Market Outlook
March 05, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
(0.4)
(137)
34,047
U.S. stocks ended mostly higher on Friday, with the S&P 500 and the NASDAQ
Nifty
(0.3)
(34)
10,458
erasing an early decline to end higher as investors viewed the reaction to
Mid Cap
(0.6)
(101)
16,461
announcements of tariffs as overdone. The Dow, however, fell for a fourth straight
Small Cap
(0.2)
(43)
18,085
session and major indexes suffered sharp weekly losses. The SPX rose 0.51% to end
Bankex
(0.9)
(242)
28,072
at 2,691. The NASDAQ gained 1.08% to close at 7,258. The Dow fell 0.29% to
finish at 24,538.
Global Indices
Chg (%)
(Pts)
(Close)
U.K. index FTSE 100 finished at their lowest in more than a year Friday, keying off
Dow Jones
(0.29)
(71)
24,538
losses kicked off on Wall Street by fears that new U.S. tariffs on steel and aluminum
imports will spark a global trade war. The FTSE 100 sank -1.47% sank to end at
Nasdaq
1.08
77
7,258
7,070.
FTSE
(1.5)
(105)
7.070
Nikkei
(1.6)
(344)
21,724
Indian stock markets remained closed today on account of Holi. Indian indexes
Sensex and the Nifty dropped 0.4% and 0.3%, respectively on Thursday to extend
Hang Seng
0.6
200
31,044
losses for a third straight session as Fed rate hike worries overshadowed upbeat core
Shanghai Com
0.4
14
3,274
sector and GDP data.
Advances / Declines
BSE
NSE
News Analysis
Advances
1,170
684
Bajaj Corp sharpens rural focus to drive volumes
Declines
1,560
1,070
Detailed analysis on Pg2
Unchanged
155
99
Investor’s Ready Reckoner
Volumes (` Cr)
Key Domestic & Global Indicators
BSE
3,926
Stock Watch: Latest investment recommendations on 150+ stocks
Refer Pg5 onwards
NSE
27,985
Top Picks
Net Inflows (` Cr)
Net
Mtd
Ytd
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
FII
(875)
(10,773)
2,211
Blue Star
Capital Goods Accumulate
756
867
14.6
*MFs
1,673
13,261
22,284
Dewan Housing Finance
Financials
Buy
538
720
33.9
Century Plyboards
Forest Products
Buy
330
400
21.1
Top Gainers
Price (`)
Chg (%)
Navkar Corporation
Other
Buy
171
265
55.1
KEI Industries
Capital Goods Accumulate
384
436
13.5
Inoxwind
135
9.6
More Top Picks on Pg4
Idbi
80
7.6
Iifl
799
5.8
Key Upcoming Events
Thermax
1,211
4.7
Previous
Consensus
Date
Region
Event Description
Reading
Expectations
Dalmiabha
2,750
4.6
Mar05
UK
PMI Manufacturing
55.30
55.00
Mar07
Germany PMI Services
55.30
Top Losers
Price (`)
Chg (%)
Mar08
China
Exports YoY%
11.10
Mar08
Euro Zone ECB announces interest rates
-
Rain
362
(5.0)
Mar09
UK
Industrial Production (YoY)
-
Vakrangee
155
(5.0)
More Events on Pg7
Jubilant
834
(5.0)
Rajeshexpo
798
(4.7)
Indianb
317
(4.2)
As on March 01 2018
Market Outlook
March 05, 2018
News Analysis
Bajaj Corp sharpens rural focus to drive volumes
Fast moving consumer goods company Bajaj Corp is sharpening focus on rural
areas to drive volumes and is also scouting for acquisitions in the personal care
category.
The Company growth is coming largely from urban markets now and the growth
rate in rural markets is a lot slower since the past 18 months or so. This year focus
will be to both sustain urban growth at the same time also accelerate growth in
rural markets.
The company focuses on the `4,000cr valued added hair oil category that is
growing at 13 per cent and would be launching new hair oil next quarter. It
recently launched Coco Jasmine hair oil in Maharashtra, making its foray into the
coconut hair oil space
Economic and Political News
Loan defaults: Sebi to push for urgent disclosure by listed firms
Cabinet clears Fugitive Economic Offenders Bill
Trump to impose steep tariffs on steel, aluminium
NHAI cleared to raise ₹70,000 cr via capital market ...
Corporate News
Auto Sales: Hero MotoCorp February sales up 20 percent year-on-year
Aurobindo Pharma gets U.S. FDA form 483 for its Unit 4 with nine
observations.
L&T Finance to consider issue price for preferential issue to L&T on March 7.
Market Outlook
March 05, 2018
Top Picks
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
26,496
2,216
2,441
10.2
more products in USA, which bodes for its international
business.
Favorable outlook for the AC industry to augur well for
Cooling products business which is out pacing the
Blue Star
7,258
756
867
14.6
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
16,862
538
720
33.9
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
7,861
108
160
47.9
Increasing share of CASA will help in NIM
improvement.
High order book execution in EPC segment, rising B2C
KEI Industries
3,011
384
436
13.5
sales and higher exports to boost the revenues and
profitability
Expected to benefit from the lower capex requirement
Music Broadcast
2,248
394
475
20.5
and 15 year long radio broadcast licensing.
Massive capacity expansion along with rail advantage
Navkar Corporation
2,572
171
265
55.1
at ICD as well CFS augur well for the company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,047
650
851
30.9
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
2,734
458
508
10.8
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
2,68,129
8,876
10,619
19.6
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
2,124
394
655
66.1
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
7,339
330
400
21.1
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
2,983
93
128
37.3
two years on the back of strong distribution network &
addition of new products in portfolio.
Third largest brand play in luggage segment Increased
product offerings and improving distribution network is
Safari Industries
1,186
533
650
22.0
leading to strong growth in business. 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 improvement in operating
HSIL
3,145
435
510
17.3
margin due price hike in container glass segment,
turnaround in consumer business.
We expect financialisation of savings and increasing
Aditya Birla Capital
36204
162
230
41.9
penetration in Insurance & Mutual fund would ensure
steady growth.
Source: Company, Angel Research
Market Outlook
March 05, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,981
299
360
20.3
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 healthy
Nilkamal
2,482
1,663
2,178
31.0
demand growth in plastic division. On the bottom-line
front, we estimate ~10% CAGR to `162cr owing to
improvement in volumes.
We expect sales/PAT to grow at 9%/14% over next two
years on the back of healthy demand growth in
Shreyans Industries
211
153
247
61.9
printing. Further, China had banned making paper
from waste pulp which would benefit Indian paper
companies.
The prism has diversified exposure in the different
segment such as Cement, Tile & ready mix concrete.
Prism Cement
6,367
127
160
26.5
Thus we believe, PCL is in the right place to capture
ongoing government spending on affordable housing
and infrastructure projects.
Source: Company, Angel Research
