Market Outlook
April 05, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open positive tracking global indices and SGX Nifty.
BSE Sensex
(1.1)
(352)
33,019
U.S. stocks showed a substantial turnaround over the course of the trading session
Nifty
(1.1)
(117)
10,128
after moving sharply lower at the open. The major averages climbed well off their
Mid Cap
(0.9)
(150)
16,185
lows of the session and firmly into positive territory. The Dow Jones jumped up by
Small Cap
(1.0)
(179)
17,450
1.1% to close at 24,264. The NASDAQ ended up by 1.5% to close at 7,042.
Bankex
(1.6)
(447)
26,944
U.K. stocks extended losses from the previous session amid persisting worries about
global trade war. The FTSE 100 was up by 0.1% to end at 7,034.
Global Indices
Chg (%)
(Pts)
(Close)
On domestic front, Indian shares gave up early gains to end sharply lower on last
Dow Jones
1.0
231
24,264
trading session amid persisting worries about global trade war. The BSE Sensex
Nasdaq
1.5
101
7,042
ended down by 1.1% at 33,019.
FTSE
0.1
4
7,034
News Analysis
Nikkei
1.6
348
21,668
Adani forays into road infra, wins Rs 1,140cr road project in Chhattisgarh
Hang Seng
(2.2)
(661)
29,519
Shanghai Com
(0.2)
(6)
3,131
Detailed analysis on Pg2
Investor’s Ready Reckoner
Advances / Declines
BSE
NSE
Key Domestic & Global Indicators
Advances
1,165
736
Stock Watch: Latest investment recommendations on 150+ stocks
Declines
1,491
1,064
Refer Pg5 onwards
Unchanged
146
61
Top Picks
CMP
Target
Upside
Volumes (` Cr)
Company
Sector
Rating
(`)
(`)
(%)
BSE
3,456
Blue Star
Capital Goods Accumulate
777
867
11.5
Dewan Housing Finance
Financials
Buy
521
720
38.1
NSE
32,857
Century Plyboards
Forest Product
Buy
334
400
19.8
Navkar Corporation
Others
Buy
170
265
55.5
Net Inflows (` Cr)
Net
Mtd
Ytd
KEI Industries
Capital Goods Accumulate
411
470
14.4
FII
(475)
(475)
13,132
More Top Picks on Pg4
*MFs
42
749
35,209
Key Upcoming Events
Previous
Consensus
Date
Region
Event Description
Top Gainers
Price (`)
Chg (%)
ReadingExpectations
Apr 05, 2018 US
Initial Jobless claims
215.00
225.00
RPOWER
42
11.4
Apr 05, 2018 Germany PMI Services
54.20
54.20
KWALITY
59
10.0
Apr 05, 2018 India
RBI Repo rate
6.00
6.00
RNAVAL
30
5.0
Apr 05, 2018 India
RBI Reverse Repo rate
5.75
5.75
Apr 05, 2018 India
RBI Cash Reserve ratio
4.00
4.00
REPCOHOME
598
4.4
More Events on Pg7
TATAMOTORS
356
3.6
Top Losers
Price (`)
Chg (%)
ADANIENT
152
-6.5
HCC
24
-5.1
NETWORK18
59
-5.1
VAKRANGEE
190
-5.0
JPASSOCIAT
19
-4.7
As on April 04, 2018
Market Outlook
April 05, 2018
News Analysis
Adani forays into road infra, wins Rs 1,140cr road project in
Chhattisgarh
Adani Group won a transport infrastructure with a Rs 1,140-crore highway project
won by a consortium led by its holding firm in Chhattisgarh from the National
Highways Authority of India (NHAI). The group's flagship firm Adani Enterprises Ltd
(AEL) has been exploring opportunities in the sector.
The Rs 1,140 crore project won by AEL pertains to four-laning with paved shoulder
of 53.3 km stretch on Bilaspur-Pathrapali section of NH-111 (New NH-130) in
Chhattisgarh under Bharatmala Pariyojana on Hybrid Annuity Mode (HAM).
Company has recently participated in tender issued by NHAI under Bharatmala
Pariyojana, and the company-led consortium has received a letter of award (LOA)
from the NHAI for the project.
Economic and Political News
Union Cabinet approves amendments to Protection of Human Rights Bill
Government sets up grievance redress mechanism for tech glitches on GST
portal
Civil aviation ministry reviews progress of Noida airport project at Jewar
Corporate News
Mukesh Ambani, Sunil Mittal plan Rs 365bn war chest in telecom fight
Kolkata Port to revive ship repairing facilities with Cochin Shipyard deal
Ashok Leyland rolls out 200,000th unit of 'Dost' LCV from TN plant
Radisson to have 200 hotels in India by 2022, will add 10,000 employees
Market Outlook
April 05, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
Strong growth in domestic business due to its
leadership in acute therapeutic segment. Alkem
Alkem Laboratories
22,629
1,893
2,441
29.0
expects to launch 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
Blue Star
7,464
777
867
11.5
the 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
16,353
521
720
38.1
presence in tier-II & III cities where the growth
opportunity is immense.
Well capitalized with CAR of 18.1% which gives
sufficient room to grow asset base. Faster resolution
ICICI Bank
1,72,559
268
416
55.0
of NPA would reduce provision cost, which would
help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,220
411
470
14.4
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
2,197
385
475
23.4
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,565
170
265
55.5
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would boost
Siyaram Silk Mills
2,920
623
851
36.6
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
TV Today Network
2,925
490
603
23.0
the 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
Maruti
2,72,331
9,015
10,619
17.8
Gujarat plant will also enable higher operating
leverage which will be margin accretive.
We expect loan book to grow at 24.3% over next
GIC Housing
2,035
378
655
73.3
two 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
Century Plyboards
7,416
334
400
19.8
growth in plywood & lamination business, forayed
into MDF & Particle boards on back of strong brand
& distribution network.
We expect sales/PAT to grow at 13.5%/20% over
LT Foods
2,827
88
128
44.8
next 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
Safari Industries
1,256
564
650
15.2
distribution network is 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
HSIL Ltd
2,846
394
510
29.6
operating margin due price hike in container glass
segment, turnaround in consumer business.
We expect financialisation of savings and increasing
Aditya Birla Capital
31,955
152
230
51.3
penetration in Insurance & Mutual fund would
ensure steady growth.
Source: Company, Angel Research
Market Outlook
April 05, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,755
282
360
27.5
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
2,385
1,599
2,178
36.2
demand growth in plastic division. On the bottom-line
front, we estimate ~10% CAGR to `162cr owing to
improvement in volumes.
The prism has diversified exposure in the different
segment such as Cement, Tile & ready mix concrete.
Prism Cement
5,673
113
160
42.0
Thus we believe, PCL is in the right place to capture
ongoing government spending on affordable housing
and infrastructure projects.
Elantas Beck India is the Indian market leader in liquid
insulation segment used in electrical equipments like
Elantas Beck India Ltd
1,664
2,100
2,500
19.1
motors, transformers etc. It derives 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 medium density fibreboards
(MDF). GIL to report net revenue CAGR of ~14% to
Greenply Industries
3,926
320
395
23.4
~`2,478cr over FY2017-20E mainly due to healthy
growth in plywood & lamination business on the back
of strong brand and distribution network
Source: Company, Angel Research
Market Outlook
April 05, 2018
Key Upcoming Events
Global economic events release calendar
Bloomberg Data
Date
Time Country
Event Description
Unit
Period
Last Reported
Estimated
Apr 05, 2018
6:00 PMUS
Initial Jobless claims
Thousands
Mar 31
215.00
225.00
1:25 PMGermany
PMI Services
Value
Mar F
54.20
54.20
2:30 PMIndia
RBI Repo rate
%
Apr 5
6.00
6.00
2:30 PMIndia
RBI Reverse Repo rate
%
Apr 5
5.75
5.75
2:30 PMIndia
RBI Cash Reserve ratio
%
Apr 5
4.00
4.00
Apr 06, 2018
US
Producer Price Index (mom)
% Change
Mar
(0.30)
6:00 PMUS
Change in Nonfarm payrolls
Thousands
Mar
313.00
185.00
Apr 10, 2018
6:00 PMUS
Unnemployment rate
%
Mar
4.10
4.00
Apr 11, 2018
6:00 PMUS
Consumer price index (mom)
% Change
Mar
0.20
-
2:00 PMUK
Industrial Production (YoY)
% Change
Feb
1.60
7:00 AMChina
Consumer Price Index (YoY)
% Change
Mar
2.90
2.60
Apr 12, 2018
India
Imports YoY%
% Change
Mar
10.41
India
Exports YoY%
% Change
Mar
4.48
5:30 PMIndia
Industrial Production YoY
% Change
Feb
7.50
Apr 13, 2018
China
Exports YoY%
% Change
Mar
44.50
10.90
Apr 16, 2018
12:00 PMIndia
Monthly Wholesale Prices YoY%
% Change
Mar
2.48
Apr 17, 2018
2:00 PMUK
Jobless claims change
% Change
Mar
9.20
6:00 PMUS
Housing Starts
Thousands
Mar
1,236.00
1,260.00
6:45 PMUS
Industrial Production
%
Mar
0.95
0.70
6:00 PMUS
Building permits
Thousands
Mar
1,321.00
1,320.00
7:30 AMChina
Industrial Production (YoY)
% Change
Mar
6.20
6.50
7:30 AMChina
Real GDP (YoY)
% Change
1Q
6.80
6.80
Apr 18, 2018
2:00 PMUK
CPI (YoY)
% Change
Mar
2.70
2:30 PMEuro Zone Euro-Zone CPI (YoY)
%
Mar F
1.40
Source: Bloomberg, Angel Research
Market Outlook
April 05, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
10.0
10.0
9.1
8.8
9.0
7.5
8.0
8.1
8.0
7.1
7.6
7.6
8.0
7.3
7.2
7.2
6.8
6.0
4.8
7.0
6.5
4.4
6.1
4.1
5.7
4.0
3.2
2.9
6.0
1.8
5.0
2.0
1.0
4.0
-
3.0
(0.3)
(2.0)
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
3.9
50.0
4.0
3.6
3.3
3.3
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
April 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
April 05, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
84,360
(1.6)
10.9
31.2
Russia
Micex
4,411
1.4
7.1
11.4
India
Nifty
10,128
(3.5)
(3.3)
10.8
China
Shanghai Composite
3,131
(3.9)
(4.4)
(4.2)
South Africa
Top 40
48,052
(6.5)
(8.5)
6.3
Mexico
Mexbol
47,457
0.0
(2.9)
(2.2)
Indonesia
LQ45
1,004
(7.2)
(4.3)
9.5
Malaysia
KLCI
1,816
(1.4)
1.1
4.1
Thailand
SET 50
1,137
(4.4)
(1.7)
14.2
USA
Dow Jones
24,264
(1.1)
(1.8)
17.3
UK
FTSE
7,034
(2.0)
(8.0)
(3.9)
Japan
Nikkei
21,320
0.7
(6.9)
11.0
Germany
DAX
11,958
(1.9)
(7.1)
(2.4)
France
CAC
5,142
(2.3)
(2.8)
0.4
Source: Bloomberg, Angel Research p68in4
