Market Outlook
April 23, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
0.1
38
34,465
Stocks moved notably lower over the course of the last trading session, adding to the
Nifty
(0.0)
(1)
10,564
losses posted in the previous session. With the drop, the Dow pulled back further off
Mid Cap
(0.4)
(68)
16,805
the one-month closing high it set on Tuesday. The Dow Jones dipped by 0.8 percent
Small Cap
0.0
9
18,183
to 24,463, the Nasdaq fell by 1.3 percent to 7,146.
Bankex
(0.7)
(204)
27,943
U.K. stocks were modestly higher with the pound easing slightly against the U.S.
dollar following remarks from the central bank governor that there won't be an
Global Indices
Chg (%)
(Pts)
(Close)
interest rate increase next month. The FTSE 100 was up by 0.5% to end at 7,368.
Dow Jones
(0.8)
(202)
24,463
On domestic front, Indian shares ended flat despite strong gains in the IT space on
Nasdaq
(1.3)
(92)
7,146
good results and bonus announcement from Tata Conultancy Services. This was on
FTSE
0.5
39
7,368
account of a largely negative trend in global markets and speculation about a rate
hike by RBI, prompting investors to tread cautiously. The BSE Sensex was down by
Nikkei
(0.3)
(76)
22,086
0.1% at 34,465.
Hang Seng
(0.3)
(103)
30,315
Shanghai Com
(0.3)
(9)
3,062
News Analysis
India probes dumping of Epoxy Resins chemical by China, EU and 3 others
Advances / Declines
BSE
NSE
Detailed analysis on Pg2
Advances
1,181
745
Investor’s Ready Reckoner
Declines
1,456
1,048
Unchanged
154
76
Key Domestic & Global Indicators
Stock Watch: Latest investment recommendations on 150+ stocks
Volumes (` Cr)
Refer Pg5 onwards
BSE
3,462
Top Picks
NSE
34,007
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
Blue Star
Capital Goods Accumulate
793
867
9.3
Net Inflows (` Cr)
Net
Mtd
Ytd
Dewan Housing Finance
Financials
Buy
585
720
23.0
FII
(647)
(3,923)
9,684
Century Plyboards
Forest Product Accumulate
350
400
14.4
*MFs
324
4,608
39,068
Navkar Corporation
Others
Buy
175
265
51.4
KEI Industries
Capital Goods Accumulate
433
485
12.0
More Top Picks on Pg4
Top Gainers
Price (`)
Chg (%)
Key Upcoming Events
WELSPUNIND
58
11.6
Previous
Consensus
CYIENT
708
9.4
Date
Region
Event Description
ReadingExpectations
MINDTREE
977
8.9
Apr 23, 2018 Germany PMI Services
53.90
53.90
Apr 23, 2018 US
Existing home sales
5.54
5.55
AVANTI
2,359
8.0
Apr 23, 2018 Germany PMI Manufacturing
58.20
57.50
MFSL
479
6.9
Apr 24, 2018 US
Consumer Confidence
127.70
126.00
Apr 24, 2018 Euro Zone
ECB announces interest rates
-
-
Top Losers
Price (`)
Chg (%)
More Events on Pg7
CANBK
259
-7.1
TATASTEELPP
164
-7.0
BANKINDIA
102
-6.2
ANDHRABANK
39
-5.5
IBVENTUREPP
211
-5.5
As on April 20, 2018
Market Outlook
April 23, 2018
News Analysis
India probes dumping of Epoxy Resins chemical by China, EU and 3 others
India is probing into alleged dumping of a chemical, used mainly in the paint
industry, from China, European Union, Korea, Taiwan and Thailand following a
complaint from a domestic industry.
Atul Ltd has filed an application before the commerce ministry's Directorate
General of Antidumping and Allied Duties (DGAD) for the imposition of anti-
dumping duty on imports of certain "Epoxy Resins" exported from these five
countries. DGAD has said that it has "sufficient evidence" of dumping of the
chemical from these countries. The authority hereby initiates an investigation into
the alleged dumping, and consequent injury to the domestic industry.In the probe,
the directorate would determine the existence, degree and effect of the dumped
products on the domestic industry.
Economic and Political News
India probes dumping of Epoxy Resins chemical by China, EU and 3 others
Government of India proposes one nation one road tax
Shipments fall over 15% in FY18 as India-Iran row over Farzad B gas field
GST Commissioner under CBI scanner for taking 'bribe' worth Rs 150,000
FPI outflow in April at Rs 80bn on trade negotiations, rising bond yields
Corporate News
Sebi fines Suzlon Rs.1.1cr for violating insider trading norms
Odisha dam poses water supply threat to NMDC plant in Chhattisgarh
Renaissance to challenge move to award Electrosteel to Vedanta
Cochin Shipyard sees Rs 185mn loss due to ONGC ship fire incident
Japan's top egg producer ISE Foods keen to invest $275 million in Odisha
Market Outlook
April 23, 2018
Quarterly Bloomberg Brokers Consensus Estimate
LIC Housing Finance - April 23, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
PAT
486
529
(8.3)
491
(1.1)
Bharti Infratel Ltd - April 23, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
3,432
1,605
113.8
1,696
102.3
EBIDTA
1,473
769
91.5
797
84.8
%
42.9
47.9
47.1
PAT
653
596
9.6
585
11.6
Market Outlook
April 23, 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
21,323
1,783
2,441
36.9
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
7,613
793
867
9.3
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
18,358
585
720
23.0
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
1,81,626
283
416
47.2
of NPA would reduce provision cost, which would
help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,392
433
485
12.0
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
2,210
387
475
22.6
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,635
175
265
51.4
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,216
686
851
24.0
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
2,809
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
2,73,058
9,039
10,619
17.5
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
2,150
399
655
64.0
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
7,772
350
400
14.4
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
3,032
95
128
35.0
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
1,569
705
750
6.3
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
2,834
392
510
30.1
operating margin due price hike in container glass
segment, turnaround in consumer business.
Source: Company, Angel Research
Market Outlook
April 23, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
34,974
156
230
48.3
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
297
333
12.1
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
810
984
21.5
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
3,851
290
360
24.4
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
2,519
1,688
2,178
29.0
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
6,111
121
160
31.8
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
2,161
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
25.7
~`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
45,399
155
163
5.2
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 23, 2018
Key Upcoming Events
Result Calendar
Date
Company
April 23, 2018
Bharti Infratel, LIC Housing Finance
April 24, 2018
Persistent
Source: Bloomberg, Angel Research
Global economic events release calendar
Bloomberg Data
Date
Time
Country
Event Description
Unit
Period
Last Reported
Estimated
Apr 23, 2018
1:00 PMGermany PMI Services
Value
Apr P
53.90
53.90
7:30 PMUS
Existing home sales
Million
Mar
5.54
5.55
1:00 PMGermany PMI Manufacturing
Value
Apr P
58.20
57.50
Apr 24, 2018
7:30 PMUS
Consumer Confidence
S.A./ 1985=100
Apr
127.70
126.00
5:15 PMEuro Zone ECB announces interest rates
%
Apr 26
-
-
Apr 26, 2018
7:30 PMUS
New home sales
Thousands
Mar
618.00
625.00
6:00 PMUS
Initial Jobless claims
Thousands
Apr 21
232.00
Apr 27, 2018
6:00 PMUS
GDP Qoq (Annualised)
% Change
1Q A
2.90
2.10
1:25 PMGermany Unemployment change (000's)
Thousands
Apr
(19.00)
(15.00)
2:00 PMUK
GDP (YoY)
% Change
1Q A
1.40
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
Change in Nonfarm payrolls
Thousands
Apr
103.00
185.00
Source: Bloomberg, Angel Research
Market Outlook
April 23, 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 23, 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 23, 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
4,368
1.4
7.1
11.4
India
Nifty
10,565
4.7
(1.7)
16.0
China
Shanghai Composite
3,117
(6.3)
(10.3)
(6.2)
South Africa
Top 40
50,729
(1.3)
(6.2)
10.8
Mexico
Mexbol
48,745
1.9
(1.3)
(0.3)
Indonesia
LQ45
1,040
0.7
(5.9)
10.0
Malaysia
KLCI
1,895
2.1
3.8
9.2
Thailand
SET 50
1,189
0.2
0.7
19.2
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
2.9
(5.3)
4.4
France
CAC
5,392
3.7
(1.4)
2.4
Source: Bloomberg, Angel Research 68in4
