Market Outlook
May 07, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open flat, tracking global indices and SGX Nifty.
BSE Sensex
(0.5)
(188)
34,915
U.S. Stocks showed a substantial move to the upside over the course of the previous
Nifty
(0.6)
(61)
10,618
trading session after opening at a lower level. The major averages pulled back off
Mid Cap
(0.4)
(58)
16,561
their best levels in the final hour of trading but held on to significant gains. The Dow
Small Cap
(0.2)
(45)
17,991
Jones surged up to 24,263 and the Nasdaq was up by 1.7 percent to 7,210.
Bankex
(0.1)
(16)
28,663
U.K. stocks rose in the previous session as miners recovered from losses in the
previous session and investors cheered trading updates from the likes of
Global Indices
Chg (%)
(Pts)
(Close)
International Consolidated Airlines Group and EasyJet. The FTSE 100 was up by
0.4% to end at 7,533.
Dow Jones
1.4
332
24,263
Nasdaq
1.7
121
7,210
On domestic front, Indian shares fell modestly, tracking weak global markets as
FTSE
0.4
31
7,533
investors kept an eye on the U.S.-China trade talks and looked ahead to the release
of U.S. jobs report for April later in the day for further indications of the strength of
Nikkei
(0.2)
(35)
22,473
the labor market and inflation pressures. Traders also exercised some caution
Hang Seng
(1.3)
(387)
29,927
ahead of Karnataka state elections scheduled to be held on May 12. The BSE
Shanghai Com
(0.3)
(10)
3,091
Sensex ended on a negative of 0.5% at 34,915.
Advances / Declines
BSE
NSE
News Analysis
Advances
1,082
697
RBI to infuse liquidity in bond market as forex reserve dips by $3.22 bn
Declines
1,638
1,101
Detailed analysis on Pg2
Unchanged
122
86
Investor’s Ready Reckoner
Key Domestic & Global Indicators
Volumes (` Cr)
Stock Watch: Latest investment recommendations on 150+ stocks
BSE
2,924
Refer Pg5 onwards
NSE
29,431
Top Picks
CMP
Target
Upside
Net Inflows (` Cr)
Net
Mtd
Ytd
Company
Sector
Rating
(`)
(`)
(%)
FII
(90)
(436)
6,961
Blue Star
Capital Goods Accumulate
797
867
8.8
*MFs
359
359
46,112
Dewan Housing Finance
Financials
Accumulate
628
720
14.7
Century Plyboards
Forest Product
Buy
307
400
30.4
Navkar Corporation
Others
Buy
167
265
59.0
Top Gainers
Price (`)
Chg (%)
KEI Industries
Capital Goods Accumulate
426
485
13.9
175
43.7
More Top Picks on Pg4
JUSTDIAL
436
14.2
Key Upcoming Events
RTNPOWER
5
9.4
Previous
Consensus
Date
Region
Event Description
BOMDYEING
300
5.5
ReadingExpectations
May 08, 2018 US
Unnemployment rate
4.10
4.00
HCC
18
5.1
May 09, 2018 US
Producer Price Index (mom)
0.20
May 10, 2018 UK
Industrial Production (YoY)
2.20
3.10
Top Losers
Price (`)
Chg (%)
May 10, 2018 US
Initial Jobless claims
211.00
HEXAWARE
387
-14.2
May 10, 2018 US
Consumer price index (mom)
(0.10)
0.30
More Events on Pg7
JSWENERGY
75
-7.7
CASTROLIND
185
-5.4
AJANTPHARM
1198
-5.4
TATAELXSI
1161
-5.1
As on May 04, 2018
Market Outlook
May 07, 2018
News Analysis
RBI to infuse liquidity in bond market as forex reserve dips by $3.22 bn
The central bank’s foreign exchange reserves dipped by $3.22 billion in the week
to 27 April, after having fallen by $2.5 billion in the week before, according to
the RBI data. This is the sharpest fall in forex reserves since the week ended
October 7, 2016, when the reserves had dipped by $4.3 billion. Most of the dip is
to check the rupee’s rapid slide.
The central bank has also tried to soothe the frayed nerves of bond dealers by
announcing a secondary market bond purchase of Rs 100 billion. This, coupled
with the recent measures taken to allow foreign investors to pick up any security
they want without any maturity restriction, should help boost bond market
sentiment by adding liquidity. Rising crude oil prices, twin deficits of the country
and rising yields in developed countries are also exerting pressure on local yields.
On the last trading day, primary dealers, or underwriters of government bond
auctions, had to buy Rs 17.45 billion of a bond maturing in two years, against the
Rs 20 billion on offer.
Economic and Political News
RBI to infuse liquidity in bond market as forex reserve dips by $3.22 bn
Sugar cess divides state governments at GST Council meeting
GST Council okays single return a month
PFRDA raises NPS equity investment cap to 75% for private sector subscribers
India requests $4 bn assistance from ADB to expand sovereign operations
Corporate News
$2.7bn shaved off PC Jeweller m-cap after promoter gifts shares to family
Dalmia Bharat moves NCLAT against NCLT direction
Another company moves Delhi HC against RBI circular on virtual currencies
DoT takes a call to cut levies as telcos bleed
Market Outlook
May 07, 2018
Quarterly Bloomberg Brokers Consensus Estimate
ICICI Bank Ltd - May 07, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
PAT
1061
2025
(47.6)
1650
(35.7)
Exide Industries Ltd - May 07, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
2438
2225
9.6
2277
7.1
EBIDTA
319
262
21.8
283
12.7
%
13.1
11.8
12.4
PAT
185
165
12.1
154
20.1
Tata Chemical Ltd - May 07, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
2959
2919
1.4
2574
15.0
EBIDTA
570
488
16.8
563
1.2
%
19.3
16.7
21.9
PAT
277
343
(19.2)
832
(66.7)
Market Outlook
May 07, 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
23,828
1,993
2,441
22.5
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
7,651
797
867
8.8
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
19,687
628
720
14.7
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 resolution
ICICI Bank
181,868
283
416
47.0
of NPA would reduce provision cost, which would
help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,335
426
485
13.9
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
2,111
370
475
28.4
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,509
167
265
59.0
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,050
651
851
30.8
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
TV Today Network
2,666
447
603
34.9
the 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
Maruti
262,177
8,679
10,619
22.4
Gujarat plant will also enable higher operating
leverage which will be margin accretive.
We expect loan book to grow at 24.3% over next
GIC Housing
2,265
421
655
55.7
two 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
Century Plyboards
6,815
307
400
30.4
healthy growth in plywood & lamination business,
forayed into MDF & Particle boards on back of
strong brand & distribution network.
We expect sales/PAT to grow at 13.5%/20% over
LT Foods
2,845
89
128
43.9
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
1,351
607
750
23.5
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
2,762
382
510
33.5
operating margin due price hike in container glass
segment, turnaround in consumer business.
Source: Company, Angel Research
Market Outlook
May 07, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
34,964
159
218
37.1
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
2,531
301
333
10.6
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
1,930
850
984
15.8
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
5,15,032
1,983
2,315
16.7
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.
Source: Company, Angel Research
Market Outlook
May 07, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
4,117
310
360
16.3
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
2,496
1,673
2,178
30.2
healthy demand growth in plastic division. On the
bottom-line front, we estimate
~10% CAGR to
`162cr owing to improvement in volumes.
The prism has diversified exposure in the different
segment such as Cement, Tile & ready mix concrete.
Prism Cement
5,969
119
160
34.5
Thus we believe, PCL is in the right place to capture
ongoing government spending on affordable
housing and infrastructure projects.
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
1,765
2,227
2,500
12.3
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
3,783
309
395
28.0
~`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
1,133
775
861
11.1
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
35,173
176
210
16.2
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
May 07, 2018
Key Upcoming Events
Result Calendar
Date
Company
May 07, 2018
Tata Chemicals, Exide Industries, ICICI Bank, Vijaya Bank, Visaka Industries
May 08, 2018
Automotive Axle, ABB, Godrej Consumer, Vesuvius India, Aventis
Source: Bloomberg, Angel Research
Global economic events release calendar
Bloomberg Data
Date
Time
Country
Event Description
Unit
Period
Last Reported
Estimated
May 08, 2018
6:00 PMUS
Unnemployment rate
%
Apr
4.10
4.00
May 09, 2018
US
Producer Price Index (mom)
% Change
Apr
0.20
May 10, 2018
2:00 PMUK
Industrial Production (YoY)
% Change
Mar
2.20
3.10
6:00 PMUS
Initial Jobless claims
Thousands
May 5
211.00
6:00 PMUS
Consumer price index (mom)
% Change
Apr
(0.10)
0.30
7:00 AMChina
Consumer Price Index (YoY)
% Change
Apr
2.10
1.90
4:30 PMUK
BOE Announces rates
% Ratio
May 10
0.50
0.50
May 11, 2018
5:30 PMIndia
Industrial Production YoY
% Change
Mar
7.10
May 14, 2018
12:00 PMIndia
Monthly Wholesale Prices YoY%
% Change
Apr
2.47
May 15, 2018
2:30 PMEuro Zone Euro-Zone GDP s.a. (QoQ)
% Change
1Q P
0.40
2:00 PMUK
Jobless claims change
% Change
Apr
11.60
7:30 AMChina
Industrial Production (YoY)
% Change
Apr
6.00
6.40
India
Imports YoY%
% Change
Apr
7.15
India
Exports YoY%
% Change
Apr
(0.66)
2:30 PMEuro Zone Euro-Zone CPI (YoY)
%
Apr F
1.20
Source: Bloomberg, Angel Research
Market Outlook
May 07, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
8.5
10.0
9.0
9.1
7.4
9.0
8.0
7.1
7.1
8.0
8.1
7.0
7.6
7.6
8.0
7.3
7.2
7.2
6.0
6.8
4.8
7.0
6.5
5.0
4.1
6.1
5.7
4.0
3.2
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
4.3
50.0
4.0
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
May 07, 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 as on 04 May, 2018
Market Outlook
May 07, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
83,118
(1.8)
(1.6)
28.5
Russia
Micex
4,502
1.4
7.1
11.4
India
Nifty
10,618
3.6
(4.6)
14.0
China
Shanghai Composite
3,091
(2.2)
(12.8)
(1.2)
South Africa
Top 40
50,874
4.3
(5.6)
8.4
Mexico
Mexbol
46,992
0.7
(7.2)
(4.1)
Indonesia
LQ45
920
(9.6)
(16.8)
(0.4)
Malaysia
KLCI
1,842
(0.5)
(1.4)
4.3
Thailand
SET 50
1,176
1.0
(1.7)
18.4
USA
Dow Jones
24,263
(0.0)
(7.3)
15.5
UK
FTSE
7,567
7.6
1.0
3.1
Japan
Nikkei
22,473
4.7
(4.9)
19.1
Germany
DAX
12,820
6.8
(2.8)
0.8
France
CAC
5,516
7.1
0.6
2.1
Source: Bloomberg, Angel Research as on 04 May, 2018 68in4
Market Outlook
May 07, 2018
Exhibit 7: Historical Angel Top Picks/Fundamental Calls
Date Added
Top Picks/Fundamental
Stocks
Current Status
02-05-2018
Top Picks
HDFC Bank
Open
20-04-2018
Top Picks
Matrimony.com Ltd
Open
16-04-2018
Top Picks
Parag Milk Foods Limited
Open
06-04-2018
Fundamental
GMM Pfaudler Limited
Open
07-03-2018
Fundamental
Ashok Leyland Ltd
Closed (26/04/2018)
03-03-2018
Fundamental
Greenply Industries
Open
21-02-2018
Top Picks
Safari Industries
Open
16-02-2018
Top Picks
HSIL Ltd
Open
07-02-2018
Fundamental
Elantas Beck India Ltd.
Open
01-02-2018
Top Picks
ICICI Bank
Open
01-02-2018
Top Picks
Aditya Birla Capital
Open
04-01-2018
Fundamental
CCL Products
Open
03-01-2018
Fundamental
Nilkamal Ltd
Open
01-01-2018
Fundamental
Capital First Ltd
Closed (15/01/2018)
30-12-2017
Fundamental
Shreyans Industries Ltd
Closed
21-12-2017
Fundamental
Prism Cement Ltd
Open
18-12-2017
Fundamental
Menon Bearings Limited
Closed (17/01/2018)
14-12-2017
Top Picks
Ruchira Papers Ltd.
Closed (09/02/2018)
28-11-2017
Top Picks
Century Plyboards India
Open
06-11-2017
Top Picks
LT Foods
Open
16-10-2017
Fundamental
Endurance Technologies Ltd
Closed (01/12/2017)
11-Sep-17
Top Picks
GIC Housing
Open
20-07-2017
Top Picks
Music Broadcast Limited
Open
07-07-2017
Fundamental
L&T Finance Holdings Ltd
Closed (28/8/2017)
06-07-2017
Fundamental
Syngene International
Closed (1/3/2018)
05-07-2017
Top Picks
Maruti
Open
03-01-2017
Top Picks
Alkem Lab
Open
30-12-2016
Top Picks
KEI Industries
Open
04-08-2016
Top Picks
TV Today Network
Open
05-04-2016
Top Picks
DHFL
Open
05-01-2016
Top Picks
Navkar Corporation
Open
08-12-2015
Top Picks
Blue Star
Open
06-11-2015
Top Picks
Siyaram Silk Mills
Open
Source: Company, Angel Research
Market Outlook
May 07, 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.
