Market Outlook
June 08, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
0.8
284
35,463
U.S. Stocks turned in a mixed performance during trading on Thursday after
Nifty
0.8
84
10,768
following the strength seen in the previous session. While the Dow rose to its best
Mid Cap
1.4
221
15,955
closing level in three months, the Nasdaq and the S&P 500 moved to the downside.
Small Cap
2.0
323
16,790
The Dow Jones was up by 0.4% to 25,241 and the Nasdaq dipped by 0.7% to
7,635.
Bankex
0.7
204
29,664
U.K. stocks were slightly lower yesterday as trading commenced following a delay by
Global Indices
Chg (%)
(Pts)
(Close)
one hour due to a technical issue. Trading in ex-dividend stocks and a firmer pound
were putting pressure on the market. The benchmark FTSE 100 was marginally
Dow Jones
0.4
95
25,241
lower by 0.1% at 7,704.
Nasdaq
(0.7)
(54)
7,635
FTSE
(0.1)
(8)
7,704
On domestic front, Indian shares extended gains from the previous session to hit
over three-week closing high on Thursday as trade war fears ebbed and investors
Nikkei
0.9
198
22,823
cheered reports of early arrival of monsoon. Private sector lenders ICICI Bank and
Hang Seng
0.8
254
31,513
Axis Bank rose over 2 percent each, drawing strength from RBI's surprise decision the
Shanghai Com
(0.2)
(6)
3,109
previous day to raise rates and an upbeat assessment of the domestic economy by
the World Bank. The BSE Sensex was rose by 0.8% to 35,463.
Advances / Declines
BSE
NSE
News Analysis
Advances
1,960
1,221
GST exclusion costs oil industry Rs 200 bn input credit annually
Declines
765
588
Unchanged
110
61
Detailed analysis on Pg2
Investor’s Ready Reckoner
Volumes (` Cr)
Key Domestic & Global Indicators
BSE
3,128
Stock Watch: Latest investment recommendations on 150+ stocks
NSE
29,490
Refer Pg5 onwards
Net Inflows (` Cr)
Net
Mtd
Ytd
Top Picks
CMP
Target
Upside
FII
134
3,238
976
Company
Sector
Rating
(`)
(`)
(%)
*MFs
112
112
59,484
Blue Star
Capital Goods
Buy
671
867
29.2
Dewan Housing Finance
Financials
Buy
617
720
16.7
Top Gainers
Price (`)
Chg (%)
Parag Milk Foods
Others
Buy
320
410
28.0
Navkar Corporation
Others
Buy
146
230
57.2
AVANTI
1,821
12.3
KEI Industries
Capital Goods
Buy
429
589
37.2
TATASTEELPP
158
10.0
More Top Picks on Pg4
HFCL
30
9.5
Key Upcoming Events
TIMETECHNO
145
9.1
Previous
Consensus
Date
Region
Event Description
PRESTIGE
254
8.5
ReadingExpectations
Jun 08, 2018 Euro Zone Euro-Zone GDP s.a. (QoQ)
0.40
0.40
Jun 09, 2018 China
Consumer Price Index (YoY)
1.80
1.80
Top Losers
Price (`)
Chg (%)
Jun 11, 2018 India
Industrial Production YoY
4.40
KWALITY
32
-5.0
Jun 12, 2018 UK
Industrial Production (YoY)
2.90
APLLTD
420
-2.5
Jun 12, 2018 UK
Jobless claims change
31.20
More Events on Pg7
STAR
349
-2.5
WABAG
408
-2.2
SHRIRAMCIT
2316
-2.1
As on June 07, 2018
Market Outlook
June 08, 2018
News Analysis
GST exclusion costs oil industry Rs 200 bn input credit annually
With petrol and diesel kept out of the purview of GST, the state owned oil industry
is losing Rs 200 billion annually in terms of input credit, says Union Minister
Dharmendra Pradhan. However, he said, with the GST regime stabilising and
apprehensions over GST collection gradually receding, “it is a matter of time petrol
and diesel are brought under GST”.
“All the expenditure of the oil industry- refinery, pipeline, exploration, are paying
GST (for various transactions). I am not getting back that money, the input credit.
So I am making it costly. I am losing Rs 200 billion per annum, only by
government companies, in input credit. So it is just a matter of time (before petrol
and diesel are brought under GST)”, he added.
“The current taxes on petrol and diesel are like a cash cow. Nobody wants to lose
this revenue avenue. But it is not far away. It has to come to GST. The states have
their apprehension. They were right also because they did not know what would be
the return on GST. They do not want to easily lose the perk”, Pradhan said.
Economic and Political News
RBI reduces interest rate on unclaimed deposits by 50 bps to 3.5%
New MSP at RS 29/kg for sugar mills still not enough for cane arrears
As Gulf expats return, Kerala requests Rs 50-bn special grants from 15th FC
GST exclusion costs oil industry Rs 200 bn input credit annually
Corporate News
IBC Ordinance: Dalmia may appeal to NCLT or courts, citing govt's stand
Minority shareholders question Century Textiles-UltraTech Cement deal
IBC Ordinance bars kin from bidding for insolvent companies
Air India seeks Rs 10 billion loan to meet urgent capital requirements
Market Outlook
June 08, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
Favorable outlook for the AC industry to augur well
for Cooling products business which is out pacing
Blue Star
6,452
671
867
29.2
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
19,348
617
720
16.7
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
ICICI Bank
1,87,083
291
416
43.0
resolution of NPA would reduce provision cost,
which would help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,364
429
589
37.2
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
1,894
332
475
43.1
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,202
146
230
57.2
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would
Siyaram Silk Mills
3,023
645
851
32.0
boost growth going ahead. Stock currently trades at
an inexpensive valuation.
GST regime and the Gujarat plant are expected to
Maruti
2,69,289
8,915
10,619
19.1
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,112
392
655
67.0
two year; change in borrowing mix will help in NIM
improvement
We expect sales/PAT to grow at 13.5%/20% over
LT Foods
2,226
70
128
83.9
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
1,358
611
720
17.9
distribution network is leading to strong growth in
business. Likely to post robust growth for next 3-4
years
Source: Company, Angel Research
Market Outlook
June 08, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
31,147
142
218
54.1
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
2,694
320
410
28.0
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
1,647
725
1,016
40.1
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
5,37,542
2,065
2,315
12.1
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.
We expect strong PAT growth on back of healthy
growth in automobile segment (on back of new
launches and facelifts in some of the model ) and
M&M
1,14,280
919
1,016
10.6
strong growth in Tractors segment coupled by its
strong brand recall and improvement in rural
sentiment
Source: Company, Angel Research
Market Outlook
June 08, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,791
285
360
26.3
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
2,554
1,712
2,178
27.3
healthy demand growth in plastic division. On the
bottom-line front, we estimate
~10% CAGR to
`162cr owing to improvement in volumes.
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
1,590
2,006
2,500
24.7
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
2,968
242
395
63.2
~`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
1,203
823
920
11.8
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
33,429
168
210
25.4
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
June 08, 2018
Key Upcoming Events
Global economic events release calendar
Bloomberg Data
Date
Time Country
Event Description
Unit
Period
Last Reported
Estimated
Jun 08, 2018
2:30 PMEuro Zone
Euro-Zone GDP s.a. (QoQ)
% Change
1Q F
0.40
0.40
Jun 09, 2018
7:00 AMChina
Consumer Price Index (YoY)
% Change
May
1.80
1.80
Jun 11, 2018
5:30 PMIndia
Industrial Production YoY
% Change
Apr
4.40
Jun 12, 2018
2:00 PMUK
Industrial Production (YoY)
% Change
Apr
2.90
2:00 PMUK
Jobless claims change
% Change
May
31.20
6:00 PMUS
Consumer price index (mom)
% Change
May
0.20
0.20
Jun 13, 2018
2:00 PMUK
CPI (YoY)
% Change
May
2.40
US
Producer Price Index (mom)
% Change
May
(0.10)
11:30 PMUS
FOMC rate decision
%
Jun 13
1.75
2.00
Jun 14, 2018
7:30 AMChina
Industrial Production (YoY)
% Change
May
7.00
7.00
12:00 PMIndia
Monthly Wholesale Prices YoY%
% Change
May
3.18
5:15 PMEuro Zone
ECB announces interest rates
%
Jun 14
-
Jun 15, 2018
2:30 PMEuro Zone
Euro-Zone CPI (YoY)
%
May F
1.90
6:45 PMUS
Industrial Production
%
May
0.72
0.30
India
Exports YoY%
% Change
May
5.17
India
Imports YoY%
% Change
May
4.60
Jun 19, 2018
6:00 PMUS
Housing Starts
Thousands
May
1,287.00
1,318.00
6:00 PMUS
Building permits
Thousands
May
1,364.00
1,345.00
Jun 20, 2018
7:30 PMUS
Existing home sales
Million
May
5.46
5.65
Jun 21, 2018
7:30 PMEuro Zone
Euro-Zone Consumer Confidence
Value
Jun A
0.20
4:30 PMUK
BOE Announces rates
% Ratio
Jun 21
0.50
Jun 22, 2018
1:00 PMGermany
PMI Services
Value
Jun P
52.10
1:00 PMGermany
PMI Manufacturing
Value
Jun P
56.90
Jun 25, 2018
7:30 PMUS
New home sales
Thousands
May
662.00
Source: Bloomberg, Angel Research
Market Outlook
June 08, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
8.5
10.0
9.0
9.1
7.3
7.4
8.0
7.0
9.0
8.0
8.1
7.6
7.6
7.7
7.0
8.0
7.2
7.0
6.0
6.8
4.8
4.4
7.0
6.3
5.0
4.1
6.1
5.6
4.0
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
4.6
4.3
50.0
4.0
3.6
3.3
3.3
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
35.0
6.50
30.0
6.00
25.0
5.50
20.0
5.00
15.0
4.50
10.0
4.00
5.0
0.0
3.50
(5.0)
3.00
Source: Bloomberg, Angel Research
Source: RBI, Angel Research
Market Outlook
June 08, 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)
25.0
20.0
15.0
10.0
5.0
-
Source: IMF, Angel Research
Market Outlook
June 08, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
76,642
(8.0)
(10.6)
20.2
Russia
Micex
4,461
1.4
7.1
11.4
India
Nifty
10,593
(0.2)
1.3
10.2
China
Shanghai Composite
3,114
(0.7)
(4.3)
0.2
South Africa
Top 40
51,414
1.1
0.1
10.5
Mexico
Mexbol
45,131
(4.0)
(5.2)
(9.0)
Indonesia
LQ45
974
0.7
(11.9)
1.0
Malaysia
KLCI
1,755
(5.8)
(5.4)
(0.7)
Thailand
SET 50
1,141
(3.6)
(5.3)
15.1
USA
Dow Jones
24,800
3.6
(0.3)
17.3
UK
FTSE
7,687
1.9
7.1
2.8
Japan
Nikkei
22,540
0.3
3.8
14.5
Germany
DAX
12,787
0.8
4.9
0.8
France
CAC
5,461
(1.0)
6.3
3.0
Source: Bloomberg, Angel Research as on 6 June,2018
Market Outlook
June 08, 2018
Exhibit 7: Historical Angel Top Picks/Fundamental Calls
Date Added
Top Picks/Fundamental
Stocks
Reco Price
Target/Revised Price
Current Status
04-05-2018
Top Picks
M&M
860
990
Open
03-05-2018
Fundamental
L&T Finance Holding
171
210
Open
02-05-2018
Top Picks
HDFC Bank
1944
2315
Open
04-05-2018
Top Picks
Matrimony.com Ltd
810
1016
Open
20-04-2018
Top Picks
Matrimony.com Ltd
781
984
15-05-2018
Top Picks
Parag Milk Foods Limited
310
410
Open
16-04-2018
Top Picks
Parag Milk Foods Limited
249
333
29-05-2018
Fundamental
GMM Pfaudler Limited
932
1,020
Open
14-05-2018
Fundamental
GMM Pfaudler Limited
818
900
06-04-2018
Fundamental
GMM Pfaudler Limited
712
861
07-03-2018
Fundamental
Ashok Leyland Ltd
139
163
Closed (26/04/2018)
03-03-2018
Fundamental
Greenply Industries
340
395
Open
16-04-2018
Top Picks
Safari Industries
651
750
Open
21-02-2018
Top Picks
Safari Industries
532
650
31-05-2018
Top Picks
HSIL Ltd
348
Closed (31/05/2018)
16-02-2018
Top Picks
HSIL Ltd
433
510
07-02-2018
Fundamental
Elantas Beck India Ltd.
2155
2500
Open
01-02-2018
Top Picks
ICICI Bank
352
416
Open
01-02-2018
Top Picks
Aditya Birla Capital
167
218
Open
04-01-2018
Fundamental
CCL Products
278
360
Open
03-01-2018
Fundamental
Nilkamal Ltd
1880
2178
Open
01-01-2018
Fundamental
Capital First Ltd
693
850
Closed (15/01/2018)
30-12-2017
Fundamental
Shreyans Industries Ltd
205
247
Closed
Fundamental
Prism Cement Ltd
160
Closed (09/05/2018)
21-12-2017
Fundamental
Prism Cement Ltd
118
131
18-12-2017
Fundamental
Menon Bearings Limited
92
114
Closed (17/01/2018)
14-12-2017
Top Picks
Ruchira Papers Ltd.
188
244
Closed (09/02/2018)
17-05-2018
Top Picks
Century Plyboards India
280
Closed(17/05/2018)
28-11-2017
Top Picks
Century Plyboards India
317
400
19-12-2017
Top Picks
LT Foods
85
128
Open
06-11-2017
Top Picks
LT Foods
74
96
16-10-2017
Fundamental
Endurance Technologies Ltd
1111
1277
Closed (01/12/2017)
11-09-2017
Top Picks
GIC Housing
533
655
Open
10-10-2017
Top Picks
Music Broadcast Limited
404
475
Open
20-07-2017
Top Picks
Music Broadcast Limited
368
434
07-07-2017
Fundamental
L&T Finance Holdings Ltd
149
179
Closed (28/8/2017)
06-07-2017
Fundamental
Syngene International
478
564
Closed (1/3/2018)
05-07-2017
Top Picks
Maruti
7371
10619
Open
05-06-2017
Top Picks
Karur Vysya Bank
127
100
Closed (12/03/2018)
23-05-2018
Top Picks
KEI Industries
481
589
Open
Source: Company, Angel Research
Market Outlook
June 08, 2018
Exhibit 8: Historical Angel Top Picks/Fundamental Calls
Date Added
Top Picks/Fundamental
Stocks
Reco Price
Target/Revised Price
Current Status
04-01-2017
Top Picks
KEI Industries
125
485
31-05-2018
Top Picks
Alkem Lab
1978
Closed (31/05/2018)
01-12-2016
Top Picks
Alkem Lab
1700
2441
17-10-2016
Top Picks
Asian Granito
267
534
Closed (18/02/2018)
17-05-2018
Top Picks
TV Today Network
460
Closed (17/05/2018)
04-08-2016
Top Picks
TV Today Network
297
603
05-04-2016
Top Picks
DHFL
189
720
Open
05-01-2016
Top Picks
Navkar Corporation
207
265
Open
08-12-2015
Top Picks
Blue Star
357
867
Open
30-10-2015
Top Picks
Siyaram Silk Mills
186
851
Open
Source: Company
Market Outlook
June 08, 2018
Research Team Tel: 022 - 39357800
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offering of securities of the company covered by Analyst during the past twelve months.
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decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should
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