Market Outlook
May 15, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Cl ose)
Indian markets are likely to open flat tracking global indices and SGX Nifty.
BSE Sensex
0.1
21
35,557
U.S. Stocks gave back ground over the course of the trading session. The major
Nifty
0.0
0
10,807
averages pulled back well off their best levels of the day but managed to close in
Mid Cap
(0.9)
(144)
16,200
positive territory. The Dow Jones was up by 0.3% to 24,899 and the Nasdaq edged
Small Cap
(1.0)
(178)
17,640
up by 0.1% to close at 7,411.
Bankex
0.2
50
29,739
U.K. shares were subdued during the last trading session as the pound recovered
against the dollar and oil prices pulled back from multi-year highs amid signs of a
Global Indices
Chg (%)
(Pts)
(Cl ose)
surge in U.S. drilling activity. The benchmark FTSE 100 was ended down by 0.2% at
7,711.
Dow Jones
0.3
68
24,899
Nasdaq
0.1
8
7,411
On domestic front, Indian shares ended a lackluster session on a flat note Monday
FTSE
(0.2)
(14)
7,711
as weak industrial output data disappointed investors and caution set in ahead of
Nikkei
(0.1)
(15)
22,851
Karnataka election results, which is due on Tuesday. The BSE Sensex closed higher
by 0.1% at 35,557.
Hang Seng
(0.8)
(258)
31,283
Shanghai Com
0.0
1
3,175
News Analysis
Update in Target Price of Parag Milk Foods to '410
A dvances / Declines
BSE
NSE
Detailed analysis on Pg2
Advances
834
523
Declines
1,879
1,283
Investor’s Ready Reckoner
Unchanged
141
70
Key Domestic & Global Indicators
Stock Watch: Latest investment recommendations on 150+ stocks
Volumes (` Cr)
Refer Pg5 onwards
BSE
3,123
Top Picks
NSE
27,402
C MP
Target
U psi de
C ompany
Sector
R ating
(`)
(`)
(%)
Blue Star
Capital Goods Accumulate
768
867
12.9
Net Inflows (` Cr)
Ne t
Mtd
Ytd
Dewan Housi ng Finance
Financials
Buy
625
720
15.2
FII
(305)
(3,420)
3,978
Century Plyboards
Forest Product
Buy
306
400
30.7
*MFs
73
4,077
49,830
Navkar Corporation
Others
Buy
162
265
63.9
KEI Industrie s
Capital Goods Accumulate
422
485
14.9
More Top Picks on Pg4
Top Gainers
Price (`)
Chg (%)
SUNTV
964
11.5
Key Upcoming Events
Previous
C onsensus
PARAGMILK
336
9.5
D ate
Region
Event Description
ReadingExpectations
PRAJIND
100
6.2
May 15, 2018 Euro Zone Euro-Zone GDP s.a. (QoQ)
0.40
0.40
May 15, 2018 China
Industrial Production (YoY)
6.00
6.40
BAYERCROP
4,645
5.6
May 15, 2018 UK
Joble ss claims change
11.60
GUJGAS
886
5.2
May 15, 2018 India
Imports YoY%
7.15
May 15, 2018 Euro Zone Euro-Zone CPI (YoY)
1.20
1.20
Top Losers
Price (`)
Chg (%)
More Events on Pg7
PFS
22
-14.3
RNAVAL
15
-13.4
PCJEWELLER
178
-11.6
TATAGLOBAL
255
-11.1
SUZLON
9
-9.4
As on May 14, 2018
Market Outlook
May 15, 2018
News Analysis
Update in Target Price of Parag Milk Foods to `410
For Q4FY2018, Parag Milk Foods (PARAG) posted decent performance with
20%/18% yoy growth in revenue/ PAT and decent margin expansion. The
company is introducing many new products/ variants and improving its supply
chain management which would drive 20%+ earnings growth in next two years.
Outlook and Valuation: We have slightly upgraded our earnings estimates in view
of new products pipeline, better off take in whey protein and the revised margin
guidance from the management. We now expect PARAG to report a CAGR of
~18%/37% in revenue/ earnings over FY18-20E. The stock has given 35% return
since our initiation in April. The stock is currently trading at 17.5x its FY2020
earnings, which still looks attractive looking at its evolving FMCG story. Hence we
recommend BUY with a target price of `410 (21x FY2020E EPS).
Economic and Political News
CBI may file charge sheet against senior bank execs in PNB case
Corporate News
Tata Power to ramp up renewable capacity fourfold; plans $ 5bn push
Munjal-Burman deal may unravel as PEs draw support to oust Fortis directors
Beauty retailer Nykaa raises Rs 1.65 bn in series D funding
PFC working to cut NPAs by 10%, bring them down to Rs 15 bn in FY19
Market Outlook
May 15, 2018
Quarterly Bloomberg Brokers Consensus Estimate
Punjab National Bank Ltd - May 15, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
PAT
(3,835)
262
-
230
-
Lupin Ltd - May 15, 2018
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Particulars ( ` cr)
Sales
3,945
4,253
(7.2)
3,975
(0.8)
EBIDTA
736
781
(5.8)
688
6.9
%
19
18
17
PAT
338
380
(11.1)
222
52.5
Britannia Industries Ltd - May 15, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
2,532
2,244
12.8
2,567
(1.4)
EBIDTA
395
308
28.1
398
(0.9)
%
16
14
16
PAT
260
210
23.4
263
(1.3)
Crompton Greaves Consumer Electricals Ltd - May 15, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
1,187
1,076
10.3
938
26.6
EBIDTA
160
136
17.5
116
37.7
%
14
13
12
PAT
101
86
17.3
69
45.9
Market Outlook
May 15, 2018
Top Picks
Market Cap
C MP
Target
Upside
C ompany
R ationale
(` Cr)
(`)
(`)
(%)
Strong growth in domestic business due to its
leadership in acute therapeutic segment. Alkem
Alkem Laboratories
23,654
1,978
2,441
23.4
expects to launch more products in USA, which
bode s for its internati onal business.
Favorable outlook for the AC industry to augur well
for Cooling products business which is out pacing
Blue Star
7,371
768
867
12.9
the market growth. EMPPAC division's profitability
to improve once oper ating environme nt turns
around.
With a focus on the low and me dium income (LMI)
consumer se gment, the company has increase d its
Dewan Housi ng Finance
19,610
625
720
15.2
presence in tier-II & III cities where the growth
opportunity i s immense.
Well capitalized with CAR of 18.1% which give s
sufficient room to grow asset base. F aster re solution
ICICI Bank
1,99,259
310
416
34.2
of NPA would reduce provi sion cost, which would
help to re port better ROE.
High order book execution in EPC segment, rising
KEI Industrie s
3,309
422
485
14.9
B2C sales and hi gher exports to boost the revenue s
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
2,054
360
475
31.9
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,434
162
265
63.9
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,061
653
851
30.3
growth goi ng ahe ad. Stock currently trades at an
inexpensive valuation.
Market leadership in Hindi news genre and no. 2
viewership ranking in English news genre, exit from
TV Today Network
2,643
443
603
36.1
the radio busine ss, and anticipated growth in ad
spends by corporate to benefit the stock.
GST regime and the Gujarat plant are expected to
Maruti
2,63,267
8,715
10,619
21.8
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,146
398
655
64.4
two year; change in borrowing mix will help in NIM
improve ment
We expect CPIL to report net Revenue/PAT CAGR of
~17%/ 16% over FY2017-20E mainly due to
Century Plyboards
6,802
306
400
30.7
healthy growth in plywood & lamination busine ss,
forayed into MDF & Particle boards on back of
strong brand & distribution network.
We expect sales/PAT to grow at 13.5%/ 20% over
LT Foods
2,763
86
128
48.1
next two years on the back of strong di stribution
network & addition of new products in portfolio.
Third large st brand play in luggage segment
Increase d product offerings and improvi ng
Safari Industries
1,380
620
750
20.9
distribution network is leading to strong growth in
busine ss. 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 improve ment in
HSIL Ltd
2,744
380
510
34.4
operating margi n due price hi ke in container glass
segment, turnaround in consumer busine ss.
Source: Company, Angel Research
Market Outlook
May 15, 2018
Top Picks
Market Cap
C MP
Target
Upside
C ompany
R ationale
(` Cr)
(`)
(`)
(%)
We expect financiali sation of savings and
Aditya Birla Capital
33,005
150
218
45.4
increasing penetration in Insurance & Mutual fund
would ensure steady growth.
One of the leading Indian dairy products
companie s in Indi a created strong brands in dairy
products. Rising revenue share of high-margin
Parag Milk F oods
2,830
336
410
22.1
Value Added Products and reduction in interest
cost is likely to boost margins and earnings in next
few years.
We expect MCL to re port net revenue CAGR of
~15% to ~` 450cr over FY2018-20E mainly due
to strong growth in online matchmaking &
Matrimony.com Ltd
1,756
773
1,016
31.4
marriage related service s. O n the bottom-line
front, we expect a CAGR of ~28% to `82cr over
the same period on the back margin
improve ment.
HDFC Bank maintaine d 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
5,24,901
2,021
2,315
14.5
aided PAT growth. The Strong liability franchise
and healthy capitalisation provi des 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 se gment (on back of new
launche s and facelifts in some of the model ) and
M&M
1,05,683
850
990
16.5
strong growth in Tractors se gme nt coupled by its
strong brand recall and i mprovement in rural
sentiment
Source: Company, Angel Research
Market Outlook
May 15, 2018
Fundamental Call
Market Cap
C MP
Target
Upside
C ompany
R ationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,960
298
360
20.9
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
2,501
1,676
2,178
30.0
healthy demand growth in plastic divi sion. On the
bottom-line front, we esti mate
~10% CAGR to
`162cr owing to improve ment in volumes.
Elantas Beck India is the Indian market leader in
liquid insulation segment used in electrical
equipme nts like motors, transformers etc. It derives
Elantas Beck India Ltd
1,681
2,121
2,500
17.9
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 me dium density fibreboards
(MDF). GIL to report net revenue CAGR of ~14% to
Greenply Industries
3,593
293
395
34.8
~`2,478cr over FY2017-20E mainly due to healthy
growth in plyw ood & lamination busine ss on the
back of strong brand and di stribution 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
1,213
830
900
8.4
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 manage ment is on track to achieve
L&T Finance Hol ding
35,684
179
210
17.4
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
May 15, 2018
Key Upcoming Events
Result Calendar
D ate
C ompany
May 15, 2018
KEC International, Mangal am Cement, Punj ab N atl.Bank, Syndicate Bank, Britannia, Electrosteel Castings, Lupin
May 16, 2018
J K Lakshmi Ce ments, ITC, NIIT, D B Corp, Tata Steel, Hindalco, JSW Steel , Jyothy Laboratories, Alembic P harma
Source: Bloomberg, Angel Research
Global economic events release calendar
Bl oomberg Data
D ate
Time
C ountry
Event Description
Unit
Period
L ast Reporte d
E stimate d
May 15, 2018
2:30 PMEuro Zone Euro-Zone GDP s.a. (QoQ)
% Change
1Q P
0.40
0.40
7:30 AMChina
Industrial Production (YoY)
% Change
Apr
6.00
6.40
2:00 PMUK
Joble ss claims change
% Change
Apr
11.60
India
Imports YoY%
% Change
Apr
7.15
2:30 PMEuro Zone Euro-Zone CPI (YoY)
%
Apr F
1.20
1.20
India
Exports YoY%
% Change
Apr
(0.66)
May 16, 2018
11: 30 AMGermany GDP nsa (YoY)
% Change
1Q P
2.30
1.70
6:45 PMUS
Industrial Production
%
Apr
0.51
0.60
6:00 PMUS
Housi ng Starts
Thousands
Apr
1,319.00
1,310.00
6:00 PMUS
Building permits
Thousands
Apr
1,379.00
1,350.00
May 17, 2018
6:00 PMUS
Initial Jobless claims
Thousands
May 12
211.00
215.00
May 23, 2018
1:00 PMGermany PMI Services
Value
May P
53.00
1:00 PMGermany PMI Manufacturing
Value
May P
58.10
7:30 PMEuro Zone Euro-Zone Consumer Confidence
Value
May A
0.40
7:30 PMUS
New home sales
Thousands
Apr
694.00
675.00
Source: Bloomberg, Angel Research
Market Outlook
May 15, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
8.5
10.0
9.0
9.1
7.4
9.0
8.0
7.1
7.1
8.0
8.1
7.0
7.6
7.6
8.0
7.3
7.2
7.2
6.0
6.8
4.8
7.0
6.5
5.0
4.1
6.1
5.7
4.0
3.2
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
4.3
50.0
4.0
3.6
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
May 15, 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
Market Outlook
May 15, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
C ountry
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
85,232
(0.0)
3.0
30.1
Russia
Micex
4,554
1.4
7.1
11.4
India
Nifty
10,807
3.7
2.9
14.9
China
Shanghai Composite
3,174
(1.0)
(7.9)
1.5
South Africa
Top 40
52,000
3.9
4.3
9.5
Mexico
Mexbol
46,519
(4.1)
(5.0)
(5.9)
Indonesia
LQ45
962
(9.6)
(14.2)
0.6
Malaysia
KLCI
1,850
0.7
2.1
4.7
Thailand
SET 50
1,173
1.2
0.9
17.4
USA
Dow Jones
24,899
1.7
2.9
18.7
UK
FTSE
7,711
6.3
7.5
2.5
Japan
Nikkei
22,866
5.5
5.8
17.6
Germany
DAX
12,978
5.6
5.9
1.3
France
CAC
5,541
5.0
7.6
4.7
Source: Bloomberg, Angel Research 68in4
Market Outlook
May 15, 2018
Exhibit 7: Historical Angel Top Picks/Fundamental Calls
D ate Added
Top Picks/Fundamental
Stocks
Reco Price
Target/Revised Price
Curre nt Status
04-05-2018
Top Picks
M&M
860
990
Open
03-05-2018
Fundamental
L&T Finance Hol ding
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
16-04-2018
Top Picks
Parag Milk F oods Limited
249
333
Open
14-05-2018
Fundamental
GMM Pfaudler Limited
818
900
Open
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
16-02-2018
Top Picks
HSIL Ltd
433
510
Open
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)
28-11-2017
Top Picks
Century Plyboards India
317
400
Open
19-12-2017
Top Picks
LT Foods
85
128
Open
06-11-2017
Top Picks
LT Foods
74
96
16-10-2017
Fundamental
Endurance Technologie s 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 Hol dings 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)
04-01-2017
Top Picks
KEI Industrie s
125
485
Open
01-12-2016
Top Picks
Alkem Lab
1700
2441
Open
17-10-2016
Top Picks
Asian Granito
267
534
Closed (18/ 02/ 2018)
04-08-2016
Top Picks
TV Today Network
297
603
Open
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, Angel Research
Market Outlook
May 15, 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 accessin g
/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 sho uld
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 de termine
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 positio ns and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a repo rt on a company's
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