Market Outlook
January 05, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open flat tracking global indices and SGX Nifty.
BSE Sensex
0.5
176
33,970
US Stocks remained mostly positive over the course of the trading session. With the
Nifty
0.6
62
10,505
upward move, the major averages once again climbed to new record closing highs.
Mid Cap
0.7
126
17,946
Early buying interest was generated in reaction to a report from payroll processor
Small Cap
0.9
170
19,516
ADP showing private sector employment jumped by much more than expected in the
Bankex
0.5
145
28,777
month of December. The Dow Jones is up 0.6% to close at 25,075 and the Nasdaq
Composite edged up to 0.2%, to 7,078.
Global Indices
Chg (%)
(Pts)
(Close)
U.K. shares were modestly higher with underlying sentiment helped by rising oil
Dow Jones
0.6
152
25,075
prices as well as better-than-expected U.K. housing and services data. The FTSE 100
Nasdaq
0.2
12
7,078
is up by 0.3% to close at 7,696.
FTSE
0.3
25
7,696
On domestic front, Indian shares rose as firm global cues and encouraging service
Nikkei
0.1
20
23,526
sector data domestically helped investors shrug off concerns over rising oil prices.
Hang Seng
0.0
11
30,747
The Sensex ended on an upside front of 0.5% at 33,970 while the Nifty ended at
Shanghai Com
0.0
2
3,387
10,505 with a upside of 0.6%.
News Analysis
Advances / Declines
BSE
NSE
Tata Motors: JLR India sales grew by 49% in 2017
Advances
1,906
1,158
Declines
1,030
641
Detailed analysis on Pg2
Unchanged
103
43
Investor’s Ready Reckoner
Key Domestic & Global Indicators
Volumes (` Cr)
Stock Watch: Latest investment recommendations on 150+ stocks
BSE
5,582
Refer Pg5 onwards
NSE
36,892
Top Picks
CMP
Target
Upside
Net Inflows (` Cr)
Net
Mtd
Ytd
Company
Sector
Rating
(`)
(`)
(%)
FII
113
721
721
Blue Star
Capital Goods Accumulate
808
867
7.3
Dewan Housing Finance
Financials
Buy
589
712
21.0
*MFs
1,209
8,333 1,18,571
Asian Granito
Other
Accumulate
570
639
12.0
Navkar Corporation
Other
Buy
206
265
28.7
Top Gainers
Price (`)
Chg (%)
KEI Industries
Capital Goods
Buy
377
436
15.6
Sjvn
39
11.9
More Top Picks on Pg4
Jindalstel
244
11.1
Key Upcoming Events
Strtech
335
10.1
Previous
Consensus
Date
Region
Event Description
Prajind
120
10.0
Reading
Expectations
Jan05
US
Unnemployment rate
4.10
4.10
Rcom
33
9.2
Jan05
US
Change in Nonfarm payrolls
228.00
190.00
Jan08
Euro Zone Euro-Zone Consumer Confidence
0.50
Top Losers
Price (`)
Chg (%)
Jan10
India
Exports YoY%
30.60
Religare
68
(3.1)
Jan10
UK
Industrial Production (YoY)
3.60
More Events on Pg7
Niitltd
105
(3.1)
Gmrinfra
21
(3.0)
Ofss
4,057
(2.9)
Whirlpool
1,540
(2.7)
As on January 04 2018
Market Outlook
January 05, 2018
News Analysis
Tata Motors: JLR India sales grew by 49% in 2017
Jaguar Land Rover (JLR) India, a part of Tata Motors, has reported 49% volume
growth for the calendar year 2017 owing to new product introductions, product
offerings at competitive prices, and superior customer satisfaction. During the year,
the company sold 3,954 units.
Demand also surged for the All-New Discovery, the top-of-the-line Range Rover
Sport and the flagship of the Land Rover brand, the Range Rover. Overall, the
luxury car segment is doing well and as a result, JLR has benefited.
Economic and Political News
Corporate sector showing signs of revival as GST impact diminishes.
India probes cheap detergent chemical import from China
Telangana aims to generate 125,000 jobs by setting up 2 IT clusters.
India looks to boost plastic, chemicals and forest goods export
Corporate News
Apple may soon become world's first trillion dollar company
Idea Cellular to raise Rs 32 bn from promoter group entities
JLR volume surges 49% at 3,954 units in 2017.
Former HP executive Raj Kumar Rishi appointed Xerox India Managing
Director
Samvardhana Motherson acquires MS Global India from Korea-based MS
Group
Market Outlook
January 05, 2018
Top Picks HHHHH
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
Strong growth in domestic business due to its leade`hip
in acute therapeutic segment. Alkem expects to launch
Alkem Laboratories
26,376
2,206
2,341
6.1
more products in USA, which bodes for its international
business.
We expect the company would report strong profitability
Asian Granito
1,716
570
639
12.0
owing to better product mix, higher B2C sales and
amalgamation synergy.
Favorable outlook for the AC industry to augur well for
Cooling products business which is out pacing the
Blue Star
7,747
808
867
7.3
market growth. EMPPAC division's profitability to
improve once operating environment turns around.
With a focus on the low and medium income (LMI)
consumer segment, the company has increased its
Dewan Housing Finance
18,460
589
712
21.0
presence in tier-II & III cities where the growth
opportunity is immense.
Loan growth is likely to pick up after a sluggish FY17.
Lower credit cost will help in strong bottom-line growth.
Karur Vysya Bank
8,800
122
180
47.6
Increasing share of CASA will help in NIM
improvement.
High order book execution in EPC segment, rising B2C
KEI Industries
2,955
377
436
15.6
sales and higher exports to boost the revenues and
profitability
Expected to benefit from the lower capex requirement
Music Broadcast
2,203
386
434
12.4
and 15 year long radio broadcast licensing.
Massive capacity expansion along with rail advantage
Navkar Corporation
3,100
206
265
28.7
at ICD as well CFS augur well for the company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,460
738
813
10.1
growth going ahead. Stock currently trades at an
inexpensive valuation.
Market leadership in Hindi news genre and no.
2
viewership ranking in English news genre, exit from the
TV Today Network
2,559
429
500
16.6
radio business, and anticipated growth in ad spends by
corporate to benefit the stock.
After GST, the company is expected to see higher
volumes along with improving product mix. The Gujarat
Maruti Suzuki
2,83,419
9,382
10,619
13.2
plant will also enable higher operating leverage which
will be margin accretive.
We expect loan book to grow at 24.3% over next two
GIC Housing
2,477
460
655
42.4
year; change in borrowing mix will help in NIM
improvement
We expect CPIL to report net Revenue/PAT CAGR of
~17%/16% over FY2017-20E mainly due to healthy
7,742
348
400
14.8
growth in plywood & lamination business, forayed into
Century Plyboards India
MDF & Particle boards on back of strong brand &
distribution network.
We expect sales/PAT to grow at 13.5%/20% over next
LT Foods
3,109
97
108
11.1
two years on the back of strong distribution network &
addition of new products in portfolio.
We expect sales/PAT to grow at 13%/16% over next two
years on the back of strong healthy demand in writing
Ruchira Papers
462
206
244
18.4
& printing paper and Kraft paper. Further, China had
banned making paper from waste pulp which would
benefit Indian paper companies.
Source: Company, Angel Research
Market Outlook
January 05, 2018
Key Upcoming Events
Global economic events release calendar
Bl oomberg Data
D ate
Time
C ountry
Event Description
Unit
Period
L ast Reporte d
E stimate d
Jan 05, 2018
7:00 PM US
Unnemployment rate
%
Dec
4.10
4.10
7:00 PM US
Change in N onfarm payrolls
Thousands
Dec
228.00
190.00
Jan 08, 2018
3:30 PM Euro Zone
Euro-Zone Consumer Confidence
Value
Dec F
0.50
Jan 10, 2018
India
Exports YoY%
% Change
Dec
30.60
3:00 PM UK
Industrial Production (YoY)
% Change
Nov
3.60
India
Imports YoY%
% Change
Dec
19.60
7:00 AM China
Consumer Price Index (YoY)
% Change
Dec
1.70
1.90
Jan 11, 2018
US
Producer Price Index (mom)
% Change
Dec
1.40
Jan 12, 2018
China
Exports YoY%
% Change
Dec
12.30
10.00
7:00 PM US
Consumer price index (mom)
% Change
Dec
0.40
0.20
5:30 PM India
Industrial Production YoY
% Change
Nov
2.20
Jan 15, 2018
12: 00 PM India
Monthly Wholesale Prices YoY%
% Change
Dec
3.93
Jan 16, 2018
3:00 PM UK
CPI (YoY)
% Change
Dec
3.10
Jan 17, 2018
3:30 PM Euro Zone
Euro-Zone CPI (YoY)
%
Dec F
1.50
7:45 PM US
Industrial Production
%
Dec
0.20
0.30
Jan 18, 2018
7:00 PM US
Building permits
Thousands
Dec
1,303.00
1,300.00
7:00 PM US
Housi ng Starts
Thousands
Dec
1,297.00
1,270.00
7:30 AM China
Industrial Production (YoY)
% Change
Dec
6.10
7:30 AM China
Real GDP (YoY)
% Change
4Q
6.80
Jan 24, 2018
2:00 PM Germany
PMI Manufacturing
Value
Jan P
63.30
8:30 PM US
Existing home sales
Million
Dec
5.81
3:00 PM UK
Joble ss claims change
% Change
Dec
5.90
Jan 25, 2018
8:30 PM US
New home sales
Thousands
Dec
733.00
6:15 PM Euro Zone
ECB announces interest rates
%
Jan 25
-
Source: Bloomberg, Angel Research
Market Outlook
January 05, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
10.0
5.0
4.5
9.1
4.4
4.1
9.0
8.0
7.9
4.0
3.5
7.6
7.5
3.2
8.0
7.3
7.2
2.9
7.0
3.0
2.4
7.0
6.3
2.2
6.1
6.1
5.7
2.0
6.0
1.2
1.0
5.0
1.0
4.0
-
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
4.9
52.0
5.0
3.9
50.0
4.0
3.7
3.6
3.4
3.3
3.3
3.2
3.0
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
60.0
6.50
50.0
6.00
40.0
5.50
30.0
5.00
20.0
4.50
10.0
4.00
0.0
3.50
(10.0)
3.00
Source: Bloomberg, Angel Research
Source: RBI, Angel Research
Market Outlook
January 05, 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)
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
-
Source: IMF, Angel Research
Market Outlook
January 05, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
C ountry
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
78,647
9.3
6.6
34.0
Russia
Micex
2,198
4.3
5.8
(1.0)
India
Nifty
10,505
3.7
5.9
28.4
China
Shanghai Composite
3,386
2.5
1.1
8.7
South Africa
Top 40
52,663
(1.1)
5.0
19.0
Mexico
Mexbol
49,745
5.6
(1.2)
6.8
Indonesia
LQ45
1,067
7.7
7.9
22.3
Malaysia
KLCI
1,803
5.0
2.8
11.5
Thailand
SET 50
1,167
6.9
9.0
24.1
USA
Dow Jones
25,075
3.5
10.7
26.0
UK
FTSE
7,696
5.0
3.0
6.7
Japan
Nikkei
23,506
3.4
15.4
21.1
Germany
DAX
13,168
1.1
2.6
13.7
France
CAC
5,414
0.8
0.9
10.7
Source: Bloomberg, Angel Research p68in4
Market Outlook
January 05, 2018
Research Team Tel: 022 - 39357800
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