result Review: Alembic Pharma, Glaxo Pharmaceuticals
FTSE
0.4
27
6,696
Refer detailed news & result analysis on the following page
Nikkei
0.3
62
20,585
Markets Today
Hang Sang
0.6
138
24,636
The trend deciding level for the day is 28,030 / 8,510 levels. If NIFTY trades above
Straits Times
(1.4)
(47)
3,203
this level during the first half-an-hour of trade then we may witness a further rally up
Shanghai Com
(1.1)
(42)
3,664
to 28,246 - 28,377 / 8,572 - 8,611 levels. However, if NIFTY trades below
28,030 / 8,510 levels for the first half-an-hour of trade then it may correct towards
Indian ADR
Chg (%)
(Pts)
(Close)
27,899 - 27,683 / 8,471 - 8,409 levels.
INFY
(0.2)
(0.0)
$16.9
Indices
S2
S1
PIVOT
R1
R2
WIT
0.1
0.8
$12.4
SENSEX
27,683
27,899
28,030
28,246
28,377
IBN
4.9
0.5
$10.0
NIFTY
8,409
8,471
8,510
8,572
8,611
HDB
1.2
0.7
$62.5
Net Inflows (July 30, 2015)
Advances / Declines
BSE
NSE
` cr
Purch
Sales
Net
MTD
YTD
Advances
1,666
892
FII
5,688
5,485
203
5,814
141,195
Declines
1,222
615
MFs
2,279
1,924
356
4,339
57,948
Unchanged
127
55
FII Derivatives (July 31, 2015)
Volumes (` cr)
` cr
Purch
Sales
Net
Open Interest
BSE
3,928
Index Futures
2,508
1,353
1,155
14,763
NSE
21,358
Stock Futures
3,380
3,039
341
48,655
Gainers / Losers
Gainer
Loser
Company
Price (`)
chg (%)
Company
Price (`)
chg (%)
RAJESHEXPO
519
12.5
GATI
181
(8.6)
SUNTV
337
9.0
KAILASH
6
(4.8)
UNIONBANK
177
8.0
APLLTD
711
(4.7)
INDIACEM
93
7.0
TITAN
324
(4.7)
SANOFI
4,276
6.6
TATACHEM
489
(3.4)
Market Outlook
August 3, 2015
July 2014 auto sales update
Maruti Suzuki: Maruti Suzuki sales grew 20% yoy to 121,712 units and were above
estimates. Domestic sales grew 22% yoy to 110,405 units while export sales
remained flat at 11,307 units.
Ashok Leyland: Ashok Leyland sales grew strongly 40% yoy to 11,022 units and
were slightly ahead of estimates. MHCV sales grew 53% yoy to 8,803 units while
the LCV sales grew marginally 5% yoy to 2,219 units.
Hero Motocorp: Hero Motocorp sales declined 8% yoy to 487,580 units and were
below estimates
TVS Motors: TVS Motors sales grew slightly 2% yoy to 218,321 units and were
marginally below estimates. Two wheeler sales grew 1% yoy to 208,044 units
while three wheeler sales grew healthy 15% yoy to 10,277 units
Tata Motors: Tata Motors sales grew marginally 1% yoy to 40,154 units and were
in line with estimates. Passenger vehicle sales grew strongly 13% yoy while the
commercial vehicle sales dipped marginally 5%.
M&M: M&M sales declined 5% yoy to 50,112 units and were in line with estimates.
Automotive sales declined 3% yoy to 34,652 units while the tractor volumes
continued to decline in double digits by 11% yoy to 15,460 units.
Result Review
Alembic Pharma (CMP: `711/ TP: /Upside: )
Alembic Pharma, for its 1QFY2016 results, posted results lower than expected, more
on the OPM and net profit front, while sales were marginally lower than expected.
On topline, the company posted sales of `583cr V/s `601cr expected and V/s
`492cr in 1QFY2015, posting a yoy growth of 18.4%. The growth was driven by
domestic formulation (`291cr) and export formulation (`176cr) markets, which
posted a yoy growth of 17.2% and 29.0% respectively. The API sales (`117cr),
posted a yoy growth of 10%.
The Indian formulation sales (`263cr), posted a yoy growth of 18.0% yoy. The
growth in the domestic formulation market was driven by specialty segment, which
posted a 22% yoy and acute segment posted a yoy growth of 12% yoy. The Indian
generic segment (`29cr), posted a yoy growth of 13%.
In export formulation markets, the generic formulation exports (`168cr) posted a yoy
growth of 47%. The export formulation branded market (`84cr) posted a yoy dip of 63%.
On the operating front, the gross margins came in at 63.4% v/s 64.0% in
1QFY2015, which lead the OPM’s to dip from 17.4% V/s 19.8% expected V/s
19.5% in 1QFY2015, a dip of 216bps yoy. The gross margins dipped, on back of
sales mix change. The Formulation: API moved to 80:20 in 1QFY2016 V/s 79:21
in 1QFY2015. OPM dip was sharper than the gross margin contraction, on back
of the R&D expenditure, which was 8.2% of sales in 1QFY2016 V/s 6.0% of sales
in 1QFY2015. Consequently, the PAT came in at `70cr V/s `86cr expected V/s
`65cr in 1QFY2015, a growth of 8% yoy. We maintain our neutral rating on the
stock, on back of valuations.
Market Outlook
August 3, 2015
Y/E
Sales OPM
PAT
EPS ROE P/E P/BV EV/EBITDA EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
2,405
19.9
334
17.7
32.6
40.1
11.5
27.9
5.6
FY2017E
2,859
20.4
415
22.0
30.9
32.3
8.8
22.6
4.6
Glaxo Pharmaceuticals (CMP: `3,508/ TP: /Upside:)
Glaxo Pharmaceuticals 1QFY2016 posted results lower than expected, on sales,
OPM and net profit front. On sales, the company posted sales of `622cr V/s
`700cr expected and V/s `655cr in 2QCY2015, de-growth of 5.1% yoy. The sales
during the quarter, was impacted on back of supply constraints.
On the operating front, the gross margins came in at 55.0% V/s 57.5% expected
and V/s 51.5% in 2QCY2015. Inspite of the same, the OPM’s came in at 16.7%
V/s 20.9% expected and V/s 16.7% in 2QCY2015, almost flat. This was mainly on
back of lower sales during the quarter. Consequently, the Adj. PAT came in at
`95cr V/s `135cr expected V/s `98cr in 2QCY2015, a de-growth of 3.5% yoy. We
maintain our neutral rating on the stock, on back of valuations.
Y/E
Sales OPM
PAT
EPS ROE P/E P/BV EV/EBITDA EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
2,870
20.0
504
59.5
28.5
59.0
17.4
48.8
9.7
FY2017E
3,158
20.1
536
63.2
32.2
55.5
18.3
44.5
8.9
Quarterly Bloomberg Brokers Consensus Estimate
Hero MotoCorp Ltd- August 03, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
7,068
6,999
1.0
6,695
5.6
EBITDA
925
947
(2.4)
838
10.3
EBITDA margin (%)
13.1
13.5
12.5
Net profit
679
563
20.7
477
42.6
Bharat Forge Ltd- August 03, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
1,189
964
23.3
1,195
(0.5)
EBITDA
346
283
22.3
360
(3.7)
EBITDA margin (%)
29.1
29.4
30.1
Net profit
191
145
31.8
203
(6.0)
HCL Technologies Ltd (Consol)- August 03, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
9,756
8,424
15.8
9,267
5.3
EBITDA
2,270
2,217
2.4
2,090
8.6
EBITDA margin (%)
23.3
26.3
22.6
Net profit
1,831
1,834
(0.2)
1,683
8.8
Market Outlook
August 3, 2015
Tata Chemicals Ltd (Consol)- August 05, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
4,118
3,803
8.3
3,658
12.6
EBITDA
564
504
12.0
411
37.1
EBITDA margin (%)
13.7
13.2
11.2
Net profit
222
176
26.3
(74)
0.0
Siemens Ltd- August 05, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
2,438
2,319
5.1
2,589
(5.8)
EBITDA
225
53
325.7
250
(10.1)
EBITDA margin (%)
9.2
2.3
9.7
Net profit
127
13
878.2
162
(21.4)
Canara Bank- August 05, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
PAT
585
807
(27.5)
613
(4.5)
Economic and Political News
India likely to export dairy products to Russia by Dec
First river info system in August
Jet fuel prices fall 9.5%, hit lowest level in over four years
Corporate News
Production from GSPC fields in KG basin faces delay
Apollo Hospitals to start three hospitals by December end
KKR to Invest $150mn in JBF Ind for a 20% stake
Godrej Consumer eyes more overseas buys
Market Outlook
August 3, 2015
Top Picks
Large Cap
Market Cap
CMP
Target
Upside
Company
Sector
Rating
(` Cr)
(`)
(`)
(%)
Axis Bank
Financials
136,300
Buy
574
716
24.8
ICICI Bank
Financials
175,593
Buy
303
370
29.6
Infosys
IT
247,622
Buy
1,078
1,306
21.1
Power Grid
Power
74,053
Buy
142
170
20.1
Sun Pharma
Pharma
197,984
Buy
823
950
15.5
TCS
IT
491,641
Buy
2,510
3,168
26.2
Tech Mahindra
IT
50,932
Buy
530
646
22.0
Yes Bank
Financials
34,649
Buy
829
1,006
21.4
LIC Housing Fin.
Financials
24,612 Accumulate
498
553
11.0
MRF
Others
17,325 Accumulate
40,849
43,439
6.3
Source: Angel Research, Bloomberg
Mid Cap
Market
CMP
Target
Upside
Company
Sector
Rating
Cap (` Cr)
(`)
(`)
(%)
Bajaj Electricals
Others
2,609
Buy
259
341
31.8
Garware Wall Rope Others
697
Buy
294
390
32.6
Hindustan Media Ven. Media
1,768
Buy
241
292
21.2
MBL Infrastructures Construction
1,170
Buy
282
395
39.8
Mangalam Cements Cement
718
Buy
269
349
29.7
Minda Industries
Auto Ancillary
850
Buy
536
652
21.6
MT Educare
Others
462
Buy
116
141
21.4
Radico Khaitan
Others
1,252
Buy
94
112
19.0
JK Tyre
Auto Ancillary
2,599 Accumulate
115
127
10.8
Source: Angel Research, Bloomberg
Market Outlook
August 3, 2015
Research Team Tel: 022 - 39357800
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