Market Outlook
May 28, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Cl ose)
Indian markets are likely to open flat tracking global indices and SGX Nifty.
BSE Sensex
0.8
262
34,925
U.S. Stocks turned in a lackluster performance during trading on Friday. The major
Nifty
0.9
91
10,605
averages spent the day bouncing back and forth across the unchanged line before
Mid Cap
1.6
243
15,904
closing mixed. The Dow Jones dipped by 0.2% to 24,753 and the Nasdaq climbed
Small Cap
1.2
198
17,151
up by 0.1% to 7,434.
Bankex
1.0
299
29,541
U.K. stocks rose modestly during the last trading session to rebound from two days
of losses as the pound selloff resumed amid growing Brexit uncertainty and after the
Global Indices
Chg (%)
(Pts)
(Cl ose)
release of first-quarter GDP data. The benchmark FTSE 100 was up by 0.1% at
7,730.
Dow Jones
(0.2)
(59)
24,753
Nasdaq
0.1
9
7,434
On domestic front, Indian shares posted strong gains for the second straight session
FTSE
0.2
14
7,730
as investors took trade worries in their stride and oil prices eased on expectations of
Nikkei
(0.0)
(6)
22,445
a gradual increase in output from Russia and other large producers. The rupee's
rebound from multi-month lows also offered some support. The BSE Sensex closed
Hang Seng
0.4
134
30,722
up by 0.8% at 34,925.
Shanghai Com
(0.1)
(4)
3,137
News Analysis
A dvances / Declines
BSE
NSE
Sebi serves notice on ICICI Bank CEO Chanda Kochhar in Videocon Loan Case
Advances
1,609
1,175
Detailed analysis on Pg2
Declines
1,043
622
Unchanged
153
68
Investor’s Ready Reckoner
Key Domestic & Global Indicators
Volumes (` Cr)
Stock Watch: Latest investment recommendations on 150+ stocks
BSE
3,025
Refer Pg5 onwards
NSE
30,928
Top Picks
C MP
Target
U psi de
C ompany
Sector
R ating
(`)
(`)
(%)
Net Inflows (` Cr)
Ne t
Mtd
Ytd
Blue Star
Capital Goods
Buy
704
867
23.2
FII
(262)
(6,318)
1,079
Dewan Housi ng Finance
Financials
Buy
616
720
16.9
*MFs
760
10,529
56,282
Parag Milk F oods
Others
Buy
335
410
22.4
Navkar Corporation
Others
Buy
149
265
77.4
Top Gainers
Price (`)
Chg (%)
KEI Industrie s
Capital Goods
Buy
475
589
24.1
More Top Picks on Pg4
GDL
199
20.0
TIMETECHNO
155
14.6
Key Upcoming Events
Previous
C onsensus
MCX
819
13.8
D ate
Region
Event Description
ReadingExpectations
IFCI
19
11.9
May 29, 2018 Euro Zone Euro-Zone Consumer Confidence
0.20
0.20
HATHWAY
31
9.3
May 30, 2018 US
Consumer Confidence
128.70
127.90
May 30, 2018 US
GDP Qoq (Annualise d)
2.30
2.30
Top Losers
Price (`)
Chg (%)
May 30, 2018 China
PMI Manufacturing
51.40
51.40
May 31, 2018 Germany
Unempl oyment change (000's)
(7.00)
(10.00)
GRANULES
79
-4.4
More Events on Pg7
SOBHA
524
-4.0
RAJESHEXPO
609
-3.5
GET&D
321
-3.1
IDBI
65
-3.1
As on May 25, 2018
Market Outlook
May 28, 2018
News Analysis
Sebi serves notice on ICICI Bank CEO Chanda Kochhar in Videocon
Loan Case
Kochhar on dealings of the bank with Videocon Group and Nupower, an entity in
lender. Appropriate response would be submitted to the Sebi, the country's largest
private bank said in a stock exchange filing. The CBI has launched a preliminary
million in Nu Power Renewables, a firm owned by Deepak Kochhar after Videocon
secured a loan from a consortium of banks, including ICICI. ICICI has denied any
wrongdoing in the loan, saying it was part of a consortium of lenders that
extended the facility to Videocon. The notice, it further said has been issued based
on information furnished by the Bank/its MD & CEO to diverse queries made by
Sebi concerning dealings between the bank and Videocon Group and certain
dealings allegedly between Videocon Group and Nupower, an entity in which
Deepak Kochhar spouse of MD& CEO has economic interests.
Economic and Political News
Corporate News
L&T Construction- Marubeni JV bags Rs 31.9 bn order for Dhaka Metro
Market Outlook
May 28, 2018
Quarterly Bloomberg Brokers Consensus Estimate
Larsen & Toubro Ltd - May 28, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
41,067
36,618
12.2
28,747
42.8
EBIDTA
5,011
5,394
(7.1)
4,658
7.5
%
12.2
14.7
16.2
PAT
2,994
3,180
(5.9)
1,617
85.2
NTPC Ltd - May 28, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
21,604
20,416
5.8
20,774
3.9
EBIDTA
6,128
4,679
30.9
5,217
17.4
%
28.4
22.9
25.2
PAT
2,714
2,079
30.5
2,360
15.0
Auro Pharma Ltd - May 28, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
4,187
3,641
14.9
4,336
(3.4)
EBIDTA
962
721
33.4
1,025
(6.2)
%
22.9
19.8
23.6
PAT
606
532
13.9
595
1.8
NMDC Ltd - May 28, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
3,532
2,871
23.1
2,469
43.1
EBIDTA
2,009
932
155.6
1,209
66.2
%
56.8
32.5
49.0
PAT
1,294
511
153.2
886
46.1
Market Outlook
May 28, 2018
Top Picks
Market Cap
C MP
Target
Upside
C ompany
R ationale
(` Cr)
(`)
(`)
(%)
Strong growth in domestic business due to its
leadership in acute therapeutic segment. Alkem
Alkem Laboratories
23,386
1,956
2,441
24.8
expects to launch more products in USA, which
bode s for its internati onal business.
Favorable outlook for the AC industry to augur well
for Cooling products busine ss which is out pacing
Blue Star
6,759
704
867
23.2
the market growth. EMPPAC division's profitability
to improve once operating environment turns
around.
With a focus on the low and me dium income (LMI)
consumer se gment, the company has increase d its
Dewan Housi ng Finance
19,323
616
720
16.9
presence in tier-II & III cities where the growth
opportunity i s immense.
Well capitalized with CAR of 18.1% which gives
sufficient room to grow asset base. Faster
ICICI Bank
1,90,636
297
416
40.3
resolution of NPA would reduce provision cost,
which would help to report better ROE.
High order book execution in EPC segment, rising
KEI Industrie s
3,721
475
589
24.1
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
1,926
338
475
40.7
requirement and
15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,248
149
265
77.4
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would
Siyaram Silk Mills
2,850
608
851
40.0
boost growth going ahe ad. Stock currently trade s at
an inexpe nsive valuation.
GST regime and the Gujarat plant are expected to
Maruti
2,58,183
8,547
10,619
24.2
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,063
383
655
71.0
two year; change in borrowing mix will help in NIM
improve ment
We expect sales/PAT to grow at 13.5%/ 20% over
LT Foods
2,455
77
128
66.8
next two years on the back of strong di stribution
network & addition of new products in portfolio.
Third large st brand pl ay in luggage segment
Increase d product offerings and improvi ng
Safari Industries
1,422
639
750
17.4
distribution network is leading to strong growth in
busine ss. Likely to post robust growth for next 3-4
years
We expect HSIL to report PAT CAGR of ~15% over
FY2017-20E owing to better i mprovement in
HSIL Ltd
2,479
343
510
48.8
operating margin due price hike in container glass
segment, turnaround in consumer busine ss.
Source: Company, Angel Research
Market Outlook
May 28, 2018
Top Picks
Market Cap
C MP
Target
Upside
C ompany
R ationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
31,464
143
218
52.5
increasing penetration in Insurance & Mutual fund
would ensure steady growth.
One of the leading Indian dairy products
companie s in India created strong brands in dairy
products. Rising revenue share of high-margin
Parag Milk F oods
2,818
335
410
22.4
Value Adde d Products and reducti on in interest cost
is likely to boost margins and e arnings 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
1,701
749
1,016
35.7
related services. On the bottom-line front, we
expect a CAGR of ~28% to `82cr over the same
period on the back margin improve ment.
HDFC Bank maintaine d 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
5,22,421
2,012
2,315
15.1
aided PAT growth. The Strong liability franchise
and he althy capitalisation provi des 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
launche s and facelifts in some of the model ) and
M&M
102638
857
990
15.5
strong growth in Tractors segment coupled by its
strong brand recall and i mprovement in rural
sentiment
Source: Company, Angel Research
Market Outlook
May 28, 2018
Fundamental Call
Market Cap
C MP
Target
Upside
C ompany
R ationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
4,189
315
360
14.3
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
2,441
1,636
2,178
33.1
healthy demand growth in plastic divi sion. On the
bottom-line front, we esti mate
~10% CAGR to
`162cr owing to improve ment in volumes.
Elantas Beck India is the Indian market leader in
liquid insulation segment used in electrical
equipme nts like motors, transformers etc. It derives
Elantas Beck India Ltd
1,633
2,059
2,500
21.4
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 me dium density fibreboards
(MDF). GIL to report net revenue CAGR of ~14% to
Greenply Industries
3,396
277
395
42.6
~`2,478cr over FY2017-20E mainly due to healthy
growth in plyw ood & lamination busine ss on the
back of strong brand and di stribution 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
1,273
871
920
5.6
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 manage ment is on track to achieve
L&T Finance Hol ding
33,668
169
210
24.5
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
May 28, 2018
Key Upcoming Events
Result Calendar
D ate
C ompany
May 28, 2018
Bank of India, Rural Elec.Corp., NMDC, Finolex Cable s, MM Forging, Cadila Healthcare, Aurobindo Pharma
May 29, 2018
M&M, BHEL, IO B, Coal India, BPCL, Siyaram Silk Mills, Glenmark Pharma., Ipca labs, Power Gri d Corpn, MT Educare
Source: Bloomberg, Angel Research
Global economic events release calendar
Bl oomberg Data
D ate
Time
C ountry
Event Description
Unit
Period
L ast Reporte d
E stimate d
May 29, 2018
2:30 PMEuro Zone Euro-Zone Consumer Confidence
Value
May F
0.20
0.20
May 30, 2018
7:30 PMUS
Consumer Confidence
S.A./ 1985=100
May
128.70
127.90
6:00 PMUS
GDP Qoq (Annualise d)
% Change
1Q S
2.30
2.30
6:30 AMChina
PMI Manufacturing
Value
May
51.40
51.40
May 31, 2018
1:25 PMGermany Unempl oyment change (000's)
Thousands
May
(7.00)
(10.00)
6:00 PMUS
Initial Jobless claims
Thousands
May 26
234.00
Jun 01, 2018
1:25 PMGermany PMI Manufacturing
Value
May F
56.80
56.80
6:00 PMUS
Change in N onfarm payrolls
Thousands
May
164.00
190.00
6:00 PMUS
Unnemployment rate
%
May
3.90
3.90
2:00 PMUK
PMI Manufacturing
Value
May
53.90
53.60
Jun 05, 2018
1:25 PMGermany PMI Services
Value
May F
52.10
Jun 06, 2018
2:30 PMIndia
RBI Reverse Re po rate
%
Jun 6
5.75
2:30 PMIndia
RBI Repo rate
%
Jun 6
6.00
2:30 PMIndia
RBI Cash Reserve ratio
%
Jun 6
4.00
Jun 07, 2018
2:30 PMEuro Zone Euro-Zone GDP s.a. (QoQ)
% Change
1Q F
0.40
Source: Bloomberg, Angel Research
Market Outlook
May 28, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
8.5
10.0
9.0
9.1
7.3
7.4
9.0
8.0
7.0
8.0
8.1
7.0
7.6
7.6
8.0
7.3
7.2
7.2
6.0
6.8
4.8
6.5
4.4
7.0
5.0
4.1
6.1
5.7
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 as on 25 May, 2018
Source: RBI, Angel Research
Market Outlook
May 28, 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
May 28, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
C ountry
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
80,122
(6.4)
(6.9)
30.1
Russia
Micex
4,485
1.4
7.1
11.4
India
Nifty
10,514
(0.1)
2.4
13.0
China
Shanghai Composite
3,155
2.4
(1.4)
0.9
South Africa
Top 40
50,346
(1.0)
(2.6)
5.3
Mexico
Mexbol
45,433
(6.2)
(7.1)
(8.2)
Indonesia
LQ45
954
(6.7)
(14.3)
1.2
Malaysia
KLCI
1,776
(5.5)
(4.4)
(0.0)
Thailand
SET 50
1,140
(3.0)
(2.3)
17.0
USA
Dow Jones
24,812
3.3
(0.6)
17.7
UK
FTSE
7,717
4.3
6.5
2.2
Japan
Nikkei
22,437
1.1
1.3
13.2
Germany
DAX
12,855
3.3
4.0
2.9
France
CAC
5,548
2.5
5.2
5.6
Source: Bloomberg, Angel Research As on 25 May, 2018
Market Outlook
May 28, 2018
Exhibit 7: Historical Angel Top Picks/Fundamental Calls
D ate Added
Top Picks/Fundamental
Stocks
Reco Price
Target/Revised Price
Curre nt Status
04-05-2018
Top Picks
M&M
860
990
Open
03-05-2018
Fundamental
L&T Finance Hol ding
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 F oods Limited
310
410
Open
16-04-2018
Top Picks
Parag Milk F oods Limited
249
333
14-05-2018
Fundamental
GMM Pfaudler Limited
818
900
Open
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
16-02-2018
Top Picks
HSIL Ltd
433
510
Open
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 Technologie s 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 Hol dings 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 Industrie s
481
589
Open
04-01-2017
Top Picks
KEI Industrie s
125
485
01-12-2016
Top Picks
Alkem Lab
1700
2441
Open
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, Angel Research
Market Outlook
May 28, 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 Particip ant with
CDSL and Portfolio Manager with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking Private Limited is
a registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number
INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authorit y for accessing
/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 sho uld
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 de termine
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 positio ns and
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