Market Outlook
June 12, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
0.1
40
35,483
U.S. Stocks moved modestly higher over the course of the trading session on
Nifty
0.2
19
10,787
Monday. With the upward gains on the day, the Dow and the S&P 500 reached their
Mid Cap
(0.1)
(15)
16,008
best closing levels in three months. The Dow Jones was up by 0.1% to 25,316 and
Small Cap
0.5
86
16,973
the Nasdaq ended up by 0.2% to 7,645.
Bankex
0.1
16
29,609
U.K. stocks posted their best session in nearly two weeks, buoyed as the pound
pulled back in value, and as investors took on risk ahead of what’s set to be a
Global Indices
Chg (%)
(Pts)
(Close)
historic meeting between U.S. President Donald Trump and North Korean leader
Kim Jong Un. The benchmark FTSE 100 was rose by 0.7% at 7,731.
Dow Jones
0.1
06
25,322
Nasdaq
0.2
15
7,659
On domestic front, Indian shares market stayed high up in positive territory till a
FTSE
0.7
57
7,737
couple of hours past noon, but suddenly lost its momentum and very nearly plunged
into the red as investors turned cautious ahead of some crucial economic data. The
Nikkei
0.5
110
22,804
BSE Sensex was ended up by 0.1% to 35,483.
Hang Seng
0.3
105
31,064
Shanghai Com
(0.5)
(14)
3,053
News Analysis
Government may launch Rs 5-bn credit enhancement fund in July
Advances / Declines
BSE
NSE
Detailed analysis on Pg2
Advances
1,549
1,015
Declines
1,175
777
Investor’s Ready Reckoner
Unchanged
127
81
Key Domestic & Global Indicators
Stock Watch: Latest investment recommendations on 150+ stocks
Volumes (` Cr)
Refer Pg5 onwards
BSE
3,037
Top Picks
NSE
26,705
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
Blue Star
Capital Goods
Buy
688
867
26.1
Net Inflows (` Cr)
Net
Mtd
Ytd
Dewan Housing Finance
Financials
Buy
618
720
16.4
FII
(501)
2,756
494
Parag Milk Foods
Others
Buy
324
410
26.5
*MFs
935
1,201
60,573
Navkar Corporation
Others
Buy
146
230
57.4
KEI Industries
Capital Goods
Buy
437
589
34.9
More Top Picks on Pg4
Top Gainers
Price (`)
Chg (%)
APLLTD
521
19.9
Key Upcoming Events
Previous
Consensus
JAICORPLTD
148
19.3
Date
Region
Event Description
ReadingExpectations
CORPBANK
33
10.2
Jun 12, 2018 UK
Jobless claims change
31.20
PCJEWELLER
146
6.5
Jun 12, 2018 UK
CPI (YoY)
2.40
2.40
CENTRALBK
83
6.0
Jun 12, 2018 India
Industrial Production YoY
4.40
6.00
Jun 13, 2018 US
Consumer price index (mom)
0.20
0.20
Jun 13, 2018 US
Producer Price Index (mom)
(0.10)
Top Losers
Price (`)
Chg (%)
More Events on Pg7
TATASTEELPP
151
-5.2
KWALITY
29
-5.0
CRISIL
1763
-4.5
GSPL
183
-4.1
GRUH
350
-3.6
As on June 11, 2018
Market Outlook
June 12, 2018
News Analysis
Government may launch Rs 5-bn credit enhancement fund in July
The government is set launch a Rs 5-billion credit enhancement fund next month to
facilitate infrastructure investments by insurance and pension funds. The fund was
first announced in the financial budget for fiscal year 2016-17. "India is launching
a dedicated fund may be next month to provide credit enhancement for
infrastructure projects which will help in upgrading credit ratings of bonds issued
by infrastructure companies and facilitate investment from investors like pension
policy and finance), ministry of finance (MoF).
The initial corpus of the fund, to be sponsored by IIFCL
(India Infrastructure Finance Company), will be Rs 5bn, and it will operate as a
non-banking finance company, he said. Pratap said there is a "mismatch" at
BBB, whereas regulatory agencies mandate a rating of at least 'AA' for investments
fructification of the budget announcement to the time taken in amending the
also getting all stakeholders together.
Economic and Political News
Coal India's output increases to 567 mn tonnes in FY18
Corporate News
Market Outlook
June 12, 2018
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
6,614
688
867
26.1
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
19,395
618
720
16.4
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
ICICI Bank
1,84,383
287
416
45.1
resolution of NPA would reduce provision cost,
which would help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,422
437
589
34.9
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
1,847
324
475
46.7
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,200
146
230
57.4
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would
Siyaram Silk Mills
2,943
628
851
35.6
boost growth going ahead. Stock currently trades at
an inexpensive valuation.
GST regime and the Gujarat plant are expected to
Maruti
2,72,508
9,021
10,619
17.7
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,097
389
655
68.2
two year; change in borrowing mix will help in NIM
improvement
We expect sales/PAT to grow at 13.5%/20% over
LT Foods
2,236
70
128
83.1
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
1,407
631
720
14.1
distribution network is leading to strong growth in
business. Likely to post robust growth for next 3-4
years
Source: Company, Angel Research
Market Outlook
June 12, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
30,674
139
218
56.4
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
2,726
324
410
26.5
Value Added Products and reduction in interest cost
is likely to boost margins and earnings in next few
years.
We expect MCL to report net revenue CAGR of
~15% to ~`450cr over FY2018-20E mainly due to
strong growth in online matchmaking & marriage
Matrimony.com Ltd
1,655
729
1,016
39.5
related services. On the bottom-line front, we
expect a CAGR of ~28% to `82cr over the same
period on the back margin improvement.
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
5,32,414
2,045
2,315
13.2
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.
We expect strong PAT growth on back of healthy
growth in automobile segment (on back of new
launches and facelifts in some of the model ) and
M&M
1,13,242
914
1,016
11.5
strong growth in Tractors segment coupled by its
strong brand recall and improvement in rural
sentiment
Source: Company, Angel Research
Market Outlook
June 12, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,803
286
360
25.9
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
2,547
1,707
2,178
27.6
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
1,593
2,010
2,500
24.4
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
3,115
254
395
55.5
~`2,478cr over FY2017-20E mainly due to healthy
growth in plywood & lamination business on the
back of strong brand and distribution network
GMM Pfaudler Limited (GMM) is the Indian market
leader in glass-lined (GL) steel equipment. GMM is
expected to cross CAGR 15%+ in revenue over the
GMM Pfaudler Ltd
1,235
845
920
8.9
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.
L&T Fin’s new management is on track to achieve
L&T Finance Holding
33,479
168
210
25.2
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
June 12, 2018
Key Upcoming Events
Global economic events release calendar
Bloomberg Data
Date
Time Country
Event Description
Unit
Period
Last Reported
Estimated
Jun 12, 2018
2:00 PMUK
Jobless claims change
% Change
May
31.20
2:00 PMUK
CPI (YoY)
% Change
May
2.40
2.40
5:30 PMIndia
Industrial Production YoY
% Change
Apr
4.40
6.00
Jun 13, 2018
6:00 PMUS
Consumer price index (mom)
% Change
May
0.20
0.20
US
Producer Price Index (mom)
% Change
May
(0.10)
11:30 PMUS
FOMC rate decision
%
Jun 13
1.75
2.00
Jun 14, 2018
6:00 PMUS
Initial Jobless claims
Thousands
Jun 9
222.00
222.00
7:30 AMChina
Industrial Production (YoY)
% Change
May
7.00
7.00
12:00 PMIndia
Monthly Wholesale Prices YoY%
% Change
May
3.18
4.00
5:15 PMEuro Zone
ECB announces interest rates
%
Jun 14
-
-
Jun 15, 2018
2:30 PMEuro Zone
Euro-Zone CPI (YoY)
%
May F
1.90
1.90
6:45 PMUS
Industrial Production
%
May
0.72
0.30
India
Imports YoY%
% Change
May
4.60
6:00 PMUS
Housing Starts
Thousands
May
1,287.00
1,315.00
Jun 19, 2018
India
Exports YoY%
% Change
May
5.17
6:00 PMUS
Building permits
Thousands
May
1,364.00
1,345.00
Jun 20, 2018
7:30 PMUS
Existing home sales
Million
May
5.46
5.53
Jun 21, 2018
7:30 PMEuro Zone
Euro-Zone Consumer Confidence
Value
Jun A
0.20
4:30 PMUK
BOE Announces rates
% Ratio
Jun 21
0.50
Jun 22, 2018
1:00 PMGermany
PMI Services
Value
Jun P
52.10
1:00 PMGermany
PMI Manufacturing
Value
Jun P
56.90
Jun 25, 2018
7:30 PMUS
New home sales
Thousands
May
662.00
Jun 26, 2018
7:30 PMUS
Consumer Confidence
S.A./ 1985=100
Jun
128.00
Jun 28, 2018
1:25 PMGermany
Unemployment change (000's)
Thousands
Jun
(12.00)
Source: Bloomberg, Angel Research
Market Outlook
June 12, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
8.5
10.0
9.0
9.1
7.3
7.4
8.0
7.0
9.0
8.0
8.1
7.6
7.6
7.7
7.0
8.0
7.2
7.0
6.0
6.8
4.8
4.4
7.0
6.3
5.0
4.1
6.1
5.6
4.0
6.0
2.9
3.0
1.8
5.0
2.0
1.0
4.0
1.0
-
3.0
(1.0)
(0.3)
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
4.6
4.3
50.0
4.0
3.6
3.3
3.3
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
35.0
6.50
30.0
6.00
25.0
5.50
20.0
5.00
15.0
4.50
10.0
4.00
5.0
0.0
3.50
(5.0)
3.00
Source: Bloomberg, Angel Research
Source: RBI, Angel Research
Market Outlook
June 12, 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)
25.0
20.0
15.0
10.0
5.0
-
Source: IMF, Angel Research As on June 11,2018
Market Outlook
June 12, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
72,942
(12.1)
(14.7)
17.1
Russia
Micex
4,369
1.4
7.1
11.4
India
Nifty
10,768
0.7
5.3
11.6
China
Shanghai Composite
3,067
(3.8)
(6.7)
(1.7)
South Africa
Top 40
51,882
1.0
(0.5)
13.7
Mexico
Mexbol
45,940
(0.8)
(4.1)
(6.4)
Indonesia
LQ45
951
3.3
(12.8)
(0.3)
Malaysia
KLCI
1,778
(4.0)
(3.5)
0.3
Thailand
SET 50
1,131
(2.4)
(4.3)
14.6
USA
Dow Jones
25,317
3.9
1.7
19.0
UK
FTSE
7,681
1.5
7.5
2.3
Japan
Nikkei
22,695
1.3
6.0
14.3
Germany
DAX
12,767
(0.9)
4.8
1.1
France
CAC
5,450
(1.5)
4.0
4.7
Source: Bloomberg, Angel Research As on June 11,2018
Market Outlook
June 12, 2018
Exhibit 7: Historical Angel Top Picks/Fundamental Calls
Date Added
Top Picks/Fundamental
Stocks
Reco Price
Target/Revised Price
Current Status
07-06-2018
Top Picks
M&M
918
1016
Open
04-05-2018
Top Picks
M&M
860
990
03-05-2018
Fundamental
L&T Finance Holding
171
210
Open
02-05-2018
Top Picks
HDFC Bank
1944
2315
Open
04-05-2018
Top Picks
Matrimony.com Ltd
810
1016
Open
20-04-2018
Top Picks
Matrimony.com Ltd
781
984
15-05-2018
Top Picks
Parag Milk Foods Limited
310
410
Open
16-04-2018
Top Picks
Parag Milk Foods Limited
249
333
29-05-2018
Fundamental
GMM Pfaudler Limited
932
1,020
Open
14-05-2018
Fundamental
GMM Pfaudler Limited
818
900
06-04-2018
Fundamental
GMM Pfaudler Limited
712
861
07-03-2018
Fundamental
Ashok Leyland Ltd
139
163
Closed (26/04/2018)
03-03-2018
Fundamental
Greenply Industries
340
395
Open
16-04-2018
Top Picks
Safari Industries
651
750
Open
21-02-2018
Top Picks
Safari Industries
532
650
31-05-2018
Top Picks
HSIL Ltd
348
Closed (31/05/2018)
16-02-2018
Top Picks
HSIL Ltd
433
510
07-02-2018
Fundamental
Elantas Beck India Ltd.
2155
2500
Open
01-02-2018
Top Picks
ICICI Bank
352
416
Open
01-02-2018
Top Picks
Aditya Birla Capital
167
218
Open
04-01-2018
Fundamental
CCL Products
278
360
Open
03-01-2018
Fundamental
Nilkamal Ltd
1880
2178
Open
01-01-2018
Fundamental
Capital First Ltd
693
850
Closed (15/01/2018)
30-12-2017
Fundamental
Shreyans Industries Ltd
205
247
Closed
Fundamental
Prism Cement Ltd
160
Closed (09/05/2018)
21-12-2017
Fundamental
Prism Cement Ltd
118
131
18-12-2017
Fundamental
Menon Bearings Limited
92
114
Closed (17/01/2018)
14-12-2017
Top Picks
Ruchira Papers Ltd.
188
244
Closed (09/02/2018)
17-05-2018
Top Picks
Century Plyboards India
280
Closed(17/05/2018)
28-11-2017
Top Picks
Century Plyboards India
317
400
19-12-2017
Top Picks
LT Foods
85
128
Open
06-11-2017
Top Picks
LT Foods
74
96
16-10-2017
Fundamental
Endurance Technologies Ltd
1111
1277
Closed (01/12/2017)
11-09-2017
Top Picks
GIC Housing
533
655
Open
10-10-2017
Top Picks
Music Broadcast Limited
404
475
Open
20-07-2017
Top Picks
Music Broadcast Limited
368
434
07-07-2017
Fundamental
L&T Finance Holdings Ltd
149
179
Closed (28/8/2017)
06-07-2017
Fundamental
Syngene International
478
564
Closed (1/3/2018)
05-07-2017
Top Picks
Maruti
7371
10619
Open
05-06-2017
Top Picks
Karur Vysya Bank
127
100
Closed (12/03/2018)
23-05-2018
Top Picks
KEI Industries
481
589
Open
Source: Company, Angel Research
Market Outlook
June 12, 2018
Exhibit 8: Historical Angel Top Picks/Fundamental Calls
Date Added
Top Picks/Fundamental
Stocks
Reco Price
Target/Revised Price
Current Status
04-01-2017
Top Picks
KEI Industries
125
485
31-05-2018
Top Picks
Alkem Lab
1978
Closed (31/05/2018)
01-12-2016
Top Picks
Alkem Lab
1700
2441
17-10-2016
Top Picks
Asian Granito
267
534
Closed (18/02/2018)
17-05-2018
Top Picks
TV Today Network
460
Closed (17/05/2018)
04-08-2016
Top Picks
TV Today Network
297
603
05-04-2016
Top Picks
DHFL
189
720
Open
05-01-2016
Top Picks
Navkar Corporation
207
265
Open
08-12-2015
Top Picks
Blue Star
357
867
Open
30-10-2015
Top Picks
Siyaram Silk Mills
186
851
Open
Source: Company
Market Outlook
June 12, 2018
Research Team Tel: 022 - 39357800
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