Market Outlook
June 15, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
(0.4)
(139)
35,600
U.S. Stocks turned in a mixed performance during trading on Thursday. While the
Nifty
(0.4)
(49)
10,808
tech-heavy Nasdaq climbed to a new record closing high, the narrower Dow closed
Mid Cap
(0.1)
(12)
16,065
lower for the third straight day. The Dow Jones was down by 0.1% to 25,175 and
Small Cap
0.1
11
17,040
the Nasdaq edged up by 0.9% to 7,761.
Bankex
(0.5)
(143)
29,751
U.K. stocks fell notably as weaker-than-expected data from China weighed on the
mining sector and the pound spiked higher after the release of upbeat retail sales
Global Indices
Chg (%)
(Pts)
(Close)
data. The benchmark FTSE 100 was down by 0.6% at 7,656.
Dow Jones
(0.1)
(26)
25,175
On domestic front, Indian shares closed lower during the last trading session to
Nasdaq
0.9
66
7,761
snap a three-day winning streak after the U.S. Federal Reserve lifted interest rates for
FTSE
(0.6)
(48)
7,656
the second time this year and signaled a more aggressive rate path for the rest of
the year. The BSE Sensex was ended down by 0.4% to 35,600.
Nikkei
(1.0)
(228)
22,739
Hang Seng
(0.9)
(285)
30,440
News Analysis
Shanghai Com
(0.2)
(6)
3,044
ICICI Bank has filed the case against Punj Lloyd to recover dues of Rs 8.52
billion
Advances / Declines
BSE
NSE
Detailed analysis on Pg2
Advances
1,215
856
Declines
1,429
940
Investor’s Ready Reckoner
Unchanged
131
81
Key Domestic & Global Indicators
Stock Watch: Latest investment recommendations on 150+ stocks
Volumes (` Cr)
Refer Pg5 onwards
BSE
3,520
Top Picks
NSE
26,329
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
Blue Star
Capital Goods
Buy
652
867
33.0
Net Inflows (` Cr)
Net
Mtd
Ytd
Dewan Housing Finance
Financials
Buy
626
720
15.1
FII
(1,322)
257
-2,005
Parag Milk Foods
Others
Buy
354
410
15.8
*MFs
98
1,953
61,325
Navkar Corporation
Others
Buy
142
230
62.1
KEI Industries
Capital Goods
Buy
430
589
37.1
More Top Picks on Pg4
Top Gainers
Price (`)
Chg (%)
MMTC
39
6.1
Key Upcoming Events
Previous
Consensus
VAKRANGEE
43
5.0
Date
Region
Event Description
ReadingExpectations
KWALITY
30
4.9
Jun 15, 2018 Euro Zone Euro-Zone CPI (YoY)
1.90
1.90
JPASSOCIAT
15
4.5
Jun 15, 2018 US
Industrial Production
0.72
0.20
VIPIND
457
4.4
Jun 15, 2018 India
Imports YoY%
4.60
Jun 15, 2018 India
Exports YoY%
5.17
Jun 19, 2018 US
Housing Starts
1,287.00
1,315.00
Top Losers
Price (`)
Chg (%)
More Events on Pg7
OBEROIRLTY
506
-4.1
MINDTREE
994
-3.5
INDIACEM
116
-3.1
RENUKA
16
-3.1
COROMANDEL
425
-2.9
As on June 14, 2018
Market Outlook
June 15, 2018
News Analysis
ICICI Bank has filed the case against Punj Lloyd to recover dues
of Rs 8.52 billion
ICICI Bank has filed a case against Punj Lloyd, the international engineering
procurement and Construction Company, in the National Company Law Tribunal
(NCLT), New Delhi, for insolvency and bankruptcy proceedings. The division bench
headed by Justice M M Kumar has issued a notice to Punj Lloyd, saying the lender
has moved the tribunal under the Insolvency and Bankruptcy Code (IBC). ICICI
Bank has filed the case against Punj Lloyd to recover dues of Rs 8.52 billion.
However, the petition seeking initiation of insolvency proceeding against the
corporate debtor was opposed by State Bank of India (SBI).
SBI disapproved the move on the grounds that the Reserve Bank of India’s (RBI)
February 12 circular gave corporate debtors six months time to resolve their debt
and Punj Lloyd still had time to seek an out-of-court settlement. Legal
representative of SBI told the NCLT that the company’s asset base only covered 5
per cent of its debt and there are 20 on-going projects, which are the only source
of revenue for the company. Further, the counsel for SBI said if insolvency
proceedings against the company were initiated the projects would be halted. SBI
is the leader of the lenders forum for Punj Lloyd.
Economic and Political News
WPI inflation soars to 14-mth high; rises to 4.43% in May from 3.18% in Apr
Corporate News
NTPC plans to load cheaper power first, plans new despatch schedule
Market Outlook
June 15, 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
6,270
652
867
33.0
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
19,621
626
720
15.1
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
1,83,037
285
416
46.1
of NPA would reduce provision cost, which would
help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,366
430
589
37.1
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
1,860
326
475
45.7
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,136
142
230
62.1
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would boost
Siyaram Silk Mills
2,880
614
851
38.5
growth going ahead. Stock currently trades at an
inexpensive valuation.
GST regime and the Gujarat plant are expected to
Maruti
2,71,091
8,974
10,619
18.3
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,087
388
655
69.0
two year; change in borrowing mix will help in NIM
improvement
We expect sales/PAT to grow at 13.5%/20% over
LT Foods
2,231
70
128
83.5
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
1,416
635
720
13.4
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 15, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
30,960
141
218
55.0
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
2,979
354
410
15.8
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
1,623
714
1,016
42.3
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
5,30,331
2,037
2,315
13.6
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
922
1,050
13.5
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
3227
1026
1230
20.0
provider for the major brands in the RAC industry
and currently serves eight out of the 10 top RAC
brands in India
Source: Company, Angel Research
Market Outlook
June 15, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,727
280
360
28.5
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
Nilkamal
2,494
1,671
2,178
30.3
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
1,605
2,024
2,500
23.5
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
3,047
249
395
59.0
~`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
1,261
863
920
6.6
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
33,479
168
210
25.2
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
June 15, 2018
Key Upcoming Events
Global economic events release calendar
Bloomberg Data
Date
Time Country
Event Description
Unit
Period
Last Reported
Estimated
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
0.20
India
Imports YoY%
% Change
May
4.60
India
Exports YoY%
% Change
May
5.17
Jun 19, 2018
6:00 PMUS
Housing Starts
Thousands
May
1,287.00
1,315.00
6:00 PMUS
Building permits
Thousands
May
1,364.00
1,335.00
Jun 20, 2018
7:30 PMUS
Existing home sales
Million
May
5.46
5.58
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 Manufacturing
Value
Jun P
56.90
1:00 PMGermany
PMI Services
Value
Jun P
52.10
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
Jun 28, 2018
6:00 PMUS
GDP Qoq (Annualised)
% Change
1Q T
2.20
Jun 29, 2018
1:25 PMGermany
Unemployment change (000's)
Thousands
Jun
(12.00)
2:00 PMUK
GDP (YoY)
% Change
1Q F
1.20
Jun 30, 2018
6:30 AMChina
PMI Manufacturing
Value
Jun
51.90
Jul 02, 2018
2:00 PMUK
PMI Manufacturing
Value
Jun
54.40
Jul 06, 2018
6:00 PMUS
Change in Nonfarm payrolls
Thousands
Jun
223.00
2:00 PMUK
Industrial Production (YoY)
% Change
May
1.80
Jul 10, 2018
7:00 AMChina
Consumer Price Index (YoY)
% Change
Jun
1.80
5:30 PMIndia
Industrial Production YoY
% Change
May
4.90
Jul 12, 2018
0-Jan-00US
Unnemployment rate
%
Jun
3.80
0-Jan-00US
Consumer price index (mom)
% Change
Jun
0.20
Source: Bloomberg, Angel Research
Market Outlook
June 15, 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 15, 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 14, 2018
Market Outlook
June 15, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
72,122
(15.4)
(17.0)
14.6
Russia
Micex
4,344
1.4
7.1
11.4
India
Nifty
10,857
0.1
3.7
12.4
China
Shanghai Composite
3,050
(4.6)
(8.5)
(3.1)
South Africa
Top 40
52,200
1.0
(0.9)
14.6
Mexico
Mexbol
46,761
0.5
(3.7)
(4.6)
Indonesia
LQ45
951
3.3
(12.8)
(0.3)
Malaysia
KLCI
1,764
(4.5)
(4.1)
(0.1)
Thailand
SET 50
1,129
(4.3)
(4.3)
13.3
USA
Dow Jones
25,201
1.5
0.8
17.9
UK
FTSE
7,704
(0.3)
6.6
3.8
Japan
Nikkei
22,966
0.4
7.0
14.9
Germany
DAX
12,891
(1.0)
3.5
1.2
France
CAC
5,453
(2.0)
3.8
2.8
Source: Bloomberg, Angel Research As on June 14, 2018
Market Outlook
June 15, 2018
Exhibit 7: Historical Angel Top Picks/Fundamental Calls
Date Added
Top Picks/Fundamental
Stocks
Reco Price
Target/Revised Price
Current Status
14-06-2018
Top Picks
Amber Enterprises
1,026
1,230
Open
07-06-2018
Top Picks
M&M
918
1050
Open
04-05-2018
Top Picks
M&M
860
990
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 15, 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 15, 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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Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
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