Angel Top Picks - March 2016
Angel Top Picks - March 2016
The domestic benchmark equity indices dropped more than 7% in the month of
February as investors maintained caution ahead of the Union Budget 2016-17
and on account of weak global cues. However, post the budget, the market
witnessed a strong rally as there were no adverse changes pertaining to long-term
capital gains tax on sale of shares in the budget, and given the government's
pronounced thrust on the infrastructure sector. The government’s decision to stick
to the fiscal deficit target (3.5% of GDP) for FY2016-17 also contributed to the
positive sentiments in the market. Further, with the government well on target in
containing the fiscal deficit, it provides room for the RBI to implement a further
rate cut in the upcoming Monetary Policy meet.
Over the past few quarters, companies with a considerable rural exposure have
been underperforming on the earnings front due to rural slowdown caused by two
consecutive sub-normal monsoons. However, to ease rural distress, the
government has announced higher allocations towards rural schemes in the
budget which will provide a much required boost to the rural economy.
Additionally, the implementation of the Seventh CPC would also drive rural
consumption, thereby benefiting rural consumption based companies. Further, the
government has also increased allocation towards roads & highways, housing,
irrigation, and power etc, which will drive demand for EPC companies, asset
developers and cement companies.
On the global front, Europe has announced the expansion of the QE program
which is expected to increase liquidity in the Indian market as it poses as an
attractive investment destination compared to other emerging markets.
We are positive on consumption driven stocks like Blue Star, Radico Khaitan and
Siyaram Silk Mills, TVS Motors. Further, we expect rate sensitive sectors like
automobile, assets developers, real estate, and housing finance to benefit from an
anticipated rate cut by the RBI. In this space, our top picks include, LIC Housing
Finance, Mahindra Lifespace, and IL&FS Transportation Networks, amongst others.
Large Cap
EPS
PER
EV/Sales
ROE
Company
Sector
Rating
CMP (`)
Target (`)
Upside (%) FY16E FY17E FY16E FY17E FY16E FY17E FY16E FY17E
Amara Raja
Auto Ancill.
Buy
906
1,040
14.9
28.8
37.1
31.4
24.4
3.1
2.5
23.4
24.1
Ashok Leyland
Automobile
Buy
96
111
15.1
3.4
4.7
28.4
20.5
1.5
1.2
17.7
22.2
BEL
Capital Goods
Buy
1,081
1,414
30.4
54.0
61.5
20.0
17.6
2.9
2.5
39.3
45.6
HCL Tech
IT
Buy
818
1,038
24.3
51.1
57.7
16.0
14.2
2.3
1.8
21.5
18.8
HDFC Bank
Financials
Buy
1,021
1,262
23.6
49.3
61.1
20.7
16.7
-
-
18.5
19.7
Infosys
IT
Buy
1,146
1,347
17.5
59.4
65.7
19.3
17.4
3.6
3.0
21.2
20.1
LIC Housing Fin.Financials
Buy
458
592
29.3
33.0
40.2
13.9
11.4
-
-
19.7
20.5
NBCC
Construction
Buy
926
1,089
17.6
29.6
39.8
31.3
23.3
1.6
1.2
24.1
26.7
TVS Motors
Automobile
Buy
284
330
16.2
9.2
15.0
30.8
18.9
1.2
1.0
22.7
29.6
Source: Angel Research
Mid Cap
EPS
PER
EV/Sales
ROE
Company
Sector
Rating
CMP (`) Target (`) Upside (%) FY16E FY17E FY16E FY17E FY16E FY17E FY16E FY17E
Blue Star
Cons. Durable
Buy
330
439
33.3
13.7
17.2
24.1
19.2
0.9
0.8
26.1
25.4
IL&FS Transport. Infra
Buy
72
93
28.7
6.6
9.2
10.9
7.9
3.7
3.6
3.2
3.7
Jagran Prakashan Media
Buy
154
189
22.7
8.9
9.9
17.3
15.5
2.2
2.0
20.9
20.4
Mahindra LifespaceReal Estate
Buy
424
554
30.8
8.9
9.9
31.1
21.4
3.9
2.7
3.8
5.3
Navkar Corp.
Logistics
Buy
163
265
62.6
5.6
5.9
29.0
27.8
7.2
6.2
6.3
6.1
Radico Khaitan
Breweries & Dist. Buy
100
156
56.0
5.8
7.1
17.2
14.1
1.4
1.2
8.6
9.6
Siyaram Silk Mills Textile
Buy
997
1,354
35.8
89.9
104.1
11.1
9.6
0.7
0.6
17.9
17.8
Source: Angel Research
Please refer to important disclosures at the end of this report
1
Top Picks Report | March 2016
Top Picks - Large Cap
March 11, 2016
2
Top Picks Report | March 2016
Stock Info
Amara Raja Batteries
CMP
906
Amara Raja Batteries Ltd (ARBL) is the second largest lead acid storage battery
TP
1,040
manufacturer. ARBL has been outpacing market leader Exide (ARBL grew at a
Upside
14.9%
24% CAGR over FY2010-15 as compared to Exide's growth of 13%), leading to its
market share improving from 25% in FY10 to about 35% currently. ARBL's
Sector
Auto Ancillary
outperformance has been mainly on back of its association with global battery leader
Market Cap (` cr)
15,467
Johnson Controls Inc (which also holds 26% stake in ARBL) for manufacturing ducts.
Beta
0.8
With the automotive OEMs following a policy of having multiple vendors and
52 Week High / Low
1,132 / 773
with ARBL’s products enjoying a strong brand recall in the replacement
segment, the company is well poised to gain further market share. Given the
economic recovery and market share gains, the company is expected to grow at
3 year-Chart
a CAGR of 18% over the next two years as against industry growth of 10-12%.
1,200
ARBL is a well diversified auto ancillary player having presence across the
1,000
automotive and the industrial segment and a broad OEM as well as
replacement customer base. We believe ARBL is a high quality stock to play
800
the auto sector revival. We assign a P/E multiple of
28x to its FY2017E
600
earnings and arrive at a target price of `1,040/share.
400
Key Financials
200
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/EBITDA
EV/Sales
0
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
4,892
17.4
493
28.8
23.4
31.4
7.3
16.9
3.1
FY2017E
5,871
17.6
634
37.1
24.1
24.4
5.9
14.1
2.5
Source: Company, Angel Research
Source: Company, Angel Research
Stock Info
Ashok Leyland
CMP
96
Ashok Leyland Ltd (ALL) is the second largest medium and heavy commercial
TP
111
vehicle (MHCV) manufacturer in the country, commanding a market share of
about 28%. The MHCV industry is expected to remain in an uptrend (we
Upside
15.1%
expect 15% growth over the next two years) given the better economic growth,
Sector
Automobile
improvement in fleet operators profitability on account of firm freight rates and
Market Cap (` cr)
27,448
decline in diesel prices and increased infrastructure investments.
Beta
1.2
In order to reduce cyclicality, ALL is also focusing on increasing the share of
52 Week High / Low
100 / 56
light commercial vehicles (LCVs) in the product mix and exports. The ALL-
Nissan JV developed LCV - "Dost" has been received well and has captured a
market share of 6% within three years of its launch. Also, ALL is targeting new
3 year-Chart
markets in Africa and Middle East to increase export contribution from the current
15% to 33% over the next five years.
120
ALL's margins are likely to improve by 400bp yoy over FY2015-17 period on
100
account of double-digit growth in MHCVs and reduced discounting.
80
We are positive on ALL, given the cyclical upturn in MHCVs and additional
60
growth avenues. We assign a multiple of 13x to FY2017E EBIDTA to arrive at
40
a target price of `111/share.
20
Key Financials
0
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/EBITDA
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
17,995
11.4
979
3.4
17.7
28.4
5.0
12.3
1.5
Source: Company, Angel Research
FY2017E
21,544
11.6
1,331
4.7
22.2
20.5
4.6
10.0
1.2
Source: Company, Angel Research
March 11, 2016
3
Top Picks Report | March 2016
Stock Info
Bharat Electronics (BEL)
CMP
1,081
(1) High priority to the defense sector in the government’s ‘Make in India’
TP
1,414
campaign, with (1) emphasis on indigenization, (2) increase in FDI limits from
26% to 49%, and (3) $47bn worth of projects cleared by Defense Acquisition
Upside
30.8%
Council (DAC) in the last 21 months, indicate at the sector being at an
Sector
Capital Goods
inflexion point where Indian defense capex cycle is entering a new era of
Market Cap (` cr)
25,944
growth. The current bid pipeline could lead to strong award activity for the
next few years and BEL could emerge as a beneficiary.
Beta
1.2
52 Week High / Low
1,417 / 974
BEL in FY2015 had 37% market share in the defense electronics space.
Considering (1) bid-pipeline of Indian Air Force and Navy’s platform projects,
which have high defense electronic component, (2) BEL’s in-house R&D
capabilities, and (3) its zero debt status, we believe that BEL would maintain its
3 year-Chart
strong market positioning in the defense electronics space.
1600
1400
We expect BEL to trade at a premium to its historical valuations on account of
1200
uptick in investment cycle. Current low competitive intensity which should
1000
enable BEL to justifiably command scarcity premium, coupled with the fact that
800
the company is the largest listed defense player, makes the stock more
600
attractive. We assign a 1-year forward P/E multiple of 23.0x to arrive at a
400
price target of `1,414. Given the upside, we recommend BUY.
200
0
Key Financials
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/EBITDA
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
Source: Company, Angel Research
FY2016E
7,737
16.8
1,296
54.0
39.3
20.0
2.9
14.7
2.5
FY2017E
8,634
17.2
1,475
61.5
45.6
17.6
2.5
12.2
2.1
Source: Company, Angel Research
Stock Info
HCL Technologies
CMP
818
Healthy pipeline: In terms of order flow in FY2015, HCL Tech has signed 58
TP
1,038
transformational engagements with US$5bn+ of TCV. During 2QFY2016, the
Upside
24.3%
company has signed orders in excess of US$1bn (in TCV), including
8
Sector
IT
transformational deals. The broad-based business wins across service lines
and industry verticals were driven by the company’s next-generation offerings.
Market Cap (` cr)
1,15,391
Thus, on back of its strong order book, the company expects 2HFY2016 to be
Beta
0.7
better than 1HFY2016.
52 Week High / Low
1,058 / 786
Robust outlook: We expect HCL Tech to post a USD and INR revenue CAGR of
13.0% and 13.2%, respectively, over FY2015-17E. On the operating front,
HCL Tech's EBIT margin has been around 22.3% in FY2015.Going ahead, the
3 year-Chart
1200
Management expects EBIT margins to sustain at 21-22%. We expect the EBIT
and PAT to post a 7.7% and 6.0% CAGR, respectively, over FY2015-17E.
1000
800
Outlook and Valuations: At current valuations, the stock is attractively valued
600
and hence we maintain our Buy with a price target of `1,038.
400
Key Financials
200
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/EBITDA
EV/Sales
0
June
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
42,038
21.2
7,216
51.1
21.5
16.0
3.4
10.6
2.3
FY2017E
47,503
21.5
8,142
57.7
18.8
14.2
2.7
8.4
1.8
Source: Company, Angel Research
Source: Company, Angel Research
March 11, 2016
4
Top Picks Report | March 2016
Stock Info
HDFC Bank
CMP
1,021
Strong capital adequacy, expanding network, to sustain traction in market
TP
1,262
share: HDFC Bank’s capital adequacy ratio as of 3QFY2016 stood strong at
Upside
23.6%
15.9%, with Tier1 ratio at 13.2%, which positions the bank to continue on its
Sector
Financials
growth path and increase its market share.
Market Cap (` cr)
2,57,838
Asset quality rock-solid: The bank has been able to maintain its asset quality
Beta
0.82
consistently. Asset quality continued to remain healthy with the Gross NPA
52 Week High / Low
1,128 / 928
ratio and the Net NPA ratio at 0.97% and 0.29%, respectively, as of
3QFY2016, in a challenging macro environment.
3 year-Chart
Outlook: Credit and deposit growth beat the industry growth rate, driven by
1,200
strong retail business, healthy CASA and continued network expansion. This
1,000
provides strong visibility for a robust 20% earnings trajectory, coupled with
800
high quality of earnings. This in our view justifies a premium valuation
600
multiple. At the current market price, the bank is trading at 3.1x its FY2017E
400
ABV. We recommend a Buy rating on the stock, with a target price of `1,262.
200
0
Key Financials
Y/E
Op. Inc
NIM
PAT
EPS
ABV
ROA
ROE
P/E
P/ABV
March
(` cr)
(%)
(` cr)
(`)
(`)
(%)
(%)
(x)
(x)
Source: Company, Angel Research
FY2016E
38,309
4.3
12,363
49.3
285.4
1.9
18.5
20.7
3.6
FY2017E
47,302
4.3
15,302
61.0
332.2
1.9
19.7
16.7
3.1
Source: Company, Angel Research
Stock Info
Infosys
CMP
1,146
Guidance upgraded to
12.8-13.2% CC growth for FY2016: During
TP
1,347
3QFY2016 Infosys has upgraded its USD revenue growth guidance to
Upside
17.5%
12.8-13.2% V/s from 10-12% on CC basis earlier for FY2016. In INR terms,
Sector
IT
the company expects a 16.2-16.6% growth for FY2016. We expect the
Market Cap (` cr)
2,63,218
company to post ~12.7% USD revenue growth in FY2016.
Beta
0.8
Aims to be US$20bn company by FY2020: The company expects its revenue
52 Week High / Low
1,219 / 933
to rise to US$20bn by FY2020, up from US$8.7bn in FY2015, as it focuses on
acquisitions and winning more new technology services, implying a
14%
CAGR over the period. Over the near term, we expect Infosys to post a 12.7%
3 year-Chart
USD revenue growth in FY2016. Over FY2015-17E, we expect USD and INR
1400
revenue to grow at a CAGR of 12.9% and 14.5%, respectively.
1200
Outlook and Valuations: The stock trades at a valuation of 17.4x FY2017E
1000
earnings. We recommend a Buy on the stock with a price target of `1,347.
800
600
Key Financials
400
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/EBITDA
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
61,850
27.5
13,631
59.4
21.2
19.3
4.1
13.0
3.6
Source: Company, Angel Research
FY2017E
69,891
27.5
15,087
65.7
20.1
17.4
3.5
11.0
3.0
Source: Company, Angel Research
March 11, 2016
5
Top Picks Report | March 2016
Stock Info
LIC Housing Finance
CMP
458
Significant under penetration of mortgages in India: India is expected to
TP
592
witness a robust housing finance growth going forward as the mortgage
Upside
29.3%
penetration in India remains at very low levels at 9% to GDP as compared to
Sector
Financials
the developed countries where it is in the range of 60-100%.
Market Cap (` cr)
23,111
NIM expansion visible: LIC Housing Finance is able to raise funds from low-
Beta
1.43
cost NCDs due to its strong AAA credit rating and backing by strong
promoters like LIC. In a declining interest rate environment, NBFC's like LIC
52 Week High / Low
526 / 389
Housing are well-placed to witness margin improvement in our view.
Outlook: For companies like LICHF, the funding environment has eased; thus
3 year-Chart
it will lead to lower cost of borrowing, while outlook for growth in retail
1,200
housing loans remains positive, going forward. We expect the company to
post a healthy loan book CAGR of 18.7% over FY2015-17E, which is likely to
1,000
reflect in an earnings CAGR of 21.0%, over the same period. The stock
800
currently trades at 2.2x FY2017E ABV. We maintain our Buy rating on the stock,
with a target price of `592.
600
Key Financials
400
Y/E
Op. Inc
NIM
PAT
EPS
ABV
ROA
ROE
P/E
P/ABV
March
(` cr)
(%)
(` cr)
(`)
(`)
(%)
(%)
(x)
(x)
FY2016E
3,101
2.5
1,664
33.0
176.7
1.4
19.7
13.9
2.6
Source: Company, Angel Research
FY2017E
3,745
2.5
2,029
40.2
207.6
1.4
20.5
11.4
2.2
Source: Company, Angel Research
Stock Info
National Buildings Construction Corporation (NBCC)
CMP
926
NBCC reported an order book of over
`35,000cr at 3QFY2016-end.
TP
1,089
Considering the bid pipeline for re-development works from Delhi and other
Upside
17.6%
State governments, and with ‘Smart City’ projects to take-off shortly, we expect
NBCC’s order-book to grow 1.5x during FY2016-18E to `59,440cr.
Sector
Construction
Market Cap (` cr)
11,115
We expect NBCC to report 26.7% revenue CAGR during FY2015-18E (to
`9,506cr), mainly driven by 29.3% revenue CAGR from PMC segment, where
Beta
1.3
re-development projects would contribute the maximum. We expect NBCC to
52 Week High / Low
1,215/ 702
report 41.5% EBITDA CAGR during the same period, led by increased
contribution from PMC segment, which is likely to experience margin
expansion. Owing to lower other income growth assumption, we expect NBCC
3 year-Chart
to report 32.9% PAT CAGR during FY2015-18E to `653cr.
1400
We have a strong positive view on NBCC, given its growth prospects as
1200
reflected by its strong order book of `35,000cr (6.3x OB to LTM revenues).
1000
Also, emerging opportunities in re-development space, government’s initiative of
800
developing ‘Smart Cities’, and the company’s cash rich status, should aid its growth.
600
On assigning 20.0x P/E multiple to our FY2018E EPS of `54.4/share, we arrive at a
400
200
price target of `1,089. Given the upside, we recommend Buy on the stock.
0
Key Financials
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/EBITDA
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
Source: Company, Angel Research
FY2016E
5,816
6.9
355
29.6
24.1
31.3
6.9
23.5
1.6
FY2017E
7,382
7.7
478
39.8
26.7
23.3
5.6
16.1
1.2
Source: Company, Angel Research
March 11, 2016
6
Top Picks Report | March 2016
Stock Info
TVS Motor Company (TVSM)
CMP
284
TVS Motors (TVSM) is the third largest two-wheeler manufacturer in the country
TP
330
having a market share of 14%. The two-wheeler industry is expected to recover
Upside
16.2%
in FY2017 and return to long term CAGR of 8-10% on back of higher income
Sector
Automobile
due to better economic growth, implementation of Seventh Pay Commission
which would boost central government employees’ incomes and on
Market Cap (` cr)
13,469
expectations of a normal monsoon which would augment rural incomes.
Beta
1.0
TVSM is likely to outpace industry growth (we expect 12% volume growth in
52 Week High / Low
311/ 201
FY2017) on back of new launches. Continued success in the scooter space
(Jupiter) and relaunch of the highly successful executive motorcycle “Victor” is
likely to lead to market share gains for TVSM.
3 year-Chart
350
TVSM margins are likely to improve over the next two years on back of
300
operating leverage due to double digit volume growth and lower raw material
250
costs due to renegotiation with vendors. TVSM has guided to reach the 10%
200
margin level in FY2018 as against 6.8% in 9MFY2016.
150
We are positive on TVSM given the market share gains and scope for margin
100
improvement. We assign a multiple of 22x to its FY2017 earnings to arrive at
50
a target price of `330.
0
Key Financials
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/EBITDA
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
Source: Company, Angel Research
FY2016E
11,263
6.9
436
9.2
22.7
30.8
7.0
18.1
1.2
FY2017E
13,122
8.5
713
15.0
29.6
18.9
5.6
12.5
1.0
Source: Company, Angel Research
March 11, 2016
7
Top Picks Report | March 2016
Top Picks - Mid Cap
March 11, 2016
8
Top Picks Report | March 2016
Stock Info
Blue Star
CMP
330
BSL is one of the largest air-conditioning companies in India. With a mere
TP
439
3% penetration level of ACs vs 25% in China, the overall outlook for the room
Upside
33.3%
air-conditioner (RAC) market in India is favourable.
Sector
Cons. Durable
BSL’s RAC business has been outgrowing the industry by ~10% points over the
Market Cap (` cr)
2,964
last few quarters, resulting in the company consistently increasing its market
Beta
0.6
share (~7% in FY2014 to ~10% at present). This has resulted in the Cooling
Products Division (CPD)'s share in overall revenues increasing from~23% in
52 Week High / Low
398 / 274
FY2010 to ~42% in FY2015 (expected to improve to ~48% in FY2018E). With
strong brand equity and higher share in split ACs, we expect the CPD to
3 year-Chart
continue to drive growth.
450
400
Aided by increasing contribution from the CPD, we expect the overall top-line
350
to post a revenue CAGR of 11.2% over FY2015-18E and margins to improve
300
from 5.3% in FY2015 to 7.1% in FY2018E. Moreover, the proposed merger
250
200
with Blue Star Infotech will provide cash influx and thus strengthen the balance
150
sheet. We maintain our Buy recommendation on the stock.
100
50
Key Financials
-
Y/E
Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
Source: Company, Angel Research
FY2016E
3,548
6.3
123
13.7
26.1
24.1
6.1
14.8
0.9
FY2017E
3,977
6.9
164
17.2
25.4
19.2
3.9
11.4
0.8
Source: Company, Angel Research
Stock Info
IL&FS Transportation Networks
CMP
72
Recently, ITNL reported Commercial Operations Date (CoD) for JSEL and
TP
93
PSRDCL. Also, Completion certificate was issued for BKEL. TRDCL P-III and
Upside
28.7%
CNTL are expected to commence in next 2-3 months. Further, RIDCRO P-III,
KSEL, KNEL, and BAEL are expected to commence operations in next 9-12
Sector
Construction
months. Accordingly, we expect revenue/ day from these projects to increase
Market Cap (` cr)
2,377
by ~`4cr/day (unadj. for stake).
Beta
1.1
Interest expenses related to 3 Annuity projects- JSEL, CNTL and TRDCL P-III
52 Week High / Low
206/64
are already captured in Income statement. As a result, we expect minimal
incremental stress on profitability to be seen with the commencement of these
3 year-Chart
projects. Also, we expect ITNL to benefit from declining interest rate cycle,
160
300
resulting in improved cash flow cycles at the SPV level.
250
With 7 projects expected to commence in next 12 months, we expect the debt
200
repayment cycle at SPV level to commence, resulting in the overall consol. D/E
150
levels peaking out at ~4.0x. With concerns over higher D/E levels allayed up
100
to certain extent, coupled with attractive valuations of 0.3x FY2017E P/BV
50
multiple ITNL stock is trading, we upgrade to Buy with price target of `93.
0
Key Financials
Y/E
Sales
OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
Source: Company, Angel Research
FY2016E
7,360
34.0
218
6.6
3.2
10.9
0.4
10.8
3.7
FY2017E
8,825
35.9
301
9.2
3.7
7.9
0.3
10.0
3.6
Source: Company, Angel Research
March 11, 2016
9
Top Picks Report | March 2016
Stock Info
Jagran Prakashan
CMP
154
We expect JPL to register a net sales CAGR of ~15% over FY2015-17E, on
TP
189
back of (a) strong growth in advertising revenue due to improvement in GDP
growth, and (b) improvement in circulation revenue owing to combination of
Upside
22.7%
increase in cover price and volume growth.
Sector
Media
Further the acquisition of Radio City would also boost the company's revenue
going ahead. Radio City has ~20 stations across 7 states in the country and is
Market Cap (` cr)
5,028
second only to ENIL in all its operating circles, ie Delhi, Mumbai, Bengaluru,
Beta
0.6
Chennai, Ahmedabad, Hyderabad, Pune and Lucknow. The company covers
52 Week High / Low
176/108
~51% (~66mn people) of the total radio population.
Raw material prices have been in a declining trend. Thus, considering lower
news print costs, healthy sales, and higher margins in the radio business, we
3 year-Chart
expect an adj. net profit CAGR of ~20% over FY2015-17E to `325cr.
180
Considering Dainik Jagran's strong presence in the rapidly growing Hindi
160
markets, we expect JPL to benefit from an eventual recovery in the Indian
140
economy. Hence, we maintain an Accumulate rating on the stock with a target
120
100
price of stock with a target price of `189.
80
60
Key Financials
40
Y/E
Sales
OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
20
0
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
2,170
27.2
290
8.9
20.9
17.3
3.6
8.8
2.2
FY2017E
2,355
26.2
325
9.9
20.4
15.5
3.2
8.4
2.0
Source: Company, Angel Research
Source: Company, Angel Research
Stock Info
Mahindra Lifespace
CMP
424
Speedy execution & speedier sales: MLF has 13 projects under implementation
across cities. MLF has exhibited fast completion of projects (4-4.5 years in
TP
554
Mumbai, other-wise 3-3.5 years across other cities), compared to others. Sales
Upside
30.8%
cycle in ~65% of projects is faster than execution cycle, contrary to industry
trends. This fast execution and sales is optimal, as it helps MLF in revenue
Sector
Real Estate
recognition, inventory cycle (better than Oberoi, DLF), cash flows and
Market Cap (` cr)
1,738
profitability. This translates in creating virtuous cycle of continuous fast growth.
Beta
0.5
Strong revenue growth visibility in short-to-long run: MLF as of 3QFY2016 is
pursuing ~5.0mn sq. ft. of sale of the total ~15.0mn sq. ft. of saleable area.
52 Week High / Low
559 / 401
Having sold ~55% of ongoing projects, we expect MLF to launch 2.55mn
sq.ft. of saleable area in rational way during 3QFY2016-2QFY2018E, across
6 cities. Maturity at existing projects, new launches give better revenue visibility
3 year-Chart
for medium-term. We expect MLF to report 72% and 77.9% consol. sales and
700
PAT CAGR during FY2016-18E to `1,273cr and `291cr, respectively. Further,
600
MLF is sitting on land bank of 12.3mn sq.ft across 4 cities, which allays any
500
concern over long-term revenue growth.
400
With Real Estate Regulatory Bill expected to be realty, MLF should be minimally
impacted, given their strong parentage and ethically implemented processes.
300
In longer-term organized, professional run, well funded players would enjoy
200
strong trust due to reliable and fast execution strategy. With improvement in
100
company’s fundamentals, strong earnings growth visibility and long-term
0
growth outlook, at current valuations of 1.1x FY2017E P/BV, MLF stock looks
attractive. We maintain BUY on MLF with target price of `554.
Key Financials
Source: Company, Angel Research
Y/E
Sales
OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
697
14.9
57
13.8
3.8
31.1
1.2
26.3
3.9
FY2017E
1,011
19.3
82
20.1
5.3
21.4
1.1
13.8
2.7
Source: Company, Angel Research
March 11, 2016
10
Top Picks Report | March 2016
Stock Info
Navkar
CMP
163
NCL is one of the largest and one of the three CFS at JNPT with rail
TP
265
connectivity, helping it garner high market share at the port. NCL is in a
Upside
62.6%
massive expansion mode where it is increasing its capacity by 234% to
Sector
Logistics
1,036,889 TEUS at JNPT and coming up with an ICD at Vapi (with Logistics
Park).
Market Cap (` cr)
2,330
Beta
0.6
The ICD with rail link should benefit from first mover advantage in a region
that has huge market potential and accounts for ~27% of volumes at JNPT.
52 Week High / Low
221 / 151
The ICD should be able to capture the EXIM volumes from the region through
rail link that till now was being custom cleared at JNPT (Import) or being
transported via road and consolidated at JNPT (Export). South Gujarat
3 year-Chart
volumes will now head straight to the Vapi ICD; thus the company can now
250
cater to bulk commodities and domestic traffic that it had been rejecting owing
200
to capacity constraints at CFS.
150
We expect NCL to successfully use its rail advantage and scale up its
100
utilizations at both JNPT and Vapi ICD. We have a Buy rating on the stock.
50
Key Financials
0
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/EBITDA
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
365
38.3
80
5.6
6.3
29.0
1.8
23.2
7.2
FY2017E
436
37.5
84
5.9
6.1
27.8
1.7
20.3
6.2
Source: Company, Angel Research
Source: Company, Angel Research
Stock Info
Radico Khaitan
CMP
100
The IMFL segment is under penetrated. Going forward, increase in income
TP
156
levels would lead to higher growth in IMFL brands. RKL has strong brands in
Upside
56.0%
the premium liquor category which reported a CAGR of ~26% over the last
Sector
Breweries & Distilleries
seven-year period. We expect the growth momentum to continue.
Market Cap (` cr)
1,336
We expect the price of ENA, a key raw material, to remain stable and
Beta
0.8
potentially even decline going forward due to higher sugar production and
lower demand for ethanol from Indian oil marketing companies
52 Week High / Low
131/78
We expect a significant hike in liquor prices in the coming financial year as
there haven't been any significant ones in recent times. Also, we believe that
3 year-Chart
industry leader - United Spirits would shift focus on profitability over volume
180
growth considering the debt on its balance sheet, which in turn, would lead to
160
increased scope for other liquor companies to hike prices.
140
120
On valuation basis, Radico is trading at ~70% discount to its close peer
100
United Spirits. We have a Buy rating on the stock and target price of `156
80
60
(22x FY2017E EPS).
40
20
Key Financials
0
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/EBITDA
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
1,517
12.7
78
5.8
8.6
17.2
1.5
11.1
1.4
Source: Company, Angel Research
FY2017E
1,635
13.4
95
7.1
9.6
14.1
1.4
9.7
1.2
Source: Company, Angel Research
March 11, 2016
11
Top Picks Report | March 2016
Siyaram Silk Mills
Stock Info
CMP
997
SSML has strong brands which cater to premium as well as popular mass
TP
1,354
segments of the market. Further, in FY2014, SSML entered the ladies' salwar
Upside
35.8%
kameez and ethnic wear segment. Going forward, we believe that the
company would be able to leverage its brand equity and continue to post
Sector
Textile
strong performance.
Market Cap (` cr)
935
The company has a nationwide network of about 1,600 dealers and business
Beta
0.8
partners. It has a retail network of 160 stores and plans to add another 300-
52 Week High / Low
1,400/857
350 stores going forward. Further, the company's brands are sold across
3,00,000 multi brand outlets in the country.
3 year-Chart
Going forward, we expect SSML to report a net sales CAGR of ~10% to
~`1,815cr and adj.net profit CAGR of ~11% to `98cr over FY2015-17E on
1,600
1,400
back of market leadership in blended fabrics, strong brand building, wide
1,200
distribution channel, strong presence in tier II and tier III cities and emphasis
1,000
on latest designs and affordable pricing points. At the current market price,
800
SSML trades at an inexpensive valuation. We have a Buy rating on the stock
600
and target price of `1,354.
400
200
Key Financials
0
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/EBITDA
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
1,636
11.5
84
89.9
17.9
11.1
1.8
7.0
0.7
Source: Company, Angel Research
FY2017E
1,815
11.5
98
104.1
17.8
9.6
1.6
6.3
0.6
Source: Company, Angel Research
March 11, 2016
12
Top Picks Report | March 2016
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
9.0
12.0
8.3
9.9
7.8
7.6
7.7
10.0
8.0
7.5
7.3
8.0
6.3
6.7
6.6
6.7
7.0
6.4
4.8
6.0
4.2
4.3
3.7
5.8
3.0
4.0
2.5
2.5
6.0
2.0
5.0
4.5
-
4.0
(2.0)
(1.3)
(4.0)
3.0
(3.4)
(6.0)
Source: CSO, Angel Research
Source: MOSPI, Angel Research
Exhibit 3: Monthly CPI inflation trends
Exhibit 4: Manufacturing and services PMI
Mfg. PMI
Services PMI
(%)
56.0
5.6
5.7
6.0
5.4
5.4
5.4
5.3
4.9
5.0
5.0
54.0
5.0
4.4
3.7
3.7
52.0
4.0
50.0
3.0
48.0
2.0
1.0
46.0
-
44.0
Source: MOSPI, Angel Research
Source: Market, Angel Research; Note: Level above 50 indicates expansion
Exhibit 5: Exports and imports growth trends
Exhibit 6: Key policy rates
(%)
Exports yoy growth
Imports yoy growth
(%)
Repo rate
Reverse Repo rate
CRR
0.0
8.00
7.50
(5.0)
7.00
(10.0)
6.50
(15.0)
6.00
5.50
(20.0)
5.00
(25.0)
4.50
4.00
(30.0)
3.50
(35.0)
3.00
Source: Bloomberg, Angel Research
Source: RBI, Angel Research
March 11, 2016
13
Top Picks Report | March 2016
Global watch
Exhibit 1: Latest quarterly GDP Growth (%, yoy) across select developing and developed countries
(%)
8.0
6.8
6.0
5.3
5.0
4.5
4.0
2.8
1.9
1.9
2.1
1.4
2.0
0.6
0.7
-
(2.0)
(4.0)
(4.1)
(6.0)
(5.9)
(8.0)
Source: Bloomberg, Angel Research
Exhibit 2: 2015 GDP Growth projection by IMF (%, yoy) across select developing and developed countries
(%)
8.0
7.3
6.8
6.0
4.7
4.7
4.0
2.5
2.5
2.6
1.4
1.5
2.0
1.2
0.6
-
(2.0)
(3.0)
(4.0)
(3.8)
(6.0)
Source: IMF, Angel Research
Exhibit 3: One year forward P-E ratio across select developing and developed countries
(x)
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
-
Source: IMF, Angel Research
March 11, 2016
14
Top Picks Report | March 2016
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
49,571
22.1
10.4
(3.4)
Russia
Micex
1,885
5.8
5.4
13.2
India
Nifty
7,486
1.3
(2.8)
(16.2)
China
Shanghai Composite
2,805
1.9
(20.8)
(14.9)
South Africa
Top 40
45,548
6.0
3.2
(0.6)
Mexico
Mexbol
44,337
4.6
5.0
2.6
Indonesia
LQ45
834
(0.7)
6.2
(12.7)
Malaysia
KLCI
1,691
1.7
0.8
(7.4)
Thailand
SET 50
888
7.6
3.8
(14.9)
USA
Dow Jones
16,995
6.0
(4.1)
(5.0)
UK
FTSE
6,037
7.2
(1.6)
(10.4)
Japan
Nikkei
16,852
(0.9)
(13.6)
(10.4)
Germany
DAX
9,498
7.0
(12.7)
(20.2)
France
CAC
4,350
8.8
(6.2)
(13.6)
Source: Bloomberg, Angel Research
March 11, 2016
15
Top Picks Report | March 2016
Stock Watch
March 11, 2016
16
Stock Watch | March 2016
Company Name
Reco
CMP
Target
Mkt Cap
Sales (` cr)
OPM (%)
EPS (`)
PER (x)
P/BV (x)
RoE (%)
EV/Sales (x)
(`)
Price (`)
(` cr)
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
Agri / Agri Chemical
Rallis
Neutral
154
-
2,990
2,097
2,415
14.4
14.4
9.5
11.0
16.2
14.0
3.2
2.8
21.1
21.3
1.5
1.3
United Phosphorus
Accumulate
447
480
19,161
12,500
14,375
18.3
18.3
29.8
35.9
15.0
12.5
2.8
2.3
20.0
20.3
1.6
1.3
Auto & Auto Ancillary
Ashok Leyland
Buy
96
111
27,448
17,995
21,544
11.4
11.6
3.4
4.7
28.4
20.5
5.0
4.6
17.7
22.2
1.5
1.2
Bajaj Auto
Accumulate
2,320
2,585
67,130
22,709
25,860
20.9
20.1
129.0
143.6
18.0
16.2
5.5
4.7
30.7
29.4
2.5
2.2
Bharat Forge
Accumulate
822
875
19,136
7,351
8,318
19.9
19.7
31.2
36.5
26.3
22.5
4.7
4.0
19.3
19.2
2.7
2.4
Eicher Motors
Neutral
19,800
-
53,779
15,556
16,747
15.5
17.3
464.8
597.5
42.6
33.1
15.6
11.4
36.2
34.3
3.4
3.1
Gabriel India
Accumulate
88
101
1,264
1,415
1,544
8.7
9.0
4.6
5.4
19.1
16.3
3.5
3.1
18.1
18.9
0.9
0.8
Hero Motocorp
Neutral
2,812
-
56,154
28,244
30,532
15.5
15.9
156.7
168.5
17.9
16.7
7.2
6.1
39.9
36.4
1.8
1.7
Jamna Auto Industries Buy
137
160
1,094
1,281
1,473
11.2
11.5
7.6
9.2
18.0
14.9
4.5
3.7
25.4
25.2
0.9
0.8
L G Balakrishnan & Bros Neutral
422
-
663
1,254
1,394
11.6
11.8
35.9
41.7
11.8
10.1
1.6
1.4
13.5
13.8
0.6
0.6
Mahindra and Mahindra Accumulate
1,226
1,364
76,149
38,416
42,904
13.7
13.9
54.8
63.4
22.4
19.3
3.5
3.1
15.4
15.8
1.6
1.4
Maruti
Neutral
3,627
-
109,569
57,865
68,104
16.4
16.7
176.3
225.5
20.6
16.1
4.0
3.4
19.4
21.2
1.7
1.4
Minda Industries
Accumulate
914
1,047
1,450
2,523
2,890
8.7
9.0
55.0
65.4
16.6
14.0
3.2
2.6
19.3
18.7
0.7
0.6
Motherson Sumi
Buy
240
313
31,686
39,343
45,100
8.8
9.1
10.1
12.5
23.7
19.2
7.5
5.9
35.3
34.4
0.9
0.8
Rane Brake Lining
Buy
365
465
289
454
511
11.5
12.0
25.2
31.0
14.5
11.8
2.2
2.0
14.9
16.6
0.8
0.7
Setco Automotive
Neutral
31
-
413
594
741
12.7
13.7
1.7
3.2
18.2
9.7
1.9
1.7
10.4
16.9
1.1
0.9
Tata Motors
Accumulate
348
371
100,590
259,686
273,957
13.0
13.4
25.9
29.5
13.5
11.8
1.8
1.5
8.0
9.0
0.6
0.6
TVS Motor
Buy
284
330
13,469
11,263
13,122
6.9
8.5
9.2
15.0
30.8
18.9
7.0
5.6
22.7
29.6
1.2
1.0
Amara Raja Batteries
Accumulate
906
1,040
15,467
4,892
5,871
17.4
17.6
28.8
37.1
31.4
24.4
7.3
5.9
23.4
24.1
3.1
2.5
Exide Industries
Buy
133
162
11,339
6,950
7,784
14.4
14.8
6.6
7.3
20.2
18.3
2.6
2.3
12.6
12.8
1.3
1.2
Apollo Tyres
Accumulate
168
183
8,575
12,056
12,714
17.2
16.4
23.0
20.3
7.3
8.3
1.3
1.1
17.7
13.6
0.8
0.8
Ceat
Accumulate
1,063
1,119
4,301
6,041
6,597
14.1
13.7
99.5
111.9
10.7
9.5
2.1
1.8
19.6
18.5
0.9
0.7
JK Tyres
Neutral
82
-
1,852
7,446
7,669
15.2
14.0
19.6
18.4
4.2
4.4
1.0
0.9
25.2
19.5
0.6
0.5
Swaraj Engines
Accumulate
843
919
1,047
552
630
14.2
14.7
44.6
54.1
18.9
15.6
4.4
4.0
23.2
25.6
1.7
1.5
Subros
Neutral
87
-
522
1,293
1,527
11.8
11.9
4.2
6.7
20.7
13.0
1.6
1.4
7.7
11.5
0.7
0.6
Indag Rubber
Neutral
166
-
436
283
329
17.0
17.2
13.0
15.4
12.8
10.8
2.8
2.3
21.8
21.6
1.3
1.0
Banking
Allahabad Bank
Neutral
51
-
3,084
8,569
9,392
2.8
2.9
16.3
27.5
3.2
1.9
0.3
0.23
7.6
11.9
-
-
Axis Bank
Buy
413
494
98,381
26,473
31,527
3.5
3.6
35.7
43.5
11.6
9.5
1.9
1.67
17.9
18.9
-
-
Bank of Baroda
Neutral
139
-
32,108
18,485
21,025
1.9
2.0
13.5
21.1
10.4
6.6
0.8
0.7
7.3
10.6
-
-
Bank of India
Neutral
94
-
7,612
15,972
17,271
1.9
2.0
15.3
33.3
6.1
2.8
0.3
0.2
3.6
7.6
-
-
Canara Bank
Neutral
180
-
9,766
15,441
16,945
2.0
2.1
46.6
70.4
3.9
2.6
0.3
0.3
8.0
11.2
-
-
Dena Bank
Neutral
29
-
1,842
3,440
3,840
2.1
2.3
7.2
10.0
3.9
2.8
0.3
0.2
6.1
7.9
-
-
Federal Bank
Neutral
49
-
8,409
3,477
3,999
3.0
3.0
5.0
6.2
9.8
7.8
1.0
0.9
10.5
11.9
-
-
HDFC
Neutral
1,153
-
182,034
10,358
11,852
3.3
3.3
41.1
47.0
28.1
24.5
5.3
4.9
24.7
24.9
-
-
HDFC Bank
Buy
1,021
1,262
257,838
38,309
47,302
4.3
4.3
49.3
61.0
20.7
16.7
3.6
3.07
18.5
19.7
-
-
ICICI Bank
Buy
215
254
125,243
34,279
39,262
3.3
3.3
21.0
24.4
10.3
8.8
1.7
1.5
14.4
14.7
-
-
March 11, 2016
17
Stock Watch | March 2016
Company Name
Reco
CMP
Target
Mkt Cap
Sales (` cr)
OPM (%)
EPS (`)
PER (x)
P/BV (x)
RoE (%)
EV/Sales (x)
(`)
Price (`)
(` cr)
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
IDBI Bank
Neutral
66
-
12,550
9,625
10,455
1.8
1.8
8.5
14.2
7.7
4.6
0.5
0.4
5.9
9.3
-
-
Indian Bank
Neutral
103
-
4,942
6,160
6,858
2.4
2.5
24.5
29.8
4.2
3.4
0.3
0.3
7.7
8.6
-
-
LIC Housing Finance
Buy
458
592
23,111
3,101
3,745
2.5
2.5
33.0
40.2
13.9
11.4
2.6
2.2
19.7
20.5
-
-
Oriental Bank
Neutral
89
-
2,681
7,643
8,373
2.4
2.4
37.2
45.4
2.4
2.0
0.2
0.2
8.2
9.4
-
-
Punjab Natl.Bank
Neutral
82
-
16,052
23,638
26,557
2.8
2.8
17.9
27.2
4.6
3.0
0.5
0.4
8.5
12.0
-
-
South Ind.Bank
Neutral
18
-
2,390
1,965
2,185
2.5
2.5
2.5
3.3
7.1
5.4
0.7
0.6
9.5
11.6
-
-
St Bk of India
Neutral
181
-
140,235
79,958
86,060
2.6
2.6
13.4
20.7
13.5
8.7
1.1
1.0
11.5
12.8
-
-
Union Bank
Neutral
124
-
8,538
12,646
14,129
2.3
2.4
31.0
39.1
4.0
3.2
0.4
0.4
9.8
11.4
-
-
Vijaya Bank
Neutral
32
-
2,745
3,536
3,827
1.8
1.9
5.5
6.7
5.8
4.8
0.5
0.4
7.8
8.8
-
-
Yes Bank
Neutral
792
-
33,300
7,190
9,011
3.2
3.3
58.2
69.7
13.6
11.4
2.4
2.1
19.2
19.6
-
-
Capital Goods
ACE
Neutral
38
-
372
660
839
4.7
8.2
1.0
3.9
37.6
9.6
1.2
1.0
3.2
11.3
0.7
0.6
BEML
Accumulate
1,038
1,157
4,321
3,277
4,006
6.0
8.9
36.2
64.3
28.7
16.1
2.0
1.8
5.7
11.7
1.4
1.1
Bharat Electronics
Buy
1,084
1,414
26,014
7,737
8,634
16.8
17.2
54.0
61.5
20.1
17.6
2.9
2.5
39.3
45.6
2.5
2.1
Voltas
Buy
238
353
7,865
5,363
5,963
8.0
9.1
11.0
13.8
21.6
17.2
3.3
2.9
16.2
17.9
1.4
1.3
BGR Energy
Neutral
104
-
748
3,615
3,181
9.5
9.4
16.7
12.4
6.2
8.4
0.6
0.6
10.0
7.0
0.6
0.8
BHEL
Neutral
104
-
25,541
33,722
35,272
10.8
11.7
10.5
14.2
9.9
7.3
0.7
0.7
7.0
9.0
0.8
0.8
Blue Star
Buy
330
439
2,964
3,548
3,977
6.3
6.9
13.7
17.2
24.1
19.2
6.1
3.9
26.1
25.4
0.9
0.8
Crompton Greaves
Neutral
151
-
9,458
13,484
14,687
4.9
6.2
4.5
7.1
33.5
21.3
2.4
2.2
7.2
10.8
0.8
0.8
Greaves Cotton
Neutral
126
-
3,073
1,655
1,755
16.6
16.8
7.4
7.8
17.0
16.1
3.4
3.2
21.1
20.6
1.8
1.7
Inox Wind
Buy
270
458
5,998
4,980
5,943
17.0
17.5
26.6
31.6
10.2
8.6
3.0
2.2
35.0
30.0
1.3
1.1
KEC International
Neutral
115
-
2,951
8,791
9,716
6.1
6.8
5.4
8.2
21.3
14.0
2.1
1.9
10.0
14.0
0.6
0.5
Thermax
Neutral
755
-
9,000
6,413
7,525
7.4
8.5
30.5
39.3
24.8
19.2
3.8
3.3
15.0
17.0
1.4
1.1
Cement
ACC
Neutral
1,230
-
23,089
13,151
14,757
16.4
18.3
63.9
83.4
19.2
14.7
2.5
2.3
13.3
16.1
1.6
1.3
Ambuja Cements
Neutral
201
-
31,255
11,564
12,556
19.4
20.7
8.9
10.1
22.6
19.9
2.8
2.7
12.8
13.8
2.3
2.1
HeidelbergCement
Neutral
70
-
1,591
1,772
1,926
13.3
15.4
1.0
3.0
70.2
23.4
1.8
1.6
2.6
7.9
1.5
1.3
India Cements
Neutral
75
-
2,316
4,216
4,840
18.0
19.5
4.0
9.9
18.9
7.6
0.8
0.7
4.0
9.5
0.9
0.7
JK Cement
Accumulate
559
605
3,909
3,661
4,742
10.1
15.8
7.5
28.5
74.5
19.6
2.2
2.0
7.5
22.9
1.5
1.1
J K Lakshmi Cement
Neutral
300
-
3,531
2,947
3,616
16.7
19.9
11.5
27.2
26.1
11.0
2.5
2.1
9.8
20.8
1.6
1.3
Mangalam Cements
Neutral
184
-
492
1,053
1,347
10.5
13.3
8.4
26.0
21.9
7.1
0.9
0.9
4.3
12.5
0.8
0.6
Orient Cement
Neutral
138
-
2,830
1,854
2,524
21.2
22.2
7.7
11.1
17.9
12.4
2.6
2.2
13.3
15.7
2.3
1.6
Ramco Cements
Neutral
379
-
9,015
4,036
4,545
20.8
21.3
15.1
18.8
25.1
20.1
3.1
2.7
12.9
14.3
2.7
2.4
Shree Cement^
Neutral
11,150
-
38,844
7,150
8,742
26.7
28.6
228.0
345.5
48.9
32.3
7.2
6.0
15.7
20.3
5.2
4.2
UltraTech Cement
Neutral
2,996
-
82,205
24,669
29,265
18.2
20.6
82.0
120.0
36.5
25.0
3.9
3.4
11.3
14.7
3.4
2.9
Construction
ITNL
Buy
72
93
2,377
7,360
8,825
34.0
35.9
7.0
9.0
10.3
8.0
0.4
0.3
3.2
3.7
3.7
3.6
KNR Constructions
Buy
517
603
1,454
937
1,470
14.3
14.0
44.2
38.6
11.7
13.4
2.3
2.0
15.4
15.4
1.6
1.1
Larsen & Toubro
Accumulate
1,186
1,310
110,473
58,870
65,708
8.3
10.3
42.0
53.0
28.2
22.4
2.0
1.8
8.8
11.2
2.1
1.9
Gujarat Pipavav Port
Neutral
158
-
7,638
629
684
51.0
52.2
6.4
5.9
24.7
26.8
3.3
3.0
15.9
12.7
11.8
10.6
MBL Infrastructures
Buy
140
285
580
2,313
2,797
12.2
14.6
19.0
20.0
7.4
7.0
0.8
0.7
11.3
10.6
1.0
0.9
Nagarjuna Const.
Neutral
69
-
3,814
7,892
8,842
8.8
9.1
3.0
5.3
22.9
12.9
1.1
1.1
5.0
8.5
0.7
0.6
PNC Infratech
Accumulate
489
558
2,511
1,873
2,288
13.2
13.5
24.0
32.0
20.4
15.3
2.0
1.8
12.1
12.3
1.4
1.2
Simplex Infra
Neutral
215
-
1,063
5,955
6,829
10.3
10.5
16.0
31.0
13.4
6.9
0.7
0.6
5.3
9.9
0.7
0.6
March 11, 2016
18
Stock Watch | March 2016
Company Name
Reco
CMP
Target
Mkt Cap
Sales (` cr)
OPM (%)
EPS (`)
PER (x)
P/BV (x)
RoE (%)
EV/Sales (x)
(`)
Price (`)
(` cr)
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
Power Mech Projects
Neutral
577
-
849
1,539
1,801
12.8
12.7
59.0
72.1
9.8
8.0
1.5
1.2
18.6
16.8
0.6
0.5
Sadbhav Engineering
Buy
244
289
4,184
3,481
4,219
10.7
10.8
8.2
11.7
29.7
20.8
2.8
2.5
10.3
13.5
1.5
1.2
NBCC
Buy
925
1,089
11,094
5,816
7,382
6.9
7.7
29.6
39.8
31.2
23.2
5.6
4.4
24.1
26.7
1.6
1.3
MEP Infra
Neutral
39
-
639
1,956
1,876
28.1
30.5
1.3
3.0
30.2
13.1
6.3
4.3
21.2
32.8
1.7
1.7
SIPL
Neutral
89
-
3,149
675
1,042
62.4
64.7
-
-
3.3
3.8
-
-
16.3
11.0
FMCG
Asian Paints
Neutral
893
-
85,671
16,553
19,160
16.0
16.2
17.7
21.5
50.5
41.5
13.4
12.1
29.4
31.2
5.0
4.3
Britannia
Neutral
2,829
-
33,940
8,481
9,795
14.0
14.1
65.5
78.3
43.2
36.1
20.4
16.8
38.3
41.2
3.9
3.3
Colgate
Neutral
808
-
21,972
4,836
5,490
19.5
19.7
48.5
53.2
16.7
15.2
12.2
10.6
99.8
97.5
4.4
3.9
Dabur India
Accumulate
246
267
43,275
9,370
10,265
17.1
17.2
7.3
8.1
33.5
30.4
10.1
8.2
33.7
30.6
4.5
4.1
GlaxoSmith Con*
Accumulate
5,673
6,118
23,857
4,919
5,742
17.2
17.4
168.3
191.2
33.7
29.7
9.6
8.1
28.8
28.9
4.4
3.7
Godrej Consumer
Neutral
1,248
-
42,505
10,168
12,886
16.1
16.1
32.1
38.4
38.9
32.5
7.9
7.3
19.7
21.0
4.3
3.4
HUL
Neutral
838
-
181,235
34,940
38,957
17.5
17.7
20.8
24.7
40.3
33.9
44.8
35.8
110.5
114.2
5.0
4.4
ITC
Accumulate
316
359
254,049
36,804
38,776
37.9
37.9
12.2
12.9
25.9
24.5
7.2
6.3
27.7
25.8
6.5
6.1
Marico
Neutral
238
-
30,674
6,551
7,766
15.7
16.0
10.4
12.5
22.9
19.0
6.6
5.5
33.2
32.4
4.6
3.9
Nestle*
Buy
5,186
6,646
50,000
11,291
12,847
22.2
22.3
158.9
184.6
32.6
28.1
17.1
15.3
55.0
57.3
4.3
3.7
Tata Global
Buy
116
144
7,350
8,635
9,072
9.8
9.9
6.5
7.6
17.9
15.3
1.8
1.7
6.8
7.4
0.8
0.7
IT
HCL Tech^
Buy
818
1,038
115,391
42,038
47,503
21.2
21.5
51.5
57.7
16.0
14.2
3.4
2.7
21.5
18.8
2.3
1.8
Infosys
Buy
1,146
1,347
263,218
61,850
69,981
27.5
27.5
59.4
65.7
19.3
17.4
4.1
3.5
21.2
20.1
3.6
3.0
TCS
Buy
2,348
2,854
462,656
108,487
122,590
28.3
28.5
122.8
138.4
19.1
17.0
7.3
6.6
38.0
38.9
3.9
3.4
Tech Mahindra
Accumulate
466
530
45,095
26,524
29,177
16.2
17.0
28.8
33.6
16.2
13.9
3.1
2.7
19.3
19.1
1.5
1.3
Wipro
Buy
536
680
132,424
50,808
56,189
23.7
23.8
37.3
40.7
14.4
13.2
2.7
2.5
19.2
17.7
2.1
1.7
Media
D B Corp
Accumulate
325
356
5,971
2,241
2,495
27.8
27.9
21.8
25.6
14.9
12.7
3.9
3.4
26.7
28.5
2.6
2.3
HT Media
Neutral
82
-
1,911
2,495
2,603
11.2
11.2
7.3
8.6
11.2
9.5
0.9
0.8
7.4
8.1
0.3
0.2
Jagran Prakashan
Buy
154
189
5,028
2,170
2,355
27.2
26.2
8.9
9.9
17.3
15.5
3.6
3.2
20.9
20.4
2.2
2.0
Sun TV Network
Neutral
342
-
13,460
2,779
3,196
70.2
70.5
22.8
27.3
15.0
12.5
3.7
3.3
26.7
28.3
4.6
4.0
Hindustan Media Ven.
Neutral
261
-
1,914
920
1,031
20.0
20.0
19.2
20.9
13.6
12.5
2.2
1.9
16.4
15.3
1.6
1.4
Metal
Coal India
Buy
322
380
203,513
76,167
84,130
19.9
22.3
22.4
25.8
14.4
12.5
5.2
5.0
35.5
41.0
2.0
1.8
Hind. Zinc
Neutral
169
-
71,598
14,641
14,026
50.4
50.4
17.7
16.0
9.6
10.6
1.5
1.3
16.2
13.2
2.5
2.4
Hindalco
Neutral
84
-
17,274
104,356
111,186
8.7
9.5
6.7
11.1
12.4
7.6
0.4
0.4
3.5
5.9
0.7
0.6
JSW Steel
Neutral
1,184
-
28,621
42,308
45,147
16.4
20.7
(10.3)
49.5
-
23.9
1.3
1.3
(1.0)
5.6
1.7
1.6
NMDC
Neutral
93
-
36,931
8,237
10,893
46.6
44.5
9.9
11.7
9.4
8.0
1.0
0.9
12.4
13.0
4.3
3.3
SAIL
Neutral
43
-
17,656
45,915
53,954
7.2
10.5
1.5
4.4
28.4
9.8
0.4
0.4
2.3
4.1
1.0
0.9
Vedanta
Neutral
88
-
26,163
71,445
81,910
26.2
26.2
12.9
19.2
6.9
4.6
0.5
0.4
7.2
8.9
0.8
0.6
Tata Steel
Neutral
296
-
28,763
126,760
137,307
8.9
11.3
6.4
23.1
46.5
12.8
0.9
0.9
2.0
7.1
0.8
0.8
March 11, 2016
19
Stock Watch | March 2016
Company Name
Reco
CMP
Target
Mkt Cap
Sales (` cr)
OPM (%)
EPS (`)
PER (x)
P/BV (x)
RoE (%)
EV/Sales (x)
(`)
Price (`)
(` cr)
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
FY16E
FY17E
Oil & Gas
Cairn India
Neutral
141
-
26,379
11,323
12,490
49.4
51.0
20.7
20.6
6.8
6.8
0.4
0.4
6.4
6.1
1.4
0.8
GAIL
Neutral
341
-
43,299
64,856
70,933
9.1
9.6
24.0
28.9
14.2
11.8
1.2
1.1
8.8
9.6
0.8
0.8
ONGC
Neutral
206
-
175,986
154,564
167,321
36.8
37.4
28.6
32.5
7.2
6.3
0.9
0.8
12.7
13.5
1.3
1.3
Petronet LNG
Neutral
248
-
18,608
29,691
31,188
5.8
6.2
12.8
13.4
19.4
18.5
2.9
2.6
15.8
14.8
0.7
0.7
Indian Oil Corp
Buy
386
455
93,743
359,607
402,760
5.9
6.1
42.5
48.7
9.1
7.9
1.2
1.1
14.1
14.3
0.4
0.3
Reliance Industries
Accumulate
1,012
1,150
327,899
304,775
344,392
12.6
13.4
91.3
102.6
11.1
9.9
1.2
1.1
11.8
12.0
1.0
0.8
Pharmaceuticals
Alembic Pharma
Neutral
623
-
11,744
3,274
3,802
26.9
19.4
35.0
28.7
17.8
21.7
7.9
5.9
55.6
31.2
3.6
3.0
Aurobindo Pharma
Buy
724
856
42,323
14,923
17,162
22.0
23.0
35.7
42.8
20.3
16.9
6.0
4.5
34.0
30.2
3.2
2.7
Aventis*
Neutral
4,395
-
10,122
2,082
2,371
17.4
20.8
118.2
151.5
37.2
29.0
5.4
4.4
19.9
25.5
4.5
3.8
Cadila Healthcare
Neutral
345
-
35,309
10,224
11,840
21.0
22.0
14.6
17.6
23.6
19.6
6.5
5.1
30.8
29.0
3.5
2.9
Cipla
Accumulate
534
605
42,936
13,979
16,447
20.2
18.6
25.7
27.5
20.8
19.4
3.4
2.9
17.6
16.1
3.1
2.5
Dr Reddy's
Buy
3,184
3,933
54,303
16,838
19,575
25.0
23.1
167.5
178.8
19.0
17.8
4.0
3.3
23.1
20.4
3.1
2.7
Dishman Pharma
Neutral
363
-
2,932
1,733
1,906
21.5
21.5
17.0
19.9
21.4
18.3
2.2
1.9
10.5
11.2
2.2
1.9
GSK Pharma*
Neutral
3,218
-
27,260
2,870
3,158
20.0
22.1
59.5
68.3
54.1
47.1
16.0
16.4
28.5
34.3
9.0
8.2
Indoco Remedies
Neutral
282
-
2,595
1,033
1,199
15.9
18.2
9.4
13.6
30.0
20.7
4.4
3.8
15.7
19.7
2.6
2.2
Ipca labs
Buy
545
900
6,875
3,363
3,909
12.9
18.6
13.4
28.0
40.7
19.5
2.9
2.5
7.4
14.0
2.3
2.0
Lupin
Neutral
1,821
-
82,044
13,092
16,561
25.0
27.0
50.4
68.3
36.1
26.7
7.5
5.9
22.8
24.7
6.0
4.6
Sun Pharma
Accumulate
865
950
208,213
28,163
32,610
25.8
30.7
17.4
26.9
49.7
32.2
4.7
4.1
13.0
16.6
6.9
5.7
Power
Tata Power
Neutral
59
-
15,930
35,923
37,402
22.6
22.8
4.1
5.2
14.5
11.4
1.1
1.0
7.5
9.3
1.4
1.3
NTPC
Buy
127
146
104,676
87,271
99,297
23.4
23.5
11.7
13.3
10.8
9.5
1.2
1.1
11.5
12.2
2.2
2.0
Power Grid
Buy
140
170
72,981
20,702
23,361
86.7
86.4
12.1
13.2
11.5
10.6
1.7
1.5
15.6
15.1
8.4
7.9
Telecom
Bharti Airtel
Neutral
322
-
128,656
101,748
109,191
32.1
31.7
12.0
12.5
26.8
25.7
1.8
1.7
6.9
6.7
1.9
1.7
Idea Cellular
Neutral
135
-
48,605
34,282
36,941
32.0
31.5
5.9
6.2
22.9
21.8
2.1
1.9
9.9
9.3
2.0
1.9
Others
Abbott India
Neutral
4,904
-
10,420
2,715
3,153
14.5
14.1
134.3
152.2
36.5
32.2
9.1
7.5
27.4
25.6
3.6
3.0
Bajaj Electricals
Buy
188
237
1,895
4,719
5,287
5.2
5.8
8.6
12.7
21.9
14.8
2.5
2.2
11.4
14.8
0.4
0.4
Banco Products (India)
Neutral
101
-
721
1,208
1,353
10.9
12.3
10.8
14.5
9.4
7.0
1.1
1.0
11.9
14.5
0.6
0.5
Coffee Day Enterprises
Neutral
226
-
4,663
2,692
2,964
17.0
18.6
-
4.7
-
47.8
2.8
2.6
0.1
5.5
2.1
2.0
Competent Automobiles Neutral
126
-
77
1,040
1,137
3.2
3.1
25.7
28.0
4.9
4.5
0.7
0.6
15.0
14.3
0.1
0.0
Elecon Engineering
Neutral
57
-
619
1,359
1,482
10.3
13.6
0.8
3.9
70.7
14.6
1.2
1.1
1.6
7.8
0.8
0.7
Finolex Cables
Neutral
232
-
3,547
2,520
2,883
12.2
12.0
12.7
14.2
18.3
16.3
2.5
2.2
13.6
13.5
1.1
1.0
Garware Wall Ropes
Buy
301
473
659
862
974
11.2
11.2
24.9
29.6
12.1
10.2
1.8
1.6
15.1
15.4
0.8
0.6
Goodyear India*
Buy
475
582
1,095
1,800
1,600
11.7
11.5
58.7
52.9
8.1
9.0
1.8
1.6
24.6
18.7
0.4
0.4
Hitachi
Neutral
1,135
-
3,085
1,779
2,081
7.8
8.8
21.8
33.4
52.0
33.9
8.4
6.8
17.4
22.1
1.8
1.5
HSIL
Accumulate
271
302
1,960
2,123
2,384
16.1
16.5
15.0
18.9
18.0
14.4
1.4
1.3
8.0
9.4
1.3
1.1
March 11, 2016
20
Stock Watch | March 2016
Company Name
Reco
CMP
Target
Mkt Cap
Sales (` cr)
OPM (%)
EPS (`)
PER (x)
P/BV (x)
RoE (%)
EV/Sales (x)
(`)
Price (`)
(` cr)
FY16E
FY17E
FY16E FY17E FY16E
FY17E
FY16E
FY17E
FY16E FY17E
FY16E FY17E FY16E FY17E
Interglobe Aviation
Neutral
807
-
29,068
17,022
21,122
20.7
14.5
63.9
53.7
12.6
15.0
18.9
15.5
149.9
103.2
1.7
1.4
Jyothy Laboratories
Neutral
289
-
5,226
1,620
1,847
11.5
11.5
7.3
8.5
39.6
34.1
5.1
4.7
13.3
14.4
3.1
2.6
Kirloskar Engines India Neutral
210
-
3,043
2,403
2,554
8.6
9.9
9.2
10.5
22.9
20.1
2.2
2.1
9.7
10.7
0.9
0.8
Linc Pen & Plastics
Neutral
182
-
269
340
371
8.3
8.9
10.8
13.2
16.9
13.8
2.7
2.4
16.0
17.1
0.8
0.8
Mahindra Lifespace
Buy
424
554
1,738
697
1,011
14.9
19.3
13.8
20.1
30.7
21.1
1.1
1.1
3.8
5.3
3.8
2.6
M M Forgings
Buy
422
614
509
511
615
21.7
21.6
43.1
55.8
9.8
7.6
1.8
1.5
19.9
21.2
1.2
0.9
MRF
Buy
34,387
45,575
14,584
20,316
14,488
21.4
21.1
5,488.0
3,797.9
6.3
9.1
2.1
1.7
41.1
21.2
0.7
0.9
MT Educare
Neutral
154
-
614
286
366
18.3
17.7
7.7
9.4
20.0
16.5
4.2
3.7
20.2
21.1
2.0
1.5
Navkar Corporation
Buy
163
265
2,330
365
436
38.3
37.5
5.6
5.9
29.0
27.8
1.8
1.7
6.3
6.1
7.2
6.2
Navneet Education
Neutral
82
-
1,947
998
1,062
24.1
24.0
5.8
6.1
14.2
13.4
3.1
2.8
22.0
20.5
2.0
1.9
Nilkamal
Neutral
1,100
-
1,642
1,871
2,031
10.7
10.5
63.2
69.8
17.4
15.8
2.8
2.4
17.6
16.6
0.9
0.8
Page Industries
Neutral
11,372
-
12,684
1,929
2,450
19.8
20.1
229.9
299.0
49.5
38.0
21.8
15.2
52.1
47.0
6.6
5.2
Radico Khaitan
Buy
100
156
1,336
1,517
1,635
12.7
13.4
5.8
7.1
17.2
14.1
1.5
1.4
8.6
9.6
1.4
1.2
Relaxo Footwears
Neutral
388
-
4,652
1,767
2,152
12.3
12.5
19.2
25.1
20.1
15.5
4.9
3.8
27.7
27.8
2.7
2.2
Siyaram Silk Mills
Buy
997
1,354
935
1,636
1,815
11.5
11.5
89.9
104.1
11.1
9.6
1.8
1.6
17.9
17.8
0.7
0.6
Styrolution ABS India*
Neutral
564
-
992
1,271
1,440
8.6
9.2
32.0
41.1
17.6
13.7
1.8
1.6
10.7
12.4
0.7
0.6
Surya Roshni
Buy
134
201
587
2,992
3,223
8.1
8.4
14.7
18.3
9.1
7.3
0.8
0.8
9.7
11.0
0.5
0.4
The Byke Hospitality
Neutral
155
-
622
222
287
20.5
20.5
5.6
7.6
27.5
20.5
5.2
4.3
18.8
20.7
2.8
2.2
Transport Corp. of India Neutral
275
-
2,092
2,830
3,350
8.8
9.0
14.4
18.3
19.1
15.0
2.9
2.6
15.4
17.1
0.9
0.7
TVS Srichakra
Buy
2,242
3,217
1,717
2,035
2,252
15.9
15.3
248.6
268.1
9.0
8.4
3.9
2.8
43.6
33.9
0.9
0.7
Visaka Industries
Buy
113
144
179
1,086
1,197
9.9
10.2
21.5
28.7
5.2
3.9
0.5
0.5
9.6
11.6
0.4
0.3
Wonderla Holidays
Neutral
372
-
2,101
206
308
44.0
43.6
9.0
12.9
41.3
28.8
5.6
5.1
13.7
17.8
10.1
6.7
Source: Company, Angel Research, Note: *December year end; #September year end;
&October year end; ^June year end; Price as of March 10, 2016; Sesa Goa's numbers reflect the standalone Sesa Goa business only. We will revise our numbers once the
consolidated entity Sesa- Sterlite is formed
March 11, 2016
21
Top Picks Report | March 2016
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
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March 11, 2016
22