Market Outlook
June 13, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
0.6
209
35,693
U.S. Stocks showed a lack of direction over the course of the trading session, with
Nifty
0.5
56
10,843
the major averages bouncing back and forth across the unchanged line. Despite the
Mid Cap
0.9
144
16,151
choppy trading, the tech-heavy Nasdaq reached a new record closing high. The
Small Cap
0.5
92
17,066
Dow Jones was down by 0.1% to 25,320 and the Nasdaq ended up by 0.6% to
7,703.
Bankex
0.7
205
29,813
U.K. stocks gave up early gains to turn lower as the pound advanced after the
Global Indices
Chg (%)
(Pts)
(Close)
release of unemployment data and the Trump-Kim summit ended with the signing of
a joint statement that gave few details or specifics on how the goals set by both sides
Dow Jones
(0.1)
(2)
25,320
would be achieved. The benchmark FTSE 100 was down by 0.2% at 7,718.
Nasdaq
0.6
44
7,703
FTSE
(0.2)
(19)
7,718
On domestic front, Indian shares closed higher on Tuesday, with underlying
sentiment supported by positive global cues ahead of retail inflation and industrial
Nikkei
0.3
74
22,878
output data, due later in the day. The BSE Sensex was ended up by 0.6% to 35,693.
Hang Seng
0.1
39
31,103
Shanghai Com
0.9
27
3,080
News Analysis
Sun Pharma receives EIR for Halol facility
Advances / Declines
BSE
NSE
Retail inflation jumps to 4-month high of 4.87% in May from 4.58% in April
Advances
1,440
1,048
Declines
1,245
749
Detailed analysis on Pg2
Unchanged
138
93
Investor’s Ready Reckoner
Key Domestic & Global Indicators
Volumes (` Cr)
Stock Watch: Latest investment recommendations on 150+ stocks
BSE
2,574
Refer Pg5 onwards
NSE
27,770
Top Picks
CMP
Target
Upside
Net Inflows (` Cr)
Net
Mtd
Ytd
Company
Sector
Rating
(`)
(`)
(%)
FII
17
2,773
511
Blue Star
Capital Goods
Buy
688
867
26.0
Dewan Housing Finance
Financials
Buy
622
720
15.8
*MFs
(88)
1,113
60,485
Parag Milk Foods
Others
Buy
329
410
24.6
Navkar Corporation
Others
Buy
146
230
57.4
Top Gainers
Price (`)
Chg (%)
KEI Industries
Capital Goods
Buy
431
589
36.6
MMTC
38
13.7
More Top Picks on Pg4
HCL-INSYS
41
11.8
Key Upcoming Events
MARKSANS
31
7.5
Previous
Consensus
Date
Region
Event Description
ReadingExpectations
SCI
68
6.8
Jun 13, 2018 UK
CPI (YoY)
2.40
2.40
IBVENTUREPP
312
6.1
Jun 13, 2018 US
Initial Jobless claims
222.00
223.00
Jun 13, 2018 US
Producer Price Index (mom)
(0.10)
Top Losers
Price (`)
Chg (%)
Jun 14, 2018 US
FOMC rate decision
1.75
2.00
KWALITY
27
-4.9
Jun 14, 2018 China
Industrial Production (YoY)
7.00
7.00
More Events on Pg7
TATASTEELPP
145
-4.3
GDL
176
-4.0
DEEPAKFERT
288
-3.5
DALMIABHA
2505
-3.5
As on June 12, 2018
Market Outlook
June 13, 2018
News Analysis
Sun Pharma receives EIR for Halol facility
US Food and Drug Administration (USFDA) cleared Sun Pharma’s Halol drug
plant, which had been under supply restrictions due to quality control failures. Sun
will now be able to restart supplies to its largest market, the United States, from the
Halol facility in western India, which contributed around 15% to the company's
U.S. revenue in 2015 (i.e FY2016).The USFDA issued the company with a warning
letter that year following an inspection that revealed manufacturing quality failures
at Halol. The company has been working on fixing problems the agency identified.
The USFDA inspected the plant again in February. This is a positive development
for the company and we maintain our Buy.
Retail inflation jumps to 4-month high of 4.87% in May from
4.58% in April
The consumer price index-based inflation rose to a four-month high of 4.87 per
cent in May, from 4.58 per cent the previous month, on rising food prices and a
lower base. This was despite the fuel and lighting category showing less of a rise,
of 3.37 per cent, from 5.24 per cent in April. Food inflation rose to 3.1 per cent,
from 2.8 per cent in April. Vegetable prices rose 8.40 per cent, from 7.29 per
cent; those of fruit by 12.33 per cent, against 9.65 per cent in April. Inflation in
household goods and services, comprising transport and communication, personal
care and effects, recreation and amusement, inched up to 4.97 per cent, from
4.75 per cent.
Economic and Political News
RBI Government faces house panel, grilled on bad loans, bank frauds, cash
Corporate News
TCS expands $1.2bn M&G Prudential contract, continues mega deal win
Government mulls selling 100% stake in debt-laden Air India after flop
Market Outlook
June 13, 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
6,617
688
867
26.0
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
19,502
622
720
15.8
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
1,84,709
287
416
44.8
resolution of NPA would reduce provision cost,
which would help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,378
431
589
36.6
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
1,846
324
475
46.8
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
2,911
621
851
37.0
boost growth going ahead. Stock currently trades at
an inexpensive valuation.
GST regime and the Gujarat plant are expected to
Maruti
2,72,392
9,017
10,619
17.8
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,091
388
655
68.7
two year; change in borrowing mix will help in NIM
improvement
We expect sales/PAT to grow at 13.5%/20% over
LT Foods
2,225
70
128
84.0
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
1,383
621
720
16.0
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 13, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
30,652
139
218
56.6
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
2,768
329
410
24.6
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
1,670
735
1,016
38.2
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
5,32,310
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
916
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 13, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,785
285
360
26.5
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
Nilkamal
2,504
1,678
2,178
29.8
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
1,594
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
3,061
250
395
58.2
~`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
33,519
168
210
25.0
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
June 13, 2018
Key Upcoming Events
Global economic events release calendar
Bloomberg Data
Date
Time Country
Event Description
Unit
Period
Last Reported
Estimated
Jun 13, 2018
2:00 PMUK
CPI (YoY)
% Change
May
2.40
2.40
6:00 PMUS
Initial Jobless claims
Thousands
Jun 9
222.00
223.00
US
Producer Price Index (mom)
% Change
May
(0.10)
Jun 14, 2018
11:30 PMUS
FOMC rate decision
%
Jun 13
1.75
2.00
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
0.20
India
Imports YoY%
% Change
May
4.60
India
Exports YoY%
% Change
May
5.17
Jun 19, 2018
6:00 PMUS
Housing Starts
Thousands
May
1,287.00
1,315.00
6:00 PMUS
Building permits
Thousands
May
1,364.00
1,335.00
Jun 20, 2018
7:30 PMEuro Zone
Euro-Zone Consumer Confidence
Value
Jun A
0.20
Jun 21, 2018
7:30 PMUS
Existing home sales
Million
May
5.46
5.58
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
6:00 PMUS
GDP Qoq (Annualised)
% Change
1Q T
2.20
Jun 29, 2018
1:25 PMGermany
Unemployment change (000's)
Thousands
Jun
(12.00)
2:00 PMUK
GDP (YoY)
% Change
1Q F
1.20
Jun 30, 2018
2:00 PMUK
PMI Manufacturing
Value
Jun
54.40
Source: Bloomberg, Angel Research
Market Outlook
June 13, 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 13, 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 12, 2018
Market Outlook
June 13, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
72,308
(14.2)
(14.9)
15.7
Russia
Micex
4,369
1.4
7.1
11.4
India
Nifty
10,787
0.3
6.0
12.4
China
Shanghai Composite
3,053
(2.6)
(6.3)
(0.4)
South Africa
Top 40
51,835
(0.1)
(0.5)
12.8
Mexico
Mexbol
46,301
(0.5)
(2.9)
(5.7)
Indonesia
LQ45
951
3.3
(12.8)
(0.3)
Malaysia
KLCI
1,776
(3.6)
(3.9)
0.6
Thailand
SET 50
1,132
(1.6)
(3.0)
14.6
USA
Dow Jones
25,322
3.2
(0.1)
19.2
UK
FTSE
7,737
1.0
8.1
3.2
Japan
Nikkei
22,804
1.4
7.3
13.0
Germany
DAX
12,843
(1.4)
4.0
0.6
France
CAC
5,474
(1.5)
3.5
3.7
Source: Bloomberg, Angel Research As on June 12, 2018
Market Outlook
June 13, 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 13, 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 13, 2018
Research Team Tel: 022 - 39357800
DISCLAIMER
Angel Broking Private Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India
Limited,Bombay Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with
CDSL and Portfolio Manager with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking Private Limited is
a registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number
INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing
/dealing in securities Market. Angel or its associates/analyst has not received any compensation / managed or co-managed public
offering of securities of the company covered by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should
make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the
companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine
the merits and risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the
contrary view, if any.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannot
testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.
While Angel Broking Pvt. Limited endeavors to update on a reasonable basis the information discussed in this material, there may be
regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from
or in connection with the use of this information.
