Market Outlook
September 09, 2019
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open flat tracking global indices and SGX Nifty.
BSE Sensex
0.9
337
36,982
Nifty
0.9
98
10,946
US stocks showed a lack of direction during trading on Friday. The major averages
Mid Cap
0.6
82
13,364
spent much of the day bouncing back and forth across the unchanged line before
closing mixed. The Dow was up by 0.3 percent to 26,797 while the Nasdaq dipped
Small Cap
0.8
99
12,595
by 0.2 percent to 8,103.
Bankex
1.3
398
30,638
The UK stocks recovered from an early slide to turn higher on Friday after London-
centric developer Berkeley said market conditions in London and the South East
Global Indices
Chg (%)
(Pts)
(Close)
have remained robust and consistent despite Brexit uncertainties. The FTSE 100
Dow Jones
0.3
69
26,797
inched up by 0.1 percent to 7,279.
Nasdaq
(0.2)
(14)
8,103
On domestic front, Indian shares followed global peers higher on Friday as investors
FTSE
0.1
9
7,279
cheered signs of resolution of trade dispute between the United States and China.
Nikkei
2.1
437
21,086
Underlying sentiment was also helped by reports suggesting that the government
Hang Seng
0
-8
26,516
may soon offer measures to boost exports. The benchmark BSE Sensex surged by
Shanghai Com
1
28
2,986
0.9 percent to 36,982.
News Analysis
Advances / Declines
BSE
NSE
NCLT approves Patanjali's resolution plan for debt-ridden Ruchi Soya
Advances
1,576
1,190
Declines
934
616
Detailed analysis on Pg2
Unchanged
148
106
Investor’s Ready Reckoner
Key Domestic & Global Indicators
Volumes (` Cr)
Stock Watch: Latest investment recommendations on 150+ stocks
BSE
1,764
Refer Pg5 onwards
NSE
29,344
Top Picks
CMP
Target
Upside
Net Inflows (` Cr)
Net
Mtd
Ytd
Company
Sector
Rating
(`)
(`)
(%)
FII
575 -18,209
-2,47,383
Blue Star
Capital Goods
Buy
739
867
17.3
*MFs
1,415
17,791
37,551
ICICI Bank
Financials
Buy
392
490
25.2
Parag Milk Foods
Others
Buy
137
306
123.6
Bata India
Others
Accumulate
1,541
1,643
6.6
Top Gainers
Price (`)
Chg (%)
KEI Industries
Capital Goods
Buy
469
612
30.5
NOCIL
92
7.8
More Top Picks on Pg4
JMFINANCIL
75
5.8
SREINFRA
12
5.9
STRTECH
123
7.5
BSOFT
70
6.9
Top Losers
Price (`)
Chg (%)
SUZLON
3
-9.9
RCOM
1
-4.0
NAUKRI
2062
-5.2
RPOWER
3
-5.8
COX&KINGS
3
-5.0
As on Sept 06, 2019
Market Outlook
September 09, 2019
News Analysis
NCLT approves Patanjali's resolution plan for debt-ridden Ruchi
Soya
The National Company Law Tribunal has approved the resolution plan submitted
by Yoga guru Ramdev-led Patanjali for the debt-ridden Ruchi Soya. A two-member
Mumbai NCLT bench, comprising Rajesh Sharma and V P Singh, approved the
resolution plan after observing that all eventuality has been discussed by it. "It is
also to be clarified that every eventuality has been discussed in the approved
resolution plan, and in implementation of the resolution plan circumstances may
arise for which clarification can be sought by the monitoring agency for effective
implementation of the plan," said the NCLT.
It further said: "In the circumstances, we hereby approve the resolution plan."
The NCLT also ordered the registrar to "immediately communicate this order to the
resolution professional, resolution applicant, corporate debtor and IBBI".
Economic and Political News
Bank of Baroda plans to raise capital up to Rs 3,000 cr via tier-II bonds
Auto firms must take up GST rate cut demand with state FMs: Anurag Thakur
Amalgamation of 10 public sector banks likely to take place on April 1
Corporate News
Market Outlook
September 09, 2019
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
7,116
739
867
17.3
the market growth. EMPPAC division's profitability
to improve once operating environment turns
around.
Well capitalized with CAR of 18.1% which gives
sufficient room to grow asset base. Faster
ICICI Bank
2,52,812
392
490
25.2
resolution of NPA would reduce provision cost,
which would help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,700
469
612
30.5
B2C sales and higher exports to boost the revenues
and profitability
GST regime and the Gujarat plant are expected to
Maruti Suzuki
1,86,862
6,186
8,552
38.3
improve the company’s sales volume and margins,
respectively.
Third largest brand play in luggage segment
Increased product offerings and improving
Safari Industries
1,251
560
1,000
78.6
distribution network is leading to strong growth in
business. Likely to post robust growth for next 3-4
years
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
1,151
137
306
123.6
Value Added Products and reduction in interest cost
is likely to boost margins and earnings in next few
years.
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
6,14,134
2,245
2,620
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.
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
65,771
529
724
36.8
strong growth in Tractors segment coupled by its
strong brand recall and improvement in rural
sentiment
Market leader in the room air conditioner (RAC)
outsourced manufacturing space in India with a
market share of 55.4%. It is a one-stop solutions
Amber Enterprises
2,571
818
910
11.3
provider for the major brands in the RAC industry
and currently serves eight out of the 10 top RAC
brands in India
BIL is the largest footwear retailer in India, offering
footwear, accessories and bags across brands. We
expect BIL to report net PAT CAGR of ~16% to
Bata India
19,805
1,541
1,643
6.6
~`3115cr over FY2018-20E mainly due to new
product launches, higher number of stores addition
and focus on women’s high growth segment and
margin improvement
Market Outlook
September 09, 2019
Continued...
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
SHTF is in the sweet spot with benefits from
stronger CV volumes, NIMs unaffected by
Shriram Transport Finance
rising bond yields on the back of stronger
22,554
994
1,385
39.3
pricing power and an enhancing ROE by
750bps over FY18-20E, supported by decline
in credit cost.
We expect JSPL’s top line to grow at 27%
CAGR over FY19-FY20 on the back of strong
steel demand and capacity addition. On the
Jindal Steel & Power Limited
9,751
96
250
161.5
bottom line front, we expect JSPL to turn in to
profit by FY19 on back of strong operating
margin improvement.
GMM Pfaudler Limited (GMM) is the Indian
market leader in glass-lined (GL) steel
equipment. GMM is expected to cross CAGR
GMM Pfaudler Ltd
2,086
1,427
1,570
10.0
15%+ in revenue over the 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.
Aurobindo Pharmaceuticals, amongst the
Indian Pharmaceutical companies, is well
placed to face the challenging generic
markets, given its focus on achieving growth
Aurobindo Pharmaceuticals
36,278
619
890
43.7
through productivity. Aurobindo will report net
revenue & net profit CAGR of ~13% & ~8%
resp. during FY2018-20E. Valuations are
cheap V/s its peers and own fair multiples of
17-18x.
We believe advance to grow at a healthy
CAGR of 35% over FY18-20E. Below peers
RBL Bank
14,494
337
540
60.4
level ROA (1.2% FY18) to expand led by
margin expansion and lower credit cost.
TTK Prestige has emerged as one of the
leading brands in kitchen appliances in India
after its successful transformation from a
TTK Prestige
7,803
5,629
7,708
36.9
single product company to offering an entire
gamut of home and kitchen appliances. We
are expecting a CAGR of 18% in revenue and
25% in PAT over FY2018-20.
Maintain Hold.
Source: Company, Angel Research
Market Outlook
September 09, 2019
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth
CCL Products
3,173
239
360
50.9
trajectory 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
1,468
984
2,178
121.4
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
1,606
2,025
2,500
23.4
demand from several industries which are expected
to register 10%+ CAGR in demand in the coming
years. We can book out from the stock with 16%
profit at Rs. 2500 TP.
Greenply Industries Ltd (GIL) manufactures plywood
& allied products and medium density fibreboards
(MDF). GIL to report net revenue CAGR of ~14% to
Greenply Industries
1,792
146
256
75.2
~`2,478cr over FY2017-20E mainly due to healthy
growth in plywood & lamination business on the
back of strong brand and distribution network
L&T Fin’s new management is on track to achieve
L&T Finance Holding
18,374
92
150
63.3
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Strong brands and distribution network would boost
Siyaram Silk Mills
1,051
224
549
144.8
growth going ahead. Stock currently trades at an
inexpensive valuation.
Expected to benefit from the lower capex
Music Broadcast Limited
1,065
39
95
146.8
requirement and 15 year long radio broadcast
licensing.
We expect Inox Wind to report exponential growth
in top-line and bottom-line over FY19-20E. The
growth would be led by changing renewable
energy industry dynamics in favor of wind energy
Inox Winds
731
33
120
264.2
segment viz. changes in auction regime from Feed-
In-Tariff (FIT) to reverse auction regime and
Government’s guidance for 10GW auction in FY19
and FY20 each.
Considering the strong CV demand due to change
in BS-VI emission norms (will trigger pre-buying
activities), pick up in construction activities and no
Ashok Leyland
18,758
64
156
144.1
significant impact on industry due to recent axle
load norms, we recommend BUY on Ashok Leyland
at current valuations.
We expect financialisation of savings and
Aditya Birla Capital
20,389
93
118
27.4
increasing penetration in Insurance & Mutual fund
would ensure steady growth.
Well planned strategy to grow small business loans
and cross-selling would propel fees income. We
Yes Bank
15,404
60
NA
NA
expect YES to grow its advance much higher than
industry and improvement in asset quality to
support profitability.
We expect loan book to grow at 24.3% over next
GIC Housing
915
170
NA
NA
two year; change in borrowing mix will help in NIM
improvement
