Market Outlook
January 18, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open positive tracking global indices and SGX Nifty.
BSE Sensex
0.9
311
35,082
US stocks rose on last trading session morning, with the Dow Jones Industrial
Nifty
0.8
88
10,789
Average making an attempt to re-claim 26,000. The Dow Jones ended on an upside
Mid Cap
0.7
118
17,932
front of 1.3% at 26,116 and the Nasdaq Composite edged up to 1.0%, to 7,298.
Small Cap
0.4
85
19,688
Bankex
1.6
455
29,812
U.K. shares fell following disappointing earnings updates from the likes of Burberry
and Pearson and Informa's takeover approach for a rival. The FTSE 100 was down
by 0.4% to close at 7,725.
Global Indices
Chg (%)
(Pts)
(Close)
Dow Jones
1.3
323
26,116
On domestic front, Indian shares rose sharply to hit fresh record highs after the
Nasdaq
1.0
75
7,298
government cut additional borrowing requirement to Rs 20,000cr from Rs 50,000cr
notified earlier, helping ease worries surrounding widening fiscal deficit. The Sensex
FTSE
(0.4)
(31)
7,725
edged up to 0.9% at 35,082 while the Nifty ended at 10,789 with an upside of
Nikkei
0.5
110
23,979
0.8%.
Hang Seng
0.6
202
32,186
Shanghai Com
0.4
13
3,458
News Analysis
Ashok Leyland signs pact with Israel-based Phinergy for electric CVs
Advances / Declines
BSE
NSE
Detailed analysis on Pg2
Advances
1,432
890
Investor’s Ready Reckoner
Declines
1,492
908
Unchanged
142
57
Key Domestic & Global Indicators
Stock Watch: Latest investment recommendations on 150+ stocks
Refer Pg5 onwards
Volumes (` Cr)
BSE
6,289
Top Picks
NSE
38,740
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
Blue Star
Capital Goods
Buy
745
867
16.4
Net Inflows (` Cr)
Net
Mtd
Ytd
Dewan Housing Finance
Financials
Buy
609
712
16.9
FII
746
2,509
2,509
Asian Granito
Other
Accumulate
588
651
10.7
Navkar Corporation
Other
Buy
201
265
31.7
*MFs
(7)
3,537
3,537
KEI Industries
Capital Goods Accumulate
399
436
9.3
More Top Picks on Pg4
Top Gainers
Price (`)
Chg (%)
Jubilant
921
13.6
Key Upcoming Events
Previous
Consensus
Ttkprestig
8,635
8.4
Date
Region
Event Description
Reading
Expectations
Radico
341
8.2
Jan18
US
Housing Starts
1,297.00
1,275.00
Welcorp
185
7.4
Jan18
US
Initial Jobless claims
261.00
249.00
Jan18
US
Building permits
1,303.00
1,295.00
Gmrinfra
24
7.1
Jan18
Euro Zone Euro-Zone Consumer Confidence
0.50
Jan18
China
Industrial Production (YoY)
6.10
6.10
Top Losers
Price (`)
Chg (%)
More Events on Pg7
Prestige
320
(5.1)
Mcx
851
(5.1)
Religare
58
(4.9)
Aban
246
(4.9)
Adanipower
41
(3.7)
As on January 17, 2018
Market Outlook
January 18, 2018
News Analysis
Ashok Leyland signs pact with Israel-based Phinergy for electric CVs
Ashok Leyland has signed a letter of intent with Israel's Phinergy for electric
commercial vehicles. Both companies will work towards the adaptation of unique,
competitive, and sustainable solutions for high-energy applications in the
commercial vehicles space.
Phinergy has developed cutting-edge technology solutions for the use of aluminum
air batteries for electric vehicles (EV) and other applications. With Ashok Leyland,
Phinergy will be tailoring its unique technology to meet the demanding high-
energy requirements of commercial vehicles in the Indian market.
Economic and Political News
FY18 direct tax collection during Apr 1-Jan 15 rises 19% to Rs 6.89trillion
West Bengal to see over Rs 43bn investment in logistics by 2020
IEA chief says huge opportunity for US to export LNG to India, China
Corporate News
Adani Group to pump in Rs 7.5bn in West Bengal's Haldia oil refinery
Ashok Leyland signs pact with Israel-based Phinergy for electric CVs
Ipca Laboratories acquires US-based API developer Pisgah Labs for
$9.65mn
Nestle sells US confectionery biz to Ferrero for $2.8bn amid health push
Market Outlook
January 18, 2018
Quarterly Bloomberg Brokers Consensus Estimate
Bharti Airtel Ltd - Jan 18, 2018
Particulars ( ` cr)
3QFY18E
3QFY17
y-o-y (%)
2QFY18
q-o-q (%)
Sales
21,095
23,335
(9.5)
21,776
(3.1)
EBIDTA
7,550
8,277
(8.8)
7,712
(2.1)
%
35.7
35.5
35.4
PAT
359
671
(46.5)
586
(38.7)
Adani Ports - Jan 18, 2018
Particulars ( ` cr)
3QFY18E
3QFY17
y-o-y (%)
2QFY18
q-o-q (%)
Sales
2,521
2,208
14.2
2,706
(6.8)
EBIDTA
1,678
1,343
24.9
1,784
(5.9)
%
66.5
60.8
65.9
PAT
946
837
13.1
992
(4.6)
UltraTech Cement - Jan 18, 2018
Particulars ( ` cr)
3QFY18E
3QFY17
y-o-y (%)
2QFY18
q-o-q (%)
Sales
7,054
5,997
17.6
6,936
1.8
EBIDTA
1,340
1,182
13.3
1,394
(3.8)
%
18.9
19.7
20.1
PAT
428
594
(27.9)
422
1.5
Yes Bank - Jan 18, 2018
Particulars ( ` cr)
3QFY18E
3QFY17
y-o-y (%)
2QFY18
q-o-q (%)
PAT
1,061
882
20.2
1002
5.8
Market Outlook
January 18, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
Strong growth in domestic business due to its
leade`hip in acute therapeutic segment. Alkem expects
Alkem Laboratories
26,806
2,242
2,441
8.9
to launch more products in USA, which bodes for its
international business.
We expect the company would report strong
Asian Granito
1,769
588
651
10.7
profitability owing to better product mix, higher B2C
sales and amalgamation synergy.
Favorable outlook for the AC industry to augur well for
Cooling products business which is out pacing the
Blue Star
7,142
745
867
16.4
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
19,100
609
712
16.9
presence in tier-II & III cities where the growth
opportunity is immense.
Loan growth is likely to pick up after a sluggish FY17.
Lower credit cost will help in strong bottom-line
Karur Vysya Bank
8,573
118
160
35.6
growth. Increasing share of CASA will help in NIM
improvement.
High order book execution in EPC segment, rising B2C
KEI Industries
3,127
399
436
9.3
sales and higher exports to boost the revenues and
profitability
Expected to benefit from the lower capex requirement
Music Broadcast
2,331
409
475
16.3
and 15 year long radio broadcast licensing.
Massive capacity expansion along with rail advantage
Navkar Corporation
3,028
201
265
31.7
at ICD as well CFS augur well for the company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,496
746
851
14.1
growth going ahead. Stock currently trades at an
inexpensive valuation.
Market leadership in Hindi news genre and no. 2
viewership ranking in English news genre, exit from the
TV Today Network
2,835
475
500
5.2
radio business, and anticipated growth in ad spends
by corporate to benefit the stock.
After GST, the company is expected to see higher
volumes along with improving product mix. The
Maruti Suzuki
2,81,297
9,312
10,619
14.0
Gujarat plant will also enable higher operating
leverage which will be margin accretive.
We expect loan book to grow at 24.3% over next two
GIC Housing
2,310
429
655
52.7
year; change in borrowing mix will help in NIM
improvement
We expect CPIL to report net Revenue/PAT CAGR of
~17%/16% over FY2017-20E mainly due to healthy
7,824
352
400
13.6
growth in plywood & lamination business, forayed into
Century Plyboards India
MDF & Particle boards on back of strong brand &
distribution network.
We expect sales/PAT to grow at 13.5%/20% over next
LT Foods
3,064
96
128
33.6
two years on the back of strong distribution network &
addition of new products in portfolio.
We expect sales/PAT to grow at 13%/16% over next
two years on the back of strong healthy demand in
Ruchira Papers
456
204
244
19.9
writing & printing paper and Kraft paper. Further,
China had banned making paper from waste pulp
which would benefit Indian paper companies.
We expect financialisation of savings and increasing
Aditya Birla Capital
39781
181
230
27.0
penetration in Insurance & Mutual fund would ensure
steady growth.
Source: Company, Angel Research
Market Outlook
January 18, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,910
294
360
22.5
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 healthy
Nilkamal
2,851
1,911
2,178
14.0
demand growth in plastic division. On the bottom-line
front, we estimate ~10% CAGR to `162cr owing to
improvement in volumes.
We expect sales/PAT to grow at 9%/14% over next two
years on the back of healthy demand growth in
Shreyans Industries
292
211
247
16.9
printing. Further, China had banned making paper
from waste pulp which would benefit Indian paper
companies.
The prism has diversified exposure in the different
segment such as Cement, Tile & ready mix concrete.
Prism Cement
7,296
145
160
10.4
Thus we believe, PCL is in the right place to capture
ongoing government spending on affordable housing
and infrastructure projects.
Source: Company, Angel Research
Market Outlook
January 18, 2018
Key Upcoming Events
Result Calendar
Date
Company
January 18, 2018
UltraTech Cement, Infotech Enterprises, D B Corp, Hind. Zinc
January 19, 2018
HDFC Bank, Kotak Mah. Bank, ITC, Wipro, HCL Tech, Reliance Industries, Kirloskar Engines India Ltd
Source: Bloomberg, Angel Research
Global economic events release calendar
Bloomberg Data
Date
Time
Country
Event Description
Unit
Period
Last Reported
Estimated
Jan 18, 2018
7:00 PMUS
Housing Starts
Thousands
Dec
1,297.00
1,275.00
7:00 PMUS
Initial Jobless claims
Thousands
Jan 13
261.00
249.00
7:00 PMUS
Building permits
Thousands
Dec
1,303.00
1,295.00
8:30 PMEuro Zone Euro-Zone Consumer Confidence
Value
Jan A
0.50
12:30 PMChina
Industrial Production (YoY)
% Change
Dec
6.10
6.10
Jan 23, 2018
12:30 PMChina
Real GDP (YoY)
% Change
4Q
6.80
6.70
Jan 24, 2018
2:00 PMGermany PMI Services
Value
Jan P
55.80
2:00 PMGermany PMI Manufacturing
Value
Jan P
63.30
8:30 PMUS
Existing home sales
Million
Dec
5.81
5.68
3:00 PMUK
Jobless claims change
% Change
Dec
5.90
Jan 25, 2018
8:30 PMUS
New home sales
Thousands
Dec
733.00
675.00
6:15 PMEuro Zone ECB announces interest rates
%
Jan 25
-
Jan 26, 2018
3:00 PMUK
GDP (YoY)
% Change
4Q A
1.70
1.30
7:00 PMUS
GDP Qoq (Annualised)
% Change
4Q A
3.20
3.00
Jan 30, 2018
8:30 PMUS
Consumer Confidence
S.A./ 1985=100
Jan
122.10
124.00
Source: Bloomberg, Angel Research
Market Outlook
January 18, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
10.0
9.0
8.4
9.1
9.0
8.0
8.0
7.9
7.0
7.6
7.5
8.0
7.3
7.2
7.0
6.0
4.8
7.0
6.3
5.0
4.4
4.1
6.1
6.1
5.7
3.5
3.2
6.0
4.0
2.9
3.0
2.0
5.0
2.0
1.2
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
4.9
52.0
5.0
3.9
50.0
3.7
3.6
4.0
3.3
3.3
3.2
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
January 18, 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)
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
-
Source: IMF, Angel Research
Market Outlook
January 18, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
81,189
11.3
5.6
30.7
Russia
Micex
2,278
6.8
8.5
4.6
India
Nifty
10,789
4.4
5.4
28.4
China
Shanghai Composite
3,445
5.8
2.6
9.4
South Africa
Top 40
54,069
5.7
4.6
16.7
Mexico
Mexbol
49,732
3.1
(0.5)
8.1
Indonesia
LQ45
1,094
6.2
10.7
24.0
Malaysia
KLCI
1,829
4.0
4.2
9.6
Thailand
SET 50
1,190
7.1
9.0
21.6
USA
Dow Jones
26,116
6.2
14.2
31.9
UK
FTSE
7,725
3.1
2.6
7.2
Japan
Nikkei
23,868
4.4
14.3
23.3
Germany
DAX
13,184
0.4
1.5
13.7
France
CAC
5,494
1.8
2.4
13.9
Source: Bloomberg, Angel Research p68in4
Market Outlook
January 18, 2018
Research Team Tel: 022 - 39357800
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