www.angelbroking.com Market Outlook February 07, 2017 www.angelbroking.com Market Cues Indian markets are likely to start off on a flat note today tracking global cues and SGX nifty. The US markets closed lower on Monday as the S&P 500 snapped a three-day winning streak after mixed earnings. The trading took a pause after a rally in absence of big news. The Dow Jones Industrial Average fell 19.04 points to end at 20,052. The S&P 500 shed 0.2%, to close at 2,293, with energy and telecommunications sectors leading the losses. The Nasdaq Composite slipped 3.21 points to finish at 5,664. The FTSE 100 closed down 16.15 points at 7172 as investors got the jitters over political risks in Europe and the US. On the domestic turf, the Budget-induced optimism got a leg to stand on as the Sensex, on Monday, pushed higher for the fourth day by scoring 199 points to close at a four month highs of 28,439 on hopes built up that RBI might go in for a rate cut at the Wednesday’s policy meet. The NSE Nifty retook the crucial 8,800-mark on Monday. News Analysis Jet Airways to add 11 Boeing 737 planes as it looks to regain market share 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 (%) Amara Raja Batteries Auto & Auto Ancillary Accumulate 896 1,009 12.6 Alkem Laboratories Pharmaceuticals Accumulate 1,819 1,989 9.4 HCL Tech IT Buy 821 1,000 21.7 Power Grid Corp. Power Accumulate 201 223 10.8 Navkar Corp. Others Buy 176 265 50.5 More Top Picks on Pg4 Key Upcoming Events Date Region Event Description Previous Reading Consensus Expectations Feb 08 India RBI Repo rate 6.25 6.00 Feb 08 India RBI Reserve Repo rate 5.75 5.50 Feb 08 US Initial Jobless claims 246.00 249.00 Feb 09 India RBI Cash Reserve Ratio 4.00 4.00 Feb 10 India Export YoY% 5.70 -- More Events on Pg5 Domestic Indices Chg (%) (Pts) (Close) BSE Sensex 0.7 199 28,439 Nifty 0.7 60 8,801 Mid Cap 1.1 146 13,431 Small Cap 0.9 118 13,540 Bankex 0.9 216 23,354 Global Indices Chg (%) (Pts) (Close) Dow Jones (0.1) (19) 20,052 Nasdaq (0.1) (3) 5,664 FTSE (0.2) (16) 7,172 Nikkei 0.3 59 18,977 Hang Seng 0.9 219 23,348 Shanghai Com 0.5 17 3,157 Advances / Declines BSE NSE Advances 1,875 1,112 Declines 1,081 549 Unchanged 126 77 Volumes (` Cr) BSE 4,037 NSE 24,042 Net Inflows (` Cr) Net Mtd Ytd FII 604 1,399 1,352 MFs (41) 911 6,126 Top Gainers Price (`) Chg (%) Renuka 17 12.5 Jublfood 1,007 9.6 Bajajfinsv 3,721 8.3 Hdil 70 7.8 Justdial 401 5.7 Top Losers Price (`) Chg (%) Intellect 134 (4.2) Orientbank 125 (4.1) Pvr 1,260 (3.3) Trent 245 (2.5) Carerating 1,381 (2.4) As on February 06, 2017
Transcript
www.angelbroking.com
Market Outlook February 07, 2017
www.angelbroking.com
Market Cues
Indian markets are likely to start off on a flat note today tracking global cues and SGX nifty.
The US markets closed lower on Monday as the S&P 500 snapped a three-day winning streak after mixed earnings. The trading took a pause after a rally in absence of big news. The Dow Jones Industrial Average fell 19.04 points to end at 20,052. The S&P 500 shed 0.2%, to close at 2,293, with energy and telecommunications sectors leading the losses. The Nasdaq Composite slipped 3.21 points to finish at 5,664.
The FTSE 100 closed down 16.15 points at 7172 as investors got the jitters over political risks in Europe and the US.
On the domestic turf, the Budget-induced optimism got a leg to stand on as the Sensex, on Monday, pushed higher for the fourth day by scoring 199 points to close at a four month highs of 28,439 on hopes built up that RBI might go in for a rate cut at the Wednesday’s policy meet. The NSE Nifty retook the crucial 8,800-mark on Monday.
News Analysis Jet Airways to add 11 Boeing 737 planes as it looks to regain market share 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 (%)
Amara Raja Batteries Auto & Auto AncillaryAccumulate 896 1,009 12.6
Navkar Corp. Others Buy 176 265 50.5More Top Picks on Pg4
Key Upcoming Events Date Region Event Description
Previous Reading
Consensus Expectations
Feb 08 India RBI Repo rate 6.25 6.00
Feb 08 India RBI Reserve Repo rate 5.75 5.50
Feb 08 US Initial Jobless claims 246.00 249.00
Feb 09 India RBI Cash Reserve Ratio 4.00 4.00
Feb 10 India Export YoY% 5.70 --More Events on Pg5
Domestic Indices Chg (%) (Pts) (Close)
BSE Sensex 0.7 199 28,439
Nifty 0.7 60 8,801
Mid Cap 1.1 146 13,431
Small Cap 0.9 118 13,540
Bankex 0.9 216 23,354
Global Indices Chg (%) (Pts) (Close)
Dow Jones (0.1) (19) 20,052
Nasdaq (0.1) (3) 5,664
FTSE (0.2) (16) 7,172
Nikkei 0.3 59 18,977
Hang Seng 0.9 219 23,348
Shanghai Com 0.5 17 3,157
Advances / Declines BSE NSE
Advances 1,875 1,112
Declines 1,081 549
Unchanged 126 77
Volumes (` Cr)
BSE 4,037
NSE 24,042
Net Inflows (` Cr) Net Mtd Ytd
FII 604 1,399 1,352
MFs (41) 911 6,126
Top Gainers Price (`) Chg (%)
Renuka 17 12.5
Jublfood 1,007 9.6
Bajajfinsv 3,721 8.3
Hdil 70 7.8
Justdial 401 5.7
Top Losers Price (`) Chg (%)
Intellect 134 (4.2)
Orientbank 125 (4.1)
Pvr 1,260 (3.3)
Trent 245 (2.5)
Carerating 1,381 (2.4) As on February 06, 2017
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Market Outlook February 07, 2017
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News Analysis
Jet Airways to add 11 Boeing 737 planes as it looks to regain market share
Due to the flat revenue growth and falling yields due to increased competition, Jet Airway’s stand alone PAT declined by 70% yoy in Q3FY17. Owing to these concerns the stock has seen steep fall in the last few trading sessions.
The domestic traffic has been growing at ~20% but Jet Airways has been unable to participate in the growth story because its fleet size has remained flat over the last two years. Most of Jet's capacity addition has come through increased fleet utilization and its domestic market share declined from 21.4% to 17.9% in 2016. While industry-wide passengers grew 23% in Q3 FY 17, Jet's traffic grew by 1% in the same quarter. In the last six months, the stock has fallen by more than 30% over various concerns.
Jet Airways has plans to add 11 Boeing 737 aircraft by 2018 to arrest its falling market share. It currently has a fleet of 114 planes which includes 76 Boeing 737s which are deployed on both domestic and short-haul overseas routes. The company will be inducting 11 aircraft on dry lease and these would be largely used to boost domestic operations.
Economic and Political News Cash deposits up to `2.5 lakh won’t be questioned: CBDT
We will surpass estimates of 15.3% growth in direct taxes, says Hasmukh Adhia
Cesses set to go with GST, see increase in Budget
Corporate News
IDBI Bank reduces MCLR by 30-35 bps
Fertilizer Ministry gets `10,000-crore under special banking arrangement
HPCL gets green nod for `3,846-cr expansion project.
Tata Sons shareholders vote to remove Mistry as director
Amara Raja Batteries 15,301 896 1,009 12.6To outpace battery industry growth due to bettertechnological products leading to market share gains in boththe automotive OEM and replacement segments.
Alkem Laboratories 21,748 1,819 1,989 9.4 Strong growth in domestic business due to its leadership in acute therapeutic segment. Alkem expects to launch moreproducts in USA, which bodes for its international business.
HCL Tech 1,15,916 821 1,000 21.7The stock is trading at attractive valuations and is factoring all the bad news.
Infosys 2,14,638 934 1,249 33.6Back on the growth trend, expect a long term growth of 14%to be a US$20bn in FY2020.
Larsen & Toubro 1,38,498 1,485 1,634 10.0Strong order backlog and improvement in execution wouldtrigger the growth for the L&T
Lupin 67,454 1,494 1,809 21.1One of the largest pharma companies with stronginternational presence. It has a rich pipeline of ANDAs whichis also one of the largest among the generic companies.
Power Grid Corporation 1,05,312 201 223 10.8Going forward, we expect the company to report strong top-line CAGR of ~16% and bottom-line CAGR of ~19% over FY16-18 on back of strong capitalization guidance
Source: Company, Angel Research
Mid Cap Company
Market Cap(` Cr)
CMP (`)
Target(`)
Upside (%)
Rationale
Asian Granito 816 271 351 29.5We expect the company would report strong profitability owing to better product mix, higher B2C sales and amalgamation synergy.
Bajaj Electricals 2,469 244 274 12.2Among the top 4 players in the consumer durables segment. Improved profitability backed by turn around in E&P segment. Strong order book lends earnings visibility.
Blue Star 5,201 544 634 16.4
Favourable 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 9,413 301 350 16.4With 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.
Equitas Holdings 6,072 181 235 29.8Strong loan growth backed by diversified loan portfolio and adequate CAR. ROE & ROA likely to remain decent as risk of dilution remains low. Attractive valuations considering growth.
Jagran Prakashan 6,108 187 225 20.4
Economic recovery to have favourable impact on advertising & circulation revenue growth. Further, the acquisition of a radio business (Radio City) would also boost the company's revenue growth.
KEI Industries 1300 167 207 24.0High order book execution in EPC segment, rising B2C sales and higher exports to boost the revenues and profitability
Mahindra Lifespace 1,454 354 522 47.4Speedier execution and speedier sales, strong revenue visibilty in short-to-long run, attractive valuations
Mirza International 1,145 95 107 12.4Higher growth in domestic branded sales and healthy export to boost the profitability.
Navkar Corporation 2,511 176 265 50.5Massive capacity expansion along with rail advantage at ICD as well CFS augurs well for the company
Siyaram Silk Mills 1,476 1,575 1,605 1.9 Strong brands and distribution network would boost growth going ahead. Stock currently trades at an inexpensive valuation.
TV Today Network 1,631 273 385 40.8
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
Feb 6, 2017 Automotive Axle, LMW, GSPL, Abbott India, Banco
Feb 7, 2017CEAT, BHEL, Ramco Cements, Punjab Natl.Bank, IDBI Bank, United Bank, Hexaware, Tata Steel, Godawari Ispat, L G Balakrishnan & Bros, Orchid Chemicals, NHPC
Feb 8, 2017Tata Chemicals, Hero Motocorp, Bharat Forge, Siemens, Thermax, Union Bank, Indraprasth Gas, Goodyear, Elecon Engineering, Cipla, NTPC, Reliance Power, Competent Automobiles, Coffee Day Enterprises Ltd
Feb 9, 2017JK Tyre, ABB, Jyoti Structures, Bank of India, Andhra Bank, SAIL, Cairn India, BPCL, Page Industries, Bajaj Electrical, Styrolution, Lupin, Aurobindo Pharma, Power Grid Corpn
Feb 10, 2017M&M, Bosch India, Crompton Greaves, St Bk of India, Bank of Baroda, Reliance Capital, Corporation Bank, Dena Bank, Sun TV Network, Jagran Prakashan, Hind. Zinc, Bhushan Steel, GAIL, Tide Water Oil India, Ipca labs, Tata Power Co., CESC, GIPCL, Anant Raj, Radico Khaitan
Result Calendar
Source: Bloomberg, Angel Research
Global economic events release calendar
Date Time Country Event Description Unit Period Bloomberg Data
Last Reported Estimated
Feb 8, 2017 2:30PM India RBI Reverse Repo rate % Feb 8 5.75 5.50
2:30PM India RBI Repo rate % Feb 8 6.25 6.00
7:00PM US Initial Jobless claims Thousands Feb 4 246.00 249.00
Feb 9, 2017 2:30PM India RBI Cash Reserve ratio % Feb 8 4.00 4.00
Feb 10, 2017 3:00PM UK Industrial Production (YoY) % Change Dec 2.00 3.20
India Exports YoY% % Change Jan 5.70 --
China Exports YoY% % Change Jan (6.20) 3.00
India Imports YoY% % Change Jan 0.50 --
5:30PM India Industrial Production YoY % Change Dec 5.70 1.40
Feb 14, 2017 3:30PM Euro Zone Euro-Zone GDP s.a. (QoQ) % Change 4Q P 0.50 --
7:00AM China Consumer Price Index (YoY) % Change Jan 2.10 2.40
12:00PM India Monthly Wholesale Prices YoY% % Change Jan 3.39 4.30
3:00PM UK CPI (YoY) % Change Jan 1.60 --
US Producer Price Index (mom) % Change Jan 0.80 --
12:30PM Germany GDP nsa (YoY) % Change 4Q P 1.50 --
Feb 15, 2017 3:00PM UK Jobless claims change % Change Jan (10.10) --
7:45PM US Industrial Production % Jan 0.83 (0.10)
7:00PM US Housing Starts Thousands Jan 1,226.00 1,228.00
Feb 16, 2017 7:00PM US Consumer price index (mom) % Change Jan 0.30 0.30
7:00PM US Building permits Thousands Jan 1,228.00 1,230.00
Feb 20, 2017 8:30PM Euro Zone Euro-Zone Consumer Confidence Value Feb A (4.90) --
Feb 21, 2017 2:00PM Germany PMI Services Value Feb P 53.40 --
2:00PM Germany PMI Manufacturing Value Feb P 56.40 --
Feb 22, 2017 3:30PM Euro Zone Euro-Zone CPI (YoY) % Jan F 1.80 --
8:30PM US Existing home sales Million Jan 5.49 5.55
3:00PM UK GDP (YoY) % Change 4Q P 2.20 --
Feb 24, 2017 8:30PM US New home sales Thousands Jan 536.00 570.00
Source: Company, Angel Research; Note: *December year end; #September year end; &October year end; Price as on February 06, 2017
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Stock WatchFebruary 07, 2017
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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