Market Outlook
May 18, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Cl ose)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
(0.7)
(239)
35,149
U.S. Stocks showed a lack of direction over the course of the trading session. The
Nifty
(0.5)
(58)
10,683
major averages spent the day bouncing back and forth across the unchanged line
Mid Cap
0.7
108
16,133
before closing modestly lower. The Dow Jones was down by 0.2% to 24,713 and the
Small Cap
0.4
76
17,612
Nasdaq ended was closed down by 0.2% to 7,382.
Bankex
(0.6)
(186)
29,171
U.K. stocks sterling traded around its lowest dollar level since late December, as the
Greenback rallied on speculation the Federal Reserve could start to raise interest
Global Indices
Chg (%)
(Pts)
(Cl ose)
rate more aggressively. The benchmark FTSE 100 was marginally higher by 0.7% at
7,787.
Dow Jones
0.2
(55)
24,713
Nasdaq
0.2
(15)
7,382
On domestic front, Indian shares ended lower after BJP's Yeddyurappa has been
FTSE
0.7
40
7,787
given 15 days to prove the party has a legislative majority in Karnataka. Rising oil
Nikkei
0.5
121
22,838
prices, concerns about a weakening rupee and mixed cues from other
Asian markets also kept investors nervous. The BSE Sensex closed down by 0.7% at
Hang Seng
(0.5)
(168)
30,942
35,149.
Shanghai Com
(0.5)
(15)
3,154
News Analysis
A dvances / Declines
BSE
NSE
RBI to keep policy rates unchanged in June
Advances
1,384
646
Detailed analysis on Pg2
Declines
1,261
1,143
Unchanged
125
72
Investor’s Ready Reckoner
Key Domestic & Global Indicators
Volumes (` Cr)
Stock Watch: Latest investment recommendations on 150+ stocks
BSE
3,598
Refer Pg5 onwards
NSE
30,694
Top Picks
C MP
Target
U psi de
C ompany
Sector
R ating
(`)
(`)
(%)
Net Inflows (` Cr)
Ne t
Mtd
Ytd
Blue Star
Capital Goods Accumulate
758
867
14.3
FII
(184)
(2,782)
4,615
Dewan Housi ng Finance
Financials
Buy
618
720
16.6
*MFs
693
5,830
51,583
Parag Milk F oods
Others
Buy
355
410
15.4
Navkar Corporation
Others
Buy
159
265
66.7
Top Gainers
Price (`)
Chg (%)
KEI Industrie s
Capital Goods Accumulate
438
485
10.8
More Top Picks on Pg4
RCOM
17
56.9
RNAVAL
17
33.1
Key Upcoming Events
Previous
C onsensus
HDIL
28
8.2
D ate
Region
Event Description
ReadingExpectations
PETRONET
219
8.1
May 23, 2018 Germany PMI Services
53.00
RADICO
435
7.9
May 23, 2018 Euro Zone Euro-Zone Consumer Confidence
0.40
May 23, 2018 Germany PMI Manufacturing
58.10
Top Losers
Price (`)
Chg (%)
May 23, 2018 US
New home sales
694.00
680.00
May 23, 2018 US
Existing home sales
5.60
5.57
PTC
84
-9.2
More Events on Pg7
GSFC
123
-6.9
TIMETECHNO
120
-5.0
CENTURYPLY
268
-4.5
DBCORP
254
-4.3
As on May 17, 2018
Market Outlook
May 18, 2018
News Analysis
RBI to keep policy rates unchanged in June
Reserve Bank is likely to keep policy rates unchanged in the forthcoming monetary
policy review, but will have a hawkish tone on concerns over inflation and as crude
oil prices remain elevated, according to a report.
Retail inflation moved up to 4.58 per cent in April from 4.28 per cent in March. It
was at 2.99 per cent in April last year. The Reserve Bank will announce its second
bi-monthly monetary policy on June 6. "Although better activity data, higher
inflation, and rising crude oil prices all point towards a more hawkish RBI and
could warrant a policy rate hike, it is expected that RBI will await clarity on
minimum support price (MSP) hikes for summer crops, monsoon out-turns, and
more inflation data before embarking on a rate hiking cycle. The probability of a
June hike would increase if international oil prices rise further or the rupee
depreciates significantly ahead of the June meeting. The report said the RBI will
likely begin hiking policy rates in August this year.
Economic and Political News
Government to set up 20 steel scrap yards; Vehicle scrapping policy likely in
Corporate News
Sun Pharma begins sale of generic Welchol tablets in U.S.
Market Outlook
May 18, 2018
Quarterly Bloomberg Brokers Consensus Estimate
Ashok Leyland Ltd - May 18, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
8,854
6,618
33.8
7,113
24.5
EBIDTA
1,065
379
180.8
788
35
%
12
6
11
PAT
638
476
33.9
450
41.8
Bajaj Auto Ltd - May 18, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
6,852
4,897
39.9
6,369
7.6
EBIDTA
1,266
905
39.9
1,231
2.9
%
18
18
19
PAT
1,114
862
29.2
1,013
10
Tata Chemicals Ltd - May 18, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
2,959
2,919
1.4
2,574
15
EBIDTA
570
488
16.9
563
1.3
%
19
17
22
PAT
238
343
(30.5)
832
(71.3)
Market Outlook
May 18, 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
23,982
2,006
2,441
21.7
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
7,282
758
867
14.3
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
19,368
618
720
16.6
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
1,90,230
296
416
40.6
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
3,429
438
485
10.8
B2C sales and hi gher exports to boost the revenue s
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
2,027
355
475
33.7
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,393
159
265
66.7
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,034
647
851
31.4
growth goi ng ahe ad. Stock currently trades at an
inexpensive valuation.
GST regime and the Gujarat plant are expected to
Maruti
2,63,106
8,710
10,619
21.9
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
improve ment
We expect sales/PAT to grow at 13.5%/ 20% over
LT Foods
2,707
85
128
51.2
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
1,418
637
750
17.7
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
2,657
367
510
38.8
operating margi n due price hi ke in container glass
segment, turnaround in consumer busine ss.
Source: Company, Angel Research
Market Outlook
May 18, 2018
Top Picks
Market Cap
C MP
Target
Upside
C ompany
R ationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
32,422
147
218
48.0
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
2,989
355
410
15.4
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
1,777
782
1,016
29.9
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
5,26,511
2,027
2,315
14.2
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
1,05,646
850
990
16.5
strong growth in Tractors segment coupled by its
strong brand recall and i mprovement in rural
sentiment
Source: Company, Angel Research
Market Outlook
May 18, 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
4,238
319
360
13.0
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
2,517
1,687
2,178
29.1
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
1,673
2,110
2,500
18.5
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
3,542
289
395
36.7
~`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
1,278
874
905
3.5
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
35,385
177
210
18.4
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
May 18, 2018
Key Upcoming Events
Result Calendar
D ate
C ompany
May 18, 2018
Tata Che mical s, Ashok Leyland, Amara Raja Batteries, Kirloskar Engine s India Ltd, Surya Roshni
May 21, 2018
Thermax, Colgate, Petronet LNG, GSPL, DLF
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 23, 2018
1:00 PMGermany PMI Services
Value
May P
53.00
7:30 PMEuro Zone Euro-Zone Consumer Confidence
Value
May A
0.40
1:00 PMGermany PMI Manufacturing
Value
May P
58.10
7:30 PMUS
New home sales
Thousands
Apr
694.00
680.00
7:30 PMUS
Existing home sales
Million
Apr
5.60
5.57
May 24, 2018
2:00 PMUK
CPI (YoY)
% Change
Apr
2.50
11: 30 AMGermany GDP nsa (YoY)
% Change
1Q F
1.60
May 25, 2018
2:00 PMUK
GDP (YoY)
% Change
1Q P
1.20
May 29, 2018
7:30 PMUS
Consumer Confidence
S.A./ 1985=100
May
128.70
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)
May 31, 2018
6:30 AMChina
PMI Manufacturing
Value
May
51.40
Jun 01, 2018
6:00 PMUS
Change in N onfarm payrolls
Thousands
May
164.00
6:00 PMUS
Unnemployment rate
%
May
3.90
2:00 PMUK
PMI Manufacturing
Value
May
53.90
Source: Bloomberg, Angel Research
Market Outlook
May 18, 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
(%)
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
May 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)
25.0
20.0
15.0
10.0
5.0
-
Source: IMF, Angel Research As on 17 May, 2018
Market Outlook
May 18, 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 17 May, 2018 68in4
Market Outlook
May 18, 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)
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 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)
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, Angel Research
Market Outlook
May 18, 2018
Research Team Tel: 022 - 39357800
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