Market Outlook
June 11, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open flat tracking global indices and SGX Nifty.
BSE Sensex
(0.1)
(19)
35,444
U.S. Stocks moved modestly higher over the course of the trading session. With the
Nifty
(0.0)
(1)
10,768
turnaround on the day, the Dow and the S&P 500 reached their best closing levels in
Mid Cap
0.4
67
16,022
about three months. The Dow Jones was up by 0.3% to 25,316 and the Nasdaq
Small Cap
0.6
97
16,887
ended up by 0.1% to 7,645.
Bankex
(0.2)
(71)
29,593
U.K. stocks fell on Friday, dragged down by financials as investors fretted about
trade fiction, rising interest rates and political risks. The benchmark FTSE 100 was
Global Indices
Chg (%)
(Pts)
(Close)
marginally lower by 0.8% at 7,642.
Dow Jones
0.3
75
25,316
On domestic front, Indian shares edged lower during the last trading session after
Nasdaq
0.1
11
7,645
two sessions of strong gains, with a weakening rupee, oil price volatility and muted
FTSE
(0.8)
(62)
7,642
global cues weighing on markets. The BSE Sensex was ended down by 0.1% to
35,444.
Nikkei
(0.6)
(129)
22,695
Hang Seng
(1.8)
(554)
30,958
News Analysis
Shanghai Com
(1.4)
(42)
3,067
RITES readies Rs 2.5 billion for IRSDC stake; IPO to boost railways infra
Detailed analysis on Pg2
Advances / Declines
BSE
NSE
Advances
1,466
1,439
Investor’s Ready Reckoner
Declines
1,201
387
Key Domestic & Global Indicators
Unchanged
133
52
Stock Watch: Latest investment recommendations on 150+ stocks
Refer Pg5 onwards
Volumes (` Cr)
Top Picks
BSE
3,037
CMP
Target
Upside
Company
Sector
Rating
NSE
28,512
(`)
(`)
(%)
Blue Star
Capital Goods
Buy
675
867
28.4
Dewan Housing Finance
Financials
Buy
623
720
15.5
Net Inflows (` Cr)
Net
Mtd
Ytd
Parag Milk Foods
Others
Buy
316
410
29.9
FII
(501)
2,756
494
Navkar Corporation
Others
Buy
146
230
57.9
*MFs
112
112
59,484
KEI Industries
Capital Goods
Buy
430
589
36.9
More Top Picks on Pg4
Top Gainers
Price (`)
Chg (%)
Key Upcoming Events
SPARC
415
11.4
Previous
Consensus
Date
Region
Event Description
ReadingExpectations
SINTEX
17
11.1
Jun 11, 2018 China
Consumer Price Index (YoY)
1.80
1.80
UCOBANK
20
9.5
Jun 12, 2018 UK
Jobless claims change
31.20
SUNPHARMA
528
8.1
Jun 12, 2018 UK
CPI (YoY)
2.40
2.40
PVR
1,409
6.0
Jun 12, 2018 India
Industrial Production YoY
4.40
6.00
Jun 13, 2018 US
Consumer price index (mom)
0.20
0.20
More Events on Pg7
Top Losers
Price (`)
Chg (%)
KWALITY
30
-4.9
CASTROLIND
174
-4.6
EDELWEISS
317
-4.1
ICIL
71
-3.8
GDL
175
-3.2
As on June 08, 2018
Market Outlook
June 11, 2018
News Analysis
RITES readies Rs 2.5 billion for IRSDC stake; IPO to boost
railways infra
The ambitious Rs 1-trillion railway station redevelopment plan is set to take a fresh
acquire around 25 per cent stake in Indian Railway Stations Development
Corporation (IRSDC), nodal agency for the redevelopment projects. RITES, which is
sources, has already set aside Rs 2.5 billion for this acquisition. The RITES’ interest
is coming at a time when IRSDC has lined up plans to raise about Rs 40 billion
from the markets for upgrading at least 50 stations in the initial phase.
The government is planning to rebuild at least 600 stations and has approached
other railway PSUs, too, to take a stake. “We were approached to participate in
equity for station development projects, where IRSDC is evolving a better model for
investment. We, in principle, approved Rs 2.5 billion for this in the March board
meeting,” said Rajeev Mehrotra, chairman and managing director of RITES.
Economic and Political News
Corporate News
Market Outlook
June 11, 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
6,491
675
867
28.4
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
19,547
623
720
15.5
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
1,85,379
288
416
44.3
resolution of NPA would reduce provision cost,
which would help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,372
430
589
36.9
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
1,877
329
475
44.4
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,193
146
230
57.9
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would
Siyaram Silk Mills
3,041
649
851
31.2
boost growth going ahead. Stock currently trades at
an inexpensive valuation.
GST regime and the Gujarat plant are expected to
Maruti
2,70,232
8,946
10,619
18.7
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,093
389
655
68.6
two year; change in borrowing mix will help in NIM
improvement
We expect sales/PAT to grow at 13.5%/20% over
LT Foods
2,223
70
128
84.2
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
1,354
607
720
18.6
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 11, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
30,993
141
218
54.8
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
2,655
316
410
29.9
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
1,636
720
1,016
41.1
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
5,33,703
2,050
2,315
12.9
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
1,13,242
911
1,016
11.5
strong growth in Tractors segment coupled by its
strong brand recall and improvement in rural
sentiment
Source: Company, Angel Research
Market Outlook
June 11, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,777
284
360
26.8
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
2,531
1,696
2,178
28.4
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
1,586
2,000
2,500
25.0
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
3,001
245
395
61.4
~`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
1,185
811
920
13.5
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
33,668
169
210
24.5
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
June 11, 2018
Key Upcoming Events
Global economic events release calendar
Bloomberg Data
Date
Time Country
Event Description
Unit
Period
Last Reported
Estimated
Jun 11, 2018
7:00 AMChina
Consumer Price Index (YoY)
% Change
May
1.80
1.80
Jun 12, 2018
2:00 PMUK
Jobless claims change
% Change
May
31.20
2:00 PMUK
CPI (YoY)
% Change
May
2.40
2.40
5:30 PMIndia
Industrial Production YoY
% Change
Apr
4.40
6.00
Jun 13, 2018
6:00 PMUS
Consumer price index (mom)
% Change
May
0.20
0.20
US
Producer Price Index (mom)
% Change
May
(0.10)
11:30 PMUS
FOMC rate decision
%
Jun 13
1.75
2.00
Jun 14, 2018
6:00 PMUS
Initial Jobless claims
Thousands
Jun 9
222.00
222.00
7:30 AMChina
Industrial Production (YoY)
% Change
May
7.00
7.00
12:00 PMIndia
Monthly Wholesale Prices YoY%
% Change
May
3.18
4.00
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
1.90
6:45 PMUS
Industrial Production
%
May
0.72
0.30
India
Imports YoY%
% Change
May
4.60
6:00 PMUS
Housing Starts
Thousands
May
1,287.00
1,315.00
Jun 19, 2018
India
Exports YoY%
% Change
May
5.17
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
5.53
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
Jun 26, 2018
7:30 PMUS
Consumer Confidence
S.A./ 1985=100
Jun
128.00
Source: Bloomberg, Angel Research
Market Outlook
June 11, 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 11, 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 As on June 08,2018
Market Outlook
June 11, 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 June 08,2018
Market Outlook
June 11, 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 11, 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 11, 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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companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine
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