Market Outlook
March 09, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open positive tracking global indices and SGX Nifty.
BSE Sensex
1.0
318
33,352
U.S. stocks fluctuated over the course of the trading day. The major averages
Nifty
0.9
88
10,243
bounced back and forth across the unchanged line before closing firmly in positive
Mid Cap
0.6
89
16,044
territory. The Dow Jones rose by 0.4% to close at 24,895. The NASDAQ gained
Small Cap
0.5
87
17,357
0.4% to close at 7,428.
Bankex
1.4
389
27,560
U.K. stocks were modestly higher as trade war fears eased somewhat and investors
looked ahead to the European Central Bank's closely watched policy decision later in
Global Indices
Chg (%)
(Pts)
(Close)
the day for direction. The FTSE 100 was up by 0.6% to end at 7,203.
Dow Jones
0.4
94
24,895
On domestic front, Indian shares rebounded from six days of losses as trade
Nasdaq
0.4
31
7,428
tensions showed signs of easing amid expectations that U.S. trade tariffs are likely to
FTSE
0.6
45
7,203
be differentiated by country and product. BSE Sensex closed up by 1.0% at 33,352.
Nikkei
0.8
175
21,543
News Analysis
Hang Seng
0.9
282
30,936
TCS ranked as the fastest growing IT services brand in 2018
Shanghai Com
(0.1)
(2)
3,286
Detailed analysis on Pg2
Advances / Declines
BSE
NSE
Investor’s Ready Reckoner
Advances
1,204
835
Key Domestic & Global Indicators
Declines
1,543
959
Stock Watch: Latest investment recommendations on 150+ stocks
Unchanged
142
57
Refer Pg5 onwards
Top Picks
Volumes (` Cr)
CMP
Target
Upside
Company
Sector
Rating
BSE
3,998
(`)
(`)
(%)
Blue Star
Capital Goods Accumulate
784
867
10.6
NSE
30,327
Dewan Housing Finance
Financials
Buy
494
720
45.6
Century Plyboards
Forest Products
Buy
323
400
23.7
Net Inflows (` Cr)
Net
Mtd
Ytd
Navkar Corporation
Other
Buy
158
265
68.1
FII
(605)
224
716
KEI Industries
Capital Goods
Buy
358
436
22.0
*MFs
1,673
13,261
22,284
More Top Picks on Pg4
Key Upcoming Events
Top Gainers
Price (`)
Chg (%)
Previous
Consensus
Date
Region
Event Description
Reading
Expectations
TRENT
333
7.2
Mar09
Euro Zone ECB announces interest rates
-
-
AEGISLOG
245
7.1
Mar09
China
Consumer Price Index (YoY)
1.50
2.50
CENTRALBK
70
5.4
Mar09
India
Industrial Production YoY
7.10
LAKSHVILAS
101
5.3
Mar09
US
Change in Nonfarm payrolls
200.00
200.00
Mar12
US
Unnemployment rate
4.10
4.00
AIAENG
1,437
5.1
More Events on Pg7
Top Losers
Price (`)
Chg (%)
RECLTD
126
(7.3)
BALRAMCHIN
90
(6.6)
IDBI
75
(5.6)
ADANIPOWER
26
(5.3)
BEML
1,139
(4.9)
As on March 08 2018
Market Outlook
March 09, 2018
News Analysis
TCS ranked as the fastest growing IT services brand in 2018
Leading global IT services organization, Tata Consultancy Services (TCS), was
named as the fastest growing IT services brand in the world in an assessment done
by leading brand valuation firm, Brand Finance. According to Brand Finance IT
Services 15 annual report for 2018, TCS now has a total brand value of $10.391
billion; a growth of 14.4 percent from last year's total of $9.081 billion, with an
increase of $1.309 billion.
The new value is the fastest incremental growth of all companies in the industry,
and places TCS in the top three most valuable brands in the global IT services
sector along with IBM and Accenture. The brand strength was derived by
benchmarking brand related measures against competitors. Brand strength is used
to determine an appropriate stream of forecasted brand royalties, which is
discounted to a net present value, the brand value.
Economic and Political News
Cotton seed firms threaten to halt supply to 8 mn farmers over price cut
India set to achieve 20 GW solar energy capacities this fiscal itself
Direct tax collection rises 19.5% in the April-Feb period to Rs 7.44 trillion
Corporate News
TCS ranked as the fastest growing IT services brand in 2018
HC dismisses RCom's appeal against arbitration order on sale of assets
Adani Group's Rs 97.6-bn m-cap wiped-off on this tweet by Subramanian
Swamy
L&T moves NCLT, seeks Rs 9 billion from 'bankrupt' Bhushan Steel
Market Outlook
March 09, 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
26,744
2,237
2,441
9.1
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
7,525
784
867
10.6
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
15,509
494
720
45.6
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
7,305
101
160
59.1
Increasing share of CASA will help in NIM
improvement.
High order book execution in EPC segment, rising B2C
KEI Industries
2,801
358
436
22.0
sales and higher exports to boost the revenues and
profitability
Expected to benefit from the lower capex requirement
Music Broadcast
2,142
375
475
26.5
and 15 year long radio broadcast licensing.
Massive capacity expansion along with rail advantage
Navkar Corporation
2,372
158
265
68.1
at ICD as well CFS augur well for the company
Strong brands and distribution network would boost
Siyaram Silk Mills
2,836
605
851
40.6
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 the
TV Today Network
2,683
450
508
12.9
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
2,63,810
8,733
10,619
21.6
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
1,992
370
655
77.1
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
7,186
323
400
23.7
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
2,751
86
128
48.8
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
1,181
531
650
22.4
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
2,993
414
510
23.2
margin due price hike in container glass segment,
turnaround in consumer business.
We expect financialisation of savings and increasing
Aditya Birla Capital
35814
154
230
47.5
penetration in Insurance & Mutual fund would ensure
steady growth.
Source: Company, Angel Research
Market Outlook
March 09, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,910
294
360
22.5
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
2,475
1,659
2,178
31.3
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
197
143
247
73.3
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
6,040
120
160
33.3
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
1,635
2,062
2,500
21.3
motors, transformers etc. It derives demand from
several industries which are expected to register 10%+
CAGR in demand in the coming years.
RPL to report healthy top-line CAGR of ~13% over
FY17-20E on the back of healthy demand in printing &
Ruchira Papers Ltd.
374
167
244
46.5
writing paper segments. On the bottom-line front, we
estimate ~16% CAGR over FY17-20E owing to strong
improvement in operating performance.
Greenply Industries Ltd (GIL) manufactures plywood &
allied products and medium density fibreboards
(MDF). GIL to report net revenue CAGR of ~14% to
Greenply Industries
4,014
327
395
20.7
~`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
March 09, 2018
Key Upcoming Events
Global economic events release calendar
Bloomberg Data
Date
Time Country
Event Description
Unit
Period
Last Reported
Estimated
Mar 09, 2018
6:15 PMEuro Zone
ECB announces interest rates
%
Mar 8
-
-
7:00 AMChina
Consumer Price Index (YoY)
% Change
Feb
1.50
2.50
5:30 PMIndia
Industrial Production YoY
% Change
Jan
7.10
7:00 PMUS
Change in Nonfarm payrolls
Thousands
Feb
200.00
200.00
Mar 12, 2018
7:00 PMUS
Unnemployment rate
%
Feb
4.10
4.00
Mar 13, 2018
6:00 PMUS
Consumer price index (mom)
% Change
Feb
0.50
0.20
Mar 14, 2018
12:00 PMIndia
Monthly Wholesale Prices YoY%
% Change
Feb
2.84
US
Producer Price Index (mom)
% Change
Feb
0.70
Mar 15, 2018
India
Imports YoY%
% Change
Feb
26.10
India
Exports YoY%
% Change
Feb
9.10
Mar 16, 2018
3:30 PMEuro Zone
Euro-Zone CPI (YoY)
%
Feb F
1.20
6:45 PMUS
Industrial Production
%
Feb
(0.05)
0.25
6:00 PMUS
Housing Starts
Thousands
Feb
1,326.00
1,280.00
6:00 PMUS
Building permits
Thousands
Feb
1,377.00
1,320.00
Mar 20, 2018
3:00 PMUK
CPI (YoY)
% Change
Feb
3.00
8:30 PMEuro Zone
Euro-Zone Consumer Confidence
Value
Mar A
0.10
Mar 21, 2018
7:30 PMUS
Existing home sales
Million
Feb
5.38
3:00 PMUK
Jobless claims change
% Change
Feb
(7.20)
11:30 PMUS
FOMC rate decision
%
Mar 21
1.50
1.75
Mar 22, 2018
2:00 PMGermany
PMI Services
Value
Mar P
55.30
2:00 PMGermany
PMI Manufacturing
Value
Mar P
60.60
5:30 PMUK
BOE Announces rates
% Ratio
Mar 22
0.50
Mar 23, 2018
7:30 PMUS
New home sales
Thousands
Feb
593.00
Mar 27, 2018
7:30 PMUS
Consumer Confidence
S.A./ 1985=100
Mar
130.80
Source: Bloomberg, Angel Research
Market Outlook
March 09, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
10.0
10.0
9.1
8.8
9.0
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
2.0
5.0
2.0
1.2
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
3.9
50.0
3.7
3.6
4.0
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
March 09, 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
March 09, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
84,985
1.1
18.1
26.9
Russia
Micex
2,291
0.4
8.8
13.2
India
Nifty
10,243
(4.8)
1.1
15.1
China
Shanghai Composite
3,288
(5.6)
(0.9)
1.3
South Africa
Top 40
52,057
4.4
(0.7)
17.4
Mexico
Mexbol
48,240
(2.2)
2.3
1.5
Indonesia
LQ45
1,068
(2.4)
5.1
20.0
Malaysia
KLCI
1,840
(0.7)
7.1
8.6
Thailand
SET 50
1,170
(0.5)
7.4
19.6
USA
Dow Jones
24,895
2.3
2.5
19.4
UK
FTSE
7,203
0.9
(1.7)
(1.9)
Japan
Nikkei
21,368
(5.8)
(6.4)
10.2
Germany
DAX
12,356
(0.3)
(5.3)
3.1
France
CAC
5,254
1.8
(2.3)
5.6
Source: Bloomberg, Angel Research p68in4
Market Outlook
March 09, 2018
Research Team Tel: 022 - 39357800
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