Market Outlook
June 21, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open flat tracking global indices and SGX Nifty.
BSE Sensex
0.7
261
35,547
U.S. Stocks turned in a mixed performance on Wednesday after moving in opposite
Nifty
0.6
62
10,772
directions earlier in the session. While the Dow remained in negative territory, the
Mid Cap
0.2
36
15,852
Nasdaq and the S&P 500 held on to gains. The Dow Jones dipped by 0.2% to
Small Cap
0.3
45
16,659
24,657 and the Nasdaq climbed up by 0.7% to 7,782.
Bankex
1.0
307
29,710
U.K. stocks were sharply higher yesterday as fears over U.S.-China trade war ebbed
and oil recovered from losses in the previous session, heading into Friday's OPEC
Global Indices
Chg (%)
(Pts)
(Close)
meeting in Vienna. Investors also keep an eye on the upcoming Bank of England
meeting, though no change is expected. The benchmark FTSE 100 was up by 0.3%
Dow Jones
(0.2)
(42)
24,657
to 7,627.
Nasdaq
0.7
56
7,782
FTSE
0.3
24
7,627
On domestic front, Indian shares ended on a positive note Wednesday to snap a
two-day losing streak as investors took trade tensions in their stride and looked
Nikkei
1.2
277
22,555
ahead to the Bank of England and OPEC meetings for direction. The BSE Sensex
Hang Seng
0.8
228
29,696
rose by 0.7% to 35,547
Shanghai Com
0.3
8
2,916
News Analysis
Advances / Declines
BSE
NSE
Higher import duties on strategic US imports to kick in from today
Advances
1,321
420
Detailed analysis on Pg2
Declines
1,323
1,381
Unchanged
138
79
Investor’s Ready Reckoner
Key Domestic & Global Indicators
Volumes (` Cr)
Stock Watch: Latest investment recommendations on 150+ stocks
BSE
2,420
Refer Pg5 onwards
NSE
25,090
Top Picks
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
Net Inflows (` Cr)
Net
Mtd
Ytd
Blue Star
Capital Goods
Buy
651
867
33.3
FII
175
432
-1,830
Dewan Housing Finance
Financials
Accumulate
629
720
14.5
*MFs
98
1,953
61,325
Parag Milk Foods
Others
Buy
332
410
23.5
Navkar Corporation
Others
Buy
139
230
65.6
Top Gainers
Price (`)
Chg (%)
KEI Industries
Capital Goods
Buy
430
589
36.9
More Top Picks on Pg4
JAICORPLTD
155
12.0
KPRMILL
649
7.2
Key Upcoming Events
Previous
Consensus
RAIN
208
5.0
Date
Region
Event Description
ReadingExpectations
VAKRANGEE
48
5.0
Jun 21, 2018 Euro Zone Euro-Zone Consumer Confidence
0.20
-
KWALITY
30
4.9
Jun 21, 2018 US
Initial Jobless claims
218.00
220.00
Jun 21, 2018 UK
BOE Announces rates
0.50
0.50
Top Losers
Price (`)
Chg (%)
Jun 22, 2018 US
New home sales
662.00
670.00
Jun 22, 2018 Germany
PMI Services
52.10
52.20
INDIGO
1136
-7.5
More Events on Pg7
AVANTI
1626
-6.1
CORPBANK
28
-4.6
SHRIRAMCIT
2189
-3.7
TIMETECHNO
131
-3.7
As on June 20, 2018
Market Outlook
June 21, 2018
News Analysis
Higher import duties on strategic US imports to kick in from
today
Strategic imports from the US, including items across the board such as dry fruits,
shrimps, chemicals, and motorcycles, are all set to attract higher duty from today
onwards.
Set to bring out the official notification during the day, India has prepared a crafty
list to counter US President Donald Trump’s repeated threats of cutting trade while
aiming to reduce the impact on domestic businesses.It hopes to rake in a total
$240 million worth of duties through higher tax by up to 50 per cent on certain
items. India last week notified the World Trade Organisation of its decision to
impose higher import tariffs on 30 US goods. The move comes after New
Delhi got a cold shoulder from Washington DC on its request for exempting India
from the higher tariffs announced by the US on steel and aluminium imports.
The global trading mechanism has been shaken up by $34 billion worth of tariff
hikes announced by both the US and China last weekend. Since then, Trump has
threatened an additional
$200 billion worth of tariffs on Chinese goods
and Beijing has indicated it won’t cow down.
Economic and Political News
Higher import duties on strategic US imports to kick in from today
RBI moots legal entity identifier for bond, money markets by October end
Asian Infra Investment Bank to pump in $1.9 bn into various Indian projects
Arvind Subramanian resigns before term; Jaitley announces CEA exit on FB
Corporate News
Bhushan Energy's resolution professional may move court against Tatas
RBI e-mail on risk control in November 2016 did not reach us, says PNB
Bank of Maharashtra CMD Ravindra Marathe arrested in Rs 30bn DSK Group
scam
Voda-Idea merger: DoT receives legal view on raising demand for dues
Competition Commission of India okays Bayer-Monsanto merger but with
riders
Market Outlook
June 21, 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
6,255
651
867
33.3
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
19,724
629
720
14.5
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 resolution
ICICI Bank
188,575
293
416
41.9
of NPA would reduce provision cost, which would
help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,370
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
1,838
322
475
47.4
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,090
139
230
65.6
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would boost
Siyaram Silk Mills
2,759
589
851
44.6
growth going ahead. Stock currently trades at an
inexpensive valuation.
GST regime and the Gujarat plant are expected to
Maruti
270,298
8,948
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
2,036
378
655
73.3
two year; change in borrowing mix will help in NIM
improvement
Third largest brand play in luggage segment
Increased product offerings and improving
Safari Industries
1,375
617
720
16.7
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 21, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
30,905
140
218
55.3
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
2,792
332
410
23.5
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 &
Matrimony.com Ltd
1,634
719
1,016
41.3
marriage 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
535,160
2,056
2,315
12.6
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
1,12,200
903
1,050
16.3
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
3,033
965
1230
27.5
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
10,839
843
896
6.3
~`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
SHTF is in the sweet spot with benefits from
stronger CV volumes, NIMs unaffected by rising
Shriram Transport Finance
33,786
1,489
1,764
18.5
bond yields on the back of stronger pricing power
and an enhancing ROE by 750bps over FY18-
20E, supported by decline in credit cost.
Source: Company, Angel Research
Market Outlook
June 21, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,574
269
360
34.0
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
1,672
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.
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
1,600
2,018
2,500
23.9
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
3,003
245
395
61.3
~`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
1,225
838
920
9.8
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
32,611
163
210
28.5
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
June 21, 2018
Key Upcoming Events
Global economic events release calendar
Bloomberg Data
Date
Time Country
Event Description
Unit
Period
Last Reported
Estimated
Jun 21, 2018
7:30 PMEuro Zone
Euro-Zone Consumer Confidence
Value
Jun A
0.20
-
6:00 PMUS
Initial Jobless claims
Thousands
Jun 16
218.00
220.00
4:30 PMUK
BOE Announces rates
% Ratio
Jun 21
0.50
0.50
Jun 22, 2018
7:30 PMUS
New home sales
Thousands
May
662.00
670.00
1:00 PMGermany
PMI Services
Value
Jun P
52.10
52.20
Jun 25, 2018
1:00 PMGermany
PMI Manufacturing
Value
Jun P
56.90
56.30
Jun 26, 2018
7:30 PMUS
Consumer Confidence
S.A./ 1985=100
Jun
128.00
127.20
Jun 28, 2018
6:00 PMUS
GDP Qoq (Annualised)
% Change
1Q T
2.20
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
193.00
6:00 PMUS
Unnemployment rate
%
Jun
3.80
3.80
Jul 10, 2018
2:00 PMUK
Industrial Production (YoY)
% Change
May
1.80
US
Producer Price Index (mom)
% Change
Jun
1.00
Jul 11, 2018
7:00 AMChina
Consumer Price Index (YoY)
% Change
Jun
1.80
Jul 12, 2018
India
Imports YoY%
% Change
Jun
14.85
India
Exports YoY%
% Change
Jun
20.18
5:30 PMIndia
Industrial Production YoY
% Change
May
4.90
6:00 PMUS
Consumer price index (mom)
% Change
Jun
0.20
Jul 13, 2018
China
Exports YoY%
% Change
Jun
12.60
Jul 16, 2018
7:30 AMChina
Industrial Production (YoY)
% Change
Jun
6.80
12:00 PMIndia
Monthly Wholesale Prices YoY%
% Change
Jun
4.43
Source: Bloomberg, Angel Research
Market Outlook
June 21, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
8.5
10.0
9.0
9.1
7.3
7.5
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
4.6
4.9
7.0
6.3
5.0
4.1
6.1
5.6
4.0
6.0
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
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
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
3.50
0.0
(5.0)
3.00
Source: Bloomberg, Angel Research
Source: RBI, Angel Research
Market Outlook
June 21, 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 21, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
71,394
(14.6)
(15.9)
15.7
Russia
Micex
4,386
1.4
7.1
11.4
India
Nifty
10,710
2.4
6.7
12.3
China
Shanghai Composite
2,908
(8.7)
(11.4)
(7.1)
South Africa
Top 40
50,020
(1.0)
(1.6)
12.9
Mexico
Mexbol
46,488
1.8
(2.8)
(5.5)
Indonesia
LQ45
951
(1.7)
(14.2)
(3.1)
Malaysia
KLCI
1,715
(7.7)
(8.0)
(4.1)
Thailand
SET 50
1,072
(6.1)
(8.8)
10.7
USA
Dow Jones
24,700
(0.1)
0.4
15.1
UK
FTSE
7,604
(2.4)
6.5
2.1
Japan
Nikkei
22,278
(2.8)
2.2
11.9
Germany
DAX
12,678
(2.6)
2.9
(0.2)
France
CAC
5,391
(4.0)
3.6
2.2
Source: Bloomberg, Angel Research As on June 20, 2018
Market Outlook
June 21, 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 21, 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 21, 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
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a registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number
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/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
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