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Market Outlook
November 21, 2019
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Market Cues
Indian markets are likely to open flat tracking global indices and SGX Nifty.
The US stocks climbed well off their worst levels of the day but still ended
Wednesday's trading firmly in negative territory. The major averages all moved to
the downside after ending the previous session on opposite sides of the unchanged
line. The Dow fell 0.4 percent to 27,821 and Nasdaq slid 0.5 percent to 8,526.
The UK stocks are notably lower Wednesday morning with trade war worries
outweighing some upbeat corporate earnings reports and prompting investors to exit
counters. The FTSE 100 was down by 1.2 percent to 7,239.
On domestic front, Indian shares opened on a buoyant note on Wednesday and
stayed firm right through the session to end with solid gain, as traders shrugged off
weak global cues and created fresh positions at several blue chip counters. The
benchmark BSE Sensex was up by 0.5 per cent to 40,651.
Investor’s Ready Reckoner
Key Domestic & Global Indicators
Stock Watch: Latest investment recommendations on 150+ stocks
Refer Pg5 onwards
Top Picks
Company
Rating
CMP
(`)
Target
(`)
Upside
(%)
Blue Star
Buy
790
990
25.3
ICICI Bank
Accumulate
495
532
7.5
GMM Pfaudlers
Accumulate
1,625
2,059
26.7
Bata India
Accumulate
1,683
1,865
10.8
HDFC Bank
Accumulate
1,274
1,390
9.1
More Top Picks on Pg4
Domestic Indices
Chg (%)
(Pts)
(Close)
BSE Sensex
0.5
182
40,651
Nifty
0.5
59
11,999
Mid Cap
0.3
37
14,867
Small Cap
0.1
10
13,414
Bankex
0.3
114
35,463
Global Indices
Chg (%)
(Pts)
(Close)
Dow Jones
(0.4)
(113)
27,821
Nasdaq
(0.5)
(44)
8,526
FTSE
(1.2)
(85)
7,239
Nikkei
(0.6)
(145)
23,148
Hang Seng
(0.8)
(204)
26,889
Shanghai Com
(0.8)
(23)
2,911
Advances / Declines
BSE
NSE
Advances
1,177
884
Declines
1,382
964
Unchanged
198
107
Volumes (` Cr)
BSE
2,946
NSE
44,082
Net Inflows (` Cr)
Net
Mtd
Ytd
FII
(529)
10,101
(2,27,082)
*MFs
-1,425
-2,187
47,522
Top Gainers
Price (
`
)
Chg (%)
UCOBANK
19
19.9
TEJASNET
97
19.9
IDEA
7
17.4
DISHTV
17
12.3
ADVENZYMES
178
10.4
Top Losers
Price (
`
)
Chg (%)
GODFRYPHLP
1,145
-6.4
ORIENTBANK
58
-6.1
RELCAPITAL
18
-5.0
IBULISL
66
-5.0
RELINFRA
33
-4.8
As on Nov 20, 2019
3
www.angelbroking.com
Market Outlook
November 21, 2019
www.angelbroking.com
Top Picks
Company
Market Cap
(` Cr)
CMP
(`)
Target
(`)
Upside
(%)
Rationale
Blue Star
76,107
790
990
25.3
Favorable outlook for the AC industry to augur well
for Cooling products business which is out pacing
the market growth. EMPPAC division's profitability
to improve once operating environment turns
around.
ICICI Bank
31,99,179
495
532
7.5
Well capitalized with CAR of 18.1% which gives
sufficient room to grow asset base. Faster
resolution of NPA would reduce provision cost,
which would help to report better ROE.
Maruti Suzuki
21,58,090
7,144
8,552
19.7
GST regime and the Gujarat plant are expected to
improve the company’s sales volume and margins,
respectively.
Safari Industries
12,843
575
1,000
74.0
Third largest brand play in luggage segment
Increased product offerings and improving
distribution network is leading to strong growth in
business. Likely to post robust growth for next 3-4
years
Parag Milk Foods
12,659
151
200
32.9
One of the leading Indian dairy products
companies in India created strong brands in dairy
products. Rising revenue share of high-margin
Value Added Products and reduction in interest cost
is likely to boost margins and earnings in next few
years.
HDFC Bank
69,71,049
1,274
1,390
9.1
HDFC Bank maintained its steady growth in the
4QFY18. The bank’s net profit grew by 20.3%.
Steady growth in interest income and other income
aided PAT growth. The Strong liability franchise
and healthy capitalisation provides strong earning
visibility. At the current market price, the bank is
trading at 3.2x FY20E ABV.
Amber Enterprises
31,373
998
1,100
10.3
Market leader in the room air conditioner (RAC)
outsourced manufacturing space in India with a
market share of 55.4%. It is a one-stop solutions
provider for the major brands in the RAC industry
and currently serves eight out of the 10 top RAC
brands in India
Bata India
2,16,325
1,683
1,865
10.8
BIL is the largest footwear retailer in India, offering
footwear, accessories and bags across brands. We
expect BIL to report net PAT CAGR of ~16% to
~`3115cr over FY2018-20E mainly due to new
product launches, higher number of stores addition
and focus on women’s high growth segment and
margin improvement
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Market Outlook
November 21, 2019
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Continued...
Company
Market Cap
(` Cr)
CMP
(`)
Target
(`)
Upside
(%)
Rationale
Shriram Transport Finance
2,55,535
1,126
1,410
25.2
SHTF is in the sweet spot with benefits from
stronger CV volumes, NIMs unaffected by
rising bond yields on the back of stronger
pricing power and an enhancing ROE by
750bps over FY18-20E, supported by decline
in credit cost.
GMM Pfaudler Ltd
23,756
1,625
2,059
26.7
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 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.
RBL Bank
1,48,455
345
410
19.0
We believe advance to grow at a healthy
CAGR of 35% over FY18-20E. Below peers
level ROA (1.2% FY18) to expand led by
margin expansion and lower credit cost.
Larsen & Toubro
19,37,855
1,381
1,850
34.0
The company has a strong order backlog of
~` 3lakh cr. and a very strong pipeline of `9
lakh cr. for FY2020. We are positive on
the prospects of the Company given the
Government’s thrust on Infrastructure with
over 100lakh cr. of investments lined up over
the next 5 years. Reduction in tax rate
for domestic companies to 22% from 30% will
improve profitability for the company.
Ultratech Cement
11,86,435
4,111
4,982
21.2
Post merger of Century textile’s cement
division of 13.4mn TPA from H2FY20
company will have ~110mn TPA of capacity
with a dominant position in West and central
India. We are positive on the long term
prospects of the Company given ramp up
from acquired capacities and pricing
discipline in the industry. Reduction in tax rate
for domestic companies to 22% from 30% will
improve profitability for the company.
Source: Company, Angel Research
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Market Outlook
November 21, 2019
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Fundamental Call
Company
Market Cap
(` Cr)
CMP
(`)
Target
(`)
Upside
(%)
Rationale
CCL Products
27,603
208
360
73.5
CCL is likely to maintain the strong growth
trajectory over FY18-20 backed by capacity
expansion and new geographical foray
Greenply Industries
19,657
160
256
59.7
Greenply Industries Ltd (GIL) manufactures
plywood & allied products and medium density
fibreboards (MDF). GIL to report net revenue CAGR
of ~14% to ~`2,478cr over FY2017-20E mainly
due to healthy growth in plywood & lamination
business on the back of strong brand and
distribution network
L&T Finance Holding
1,98,150
99
150
51.4
L&T Fin’s new management is on track to achieve
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Aditya Birla Capital
1,97,879
86
118
37.9
We expect financialisation of savings and
increasing penetration in Insurance & Mutual fund
would ensure steady growth.
KEI Industries
42,420
534
612
14.7
High order book execution in EPC segment, rising
B2C sales and higher exports to boost the revenues
and profitability
Nilkamal
19,397
1,300
NA
NA
We forecast Nilkamal to report top-line CAGR of
~9% to `2,635cr over FY17-20E on the back of
healthy demand growth in plastic division. On the
bottom-line front, we estimate ~10% CAGR to
`162cr owing to improvement in volumes.
Siyaram Silk Mills
10,797
230
NA
NA
Strong brands and distribution network would
boost growth going ahead. Stock currently trades
at an inexpensive valuation.
Music Broadcast Limited
7,688
28
NA
NA
Expected to benefit from the lower capex
requirement and 15 year long radio broadcast
licensing.
Inox Winds
7,212
33
NA
NA
We expect Inox Wind to report exponential growth
in top-line and bottom-line over FY19-20E. The
growth would be led by changing renewable
energy industry dynamics in favor of wind energy
segment viz. changes in auction regime from Feed-
In-Tariff (FIT) to reverse auction regime and
Government’s guidance for 10GW auction in FY19
and FY20 each.
Ashok Leyland
2,43,649
83
NA
NA
Considering the strong CV demand due to change
in BS-VI emission norms (will trigger pre-buying
activities), pick up in construction activities and no
significant impact on industry due to recent axle
load norms, we recommend BUY on Ashok Leyland
at current valuations.
Jindal Steel & Power Limited
1,43,006
140
NA
NA
We expect JSPL’s top line to grow at 27% CAGR
over FY19-FY20 on the back of strong steel
demand and capacity addition. On the bottom line
front, we expect JSPL to turn in to profit by FY19 on
back of strong operating margin improvement.
6
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Market Outlook
November 21, 2019
www.angelbroking.com
Continued...
Company
Market Cap
(` Cr)
CMP
(`)
Target
(`)
Upside
(%)
Rationale
Yes Bank
1,67,939
66
NA
NA
Well planned strategy to grow small business
loans and cross-selling would propel fees
income. We expect YES to grow its advance
much higher than industry and improvement
in asset quality to support profitability.
GIC Housing
8,126
151
NA
NA
We expect loan book to grow at 24.3% over
next two year; change in borrowing mix will
help in NIM improvement
Source: Company, Angel Research