www.angelbroking.com Market Outlook May 12, 2017 www.angelbroking.com Market Cues Indian markets are likely to flat tracking the SGX Nifty and Asian markets. US stocks started lower but rallied to close slightly negative for the session. US producer price index for final demand climbed by 0.5 percent in April against expectations of a price rise by 0.2 percent. Core producer prices rose by 0.4 percent in April and were up by 1.9 percent YoY. UK stock indices closed flat yesterday after the Bank of England's rate-setting body decided to hold interest rates steady in a split. The Bank of England also downgraded its 2017 growth outlook to 1.9 percent from 2 percent, citing weakening household spending. However, the bank lifted the growth projection for 2018 to 1.7 percent from 1.6 percent and for 2019 to 1.8 percent from 1.7 percent. Indian markets ended Thursday’s session slightly higher as the indices continued to reach new highs. The consumer durables index was the biggest gainer from the session and closed up 1.65 percent. The oil and Gas index lost 0.93 percent on profit booking. Result Preview & Review Dr Reddy’s Lab Q4FY17 Preview HCL Tech Q4FY17 Review Detailed analysis on Pg2 Investor’s Ready Reckoner Key Domestic & Global Indicators Stock Watch: Latest investment recommendations on 150+ stocks Refer Pg6 onwards Top Picks Company Sector Rating CMP (`) Target (`) Upside (%) Blue Star Capital Goods Accumulate 676 760 12.5 Dewan Housing Fin. Financials Buy 442 520 17.7 Mahindra Lifespace Real Estate Accumulate 459 522 13.6 Navkar Corporation Others Buy 218 265 21.7 KEI Industries Capital Goods Accumulate 222 239 7.7 More Top Picks on Pg4 Key Upcoming Events Date Region Event Description Previous Reading Consensus Expectations May 12, 2017 India Imports YoY% 45.30 -- May 12, 2017 US Consumer price index (mom) (0.30) 0.20 May 12, 2017 India Exports YoY% 27.60 -- May 12, 2017 India Industrial Production YoY (1.20) 1.90 May 12, 2017 Germany GDP nsa (YoY) 1.20 2.80 May 12, 2017 India Monthly Wholesale Prices YoY% 5.70 4.50 More Events on Pg5 29,422 9,136 14,485 15,128 24,444 (Close) 20,579 5,917 7,119 18,430 24,057 3,172 1,130 4,029 25,391 41,972 14,333 (5.0) (3.8) (2.9) (2.5) (2.5) Domestic Indices Chg (%) (Pts) (Close) BSE Sensex 0.0 3 30,251 Nifty 0.2 15 9,422 Mid Cap 0.1 8 14,957 Small Cap (0.1) (8) 15,653 Bankex 0.0 8 25,949 Global Indices Chg (%) (Pts) (Close) Dow Jones (0.1) (24) 20,919 Nasdaq (0.2) (13) 6,116 FTSE 0.0 1 7,387 Nikkei 0.3 61 19,962 Hang Seng 0.4 110 25,126 Shanghai Com 0.3 9 3,062 Advances / Declines BSE NSE Advances 1,234 678 Declines 1,630 991 Unchanged 149 81 Volumes (` Cr) BSE 4,031 NSE 25,387 #Net Inflows (` Cr) Net Mtd Ytd FII 1,365 (32) 41,980 MFs 924 3,413 24,095 Top Gainers Price (`) Chg (%) Adanitrans 84 9.9 Unitdspr 2,135 8.7 Ubl 850 5.8 Zeel 545 5.7 Eichermot 29,402 5.6 Top Losers Price (`) Chg (%) Abb 1,529 (4.4) Siemens 1,405 (3.8) Gsfc 140 (3.8) Marksans 52 (3.4) Welcorp 84 (3.4) #As on May 11, 2017
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www.angelbroking.com
Market Outlook
May 12, 2017
www.angelbroking.com
Market Cues
Indian markets are likely to flat tracking the SGX Nifty and Asian markets.
US stocks started lower but rallied to close slightly negative for the session. US
producer price index for final demand climbed by 0.5 percent in April against
expectations of a price rise by 0.2 percent. Core producer prices rose by 0.4 percent
in April and were up by 1.9 percent YoY.
UK stock indices closed flat yesterday after the Bank of England's rate-setting body
decided to hold interest rates steady in a split. The Bank of England also
downgraded its 2017 growth outlook to 1.9 percent from 2 percent, citing
weakening household spending. However, the bank lifted the growth projection for
2018 to 1.7 percent from 1.6 percent and for 2019 to 1.8 percent from 1.7 percent.
Indian markets ended Thursday’s session slightly higher as the indices continued to
reach new highs. The consumer durables index was the biggest gainer from the
session and closed up 1.65 percent. The oil and Gas index lost 0.93 percent on
profit booking.
Result Preview & Review
Dr Reddy’s Lab Q4FY17 Preview
HCL Tech Q4FY17 Review
Detailed analysis on Pg2
Investor’s Ready Reckoner
Key Domestic & Global Indicators
Stock Watch: Latest investment recommendations on 150+ stocks
Refer Pg6 onwards
Top Picks
Company Sector Rating CMP
(`) Target
(`) Upside
(%)
Blue Star Capital Goods Accumulate 676 760 12.5
Dewan Housing Fin. Financials Buy 442 520 17.7
Mahindra Lifespace Real Estate Accumulate 459 522 13.6
Navkar Corporation Others Buy 218 265 21.7
KEI Industries Capital Goods Accumulate 222 239 7.7
More Top Picks on Pg4
Key Upcoming Events
Date Region Event Description Previous
Reading
Consensus
Expectations
May 12, 2017 India Imports YoY% 45.30 --
May 12, 2017 US Consumer price index (mom) (0.30) 0.20
May 12, 2017 India Exports YoY% 27.60 --
May 12, 2017 India Industrial Production YoY (1.20) 1.90
May 12, 2017 Germany GDP nsa (YoY) 1.20 2.80
May 12, 2017 India Monthly Wholesale Prices YoY% 5.70 4.50
More Events on Pg5
Domestic Indices Chg (%) (Pts) (Close)
BSE Sensex 0.3 86 29,422
Nifty 0.4 33 9,136
Mid Cap 0.7 95 14,485
Small Cap 1.1 171 15,128
Bankex (0.5) (131) 24,444
Global Indices Chg (%) (Pts) (Close)
Dow Jones 0.9 174 20,579
Nasdaq 0.9 54 5,917
FTSE 0.1 4 7,119
Nikkei (0.0) (2) 18,430
Hang Seng 1.0 231 24,057
Shanghai Com 0.0 1 3,172
Advances / Declines BSE NSE
Advances 1,849 1,130
Declines 1,039 543
Unchanged 164 74
Volumes (` Cr)
BSE 4,029
NSE 25,391
#Net Inflows (` Cr) Net Mtd Ytd
FII (565) (2,249) 41,972
MFs 804 4,895 14,333
Top Gainers Price (`) Chg (%)
Indiacem 190 8.8
Jktyre 154 8.4
Gsfc 124 7.5
Sobha 392 7.3
Jetairways 511 6.5
Top Losers Price (`) Chg (%)
Irb 240 (5.0)
Yesbank 1,545 (3.8)
Icicibank 273 (2.9)
Polaris 214 (2.5)
Concor 1,186 (2.5)
#As on April 20, 2017
Domestic Indices Chg (%) (Pts) (Close)
BSE Sensex 0.0 3 30,251
Nifty 0.2 15 9,422
Mid Cap 0.1 8 14,957
Small Cap (0.1) (8) 15,653
Bankex 0.0 8 25,949
Global Indices Chg (%) (Pts) (Close)
Dow Jones (0.1) (24) 20,919
Nasdaq (0.2) (13) 6,116
FTSE 0.0 1 7,387
Nikkei 0.3 61 19,962
Hang Seng 0.4 110 25,126
Shanghai Com 0.3 9 3,062
Advances / Declines BSE NSE
Advances 1,234 678
Declines 1,630 991
Unchanged 149 81
Volumes (` Cr)
BSE 4,031
NSE 25,387
#Net Inflows (` Cr) Net Mtd Ytd
FII 1,365 (32) 41,980
MFs 924 3,413 24,095
Top Gainers Price (`) Chg (%)
Adanitrans 84 9.9
Unitdspr 2,135 8.7
Ubl 850 5.8
Zeel 545 5.7
Eichermot 29,402 5.6
Top Losers Price (`) Chg (%)
Abb 1,529 (4.4)
Siemens 1,405 (3.8)
Gsfc 140 (3.8)
Marksans 52 (3.4)
Welcorp 84 (3.4)
#As on May 11, 2017
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Market Outlook
May 12, 2017
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Result Preview
Dr Reddy’s Lab (CMP: `2,592 / TP: / Upside: )
The company for its 4QFY2017 results is expected to post top line growth of 7.0%
yoy to end the period at `4,020cr, mainly driven by India region. On the operating
front, EBIT margin is expected to come in at 16.0% V/s 13.5% in 3QFY2016, a
expansion of 2.5% yoy. EBDITA margin is expected to be 23.0% in 4QFY2017 V/s
22.5% in 4QFY2016. Thus, PAT is expected to come in at `484cr V/s `75cr in
4QFY2016.
Given the valuations, we maintain our neutral rating on the stock.
Result Review
HCL Tech (CMP: `839 / TP: `1,000 / Upside: 19.2%)
The company, posted 4QFY2017 results better than expected. In US$ the revenues
came in at US$1,817mn V/s US$1,810mn expected V/s US$1,745mn in
3QFY2017, a qoq growth of 4.1%. In rupee terms, the revenue is expected to
grow by 2.0% qoq to `12,053cr V/s `12,064cr expected V/s `11,814cr in
3QFY2017. On constant Currency (CC) basis, company posted a 3.8% qoq
growth.
On the growth front; USA posted a CC qoq growth of 5.3%, Europe posted a dip
of 3.0% CC and ROW posted a CC qoq growth of 15.8%. In terms, of verticals the
Financial services posted a CC qoq growth of 3.0%, Manufacturing posted a CC
qoq growth of 6.3%, Lifesciences & Healthcare posted a CC qoq growth of 0.1%,
Public Services posted a CC qoq growth of 8.1%, while Retail & CPG posted a CC
qoq growth of 2.1%. The vertical which posted a dip was Telecommunication,
Media, and Publishing & Entertainment which came in at 2.1%.
On the operating front, EBITDA margin came in at 22.0% V/s 21.9% expected V/s
22.2% in 3QFY2017, a dip of 20ps qoq, while the EBIT, came in at 20.0% V/s
20.1% expected V/s 20.4% in 3QFY2017, 40bps qoq dip. Thus, PAT came in at
`2,325cr V/s `1,982cr expected V/s `2,070cr in 3QFY2017, down 12.3% qoq.
Strong client addition: $5+ mn clients up by 13, $10+ mn clients up by 9, $20+
mn clients up by 10, $40+ mn clients up by 5, and $50+ mn clients up by 6.
For FY'2018 revenues are expected to grow between 10.5% to 12.5% in Constant
Currency (CC). Revenue Guidance is based on FY’17 (April to March) average
exchange rates. The above constant currency guidance translates to 9.9% to
11.9% in US$ terms based on March 31, 2017 rates. On the operating Margin
(EBIT), with FY2018 is expected to come in the range is from 19.5% to 20.5%.
Given the valuations, we maintain our buy rating with target price of `1,000.
3
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Market Outlook
May 12, 2017
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Economic and Political News
Odisha Cabinet approves GST Bill
NHAI's launches its first Masala Bond in UK
Retail inflation likely to cool in April on lower food prices
Corporate News
CCI to probe Idea, Vodafone, Airtel on complaints regarding alleged
cartelization
Over half of US based workforce are locals: HCL Technologies
TCS starts BPO centre in Patna
Granules India's Q4 net profit up 38% YoY at `45 cr
visibilty in short-to-long run, attractive valuations
Navkar Corporation 3,105 218 265 21.7 Massive capacity expansion along with rail advantage at
ICD as well CFS augurs well for the company
Siyaram Silk Mills 1,600 1,707 1,872 9.7
Strong brands and distribution network would boost
growth going ahead. Stock currently trades at an
inexpensive valuation.
TV Today Network 1,639 275 344 25.2
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
corporates to benefit the stock.
Source: Company, Angel Research
Date Company
May 12, 2017 Oriental Bank, UCO Bank, Relaxo, Dr Reddy's, GIPCL, S H Kelkar & Co., Quick Heal
May 13, 2017 Mangalam Cement, J & K Bank
May 15, 2017 JK Tyre, South Ind.Bank
May 16, 2017 Punjab Natl.Bank, Andhra Bank, Tata Steel, Dishman Pharma, Transport Corporation of India
May 17, 2017 J K Lakshmi Cements, Allahabad Bank, HUL, NIIT, JSW Steel , UFO Moviez
May 18, 2017Bajaj Auto, Automotive Axle, Cummins India, Bank of Baroda, Hindustan Media Ventures, Jyothy Laboratories, CESC, Coffee Day Enterprises Ltd
Result Calendar
Source: Bloomberg, Angel Research
Global economic events release calendar
Date Time Country Event Description Unit Period Bloomberg Data
Last Reported Estimated
May 12, 2017 India Imports YoY% % Change Apr 45.30 --
6:00PM US Consumer price index (mom) % Change Apr (0.30) 0.20
India Exports YoY% % Change Apr 27.60 --
5:30PM India Industrial Production YoY % Change Mar (1.20) 1.90
11:30AM Germany GDP nsa (YoY) % Change 1Q P 1.20 2.80
Source: Company, Angel Research; Note: *December year end; #September year end; &October year end; Price as on May 11, 2017
www.angelbroking.com
Stock WatchMay 12, 2017
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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