Market Outlook
March 01, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
(0.5)
(162)
34,184
US stocks fluctuated over the course of the trading day. The major averages
Nifty
(0.6)
(61)
10,493
bounced back and forth across the unchanged line before closing firmly in negative
Mid Cap
(0.2)
(38)
16,563
territory for the second straight day. The Dow Jones ended on a downside front of
Small Cap
0.2
38
18,128
1.5% to close at 25,029 and the Nasdaq Composite edged down to 0.8%, to 7,273.
Bankex
(1.0)
(274)
28,314
U.K. shares extended losses from the previous session as hawkish comments from
Federal Reserve Chairman Jerome Powell coupled with weak economic data from
Global Indices
Chg (%)
(Pts)
(Close)
China and Japan dented investors' risk appetite. The FTSE 100 was ended on a
Dow Jones
(1.5)
(380)
25,029
downside front of 0.2% at 7,264.
Nasdaq
(0.8)
(57)
7,273
On domestic front, Indian shares fell for a second day, although markets finished off
FTSE
(0.2)
(17)
7,264
their day's lows. The Sensex ended on a downside front of 0.5% at 34,184 while the
Nikkei
(1.4)
(322)
22,068
Nifty ended at 10,493 with a downside of 0.6%.
Hang Seng
(1.4)
(424)
30,845
Shanghai Com
(1.0)
(33)
3,259
News Analysis
April-January fiscal deficit touches 113.7% of full-year target
Advances / Declines
BSE
NSE
Detailed analysis on Pg2
Advances
1,103
620
Investor’s Ready Reckoner
Declines
1,629
1,177
Unchanged
160
57
Key Domestic & Global Indicators
Stock Watch: Latest investment recommendations on 150+ stocks
Refer Pg5 onwards
Volumes (` Cr)
BSE
3,234
Top Picks
NSE
35,921
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
Blue Star
Capital Goods
Buy
744
867
16.6
Net Inflows (` Cr)
Net
Mtd
Ytd
Dewan Housing Finance
Financials
Buy
547
712
30.2
FII
(1,115)
(9,898)
3,086
Century Plyboards
Forest Products
Buy
330
400
21.2
Navkar Corporation
Other
Buy
170
265
55.9
*MFs
1,466
11,572
20,595
KEI Industries
Capital Goods Accumulate
388
436
12.4
More Top Picks on Pg4
Top Gainers
Price (`)
Chg (%)
Astral
931
7.0
Key Upcoming Events
Previous
Consensus
Flfl
403
6.1
Date
Region
Event Description
Reading
Expectations
Indianb
331
6.1
Mar01
US
GDP Qoq (Annualised)
2.60
2.50
Laxmimach
6,785
5.8
Mar01
Germany PMI Manufacturing
60.30
60.30
Mar01
Euro Zone Euro-Zone GDP s.a. (QoQ)
0.60
Iifl
760
5.4
Mar01
UK
PMI Manufacturing
55.30
55.00
Mar05
Germany
PMI Services
55.30
Top Losers
Price (`)
Chg (%)
More Events on Pg7
Lakshvilas
105
(6.1)
Vakrangee
163
(5.0)
Videoind
15
(4.9)
Rain
381
(4.6)
Bbtc
1,425
(4.2)
As on February 28 2018
Market Outlook
March 01, 2018
News Analysis
April-January fiscal deficit touches 113.7% of full-year target
India reported a fiscal deficit of Rs 6.77 trillion ($103.72 billion) for April-January
or 113.7 per cent of the target originally set for the fiscal year that ends in March.
According to data, Net tax receipts in the first ten months of 2017/18 fiscal year
were Rs 9.7 trillion.
The capital expenditure during the period stood at Rs
2.64 trillion.
The revenue deficit during the period was at Rs 4.8 trillion, revealed the data.
Economic and Political News
April-January fiscal deficit touches 113.7% of full-year target
India factory growth slows to 4-month low as rising prices dent demand
Cabinet approves 55% hike in monthly allowances of MPs by Rs 40,000
Defence ministry approves purchase of LMGs, carbines worth over Rs 94bn
Corporate News
Amazon launches Prime Music service in India, to take on Gaana, Wynk
TCS iON to launch 'phygital' to offer vocational training across country
Wilmar Sugar gets CCI nod for additional stake acquisition in Shree Renuka
Dilip Buildcon wins Rs 20-bn hybrid annuity project from NHAI in Andhra
Market Outlook
March 01, 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
26,555
2,221
2,441
9.9
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
7,137
744
867
16.6
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
17,157
547
712
30.2
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
7,832
108
160
48.4
Increasing share of CASA will help in NIM
improvement.
High order book execution in EPC segment, rising B2C
KEI Industries
3,040
388
436
12.4
sales and higher exports to boost the revenues and
profitability
Expected to benefit from the lower capex requirement
Music Broadcast
2,242
393
475
20.9
and 15 year long radio broadcast licensing.
Massive capacity expansion along with rail advantage
Navkar Corporation
2,559
170
265
55.9
at ICD as well CFS augur well for the company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,074
656
851
29.8
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
2,777
466
508
9.1
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
2,68,040
8,873
10,619
19.7
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
2,159
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
7,332
330
400
21.2
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
2,983
93
128
37.3
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 distribution network is
Safari Industries
1,161
522
650
24.5
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
3,158
437
510
16.8
margin due price hike in container glass segment,
turnaround in consumer business.
We expect financialisation of savings and increasing
Aditya Birla Capital
36204
167
230
37.7
penetration in Insurance & Mutual fund would ensure
steady growth.
Source: Company, Angel Research
Market Outlook
March 01, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,943
296
360
21.5
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 healthy
Nilkamal
2,534
1,698
2,178
28.3
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
213
154
247
60.4
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
6,360
126
160
26.6
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
March 01, 2018
Key Upcoming Events
Global economic events release calendar
Bloomberg Data
Date
Time Country
Event Description
Unit
Period
Last Reported
Estimated
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
Mar 20, 2018
0-Jan-00US
Existing home sales
Million
Feb
5.38
Mar 21, 2018
0-Jan-00UK
Jobless claims change
% Change
Feb
(7.20)
0-Jan-00US
FOMC rate decision
%
Mar 21
1.50
1.75
Source: Bloomberg, Angel Research
Market Outlook
March 01, 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
4.0
3.7
3.6
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
March 01, 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
March 01, 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
0.5
6.7
13.3
India
Nifty
10,554
(5.2)
0.9
17.4
China
Shanghai Composite
3,292
(6.9)
(5.0)
0.6
South Africa
Top 40
52,034
(4.4)
(4.3)
15.8
Mexico
Mexbol
47,970
(5.5)
(0.3)
1.3
Indonesia
LQ45
1,104
(2.3)
8.3
23.0
Malaysia
KLCI
1,871
1.8
8.8
9.6
Thailand
SET 50
1,206
0.8
11.2
22.9
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)
(4.1)
3.3
France
CAC
5,344
(3.5)
(0.6)
7.2
Source: Bloomberg, Angel Research p68in4
Market Outlook
March 01, 2018
Research Team Tel: 022 - 39357800
DISCLAIMER
Angel Broking Private Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India
Limited,Bombay Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with
CDSL and Portfolio Manager with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking Private Limited is a
registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number
INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing
/dealing in securities Market. Angel or its associates/analyst has not received any compensation / managed or
co-managed public offering of securities of the company covered by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make
such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and
risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the
contrary view, if any.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannot
testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.
While Angel Broking Pvt. Limited endeavors to update on a reasonable basis the information discussed in this material, there may be
regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from
or in connection with the use of this information.
