Market Outlook
July 30, 2015
Dealer’s Diary
Domestic Indices
Chg (%)
(Pts)
(Close)
BSE Sensex
0.4
104
27,563
Indian markets are expected to open in green tracking SGX Nifty.
Nifty
0.5
38
8,375
With Fed leaving rates unchanged, US markets ended in green. Investors were also
MID CAP
0.9
97
11,071
encouraged by strong earnings from Gilead Systems and other companies. Fed
SMALL CAP
0.9
96
11,619
cited progress in U.S. labor market, a sign it remains on course to raise rates at
BSE HC
0.5
85
16,587
some point this year, but it also flagged nagging concern about low inflation, which
BSE PSU
(0.3)
(23)
7,545
could give some officials pause.
BANKEX
0.2
46
21,023
U.K. stocks climbed Wednesday, notching second day of gains, with Barclays, Sky
AUTO
(1.4)
257
18,719
and British American Tobacco moving higher after reporting surge in profits. Other
METAL
0.4
30
8,539
European markets, France’s CAC and Germany’s DAX 30 index closed in green.
OIL & GAS
(0.2)
(18)
9,899
BSE IT
1.5
160
11,012
Key Indian benchmark Indices snapped four-day losing streak to close marginally
Global Indices
Chg (%)
(Pts)
(Close)
higher amid consolidation on Wednesday as investors turned cautious ahead of Fed
Dow Jones
0.7
121
17,751
meet and expiry of July derivatives contracts.
NASDAQ
0.4
23
5,111
News & Result Analysis
FTSE
1.2
76
6,631
Result Review: UPL
Nikkei
(0.1)
(26)
20,303
Result Preview: IPCA Labs, Dr. Reddy’s Lab., Indoco Remedies
Hang Sang
0.5
116
24,619
Refer detailed news & result analysis on the following page
Straits Times
0.1
3
3,284
Markets Today
Shanghai Com
3.4
126
3,789
The trend deciding level for the day is 27,548 / 8,365 levels. If NIFTY trades above
this level during the first half-an-hour of trade then we may witness a further rally up
Indian ADR
Chg (%)
(Pts)
(Close)
to 27,625 - 27,687 / 8,392 - 8,408 levels. However, if NIFTY trades below
INFY
0.4
0.1
$17.0
27,548 / 8,365 levels for the first half-an-hour of trade then it may correct towards
WIT
0.8
0.1
$12.3
27,486 - 27,408 / 8,349 - 8,322 levels.
IBN
(1.2)
(0.1)
$9.4
Indices
S2
S1
PIVOT
R1
R2
HDB
0.2
0.1
$61.6
SENSEX
27,408
27,486
27,548
27,625
27,687
NIFTY
8,322
8,349
8,365
8,392
8,408
Advances / Declines
BSE
NSE
Advances
1,664
862
Net Inflows (July 28, 2015)
Declines
1,161
569
` cr
Purch
Sales
Net
MTD
YTD
Unchanged
123
103
FII
4,235
5,545
(1,310)
5,630
141,010
MFs
1,460
643
817
3,247
56,856
Volumes (` cr)
BSE
3,348
FII Derivatives (July 29, 2015)
NSE
17,194
` cr
Purch
Sales
Net
Open Interest
Index Futures
5,060
6,452
(1,391)
22,627
Stock Futures
15,256
15,448
(191)
54,795
Gainers / Losers
Gainer
Loser
Company
Price (`)
chg (%)
Company
Price (`)
chg (%)
JETAIRWAYS
390
18.7
RAJESHEXPO
481
(9.2)
SUNTV
303
10.6
TATACOM
439
(7.2)
CEATLTD
880
7.4
JPASSOCIAT
9
(5.1)
MANNAPURAM
27
6.5
PMCFIN
3
(4.7)
GDL
355
6.2
GLENMARK
951
(4.2)
Market Outlook
July 30, 2015
Result Review
UPL (CMP: `526/ TP: /Upside :)
UPL, for its 1QFY2016 results, posted an 11.0% yoy growth in sales to end the
period at `3,064cr, driven by domestic sales (`1,083cr), which rose 15% yoy,
while exports (`1,981cr) posted a growth of 9%. The exports were driven by the
Latin America, which posted a 21% yoy and ROW which posted a 10% yoy growth.
Other key markets, Europe and USA, which posted a yoy growth of 1% and 5%,
respectively. The overall growth was driven by the volumes, which rose by 16%
yoy, while the exchange rate impact was -5% yoy, while pricing remained constant.
The EBDITA margins came in at 19.0% almost similar to 1QFY2015, while the
gross margins saw an expansion, which came in at 39% V/s 38% in 1QFY2015.
PAT is expected to come in at `275cr V/s `289cr in 1QFY2015, de-growth of
5.0% yoy. We maintain our neutral rating on the stock.
Y/E
Sales OPM
PAT
EPS ROE P/E P/BV EV/EBITDA EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
13,698
17.6
1,376
32.1
21.4
16.4
3.2
8.7
1.5
FY2017E
15,752
17.6
1,651
38.5
21.3
13.4
2.7
7.2
1.3
Result Preview
IPCA Labs (CMP: `691/ TP: `736 /Upside: 6.5%)
IPCA Labs, for its 1QFY2016 results, is expected to post an 11.7% yoy decline in
sales on top line to end the period at `820cr. The dip in the sales is expected on
back of import alerts for its USFDA facilities. The EBDITA margins consequently are
expected to come in at 12.6% v/s 24.0% in 1QFY2015, on back of lower sales
during the quarter. Consequently the PAT is expected to come in at `36cr V/s
`145cr expected, a de-growth of 75.0% yoy. We maintain our accumulate rating
on the stock with a target price of `736.
Y/E
Sales OPM
PAT
EPS ROE P/E P/BV EV/EBITDA EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
3,533
18.6
356
28.2
15.0
22.7
3.2
13.6
2.5
FY2017E
4,109
19.6
440
34.8
15.9
18.4
2.7
11.0
2.1
Indoco Remedies (CMP: `371/ TP: /Upside: )
Indoco Remedies, for its 1QFY2016 results, is expected to post a 28.3% yoy
growth in sales on top line to end the period at `254cr, mainly driven by exports.
The EBDITA margins consequently are expected to come in at 18.0% v/s 18.1% in
1QFY2015, inspite of higher R&D expenditure mainly driven by robust sales
growth. R&D expenditure during the quarter is expected to be 3.5% of sales V/s
2.2% of sales in 1QFY2015. Consequently, the PAT is expected to come in at
`27cr V/s `20cr in 1QFY2015, a growth of 34.5% yoy. We maintain our neutral
rating on the stock, on back of valuations.
Market Outlook
July 30, 2015
Y/E
Sales OPM
PAT
EPS ROE P/E P/BV EV/EBITDA EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
1,088
18.2
120
13.1
21.2
28.4
5.5
18.0
3.3
FY2017E
1,262
18.2
143
15.5
21.1
23.9
4.6
15.2
2.8
Dr Reddy’s Laboratories (CMP: `3,713/ TP: `3,963/Upside: 6.7%)
Dr Reddy’s Lab (DRL), for its 1QFY2016 results, is expected to post a 13.7% yoy
growth in sales on top line to end the period at `4,000cr, mainly driven by exports.
The EBDITA margins are expected to come in at 23.3% v/s 23.2% in 1QFY2015.
R&D expenditure during the quarter is expected to be 12.9% of sales V/s 11.0% of
sales in 1QFY2015. Consequently; the PAT is expected to come in at `642cr V/s
`550cr in 1QFY2015, a growth of 16.6% yoy. We maintain our accumulate 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
1,088
18.2
120
13.1
21.2
28.4
5.5
18.0
3.3
FY2017E
1,262
18.2
143
15.5
21.1
23.9
4.6
15.2
2.8
Quarterly Bloomberg Brokers Consensus Estimate
Kotak Mahindra Bank Ltd- July 30, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
PAT
600
430
40
527
14
Exide Industries Ltd- July 30, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
1,940
1,910
2
1,645
18
EBITDA
300
291
3
238
26
EBITDA margin (%)
15
15
14
Net profit
185
185
0
138
35
Bank of Baroda- July 30, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
PAT
901
1,362
(34)
6
14,952
IDFC Ltd (Consol)- July 30, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
900
2,123
(58)
2,571
(65)
EBITDA
840
1,784
(53)
1,944
(57)
EBITDA margin (%)
93
84
76
Net profit
374
482
(22)
382
(2)
Market Outlook
July 30, 2015
ITC Ltd- July 30, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
9,349
9,164
2
9,188
2
EBITDA
3,380
3,278
3
3,243
4
EBITDA margin (%)
36
36
35
Net profit
2,322
2,186
6
2,361
(2)
Colgate-Palmolive India Ltd- July 30, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
1,051
951
11
1,022
3
EBITDA
232
194
20
247
(6)
EBITDA margin (%)
22
20
24
Net profit
156
135
16
164
(5)
Dr Reddy's Laboratories Ltd (Consol)- July 30, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
3,859
3,518
10
3,870
0
EBITDA
863
779
11
765
13
EBITDA margin (%)
22
22
20
Net profit
554
550
1
519
7
Glenmark Pharmaceuticals Ltd (Consol)- July 30, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
1,778
1,478
20
1,754
1
EBITDA
366
342
7
281
30
EBITDA margin (%)
21
23
16
Net profit
208
185
12
11
1857
NTPC Ltd- July 30, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
18,571
18,086
3
19,230
(3)
EBITDA
4,195
3,519
19
4,649
(10)
EBITDA margin (%)
23
19
24
Net profit
2,116
2,201
(4)
2,944
(28)
ICICI Bank Ltd- July 31, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
PAT
2,920
2,655
10
2,922
0
Shriram Transport Finance Co Ltd- July 31, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
1,114
2,016
(45)
2,311
(52)
EBITDA
844
1437
(41)
1,670
(49)
EBITDA margin (%)
76
71
72
Net profit
329
306
7
317
4
Market Outlook
July 30, 2015
Economic and Political News
Govt to assess impact of MAT on IND-AS companies
Govt clears GST amendments, states to be compensated for 5 yrs
Govt clears seven FDI proposals worth `981cr
Corporate News
Eveready to enter home and kitchen appliances biz
BPCL buys first shipment of Russian Far East crude grade
SpiceJet in talks with Airbus, Boeing to acquire over 100 planes
Top Picks
Large Cap
Market Cap
CMP
Target
Upside
Company
Sector
Rating
(` Mn)
(`)
(`)
(%)
Axis Bank
Financials
134,744
Buy
567
716
26.2
ICICI Bank
Financials
167,872
Buy
289
392
35.5
Infosys
IT
249,264
Buy
1,085
1,306
20.3
Power Grid
Power
73,242
Buy
140
170
21.4
TCS
IT
491,269
Buy
2,508
3,168
26.3
Tech Mahindra
IT
50,471
Buy
525
646
23.1
Yes Bank
Financials
34,105
Buy
816
1,006
23.3
Ashok Leyland
Auto
24,090 Accumulate
85
88
4.0
LIC Housing Fin.
Financials
24,612 Accumulate
488
553
13.4
MRF
Others
16,758 Accumulate
39,513
43,439
9.9
Source: Angel Research, Bloomberg
Mid Cap
Market
CMP
Target
Upside
Company
Sector
Rating
Cap (` Mn)
(`)
(`)
(%)
Action Const. Equip. Capital Goods
450
Buy
45
54
18.8
Bajaj Electricals
Others
2,590
Buy
257
341
32.7
Hindustan Media Ven. Media
1,800
Buy
245
292
19.1
MBL Infrastructures
Construction
1,171
Buy
283
395
39.6
Mangalam Cements Cement
725
Buy
272
349
28.5
MT Educare
Others
465
Buy
117
141
20.8
Radico Khaitan
Others
1,217
Buy
92
112
22.4
Setco Automotive
Auto Ancillary
604
Buy
226
286
26.5
JK Tyre
Auto Ancillary
2,521
Buy
111
127
14.3
Source: Angel Research, Bloomberg
Market Outlook
July 30, 2015
Research Team Tel: 022 - 39357800
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