Market Outlook
May 29, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Cl ose)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
0.7
241
35,165
U.S. Stocks turned in a lackluster performance during the last trading session. The
Nifty
0.8
83
10,689
major averages spent the day bouncing back and forth across the unchanged line
Mid Cap
1.3
215
16,119
before closing mixed. The Dow Jones dipped by 0.2% to 24,753 and the Nasdaq
Small Cap
1.6
274
17,426
climbed up by 0.1% to 7,434.
Bankex
1.2
350
29,891
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 0.2% at
7,730.
Dow Jones
(0.2)
(59)
24,753
Nasdaq
0.1
9
7,434
On domestic front, Indian shares closed higher for a third day running on Monday
FTSE
0.2
14
7,730
and the rupee hit a two-week high as geopolitical worries abated and a steep drop
Nikkei
(1.1)
(239)
22,242
in oil prices helped ease investor worries over inflation and twin deficits. The BSE
Sensex closed up by 0.7% at 35,165.
Hang Seng
(0.4)
(118)
30,674
Shanghai Com
0.0
1
3,136
News Analysis
Increasing Target Price of GMM Pfaudler to ' 1020
A dvances / Declines
BSE
NSE
L&T Construction secures two major orders worth Rs 57.04 billion
Advances
1,853
1,295
Declines
867
508
Detailed analysis on Pg2
Unchanged
158
67
Investor’s Ready Reckoner
Volumes (` Cr)
Key Domestic & Global Indicators
BSE
3,130
Stock Watch: Latest investment recommendations on 150+ stocks
Refer Pg5 onwards
NSE
30,128
Top Picks
C MP
Target
U psi de
Net Inflows (` Cr)
Ne t
Mtd
Ytd
C ompany
Sector
R ating
(`)
(`)
(%)
FII
(2,047)
(8,950)
(1,553)
Blue Star
Capital Goods
Buy
704
867
23.1
*MFs
760
10,529
56,282
Dewan Housi ng Finance
Financials
Accumulate
629
720
14.4
Parag Milk F oods
Others
Buy
341
410
20.2
Navkar Corporation
Others
Buy
155
265
70.5
Top Gainers
Price (`)
Chg (%)
KEI Industrie s
Capital Goods
Buy
478
589
23.2
JUSTDIAL
609
20.0
More Top Picks on Pg4
CANFINHOME
400
10.8
Key Upcoming Events
IBVENTUREPP
259
10.0
Previous
C onsensus
D ate
Region
Event Description
J&KBAN K
57
9.3
ReadingExpectations
May 29, 2018 US
Consumer Confidence
128.70
128.00
ORIENTBANK
85
8.7
May 30, 2018 US
GDP Qoq (Annualise d)
2.30
2.30
May 30, 2018 Euro Zone Euro-Zone Consumer Confidence
0.20
0.20
Top Losers
Price (`)
Chg (%)
May 30, 2018 Germany Unempl oyment change (000's)
(7.00)
(10.00)
PCJEWELLER
179
-7.2
May 31, 2018 Germany PMI Manufacturing
56.80
56.80
More Events on Pg7
AVANTI
1819
-6.8
NIITTECH
1068
-4.8
DIVISLAB
1092
-4.7
MPHASIS
1072
-4.3
As on May 28, 2018
Market Outlook
May 29, 2018
News Analysis
Increasing Target Price of GMM Pfaudler to ' 1020
GMM Pfaudler has given 31% returns since our coverage initiated on the stock,
last month. In view of continued traction in its user industries like Pharma and
Agrochemical, we are increasing our target price to ' 1020
( revised target
multiple of 24x on its FY2020 earnings). In view of limited upside, we maintain
accumulate rating on the stock.
L&T Construction secures two major orders worth Rs 57.04 billion
Larsen & Toubro's construction arm has won orders worth Rs 57.04 billion in
domestic market. "The water and effluent treatment business of L&T
Authority (NVDA), government of Madhya Pradesh, for execution of Indira Sagar
Project- Parwati phases I and II and Kalisindh phase I Micro Lift Irrigation Schemes.
The company has also received an EPC order from the Madhya Pradesh Jal
Nigam Maryadit for execution of Buxwaha Multi Village Rural Water Supply
Scheme.
Economic and Political News
According to foreign affairs, Economic diplomacy attracted over $209bn in
investments
Corporate News
Market Outlook
May 29, 2018
Quarterly Bloomberg Brokers Consensus Estimate
M&M Ltd - May 29, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
13112
11125
17.9
11577
13.3
EBIDTA
1880
938
100.4
1495
25.8
%
14.3
8.4
16.2
PAT
1049
725
44.7
1216
(13.7)
Power grid Corporation of India Ltd - May 29, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
7724
6712
15.0
7506
2.9
EBIDTA
6917
5618
23.1
6636
4.2
%
89.5
83.7
88.4
PAT
2258
1916
17.8
2041
10.6
BHEL Ltd - May 29, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
10547
9688
8.8
6626
59.2
EBIDTA
903
651
38.7
295
206.0
%
8.6
6.7
4.5
PAT
462
215
114.9
153
202.0
Coal India Ltd - May 29, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
24719
23171
6.7
21643
14.2
EBIDTA
6460
3387
90.7
4618
39.9
%
26.1
14.6
49.0
PAT
4341
2716
59.8
3005
44.5
BEL Ltd - May 29, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
3452
3988
(13.4)
2513
37.4
EBIDTA
718
980
(26.7)
445
61.3
%
20.8
24.6
49.0
PAT
541
792
31.7
303
78.5
Market Outlook
May 29, 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
24,271
2,030
2,441
20.2
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
6,763
704
867
23.1
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
19,743
629
720
14.4
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
192,406
299
416
39.0
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
3,746
478
589
23.2
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
1,940
340
475
39.7
requirement and
15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,339
155
265
70.5
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would
Siyaram Silk Mills
2,938
627
851
35.8
boost growth going ahe ad. Stock currently trade s at
an inexpe nsive valuation.
GST regime and the Gujarat plant are expected to
Maruti
262,986
8,706
10,619
22.0
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,190
407
655
61.1
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
2,434
76
128
68.2
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
1,425
641
750
17.1
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
2,532
350
510
45.6
operating margin due price hike in container glass
segment, turnaround in consumer busine ss.
Source: Company, Angel Research
Market Outlook
May 29, 2018
Top Picks
Market Cap
C MP
Target
Upside
C ompany
R ationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
32,169
146
218
49.2
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
2,870
341
410
20.2
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
1,720
757
1,016
34.2
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
530,380
2,042
2,315
13.4
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
105,621
850
990
16.5
strong growth in Tractors segment coupled by its
strong brand recall and i mprovement in rural
sentiment
Source: Company, Angel Research
Market Outlook
May 29, 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
4,150
312
360
15.4
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
2,547
1,707
2,178
27.6
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
1,620
2,044
2,500
22.3
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
3,408
278
395
42.1
~`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
1,362
932
1020
9.5
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 manage ment is on track to achieve
L&T Finance Hol ding
34,586
173
210
21.2
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
May 29, 2018
Key Upcoming Events
Result Calendar
D ate
C ompany
May 29, 2018
M&M, BHEL, IOB, Coal Indi a, BPCL, Siyaram Silk Mills, Glenmark Pharma., Ipca labs, Power Grid Corpn, MT Educare
May 30, 2018
Crompton Greave s, BGR Energy , J & K Bank, SAIL, Monnet Ispat, ONGC, Tree House , HSIL, Banco, Tide Water Oil
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
7:30 PMUS
Consumer Confidence
S.A./ 1985=100
May
128.70
128.00
May 30, 2018
6:00 PMUS
GDP Qoq (Annualise d)
% Change
1Q S
2.30
2.30
2:30 PMEuro Zone Euro-Zone Consumer Confidence
Value
May F
0.20
0.20
1:25 PMGermany Unempl oyment change (000's)
Thousands
May
(7.00)
(10.00)
May 31, 2018
1:25 PMGermany PMI Manufacturing
Value
May F
56.80
56.80
6:00 PMUS
Initial Jobless claims
Thousands
May 26
234.00
229.50
Jun 01, 2018
6:30 AMChina
PMI Manufacturing
Value
May
51.40
51.40
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
53.50
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
5.75
2:30 PMIndia
RBI Repo rate
%
Jun 6
6.00
6.00
2:30 PMIndia
RBI Cash Reserve ratio
%
Jun 6
4.00
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 29, 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 28 May, 2018
Source: RBI, Angel Research
Market Outlook
May 29, 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 29, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
C ountry
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
75,356
(11.4)
(13.7)
22.2
Russia
Micex
4,491
1.4
7.1
11.4
India
Nifty
10,689
1.1
2.8
14.2
China
Shanghai Composite
3,135
0.6
(4.0)
1.5
South Africa
Top 40
50,551
(0.6)
(0.9)
6.3
Mexico
Mexbol
44,851
(6.7)
(7.6)
(9.7)
Indonesia
LQ45
978
(3.3)
(11.5)
2.6
Malaysia
KLCI
1,776
(5.9)
(4.4)
(0.1)
Thailand
SET 50
1,141
(3.0)
(2.4)
16.1
USA
Dow Jones
24,753
2.8
(2.2)
17.4
UK
FTSE
7,730
4.1
6.2
2.7
Japan
Nikkei
22,481
1.8
2.3
14.8
Germany
DAX
12,863
2.5
3.2
2.1
France
CAC
5,509
1.8
3.8
3.6
Source: Bloomberg, Angel Research
Market Outlook
May 29, 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
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
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
Market Outlook
May 29, 2018
Source: Company, Angel Research
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 authority for accessing
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