Market Outlook
October 26, 2015
Market Cues
Domestic Indices
Chg (%)
(Pts)
(Close)
Indian markets are expected to open on positive note tracking the SGX Nifty and
BSE Sensex
0.7
183
27,471
most its Asian peers.
Nifty
0.5
44
8,295
Extending the rally seen in the previous session, the US markets closed higher mainly
Mid Cap
(0.3)
(29)
11,138
on the news that China’s Central Bank had unexpectedly lowered interest rates.
Small Cap
(0.4)
(43)
11,519
Additionally, the markets also reacted to strong quarterly numbers reported by tech
companies after the close of Thursday’s trading session.
Bankex
1.3
263
20,478
European stocks also extended gains for a second day on expectations of European
Central Bank (ECB) considering expanding its stimulus program in December and
Global Indices
Chg (%)
(Pts)
(Close)
on news of Chinese rate cut.
Dow Jones
0.9
158
17,647
Indian Markets closed in the positive territory and snapped its two-day loosing streak
Nasdaq
2.3
112
5,032
as it mirrored global market’s reaction to positive news flow from Europe.
FTSE
1.1
68
6,444
Nikkei
2.1
389
18,825
News & Result Analysis
Hang Seng
1.3
307
23,152
Ashoka Buildcon bags `277cr project from NHAI
Shanghai Com
1.3
44
3,412
Tata Motors expect 30% growth in exports
TVS Srichakra to invest `150cr to expand capacity
Detailed analysis on Pg2
Advances / Declines
Bse
Nse
Advances
1,262
648
Investor’s Ready Reckoner
Declines
1,451
846
Key Domestic & Global Indicators
Unchanged
158
85
Stock Watch: Latest investment recommendations on 150+ stocks
Refer P5 onwards
Volumes (` Cr)
Top Picks
BSE
2,545
CMP
Target
Upside
Company
Sector
Rating
(`)
(`)
(%)
NSE
15,587
Axis Bank
Financials
Buy
526
674
28.2
HCL Tech
IT
Buy
854
1,132
32.6
Net Inflows (` Cr)
Net
Mtd
Ytd
ICICI Bank
Financials
Buy
286
370
29.3
FII
626
5,306
123,371
Power Grid
Power
Buy
136
170
24.8
MFs
78
1,063
80,068
TCS
IT
Buy
2,536
3,165
24.8
More Top Picks on Pg3
Top Gainers
Price (`)
Chg (%)
Key Upcoming Events
Kpit
135
9.3
Previous
Consensus
Date
Region
Event Description
Fsl
33
6.6
Reading
Expectations
Oct 27
UK
GDP(YoY)
2.4
-
Pel
983
5.2
Oct 27
US
Consumer Confidence
103.0
102
Justdial
1,053
3.5
Oct 28
US
FOMC rate decision
0.25
0.25
Cub
89
3.3
Oct 28
Germany
Unemployment change (000's)
2.0
-
Top Losers
Price (`)
Chg (%)
Concor
1,351
(8.3)
Sreinfra
51
(7.9)
Idea
140
(7.4)
Infratel
390
(4.7)
Irb
248
(4.3)
As on October 23, 2015
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Market Outlook
October 26, 2015
Ashoka Buildcon bags `277cr project from NHAI
Ashoka Buildcon has bagged a `277cr road project from National Highways
Authority of India (NHAI) for development of 4-lane Islampur bypass of 10.31 km
length on NH-31 in the state of West Bengal under NHDP Phase-II on EPC basis.
As on 1QFY2016, the company’s Roads order book stood at `1,258cr. The
company is also in power transmission and distribution sector with various projects
in Maharashtra, Chhattisgarh, Tamil Nadu and Bihar. Roads constitute 44% of the
overall order book while the T&D EPC orders account for the balance 56%. The
company expects that road EPC will form a significant portion of the overall EPC
order book on the back of anticipated awarding from NHAI. Ashoka Builcon had
recently raised `500cr from QIP and the proceeds from the QIP are expected to
fund the future growth for the company.
Tata Motors expect 30% growth in exports
Tata Motors which had seen exports of 45,000 vehicles, including busses, last year
is expecting a 30% yoy increase in exports on yoy basis. The company is targeting
exports of approximately 60,000 units for the current year. The bus industry which
has grown in the first half in comparison to the previous is expected to grow at
around 20% this year and continue the growth in next 12-18 months. The
company is expected to continue maintaining its market share of 40-45% in the
segment. The total year to date sales for Tata Motors for FY2016 stood at 242,569
units compared to 236,594 for FY2015. We remain positive on the stock and have
an Accumulate rating on the stock with a target price of `424.
TVS Srichakra to invest `150cr
As per media reports, the company has lined up capex of `150cr to increase its
capacity to around 30.0mn tyres per year. This is in-line with the management’s
previous indication of reaching monthly production target of 2.5mn tyres per
month. The company has been adding capacity and has raised its monthly
production capacity from 1.7mn tyres per month to 2.0mn tyres per month in
FY2015 and has initiated work to add 3mn tyres per month by December 2015.
Despite of muted year in terms of growth for the 2W industry, the management
said that the company grown by 3% for the year in the OEM segment. It has a
leadership position in the 2W OEM segment and is constantly increasing its share
in the aftermarket segment. We have a positive view on the stock and have an
Accumulate rating on the stock with a target price of `3,210.
Economic and Political News
'Sin tax' for alcohol, tobacco industries in GST regime
New energy norms for urea plants may save `800cr in subsidy
Captive coal mines production rises 34% to 53MT in FY2015
Corporate News
Madhucon Projects sells Agra-Jaipur expressway project for `248cr
Jaypee Group again in talks with JSW to sell its 20 MT cement portfolio
Special audit report on Amtek Auto likely by next week: Bankers
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Market Outlook
October 26, 2015
Top Picks ★★★★★
Large Cap
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
Healthy pace of branch expansion, backed by distribution
Axis Bank
1,25,004
526
674
28.2
network, will be the driving force for the bank’s retail business
and overall earnings.
The stock is trading at attractive valuations and is factoring all
HCL Tech
1,20,073
854
1,132
32.6
the bad news.
Due to its robust franchise and capital adequacy position, the
bank is well positioned to grow by at least a few percentage
ICICI Bank
1,66,187
286
370
29.3
points higher than the average industry growth rate from a
structural point of view.
Back on the growth trend; expect a long term growth of 14% to
Infosys
2,63,816
1,149
1,306
13.7
be a US$20bn in FY2020.
Government thrust on Renewable sector and strong order book
Inox Wind
8,811
397
505
27.2
would drive future growth.
LICHF continues to grow its retail loan book at a healthy pace
with improvement in asset quality. We expect the company to
LIC HFL
24,211
480
570
18.8
post a healthy loan book which is likely to reflect in a strong
earnings growth.
Direct beneficiary of the huge investments lined up in the power
Power Grid
71,280
136
170
24.8
transmission sector.
Growth to pick up from 2HFY2017, attractive given the risk-
TCS
4,99,740
2,536
3,165
24.8
reward.
Tech Mahindra
51,976
540
646
19.6
Acquisitions, to drive growth, normalised valuations attractive.
An improving liability franchise, capital adequacy well above
Yes Bank
32,273
770
906
17.6
Basel III requirements and lowest NPA ratio in the industry, will
help Yes Bank to deliver a stronger growth.
Source: Company, Angel Research
Mid Cap
Market Cap
CMP
Target
Upside
Company
Rationale
(` Cr)
(`)
(`)
(%)
Bajaj Electricals
2,536
251
341
35.7
Visible turnaround in E&P business to drive the earnings
Garware Wall Ropes
765
350
390
11.6
Higher exports & easing material prices to drive profitability
Comfortable balance sheet to support strong growth; this
MBL Infrastructures
902
218
360
65.5
coupled with attractive valuation to lead to rerating.
New product introductions and increased sourcing by clients to
Minda Industries
802
506
652
28.9
enable outpace industry growth
Strong brand & quality teaching with innovative technologies &
MT Educare
566
142
169
18.8
higher government educational spending to boost growth
Earnings boost on back of stable material prices and favourable
Radico Khaitan
1,326
100
112
12.3
pricing environment. Valuation discount to peers provides
additional comfort
Structural shift in the Lighting industry towards LED lighting will
Surya Roshni
640
146
183
25.3
drive growth.
Tree House
1,219
288
449
55.8
Robust expansion plan for pre-schools to drive growth
Source: Company, Angel Research
www.angelbroking.com
Market Outlook
October 26, 2015
Quarterly Bloomberg Brokers Consensus Estimate
United Phosphorus Ltd Consol - October 26, 2015
Particulars (` cr)
2QFY16E
2QFY15
y-o-y (%)
1QFY16
q-o-q (%)
Net sales
2,906
2,618
11.0
3,012
(3.5)
EBITDA
530
481
10.2
562
(5.7)
EBITDA margin (%)
18.2
18.4
18.7
Net profit
231
166
39.2
275
(16.0)
HDFC Ltd - October 26, 2015
Particulars (` cr)
2QFY16E
2QFY15
y-o-y (%)
1QFY16
q-o-q (%)
PAT
1,637
1,361
20.3
1,358
20.5
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