Market Outlook
April 20, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
0.3
96
34,427
U.S. stocks moved mostly lower during the last trading session. The major averages
Nifty
0.4
39
10,565
all moved to the downside after ending Wednesday's trading mixed. The Dow Jones
Mid Cap
0.6
105
16,874
dipped by 0.3 percent to 24,665, while the Nasdaq ended down by 0.8 percent to
Small Cap
0.6
109
18,174
7,238.
Bankex
(0.0)
(11)
28,147
U.K. shares closed modestly higher on Thursday as a surge in commodity prices
helped support mining stocks and the pound dropped after the release of weaker-
Global Indices
Chg (%)
(Pts)
(Close)
than-expected retail sales data. The FTSE 100 was up by 0.2% to end at 7,329.
Dow Jones
(0.3)
(83)
24,665
On domestic front, Indian shares ended modestly higher during the last trading
Nasdaq
(0.8)
(57)
7,238
session as a surge in commodity prices helped lift mining stocks and investors
FTSE
0.2
12
7,329
remained optimistic about the ongoing earnings season. The BSE Sensex closed
higher by 0.3% at 34,427.
Nikkei
0.2
54
22,245
Hang Seng
(0.1)
(30)
30,678
News Analysis
Shanghai Com
(0.5)
(16)
3,102
Initiating Coverage on Matrimony.com Ltd CMP: `781 TP: `984 Upside: 26%
Detailed analysis on Pg2
Advances / Declines
BSE
NSE
Advances
1,340
999
Investor’s Ready Reckoner
Declines
1,342
805
Key Domestic & Global Indicators
Unchanged
157
76
Stock Watch: Latest investment recommendations on 150+ stocks
Refer Pg5 onwards
Volumes (` Cr)
Top Picks
BSE
3,434
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
NSE
30,728
Blue Star
Capital Goods Accumulate
785
867
10.4
Dewan Housing Finance
Financials
Buy
590
720
22.1
Net Inflows (` Cr)
Net
Mtd
Ytd
Century Plyboards
Forest Product
Buy
347
400
15.3
FII
(878)
(3,276)
10,331
Navkar Corporation
Others
Buy
178
265
48.9
*MFs
324
4,608
39,068
KEI Industries
Capital Goods Accumulate
432
485
12.3
More Top Picks on Pg4
Top Gainers
Price (`)
Chg (%)
Key Upcoming Events
SCI
77
11.8
Previous
Consensus
Date
Region
Event Description
ReadingExpectations
HINDCOPPER
80
11.5
Apr 20, 2018 US
Initial Jobless claims
233.00
230.00
IBVENTUREPP
223
10.4
Apr 23, 2018 Germany PMI Services
53.90
RADICO
421
10.2
Apr 23, 2018 US
Consumer Confidence
127.70
126.00
TATASTEELPP
176
10.0
Apr 23, 2018 Germany PMI Manufacturing
58.20
Apr 23, 2018 US
Existing home sales
5.54
5.57
More Events on Pg7
Top Losers
Price (`)
Chg (%)
BPCL
378
(6.8)
HINDPETRO
302
(5.8)
BALRAMCHIN
67
(5.5)
IOC
158
(4.0)
TITAN
954
(2.3)
As on April 19, 2018
Market Outlook
April 20, 2018
News Analysis
Initiating Coverage on Matrimony.com
CMP: `781 TP: `984 Upside: 26%
About Company: Incorporated in 2001, Matrimony.com Ltd (MCL) is engaged
in providing online matchmaking and marriage services through Internet and
mobile platforms in India and internationally. Currently MCL has database
comprising 3.29 million active profiles As of Dec 31, 2017 and also they had 140
retail centres distributed across India. Its flagship brand, BharatMatrimony, has 15
language based domains under its umbrella.
Outlook and Valuation: We expect MCL to report net revenue CAGR of ~15%
to ~`450cr over FY2018-20E mainly due to strong growth in core online
matchmaking services (strong band recall and large user data base). Further, MCL
has also started other marriage related services which boot the additional revenue.
On the bottom-line front, we expect a CAGR of ~28% to `82cr over the same
period on the back margin improvement (due to strong operating leverage &
reduction in losses of marriage service business). At the current market price of
`804, the stock trades at a PE of 21.4x its FY2020E EPS of `36.4. We initiate
coverage on the stock with a Buy recommendation and target price of `984 based
on 28x FY20E EPS, indicating an upside of ~26% from the current levels.
Economic and Political News
CCI imposes Rs 2.15bn fine on Everyday, Indo National for unfair biz ways
UIDAI introduces new QR code for offline Aadhaar verification
IMF lauds India for 'right policies' to lower debt, bats for transparency
Ahead of monsoon, rural economy at risk of slowdown over cash crunch
Corporate News
TCS Q4 net rises 4.5% at Rs 69.04bn; Board approves 1:1 bonus share issue
Chai Point raises $20mn in fresh funding from Paragon Partners, others
In Essar Steel case invitation of second round of bids invalid, says NCLT
Fortis board approves evaluation of binding offers, forms expert panel
Maruti Suzuki's Alto retains its position as best entry-level PV in FY18
Market Outlook
April 20, 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
1,803
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
785
867
10.4
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
590
720
22.1
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
289
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
432
485
12.3
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
178
265
48.9
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,296
696
851
22.3
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
473
603
27.5
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
9,076
10,619
17.1
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
347
400
15.3
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
95
128
34.7
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
736
750
1.9
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 20, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
34,974
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
2,092
286
333
16.4
Value Added Products and reduction in interest cost
is likely to boost margins and earnings 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
1,774
781
984
26.0
related services. On the bottom-line front, we
expect a CAGR of ~28% to `82cr over the same
period on the back margin improvement.
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
1,727
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
2,162
2,500
15.6
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
151
163
7.9
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 20, 2018
Key Upcoming Events
Result Calendar
Date
Company
April 21, 2018
HDFC Bank
Source: Bloomberg, Angel Research
Global economic events release calendar
Bloomberg Data
Date
Time
Country
Event Description
Unit
Period
Last Reported
Estimated
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
May 04, 2018
6:00 PMUS
Unnemployment rate
%
Apr
4.10
4.00
Source: Bloomberg, Angel Research
Market Outlook
April 20, 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 20, 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 20, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
85,824
2.3
7.6
33.4
Russia
Micex
4,369
1.4
7.1
11.4
India
Nifty
10,565
3.6
(1.1)
15.6
China
Shanghai Composite
3,117
(5.5)
(9.5)
(5.3)
South Africa
Top 40
50,729
(1.7)
(5.7)
10.6
Mexico
Mexbol
48,745
1.9
(1.3)
(0.3)
Indonesia
LQ45
1,040
0.4
(6.2)
9.6
Malaysia
KLCI
1,895
2.1
3.8
9.2
Thailand
SET 50
1,189
(0.6)
0.0
18.5
USA
Dow Jones
24,665
0.2
(5.6)
19.9
UK
FTSE
7,329
2.3
(5.1)
3.0
Japan
Nikkei
22,191
3.3
(7.0)
19.6
Germany
DAX
12,567
1.4
(4.7)
4.5
France
CAC
5,392
2.1
(1.9)
2.2
Source: Bloomberg, Angel Research 68in4
