Angel Top Picks - February 2016
Angel Top Picks - February 2016
Benchmark indices have seen a sharp fall year to date largely on account of
global factors such as the slowdown in the Chinese economy, currency
devaluations and fall in crude oil prices. Domestic macro indicators, however,
continue to remain favourable, with 3QFY2016 GDP growth exceeding
expectations at 7.3%. For consumption growth and inflation, key monitorables will
be the seventh pay commission impact and likelihood of good monsoons.
A key trigger for the markets would be if the government is able to present a
budget focused on growth and increasing investment spending, while staying firm
on the fiscal consolidation path. The sharp reduction in crude prices has offered
the Government a windfall that will be diverted towards investments in
infrastructure, urban development and welfare schemes. With the backdrop of the
budget, we believe select plays focused on infrastructure and housing would be
key beneficiaries going ahead.
While global headwinds continue to affect liquidity, India will remain a key
beneficiary of lower commodity prices and any delays in US rate hikes. With the
correction, markets are now trading at 13.5x FY2017E earnings, which is quite
reasonable. In our view this remains a bottom-up stock pickers market, with
quality stocks now trading at attractive valuations, which investors can start
accumulating at current levels.
Large Cap
EPS
PER
EV/Sales
ROE
Company
Sector
Rating
CMP (`) Target (`) Upside (%) FY16 FY17 FY16 FY17 FY16 FY17 FY16 FY17
Amara Raja
Auto & Auto Ancill. Buy
861
1,040
20.8
28.8
37.1
28.5
23.2
3.0
2.5
23.4
24.1
Ashok Leyland
Auto & Auto Ancill. Buy
81
111
37.0
3.4
4.7
23.9
17.3
1.2
1.0
17.7
22.2
BEL
Capital Goods
Buy
1,124
1,414
25.8
54.0
61.5
20.8
18.3
2.6
2.2
39.3
45.6
HCL Tech
IT
Buy
809
1,038
28.3
51.1
57.7
15.8
14.0
2.2
1.8
21.5
18.8
HDFC Bank
Financials
Buy
976
1,262
29.3
49.3
61.1
19.8
16.0
-
-
18.5
19.7
Infosys
IT
Buy
1,081
1,347
24.6
59.4
65.7
18.2
16.5
3.3
2.8
21.2
20.1
LIC Housing Finance Financials
Buy
406
592
45.8
33.0
40.2
12.3
10.1
-
-
19.7
20.5
NBCC
Construction
Buy
839
1,089
29.7
29.6
39.8
28.3
21.1
1.5
1.1
24.1
26.7
TVS Motors
Auto & Auto Ancill
Buy
278
330
18.7
9.2
15.0
30.3
18.5
1.2
1.1
22.7
29.6
Source: Angel Research
Mid Cap
EPS
PER
EV/Sales
ROE
Company
Sector
Rating
CMP (`) Target (`) Upside (%) FY16 FY17 FY16 FY17 FY16 FY17 FY16 FY17
Blue Star
Cons. Durable
Buy
329
439
33.6
13.7
17.2
24.0
19.2
0.9
0.8
26.1
25.4
Jagran Prakashan Media
Buy
156
189
21.2
8.9
9.9
17.6
15.8
2.3
2.1
20.9
20.5
Navkar Corp.
Logistics
Buy
174
265
52.3
5.6
5.9
30.8
29.6
7.6
6.5
6.3
6.1
Radico Khaitan
Breweries & Distilleries
Buy
98
156
59.2
5.8
7.1
16.8
13.7
1.3
1.2
8.6
9.6
Siyaram Silk Mills Textile
Buy
997
1,354
35.8
89.9
104.1
11.1
9.6
0.7
0.7
17.9
17.8
Source: Angel Research
Please refer to important disclosures at the end of this report
1
Top Picks Report | February 2016
Top Picks - Large Cap
February 12, 2016
2
Top Picks Report | February 2016
Stock Info
Amara Raja Batteries
CMP
861
Amara Raja Batteries Ltd (ARBL) is the second largest lead acid storage battery
TP
1,040
manufacturer. ARBL has been outpacing market leader Exide (ARBL grew 24%
Upside
20.8%
CAGR over FY2010-15 as compared to Exide's growth of 13%), leading to
Sector
Auto Ancillary
market share improving from 25% in FY10 to about current 35% . ARBL's
outperformance is mainly due to of ducts developed with from global battery
Market Cap (` cr)
14,707
leader Johnson Controls Inc (which also holds 26% stake in ARBL).
Beta
0.8
With the automotive OEM policy of having multiple vendors and a strong
52 Week High / Low
1,132 / 773
brand recall in the replacement segment, ARBL is well poised to further gain
market share. Given the economic recovery and market share gains, 18% over
3 year-Chart
the next two years as against industry growth of 10-12%.
1200
ARBL is a well diversified auto ancillary player having presence across the
1000
automotive and the industrial segment and a broad OEM as well as
800
replacement customer base. We believe ARBL is a high quality stock to play
600
the auto sector revival. We assign a P/E multiple of 28x to FY2017E earnings
400
and arrive at a target price of `1,040/share.
200
Key Financials
0
Y/E
Sales
OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
4,892
17.4
493
28.8
23.4
28.5
6.9
16.9
3.0
FY2017E
5,871
17.6
634
37.1
24.1
23.2
5.5
14.1
2.5
Source: Company, Angel Research
Stock Info
Ashok Leyland
CMP
81
Ashok Leyland Ltd (ALL) is the second largest medium and heavy commercial
TP
111
vehicle (MHCV) manufacturer in the country, commanding a market share of
Upside
37.0%
about 28%. The MHCV industry is expected to remain in an uptrend (we
Sector
Automobile
expect 15% growth over the next two years) given the better economic growth,
improvement in fleet operators profitability on account of firm freight rates and
Market Cap (` cr)
23,080
decline in diesel prices and increased infrastructure investments.
Beta
1.2
In order to reduce cyclicality, ALL is also focusing on increasing light
52 Week High / Low
100 /56
commercial vehicles (LCVs) and exports. ALL-Nissan JV developed LCV - "Dost"
has been received well and has captured a market share of 6% within three years
3 year-Chart
of its launch. Also, ALL is targeting new markets in Africa and Middle East to
120
increase export contribution from the current 15% to 33% over the next five years.
100
ALL's margins are likely to improve by 400bp yoy over FY2015-17 period on
80
account of double-digit growth in MHCVs and reduced discounting.
60
We are positive on ALL, given the cyclical upturn in MHCVs and additional
40
growth avenues. We assign a multiple of 13x to FY2017E EBIDTA to arrive at
20
a target price of `111/share.
0
Key Financials
Y/E
Sales
OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
17,995
11.4
979
3.4
17.7
23.9
4.2
12.3
1.2
FY2017E
21,544
11.6
1,331
4.7
22.2
17.3
3.8
10.0
1.0
Source: Company, Angel Research
February 12, 2016
3
Top Picks Report | February 2016
Stock Info
Bharat Electronics (BEL)
CMP
1,124
(1) High priority of Defense sector in government’s ‘Make in India’ campaign,
TP
1,414
with emphasis on indigenization, (2) increase in FDI limits from 26% to 49%,
and (3) $47bn worth of projects cleared by Defense Acquisition Council (DAC)
Upside
25.8%
in last 20 months, indicate that we are at inflexion point where Indian Defense
Sector
Capital Goods
capex cycle is entering new era of growth. Current bid pipeline, could lead to
Market Cap (` cr)
26,977
strong award activity for next few years and BEL could emerge as beneficiary.
BEL in FY2015 had
37% market share in defense electronics space.
Beta
1.2
Considering (1) bid-pipeline of Indian Airforce and Navy’s platform projects,
52 Week High / Low
1,417 / 974
which have high Defense Electronic component, (2) BEL’s in-house R&D
capabilities, and (3) zero debt status, all point that BEL would maintain its
3 year-Chart
strong market positioning in Defense Electronics space.
1600
We expect BEL to trade at premium to its historical valuations on account of
1400
uptick in investment cycle. Current low competitive intensity and the contention
1200
of it justifiably commanding scarcity premium, being largest listed defense
1000
player, makes the stock more attractive. We assign 1-year forward P/E
800
multiple of 23.0x to arrive at price target of `1,414/share. Given the upside,
600
we recommend BUY.
400
200
Key Financials
0
Y/E
Sales
OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
7,737
16.8
1,296
54.0
39.3
20.8
3.0
15.5
2.6
FY2017E
8,634
17.2
1,475
61.5
45.6
18.3
2.6
12.9
2.2
Source: Company, Angel Research
Stock Info
HCL Technologies
CMP
809
Healthy pipeline: In terms of order flow in FY2015, HCL Tech has signed 58
TP
1,038
transformational engagements with US$5bn+ of TCV. During 2QFY2016, the
Upside
28.3%
company has signed in excess of US$1bn in TVC, including 8 transformational
Sector
IT
deals. The broad-based business wins, across service lines and industry
verticals were driven by the company’s next-generation offerings. Thus, on
Market Cap (` cr)
1,14,071
back of strong order book, the company expects 2HFY2016 to be better than
Beta
0.6
1HFY2016.
52 Week High / Low
1,058 / 798
Robust outlook: We expect HCL Tech to post a USD and INR revenue CAGR of
13.0% and 13.2%, respectively, over FY2015-17E. On the operating front,
3 year-Chart
HCL Tech's EBIT margin has been around 22.3% in FY2015.Going ahead, the
1200
Management expects EBIT margins to sustain at 21-22%. We expect the EBIT
1000
and PAT to post a 7.7% and 6.0% CAGR, respectively, over FY2015-17E.
800
Outlook and Valuations: At current valuations, the stock is attractively valued
600
and hence we maintain our buy with a price target of `1,038.
400
Key Financials
200
Y/E
Sales
OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
0
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
42,038
21.2
7,216
51.1
21.5
15.8
3.4
10.5
2.2
FY2017E
47,503
21.5
8,142
57.7
18.8
14.0
2.6
8.2
1.8
Source: Company, Angel Research
February 12, 2016
4
Top Picks Report | February 2016
Stock Info
HDFC Bank
CMP
976
Strong capital adequacy, expanding network, to sustain traction in market
TP
1,262
share: HDFC Bank’s capital adequacy ratio as of 3QFY2016 stood strong at
Upside
29.3%
15.9%, with Tier1 ratio at 13.2%, which positions the bank to continue on its
Sector
Financials
growth path and increase its market share.
Market Cap (` cr)
2,46,559
Asset quality rock-solid: The bank has been able to maintain its asset quality
Beta
0.84
consistently. Asset quality continued to remain healthy with the Gross NPA
52 Week High / Low
1,128 / 944
ratio and the Net NPA ratio at 0.97% and 0.29%, respectively, as of
3QFY2016, in a challenging macro environment.
3 year-Chart
1,200
Outlook: Credit and deposit growth beat the industry growth rate, driven by
strong retail business, healthy CASA and continued network expansion. This
1,000
provides strong visibility for a robust 20% earnings trajectory, coupled with
high quality of earnings. This in our view justifies a premium valuation
800
multiple. At the current market price, the bank is trading at 2.9x FY2017E
ABV. We recommend a Buy rating on the stock, with a target price of `1,262.
600
Key Financials
400
Y/E
Op. Inc NIM
PAT
EPS
ABV ROA ROE P/E P/ABV
March
(` cr)
(%)
(` cr)
(`)
(`)
(%)
(%)
(x)
(x)
FY2016E
38,309
4.3
12,363
49.3
285.4
1.9
18.5
19.8
3.4
FY2017E
47,302
4.3
15,302
61.0
332.2
1.9
19.7
16.0
2.9
Source: Company, Angel Research
Stock Info
Infosys
CMP
1,081
Guidance
- upgraded to
12.8-13.2% CC growth in FY2016: During
TP
1,347
3QFY2016 Infosys has upgraded its USD revenue growth guidance to 12.8-
Upside
24.6%
13.2% V/s from 10-12% on CC basis earlier for FY2016. In INR terms, the
Sector
IT
company expects a 16.2-16.6% growth for FY2016. We expect the company
to post ~12.7% USD revenue growth in FY2016.
Market Cap (` cr)
2,48,334
Aims to be US$20bn company by FY2020: Company expects its revenue to
Beta
0.7
rise to US$20bn by FY2020, up from US$8.7bn now, as it focuses on
52 Week High / Low
1,219 / 933
acquisitions and win more new technology services, implying a 14% CAGR
over the period. Over the near term, we expect Infosys to post a 12.7% USD
3 year-Chart
revenue growth in FY2016. Over FY2015-17E, we expect USD and INR
1400
revenue to grow at a CAGR of 12.9% and 14.5%, respectively.
1200
Outlook and Valuations: The stock trades at current valuations of 16.5x FY2017E
1000
earnings. We recommend a Buy on the stock with a price target of `1,347.
800
600
Key Financials
400
Y/E
Sales
OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
200
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
0
FY2016E
61,850
27.5
13,631
59.4
21.2
18.2
3.9
12.1
3.3
FY2017E
69,891
27.5
15,087
65.7
20.1
16.5
3.3
10.2
2.8
Source: Company, Angel Research
February 12, 2016
5
Top Picks Report | February 2016
Stock Info
LIC Housing Finance
CMP
406
Significant under penetration of mortgages in India: India is expected to
TP
592
witness a robust housing finance growth going forward as the mortgage
Upside
45.8%
penetration in India remains at very low levels at 9% to GDP as compared to
Sector
Financials
the developed countries where it is in the range of 60-100%.
Market Cap (` cr)
20,510
NIM expansion visible: LIC Housing Finance is able to raise funds from low-
Beta
1.41
cost NCDs due to its strong AAA credit rating and backing by strong
promoters like LIC. In a declining interest rate environment, NBFC's like LIC
52 Week High / Low
526 / 389
Housing are well-placed to increase margins in our view.
3 year-Chart
Outlook: : For companies like LICHF, the funding environment has eased;
600
thus it will lead to lower cost of borrowing, while outlook for growth in retail
housing loans remains positive, going forward. We expect the company to
500
post a healthy loan book CAGR of 18.7% over FY2015-17E, which is likely to
400
reflect in an earnings CAGR of 21.0%, over the same period. The stock
300
currently trades at 2.0x FY2017E ABV. We maintain our Buy rating on the stock,
200
with a target price of `592.
100
Key Financials
0
Y/E
Op. Inc NIM
PAT
EPS
ABV ROA ROE P/E P/ABV
March
(` cr)
(%)
(` cr)
(`)
(`)
(%)
(%)
(x)
(x)
FY2016E
3,101
2.5
1,664
33.0
176.7
1.4
19.7
12.3
2.3
FY2017E
3,745
2.5
2,029
40.2
207.6
1.4
20.5
10.1
2.0
Source: Company, Angel Research
Stock Info
National Buildings Construction Corporation (NBCC)
CMP
839
NBCC reported order book of over
`35,000cr at 3QFY2016-end.
TP
1,089
Considering the bid pipeline for re-development works from Delhi and other
Upside
29.7%
State governments, and with ‘Smart City’ projects to take-off shortly, we expect
NBCC’s order-book to grow 3.5x during FY2015-18E to `59,440cr.
Sector
Construction
We expect NBCC to report 26.7% revenue CAGR during FY2015-18E (to
Market Cap (` cr)
10,063
`9,506cr), mainly driven by 29.3% revenue CAGR from PMC segment, where
Beta
1.3
re-development projects would contribute maximum. We expect NBCC to
52 Week High / Low
1,215/ 699
report 41.5% EBITDA CAGR during the same period, led by increased
contribution from PMC segment, which is likely to experience margin
3 year-Chart
expansion. Owing to lower other income growth assumption, we expect NBCC
1400
to report 32.9% PAT CAGR during FY2015-18E to `653cr.
1200
We have strong positive view on NBCC, given its growth prospects as reflected
1000
by its strong order book of
`35,000cr (6.3x OB to LTM revenues). Also,
800
emerging opportunities in re-development space, government’s initiative of
600
developing ‘Smart Cities’, and the company’s cash rich status, should aid its growth.
400
On assigning 20.0x P/E multiple to our FY2018E EPS of `54.4/share, we arrive at
200
price target of `1,089. Given the upside, we recommend BUY on the stock.
0
Key Financials
Y/E
Sales
OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
5,816
6.9
355
29.6
24.1
28.3
5.1
20.9
1.5
FY2017E
7,382
7.7
478
39.8
26.7
21.1
4.0
14.3
1.1
Source: Company, Angel Research
February 12, 2016
6
Top Picks Report | February 2016
Stock Info
TVS Motor Company (TVSM)
CMP
278
TVS Motors (TVSM) is the third largest two wheeler manufacturer in the country
TP
330
having a market share of 14%. The two wheeler industry is expected to recover
Upside
18.7%
in FY2017 and return to long term CAGR of 8-10% on back of higher income
Sector
Automobile
due to better economic growth, implementation of Seventh Pay commission
which boosts central government employees income and expectations of
Market Cap (` cr)
13,205
normal monsoon which would augment rural incomes.
Beta
1.0
TVSM is likely to outpace industry growth (we expect 12% volume growth in
52 Week High / Low
311/ 201
FY2017) on back of new launches. Continued success in the scooter space
(Jupiter) and relaunch of highly successful executive motorcycle “Victor” is
3 year-Chart
likely to lead to market share gains for TVSM.
350
TVSM margins are likely to improve over the next two years on back of
300
operating leverage due to double digit volume growth and lower raw material
250
costs due to renegotiation with vendors. TVSM has guided to reach the 10%
200
margin level in FY2018 as against 6.8% in 9MFY2016.
150
100
We are positive on TVSM given the market share gains and scope for margin
improvement. We assign a multiple of 22x to FY2017 earnings to arrive at a
50
target price of `330
0
Key Financials
Y/E
Sales
OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
11,263
6.9
436
9.2
22.7
30.3
6.9
18.1
1.2
FY2017E
13,122
8.5
713
15.0
29.6
18.5
4.8
12.5
1.1
Source: Company, Angel Research
February 12, 2016
7
Top Picks Report | February 2016
Top Picks - Mid Cap
February 12, 2016
8
Top Picks Report | February 2016
Stock Info
Blue Star
CMP
329
BSL is one of the largest air-conditioning companies in India. With a mere
TP
439
3% penetration level vs 25% in China, the overall outlook for the room
Upside
33.6%
air-conditioner (RAC) market in India is favourable.
Sector
Cons. Durable
BSL’s RAC business has been outgrowing the industry by ~10% points over the
Market Cap (` cr)
2,957
last few quarters, resulting in the company consistently increasing its market
Beta
0.7
share (~7% in FY2014 to 10% at present). This has resulted in CPD's share in
52 Week High / Low
398 / 274
overall revenues increasing from~23% in FY2010 to ~42% in FY2015
(expected to improve to ~48% in FY2018E). With strong brand equity and
3 year-Chart
higher share in split ACs, we expect the CPD to continue to drive growth.
600
500
Aided by increasing contribution from the CPD, we expect the overall top-line
to post a revenue CAGR of 11.2% over FY2015-18E and margins to improve
400
from 5.3% in FY2015 to 7.1% in FY2018E. Moreover, the proposed merger
300
with Blue Star Infotech will provide cash influx and thus strengthen the balance
200
sheet. We maintain our Buy recommendation on the stock.
100
-
Key Financials
Y/E
Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
3,548
6.3
123
13.7
26.1
24.0
6.0
14.7
0.9
FY2017E
3,977
6.9
164
17.2
25.4
19.2
3.9
11.4
0.8
Source: Company, Angel Research
Stock Info
Jagran Prakashan
CMP
156
We expect JPL to register a net sales CAGR of ~15% over FY2015-17E, on
TP
189
back of (a) strong growth in advertising revenue due to improvement in GDP
Upside
21.2%
growth, (b) improvement in circulation revenue owing to combination of
increase in cover price and volume growth.
Sector
Media
Further the acquisition of Radio City would also boost the company's revenue
Market Cap (` cr)
5,110
going ahead. Radio City has ~20 stations across 7 states in the country and is
Beta
0.6
second only to ENIL in all its operating circles, ie Delhi, Mumbai, Bengaluru,
52 Week High / Low
176/108
Chennai, Ahmedabad, Hyderabad, Pune and Lucknow. The company covers
~51% (~66mn people) of the total radio population.
3 year-Chart
Raw material prices have been in a declining trend. Thus, considering lower
180
news print costs, healthy sales, and higher margins in the radio business, we
160
expect an adj. net profit CAGR of ~20% over FY2015-17E to `325cr.
140
Considering Dainik Jagran's strong presence in the rapidly growing Hindi
120
100
markets, we expect JPL to benefit from an eventual recovery in the Indian
80
economy. Hence, we maintain an Accumulate rating on the stock with a target
60
price of stock with a target price of `189.
40
20
Key Financials
0
Y/E
Sales
OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
2,170
27.2
290
8.9
20.9
17.6
3.7
8.8
2.3
FY2017E
2,355
26.2
325
9.9
20.5
15.8
3.2
8.4
2.1
Source: Company, Angel Research
February 12, 2016
9
Top Picks Report | February 2016
Stock Info
Navkar
CMP
174
NCL is one of the largest and one of the three CFS at JNPT with rail
TP
265
connectivity, helping garner high market share at the port. NCL is in a massive
Upside
52.3%
expansion mode where it is increasing its capacity by 234% to 1,036,889
Sector
Logistics
TEUS at JNPT and coming up with an ICD at Vapi (with Logistics Park).
Market Cap (` cr)
2,477
The ICD with rail link should benefit from first mover advantage in a region
Beta
0.6
that has huge market potential and accounts for ~27% of volumes at JNPT.
The ICD should be able to capture the EXIM volumes from the region through
52 Week High / Low
221 / 151
rail link that till now was being custom cleared at JNPT (Import) or being
transported via road and consolidated at JNPT (Export). Although, South
3 year-Chart
Gujarat volume will now head straight to Vapi ICD, the company can now
220
cater to bulk commodities and domestic traffic that it had been rejecting owing
210
to capacity constraints at CFS.
200
190
We expect NCL to successfully use its rail advantage and scale up its
180
utilisations at both JNPT and Vapi ICD. We have a Buy rating on the stock.
170
160
Key Financials
150
Y/E
Sales
OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
140
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
365
38.3
80
5.6
6.3
30.8
1.9
23.2
7.6
FY2017E
436
37.5
84
5.9
6.1
29.6
1.8
20.3
6.5
Source: Company, Angel Research
Stock Info
Radico Khaitan
CMP
98
The IMFL segment is under penetrated. Going forward, increase in income
TP
156
levels would lead to higher growth in IMFL brands. RKL has strong brands in
the premium liquor category which reported a CAGR of ~26% over the last
Upside
59.2%
seven-year period. We expect the growth momentum to continue.
Sector
Breweries & Distilleries
We expect the price of ENA, a key raw material, to remain stable and
Market Cap (` cr)
1,298
potentially even decline going forward due to higher sugar production and
Beta
0.8
lower demand for ethanol from Indian oil marketing companies
52 Week High / Low
131/78
We expect a significant hike in liquor prices in the coming financial year as
there haven't been any significant ones in recent times. Also, we believe that
3 year-Chart
industry leader - United Spirit would shift focus on profitability over volume
180
growth considering the debt on its Balance Sheet, which in turn, would lead to
160
increased scope for other liquor companies to hike prices.
140
120
On valuation basis, Radico is trading at about 70% discount to its close peer,
100
United Spirits.. We have a Buy rating on the stock and target price of and
80
60
target price of `156 (22x FY2017E EPS).
40
20
Key Financials
0
Y/E
Sales
OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
1,517
12.7
78
5.8
8.6
16.8
1.4
11.1
1.3
FY2017E
1,635
13.4
95
7.1
9.6
13.7
1.3
9.7
1.2
Source: Company, Angel Research
February 12, 2016
10
Top Picks Report | February 2016
Stock Info
Siyaram Silk Mills
CMP
997
SSML has strong brands which cater to premium as well as popular mass
TP
1,354
segments of the market. Further, in FY2014, SSML entered the ladies' salwar
Upside
35.8%
kameez and ethnic wear segment. Going forward, we believe that the
Sector
Textile
company would be able to leverage its brand equity and continue to post
strong performance.
Market Cap (` cr)
934
Beta
0.8
The company has a nationwide network of about 1,600 dealers and business
partners. It has a retail network of 160 stores and plans to add another 300-
52 Week High / Low
1,400/857
350 stores going forward. Further, the company's brands are sold across
3,00,000 multi brand outlets in the country.
3 year-Chart
Going forward, we expect SSML to report a net sales CAGR of ~10% to
1600
1400
~`1,815cr and adj.net profit CAGR of ~11% to `98cr over FY2015-17E on
1200
back of market leadership in blended fabrics, strong brand building, wide
1000
distribution channel, strong presence in tier II and tier III cities and emphasis
800
on latest designs and affordable pricing points. At the current market price,
600
SSML trades at an inexpensive valuation. We have a Buy rating on the stock
400
and target price of stock and target price of stock and target price of `1,354.
200
0
Key Financials
Y/E
Sales
OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
1,636
11.5
84
89.9
17.9
11.1
1.8
7.0
0.7
FY2017E
1,815
11.5
98
104.1
17.8
9.6
1.6
6.3
0.7
Source: Company, Angel Research
February 12, 2016
11
Top Picks Report | February 2016
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
9.0
8.4
12.0
9.9
8.0
7.5
7.5
7.4
10.0
7.3
7.0
7.0
6.7
6.7
8.0
6.3
6.6
7.0
6.4
6.0
4.8
4.2
4.3
3.8
6.0
2.8
3.0
4.0
2.5
2.5
4.7
5.0
2.0
-
4.0
(2.0)
3.0
(4.0)
(3.2)
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
5.4
5.4
5.4
5.6
5.2
5.3
54.0
4.9
5.0
5.0
5.0
4.4
3.7
3.7
52.0
4.0
3.0
50.0
2.0
48.0
1.0
46.0
-
44.0
Source: MOSPI, Angel Research
Source: Market, Angel Research; Note: Level above 50 indicates expansion
Exhibit 5: Exports and imports growth trends
Exhibit 6: Key policy rates
(%)
Exports yoy growth
Imports yoy growth
(%)
Repo rate
Reverse Repo rate
CRR
0.0
8.00
7.50
(5.0)
7.00
(10.0)
6.50
(15.0)
6.00
5.50
(20.0)
5.00
(25.0)
4.50
4.00
(30.0)
3.50
(35.0)
3.00
Source: Bloomberg, Angel Research
Source: RBI, Angel Research
February 12, 2016
12
Top Picks Report | February 2016
Global watch
Exhibit 1: Latest quarterly GDP Growth (%, yoy) across select developing and developed countries
(%)
8.0
6.8
6.0
5.3
5.0
4.7
4.0
2.9
1.9
1.8
1.8
1.3
1.6
2.0
1.0
-
(2.0)
(4.0)
(4.1)
(4.5)
(6.0)
Source: Bloomberg, Angel Research
Exhibit 2: 2015 GDP Growth projection by IMF (%, yoy) across select developing and developed countries
(%)
7.3
8.0
6.8
6.0
4.7
4.7
4.0
2.5
2.5
2.6
1.4
1.5
2.0
1.2
0.6
(3.8)
-
(2.0)
(4.0)
(3.0)
(6.0)
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
February 12, 2016
13
Top Picks Report | February 2016
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
39,318
(3.4)
(18.2)
(16.2)
Russia
Micex
1,712
1.3
(2.3)
(1.8)
India
Nifty
6,976
(7.8)
(11.9)
(19.5)
China
Shanghai Composite
2,763
(17.8)
(23.0)
(16.4)
South Africa
Top 40
42,054
(3.3)
(10.9)
(8.4)
Mexico
Mexbol
42,359
4.1
(4.8)
1.0
Indonesia
LQ45
839
6.1
6.5
(8.1)
Malaysia
KLCI
1,644
(1.4)
(2.0)
(7.8)
Thailand
SET 50
805
2.3
(11.0)
(23.5)
USA
Dow Jones
15,660
(4.5)
(11.7)
(12.9)
UK
FTSE
5,537
(6.6)
(11.8)
(19.4)
Japan
Nikkei
15,713
(11.2)
(17.8)
(10.5)
Germany
DAX
8,753
(12.3)
(19.1)
(20.2)
France
CAC
3,897
(11.0)
(21.3)
(18.8)
Source: Bloomberg, Angel Research
February 12, 2016
14
Top Picks Report | February 2016
Stock Watch
February 12, 2016
15
Stock Watch
February 12, 2016
Company Name
Reco
CMP
Target
Mkt Cap
Sales ( Čcr )
OPM(%)
EPS (Č)
PER(x)
P/BV(x)
RoE(%)
EV/Sales(x)
(Č)
Price ( Č)
( Č cr )
FY16E FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
Agri / Agri Chemical
Rallis
Neutral
152
-
2,955
2,097
2,415
14.4
14.4
9.5
11.0
16.0
13.8
3.2
2.8
21.1
21.3
1.5
1.2
United Phosphorus
Buy
387
480
16,606
12,500
14,375
18.3
18.3
29.8
35.9
13.0
10.8
2.4
2.0
20.0
20.3
1.4
1.2
Auto & Auto Ancillary
Ashok Leyland
Buy
81
111
23,080
17,995
21,544
11.4
11.6
3.4
4.7
23.9
17.3
4.2
3.8
17.7
22.2
1.2
1.0
Bajaj Auto
Buy
2,331
2,728
67,456
23,695
27,298
21.3
20.4
134.6
151.5
17.3
15.4
5.5
4.7
31.8
30.6
2.4
2.1
Bharat Forge
Buy
765
943
17,816
7,867
8,881
20.0
20.3
34.4
41.0
22.3
18.7
4.3
3.6
21.1
20.9
2.4
2.1
Eicher Motors
Accumulate
17,619
20,044
47,844
15,556
16,747
15.5
17.3
464.8
597.5
37.9
29.5
13.8
10.2
36.2
34.3
3.0
2.7
Gabriel India
Buy
80
101
1,150
1,415
1,544
8.7
9.0
4.6
5.4
17.4
14.8
3.2
2.8
18.1
18.9
0.8
0.7
Hero Motocorp
Accumulate
2,498
2,774
49,891
28,561
31,559
14.7
14.7
151.1
163.2
16.5
15.3
6.4
5.5
38.7
35.6
1.6
1.4
Jamna Auto Industries Buy
122
160
976
1,281
1,473
11.2
11.5
7.6
9.2
16.1
13.3
4.1
3.3
25.4
25.2
0.8
0.7
L G Balakrishnan & Bros Neutral
409
-
642
1,254
1,394
11.6
11.8
35.9
41.7
11.4
9.8
1.5
1.4
13.5
13.8
0.6
0.6
Mahindra and Mahindra Buy
1,126
1,449
69,935
39,031
44,440
13.8
13.9
57.9
67.6
19.5
16.7
3.1
2.8
16.1
16.6
1.4
1.2
Maruti
Neutral
3,541
-
106,971
57,865
68,104
16.4
16.7
176.3
225.5
20.1
15.7
3.9
3.3
19.4
21.2
1.6
1.3
Minda Industries
Buy
782
1,047
1,241
2,523
2,890
8.7
9.0
55.0
65.4
14.2
12.0
2.7
2.2
19.3
18.7
0.6
0.5
Motherson Sumi
Buy
221
313
29,173
39,343
45,100
8.8
9.1
10.1
12.5
21.8
17.6
6.9
5.4
35.3
34.4
0.8
0.7
Rane Brake Lining
Buy
344
465
272
454
511
11.5
12.0
25.2
31.0
13.6
11.1
2.0
1.8
14.9
16.6
0.7
0.7
Setco Automotive
Neutral
30
-
405
594
741
12.7
13.7
1.7
3.2
17.9
9.5
1.9
1.6
10.4
16.9
1.1
0.9
Tata Motors
Buy
276
409
79,586
266,022
312,667
12.8
13.1
26.3
38.3
10.5
7.2
1.4
1.2
8.4
12.1
0.5
0.4
TVS Motor
Buy
278
330
13,205
11,263
13,122
6.9
8.5
9.2
15.0
30.2
18.5
6.9
5.5
22.7
29.6
1.2
1.0
Amara Raja Batteries
Buy
861
1,040
14,707
4,892
5,871
17.4
17.6
28.8
37.1
29.9
23.2
7.0
5.6
23.4
24.1
3.0
2.4
Exide Industries
Buy
127
162
10,787
6,950
7,784
14.4
14.8
6.6
7.3
19.2
17.4
2.4
2.2
12.6
12.8
1.3
1.1
Apollo Tyres
Accumulate
149
171
7,572
12,146
12,689
16.8
16.0
21.2
19.0
7.0
7.8
1.2
1.0
16.5
13.0
0.7
0.7
Ceat
Buy
900
1,119
3,639
6,041
6,597
14.1
13.7
99.5
111.9
9.0
8.0
1.8
1.5
19.6
18.5
0.8
0.6
JK Tyres
Neutral
82
-
1,852
7,446
7,669
15.2
14.0
19.6
18.4
4.2
4.4
1.1
0.9
25.2
19.5
0.6
0.6
Swaraj Engines
Accumulate
806
919
1,001
552
630
14.2
14.7
44.6
54.1
18.1
14.9
4.2
3.8
23.2
25.6
1.7
1.4
Subros
Neutral
78
-
467
1,293
1,527
11.8
11.9
4.2
6.7
18.5
11.6
1.4
1.3
7.7
11.5
0.7
0.6
Indag Rubber
Neutral
153
-
401
283
329
17.0
17.2
13.0
15.4
11.8
9.9
2.6
2.1
21.8
21.6
1.1
0.9
Capital Goods
ACE
Neutral
35
-
346
660
839
4.7
8.2
1.0
3.9
35.0
9.0
1.1
1.0
3.2
11.3
0.7
0.5
BEML
Neutral
969
-
4,036
3,277
4,006
6.0
8.9
29.2
64.3
33.2
15.1
1.9
1.7
5.7
11.7
1.3
1.0
Bharat Electronics
Buy
1,124
1,414
26,977
7,737
8,634
16.8
17.2
54.0
61.5
20.8
18.3
3.0
2.6
39.3
45.6
2.6
2.2
Stock Watch
February 12, 2016
Company Name
Reco
CMP
Target
Mkt Cap
Sales ( Čcr )
OPM(%)
EPS (Č)
PER(x)
P/BV(x)
RoE(%)
EV/Sales(x)
(Č)
Price ( Č)
( Č cr )
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
Capital Goods
Voltas
Buy
241
353
7,979
5,363
5,963
8.0
9.1
11.0
13.8
21.9
17.5
3.4
3.0
16.2
17.9
1.4
1.3
BGR Energy
Neutral
102
-
735
3,615
3,181
9.5
9.4
16.7
12.4
6.1
8.2
0.6
0.6
10.0
7.0
0.6
0.8
BHEL
Neutral
120
-
29,457
33,722
35,272
10.8
11.7
10.5
14.2
11.5
8.5
0.9
0.8
7.0
9.0
1.0
0.9
Blue Star
Buy
329
439
2,957
3,548
3,977
6.3
6.9
13.7
17.2
24.0
19.2
6.0
3.9
26.1
25.4
0.9
0.8
Crompton Greaves
Neutral
123
-
7,684
13,484
14,687
4.9
6.2
4.5
7.1
27.2
17.3
1.9
1.8
7.2
10.8
0.7
0.6
Greaves Cotton
Neutral
121
-
2,952
1,655
1,755
16.6
16.8
7.4
7.8
16.3
15.5
3.3
3.1
21.1
20.6
1.7
1.6
Inox Wind
Buy
244
458
5,416
4,980
5,943
17.0
17.5
26.6
31.6
9.2
7.7
2.7
2.0
35.0
30.0
1.2
1.0
KEC International
Neutral
102
-
2,612
8,791
9,716
6.1
6.8
5.4
8.2
18.8
12.4
1.9
1.7
10.0
14.0
0.5
0.5
Thermax
Neutral
767
-
9,136
6,413
7,525
7.4
8.5
30.5
39.3
25.1
19.5
3.9
3.4
15.0
17.0
1.4
1.1
Cement
ACC
Buy
1,234
1,630
23,173
13,151
14,757
16.4
18.3
63.9
83.4
19.3
14.8
2.5
2.3
13.3
16.1
1.6
1.3
Ambuja Cements
Buy
194
233
30,037
11,564
12,556
19.4
20.7
8.9
10.1
21.8
19.2
2.7
2.6
12.8
13.8
2.2
2.0
HeidelbergCement
Neutral
64
-
1,458
1,772
1,926
13.3
15.4
1.0
3.0
64.4
21.5
1.6
1.5
2.6
7.9
1.4
1.2
India Cements
Buy
72
112
2,199
4,216
4,840
18.0
19.5
4.0
9.9
17.9
7.2
0.7
0.7
4.0
9.5
0.9
0.7
JK Cement
Buy
437
744
3,057
3,661
4,742
10.1
15.8
18.0
61.0
24.3
7.2
1.8
1.6
7.5
22.9
1.3
1.0
J K Lakshmi Cement
Buy
266
430
3,124
2,947
3,616
16.7
19.9
11.5
27.2
23.1
9.8
2.2
1.9
9.8
20.8
1.5
1.2
Mangalam Cements
Neutral
157
-
420
1,053
1,347
10.5
13.3
8.4
26.0
18.7
6.1
0.8
0.7
4.3
12.5
0.8
0.6
Orient Cement
Buy
136
183
2,786
1,854
2,524
21.2
22.2
7.7
11.1
17.7
12.3
2.5
2.2
13.3
15.7
2.2
1.6
Ramco Cements
Neutral
369
-
8,789
4,036
4,545
20.8
21.3
15.1
18.8
24.5
19.6
3.0
2.7
12.9
14.3
2.7
2.3
Shree Cement^
Neutral
10,255
-
35,725
7,150
8,742
26.7
28.6
228.0
345.5
45.0
29.7
6.6
5.6
15.7
20.3
4.8
3.8
UltraTech Cement
Buy
2,708
3,282
74,308
25,021
30,023
19.1
21.6
89.0
132.0
30.4
20.5
3.5
3.1
12.2
15.9
3.0
2.5
Construction
ITNL
Neutral
70
-
2,316
7,360
8,825
34.0
35.9
7.0
9.0
10.1
7.8
0.3
0.3
3.2
3.7
3.7
3.6
KNR Constructions
Buy
445
673
1,250
937
1,470
14.3
14.0
33.5
38.6
13.3
11.5
2.0
1.7
15.4
15.4
1.4
0.9
Larsen & Toubro
Buy
1,092
1,310
101,745
58,870
65,708
8.3
10.3
42.0
53.0
26.0
20.6
1.8
1.6
8.8
11.2
1.9
1.8
Gujarat Pipavav Port
Neutral
152
-
7,327
629
684
51.0
52.2
6.4
5.9
23.7
25.7
3.1
2.9
15.9
12.7
11.3
10.2
MBL Infrastructures
Buy
132
285
549
2,313
2,797
12.2
14.6
19.0
20.0
7.0
6.6
0.7
0.7
11.3
10.6
0.9
0.8
Nagarjuna Const.
Neutral
57
-
3,158
7,892
8,842
8.8
9.1
3.0
5.3
18.9
10.7
1.0
0.9
5.0
8.5
0.6
0.5
PNC Infratech
Accumulate
495
558
2,541
1,873
2,288
13.2
13.5
24.0
32.0
20.6
15.5
2.0
1.8
12.1
12.3
1.5
1.2
Simplex Infra
Neutral
245
-
1,213
5,955
6,829
10.3
10.5
16.0
31.0
15.3
7.9
0.8
0.7
5.3
9.9
0.7
0.6
Power Mech Projects
Neutral
577
-
849
1,539
1,801
12.8
12.7
59.0
72.1
9.8
8.0
1.5
1.2
18.6
16.8
0.6
0.5
Stock Watch
February 12, 2016
Company Name
Reco
CMP
Target
Mkt Cap
Sales ( Čcr )
OPM(%)
EPS (Č)
PER(x)
P/BV(x)
RoE(%)
EV/Sales(x)
(Č)
Price ( Č)
( Č cr )
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
Construction
Sadbhav Engineering
Neutral
263
-
4,512
3,481
4,219
10.7
10.8
8.0
12.0
32.9
21.9
3.1
2.7
10.3
13.5
1.6
1.3
NBCC
Buy
839
1,089
10,063
5,816
7,382
6.9
7.7
29.6
39.8
28.3
21.1
5.1
4.0
24.1
26.7
1.5
1.1
MEP Infra
Neutral
37
-
601
1,956
1,876
28.1
30.5
1.3
3.0
28.4
12.3
6.0
4.0
21.2
32.8
1.7
1.7
SIPL
Neutral
78
-
2,742
675
1,042
62.4
64.7
-
-
2.9
3.3
-
-
15.7
10.6
Financials
Allahabad Bank
Neutral
43
-
2,576
8,569
9,392
2.8
2.9
16.3
27.5
2.6
1.6
0.3
0.2
7.6
11.9
-
-
Axis Bank
Buy
378
494
89,849
26,473
31,527
3.5
3.6
35.7
43.5
10.6
8.7
1.8
1.5
17.9
18.9
-
-
Bank of Baroda
Neutral
116
-
26,717
18,485
21,025
1.9
2.0
13.5
21.1
8.6
5.5
0.7
0.6
7.3
10.6
-
-
Bank of India
Neutral
85
-
6,918
15,972
17,271
1.9
2.0
15.3
33.4
5.6
2.6
0.3
0.2
3.6
7.6
-
-
Canara Bank
Neutral
173
-
9,377
15,441
16,945
2.0
2.1
46.6
70.4
3.7
2.5
0.3
0.3
8.0
11.2
-
-
Dena Bank
Neutral
28
-
1,826
3,440
3,840
2.1
2.3
7.3
10.0
3.9
2.8
0.3
0.2
6.1
7.9
-
-
Federal Bank
Neutral
44
-
7,515
3,477
3,999
3.0
3.0
5.0
6.2
8.7
7.0
0.9
0.8
10.6
11.9
-
-
HDFC
Neutral
1,068
-
168,600
10,358
11,852
3.3
3.3
41.1
47.0
26.0
22.7
5.0
4.5
24.7
24.9
-
-
HDFC Bank
Buy
976
1,262
246,559
38,309
47,302
4.3
4.3
49.3
61.1
19.8
16.0
3.4
2.9
18.5
19.7
-
-
ICICI Bank
Buy
199
254
115,876
34,279
39,262
3.3
3.3
21.0
24.4
9.5
8.2
1.6
1.4
14.4
14.7
-
-
IDBI Bank
Neutral
52
-
9,880
9,625
10,455
1.8
1.8
8.5
14.2
6.1
3.7
0.4
0.3
5.9
9.3
-
-
Indian Bank
Neutral
80
-
3,857
6,160
6,858
2.5
2.5
24.5
29.8
3.3
2.7
0.3
0.2
7.7
8.6
-
-
LIC Housing Finance
Buy
406
592
20,510
3,101
3,745
2.5
2.5
33.0
40.2
12.3
10.1
2.3
2.0
19.7
20.5
-
-
Oriental Bank
Neutral
85
-
2,555
7,643
8,373
2.4
2.4
37.2
45.4
2.3
1.9
0.2
0.2
8.2
9.4
-
-
Punjab Natl.Bank
Neutral
77
-
15,071
23,638
26,557
2.8
2.8
17.9
27.2
4.3
2.8
0.4
0.4
8.5
12.0
-
-
South Ind.Bank
Neutral
17
-
2,309
1,965
2,185
2.5
2.5
2.5
3.3
6.9
5.2
0.7
0.6
9.5
11.7
-
-
St Bk of India
Buy
154
202
119,702
82,520
93,299
2.7
2.8
20.0
24.5
7.7
6.3
0.8
0.7
11.5
12.8
-
-
Union Bank
Neutral
119
-
8,167
12,646
14,129
2.3
2.4
31.0
39.1
3.8
3.0
0.4
0.4
9.8
11.4
-
-
Vijaya Bank
Neutral
31
-
2,620
3,536
3,827
1.9
1.9
5.5
6.7
5.5
4.6
0.5
0.4
7.8
8.8
-
-
Yes Bank
Accumulate
714
767
29,967
7,190
9,011
3.2
3.3
58.2
69.7
12.3
10.2
2.2
1.9
19.2
19.6
-
-
FMCG
Asian Paints
Neutral
855
-
82,040
16,553
19,160
16.0
16.2
17.7
21.5
48.4
39.8
12.8
11.6
29.4
31.2
4.8
4.1
Britannia
Neutral
2,637
-
31,635
8,065
9,395
9.6
10.2
47.2
65.5
55.9
40.3
18.6
17.5
38.3
41.2
3.8
3.2
Colgate
Neutral
828
-
22,523
4,836
5,490
19.5
19.7
48.5
53.2
17.1
15.6
12.5
10.9
99.8
97.5
4.5
4.0
Dabur India
Accumulate
238
267
41,912
9,370
10,265
17.1
17.2
7.3
8.1
32.5
29.4
9.8
8.0
33.7
30.6
4.4
4.0
GlaxoSmith Con*
Accumulate
5,793
6,118
24,362
4,919
5,742
17.2
17.4
168.3
191.2
34.4
30.3
9.8
8.3
28.8
28.9
4.5
3.8
Stock Watch
February 12, 2016
Company Name
Reco
CMP
Target
Mkt Cap
Sales ( Čcr )
OPM(%)
EPS (Č)
PER(x)
P/BV(x)
RoE(%)
EV/Sales(x)
(Č)
Price ( Č)
( Č cr )
FY16E FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FMCG
Godrej Consumer
Neutral
1,187
-
40,425
10,168
12,886
16.1
16.1
32.1
38.4
37.0
30.9
7.5
6.9
19.7
21.0
4.1
3.2
HUL
Neutral
799
-
172,850
34,940
38,957
17.5
17.7
20.8
24.7
38.4
32.3
42.7
34.1
110.5
114.2
4.8
4.2
ITC
Buy
299
359
240,103
41,068
45,068
37.8
37.4
13.9
15.9
21.5
18.8
7.2
6.3
34.1
33.8
5.5
5.0
Marico
Neutral
229
-
29,493
6,551
7,766
15.7
16.0
10.4
12.5
22.0
18.3
6.4
5.3
33.2
32.4
4.4
3.7
Nestle*
Buy
5,224
6,646
50,371
11,291
12,847
22.2
22.3
158.9
184.6
32.9
28.3
17.2
15.5
55.0
57.3
4.3
3.7
Tata Global
Buy
105
144
6,643
8,635
9,072
9.8
9.9
6.5
7.6
16.2
13.9
1.6
1.6
6.8
7.4
0.7
0.7
IT
HCL Tech^
Buy
809
1,038
114,028
42,038
47,503
21.2
21.5
51.5
57.7
15.7
14.0
3.4
2.6
21.5
18.8
2.3
1.9
Infosys
Buy
1,081
1,347
248,334
61,850
69,981
27.5
27.5
59.4
65.7
18.2
16.5
3.9
3.3
21.2
20.1
3.3
2.8
TCS
Buy
2,196
2,854
432,716
108,487
122,590
28.3
28.5
122.8
138.4
17.9
15.9
6.8
6.2
38.0
38.9
3.6
3.1
Tech Mahindra
Buy
431
646
41,702
25,566
28,890
16.0
17.0
26.3
31.9
16.4
13.5
3.0
2.5
17.9
18.6
1.4
1.2
Wipro
Buy
516
680
127,502
50,808
56,189
23.7
23.8
37.3
40.7
13.8
12.7
2.6
2.4
19.2
17.7
2.0
1.6
Media
D B Corp
Accumulate
314
356
5,763
2,241
2,495
27.8
27.9
21.8
25.6
14.4
12.3
3.8
3.3
26.7
28.5
2.5
2.2
HT Media
Neutral
76
-
1,761
2,495
2,603
11.2
11.2
7.3
8.6
10.4
8.8
0.8
0.7
7.4
8.1
0.2
0.2
Jagran Prakashan
Buy
156
189
5,110
2,170
2,355
27.2
26.2
8.9
9.9
17.6
15.8
3.7
3.2
20.9
20.5
2.3
2.1
Sun TV Network
Neutral
326
-
12,863
2,779
3,196
70.2
70.5
22.8
27.3
14.3
12.0
3.5
3.2
26.7
28.3
4.4
3.8
Hindustan Media
Neutral
260
-
1,907
920
1,031
20.0
20.0
19.2
20.9
13.5
12.5
2.2
1.9
16.4
15.3
1.6
1.4
Ventures
Metals & Mining
Coal India
Buy
305
380
192,681
76,167
84,130
19.9
22.3
22.4
25.8
13.6
11.8
4.9
4.8
35.5
41.0
1.9
1.7
Hind. Zinc
Accumulate
162
175
68,345
14,641
14,026
50.4
50.4
17.7
16.0
9.2
10.1
1.4
1.3
16.2
13.2
2.3
2.1
Hindalco
Neutral
64
-
13,144
104,356
111,186
8.7
9.5
6.7
11.1
9.5
5.8
0.3
0.3
3.5
5.9
0.7
0.6
JSW Steel
Neutral
1,004
-
24,271
42,308
45,147
16.4
20.7
(10.3)
49.5
20.3
1.1
1.1
(1.0)
5.6
1.6
1.5
NMDC
Neutral
79
-
31,440
8,237
10,893
46.6
44.5
10.0
11.7
8.0
6.8
0.9
0.8
12.5
13.0
3.6
2.8
SAIL
Neutral
36
-
14,868
45,915
53,954
7.2
10.5
1.5
4.4
23.9
8.2
0.4
0.3
2.3
4.1
1.0
0.9
Vedanta
Neutral
62
-
18,470
71,445
81,910
26.2
26.3
12.9
19.2
4.8
3.3
0.3
0.3
7.2
8.9
0.7
0.5
Tata Steel
Neutral
225
-
21,852
126,760
137,307
8.9
11.3
6.4
23.1
35.4
9.8
0.7
0.7
2.0
7.1
0.8
0.7
Oil & Gas
Cairn India
Neutral
114
-
21,411
11,323
12,490
49.4
51.0
20.7
20.7
5.5
5.5
0.4
0.3
6.4
6.1
1.0
0.4
GAIL
Neutral
332
-
42,151
64,856
70,933
9.1
9.6
24.0
28.9
13.9
11.5
1.2
1.1
8.8
9.6
0.8
0.7
ONGC
Neutral
203
-
173,505
154,564
167,321
36.8
37.4
28.6
32.5
7.1
6.2
0.9
0.8
12.7
13.5
1.3
1.2
Petronet LNG
Neutral
246
-
18,424
29,691
31,188
5.8
6.2
12.8
13.4
19.2
18.3
2.9
2.6
15.8
14.8
0.7
0.7
Indian Oil Corp
Buy
372
455
90,368
359,607
402,760
5.9
6.1
42.5
48.7
8.8
7.6
1.2
1.0
14.1
14.4
0.4
0.3
Stock Watch
February 12, 2016
Company Name
Reco
CMP
Target
Mkt Cap
Sales ( Čcr )
OPM(%)
EPS (Č)
PER(x)
P/BV(x)
RoE(%)
EV/Sales(x)
(Č)
Price ( Č)
( Č cr )
FY16E FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
Oil & Gas
Reliance Industries
Buy
922
1,150
298,819
304,775
344,392
12.6
13.4
91.3
102.6
10.1
9.0
1.1
1.0
11.8
12.0
0.9
0.8
Pharmaceuticals
Alembic Pharma
Neutral
591
-
11,138
3,274
3,802
26.9
19.4
35.0
28.7
16.9
20.6
7.5
5.6
55.6
31.2
3.4
2.8
Aurobindo Pharma
Buy
642
856
37,522
14,923
17,162
22.0
23.0
35.7
42.8
18.0
15.0
5.3
4.0
34.0
30.2
2.9
2.5
Sanofi India
Neutral
4,154
-
9,566
2,082
2,371
17.4
20.8
118.2
151.5
35.1
27.4
5.1
4.1
19.9
25.5
4.3
3.5
Cadila Healthcare
Accumulate
320
352
32,724
10,224
11,840
21.0
22.0
14.6
17.6
21.9
18.2
6.0
4.7
30.8
29.0
3.3
2.7
Cipla
Buy
541
636
43,460
14,211
16,611
20.6
19.0
27.0
28.9
20.0
18.7
3.4
2.9
18.4
16.8
3.0
2.5
Dr Reddy's
Buy
2,887
3,933
49,234
16,838
19,575
25.0
23.1
167.5
178.8
17.2
16.2
3.6
3.0
23.1
20.4
2.9
2.4
Dishman Pharma
Neutral
297
-
2,396
1,733
1,906
21.5
21.5
17.0
19.9
17.5
14.9
1.8
1.6
10.5
11.2
1.9
1.6
GSK Pharma
Neutral
3,213
-
27,212
2,870
3,158
20.0
22.1
59.5
68.3
54.0
47.0
15.9
16.4
28.5
34.3
9.0
8.2
Indoco Remedies
Neutral
288
-
2,650
1,033
1,199
15.9
18.2
9.4
13.6
30.6
21.2
4.5
3.9
15.7
19.7
2.7
2.3
Ipca labs
Buy
606
900
7,645
3,363
3,909
12.9
18.6
13.4
28.0
45.2
21.6
3.2
2.8
7.4
14.0
2.6
2.2
Lupin
Neutral
1,793
-
80,796
13,092
16,561
25.0
27.0
50.4
68.3
35.6
26.3
7.4
5.8
22.8
24.7
5.9
4.5
Sun Pharma
Accumulate
831
950
199,977
28,163
32,610
25.8
30.7
17.4
26.9
47.8
30.9
4.5
3.9
13.0
16.6
6.6
5.5
Power
Tata Power
Neutral
56
-
15,227
35,923
37,402
22.6
22.8
4.1
5.2
13.9
10.9
1.1
1.0
7.5
9.3
1.4
1.3
NTPC
Buy
121
157
99,853
87,064
98,846
23.5
23.5
11.7
13.2
10.4
9.2
1.2
1.1
11.4
12.1
2.2
1.9
Power Grid
Buy
136
170
71,385
20,702
23,361
86.7
86.4
12.1
13.2
11.3
10.3
1.7
1.5
15.6
15.1
8.4
7.8
Telecom
Bharti Airtel
Neutral
309
-
123,360
101,748
109,191
32.1
31.7
12.0
12.5
25.7
24.7
1.8
1.7
6.9
6.7
1.8
1.7
Idea Cellular
Neutral
101
-
36,310
34,282
36,941
32.0
31.5
5.9
6.2
17.1
16.3
1.6
1.4
9.9
9.3
1.6
1.6
zOthers
Abbott India
Neutral
4,802
-
10,204
2,715
3,153
14.5
14.1
134.3
152.2
35.8
31.5
8.9
7.4
27.4
25.6
3.5
2.9
Bajaj Electricals
Buy
170
290
1,717
4,719
5,287
5.2
5.8
8.6
12.7
19.9
13.4
2.3
2.0
11.4
14.8
0.4
0.3
Finolex Cables
Neutral
219
-
3,355
2,520
2,883
12.2
12.0
12.7
14.2
17.3
15.5
2.4
2.1
13.6
13.5
1.1
0.9
Goodyear India*
Buy
485
582
1,118
1,800
1,600
11.7
11.5
58.7
52.9
8.3
9.2
1.9
1.6
24.6
18.7
0.4
0.4
Hitachi
Neutral
1,093
-
2,972
1,779
2,081
7.8
8.8
21.8
33.4
50.1
32.7
8.1
6.5
17.4
22.1
1.7
1.5
Jyothy Laboratories
Neutral
268
-
4,860
1,620
1,847
11.5
11.5
7.3
8.5
36.8
31.7
4.8
4.4
13.3
14.4
2.9
2.4
MRF
Buy
32,240
45,575
13,673
20,316
14,488
21.4
21.1
5,488.0
3,798.0
5.9
8.5
2.0
1.6
41.1
21.2
0.6
0.8
Page Industries
Neutral
10,878
-
12,133
1,929
2,450
19.8
20.1
229.9
299.0
47.3
36.4
20.9
14.5
52.1
47.1
6.3
5.0
Relaxo Footwears
Neutral
407
-
4,882
1,767
2,152
12.3
12.5
19.3
25.1
21.1
16.2
5.2
4.0
27.7
27.8
2.8
2.3
Siyaram Silk Mills
Buy
997
1,354
934
1,636
1,815
11.5
11.5
89.9
104.1
11.1
9.6
1.8
1.6
17.9
17.8
0.7
0.7
Styrolution ABS India*
Neutral
524
-
921
1,271
1,440
8.6
9.2
32.0
41.1
16.4
12.8
1.7
1.5
10.7
12.4
0.7
0.6
Stock Watch
February 12, 2016
Company Name
Reco
CMP
Target
Mkt Cap
Sales ( Čcr )
OPM(%)
EPS (Č)
PER(x)
P/BV(x)
RoE(%)
EV/Sales(x)
(Č)
Price ( Č)
( Č cr )
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
zOthers
TVS Srichakra
Buy
2,301
3,217
1,762
2,035
2,252
15.9
15.3
248.6
268.1
9.3
8.6
4.0
2.9
43.6
33.9
0.9
0.8
HSIL
Buy
259
302
1,870
2,123
2,384
16.1
16.5
15.0
18.9
17.2
13.7
1.3
1.2
8.0
9.4
1.2
1.1
Kirloskar Engines India
Neutral
217
-
3,135
2,403
2,554
8.6
9.9
9.2
10.5
23.6
20.7
2.3
2.2
9.7
10.7
0.9
0.9
Ltd
M M Forgings
Buy
407
614
492
511
615
21.7
21.6
43.1
55.8
9.4
7.3
1.7
1.4
19.9
21.2
1.2
0.9
Banco Products (India) Neutral
103
-
739
1,208
1,353
11.0
12.3
10.8
14.5
9.6
7.1
1.1
1.0
11.9
14.5
0.6
0.5
Competent Automobiles Neutral
126
-
77
1,040
1,137
3.2
3.1
25.7
28.0
4.9
4.5
0.7
0.6
15.0
14.3
0.1
0.1
Nilkamal
Neutral
994
-
1,483
1,871
2,031
10.7
10.5
63.2
69.8
15.7
14.3
2.6
2.2
17.6
16.6
0.8
0.7
Visaka Industries
Buy
90
144
143
1,086
1,197
9.9
10.3
21.5
28.8
4.2
3.1
0.4
0.4
9.6
11.6
0.4
0.3
Transport Corporation of
Neutral
222
-
1,686
2,830
3,350
8.8
9.0
14.4
18.3
15.4
12.1
2.4
2.1
15.4
17.1
0.7
0.6
India
Elecon Engineering
Neutral
53
-
577
1,359
1,482
10.3
13.7
0.8
3.9
65.9
13.6
1.1
1.0
1.6
7.8
0.8
0.7
Surya Roshni
Buy
130
201
570
2,992
3,223
8.1
8.4
14.7
18.3
8.9
7.1
0.8
0.8
9.7
11.0
0.5
0.4
MT Educare
Neutral
143
-
571
286
366
18.3
17.7
7.7
9.4
18.6
15.3
3.9
3.4
20.2
21.1
1.9
1.4
Radico Khaitan
Buy
98
156
1,298
1,517
1,635
12.7
13.4
5.8
7.1
16.8
13.7
1.4
1.3
8.6
9.6
1.3
1.2
Garware Wall Ropes
Buy
310
473
677
862
974
11.2
11.2
24.9
29.6
12.4
10.5
1.9
1.6
15.1
15.4
0.8
0.7
Wonderla Holidays
Neutral
338
-
1,907
206
308
44.0
43.6
9.0
12.9
37.5
26.2
5.1
4.6
13.7
17.8
9.2
6.1
Linc Pen & Plastics
Neutral
176
-
261
340
371
8.3
8.9
10.8
13.2
16.3
13.4
2.6
2.3
16.0
17.1
0.8
0.7
The Byke Hospitality
Neutral
151
-
604
222
287
20.5
20.5
5.6
7.6
26.7
19.9
5.0
4.1
18.9
20.8
2.8
2.1
Interglobe Aviation
Neutral
720
-
25,935
17,022
21,122
20.7
14.5
63.9
53.7
11.3
13.4
16.9
13.8
149.9
103.2
1.6
1.2
Coffee Day Enterprises
Neutral
225
-
4,639
2,692
2,964
17.0
18.6
-
4.7
-
47.5
2.8
2.6
0.2
5.5
2.1
2.0
Ltd
Navneet Education
Neutral
82
-
1,957
998
1,062
24.1
24.0
5.8
6.1
14.3
13.5
3.2
2.8
22.0
20.6
2.0
1.9
Navkar Corporation
Buy
174
265
2,477
365
436
38.3
37.5
5.6
5.9
30.8
29.6
1.9
1.8
6.3
6.1
7.6
6.5
Source: Company, Angel Research; Note: *December year end; #September year end; &October year end; Price as on February 11, 2016
Top Picks Report | February 2016
Research Team Tel: 022 - 39357800
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February 12, 2016
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