Market Outlook

February 12, 2018

Market Cues

Domestic Indices

Chg (%)

(Pts)

(Close)

Indian markets are likely to open positive tracking global indices and SGX Nifty.

BSE Sensex

(1.2)

(407)

34,006

US stocks saw substantial volatility over the course of the last trading session. The

Nifty

(1.2)

(122)

10,455

major averages showed wild swings as the day progressed before closing notably

Mid Cap

(0.1)

(14)

16,635

higher. The Dow Jones ended on an upside front of 1.4% to close at 24,191 and the

Small Cap

0.2

18,173

Nasdaq Composite edged up to 1.4%, to 6,874.

Bankex

(1.7)

(514)

28,882

U.K. shares drifted lower on last trading session, although a rebound in U.S. stock

futures helped to limit overall losses to some extent. The FTSE 100 was down by

Global Indices

Chg (%)

(Pts)

(Close)

1.1% to close at 7,092.

Dow Jones

1.4

330

24,191

Nasdaq

1.4

6,874

On domestic front, Indian shares opened sharply lower after the Dow Jones

Industrial Average plunged more than 4 percent overnight to enter correction

FTSE

(1.1)

(78)

7,092

territory on worries over rising inflation and higher interest rates. The Sensex ended

Nikkei

(2.3)

(508)

21,383

on a downside front of 1.2% at 34,006 while the Nifty ended at 10,455 with

Hang Seng

0.7

207

29,714

andownside of 1.2%.

Shanghai Com

(0.1)

(3)

3,127

News Analysis

Advances / Declines

BSE

NSE

 Mahindra & Mahindra sells 22% stake in JV Mahindra Sanyo for Rs 1.46bn

Advances

1,377

849

Detailed analysis on Pg2

Declines

1,410

933

Investor’s Ready Reckoner

Unchanged

140

Key Domestic & Global Indicators

Stock Watch: Latest investment recommendations on 150+ stocks

Volumes (` Cr)

Refer Pg5 onwards

BSE

4,044

NSE

31,582

Top Picks

CMP

Target

Upside

Company

Sector

Rating

(`)

(%)

Net Inflows (` Cr)

Net

Mtd

Ytd

Blue Star

Capital Goods

Buy

742

867

16.9

FII

(2,226)

(3,573)

9,411

Dewan Housing Finance

Financials

Buy

514

712

38.4

Asian Granito

Other

Buy

517

651

25.9

*MFs

2,221

3,643

12,666

Navkar Corporation

Other

Buy

171

265

54.8

KEI Industries

Capital Goods Accumulate

382

436

14.1

Top Gainers

Price (`)

Chg (%)

More Top Picks on Pg4

Fortis

148

17.6

Key Upcoming Events

Sail

9.1

Consensus

Date

Region

Event Description

Hfcl

8.1

Reading

Expectations

Bfutilitie

473

7.6

Feb12

Euro Zone Euro-Zone GDP s.a. (QoQ)

0.60

Feb13

India

Industrial Production YoY

8.40

Ibrealest

228

7.1

Feb14

CPI (YoY)

3.00

Feb14

India

Monthly Wholesale Prices YoY%

3.58

Top Losers

Price (`)

Chg (%)

Feb14

Consumer price index (mom)

0.20

0.30

More Events on Pg7

Glenmark

535

(7.4)

Jmfinancil

151

(4.8)

Hathway

(4.5)

Oberoirlty

457

(4.3)

Dbcorp

315

(4.3)

As on February 09 2018

www.angelbroking.com

Market Outlook

February 12, 2018

News Analysis

Mahindra & Mahindra sells 22% stake in JV Mahindra Sanyo for Rs

1.46bn

Mahindra & Mahindra will sell

22 per cent of its stake in joint venture

firm Mahindra Sanyo to Sanyo Special Steel Co Ltd for Rs 1.46 billion.

MSSSPL is a joint venture (JV) between M&M (51 per cent) India, Sanyo Special

Steel Co Ltd (29 per cent) Japan and Mitsui & Co Ltd (20 per cent) Japan.

"Following the sale, company's shareholding in MSSSPL would come down to 29

per cent from 51 per cent of its share capital, and MSSSPL will cease to be a

subsidiary of the company". The transaction is expected to be completed by March

31 depending upon receipt of requisite approvals.

Economic and Political News

 Direct tax collection grows 19.3% to Rs 6.95 trillion in Apr-Jan 2017-18

 Modi to solidify India's economic footprint in West Asia in 3-nation tour

 According to reports, Railways collected over Rs 8.5 billion in ticket-related

fines

 Investigation notices issued in 9 cases under anti-GST profiteering

Corporate News

 Steel and mining companies still bearing the brunt of ban in Karnataka,

Goa

 Mahindra & Mahindra sells 22% stake in JV Mahindra Sanyo for Rs 1.46bn

 Malvinder & Shivinder Singh took Rs 5 bn out of Fortis without board nod

www.angelbroking.com

Market Outlook

February 12, 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

26,056

2,179

2,441

12.0

more products in USA, which bodes for its international

business.

We expect the company would report strong profitability

Asian Granito

1,556

517

651

25.9

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

7,117

742

867

16.9

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

16,136

514

712

38.4

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

8,198

113

160

41.8

Increasing share of CASA will help in NIM

improvement.

High order book execution in EPC segment, rising B2C

KEI Industries

2,994

382

436

14.1

sales and higher exports to boost the revenues and

profitability

Expected to benefit from the lower capex requirement

Music Broadcast

2,022

354

475

34.0

and 15 year long radio broadcast licensing.

Massive capacity expansion along with rail advantage

Navkar Corporation

2,576

171

265

54.8

at ICD as well CFS augur well for the company

Strong brands and distribution network would boost

Siyaram Silk Mills

3,186

680

851

25.2

growth going ahead. Stock currently trades at an

inexpensive valuation.

Market leadership in Hindi news genre and no.

viewership ranking in English news genre, exit from the

TV Today Network

2,855

479

508

6.1

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

2,70,254

8,946

10,619

18.7

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

2,202

409

655

60.2

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

7,154

322

400

24.2

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

2,891

128

41.6

two years on the back of strong distribution network &

addition of new products in portfolio.

We expect financialisation of savings and increasing

Aditya Birla Capital

36942

167

230

36.9

penetration in Insurance & Mutual fund would ensure

steady growth.

Source: Company, Angel Research

www.angelbroking.com

Market Outlook

February 12, 2018

Fundamental Call

Market Cap

CMP

Target

Upside

Company

Rationale

(` Cr)

(`)

(%)

CCL is likely to maintain the strong growth trajectory

CCL Products

3,912

294

360

22.4

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

2,624

1,758

2,178

23.9

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

239

173

247

43.0

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

6,707

133

160

20.1

Thus we believe, PCL is in the right place to capture

ongoing government spending on affordable housing

and infrastructure projects.

Source: Company, Angel Research