Market Outlook
May 16, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Cl ose)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
(0.0)
(13)
35,544
U.S. Stocks showed a significant move back to the downside during the last trading
Nifty
(0.0)
(5)
10,802
session. The major averages pulled back sharply in morning trading and remained
Mid Cap
(0.8)
(131)
16,069
firmly negative throughout the afternoon. The Dow Jones was down by 0.8% to
Small Cap
(0.7)
(115)
17,525
24,706 and the Nasdaq ended was ended down by 0.8% to 7,351.
Bankex
(0.1)
(33)
29,706
U.K. shares were modestly higher on Tuesday after a government report showed the
U.K. jobless rate in the three months to March reached the lowest point since 1975.
Global Indices
Chg (%)
(Pts)
(Cl ose)
The benchmark FTSE 100 was marginally higher by 0.2% at 7,722.
Dow Jones
(0.8)
193
24,706
On domestic front, Indian shares gave up initial gains to end marginally lower after
Nasdaq
(0.8)
60
7,351
the BJP emerged as the single-largest party in Karnataka, but fell short of majority to
FTSE
0.2
11
7,722
form the next government on its own. The BSE Sensex closed flat at 35,544.
Nikkei
(0.2)
(48)
22,818
News Analysis
Hang Seng
(1.2)
(389)
31,152
April trade deficit widens to $13.7bn, exports grow 5.17% to $25.9bn
Shanghai Com
0.6
18
3,192
Detailed analysis on Pg2
A dvances / Declines
BSE
NSE
Investor’s Ready Reckoner
Advances
1,010
523
Key Domestic & Global Indicators
Declines
1,654
1,283
Stock Watch: Latest investment recommendations on 150+ stocks
Unchanged
131
70
Refer Pg5 onwards
Top Picks
Volumes (` Cr)
C MP
Target
U psi de
C ompany
Sector
R ating
BSE
3,123
(`)
(`)
(%)
Blue Star
Capital Goods Accumulate
754
867
15.0
NSE
33,295
Dewan Housi ng Finance
Financials
Buy
622
720
15.8
Century Plyboards
Forest Product
Buy
306
400
30.7
Net Inflows (` Cr)
Ne t
Mtd
Ytd
Navkar Corporation
Others
Buy
163
265
62.7
FII
(171)
(3,115)
4,283
KEI Industrie s
Capital Goods Accumulate
434
485
11.7
*MFs
660
4,004
49,757
More Top Picks on Pg4
Key Upcoming Events
Top Gainers
Price (`)
Chg (%)
Previous
C onsensus
D ate
Region
Event Description
ReadingExpectations
LALPATHLAB
887
10.1
May 16, 2018 Germany GDP nsa (YoY)
1.60
1.70
MPHASIS
1,082
9.8
May 16, 2018 Euro Zone Euro-Zone CPI (YoY)
1.20
1.20
TATASTEELPP
179
7.0
May 16, 2018 US
Housi ng Starts
1,319.00
1,310.00
DBL
1,207
5.7
May 16, 2018 US
Building permits
1,379.00
1,350.00
May 17, 2018 US
Initial Jobless claims
211.00
215.00
DMART
1,486
4.3
More Events on Pg7
Top Losers
Price (`)
Chg (%)
ADANITRANS
141
-10.8
PFS
19
-10.2
ALBK
40
-8.6
NCC
109
-8.0
RCOM
12
-7.8
As on May 15, 2018
Market Outlook
May 16, 2018
News Analysis
April trade deficit widens to $13.7bn, exports grow 5.17% to $25.9bn
India's trade deficit slightly widened to $13.72 billion in April from $13.25 billion
a year ago, government data showed on Tuesday. Merchandise exports for April
rose 5.2 per cent from a year ago to $25.9 billion. Goods imports last month
were $39.6 billion, a gain of 4.6 percent from a year ago, data from the
commerce and industry ministry showed. Non-petroleum and non-gems and
jewellery exports in April 2018 were valued at USD 19.8 billion as against USD
17.7 billion in April 2017, showing an increase of 11.73%. Major commodity
groups showing positive export growth in April on annual basis include
engineering goods (17.63 per cent), chemicals (38.48 per cent), pharmaceuticals
(13.56 per cent), yarn and handloom products (15.66 per cent) and plastic and
linoleum (30.03 per cent).
The trade deficit for 2017/18 fiscal year ending in March grew to $156.8 billion
from $105.72 billion in the previous year, mainly driven by a rising oil import bill -
a growing concern for the central bank.
Economic and Political News
Corporate News
Godrej Agrovet March quarter profit drops 54% to Rs 320 mn, income up
Reliance Communications admitted into insolvency by NCLT bench.
Market Outlook
May 16, 2018
Quarterly Bloomberg Brokers Consensus Estimate
Tata Steel Ltd - May 16, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
32,787
33,896
(3.3)
33,446
(2)
EBIDTA
5,876
2,397
145.2
4,573
28.5
%
18
7
14
PAT
2,272
(1,168)
-
1,135.9
52.5
JSW Steel Ltd - May 16, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
16,656
16.
17,861
8.5
19,378
EBIDTA
3,165
38.4
3,587
22.1
4,379
%
19
20
23%
PAT
1,833
1,009
81.7
1,774
3.4
ITC Ltd - May 16, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
13,095
11,125
17.7
9,772
34
EBIDTA
4,187
3,875
8
3,904
7.2
%
32
35
40
PAT
2,929
2,669
9.7
3,090
(5.2)
Hindalco Industries Ltd - May 16, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
10,875
11,026
(1.4)
11,022
(1.3)
EBIDTA
1,162
1,346
(13.7)
1,196
(2.8)
%
11
12
11
PAT
375
502
(25.3)
377
(0.4)
TVS Motor Company Ltd - May 16, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
3987
2,844
40.2
3,684
8.2
EBIDTA
341
161
111.4
286
19.1
%
9
6
8
PAT
196
126
55.3
154
27.6
Market Outlook
May 16, 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
23,888
1,998
2,441
22.2
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
7,239
754
867
15.0
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
19,497
622
720
15.8
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
1,98,008
308
416
35.1
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
3,404
434
485
11.7
B2C sales and hi gher exports to boost the revenue s
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
2,031
356
475
33.4
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,451
163
265
62.7
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,107
663
851
28.4
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
2,672
448
603
34.6
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
2,63,592
8,726
10,619
21.7
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,159
401
655
63.3
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
6,798
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
2,765
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
1,436
646
750
16.2
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
2,709
375
510
36.1
operating margi n due price hi ke in container glass
segment, turnaround in consumer busine ss.
Source: Company, Angel Research
Market Outlook
May 16, 2018
Top Picks
Market Cap
C MP
Target
Upside
C ompany
R ationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
32,499
148
218
47.6
increasing penetration in Insurance & Mutual fund
would ensure steady growth.
One of the leading Indian dairy products
companie s in India created strong brands in dairy
products. Rising revenue share of high-margin
Parag Milk F oods
2,775
330
410
24.3
Value Adde d Products and reducti on in interest cost
is likely to boost margins and e arnings 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
1,750
771
1,016
31.9
related services. On 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
5,29,575
2,039
2,315
13.5
aided PAT growth. The Strong liability franchise
and he althy 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 segment (on back of new
launche s and facelifts in some of the model ) and
M&M
1,05,504
845
990
14.6
strong growth in Tractors segment coupled by its
strong brand recall and i mprovement in rural
sentiment
Source: Company, Angel Research
Market Outlook
May 16, 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
4,137
311
360
15.8
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
2,500
1,675
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
1,663
2,098
2,500
19.1
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
3,605
294
395
34.4
~`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
1,217
833
900
8.1
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
34,846
175
210
20.3
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
May 16, 2018
Key Upcoming Events
Result Calendar
D ate
C ompany
May 16, 2018
J K Lakshmi Ce ments, ITC, NIIT, D B Corp, Tata Steel, Hindalco, Jyothy Laboratories, Alembic Pharma, PTC Indi a,
Transport Corporation of India, Team Lease Serv.
May 17, 2018
JK Tyre, Central Bank, Coffee Day Enterpri ses Ltd
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 16, 2018
11: 30 AMGermany GDP nsa (YoY)
% Change
1Q P
1.60
1.70
2:30 PMEuro Zone Euro-Zone CPI (YoY)
%
Apr F
1.20
1.20
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
680.00
2:00 PMUK
CPI (YoY)
% Change
Apr
2.50
May 24, 2018
7:30 PMUS
Existing home sales
Million
Apr
5.60
5.60
May 25, 2018
7:30 PMUS
Consumer Confidence
S.A./ 1985=100
May
128.70
May 29, 2018
2:00 PMUK
GDP (YoY)
% Change
1Q P
1.20
May 30, 2018
6:00 PMUS
GDP Qoq (Annualise d)
% Change
1Q S
2.30
1:25 PMGermany Unempl oyment change (000's)
Thousands
May
(7.00)
Source: Bloomberg, Angel Research
Market Outlook
May 16, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
8.5
10.0
9.0
9.1
7.3
7.4
9.0
8.0
7.0
8.0
8.1
7.0
7.6
7.6
8.0
7.3
7.2
7.2
6.0
6.8
4.8
6.5
4.4
7.0
5.0
4.1
6.1
5.7
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
54.0
52.0
50.0
48.0
46.0
44.0
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 16, 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 15 May, 2018
Market Outlook
May 16, 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 As on 15 May, 2018 68in4
Market Outlook
May 16, 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
15-05-2018
Top Picks
Parag Milk F oods Limited
310
410
Open
16-04-2018
Top Picks
Parag Milk F oods Limited
249
333
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 16, 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 Particip ant 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
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