Market Outlook
April 25, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Cl ose)
Indian markets are likely to open negative tracking global indices and SGX Nifty.
BSE Sensex
0.5
166
34,617
U.S. Stocks moved sharply lower over the course of the trading session. With the
Nifty
0.3
30
10,614
pullback on the day, the Dow closed lower for the fifth consecutive session. The Dow
Mid Cap
(0.0)
(4)
16,877
Jones dipped by 1.7 percent to 24,024 and the Nasdaq fell by 1.7 percent to
Small Cap
(0.1)
(24)
18,250
7,007.
Bankex
0.4
111
28,034
U.K. stocks were modestly higher, tracking a weaker pound, which extended its slide
to hit a five-week low against the dollar on expectations the Bank of England might
Global Indices
Chg (%)
(Pts)
(Cl ose)
not raise interest rates again in May. The FTSE 100 was up by 0.3% to end at 7,419.
Dow Jones
(1.7)
(425)
24,024
On domestic front, Indian shares rose on Tuesday even as the near-term economic
Nasdaq
(1.7)
(122)
7,007
outlook remained clouded with significant external and domestic headwinds. The
FTSE
0.3
21
7,419
BSE Sensex was up by 0.5% at 34,617.
Nikkei
0.9
190
22,278
News Analysis
Hang Seng
1.3
382
30,636
Yogi Government to host MSME Summit, aims to give CM's pet ODOP project
Shanghai Com
2.0
61
3,129
big push
Detailed analysis on Pg2
A dvances / Declines
BSE
NSE
Advances
1,184
922
Investor’s Ready Reckoner
Declines
1,510
884
Key Domestic & Global Indicators
Unchanged
141
77
Stock Watch: Latest investment recommendations on 150+ stocks
Refer Pg5 onwards
Volumes (` Cr)
Top Picks
BSE
3,380
C MP
Target
U psi de
C ompany
Sector
R ating
(`)
(`)
(%)
NSE
31,968
Blue Star
Capital Goods Accumulate
785
867
10.4
Dewan Housi ng Finance
Financials
Buy
585
720
23.1
Net Inflows (` Cr)
Ne t
Mtd
Ytd
Century Plyboards
Forest Product
Buy
347
400
15.2
FII
(257)
(4,305)
9,303
Navkar Corporation
Others
Buy
179
265
48.1
*MFs
198
7,764
42,224
KEI Industrie s
Capital Goods Accumulate
439
485
10.5
More Top Picks on Pg4
Top Gainers
Price (`)
Chg (%)
Key Upcoming Events
Previous
C onsensus
GATI
121
20.0
D ate
Region
Event Description
ReadingExpectations
ASTRAMICRO
98
11.8
Apr 26, 2018 Euro Zone ECB announces interest rates
-
-
IBVENTUREPP
231
10.0
Apr 26, 2018 US
Initial Jobless claims
232.00
230.00
Apr 27, 2018 Euro Zone Euro-Zone Consumer Confidence
0.40
IBVENTURES
429
10.0
Apr 27, 2018 UK
GDP (YoY)
1.40
1.40
GNFC
461
7.2
Apr 27, 2018 US
GDP Qoq (Annualise d)
2.90
2.00
More Events on Pg7
Top Losers
Price (`)
Chg (%)
RNAVAL
23
-13.3
COROMANDEL
471
-11.0
RCOM
18
-10.5
HATHWAY
36
-7.6
NATIONALUM
79
-7.5
As on April 24, 2018
Market Outlook
April 25, 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
Over 60,000 spouses of Indian H-1B visaholders may soon go jobless
Indian companies plan changes as AI reshapes future workplace
Government meets Rs 10 trillion agricultural credit disbursal target for FY18
Yogi Government to host MSME Summit, aims to give CM's pet ODOP project
big push
Corporate News
Gujarat's GNFC turns long term debt free, posts 51% rise in PAT for FY'18
Tata Steel Kalinganagar misses crude steel output target in FY18
Lenovo Group to 'Make in India' smart wearables, eyes 20% market share
Malaysia's IHH makes binding offer to invest Rs 6.5 bn in Fortis Healthcare
Market Outlook
April 25, 2018
Quarterly Bloomberg Brokers Consensus Estimate
Wipro Ltd - April 25, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
13,924
14,396
(3.3)
13,669
1.9
EBIDTA
2,842
3,226
(12)
2,487
14.3
%
20.4
22.4
18.2
PAT
2,127
2,267
(6.2)
1,930
10.2
UltraTech Cement Ltd - April 25, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
8,700
7,020
23.9
8,019
8.5
EBIDTA
1,446
1,336
8.2
1,338
8.1
%
16.6
19
16.7
PAT
530
726
(27)
456
16.2
Mahindra & Mahindra Financial Services Ltd - April 25, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
1,320
2,123
(37.8)
2,182
(39.5)
EBIDTA
828
1,257
(34.1)
1,406
(41.1)
%
62.7
59.2
64.4
PAT
430
278
54.6
365
17.8
Market Outlook
April 25, 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
23,011
1,925
2,441
26.8
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
7,540
785
867
10.4
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
18,352
585
720
23.1
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
1,82,687
284
416
46.4
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
3,440
439
485
10.5
B2C sales and hi gher exports to boost the revenue s
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
2,213
388
475
22.4
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,693
179
265
48.1
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would boost
Siyaram Silk Mills
3,187
680
851
25.1
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
2,807
471
603
28.1
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
2,73,938
9,068
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
2,187
406
655
61.3
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
7,715
347
400
15.2
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
2,944
92
128
39.1
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
1,518
682
750
9.9
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
2,827
391
510
30.4
operating margi n due price hi ke in container glass
segment, turnaround in consumer busine ss.
Source: Company, Angel Research
Market Outlook
April 25, 2018
Top Picks
Market Cap
C MP
Target
Upside
C ompany
R ationale
(` Cr)
(`)
(`)
(%)
We expect financi alisation of savings and
Aditya Birla Capital
34,400
156
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
2,512
293
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
3,940
296
360
21.5
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
Nilkamal
2,568
1,721
2,178
26.5
healthy demand growth in plastic divi sion. On the
bottom-line front, we esti mate
~10% CAGR to
`162cr owing to improve ment in volumes.
The prism has diversified exposure in the different
segment such as Ceme nt, Tile & ready mix concrete.
Prism Cement
5,862
116
160
37.4
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
equipme nts like motors, transformers etc. It derives
Elantas Beck India Ltd
1,796
2,266
2,500
10.3
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
3,772
308
395
28.4
~`2,478cr over FY2017-20E mainly due to healthy
growth in plywood & lamination busine ss on the
back of strong brand and di stribution network
Ashok Leyland Ltd (ALL) i s the flagship company of
the Hinduja Group, and one of the largest
commercial vehicle manufacturers in India. Ashok
Ashok Leyland
46,556
159
163
2.5
Leyland expected to report net Profit (reported)
CAGR of ~19% to ~`2,075cr over FY2017-20E
mainly due to improve ment in re placeme nt de mand.
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
GMM Pfaudler Ltd
1,115
776
861
11
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.
Market Outlook
April 25, 2018
Key Upcoming Events
Result Calendar
D ate
C ompany
April 25, 2018
UltraTech Cement, Wipro
April 26, 2018
Rallis, Ye s Bank, Reliance Capital
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 26, 2018
5:15 PMEuro Zone ECB announces interest rates
%
Apr 26
-
-
6:00 PMUS
Initial Jobless claims
Thousands
Apr 21
232.00
230.00
Apr 27, 2018
2:30 PMEuro Zone Euro-Zone Consumer Confidence
Value
Apr F
0.40
2:00 PMUK
GDP (YoY)
% Change
1Q A
1.40
1.40
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)
Apr 30, 2018
6:30 AMChina
PMI Manufacturing
Value
Apr
51.50
51.20
May 01, 2018
2:00 PMUK
PMI Manufacturing
Value
Apr
55.10
May 02, 2018
1:25 PMGermany PMI Manufacturing
Value
Apr F
58.10
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
1:25 PMGermany PMI Services
Value
Apr F
54.10
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
China
Exports YoY%
% Change
Apr
(2.70)
Source: Bloomberg, Angel Research
Market Outlook
April 25, 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 25, 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 25 April, 2018
Market Outlook
April 25, 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
4,432
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 25 April, 2018 68in4
