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www.angelbroking.com
Market Outlook
December 21, 2017
www.angelbroking.com
Market Cues
Indian markets are likely to open flat tracking global indices and SGX Nifty.
After failing to sustain an initial upward move, US markets showed a lack of
direction over the course of the trading session on Wednesday. The major averages
spent much of the day lingering near the unchanged line. The Dow dipped 28.1
points or 0.1 percent to 24,727, the NASDAQ edged down 2.9 points or less than a
tenth of a percent to 6,961 and the S&P 500 slipped 2.2 points or 0.1 percent to
2,679.
U.K. stocks ended lower on Wednesday after the International Monetary Fund
downgraded its forecast for Britain’s growth, saying last year’s decision to leave the
European Union is slowing the economy. The FTSE 100 index fell 0.3% to close at
7,525, its lowest close since Friday.
The benchmark indices in India closed lower after hitting record highs in the late
morning trade on Wednesday. BSE Sensex closed higher by 59.4 points, or 0.2%, to
33,777, while the Nifty 50 fell 19 points, or 0.2%, to 10,444.
News Analysis
HDFC Bank to raise up to `24,000cr via share sale
Detailed analysis on Pg2
Investor’s Ready Reckoner
Key Domestic & Global Indicators
Stock Watch: Latest investment recommendations on 150+ stocks
Refer Pg5 onwards
Top Picks
Company Sector Rating CMP
(`) Target
(`) Upside
(%)
Blue Star Capital Goods Accumulate 800 867 8.4
Dewan Housing Finance Financials Buy 607 712 17.3
Asian Granito Other Accumulate 530 570 7.5
Navkar Corporation Other Buy 191 265 39.0
KEI Industries Capital Goods Buy 359 436 21.5
More Top Picks on Pg4
Key Upcoming Events
Date Region Event Description Previous
Reading
Consensus
Expectations
Dec22 US New home sales Nov 685.00
Dec22 UK GDP (YoY) 3Q F 1.50
Dec27 US Consumer Confidence Dec 129.50
Feb14 Germany GDP nsa (YoY) 4Q P 2.30
More Events on Pg7
Domestic Indices Chg (%) (Pts) (Close)
BSE Sensex (0.2) (59) 33,777
Nifty (0.2) (19) 10,444
Mid Cap 0.4 63 17,419
Small Cap 0.8 147 18,675
Bankex (0.3) (99) 28,956
Global Indices Chg (%) (Pts) (Close)
Dow Jones (0.1) (28) 24,727
Nasdaq (0.1) (3) 6,961
FTSE (0.3) (19) 7,525
Nikkei 0.1 24 22,892
Hang Seng (0.1) (20) 29,234
Shanghai Com (0.3) (9) 3,288
Advances / Declines BSE NSE
Advances 1,587 1,058
Declines 1,136 683
Unchanged 185 77
Volumes (` Cr)
BSE 5,525
NSE 34,328
Net Inflows (` Cr) Net Mtd Ytd
FII (1,276) (4,545) 52,590
*MFs 146 6,172 1,14,674
Top Gainers Price (`) Chg (%)
Rcom 17 35.2
Ramcocem 808 12.9
Rnaval 39 10.7
Relcapital 455 7.1
Rpower 40 6.9
Top Losers Price (`) Chg (%)
Pnb 171 (4.4)
Bankindia 174 (3.9)
Videoind 17 (3.2)
Bluedart 4,484 (3.0)
Pageind 24,660 (2.7)
As on December 15 2017
2
www.angelbroking.com
Market Outlook
December 21, 2017
www.angelbroking.com
News Analysis
HDFC Bank to raise up to `24,000cr via share sale
Board of HDFC Bank Ltd has approved a plan to raise up to `24,000cr ($3.75
billion) to fund growth by selling shares to investors, including a preferential issue
to its parent HDFC Ltd. Shareholders will be asked to vote on the plan on January
19. As part of the planned fundraising, HDFC Bank will issue up to `8,500cr.
worth of shares to mortgage lender HDFC Ltd on a preferential basis, while the
remainder will be raised via modes, including ADRs and a share sale in India to
institutional investors.
The fund raising will result in a ~5% equity dilution and the capital infusion by
HDFC Ltd is likely to maintain or exceed parents current shareholding of 21.7% in
the bank. The current capital adequacy ratio is ~15% which will go up to ~18%.
With the expectation of capex recovery, it makes sense to raise funds now as
market conditions and valuations are good. The fundraising will help to fuel the
growth of the bank while improving its ratios.
Economic and Political News
RBI adds more restrictions on United Bank of India due to high NPAs
Risks to inflation, fiscal uncertainty to keep RBI alert, says Patel
DGCA issues show-cause notice to IndiGo in manhandling case
Govt may allow 100% FDI in telecom via automatic route
Corporate News
Hyundai to hike prices by up to 2% from January
Automotive industry seeks cut in tax on EVs batteries
Pidilite to consider share buyback on Dec. 26.
Varun Beverages to acquire PepsiCo India’s franchised sub territory in
Jharkhand
3
www.angelbroking.com
Market Outlook
December 21, 2017
www.angelbroking.com
Top Picks
Company Market Cap
(` Cr)
CMP
(`) Target
(`) Upside
(%) Rationale
Alkem Laboratories 25,677 2,148 2,341 9.0
Strong growth in domestic business due to its leade`hip
in acute therapeutic segment. Alkem expects to launch
more products in USA, which bodes for its international
business.
Asian Granito 1,595 530 570 7.5
We expect the company would report strong profitability
owing to better product mix, higher B2C sales and
amalgamation synergy.
Blue Star 7,667 800 867 8.4
Favorable outlook for the AC industry to augur well for
Cooling products business which is out pacing the
market growth. EMPPAC division's profitability to
improve once operating environment turns around.
Dewan Housing Finance 19,036 607 712 17.3
With a focus on the low and medium income (LMI)
consumer segment, the company has increased its
presence in tier-II & III cities where the growth
opportunity is immense.
Karur Vysya Bank 8,815 122 180 47.4
Loan growth is likely to pick up after a sluggish FY17.
Lower credit cost will help in strong bottom-line growth.
Increasing share of CASA will help in NIM
improvement.
KEI Industries 2,813 359 436 21.5
High order book execution in EPC segment, rising B2C
sales and higher exports to boost the revenues and
profitability
Music Broadcast 2,168 380 434 14.2 Expected to benefit from the lower capex requirement
and 15 year long radio broadcast licensing.
Navkar Corporation 2,869 191 265 39.0 Massive capacity expansion along with rail advantage
at ICD as well CFS augur well for the company
Siyaram Silk Mills 3,556 759 800 5.5
Strong brands and distribution network would boost
growth going ahead. Stock currently trades at an
inexpensive valuation.
TV Today Network 2,466 413 435 5.2
Market leadership in Hindi news genre and no. 2
viewership ranking in English news genre, exit from the
radio business, and anticipated growth in ad spends by
corporate to benefit the stock.
Maruti Suzuki 2,94,155 9,738 10,784 10.7
After GST, the company is expected to see higher
volumes along with improving product mix. The Gujarat
plant will also enable higher operating leverage which
will be margin accretive.
GIC Housing
2,212 411 655 59.5
We expect loan book to grow at 24.3% over next two
year; change in borrowing mix will help in NIM
improvement
Century Plyboards India 7,335 330 400 21.2
We expect CPIL to report net Revenue/PAT CAGR of
~17%/16% over FY2017-20E mainly due to healthy
growth in plywood & lamination business, forayed into
MDF & Particle boards on back of strong brand &
distribution network.
LT Foods 2,303 86 96 11.2
We expect sales/PAT to grow at 13.5%/20% over next
two years on the back of strong distribution network &
addition of new products in portfolio.
Ruchira Papers
429 198 244 23.5
We expect sales/PAT to grow at 13%/16% over next two
years on the back of strong healthy demand in writing
& printing paper and Kraft paper. Further, China had
banned making paper from waste pulp which would
benefit Indian paper companies.
Source: Company, Angel Research
1
www.angelbroking.com
Market Outlook
December 21, 2017
www.angelbr oki ng.com
Key Upcoming Events
Global economic events release calendar
Date Time Country Event Description Unit Period
Bloomberg Data
Last Reported Estimated
Dec 22, 2017 8:30 PM US New home sales Thousands Nov 685.00
3:00 PM UK GDP (YoY) % Change 3Q F 1.50
Dec 27, 2017 8:30 PM US Consumer Confidence S.A./ 1985=100 Dec 129.50
Feb 14, 2018 12:30 PM Germany GDP nsa (YoY) % Change 4Q P 2.30
Source: Bloomberg, Angel Research
3
www.angelbroking.com
Market Outlook
December 21, 2017
www.angelbr oki ng.com
Macro watch
Exhibit 1: Quarterly GDP trends
Source: CSO, Angel Research
Exhibit 2: IIP trends
Source: MOSPI, Angel Research
Exhibit 3: Monthly CPI inflation trends
Source: MOSPI, Angel Research
Exhibit 4: Manufacturing and services PMI
Source: Market, Angel Research; Note: Level above 50 indicates expansion
Exhibit 5: Exports and imports growth trends
Source: Bloomberg, Angel Research
Exhibit 6: Key policy rates
Source: RBI, Angel Research
6.1
7.3 7.6
8.0
7.2
9.1
7.9
7.5
7.0
6.1
5.7
6.3
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
3Q
FY15
4Q
FY15
1Q
FY16
2Q
FY16
3Q
FY16
4Q
FY16
1Q
FY17
2Q
FY17
3Q
FY17
4Q
FY17
1Q
FY18
2Q
FY18
(%)
2.4
3.5
1.2
4.4
3.2
2.9
(0.3)
1.0
4.5
4.1
2.2
(1.0)
-
1.0
2.0
3.0
4.0
5.0
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
(%)
3.4 3.2
3.7 3.9
3.0
2.2
1.5
2.4
3.3 3.3
3.6
4.9
-
1.0
2.0
3.0
4.0
5.0
6.0
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
(%)
40.0
42.0
44.0
46.0
48.0
50.0
52.0
54.0
56.0 O
ct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Mfg. PMI Services PMI
(10.0)
0.0
10.0
20.0
30.0
40.0
50.0
60.0
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Exports yoy growth Imports yoy growth(%)
3.00
3.50
4.00
4.50
5.00
5.50
6.00
6.50
No
v-1
6
Dec-1
6
Jan-17
Jan-17
Feb-1
7
Mar-17
Mar-17
Apr-17
May-17
May-17
Jun-1
7
Jul-1
7
Aug-17
Aug-17
Sep-1
7
Oct-1
7
Repo rate Reverse Repo rate CRR(%)
4
www.angelbroking.com
Market Outlook
December 21, 2017
www.angelbr oki ng.com
Global watch
Exhibit 1: Latest quarterly GDP Growth (%, yoy) across select developing and developed countries
Source: Bloomberg, Angel Research
Exhibit 2: 2017 GDP Growth projection by IMF (%, yoy) across select developing and developed countries
Source: IMF, Angel Research
Exhibit 3: One year forward P-E ratio across select developing and developed countries
Source: IMF, Angel Research
0.3
2.5
5.3
6.9
1.1
5.0
5.8
3.7
1.5
2.2
0.8
1.8
1.4
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Bra
zil
Russia
Ind
ia
Ch
ina
South
Africa
Ind
onesia
Ma
laysia
Tha
ilan
d
UK
USA
Germ
any
France
Ja
pa
n
(%)
0.7
1.8
6.7 6.8
0.7
5.2 5.4
3.7
1.7
2.2 2.0
1.6 1.5
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Brazil
Russia
India
China
South A
frica
Indonesia
Malaysia
Thailand
UK
USA
Germ
any
France
Japan
(%)
12
.5
4.5
19
.8
13
.2
16
.1
18
.4
15
.9
16
.9
14
.9
18
.6
13
.5
14
.7
15
.5
-
5.0
10.0
15.0
20.0
25.0
Brazil
Russia
India
China
South
Africa
Indonesia
Malaysia
Thailand
UK
USA
Germ
any
France
Japan
(x)
5
www.angelbroking.com
Market Outlook
December 21, 2017
www.angelbr oki ng.com
Exhibit 4: Relative performance of indices across globe
Returns (%)
Country Name of index Closing price 1M 3M 1YR
Brazil Bovespa 72,680 0.2 (2.6) 24.9
Russia Micex 2,118 (1.1) 2.4 (3.2)
India Nifty 10,463 1.4 2.9 28.9
China Shanghai Composite 3,297 (3.1) (2.5) 4.3
South Africa Top 40 51,266 (5.3) 3.8 18.7
Mexico Mexbol 48,403 1.5 (3.0) 7.6
Indonesia LQ45 1,042 1.6 4.5 16.7
Malaysia KLCI 1,737 1.1 (2.8) 5.7
Thailand SET 50 1,122 4.6 6.0 18.0
USA Dow Jones 24,755 5.5 10.7 23.9
UK FTSE 7,544 2.2 3.7 7.1
Japan Nikkei 22,868 2.3 15.5 18.8
Germany DAX 13,216 1.1 5.1 15.3
France CAC 5,383 0.6 2.0 11.0
Source: Bloomberg, Angel Research p68in4
Company Name Reco CMP Target Mkt Cap Sales ( ₹cr ) OPM(%) EPS (₹) PER(x) P/BV(x) RoE(%) EV/Sales(x)
( ₹ ) Price ( ₹) ( ₹ cr ) FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E
Agri / Agri Chemical
Rallis Sell 251 209 4,882 1,873 2,099 15.0 15.0 9.5 10.5 26.4 23.9 4.0 3.6 15.8 16.0 2.5 2.3
United Phosphorus Accumulate 736 820 37,438 18,922 21,949 18.0 18.5 36.2 45.6 20.3 16.2 4.3 3.5 22.7 23.8 2.1 1.8
Auto & Auto Ancillary
Ashok Leyland Accumulate 118 127 34,496 23,339 27,240 10.1 10.8 4.7 6.2 25.4 19.0 5.1 4.5 20.0 23.6 1.4 1.2
Bajaj Auto Neutral 3,301 - 95,524 23,936 27,955 19.5 20.1 142.7 167.3 23.1 19.7 5.0 4.5 21.8 22.8 3.6 3.0
Bharat Forge Buy 731 875 34,035 7,637 8,755 21.7 23.2 36.1 47.3 20.3 15.5 3.6 3.1 18.5 20.8 4.3 3.7
Eicher Motors Neutral 30,175 - 82,186 19,043 22,837 19.5 19.9 835.4 1,019.0 36.1 29.6 13.5 10.4 40.9 37.8 4.2 3.4
Gabriel India Neutral 196 - 2,811 1,782 2,033 9.7 10.2 7.1 8.9 27.6 22.1 5.6 4.7 21.0 22.2 1.5 1.3
Hero Motocorp Accumulate 3,741 4,129 74,702 32,239 36,878 16.0 15.6 184.4 206.5 20.3 18.1 6.4 5.6 31.3 30.7 2.1 1.8
Jamna Auto Industries Neutral 73 - 2,899 1,441 1,662 14.4 14.8 13.9 17.6 5.2 4.1 1.4 1.2 30.0 31.0 2.0 1.7
Mahindra and Mahindra Neutral 1,542 - 95,838 46,971 53,816 13.6 14.0 67.7 79.8 22.8 19.3 3.3 2.9 15.0 15.9 1.9 1.6
Maruti Accumulate 9,738 10,784 294,155 79,470 95,208 15.9 17.2 281.7 363.8 34.6 26.8 7.5 6.1 21.7 22.8 3.4 2.7
Minda Industries Neutral 1,299 - 11,229 4,328 5,084 11.0 11.9 27.3 36.4 47.7 35.7 10.1 7.9 23.1 25.6 2.7 2.3
Motherson Sumi Neutral 385 - 81,133 55,937 64,445 10.8 11.4 16.9 21.1 22.8 18.3 5.1 5.2 25.2 25.4 1.5 1.3
Tata Motors Neutral 422 - 121,832 303,167 343,649 11.8 13.8 33.1 54.7 12.8 7.7 2.1 1.7 16.9 23.0 0.5 0.4
TVS Motor Neutral 778 - 36,983 13,992 16,216 9.0 9.4 17.1 20.3 45.7 38.4 12.1 9.4 29.7 27.7 2.6 2.2
Amara Raja Batteries Neutral 833 - 14,227 6,140 7,122 14.3 15.6 29.3 39.0 28.4 21.4 4.9 4.1 17.1 19.0 2.3 2.0
Exide Industries Neutral 215 - 18,267 8,689 9,854 15.1 15.2 9.7 11.0 22.3 19.5 4.0 3.5 15.7 16.1 1.8 1.6
Apollo Tyres Neutral 260 - 14,870 15,739 17,326 13.3 14.6 20.4 26.7 12.7 9.7 1.5 1.4 20.4 26.7 1.2 1.1
Ceat Neutral 1,836 - 7,427 6,661 7,717 11.1 14.2 116.2 178.2 15.8 10.3 2.7 2.3 15.2 21.3 1.2 1.1
JK Tyres Neutral 140 - 3,186 8,318 9,239 16.2 16.4 21.0 27.5 6.7 5.1 1.3 1.1 19.1 20.4 0.8 0.7
Swaraj Engines Neutral 2,030 - 2,521 788 889 16.4 16.5 71.6 81.0 28.4 25.1 8.2 7.6 29.6 31.0 2.9 2.5
Subros Neutral 297 - 1,782 1,855 2,135 11.6 11.8 10.3 14.7 29.0 20.3 4.4 3.8 15.8 19.1 1.2 1.0
Capital Goods
BEML Neutral 1,566 - 6,523 4,286 5,194 7.1 8.2 42.9 58.1 36.5 27.0 3.0 2.7 7.6 8.7 1.6 1.3
Bharat Electronics Neutral 185 - 45,442 10,258 12,470 19.6 19.5 7.3 8.6 25.3 21.5 0.5 0.4 20.4 21.9 3.9 3.2
Voltas Neutral 637 - 21,064 6,778 8,004 9.6 11.0 17.1 22.4 37.2 28.4 8.9 7.8 17.7 19.8 2.8 2.4
BHEL Neutral 90 - 33,134 33,200 39,167 6.8 9.5 6.2 11.2 14.6 8.1 0.7 0.6 4.6 8.0 0.6 0.4
Blue Star Accumulate 800 867 7,667 5,220 6,207 6.3 6.6 16.8 22.3 47.6 35.9 9.5 8.4 19.9 23.3 1.4 1.2CG Power and Industrial Solutions Neutral 88 - 5,512 6,555 7,292 7.5 7.5 - 0.8 8,795.0 109.9 1.4 1.4 0.1 1.2 0.9 0.8
Greaves Cotton Neutral 114 - 2,793 1,778 1,993 14.7 15.1 8.1 9.1 14.1 12.6 3.2 3.0 21.8 23.6 1.3 1.2
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Stock WatchDecember 21, 2017
Company Name Reco CMP Target Mkt Cap Sales ( ₹cr ) OPM(%) EPS (₹) PER(x) P/BV(x) RoE(%) EV/Sales(x)
( ₹ ) Price ( ₹) ( ₹ cr ) FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E
Capital Goods
KEC International Neutral 369 - 9,483 9,779 11,113 9.4 9.8 14.2 18.2 26.0 20.3 5.0 4.1 21.1 22.1 1.2 1.1
KEI Industries Buy 359 436 2,813 3,001 3,391 10.0 10.0 13.0 16.1 27.6 22.3 5.0 4.2 18.2 18.7 1.1 1.0
Thermax Neutral 1,187 - 14,138 4,125 4,747 10.3 10.8 26.7 31.5 44.4 37.7 5.0 4.5 11.2 12.0 3.2 2.7
VATech Wabag Accumulate 603 681 3,294 3,867 4,126 9.6 10.0 34.9 39.8 17.3 15.1 2.9 2.5 17.7 17.5 0.9 0.8
Cement
ACC Neutral 1,725 - 32,392 12,255 13,350 13.5 14.3 58.0 66.2 29.7 26.1 3.5 3.3 11.5 12.2 2.6 2.4
Ambuja Cements Neutral 267 - 53,106 10,250 11,450 17.5 19.0 7.2 8.3 37.2 32.2 2.7 2.5 7.0 7.8 5.0 4.4
India Cements Neutral 178 - 5,494 6,135 6,750 14.8 15.2 8.5 11.5 21.0 15.5 1.0 1.0 4.8 6.2 1.2 1.1
JK Cement Neutral 1,070 - 7,479 4,150 4,775 19.2 20.0 49.0 63.5 21.8 16.9 3.5 3.0 17.0 18.5 2.2 1.9
J K Lakshmi Cement Neutral 459 - 5,397 3,422 3,757 15.5 17.0 13.5 23.2 34.0 19.8 3.5 3.0 10.8 15.5 2.0 1.7
Orient Cement Neutral 166 - 3,408 2,215 3,233 16.8 17.0 5.9 6.9 28.2 24.1 2.2 2.0 10.8 10.1 2.5 1.7
UltraTech Cement Neutral 4,343 - 119,226 28,250 35,150 20.2 23.5 77.5 122.2 56.0 35.5 4.7 4.3 9.6 14.8 4.7 3.8
Construction
KNR Constructions Neutral 274 - 3,848 1,846 2,203 14.5 14.5 12.1 13.7 22.6 20.1 1.2 1.1 17.5 16.7 2.1 1.8
Larsen & Toubro Neutral 1,230 - 172,348 95,787 109,476 10.2 11.6 44.5 50.8 27.7 24.2 3.5 3.2 12.9 13.1 2.3 2.1
Gujarat Pipavav Port Neutral 136 - 6,563 739 842 61.6 62.7 5.1 6.2 26.6 22.1 3.3 3.2 12.7 14.9 8.3 7.2
PNC Infratech Neutral 196 - 5,023 2,040 2,935 13.0 13.0 6.4 9.0 30.6 21.8 0.8 0.7 9.7 12.2 2.5 1.8
Simplex Infra Neutral 582 - 2,878 6,012 6,619 11.6 11.7 21.1 31.0 27.6 18.8 1.9 1.8 6.5 8.6 1.0 0.9
Sadbhav Engineering Neutral 379 - 6,503 3,823 4,426 10.7 10.8 10.3 11.8 36.8 32.1 4.4 3.9 10.1 10.5 2.0 1.8
NBCC Neutral 253 - 22,797 9,099 12,706 6.4 6.4 7.3 9.6 34.8 26.5 1.5 1.2 27.5 30.5 2.4 1.7
MEP Infra Neutral 96 - 1,566 2,403 2,910 18.3 16.8 2.4 6.1 40.9 15.9 15.5 10.5 35.2 55.8 1.8 1.5
SIPL Neutral 145 - 5,109 2,060 2,390 46.8 47.7 (5.8) (3.1) 5.4 6.2 (14.2) (2.3) 7.2 6.7
Engineers India Neutral 191 - 12,901 1,795 2,611 21.1 22.4 5.9 8.1 32.5 23.6 2.3 2.2 12.9 16.1 5.6 3.7
Financials
Axis Bank Neutral 555 - 133,096 32,558 35,843 3.5 3.2 27.8 41.0 20.0 13.5 2.2 1.9 11.4 14.9 - -
Bank of Baroda Neutral 167 - 38,387 22,533 26,079 2.4 2.4 12.0 20.9 13.9 8.0 0.9 0.9 6.6 11.0 - -
Canara Bank Neutral 365 - 21,825 17,925 20,235 2.0 2.1 18.5 36.5 19.8 10.0 0.8 0.7 3.4 6.2 - -
Can Fin Homes Neutral 474 - 6,306 586 741 3.5 3.5 107.8 141.0 4.4 3.4 1.0 0.8 24.1 25.6 - -Cholamandalam Inv. & Fin. Co. Neutral 1,300 - 20,317 2,826 3,307 6.3 6.3 53.7 64.6 24.2 20.1 4.1 3.5 18.3 18.9 - -
Dewan Housing Finance Buy 607 712 19,036 2,676 3,383 2.4 2.7 37.4 49.7 16.2 12.2 2.1 1.9 13.8 16.2 - -
Equitas Holdings Buy 144 235 4,894 1,125 1,380 9.6 9.8 1.5 6.0 96.0 24.0 2.2 2.0 2.4 8.2 - -
Federal Bank Buy 108 125 21,285 4,896 5,930 2.8 3.1 5.4 7.6 20.2 14.3 1.7 1.6 8.5 11.0 - -
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Stock WatchDecember 21, 2017
Company Name Reco CMP Target Mkt Cap Sales ( ₹cr ) OPM(%) EPS (₹) PER(x) P/BV(x) RoE(%) EV/Sales(x)
( ₹ ) Price ( ₹) ( ₹ cr ) FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E
Financials
GIC Housing Buy 411 655 2,212 376 477 3.6 3.7 33.0 40.0 12.5 10.3 2.2 1.9 20.0 23.0 - -
HDFC Bank Neutral 1,870 - 483,968 55,236 63,253 4.5 4.4 68.9 82.4 27.2 22.7 4.7 3.9 18.7 18.5 - -
ICICI Bank Neutral 316 - 202,695 42,361 51,378 3.6 3.9 18.4 25.7 17.2 12.3 1.9 1.8 11.3 15.0 - -
Karur Vysya Bank Buy 122 180 8,815 3,289 3,630 3.7 3.9 10.8 14.1 11.3 8.7 1.4 1.2 12.5 14.7 - -
LIC Housing Finance Accumulate 569 630 28,728 4,895 6,332 3.4 3.7 50.7 66.8 11.2 8.5 2.2 1.9 21.7 23.8 - -
Punjab Natl.Bank Neutral 171 - 36,303 23,708 25,758 2.1 2.1 5.9 16.4 29.0 10.4 0.9 0.8 3.0 8.3 - -
RBL Bank Neutral 516 - 21,511 2,309 2,888 2.6 2.5 16.4 19.1 31.6 27.1 4.0 3.5 13.3 13.8 - -
Repco Home Finance Buy 677 825 4,238 496 597 4.4 4.2 38.5 48.7 17.6 13.9 3.2 2.6 19.6 20.6 - -
South Ind.Bank Neutral 32 - 5,706 3,195 3,567 3.0 3.1 3.0 3.8 10.5 8.3 1.0 0.9 10.5 11.9 - -
St Bk of India Neutral 317 - 273,852 105,827 121,056 2.4 2.5 16.1 25.6 19.7 12.4 1.6 1.4 6.6 9.9 - -
Union Bank Neutral 148 - 10,769 14,650 16,225 2.3 2.3 23.1 32.5 6.4 4.6 0.5 0.4 7.1 9.2 - -
Yes Bank Neutral 312 - 71,582 11,088 13,138 3.0 2.9 84.0 99.3 3.7 3.1 0.6 0.5 16.3 16.8 - -
FMCG
Akzo Nobel India Neutral 1,818 - 8,720 3,164 3,607 13.8 13.7 58.6 67.9 31.0 26.8 7.6 6.7 24.5 25.1 2.6 2.3
Asian Paints Neutral 1,134 - 108,807 17,603 20,615 18.6 18.6 2,128.9 2,543.3 0.5 0.5 11.2 9.5 28.0 28.9 6.0 5.0
Britannia Neutral 4,738 - 56,885 9,690 11,278 14.8 15.4 84.0 101.0 56.4 46.9 20.6 16.3 40.6 39.0 5.8 5.0
Colgate Neutral 1,083 - 29,442 4,420 5,074 24.9 25.3 28.6 32.8 37.9 33.0 14.9 12.1 43.8 40.5 6.4 5.5
Dabur India Neutral 352 - 61,979 8,346 9,344 19.6 19.9 7.8 9.0 45.1 39.1 9.1 8.2 25.2 24.8 7.0 6.2
GlaxoSmith Con* Neutral 6,502 - 27,344 5,072 5,760 18.2 18.4 176.3 199.2 36.9 32.6 7.8 7.1 21.2 21.7 4.7 4.1
Godrej Consumer Neutral 985 - 67,097 10,171 11,682 20.8 21.5 21.7 27.1 45.4 36.3 10.2 8.8 22.3 23.4 6.7 5.8
HUL Neutral 1,361 - 294,661 37,077 41,508 20.3 21.8 5,189.9 6,318.5 0.3 0.2 41.5 35.5 74.8 82.0 7.8 7.0
ITC Neutral 263 - 320,916 44,588 49,853 37.0 37.3 9.6 11.0 27.4 23.9 6.7 6.4 25.1 27.3 6.7 5.9
Marico Neutral 318 - 41,027 6,788 7,766 18.5 19.2 7.1 8.5 44.8 37.4 15.7 13.4 36.9 38.0 5.9 5.1
Nestle* Neutral 7,951 - 76,659 10,083 11,182 20.0 20.9 119.7 141.3 66.4 56.3 234.1 214.0 36.7 39.8 7.3 6.5
Tata Global Neutral 301 - 18,984 7,121 7,641 11.9 12.3 6.9 8.0 43.6 37.6 2.9 2.8 6.8 7.2 2.5 2.3Procter & Gamble Hygiene Neutral 9,447 - 30,666 3,034 3,579 27.1 27.7 167.7 198.8 56.3 47.5 15.1 13.0 28.8 29.5 9.5 8.0
IT
HCL Tech^ Buy 871 1,014 124,269 50,009 54,608 22.1 22.1 62.8 67.6 13.9 12.9 3.1 2.7 22.4 20.6 2.1 1.9
Infosys Accumulate 1,013 1,120 232,754 70,333 75,960 26.0 26.0 61.7 65.9 16.4 15.4 3.1 2.9 18.9 18.7 2.7 2.4
TCS Reduce 2,588 2,442 495,418 123,384 134,488 26.1 26.1 133.2 143.7 19.4 18.0 5.4 5.0 27.6 27.8 3.7 3.3
Tech Mahindra Accumulate 493 526 48,142 30,545 32,988 15.0 15.0 35.2 37.6 14.0 13.1 2.4 2.2 16.8 16.2 1.4 1.2
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Stock WatchDecember 21, 2017
Company Name Reco CMP Target Mkt Cap Sales ( ₹cr ) OPM(%) EPS (₹) PER(x) P/BV(x) RoE(%) EV/Sales(x)
( ₹ ) Price ( ₹) ( ₹ cr ) FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E
IT
Wipro Neutral 297 - 144,370 54,164 56,544 22.3 22.3 18.8 19.5 15.8 15.2 2.5 2.2 15.0 13.6 1.9 1.7
Media
D B Corp Neutral 343 - 6,318 2,404 2,625 30.5 31.5 23.7 26.9 14.5 12.8 3.4 2.9 23.5 22.8 2.5 2.2
HT Media Neutral 98 - 2,269 2,589 2,830 15.1 15.4 8.3 10.9 11.8 8.9 1.0 0.9 8.4 10.4 0.4 0.3
Jagran Prakashan Buy 166 225 5,173 2,541 2,835 28.5 28.7 12.7 14.1 13.1 11.8 2.7 2.4 21.3 21.4 1.9 1.6
Sun TV Network Neutral 940 - 37,034 3,238 3,789 51.9 55.1 30.9 38.0 30.4 24.7 8.7 7.6 30.0 31.0 10.9 9.2Hindustan Media Ventures Neutral 241 - 1,770 1,002 1,074 23.3 23.5 29.2 33.8 8.3 7.1 1.3 1.1 15.6 15.4 0.8 0.5
TV Today Network Accumulate 413 435 2,466 667 727 27.7 27.7 18.6 20.1 22.2 20.6 3.5 3.5 15.6 17.3 3.2 3.0
Music Broadcast Limited Accumulate 380 434 2,168 271 317 91.0 109.0 6.0 10.0 63.3 38.0 4.0 3.6 6.5 9.3 7.6 6.3
Metals & Mining
Coal India Neutral 270 - 167,352 82,301 91,235 17.0 18.0 17.1 20.5 15.8 13.2 3.0 2.8 45.0 55.0 1.7 1.5
Hind. Zinc Neutral 303 - 128,217 22,108 24,555 57.0 58.0 22.1 26.3 13.7 11.5 4.5 3.6 32.0 35.0 4.8 4.0
Hindalco Neutral 259 - 58,042 102,350 105,355 13.5 14.5 21.5 24.5 12.0 10.6 1.7 1.4 15.0 15.2 1.1 1.1
JSW Steel Neutral 263 - 63,476 64,500 68,245 21.1 21.5 20.1 21.2 13.1 12.4 2.4 2.1 - - 1.7 1.6
NMDC Neutral 135 - 42,839 10,209 11,450 47.0 48.0 11.1 12.1 12.2 11.2 1.7 1.6 - - 3.7 3.4
SAIL Neutral 85 - 34,920 54,100 63,555 3.0 10.0 (10.0) 1.5 56.4 1.1 1.1 - - 1.6 1.4
Vedanta Neutral 317 - 117,928 81,206 87,345 28.0 29.0 26.5 33.5 12.0 9.5 2.7 2.3 - - 2.2 1.9
Tata Steel Neutral 703 - 68,233 121,445 126,500 16.2 17.2 65.4 81.3 10.7 8.7 1.7 1.5 - - 1.1 1.0
Oil & Gas
GAIL Neutral 500 - 84,557 53,115 52,344 14.2 15.3 30.0 31.1 16.7 16.1 2.1 1.9 - - 1.3 1.3
ONGC Neutral 188 - 241,137 83,111 84,934 44.2 44.9 16.4 16.9 11.5 11.1 1.4 1.3 - - 2.8 2.7
Indian Oil Corp Neutral 410 - 199,141 396,116 432,560 8.5 8.8 40.1 42.2 10.2 9.7 1.8 1.6 - - 0.6 0.6
Reliance Industries Neutral 919 - 597,537 257,711 267,438 17.0 18.2 89.1 89.5 10.3 10.3 1.0 0.9 - - 2.0 1.9
Pharmaceuticals
Alembic Pharma Accumulate 529 600 9,965 3,346 3,915 19.6 19.2 21.0 23.9 25.2 22.1 4.4 3.8 19.1 18.4 3.0 2.6
Alkem Laboratories Ltd Accumulate 2,148 2,341 25,677 6,320 7,341 17.5 19.8 72.7 96.6 29.5 22.2 5.2 4.4 16.7 18.7 4.0 3.4
Aurobindo Pharma Buy 687 823 40,259 17,086 19,478 22.1 22.0 44.7 51.4 15.4 13.4 3.4 2.8 24.7 22.7 2.5 2.2
Aventis* Neutral 4,630 - 10,664 2,411 2,698 18.8 18.8 151.6 163.9 30.5 28.3 4.7 3.8 25.4 27.5 4.0 3.4
Cadila Healthcare Neutral 420 - 42,997 11,365 12,926 20.0 20.0 18.4 20.5 22.8 20.5 5.0 4.2 24.3 22.2 3.9 3.4
Cipla Sell 599 462 48,208 16,163 18,711 16.6 16.9 20.7 24.3 28.9 24.7 3.4 3.1 12.6 13.1 3.1 2.7
Dr Reddy's Reduce 2,356 2,040 39,075 13,734 15,548 17.7 20.2 69.9 102.0 33.7 23.1 3.0 2.7 9.2 12.4 3.1 2.7
GSK Pharma* Sell 2,413 2,000 20,438 2,968 3,324 13.8 15.9 37.8 46.3 63.8 52.1 11.2 12.3 16.7 22.4 6.7 6.1
Indoco Remedies Sell 288 136 2,649 1,114 1,297 9.9 13.9 5.6 11.4 51.3 25.2 3.9 3.5 7.7 14.5 2.6 2.2
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Stock WatchDecember 21, 2017
Company Name Reco CMP Target Mkt Cap Sales ( ₹cr ) OPM(%) EPS (₹) PER(x) P/BV(x) RoE(%) EV/Sales(x)
( ₹ ) Price ( ₹) ( ₹ cr ) FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E
Pharmaceuticals
Ipca labs Neutral 573 - 7,226 3,256 3,647 14.1 17.1 16.2 25.4 35.4 22.6 2.7 2.5 8.0 11.5 2.3 2.0
Lupin Buy 875 1,091 39,549 16,240 18,562 21.3 21.7 42.5 49.6 20.6 17.6 2.6 2.3 13.3 13.7 2.5 2.1
Natco Pharma Accumulate 989 1,057 17,257 1,886 2,016 32.3 29.5 23.2 22.0 42.7 44.9 8.9 7.9 20.9 17.6 9.0 8.4
Sun Pharma Buy 527 615 126,476 28,312 31,826 20.7 22.4 18.5 22.3 28.5 23.6 3.2 2.9 11.5 14.0 4.1 3.5
Syngene International Accumulate 533 587 10,650 1,394 1,818 33.0 36.5 15.8 21.0 33.7 25.4 6.3 5.1 18.6 20.3 7.6 5.8
Power
Tata Power Neutral 91 - 24,573 32,547 33,806 20.5 20.5 4.7 5.4 19.3 17.0 1.8 1.6 10.5 10.5 1.7 1.7
NTPC Neutral 179 - 147,223 86,070 101,246 28.3 30.7 12.9 16.2 13.8 11.0 1.4 1.3 10.6 12.4 3.1 2.8
Power Grid Accumulate 203 223 106,227 29,183 32,946 89.7 90.0 18.0 20.8 11.3 9.8 1.9 1.7 17.7 18.2 7.6 7.0
Real Estate
Prestige Estate Neutral 302 - 11,331 4,607 5,146 21.0 22.2 7.9 9.8 38.3 30.8 2.4 2.2 10.3 12.0 3.6 3.3
MLIFE Accumulate 465 522 2,384 487 590 12.3 17.8 21.0 31.2 22.1 14.9 1.2 1.1 5.2 7.4 3.6 2.9
Telecom
Bharti Airtel Neutral 529 - 211,303 97,903 105,233 36.0 36.3 9.3 11.1 56.8 47.8 2.8 2.6 5.0 5.6 3.1 2.8
Idea Cellular Neutral 98 - 35,370 35,012 37,689 27.1 27.7 (4.4) (2.7) 1.5 1.6 (6.8) (4.6) 2.3 2.1
zOthers
Abbott India Neutral 5,564 - 11,824 3,244 3,723 14.9 16.1 167.5 209.4 33.2 26.6 7.3 6.1 23.7 24.8 3.3 2.8
Asian Granito Accumulate 530 570 1,595 1,169 1,286 12.5 12.5 16.0 19.7 33.2 26.9 3.5 3.1 10.7 11.6 1.6 1.4
Bajaj Electricals Neutral 483 - 4,907 4,646 5,301 6.7 7.6 16.1 22.3 30.0 21.6 4.9 4.2 16.4 19.2 1.0 0.9
Banco Products (India) Neutral 257 - 1,836 1,530 1,695 13.2 12.7 19.0 20.0 13.5 12.8 2.2 1.9 0.2 0.2 1.1 124.2Coffee Day Enterprises Ltd Neutral 284 - 5,848 3,494 3,913 17.4 18.0 4.8 5.7 - 49.8 2.5 2.4 - 0.1 2.1 1.9
Elecon Engineering Neutral 111 - 1,240 171 201 15.0 16.2 36.0 43.0 3.1 2.6 0.3 0.2 0.1 0.1 6.6 5.6
Garware Wall Ropes Neutral 931 - 2,036 928 1,003 15.2 15.2 39.4 43.2 23.6 21.6 3.9 3.3 16.5 15.4 2.1 1.8
Goodyear India* Neutral 943 - 2,175 1,717 1,866 11.8 12.3 47.9 49.8 19.7 19.0 3.0 2.6 15.6 15.7 1.0 138.1
Hitachi Neutral 2,615 - 7,110 2,355 2,715 10.3 10.8 49.0 60.9 53.4 42.9 12.5 9.9 0.2 0.2 3.1 2.6
HSIL Neutral 525 - 3,794 2,240 2,670 14.6 15.0 17.0 22.0 30.9 23.9 2.5 2.4 0.1 0.1 1.9 1.6
Interglobe Aviation Neutral 1,166 - 44,822 22,570 27,955 14.2 15.0 63.6 81.8 18.4 14.3 9.7 8.2 0.5 0.6 1.7 1.3
Jyothy Laboratories Neutral 385 - 7,003 1,781 2,044 14.1 15.0 9.4 10.5 41.2 36.7 8.8 8.2 0.2 0.2 4.2 3.6
Linc Pen & Plastics Neutral 338 - 499 420 462 9.3 9.3 15.3 17.1 22.1 19.7 3.7 3.9 16.9 19.5 1.2 1.1
M M Forgings Neutral 1,104 - 1,333 542 642 20.1 21.0 41.6 56.8 26.5 19.4 3.7 3.1 0.1 0.2 2.9 2.5
Mirza International Neutral 162 - 1,946 1,148 1,285 18.0 18.0 8.0 9.4 20.1 17.3 3.3 2.8 16.3 16.1 1.9 1.6
Navkar Corporation Buy 191 265 2,869 561 617 41.5 41.5 11.5 12.7 16.6 15.0 1.7 1.6 10.5 10.4 5.8 5.0
Nilkamal Neutral 1,852 - 2,764 2,317 2,525 11.4 11.1 96.0 105.0 19.3 17.6 3.3 2.9 0.2 0.2 1.2 1.1
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Stock WatchDecember 21, 2017
Company Name Reco CMP Target Mkt Cap Sales ( ₹cr ) OPM(%) EPS (₹) PER(x) P/BV(x) RoE(%) EV/Sales(x)
( ₹ ) Price ( ₹) ( ₹ cr ) FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E
zOthers
Parag Milk Foods Neutral 293 - 2,466 1,987 2,379 7.6 9.0 12.4 18.3 23.6 16.0 3.3 2.9 8.2 13.2 1.4 1.1
Radico Khaitan Neutral 279 - 3,720 1,811 1,992 13.2 13.2 8.1 8.8 34.5 31.7 3.5 3.8 10.1 12.0 2.4 2.2
Relaxo Footwears Neutral 693 - 8,338 1,981 2,310 13.7 14.5 12.0 15.5 57.7 44.7 11.2 9.1 0.2 0.2 4.3 3.7
Siyaram Silk Mills Accumulate 759 800 3,556 1,769 1,981 12.7 12.7 22.6 26.2 33.5 28.9 5.2 4.5 15.5 15.5 2.2 2.0
Styrolution ABS India* Neutral 1,085 - 1,908 1,800 1,980 8.0 8.1 42.0 46.2 25.8 23.5 2.9 2.6 0.1 0.1 1.2 1.1
Surya Roshni Neutral 387 - 1,697 4,870 5,320 7.7 7.8 22.8 28.1 17.0 13.8 2.3 2.0 0.1 0.1 0.6 0.5
TVS Srichakra Neutral 3,345 - 2,562 2,729 2,893 12.7 12.5 248.5 265.0 13.5 12.6 3.8 3.1 0.3 0.3 0.9 0.9
Visaka Industries Neutral 631 - 1,003 1,104 1,214 12.1 12.6 31.0 37.9 20.4 16.7 2.5 2.2 0.1 0.1 1.1 1.0
VIP Industries Accumulate 351 400 4,962 1,450 1,693 10.4 10.5 6.5 7.8 53.7 45.0 11.3 9.9 21.1 22.1 3.4 2.9
Navin Fluorine Neutral 751 - 3,706 945 1,154 17.5 17.9 28.7 34.8 26.2 21.6 4.3 3.7 - - 3.4 2.7
Source: Company, Angel Research; Note: *December year end; #September year end; &October year end; Price as on December 20, 2017
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Stock WatchDecember 21, 2017
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Market OutlookDecember 21, 2017