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Market Outlook
May 04, 2021
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Market Cues
Indian markets are likely to open flat tracking global indices and SGX Nifty.
U.S. stocks moved mostly higher during trading on Monday, although the tech-
heavy Nasdaq bucked the uptrend. The advance on the day lifted the Dow back
within striking distance of last month's record highs. the Dow climbed 0.7 percent to
34,113 while the Nasdaq fell 0.5 percent to 13,895.
U.K. stocks rose on Friday amid economic optimism after data showed house prices
in the country jumped at the fastest pace in 17 years. The benchmark FTSE 100 went
up by 0.3 percent to 6,979.
Indian shares ended narrowly mixed on Monday after a sharp gap-down opening
as the Supreme Court urged the Centre and states "to consider imposing a lockdown
to break the chain in the interest of public welfare. The benchmark BSE Sensex
dipped by 0.1 percent to 48,719.
Investor’s Ready Reckoner
Key Domestic & Global Indicators
Stock Watch: Latest investment recommendations on 150+ stocks
Refer Pg7 onwards
Top Picks
Company
Rating
CMP
(`)
Target
(`)
Upside
(%)
IDFC First Bank
Buy
54
77
42.6
Galaxy Surfactants
Accumulate
2,901
3,200
10.3
NRB Bearing
Buy
107
150
40.8
Escorts
Buy
1,126
1,573
39.7
More Top Picks on Pg3
Domestic Indices
Chg (%)
(Pts)
(Close)
BSE Sensex
-0.1
-64
48,719
Nifty 50
0.0
3
14,634
BSE MidCap
0.1
10
20,322
BSE SmallCap
1.6
341
22,011
BSE Bankex
-0.9
-335
36,970
Global Indices
Chg (%)
(Pts)
(Close)
Dow Jones
0.7
238
34,133
Nasdaq
-0.5
-68
13,895
FTSE
0.3
18
6,979
Nikkei
-0.8
-241
28,813
Hang Seng
-1.3
-367
28,358
Shang Com
-0.8
-28
3,447
Advances / Declines
BSE
NSE
Advances
1,779
1,166
Declines
1,258
786
Unchanged
177
106
Volumes (` Cr)
BSE
4,691
NSE
70,886
Net Inflows (` Cr)
Net
Mtd
Ytd
FII
3,307
22,020
36,837
*MFs
-1,118
-5,678
-18,659
Top Gainers
Price (₹)
Chg (%)
BAJAJHIND
9
19.9
BALRAMCHIN
324
16.3
DALMIASUG
297
17.3
DHAMPURSUG
272
19.6
EIDPARRY
404
16.7
Top Losers
Price (`)
Chg (%)
TITAN
1,424
-4.6
CANFINHOME
547
-5.5
JKPAPER
134
-4.3
IIFL
254
-4.9
YESBANK
14
-4.4
As on May 03, 2021
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Market Outlook
May 04, 2021
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Corporate News
JSW Energy signs PPA for 540 MW of wind power projects
RBI imposes Rs 3 cr fine on ICICI Bank for violating certain rules
SBI Life profit nearly flat in Q4, net premium income jumps to Rs 15,556 cr
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Market Outlook
May 04, 2021
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Top Picks
Company
Market Cap
(` Cr)
CMP
(`)
Target
(`)
Upside
(%)
Rationale
IDFC First Bank
33,479
54
77
42.6
We believe efforts to built liability franchise, fresh
capital infusion and provision taken on wholesale
book will help to tide over this difficult time. The
IDFC First Bank is trading ( 0.7 x FY22ABV) at a
significant discount to historical average
valuations.
Galaxy Surfactants
10,286
2,901
3,200
10.3
Galaxy Surfactants is a market leader in oleo
chemical-based surfactants, which is used in
personal and home care products. The company
has been increasing its share of high margin
specialty care products in it’s portfolio which now
accounts for ~ 40% of it’s revenues while the
balance is accounted for by the performance
surfactant business. The company has a very strong
relationship with MNC clients like Unilever, P&G,
Henkel, Colgate-Palmolive and supplies raw
materials to them not only in India but also in US,
EU and MENA region.
NRB Bearings
1,033
107
150
40.8
NRB is one of the leading suppliers of bearings to
Auto companies. The company supplies bearings to
two wheelers, PV, CV, Three wheelers and tractors
OEMs and has a wide customer base. The
company has also been focusing on exports
markets in order to diversify its revenue base.
Escorts Ltd
15,180
1,126
1,573
39.7
Escorts is a prominent tractor player domestically
with market share in excess of 11%. With rural
India relatively less impacted due to Covid-19,
record food-grain procurement by government
agencies as well as better than expected Kharif
crop in 2020, we expect the tractor industry will
continue to outperform the larger automobile
space in FY21. The company has also reported a
strong growth of 25.7% YoY in Q3FY21 which is
expected to continue into the fourth quarter driven
by strong demand.
Federal Bank
15,930
80
110
37.8
Federal bank is one of India’s largest old
generation private sector banks with total assets of
Rs. 1.9 lakh cr. with deposits of Rs. 1.56 lakh cr.
and a loan book of Rs. 1.2 lakh cr in F21. NPA’s
have remained steady for the bank over the past
few years with GNPA for Q3FY21 at 3.38% while
NNPA ratio stood at 1.14%. PCR at the end
of Q3FY21 stood at ~67% which we believe is
adequate. Restructuring book is expected to be at
Rs. 1,500-1,600 crore out of which Rs. 1,067 crore
has already been restructured. This is against
earlier expectations of total restructuring of Rs.
3,000-3,500 crore
Carborundum
Universal
10,885
574
660
15.0
Carborundum Universal (CUMI) is part of the
Murugappa group and is a leading manufacturer
of abrasives, industrial ceramics, refractories, and
electro minerals in India having application across
diversified user industries. The company is expected
to benefit from improving demand scenarios across
its end user industries such as auto, auto
components, engineering and others. While
demand from the Auto sector has been robust we
expect demand from metal industry pick up, given
increased economic activity.
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Market Outlook
May 04, 2021
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Continued....
Company
Market Cap
(` Cr)
CMP
(`)
Target
(`)
Upside
(%)
Rationale
Shriram City Union
10,025
1,519
1,800
18.5
Shriram City Union Finance is part of the Shriram group
and is in the high margin business of lending to small
businesses, which account for 57.3% of the loan book as
of end FY20. It reported a strong 50% sequential growth
in disbursement for the quarter which led to a 3.7% qoq
growth in AUM to ~ Rs. 28,500 crore. We are positive on
the company as we believe that the worst is over in terms
of asset quality, which along with growth momentum
should lead to a rerating for the company.
GNA Axles
802
374
500
33.8
GNA Axles is one of the leading suppliers of rear axles to
the Auto industry. GNA is expected to be one of the
biggest beneficiaries of strong growth outlook for truck
sales in US and Europe markets which are witnessing
strong recovery in demand. US which accounts for almost
40% of the company's revenues has been registering
strong class 8 truck sales. At current level the stock is
trading at a P/E multiple of 9xFY23E,given inexpensive
valuations we believe that the stock offers value at current
levels.
PVR
6,915
1,138
1,800
58.2
PVR is the largest multiplex chain in India with 800+
screens across India and multiplex screens are gaining
ground at the expense of single screen. Share prices have
corrected significantly as most of the theaters are
operating at very low capacity utilization due to the lack of
major releases due to the Covid-19 crisis.However, with a
significant decrease in Covid-19 cases over the past few
months we believe that it’s a matter of time before we see
new releases by production houses post April 2021 which
should lead to significant increase in business for the
companies.
Cromptongreaves
Consumer Electricals
23,619
376
480
27.6
CGCEL is of India’s leading fast moving electrical goods
(FMEG) company with a strong presence in the fan and
residential pump category. The company is leveraging its
strong distribution network to expand into other product
categories like water pump, lightings and small appliances
fan business up from 14% in FY17 and is expected to
improve further. Moreover the company has posted a
strong set of numbers for Q3FY21 with revenue growing
by 25.8% YoY to Rs. 1348 crore. PBT for the quarter was
up by 45.6% yoy at Rs. 202.5 crore.
Ashok Leyland
32,849
112
145
29.6
Ashok Leyland Ltd (ALL) is one of the leading players in
Indian CV industry with a 32% market share in the MHCV
segment and has strong presence in LCV segment also.
While demand for the LCV segment has been growing
smartly post the pandemic, demand for the MHCV
segment has also started to recover over the past few
months. We believe that the company is ideally placed to
capture the growth revival in the CV segment and will be
the biggest beneficiary of the Government’s voluntary
scrappage policy and hence rate the stock a BUY.
Apollo Hospitals
46,045
3,202
3,700
15.6
Apollo hospitals engage in the business of providing
healthcare Service, Apollo hospitals is the largest private
healthcare company in India. Company having 44
owned hospitals with Operational beds of 7500+. We
expect the company to report very strong revenue growth
in upcoming quarters as higher occupancy due to covid
2nd wave in India, we expect this quarter to report vacancy
levels of more than 75% along with that We expect
pharmacy growth and LOS to increase further. Company
having capacity of 10300+ beds out of which 7500 beds
are operational only, we expect these beds to come in
operation soon and start contributing in revenue along
with this company is not looking for any brown field
expansion in upcoming years.
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Market Outlook
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