Market Outlook
April 19, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open positive tracking global indices and SGX Nifty.
BSE Sensex
(0.2)
(63)
34,332
U.S. stocks turned in a lackluster performance during trading on Wednesday. The
Nifty
(0.2)
(22)
10,526
Dow Jones dipped by 0.2 percent to 24,748, while the Nasdaq rose 0.2 percent to
Mid Cap
(0.1)
(12)
16,768
7,295.
Small Cap
(0.4)
(66)
18,066
U.K. shares rose sharply on Wednesday as weaker-than-expected inflation data sent
Bankex
(0.8)
(241)
28,158
the pound lower against the dollar. The FTSE 100 was up by 1.3% to end at 7,317.
Global Indices
Chg (%)
(Pts)
(Close)
On domestic front, Indian shares fell slightly on Wednesday to snap a nine-day
winning streak even as global markets remained buoyant amid easing geopolitical
Dow Jones
(0.2)
(39)
24,748
and trade tensions. The BSE Sensex was down by 0.2% at 34,332.
Nasdaq
0.2
14
7,295
FTSE
1.3
91
7,317
News Analysis
Nikkei
0.6
138
22,296
India takes US to WTO's safeguard committee on steel and aluminium duties
Hang Seng
1.4
437
30,722
Detailed analysis on Pg2
Shanghai Com
0.8
23
3,115
Investor’s Ready Reckoner
Key Domestic & Global Indicators
Advances / Declines
BSE
NSE
Advances
1,120
697
Stock Watch: Latest investment recommendations on 150+ stocks
Refer Pg5 onwards
Declines
1,572
1,110
Unchanged
145
70
Top Picks
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
Volumes (` Cr)
Blue Star
Capital Goods Accumulate
780
867
11.2
BSE
3,082
Dewan Housing Finance
Financials
Buy
593
720
21.4
NSE
27,981
Century Plyboards
Forest Product
Buy
344
400
16.3
Navkar Corporation
Others
Buy
174
265
52.2
KEI Industries
Capital Goods Accumulate
442
485
9.8
Net Inflows (` Cr)
Net
Mtd
Ytd
More Top Picks on Pg4
FII
(1,140)
(2,399)
11,209
*MFs
324
4,608
39,068
Key Upcoming Events
Previous
Consensus
Date
Region
Event Description
ReadingExpectations
Top Gainers
Price (`)
Chg (%)
Apr 19, 2018 Euro Zone Euro-Zone Consumer Confidence
0.10
(0.10)
Apr 20, 2018 US
Initial Jobless claims
233.00
230.00
BBTC
1,392
9.8
Apr 23, 2018 Germany PMI Services
53.90
JPASSOCIAT
21
6.4
Apr 23, 2018 US
Consumer Confidence
127.70
126.00
GODREJCP
1,134
5.4
Apr 23, 2018 Germany
PMI Manufacturing
58.20
More Events on Pg7
VAKRANGEE
126
5.0
TATASTEELPP
162
4.9
Top Losers
Price (`)
Chg (%)
KWALITY
55
-6.4
BALRAMCHIN
70
-4.8
BANKBARODA
142
-4.0
JETAIRWAYS
618
-4.0
INDIANB
307
-3.8
As on April 18, 2018
Market Outlook
April 19, 2018
News Analysis
India takes US to WTO's safeguard committee on steel and aluminium
duties
India has sought consultations with the US under the WTO's safeguard agreement
against American authorities' decision to impose import duties on certain steel and
aluminium products. The US had last month imposed high import duties on certain
steel and aluminium products. India considers this move to be an emergency
action/safeguard measures under a provision of the General Agreement on Tariffs
and Trade and the Agreement on Safeguards, the WTO has said.
"As an affected member with a significant export interest to the US for the products
at issue, India requests consultations with the US."
Economic and Political News
Govt invites bids from advisors for creation of debt ETF for PSUs and banks
India takes US to WTO's safeguard committee on steel, aluminium duties
India may become surprise victim of US-China trade war
Corporate News
CBI questions NuPower Renewables CFO Sunia Bhuta in ICICI loan case
Maruti Suzuki attains leadership in UV segment with 27.53% market share
Amtek Auto sells its SMI JV stake to Nippon Steel, Sumitomo Metal Corp
Market Outlook
April 19, 2018
Quarterly Bloomberg Brokers Consensus Estimate
Indusind Bank - April 19, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
PAT
963
751
28.2
936
2.9
TCS Ltd - April 19, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
31,663
29,642
6.8
30,904
2.5
EBIDTA
8,645
8,132
6.3
8,287
4.3
%
27.3
27.5
26.9
PAT
6,813
6,622
2.8
6,545
4.1
Market Outlook
April 19, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
Strong growth in domestic business due to its
leadership in acute therapeutic segment. Alkem
Alkem Laboratories
21,274
1,779
2,441
37.2
expects to launch more products in USA, which
bodes for its international business.
Favorable outlook for the AC industry to augur well
for Cooling products business which is out pacing
Blue Star
7,486
780
867
11.2
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
18,605
593
720
21.4
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 resolution
ICICI Bank
1,86,543
290
416
43.3
of NPA would reduce provision cost, which would
help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,462
442
485
9.8
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
2,202
386
475
23.1
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,621
174
265
52.2
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,296
703
851
21.0
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
TV Today Network
2,810
471
603
28.0
the 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
2,75,577
9,123
10,619
16.4
Gujarat plant will also enable higher operating
leverage which will be margin accretive.
We expect loan book to grow at 24.3% over next
GIC Housing
2,184
406
655
61.5
two 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
Century Plyboards
7,639
344
400
16.3
healthy growth in plywood & lamination business,
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
2,965
93
128
38.1
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
1,517
682
720
5.6
distribution network is leading to strong growth in
business. 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 improvement in
HSIL Ltd
2,860
396
510
28.9
operating margin due price hike in container glass
segment, turnaround in consumer business.
Source: Company, Angel Research
Market Outlook
April 19, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
34974
157
230
44.7
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
2092
274
333
21.5
Value Added Products and reduction in interest cost
is likely to boost margins and earnings in next few
years.
Source: Company, Angel Research
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,853
290
360
24.3
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
2,579
1,728
2,178
26.0
demand growth in plastic division. On the bottom-line
front, we estimate ~10% CAGR to `162cr owing to
improvement in volumes.
The prism has diversified exposure in the different
segment such as Cement, Tile & ready mix concrete.
Prism Cement
6,058
120
160
32.9
Thus we believe, PCL is in the right place to capture
ongoing government spending on affordable housing
and infrastructure projects.
Elantas Beck India is the Indian market leader in liquid
insulation segment used in electrical equipments like
Elantas Beck India Ltd
1,713
2,160
2,500
15.7
motors, transformers etc. It derives 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
3,852
314
395
25.8
~`2,478cr over FY2017-20E mainly due to healthy
growth in plywood & lamination business on the back
of strong brand and distribution network
Ashok Leyland Ltd (ALL) is the flagship company of the
Hinduja Group, and one of the largest commercial
vehicle manufacturers in India. Ashok Leyland
Ashok Leyland
43,699
149
163
9.3
expected to report net Profit (reported) CAGR of ~19%
to
~`2,075cr over FY2017-20E mainly due to
improvement in replacement demand.
Market Outlook
April 19, 2018
Key Upcoming Events
Result Calendar
D ate
C ompany
April 19, 2018
TCS, Indusind Bank, Infotech Enterprise s, Reliance Power
April 21, 2018
HDFC Bank
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
Apr 19, 2018
7:30 PMEuro Zone Euro-Zone Consumer Confidence
Value
Apr A
0.10
(0.10)
Apr 20, 2018
6:00 PMUS
Initial Jobless claims
Thousands
Apr 14
233.00
230.00
Apr 23, 2018
1:00 PMGermany PMI Services
Value
Apr P
53.90
7:30 PMUS
Consumer Confidence
S.A./ 1985=100 Apr
127.70
126.00
1:00 PMGermany PMI Manufacturing
Value
Apr P
58.20
Apr 24, 2018
7:30 PMUS
Existing home sales
Million
Mar
5.54
5.57
7:30 PMUS
New home sales
Thousands
Mar
618.00
628.00
Apr 26, 2018
5:15 PMEuro Zone ECB announces interest rates
%
Apr 26
-
Apr 27, 2018
6:00 PMUS
GDP Qoq (Annualised)
% Change
1Q A
2.90
2.20
1:25 PMGermany Unemployment change (000's)
Thousands
Apr
(19.00)
2:00 PMUK
GDP (YoY)
% Change
1Q A
1.40
Apr 30, 2018
6:30 AMChina
PMI Manufacturing
Value
Apr
51.50
May 01, 2018
2:00 PMUK
PMI Manufacturing
Value
Apr
55.10
May 02, 2018
11:30 PMUS
FOMC rate decision
%
May 2
1.75
1.75
2:30 PMEuro Zone Euro-Zone GDP s.a. (QoQ)
% Change
1Q A
0.70
Source: Bloomberg, Angel Research
Market Outlook
April 19, 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
April 19, 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
April 19, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
C ountry
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
85,776
1.0
8.1
32.7
Russia
Micex
4,385
1.4
7.1
11.4
India
Nifty
10,526
1.6
(1.2)
15.0
China
Shanghai Composite
3,091
(4.7)
(9.0)
(5.3)
South Africa
Top 40
51,026
(1.5)
(4.5)
9.4
Mexico
Mexbol
49,091
1.9
(0.1)
0.7
Indonesia
LQ45
1,034
(0.3)
(5.5)
11.0
Malaysia
KLCI
1,879
1.7
2.9
8.0
Thailand
SET 50
1,170
(2.1)
(0.5)
17.0
USA
Dow Jones
24,748
(0.8)
(4.1)
21.3
UK
FTSE
7,317
2.5
(5.7)
2.8
Japan
Nikkei
22,158
2.2
(7.5)
18.2
Germany
DAX
12,591
2.0
(4.9)
4.8
France
CAC
5,380
2.1
(2.4)
2.1
Source: Bloomberg, Angel Research 68in4
