Market Outlook
January 24, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
1.0
342
36,140
US stocks saw some further upside during the last trading session. The advance on
Nifty
1.1
117
11,084
the day lifted the Nasdaq and the S&P 500 to new record closing highs. The Dow
Mid Cap
1.1
202
18,079
Jones ended on a flat note at 26,211 and the Nasdaq Composite edged up to
Small Cap
0.2
43
19,651
7,460.
Bankex
1.6
500
31,118
U.K. shares moved higher after the three-day U.S. government shutdown ended and
the Bank of Japan maintained its massive monetary stimulus program, helping ease
Global Indices
Chg (%)
(Pts)
(Close)
worries that it might shift toward a tighter policy. The FTSE 100 was up by 0.2% to
Dow Jones
(0.0)
(4)
26,211
close at 7,732.
Nasdaq
0.7
52
7,460
On domestic front, Indian shares extended their recent winning streak to close at
FTSE
0.2
16
7,732
fresh record highs as firm global markets and growing optimism about India's
Nikkei
(0.5)
(127)
23,997
economic recovery boosted investor sentiment. The Sensex edged up to 1.0% at
Hang Seng
(0.2)
(81)
32,849
36,140 while the Nifty ended at 11,084 with an upside of 1.1%.
Shanghai Com
0.2
6
3,552
News Analysis
Advances / Declines
BSE
NSE
ONGC get government NOD to sell stake
Advances
1,362
865
Detailed analysis on Pg2
Declines
1,586
928
Investor’s Ready Reckoner
Unchanged
138
54
Key Domestic & Global Indicators
Stock Watch: Latest investment recommendations on 150+ stocks
Volumes (` Cr)
Refer Pg5 onwards
BSE
6,809
NSE
42,482
Top Picks
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
Net Inflows (` Cr)
Net
Mtd
Ytd
Blue Star
Capital Goods Accumulate
758
867
14.3
FII
1,544
7,867
7,867
Dewan Housing Finance
Financials
Buy
614
712
16.0
Asian Granito
Other
Accumulate
592
651
10.0
*MFs
168
4,412
4,412
Navkar Corporation
Other
Buy
195
265
36.0
KEI Industries
Capital Goods Accumulate
401
436
8.8
Top Gainers
Price (`)
Chg (%)
More Top Picks on Pg4
Deltacorp
389
11.0
Key Upcoming Events
Jindalstel
291
10.3
Previous
Consensus
Date
Region
Event Description
Strtech
396
7.6
Reading
Expectations
Hathway
45
7.5
Jan24
Germany PMI Services
55.80
55.50
Jan24
US
Existing home sales
5.81
5.70
Den
129
7.0
Jan24
Germany PMI Manufacturing
63.30
63.00
Jan24
UK
Jobless claims change
5.90
Top Losers
Price (`)
Chg (%)
Jan25
Euro Zone
ECB announces interest rates
-
-
More Events on Pg7
Rallis
252
(7.1)
Canfinhome
461
(5.0)
Geship
435
(4.6)
Videoind
20
(4.3)
Godrejprop
845
(4.1)
As on January 23, 2018
Market Outlook
January 24, 2018
News Analysis
ONGC gets govt nod to sell stake
State-owned Oil and Natural Gas Corp (ONGC) has got approval from the
government for selling its stake in IOC and GAIL to help fund the `369.15 billion
acquisition of HPCL.
ONGC holds 13.77 per cent stake in nation's biggest refiner Indian Oil Corp
(IOC), which at today's trading price is worth over `262 billion. It also holds 4.86
per cent stake in gas utility GAIL India Ltd, which is worth over `38.47 billion.
For the moment ONGC is funding the `369.15 billion acquisition of government's
51.11 per cent stake in oil refining and marketing firm Hindustan Petroleum Corp
Ltd (HPCL) from the about `120 billion cash it has and short- term borrowing.
Economic and Political News
Metro Cash & Carry India sales up 16% to Rs 62.42 billion in FY'17
ONGC gets government nod to sell stake in IOC, GAIL to fund HPCL
acquisition
Domestic air traffic doubles to over 100mn in 7 yrs on low fares, oil
ONGC-HPCL deal: State-run oil firms to see more integration, says Pradhan
Corporate News
Amazon expands product offering from 11mn to 24mn for Prime subscribers
Abu Dhabi's NPCC wins $327mn contract from ONGC to build offshore
infra
Maruti beats Hyundai with 6 cars appearing in 10 best-selling PVs in Dec
Telcos call for tax relief under GST; raise OTT, infra issues with Trai
Market Outlook
January 24, 2018
Quarterly Bloomberg Brokers Consensus Estimate
Idea Ltd - Jan 24, 2018
Particulars ( ` cr)
3QFY18E
3QFY17
y-o-y (%)
2QFY18
q-o-q (%)
Sales
6,690
8,662
(22.7)
7,465
(10.4)
EBIDTA
1,222
2,165
(43.5)
1,501
(18.6)
%
18.3
25
20.1
PAT
(1,304)
(384)
(239.5)
(1,106)
(17.9)
Pidilite Industries - Jan 24, 2018
Particulars ( ` cr)
3QFY18E
3QFY17
y-o-y (%)
2QFY18
q-o-q (%)
Sales
1,489
1,334
11.7
1,529
(2.6)
EBIDTA
336
286
17.5
376
(10.6)
%
22.6
21.5
24.5
PAT
229
202
13.4
252
(9.2)
Mahindra and Mahindra Finance - Jan 24, 2018
Particulars ( ` cr)
3QFY18E
3QFY17
y-o-y (%)
2QFY18
q-o-q (%)
PAT
142
12
1083.3
100
42
Market Outlook
January 24, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
Strong growth in domestic business due to its
leade`hip in acute therapeutic segment. Alkem expects
Alkem Laboratories
26,552
2,221
2,441
9.9
to launch more products in USA, which bodes for its
international business.
We expect the company would report strong
Asian Granito
1,781
592
651
10.0
profitability owing to better product mix, higher B2C
sales and amalgamation synergy.
Favorable outlook for the AC industry to augur well for
Cooling products business which is out pacing the
Blue Star
7,274
758
867
14.3
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
19,256
614
712
16.0
presence in tier-II & III cities where the growth
opportunity is immense.
Loan growth is likely to pick up after a sluggish FY17.
Lower credit cost will help in strong bottom-line
Karur Vysya Bank
8,489
117
160
36.9
growth. Increasing share of CASA will help in NIM
improvement.
High order book execution in EPC segment, rising B2C
KEI Industries
3,141
401
436
8.8
sales and higher exports to boost the revenues and
profitability
Expected to benefit from the lower capex requirement
Music Broadcast
2,244
393
475
20.8
and 15 year long radio broadcast licensing.
Massive capacity expansion along with rail advantage
Navkar Corporation
2,934
195
265
36.0
at ICD as well CFS augur well for the company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,384
722
851
17.9
growth going ahead. Stock currently trades at an
inexpensive valuation.
Market leadership in Hindi news genre and no. 2
viewership ranking in English news genre, exit from the
TV Today Network
2,736
459
500
9.0
radio business, and anticipated growth in ad spends
by corporate to benefit the stock.
After GST, the company is expected to see higher
volumes along with improving product mix. The
Maruti Suzuki
2,83,865
9,397
10,619
13.0
Gujarat plant will also enable higher operating
leverage which will be margin accretive.
We expect loan book to grow at 24.3% over next two
GIC Housing
2,458
456
655
43.5
year; change in borrowing mix will help in NIM
improvement
We expect CPIL to report net Revenue/PAT CAGR of
~17%/16% over FY2017-20E mainly due to healthy
7,379
332
400
20.4
growth in plywood & lamination business, forayed into
Century Plyboards India
MDF & Particle boards on back of strong brand &
distribution network.
We expect sales/PAT to grow at 13.5%/20% over next
LT Foods
2,919
91
128
40.3
two years on the back of strong distribution network &
addition of new products in portfolio.
We expect sales/PAT to grow at 13%/16% over next
two years on the back of strong healthy demand in
Ruchira Papers
438
195
244
25.0
writing & printing paper and Kraft paper. Further,
China had banned making paper from waste pulp
which would benefit Indian paper companies.
We expect financialisation of savings and increasing
Aditya Birla Capital
39781
176
230
30.6
penetration in Insurance & Mutual fund would ensure
steady growth.
Source: Company, Angel Research
Market Outlook
January 24, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,957
297
360
21.0
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 healthy
Nilkamal
2,925
1,960
2,178
11.1
demand growth in plastic division. On the bottom-line
front, we estimate ~10% CAGR to `162cr owing to
improvement in volumes.
We expect sales/PAT to grow at 9%/14% over next two
years on the back of healthy demand growth in
Shreyans Industries
270
195
247
26.7
printing. Further, China had banned making paper
from waste pulp which would benefit Indian paper
companies.
The prism has diversified exposure in the different
segment such as Cement, Tile & ready mix concrete.
Prism Cement
7,050
140
160
14.2
Thus we believe, PCL is in the right place to capture
ongoing government spending on affordable housing
and infrastructure projects.
Source: Company, Angel Research
