Market Outlook
July 29, 2015
Dealer’s Diary
Domestic Indices
Chg (%)
(Pts)
(Close)
BSE Sensex
(0.4)
(102)
27,459
Indian markets are expected to open flat tracking SGX Nifty.
Nifty
(0.3)
(24)
8,337
After five trading sessions of losses, US markets ended in green as investors were
MID CAP
(0.2)
(20)
10,974
encouraged by strong earnings from UPS, Ford and other big companies. Also, US
SMALL CAP
(0.2)
(20)
11,523
markets gained on account of steady global markets performance.
BSE HC
(0.9)
(145)
16,503
FTSE 100 rose 0.8%, its first advance in six sessions. U.K. stocks finished higher
BSE PSU
(0.4)
(27)
7,568
Tuesday, aided by rally in RSA Insurance Group shares on takeover speculation.
BANKEX
0.4
90
20,977
AUTO
(0.7)
(129)
18,462
Benchmark Indices ended lower for fourth consecutive session on concerns of capital
METAL
(0.7)
(62)
8,509
outflows after SIT proposed stringent norms for P-notes. Also, investors turned
OIL & GAS
(0.5)
(45)
9,917
cautious with US FOMC meet ahead, as it would give signals on rate hikes.
BSE IT
(0.2)
(25)
10,851
News & Result Analysis
Global Indices
Chg (%)
(Pts)
(Close)
Result Review: Blue Star
Dow Jones
1.0
190
17,630
Refer detailed news & result analysis on the following page
NASDAQ
1.0
49
5,089
Markets Today
FTSE
0.8
50
6,555
The trend deciding level for the day is 27,517 / 8,352 levels. If NIFTY trades above
Nikkei
(0.1)
(21)
20,329
this level during the first half-an-hour of trade then we may witness a further rally up
Hang Sang
0.6
152
24,504
to 27,618 - 27,778 / 8,382 - 8,428 levels. However, if NIFTY trades below
Straits Times
(1.0)
(32)
3,281
27,517 / 8,352 levels for the first half-an-hour of trade then it may correct towards
Shanghai Com
(1.7)
(63)
3,663
27,358 - 27,257 / 8,307 - 8,276 levels.
Indian ADR
Chg (%)
(Pts)
(Close)
Indices
S2
S1
PIVOT
R1
R2
SENSEX
27,257
27,358
27,517
27,618
27,778
INFY
1.1
0.2
$16.9
NIFTY
8,276
8,307
8,352
8,382
8,428
WIT
0.5
0.1
$12.2
IBN
(0.9)
(0.1)
$9.5
Net Inflows (July 27, 2015)
HDB
0.7
0.4
$61.5
` cr
Purch
Sales
Net
MTD
YTD
FII
3,837
4,697
(860)
6,940
142,320
Advances / Declines
BSE
NSE
MFs
1,780
1,541
238
2,430
56,039
Advances
1,363
675
Declines
1,388
786
FII Derivatives (July 28, 2015)
Unchanged
127
73
` cr
Purch
Sales
Net
Open Interest
Index Futures
6,973
7,093
(120)
22,856
Volumes (` cr)
Stock Futures
15,049
15,455
(407)
53,072
BSE
3,318
NSE
18,178
Gainers / Losers
Gainer
Loser
Company
Price (`)
chg (%)
Company
Price (`)
chg (%)
JUBILANT
253
11.3
SYNDIBANK
90
(9.0)
ABIRLANUVO
2,196
6.8
JPINFRATEC
13
(7.0)
PNB
142
5.0
JSWENERGY
86
(6.8)
ALSTOMT&D
564
4.5
NAUKRI
829
(6.5)
SADBHAV
309
3.9
SUNTV
274
(6.2)
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Market Outlook
July 29, 2015
Result Review
Blue Star Ltd (CMP: `335/ TP: `387 / Upside: 15.7%)
Blue Star reported good set of numbers for 1QFY2016. The top-line for the
quarter improved by 8.5% yoy to `909cr. During the quarter, there were some
contracts of the PEIS business that were executed by Blue Star (PEIS was transferred
to subsidiary BSEEL on 31st March 2015- total amount of the contracts was `25cr).
The raw material cost as a percentage of sale increased marginally by 61bp yoy to
70.4% while employee and other expenses declined by 59bp yoy and 69bp yoy to
6.7% and 15.7% of sales, respectively. The EBITDA margin for the quarter
expanded by 67bp yoy to 7.2%. Consequently, the net profit increased by 25.9%
yoy to `39cr.
Electro Mechanical Projects and Packaged Air-conditioning Systems (EMPPAC)
business revenues declined by 2.9% yoy to `327cr while the segment margins
declined by 46bp yoy to 2.7%. EMMPPAC business continues to be impacted by
slower execution of projects and cost overruns in legacy projects. The cooling
products business on the other hand, continues to perform well for the company
registering 17.2% yoy growth in revenues to `556cr. The segment margins
declined by 66bp yoy to 14.2%.
At the current market price, the stock is trading at EV/Sales of 0.8x for FY2017E.
We have a Buy rating on the stock and with a revised target price of `387 based
on target EV/Sales of 0.9x for FY2017E. We may revise our numbers post
1QFY2016 earnings call.
Y/E
Sales OPM
PAT
EPS ROE P/E
P/BV
EV/EBITDA EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
3,649
5.0
82
9.1 17.5 36.6
6.2
18.4
0.9
FY2017E
4,209
5.9
132
14.7 25.3 22.7
5.4
13.4
0.8
Quarterly Bloomberg Brokers Consensus Estimate
Yes Bank Ltd- July 29, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
PAT
550
439
25.1
551
(0.2)
Nestle India Ltd- July 29, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
2,361
2,419
(2.4)
2,507
(5.8)
EBITDA
400
500
(20.1)
612
(34.7)
EBITDA margin (%)
16.9
20.7
24.4
Net profit
272
288
(5.6)
320
(15.2)
Dabur India Ltd (Consol)- July 29, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
2,065
1,864
10.8
1,945
6.2
EBITDA
317
268
18.4
346
(8.2)
EBITDA margin (%)
15.4
14.4
17.8
Net profit
255
211
21.1
285
(10.3)
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Market Outlook
July 29, 2015
Godrej Consumer Products Ltd (Consol)- July 29, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
2,116
1,886
12.2
2,083
1.6
EBITDA
298
242
23.4
387
(22.9)
EBITDA margin (%)
14.1
12.8
18.6
Net profit
193
143
34.8
266
(27.2)
JSW Steel Ltd (Consol)- July 29, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
11,583
13,067
(11.4)
12,364
(6.3)
EBITDA
1,540
2,612
(41.0)
1,683
(8.4)
EBITDA margin (%)
13.3
20.0
13.6
Net profit
(98)
656
0.0
62
0.0
Vedanta- July 29, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
17,403
17,056
2.0
17,732
(1.9)
EBITDA
4,300
5,673
(24.2)
4,014
7.1
EBITDA margin (%)
24.7
33.3
22.6
Net profit
544
1,341
(59.5)
491
10.6
NHPC Ltd- July 29, 2015
Particulars (` cr)
1QFY16E
1QFY15
y-o-y (%)
4QFY15
q-o-q (%)
Net sales
2,168
2,034
6.6
1,450
49.5
EBITDA
1,467
1,317
11.3
872
68.2
EBITDA margin (%)
67.7
64.8
60.2
Net profit
763
616
23.9
645
18.4
Economic and Political News
Import cover in forex reserves close to 9 months: RBI
ADB, govt ink $300mn loan pact for urban health mission
Monsoon improves, but pockets remain dry
Corporate News
IPAB to hear HUL's appeal against trade mark Sun Plus
Reliance shale gas returns turn negative in US
Mahindra Reva bets big on Metro Rail projects
Notify de-allocation of costly power from NTPC: Odisha tells Centre
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Market Outlook
July 29, 2015
Top Picks
Large Cap
Market Cap
CMP
Target
Upside
Company
Sector
Rating
(` Mn)
(`)
(`)
(%)
Axis Bank
Financials
1,33,271
Buy
561
716
27.6
ICICI Bank
Financials
1,65,463
Buy
285
392
37.5
Infosys
IT
2,44,280
Buy
1,064
1,306
22.8
LIC Housing Fin.
Financials
24,870
Buy
493
553
12.2
Power Grid
Power
73,896
Buy
141
170
20.4
TCS
IT
4,89,976
Buy
2,502
3,168
26.6
Tech Mahindra
IT
50,230
Buy
522
646
23.7
Yes Bank
Financials
33,225
Buy
795
1,006
26.6
Ashok Leyland
Auto
23,678 Accumulate
83
88
5.8
MRF
Others
16,665 Accumulate
39,293
43,439
10.6
Source: Angel Research, Bloomberg
Mid Cap
Market
CMP
Target
Upside
Company
Sector
Rating
Cap (` Mn)
(`)
(`)
(%)
Action Const. Equip. Capital Goods
434
Buy
44
54
22.7
Bajaj Electricals
Others
2,674
Buy
265
341
28.7
Hindustan Media Ven. Media
1,889
Buy
248
292
17.7
JK Tyre
Auto Ancillary
2,378
Buy
105
127
21.0
MBL Infrastructures
Construction
1,163
Buy
281
395
40.5
Mangalam Cements Cement
718
Buy
269
349
29.7
MT Educare
Others
452
Buy
113
141
24.8
Radico Khaitan
Others
1,201
Buy
88
112
27.3
Setco Automotive
Auto Ancillary
608
Buy
228
286
25.4
Source: Angel Research, Bloomberg
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Market Outlook
July 29, 2015
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
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