Market Outlook
April 12, 2019
Domestic Indices
Chg (%)
(Pts)
(Close)
Market Cues
BSE Sensex
0.1
21
38,607
Indian markets are likely to open negative tracking global indices and SGX Nifty.
Nifty
0.2
12
11,596
US Stocks fluctuated over the course of the trading session on Thursday before
Mid Cap
0.09
14
15,382
eventually ending the day little changed. The major averages spent a big chunk of
Small Cap
(0.02)
(3)
14,966
the day bouncing back and forth across the unchanged line. The Dow edged down
Bankex
(0.3)
(90)
33,484
0.1 percent to 26,143 and the Nasdaq dipped 0.2 percent to 7,947.
U.K. markets slipped into the red on Thursday as growth worries pulled down
Global Indices
Chg (%)
(Pts)
(Close)
mining stocks and insurers fell on going ex-dividend. The FTSE 100 was down by
Dow Jones
(0.1)
(15)
26,143
0.1% to 7,415.
Nasdaq
(0.2)
(16)
7,947
On domestic front, Indian shares ended Thursday's choppy session on a flat note as
FTSE
(0.1)
(6)
7,415
91 constituencies spread across 18 States and two Union Territories went to polls
Nikkei
0.1
24
21,711
today in the first phase of Lok Sabha elections. The benchmark BSE Sensex was
Hang Seng
(0.9)
(280)
29,839
ended up by 0.1% to 38,607 at the end of trading session.
Shanghai Com
(1.6)
(52)
3,189
News Analysis
Advances / Declines
BSE
NSE
L&T acquires TN Industrial Development Corp's stake in L&T Shipbuilding
1,511
1,145
Advances
1,072
638
Naresh Goyal has pledged 26% stake in Jet as security for loans from PNB
Declines
155
118
Unchanged
Detailed analysis on Pg2
Investor’s Ready Reckoner
Volumes (` Cr)
Key Domestic & Global Indicators
BSE
2,709
Stock Watch: Latest investment recommendations on 150+ stocks
NSE
30,164
Refer Pg5 onwards
Net Inflows (` Cr)
Net
Mtd
Ytd
Top Picks
CMP
Target
Upside
FII
(895)
822
(199)
Company
Sector
Rating
(`)
(`)
(%)
*MFs
(518)
5,097
6,274
Blue Star
Capital Goods
Buy
683
867
26.9
ICICI Bank
Financials
Buy
390
460
17.9
Top Gainers
Price (`)
Chg (%)
Parag Milk Foods
Others
Buy
247
330
33.4
Bata India
Others
Accumulate
1,384
1,479
6.9
66
15.8
KEI Industries
Capital Goods
Buy
398
486
22.2
527
9.4
More Top Picks on Pg4
102
7.2
127
5.9
Key Upcoming Events
Previous
Consensus
436
4.9
Date
Region
Event Description
ReadingExpectations
Mar 26, 2019
TU Central Bank Inflation Report
Top Losers
Price (`)
Chg (%)
Mar 27, 2019
TH Exports YoY
0.06
--
84
-5.4
Mar 27, 2019
TH Exports
$22380m
--
Mar 30, 2019
TH Imports YoY
0.24
--
RCOM
3
-4.9
Mar 30, 2019
TH Imports
$21776m
--
182
-3.8
More Events on Pg7
63
-3.4
177
-3.3
As on Apr 11, 2019
Market Outlook
April 12, 2019
News Analysis
L&T acquires TN Industrial Development Corp's stake in
L&T Shipbuilding
Larsen & Toubro Limited has acquired Tamil Nadu Industrial Development
Corporation Limited's (TIDC0) three per cent stake in L&T Shipbuilding Limited,
making it a wholly owned subsidiary. The company is into shipbuilding and has
yard in North Chennai. The company has acquired the stake for Rs 32.74 crore
from TIDCO, which held three per cent in the company. L&T Shipbuilding was
incorporated in
Chennai. The facility carries out shipbuilding and ship related activities including
manufacturing and building of warships, auxiliary vessels/ crafts and specialised
commercial ships. In addition, the yard also undertakes repairs and refits of both
defence and commercial ships.
Naresh Goyal has pledged 26% stake in Jet as security for
loans from PNB
26 per cent stake in the
ailing airline as security for loans from Punjab National Bank, according to a
regulatory filing. Last month, Goyal and his wife Anita Goyal quit the board
informed the stock exchanges that Goyal has pledged over 29.5 million shares or
4 as "security for existing/ new borrowings taken by Jet Airways (India) Ltd," the
filing to the BSE said. Goyal gave up the chairmanship of Jet Airways, which he
founded more than 25 years ago, under a debt restructuring plan wherein lenders
have taken control of the carrier.
Economic and Political News
Climbing oil prices put India's benign inflation outlook at risk
Unemployment in 11 states exceeds national average, shows NSSO report
India brings down trade deficit with China by $10 billion in 2019
Sugar mills owe $4.38 billion to cane growers who are unpaid from a year
IMF flags concern over India's high stock of bad bank loans
Corporate News
Reliance Jio brings current affairs, news offerings on single platform
Delay in infusing Rs 1,500 crore emergency funds puts Jet Airways in a spot
Panasonic India to launch facial recognition tech for Indian market by 2020
Combination drug market declines 56% in March as govt clamps down
NMDC's new integrated steel plant to add $1.7 billion to topline
Market Outlook
April 12, 2019
Quarterly Bloomberg Brokers Consensus Estimate
Infosys Ltd - April 12, 2019
Particulars (` cr)
4QFY19E
4QFY18
y-o-y (%)
3QFY19
q-o-q (%)
Sales
21,460
18,083
18.7
21,400
0.3
EBIDTA
5,308
4,812
10.3
4,959
7.1
%
24
27
23
PAT
3,952
3,690
7.1
3,609
9.5
TCS Ltd - April 12, 2019
Particulars (` cr)
4QFY19E
4QFY18
y-o-y (%)
3QFY19
q-o-q (%)
Sales
37,827
32,075
17.9
37,338
1.3
1.1
EBIDTA
10,192
8,652
17.8
10,083
%
26
27
27
PAT
7,968
6,904
15.4
8,105
(1.7)
Market Outlook
April 12, 2019
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
Favorable outlook for the AC industry to augur well
for Cooling products business which is out pacing
Blue Star
6,579
683
867
26.9
the market growth. EMPPAC division's profitability
to improve once operating environment turns
around.
Well capitalized with CAR of 18.1% which gives
sufficient room to grow asset base. Faster
ICICI Bank
2,51,475
390
460
17.9
resolution of NPA would reduce provision cost,
which would help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,140
398
486
22.2
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
1,596
57
95
68.1
requirement and 15 year long radio broadcast
licensing.
Strong brands and distribution network would
Siyaram Silk Mills
2,029
433
606
40.0
boost growth going ahead. Stock currently trades
at an inexpensive valuation.
GST regime and the Gujarat plant are expected to
Maruti Suzuki
2,16,872
7,179
10,820
50.7
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
1,405
261
424
62.5
two year; change in borrowing mix will help in NIM
improvement
Third largest brand play in luggage segment
Increased product offerings and improving
Safari Industries
1,635
732
1,000
36.6
distribution network is leading to strong growth in
business. Likely to post robust growth for next 3-4
years
We expect financialisation of savings and
Aditya Birla Capital
21,695
99
151
53.2
increasing penetration in Insurance & Mutual fund
would ensure steady growth.
One of the leading Indian dairy products
companies in India created strong brands in dairy
products. Rising revenue share of high-margin
Parag Milk Foods
2,081
247
330
33.4
Value Added Products and reduction in interest cost
is likely to boost margins and earnings in next few
years.
HDFC Bank maintained its steady growth in the
4QFY18. The bank’s net profit grew by 20.3%.
Steady growth in interest income and other income
HDFC Bank
6,14,596
2,257
2,500
10.8
aided PAT growth. The Strong liability franchise
and healthy capitalisation provides strong earning
visibility. At the current market price, the bank is
trading at 3.2x FY20E ABV.
Market Outlook
April 12, 2019
Continued...
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect strong PAT growth on back of
healthy growth in automobile segment (on back
of new launches and facelifts in some of the
M&M
83,561
672
1,050
56.2
model ) and strong growth in Tractors segment
coupled by its strong brand recall and
improvement in rural sentiment
Market leader in the room air conditioner (RAC)
outsourced manufacturing space in India with a
market share of
55.4%. It is a one-stop
Amber Enterprises
2,625
835
984
17.9
solutions provider for the major brands in the
RAC industry and currently serves eight out of
the 10 top RAC brands in India
BIL is the largest footwear retailer in India,
offering footwear, accessories and bags across
brands. We expect BIL to report net PAT CAGR
of
~16% to
~`3115cr over FY2018-20E
Bata India
17,782
1,384
1,479
6.9
mainly due to new product launches, higher
number of stores addition and focus on
women’s high growth segment and margin
improvement
SHTF is in the sweet spot with benefits from
stronger CV volumes, NIMs unaffected by rising
Shriram Transport Finance
27,456
1,210
1,764
45.8
bond yields on the back of stronger pricing
power and an enhancing ROE by 750bps over
FY18-20E, supported by decline in credit cost.
We expect JSPL’s top line to grow at 27% CAGR
over FY19-FY20 on the back of strong steel
demand and capacity addition. On the bottom
Jindal Steel & Power Limited
17,133
177
327
84.7
line front, we expect JSPL to turn in to profit by
FY19 on back of strong operating margin
improvement.
GMM Pfaudler Limited (GMM) is the Indian
market leader in glass-lined (GL) steel
equipment. GMM is expected to cross CAGR
GMM Pfaudler Ltd
1,747
1,195
1,400
17.1
15%+ in revenue over the next few years
mainly led by uptick in demand from user
industries and it is also expecting to increase its
share of non-GL business to 50% by 2020.
Aurobindo Pharmaceuticals, amongst the
Indian Pharmaceutical companies, is well
placed to face the challenging generic markets,
given its focus on achieving growth through
Aurobindo Pharmaceuticals
45,933
784
890
13.5
productivity. Aurobindo will report net revenue
& net profit CAGR of ~13% & ~8% resp.
during FY2018-20E. Valuations are cheap V/s
its peers and own fair multiples of 17-18x.
We believe advance to grow at a healthy CAGR
of 35% over FY18-20E. Below peers level ROA
RBL Bank
28,334
664
763
14.9
(1.2% FY18) to expand led by margin
expansion and lower credit cost.
TTK Prestige has emerged as one of the leading
brands in kitchen appliances in India after its
successful transformation from a single product
TTK Prestige
9,699
8,396
9,250
10.2
company to offering an entire gamut of home
and kitchen appliances. We are expecting a
CAGR of 18% in revenue and 25% in PAT over
FY2018-20.
Maintain Hold.
Source: Company, Angel Research
Market Outlook
April 12, 2019
Continued...
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect Inox Wind to report exponential
growth in top-line and bottom-line over FY19-
20E. The growth would be led by changing
renewable energy industry dynamics in favor of
Inox Winds
1,508
68
120
76.6
wind energy segment viz. changes in auction
regime from Feed-In-Tariff (FIT) to reverse
auction regime and Government’s guidance for
10GW auction in FY19 and FY20 each.
Considering the strong CV demand due to
change in BS-VI emission norms (will trigger
pre-buying activities), pick up in construction
Ashok Leyland
27,682
94
156
65.4
activities and no significant impact on industry
due to recent axle load norms, we recommend
BUY on Ashok Leyland at current valuations.
Source: Company, Angel Research
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth
CCL Products
3,666
276
360
30.6
trajectory 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
Nilkamal
2,034
1,363
2,178
59.8
healthy demand growth in plastic division. On the
bottom-line front, we estimate
~10% CAGR to
`162cr owing to improvement in volumes.
Elantas Beck India is the Indian market leader in
liquid insulation segment used in electrical
equipments like motors, transformers etc. It derives
Elantas Beck India Ltd
1,835
2,314
2,500
8.0
demand from several industries which are expected
to register 10%+ CAGR in demand in the coming
years. We can book out from the stock with 16%
profit at Rs. 2500 TP.
Greenply Industries Ltd (GIL) manufactures plywood
& allied products and medium density fibreboards
(MDF). GIL to report net revenue CAGR of ~14% to
Greenply Industries
2,071
169
256
51.6
~`2,478cr over FY2017-20E mainly due to healthy
growth in plywood & lamination business on the
back of strong brand and distribution network
L&T Fin’s new management is on track to achieve
L&T Finance Holding
29,393
147
210
42.8
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Well planned strategy to grow small business loans
and cross-selling would propel fees income. We
Yes Bank
62,251
269
290
7.8
expect YES to grow its advance much higher than
industry and improvement in asset quality to
support profitability.
