www.angelbroking.com Market Outlook May 14, 2014 Dealer’s Diary The Indian Markets are expected to to open on a positive note today tracking positive start to SGX Nifty which is trading up by ~0.4%. US stocks showed a lack of direction throughout the trading day on Tuesday after moving sharply higher over the course of the previous session. The lackluster performance was partially due to release of a report from the Commerce Department showing weaker than expected retail sales growth in the month of April. The report said retail sales edged up by 0.1% (expected 0.4%) in April after surging up by an upwardly revised 1.5% in March. Meanwhile, European stocks settled slightly higher after choppy session Tuesday, aided by gains among a few big companies posting better-than-expected earnings. Back home, Indian shares recorded all-time high for a third consecutive session on Tuesday lifted by heavy capital inflows from foreign institutional investors (FIIs). Strong buying was witnessed across the markets on hopes of a strong government coming to power after various exit polls conducted projected a clear win for Narendra Modi led NDA in Lok Sabha elections. The actual results are slated to be announced on Friday. Markets Today The trend deciding level for the day is 23,890 / 7,116 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 24,050 – 24,229 / 7,165 – 7,221 levels. However, if NIFTY trades below 23,890 / 7,116 levels for the first half-an-hour of trade then it may correct 23,711 – 23,550 / 7,060 – 7,011 levels. Indices S2 S1 PIVOT R1 R2 SENSEX 23,550 23,711 23,890 24,050 24,229 NIFTY 7,011 7,060 7,116 7,165 7,221 News Analysis Result Review: Dr. Reddy’s Labs, BOB, PNB, Siyaram Silk Mills Refer detailed news analysis on the following page Net Inflows (May 12, 2014) ` cr Purch Sales Net MTD YTD FII 4,679 3,417 1,262 2,807 39,177 MFs 947 778 169 442 (10,248) FII Derivatives (May 13, 2014) ` cr Purch Sales Net Open Interest Index Futures 4,918 3,418 1,500 12,750 Stock Futures 4,361 4,555 -194 42,681 Gainers / Losers Gainer Loser Company Price (`) chg (%) Company Price (`) chg (%) Titan 319 11.9 Torrent Power 130 (7.4) Adani Enter 478 11.1 PNB 800 (4.2) BHEL 219 10.3 Dr Reddys Lab 2,611 (4.0) Grasim Ind. 2,990 9.8 Apollo Tyres 167 (3.4) GMR Infra 29 9.7 Bajaj Fin. 1,853 (2.1) Domestic Indices Chg (%) (Pts) (Close) BSE Sensex 1.4 320 23,871 Nifty 1.3 94 7,109 MID CAP 1.4 108 7,619 SMALL CAP 1.7 131 7,763 BSE HC (0.4) -48 10,541 BSE PSU 2.4 171 7,154 BANKEX 0.6 93 16,206 AUTO 0.7 105 14,176 METAL 0.7 75 10,541 OIL & GAS 2.8 295 10,705 BSE IT 2.6 224 8,893 Global Indices Chg (%) (Pts) (Close) Dow Jones 0.1 20 16,715 NASDAQ (0.3) (14) 4,130 FTSE 0.3 21 6,873 Nikkei 2.0 276 14,425 Hang Sang 0.4 91 22,352 Straits Times (0.9) -30 3,222 Shanghai Com (0.1) -2 2,051 Indian ADR Chg (%) (Pts) (Close) INFY 0.6 0.3 $54.3 WIT (0.9) (0.1) $12.0 IBN (3.2) (1.6) $48.1 HDB (2.3) (1.0) $43.9 Advances / Declines BSE NSE Advances 1,593 959 Declines 1,300 547 Unchanged 145 110 Volumes (` cr) BSE 4,621 NSE 22,247
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www.angelbroking.com
Market Outlook
May 14, 2014
Dealer’s Diary
The Indian Markets are expected to to open on a positive note today tracking
positive start to SGX Nifty which is trading up by ~0.4%.
US stocks showed a lack of direction throughout the trading day on Tuesday after
moving sharply higher over the course of the previous session. The lackluster
performance was partially due to release of a report from the Commerce
Department showing weaker than expected retail sales growth in the month of
April. The report said retail sales edged up by 0.1% (expected 0.4%) in April after
surging up by an upwardly revised 1.5% in March. Meanwhile, European stocks
settled slightly higher after choppy session Tuesday, aided by gains among a few
big companies posting better-than-expected earnings.
Back home, Indian shares recorded all-time high for a third consecutive session on
Tuesday lifted by heavy capital inflows from foreign institutional investors (FIIs).
Strong buying was witnessed across the markets on hopes of a strong government
coming to power after various exit polls conducted projected a clear win for
Narendra Modi led NDA in Lok Sabha elections. The actual results are slated to be
announced on Friday.
Markets Today
The trend deciding level for the day is 23,890 / 7,116 levels. If NIFTY trades above
this level during the first half-an-hour of trade then we may witness a further rally
up to 24,050 – 24,229 / 7,165 – 7,221 levels. However, if NIFTY trades below
23,890 / 7,116 levels for the first half-an-hour of trade then it may correct
23,711 – 23,550 / 7,060 – 7,011 levels.
Indices S2 S1 PIVOT R1 R2
SENSEX 23,550 23,711 23,890 24,050 24,229
NIFTY 7,011 7,060 7,116 7,165 7,221
News Analysis
Result Review: Dr. Reddy’s Labs, BOB, PNB, Siyaram Silk Mills
Refer detailed news analysis on the following page
Net Inflows (May 12, 2014)
` cr Purch Sales Net MTD YTD
FII 4,679 3,417 1,262 2,807 39,177
MFs 947 778 169 442 (10,248)
FII Derivatives (May 13, 2014)
` cr Purch Sales Net Open Interest
Index Futures 4,918 3,418 1,500 12,750
Stock Futures 4,361 4,555 -194 42,681
Gainers / Losers
Gainer Loser
Company Price (`) chg (%) Company Price (`) chg (%)
Titan 319 11.9 Torrent Power 130 (7.4)
Adani Enter 478 11.1 PNB 800 (4.2)
BHEL 219 10.3 Dr Reddys Lab 2,611 (4.0)
Grasim Ind. 2,990 9.8 Apollo Tyres 167 (3.4)
GMR Infra 29 9.7 Bajaj Fin. 1,853 (2.1)
Domestic Indices Chg (%) (Pts) (Close)
BSE Sensex 1.4 320 23,871
Nifty 1.3 94 7,109
MID CAP 1.4 108 7,619
SMALL CAP 1.7 131 7,763
BSE HC (0.4) -48 10,541
BSE PSU 2.4 171 7,154
BANKEX 0.6 93 16,206
AUTO 0.7 105 14,176
METAL 0.7 75 10,541
OIL & GAS 2.8 295 10,705
BSE IT 2.6 224 8,893
Global Indices Chg (%) (Pts) (Close)
Dow Jones 0.1 20 16,715
NASDAQ (0.3) (14) 4,130
FTSE 0.3 21 6,873
Nikkei 2.0 276 14,425
Hang Sang 0.4 91 22,352
Straits Times (0.9) -30 3,222
Shanghai Com (0.1) -2 2,051
Indian ADR Chg (%) (Pts) (Close)
INFY 0.6 0.3 $54.3
WIT (0.9) (0.1) $12.0
IBN (3.2) (1.6) $48.1
HDB (2.3) (1.0) $43.9
Advances / Declines BSE NSE
Advances 1,593 959
Declines 1,300 547
Unchanged 145 110
Volumes (` cr)
BSE 4,621
NSE 22,247
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Market Outlook
May 14, 2014
Result Review
Dr Reddy’s Lab (CMP: `2,730/ TP: `3,634/ Upside: 33%)
DRL, posted numbers lower than the expectations. DRL, posted net sales of
`3408cr V/s `3,881cr expected, posting a yoy growth of 4%. The main growth
came in from the global generics, 21% yoy, while the PSAI declined by 35% yoy.
The global generics, growth came in on back of the USA and India which grew by
31% yoy and 18% yoy respectively. Russia and CIS, on other posted flat growth.
ROW, on the other hand posted gains of 48% yoy. The PSAI, on the other hand
declined mainly on back of Europe and India, which declined by 46% and 39%
respectively. On, the gross profitability, the GPM, expanded by 680bps to end the
period at 57.2%. However, on back of the lower sales growth, higher SG&A
expenses which grew by 18% and R&D expenses , which grew by 71% yoy
respectively, lead the OPM to come in at 22.4% V/s 24.4% expected, up from
21.4%in 4QFY2013.Also, the other income dipped by 86% yoy. These factors,
along aided the company to post a net profit of `481.6cr V/s `825cr expected,
posting a dip of 16.0% yoy. We maintain our buy recommendation on the stock
with a price target of `3,634.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/sales
Source: Company, Angel Research; Note: *December year end; #September year end; &October year end; Price as on May 13, 2014
www.angelbroking.com
May 14, 2014
Market Outlook
Stock Watch
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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