Market Outlook
April 24, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Cl ose)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
0.1
35
34,451
U.S. Stocks fluctuated over the course of the trading session before ending the day
Nifty
0.2
21
10,585
modestly lower. With the drop on the day, the Dow closed lower for the fourth
Mid Cap
0.5
82
16,881
consecutive session. The Dow Jones dipped by 0.1 percent to 24,448, the Nasdaq
Small Cap
0.5
96
18,274
fell by 0.3 percent to 7,128.
Bankex
(0.1)
(19)
27,923
U.K. stocks were fluctuating in lackluster trade as investors kept an eye on U.S. bond
yields and tracked the pound, which hit a two-week low against the dollar following
Global Indices
Chg (%)
(Pts)
(Cl ose)
comments from the Bank of England Governor Mark Carney that market
expectations over the possibility of a rate hike in May were overblown. The FTSE 100
Dow Jones
(0.1)
(15)
24,448
was up by 0.5% to end at 7,398.
Nasdaq
(0.3)
(18)
7,128
FTSE
0.5
30
7,398
On domestic front, Indian shares closed modestly higher, with IT bellwether TCS
Nikkei
(0.3)
(74)
22,088
creating history by becoming the first Indian listed company to hit the coveted $100
billion m-cap figure, after saying it doesn't believe in sacrificing profitability to drive
Hang Seng
(0.5)
(164)
30,254
growth. The BSE Sensex was up by 0.1% at 34,451.
Shanghai Com
(0.1)
(4)
3,068
News Analysis
A dvances / Declines
BSE
NSE
Yogi Government to host MSME Summit, aims to give CM's pet ODOP project
Advances
1,396
745
big push
Declines
1,329
1,048
Detailed analysis on Pg2
Unchanged
145
76
Investor’s Ready Reckoner
Key Domestic & Global Indicators
Volumes (` Cr)
Stock Watch: Latest investment recommendations on 150+ stocks
BSE
3,549
Refer Pg5 onwards
NSE
32,293
Top Picks
C MP
Target
U psi de
Net Inflows (` Cr)
Ne t
Mtd
Ytd
C ompany
Sector
R ating
(`)
(`)
(%)
FII
(647)
(3,923)
9,684
Blue Star
Capital Goods Accumulate
794
867
9.1
*MFs
324
4,608
39,068
Dewan Housi ng Finance
Financials
Buy
581
720
23.8
Century Plyboards
Forest Product
Accumulate
353
400
13.3
Navkar Corporation
Others
Buy
176
265
51.0
Top Gainers
Price (`)
Chg (%)
KEI Industrie s
Capital Goods Accumulate
443
485
9.6
OBEROIRLTY
579
11.2
More Top Picks on Pg4
ASTRAMICRO
88
8.5
Key Upcoming Events
LTI
1,520
8.4
Previous
C onsensus
D ate
Region
Event Description
NIITLTD
117
7.5
ReadingExpectations
Apr 24, 2018 US
Existing home sales
5.5
5.6
GESHIP
377
6.3
Apr 24, 2018 US
New home sales
618
630
Apr 26, 2018 Euro Zone Euro-Zone Consumer Confidence
0.4
Top Losers
Price (`)
Chg (%)
Apr 26, 2018 US
Initial Jobless claims
232
230
VAKRANGEE
129
-5.0
Apr 27, 2018 Euro Zone
ECB announces interest rates
-
-
More Events on Pg7
RAIN
340
-4.4
RNAVAL
27
-4.1
GNFC
430
-3.4
VGUARD
243
-2.7
As on April 23, 2018
Market Outlook
April 24, 2018
News Analysis
Yogi Government to host MSME Summit, aims to give CM's pet ODOP
project big push
state to boost the Micro, Small and Medium Enterprises (MSME) sector and as a
propelling Adityanath’s flagship ‘One District, One Product’ (ODOP) scheme on a
big scale for international branding and marketing of the theme. Launched in
January 2018, ODOP seeks to promote traditional industries synonymous with
the respective districts of UP to spur local economy and create jobs.
MSME sector is the backbone of UP’s industrial landscape and contributes 60% to
its annual industrial output. It employs 40 million people, generating direct
economic activity worth Rs 1.2 trillion annually. The state is home to over 5 million
MSMEs and the sector is the second largest employer after agriculture, making it
imperative for any development roadmap, especially in the backdrop of the
government targeting to generate 2 million jobs in the next 4 years.
Economic and Political News
Centre may levy cess on sugar, lower GST on ethanol to help clear dues
Government may move WTO if US rejects exemption on higher tariff
New industrial policy to be announced soon, to promote emerging sector
Yogi Government to host MSME Summit, aims to give CM's pet ODOP project
big push
Corporate News
Vedanta's aluminium output surges 38% in FY18, with ramp up of facilities
According to reports, Flipkart close to sealing $12-bn deal with Walmart
Clouds over Fortis Healthcare keep suitors from making higher bids
Music Broadcast to acquire radio business of Ananda Offset on slump sale
basis.
Astron Paper entered into MOU with Balaram Papers to take over its Gujarat
plant.
Market Outlook
April 24, 2018
Quarterly Bloomberg Brokers Consensus Estimate
IDFC Bank Ltd - April 24, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
PAT
162
176
(8)
146
(11)
Bharti Airtel Ltd - April 24, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
19,836
21,935
(9.6)
20,319
(2.4)
EBIDTA
6,967
7,207
(3.3)
7,229
(3.6)
%
35.1
32.9
35.6
PAT
(105)
471
-
561
-
Market Outlook
April 24, 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
21,901
1,832
2,441
33.3
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
7,626
794
867
9.1
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
18,235
581
720
23.8
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
1,79,698
280
416
48.8
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
3,469
443
485
9.6
B2C sales and hi gher exports to boost the revenue s
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
2,182
383
475
24.2
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,642
176
265
51.0
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,249
693
851
22.8
growth goi ng ahe ad. 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
2,803
470
603
28.3
the radio busine ss, and anticipated growth in ad
spends by corporate to benefit the stock.
After GST, the company is expected to see higher
volume s along with improving product mix. The
Maruti
2,73,724
9,061
10,619
17.2
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
2,154
400
655
63.8
two year; change in borrowing mix will help in NIM
improve ment
We expect CPIL to report net Revenue/PAT CAGR of
~17%/ 16% over FY2017-20E mainly due to
Century Plyboards
7,846
353
400
13.3
healthy growth in plywood & lamination busine ss,
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
2,979
93
128
37.4
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
1,555
699
750
7.3
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
2,845
394
510
29.6
operating margi n due price hi ke in container glass
segment, turnaround in consumer busine ss.
Source: Company, Angel Research
Market Outlook
April 24, 2018
Top Picks
Market Cap
C MP
Target
Upside
C ompany
R ationale
(` Cr)
(`)
(`)
(%)
We expect financi alisation of savings and
Aditya Birla Capital
34,974
158
230
31.33
increasing penetration in Insurance & Mutual fund
would ensure steady growth.
One of the leading Indi an dairy products
companie s in India create d strong brands in dairy
products. Rising revenue share of hi gh-margin
Parag Milk F oods
2,092
295
333
12.1
Value Added Products and reduction 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
1,852
825
984
16.2
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.
Source: Company, Angel Research
Fundamental Call
Market Cap
C MP
Target
Upside
C ompany
R ationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
3,864
291
360
23.9
over FY18-20 backed by capacity expansi on 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
2,616
1,753
2,178
24.3
demand growth in pl astic division. On the bottom -line
front, we estimate ~10% CAGR to `162cr owing to
improve ment in volumes.
The prism has diversified exposure in the different
segment such as Cement, Tile & ready mix concrete.
Prism Cement
6,078
121
160
32.5
Thus we believe, PCL is in the right place to capture
ongoing government spendi ng on affordable housing
and infrastructure projects.
Elantas Beck India is the Indian market leader in liquid
insulation segment use d in electrical equipments like
Elantas Beck India Ltd
1,728
2,179
2,500
14.7
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 reve nue CAGR of ~14% to
Greenply Industries
3,795
309
395
27.6
~`2,478cr over F Y2017-20E mainly due to healthy
growth in plywood & lamination busine ss on the back
of strong brand and di stribution 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
46,703
159
163
2.5
expected to report net Profit (reported) CAGR of ~19%
to
~`2,075cr over FY2017-20E mainly due to
improve ment in replace ment demand.
Market Outlook
April 24, 2018
Key Upcoming Events
Result Calendar
D ate
C ompany
April 24, 2018
Persistent
April 25, 2018
UltraTech Cement, Wipro
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 24, 2018
7:30 PMUS
Existing home sales
Million
Mar
5.54
5.55
7:30 PMUS
New home sales
Thousands
Mar
618.00
630.00
Apr 26, 2018
2:30 PMEuro Zone Euro-Zone Consumer Confidence
Value
Apr F
0.40
6:00 PMUS
Initial Jobless claims
Thousands
Apr 21
232.00
230.00
Apr 27, 2018
5:15 PMEuro Zone ECB announces interest rates
%
Apr 26
-
-
6:00 PMUS
GDP Qoq (Annualise d)
% Change
1Q A
2.90
2.00
1:25 PMGermany Unempl oyment 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 N onfarm payrolls
Thousands
Apr
103.00
185.00
6:00 PMUS
Unnemployment rate
%
Apr
4.10
4.00
May 08, 2018
US
Producer Price Index (mom)
% Change
Apr
0.20
Source: Bloomberg, Angel Research
Market Outlook
April 24, 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 24, 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 as on 24 April, 2018
Market Outlook
April 24, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
C ountry
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
85,824
2.3
7.6
33.4
Russia
Micex
4,386
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 as on 24 April, 2018 68in4
