Market Outlook
May 25, 2018
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are likely to open positive tracking global indices and SGX Nifty.
BSE Sensex
0.9
318
34,663
U.S. Stocks once again staged a recovery attempt over the course of the trading day
Nifty
0.8
84
10,514
on Thursday. The major averages climbed well off their worst levels of the day but
Mid Cap
(0.2)
(38)
15,662
still closed in negative territory. The Dow Jones dipped by 0.3% to 24,811 and the
Small Cap
(0.1)
(23)
16,954
Nasdaq was flat 0.0% at 7,424.
Bankex
1.4
407
29,242
U.K. stocks gave up earlier gains to turn lower on yesterday as the pound climbed
against its major rivals after the release of upbeat retail sales data. Retail sales
Global Indices
Chg (%)
(Pts)
(Close)
volume, including auto fuel, expanded 1.6 percent month-on-month in April, in
contrast to a 1.1 percent fall in March, official data showed. Sales were forecast to
Dow Jones
(0.3)
(75)
24,811
climb 0.9 percent. The benchmark FTSE 100 was down by 0.9% at 7,717.
Nasdaq
(0.0)
(1.5)
7,424
FTSE
(0.9)
(72)
7,717
On domestic front, Indian shares rose sharply on Thursday, with IT stocks leading
the surge as a weakening rupee helped lift IT stocks.
The trading started flat with
Nikkei
(1.1)
(253)
22,437
dovish Fed minutes as well as a drop in crude oil prices offering some support after
Hang Seng
0.3
95
30,760
recent heavy losses. The BSE Sensex was up by 0.9% to 34,663.
Shanghai Com
(0.5)
(14)
3,155
News Analysis
Advances / Declines
BSE
NSE
Sebi allows 'omnibus' trade structure at Gift City to ease market access
Advances
1,263
698
Detailed analysis on Pg2
Declines
1,398
1,117
Unchanged
134
66
Investor’s Ready Reckoner
Key Domestic & Global Indicators
Volumes (` Cr)
Stock Watch: Latest investment recommendations on 150+ stocks
BSE
3,147
Refer Pg5 onwards
NSE
28,862
Top Picks
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
Net Inflows (` Cr)
Net
Mtd
Ytd
Blue Star
Capital Goods
Buy
705
867
23.0
FII
(1,428)
(6,056)
1,341
Dewan Housing Finance
Financials
Buy
601
720
19.8
*MFs
(23)
7,379
53,132
Parag Milk Foods
Others
Buy
331
410
23.9
Navkar Corporation
Others
Buy
150
265
76.7
Top Gainers
Price (`)
Chg (%)
KEI Industries
Capital Goods
Buy
478
589
23.4
More Top Picks on Pg4
EROSMEDIA
142
19.1
NCC
114
8.8
Key Upcoming Events
Previous
Consensus
KSCL
507
7.5
Date
Region
Event Description
ReadingExpectations
ASTRAL
970
7.0
May 25, 2018 UK
GDP (YoY)
1.20
1.20
JUSTDIAL
465
6.6
May 29, 2018 US
Consumer Confidence
128.70
128.00
May 30, 2018 US
GDP Qoq (Annualised)
2.30
2.30
Top Losers
Price (`)
Chg (%)
May 30, 2018 Germany Unemployment change (000's)
(7.00)
May 31, 2018 China
PMI Manufacturing
51.40
GET&D
331
-8.5
More Events on Pg7
GRANULES
83
-7.3
JETAIRWAYS
392
-7.0
TATASTEELPP
132
-6.9
OIL
215
-6.8
As on May 24, 2018
Market Outlook
May 25, 2018
News Analysis
Sebi allows 'omnibus' trade structure at Gift City to ease
market access
Capital market regulator Securities and Exchange Board of India (Sebi) on
Thursday allowed ‘omnibus’ trades at the Gujarat International Finance Tec-
city (GIFT City), India’s only international financial service centre (IFSC). An
omnibus structure allows an investor trade through a broker or service
provider with confidentiality. Such structures are allowed at major jurisdiction
worldwide. With a view to further facilitate ease of market access for foreign
investors and based on feedback received from market participants, it has
been decided to permit segregated nominee account structure in IFSC. Orders
of foreign investors may be routed through eligible segregated nominee
account providers for trading on stock exchanges in IFSC.
Permission for omnibus trading comes at a time when Indian exchanges have
snapped ties with foreign bourses in order to curb offshore trading of Indian
products. This brings Gift City at par with any international market.
Earlier, foreign portfolio investors (FPIs) couldn’t trade at Gift without setting
up a shop there. Omnibus structure will now allow them to trade directly
Economic and Political News
Rs 130 bn tenders withdrawn or cancelled to promote Make in India products
States must reduce duty on petrol, create fiscal space, says NITI Aayog V-C
Andhra plans Rs51,000 crore capex in 1st phase of Amaravati project
India drags US to WTO over levy of additional duties on steel, aluminium
Corporate News
Sebi allows 'omnibus' trade structure at Gift City to ease market access
DoT clears Rs 40 bn Idea-ATC mobile tower deal, paves way for Voda merger
GAIL India March quarter net profit posts four-fold jump to Rs.10.21 bn
Chhattisgarh ties up with Dabur to provide herbs for ayurvedic products
Market Outlook
May 25, 2018
Quarterly Bloomberg Brokers Consensus Estimate
Sunpharma Ltd - May 25, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
6,703
7,136
(6.1)
6,653
2.3
EBIDTA
1,449
1,547
(6.3)
1,453
(0.3)
%
21.6
21.7
21.8
PAT
895
1,385
(35.4)
400
123.7
Cadila Healthcare Ltd - May 25, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
3,207
2,478
29.5
3,259
(1.6)
EBIDTA
794
463
71.5
841
(5.6)
%
24.5
18.7
25.8
PAT
546
385
41.9
543
0.6
Tech Mahindra Ltd - May 25, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
Sales
7,987
7,495
6.5
7,775
2.7
EBIDTA
1,344
898
49.7
1,264
6.3
%
16.8
11.9
16.2
PAT
930
589
57.9
924
0.6
Bank of Baroda Ltd - May 25, 2018
Particulars ( ` cr)
4QFY18E
4QFY17
y-o-y (%)
3QFY18
q-o-q (%)
PAT
(28)
154
111
Market Outlook
May 25, 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
23,255
1,945
2,441
25.5
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
6,770
705
867
23.0
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
18,851
601
720
19.8
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
ICICI Bank
1,91,119
297
416
39.9
resolution of NPA would reduce provision cost,
which would help to report better ROE.
High order book execution in EPC segment, rising
KEI Industries
3,742
478
589
23.4
B2C sales and higher exports to boost the revenues
and profitability
Expected to benefit from the lower capex
Music Broadcast Limited
1,953
342
475
38.8
requirement and 15 year long radio broadcast
licensing.
Massive capacity expansion along with rail
Navkar Corporation
2,258
150
265
76.7
advantage at ICD as well CFS augur well for the
company
Strong brands and distribution network would
Siyaram Silk Mills
2,854
609
851
39.8
boost growth going ahead. Stock currently trades at
an inexpensive valuation.
GST regime and the Gujarat plant are expected to
Maruti
2,54,043
8,410
10,619
26.3
improve the company’s sales volume and margins,
respectively.
We expect loan book to grow at 24.3% over next
GIC Housing
2,037
378
655
73.1
two year; change in borrowing mix will help in NIM
improvement
We expect sales/PAT to grow at 13.5%/20% over
LT Foods
2,674
84
128
53.1
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
1,409
633
750
18.4
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
2,588
358
510
42.5
operating margin due price hike in container glass
segment, turnaround in consumer business.
Source: Company, Angel Research
Market Outlook
May 25, 2018
Top Picks
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
We expect financialisation of savings and
Aditya Birla Capital
31,233
142
218
53.6
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
2,784
331
410
23.9
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
1,704
750
1,016
35.5
related services. On the bottom-line front, we
expect a CAGR of ~28% to `82cr over the same
period on the back margin improvement.
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
HDFC Bank
5,15,733
1,986
2,315
16.6
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.
We expect strong PAT growth on back of healthy
growth in automobile segment (on back of new
launches and facelifts in some of the model ) and
M&M
102638
831
990
19.2
strong growth in Tractors segment coupled by its
strong brand recall and improvement in rural
sentiment
Source: Company, Angel Research
Market Outlook
May 25, 2018
Fundamental Call
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
CCL is likely to maintain the strong growth trajectory
CCL Products
4,156
312
360
15.2
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
2,453
1,644
2,178
32.5
healthy demand growth in plastic division. On the
bottom-line front, we estimate
~10% CAGR to
`162cr owing to improvement in volumes.
Elantas Beck India is the Indian market leader in
liquid insulation segment used in electrical
equipments like motors, transformers etc. It derives
Elantas Beck India Ltd
1,622
2,046
2,500
22.2
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
3,396
277
395
42.6
~`2,478cr over FY2017-20E mainly due to healthy
growth in plywood & lamination business on the
back of strong brand and distribution network
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
1,172
802
920
14.7
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.
L&T Fin’s new management is on track to achieve
L&T Finance Holding
32,511
163
210
28.9
ROE of 18% by 2020 and recent capital infusion of
`3000cr would support advance growth.
Market Outlook
May 25, 2018
Key Upcoming Events
Result Calendar
Date
Company
May 25, 2018
Sun Pharma, Tech Mahindra, Bank of Baroda, Cadila Healthcare, IDBI Bank, Page Industries
May 26, 2018
Corporation Bank, Nalco, Sarda Energy, Divi's Lab.
Source: Bloomberg, Angel Research
Global economic events release calendar
Bloomberg Data
Date
Time
Country
Event Description
Unit
Period
Last Reported
Estimated
May 25, 2018
2:00 PMUK
GDP (YoY)
% Change
1Q P
1.20
1.20
May 29, 2018
7:30 PMUS
Consumer Confidence
S.A./ 1985=100
May
128.70
128.00
May 30, 2018
6:00 PMUS
GDP Qoq (Annualised)
% Change
1Q S
2.30
2.30
1:25 PMGermany Unemployment change (000's)
Thousands
May
(7.00)
May 31, 2018
6:30 AMChina
PMI Manufacturing
Value
May
51.40
Jun 01, 2018
6:00 PMUS
Change in Nonfarm payrolls
Thousands
May
164.00
195.00
6:00 PMUS
Unnemployment rate
%
May
3.90
3.90
2:00 PMUK
PMI Manufacturing
Value
May
53.90
Jun 06, 2018
2:30 PMIndia
RBI Repo rate
%
Jun 6
6.00
2:30 PMIndia
RBI Reverse Repo rate
%
Jun 6
5.75
2:30 PMIndia
RBI Cash Reserve ratio
%
Jun 6
4.00
Jun 07, 2018
2:30 PMEuro Zone Euro-Zone GDP s.a. (QoQ)
% Change
1Q F
0.40
Jun 08, 2018
China
Exports YoY%
% Change
May
12.90
Jun 09, 2018
7:00 AMChina
Consumer Price Index (YoY)
% Change
May
1.80
Jun 11, 2018
2:00 PMUK
Industrial Production (YoY)
% Change
Apr
2.90
Source: Bloomberg, Angel Research
Market Outlook
May 25, 2018
Macro watch
Exhibit 1: Quarterly GDP trends
Exhibit 2: IIP trends
(%)
(%)
8.5
10.0
9.0
9.1
7.3
7.4
9.0
8.0
7.0
8.0
8.1
7.0
7.6
7.6
8.0
7.3
7.2
7.2
6.0
6.8
4.8
6.5
4.4
7.0
5.0
4.1
6.1
5.7
4.0
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
4.6
4.3
50.0
4.0
3.6
3.3
3.3
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
35.0
6.50
30.0
6.00
25.0
5.50
20.0
5.00
15.0
4.50
10.0
4.00
5.0
0.0
3.50
(5.0)
3.00
Source: Bloomberg, Angel Research as on 24 May, 2018
Source: RBI, Angel Research
Market Outlook
May 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 24 May, 2018
Market Outlook
May 25, 2018
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country
Name of index
Closing price
1M
3M
1YR
Brazil
Bovespa
80,867
(5.5)
(5.8)
19.7
Russia
Micex
4,485
1.4
7.1
11.4
India
Nifty
10,430
(0.7)
1.3
11.4
China
Shanghai Composite
3,169
2.7
0.0
2.1
South Africa
Top 40
50,600
(0.5)
(3.1)
5.1
Mexico
Mexbol
45,777
(5.5)
(6.4)
(6.7)
Indonesia
LQ45
923
(7.8)
(15.0)
1.3
Malaysia
KLCI
1,804
(4.1)
(1.9)
1.6
Thailand
SET 50
1,156
(3.8)
(2.7)
15.8
USA
Dow Jones
24,887
1.8
0.4
18.4
UK
FTSE
7,788
5.7
7.5
3.6
Japan
Nikkei
22,690
2.4
4.5
13.9
Germany
DAX
12,977
3.5
4.7
2.6
France
CAC
5,566
2.8
5.7
5.3
Source: Bloomberg, Angel Research as on 24 May, 2018
Market Outlook
May 25, 2018
Exhibit 7: Historical Angel Top Picks/Fundamental Calls
Date Added
Top Picks/Fundamental
Stocks
Reco Price
Target/Revised Price
Current Status
04-05-2018
Top Picks
M&M
860
990
Open
03-05-2018
Fundamental
L&T Finance Holding
171
210
Open
02-05-2018
Top Picks
HDFC Bank
1944
2315
Open
04-05-2018
Top Picks
Matrimony.com Ltd
810
1016
Open
20-04-2018
Top Picks
Matrimony.com Ltd
781
984
15-05-2018
Top Picks
Parag Milk Foods Limited
310
410
Open
16-04-2018
Top Picks
Parag Milk Foods Limited
249
333
14-05-2018
Fundamental
GMM Pfaudler Limited
818
900
Open
06-04-2018
Fundamental
GMM Pfaudler Limited
712
861
07-03-2018
Fundamental
Ashok Leyland Ltd
139
163
Closed (26/04/2018)
03-03-2018
Fundamental
Greenply Industries
340
395
Open
16-04-2018
Top Picks
Safari Industries
651
750
Open
21-02-2018
Top Picks
Safari Industries
532
650
16-02-2018
Top Picks
HSIL Ltd
433
510
Open
07-02-2018
Fundamental
Elantas Beck India Ltd.
2155
2500
Open
01-02-2018
Top Picks
ICICI Bank
352
416
Open
01-02-2018
Top Picks
Aditya Birla Capital
167
218
Open
04-01-2018
Fundamental
CCL Products
278
360
Open
03-01-2018
Fundamental
Nilkamal Ltd
1880
2178
Open
01-01-2018
Fundamental
Capital First Ltd
693
850
Closed (15/01/2018)
30-12-2017
Fundamental
Shreyans Industries Ltd
205
247
Closed
Fundamental
Prism Cement Ltd
160
Closed (09/05/2018)
21-12-2017
Fundamental
Prism Cement Ltd
118
131
18-12-2017
Fundamental
Menon Bearings Limited
92
114
Closed (17/01/2018)
14-12-2017
Top Picks
Ruchira Papers Ltd.
188
244
Closed (09/02/2018)
17-05-2018
Top Picks
Century Plyboards India
280
Closed(17/05/2018)
28-11-2017
Top Picks
Century Plyboards India
317
400
19-12-2017
Top Picks
LT Foods
85
128
Open
06-11-2017
Top Picks
LT Foods
74
96
16-10-2017
Fundamental
Endurance Technologies Ltd
1111
1277
Closed (01/12/2017)
11-09-2017
Top Picks
GIC Housing
533
655
Open
10-10-2017
Top Picks
Music Broadcast Limited
404
475
Open
20-07-2017
Top Picks
Music Broadcast Limited
368
434
07-07-2017
Fundamental
L&T Finance Holdings Ltd
149
179
Closed (28/8/2017)
06-07-2017
Fundamental
Syngene International
478
564
Closed (1/3/2018)
05-07-2017
Top Picks
Maruti
7371
10619
Open
05-06-2017
Top Picks
Karur Vysya Bank
127
100
Closed (12/03/2018)
23-05-2018
Top Picks
KEI Industries
481
589
Open
04-01-2017
Top Picks
KEI Industries
125
485
01-12-2016
Top Picks
Alkem Lab
1700
2441
Open
17-10-2016
Top Picks
Asian Granito
267
534
Closed (18/02/2018)
17-05-2018
Top Picks
TV Today Network
460
Closed (17/05/2018)
04-08-2016
Top Picks
TV Today Network
297
603
05-04-2016
Top Picks
DHFL
189
720
Open
05-01-2016
Top Picks
Navkar Corporation
207
265
Open
08-12-2015
Top Picks
Blue Star
357
867
Open
30-10-2015
Top Picks
Siyaram Silk Mills
186
851
Open
Source: Company, Angel Research
Market Outlook
May 25, 2018
Research Team Tel: 022 - 39357800
DISCLAIMER
Angel Broking Private Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India
Limited,Bombay Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with
CDSL and Portfolio Manager with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking Private Limited is
a registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number
INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing
/dealing in securities Market. Angel or its associates/analyst has not received any compensation / managed or co-managed public
offering of securities of the company covered by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should
make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the
companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine
the merits and risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
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