Market Outlook

April 27, 2018

Market Cues
Domestic Indices Chg (%) (Pt s) (Cl ose)
Indian markets are likely to open positive tracking global indices and SGX Nifty.
BSE Sensex 0.6 212 34,714
U.S. Stocks moved sharply higher over the course of the trading session, as traders Nifty 0.4 47 10,618
reacted positively to latest batch of earnings news. The major averages climbed
Mid Cap (0.0) (3) 16,785
firmly into positive territory after ending the previous session mixed. The Dow Jones
Small Cap 0.3 46 18,164
ended up by 1.0 percent to 24,332 and the Nasdaq jumped by 1.6 percent to
7,119. Bankex 0.9 238 27,970

U.K. stocks rose modestly during the last trading session as the pound pulled back
Global Indices Chg (%) (Pt s) (Cl ose)
against the dollar and investors looked ahead to the ECB rate decision later in the
day for directional cues. The FTSE 100 was up by 0.6% to end at 7,421. Dow Jones 1.0 239 24,322

Nasdaq 1.6 115 7,119

On domestic front, Indian shares closed higher on Thursday as Yes Bank delivered
FTSE 0.6 42 7,421
good quarterly numbers and traders covered their short positions on eve of
derivative expiry. The BSE Sensex ended up by 0.6% at 34,714. Nikkei 0.4 97 22,416

Hang Seng 0.6 176 30,183

News Analysis Shanghai Com 0.2 5 3,080
 Ashok Leyland generates 17% returns (Profit booked)

 Result Update – HDFC Bank A dvances / Declines BSE NSE

Detailed analysis on Pg2 Advances 1,095 796

Declines 1,548 982

Investor’s Ready Reckoner Unchanged 146 76
Key Domestic & Global Indicators
Stock Watch: Latest investment recommendations on 150+ stocks Volumes (` Cr)
Refer Pg5 onwards
BSE 2,897

Top Picks NSE 41,542

CMP Tar get Upsi de
Company Sector Rating
(`) (`) (%)
Blue Star Capital Goods Accumulate 793 867 9.4 Net Inflows (` Cr) Ne t Mt d Yt d

Dewan Housi ng Finance Financials Buy 621 720 15.9 FII (100) (4,952) 8,655
Century Plyboards Forest Product Buy 336 400 19.0 *MFs 409 8,173 42,632
Navkar Cor por ation Others Buy 177 265 49.7
KEI Industrie s Capital Goods Accumulate 426 485 13.9
Top Gainers Price (` ) Chg (%)
More Top Picks on Pg4
YESBANK 352 8.3
Key Upcoming Events BFUTILITIE 431 8.0
Previous Consensus
Date Regi on Event Descripti on
ReadingExpect ations JMFINANCIL 135 8.0
Apr 27, 2018 US GDP Qoq (Annualise d) 2.90 2.00
IBVENTUREPP 274 8.0
Apr 27, 2018 Euro Zone Euro-Zone Consumer Confidence 0.40 (0.10)
HATHWAY 35 7.9
Apr 27, 2018 Germany Unempl oyment change (000's) (19.00) (15.00)
Apr 27, 2018 UK PMI Manufacturing 55.10
Top Losers Price (` ) Chg (%)
Apr 30, 2018 UK GDP (YoY) 1.40 1.40
More Events on Pg7
RNAVAL 19 -14.7

HDIL 37 -5.5

RCOM 17 -5.1

SYNGENE 642 -5.0

VAKRANGEE 111 -5.0

As on April 26, 2018

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Market Outlook
April 27, 2018

News Analysis
Ashok Leyland - 17% returns (Profit booked)

Company background: Ashok Leyland Ltd (ALL) is the flagship company of the
Hinduja Group, and one of the largest commercial vehicle manufacturers in India.
ALL is engaged in the manufacturing of commercial vehicles and related
components. ALL’s products include buses, trucks, engines, defense and special
vehicles. Ashok Leyland offers a range of products from 18 to 82 seater double-
decker buses, from 7.5 to 49 tonne in haulage vehicles, from numerous special
application vehicles to diesel engines for industrial, marine and genset
applications. The company is headquartered in Chennai, India. The company’s
manufacturing facilities are spread across India with two facilities in Prague (Czech
Republic) and Ras Al Khaimah (UAE). It has operations in India, Sri Lanka,
Bangladesh, Mauritius, the Middle East and Africa.

Outlook valuation: In the recent past, stock has achieved our target price of
Rs.163 (reco price was Rs.139). Currently, stock is trading at a higher range of the
valuation. We recommend booking the profit.

Economic and Political News

 UP government to restore industrial glory of Kanpur by reviving textile mills

 India will network with Asia's major oil buyers for better sellers

 According to reports, India to grow 7.2% this fiscal, rising oil prices challenge

Corporate News

 I-T to refund Flipkart Rs 550 mn as ITAT says discounts offered not taxable

 CCI okays Tata Steel's acquisition of debt-ridden Bhushan Steel

 Ex-Aircel promoter Sivasankaran's cos, top bankers booked in Rs 6-bn fraud

 SECL records 144.71 MT of coal production in 2017-18, retains top spot

 Essar Oil to become Nayara Energy post takeover by Rosneft, Trafigura

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Market Outlook
April 27, 2018

Quarterly Bloomberg Brokers Consensus Estimate

Reliance Industries Ltd - April 27, 2018

Particular s ( ` cr) 4QFY18E 4QFY17 y-o-y (%) 3QFY18 q-o-q (%)

Sales 1,59,000 84,823 87 99,810 59.3

EBIDTA 17,824 12,228 46 17,588 1.3

% 11 14 18
PAT 9,347 8,053 16 9,445 (1)

Maruti Suzuki India Ltd – April 27, 2018

Particular s ( ` cr) 4QFY18E 4QFY17 y-o-y (%) 3QFY18 q-o-q (%)

Sales 20,975 18,333 14.4 19,283 8.8

EBIDTA 3282 2,560 28.3 3,038 8.1

% 16 14 16
PAT 2,085 1,711 21.9 1,799 15.9

Shriram Transport Finance Co. Ltd – April 27, 2018

Particular s ( ` cr) 4QFY18E 4QFY17 y-o-y (%) 3QFY18 q-o-q (%)

Sales 1,956 2,712 (28) 3,088 (36.7)

EBIDTA 1,383 1,506 (8.2) 2,117 (34.7)

% 71 56 69
PAT 393 150 163 496 (20.6)

UPL Ltd. – April 27, 2018

Particular s ( ` cr) 4QFY18E 4QFY17 y-o-y (%) 3QFY18 q-o-q (%)

Sales 5,905 5,341 10.6 4,194 40.8

EBIDTA 1,221 1,036 17.8 709 72.2

% 21 19 17
PAT 772 740 4.4 579 33.4

Hindustan Petroleum Corporation Ltd. – April 27, 2018

Particular s ( ` cr) 4QFY18E 4QFY17 y-o-y (%) 3QFY18 q-o-q (%)

Sales 50,050 51,525 (2.9) 57,474 (12.9)

EBIDTA 3,202 2,886 11 3,159 1.4

% 6 6 5
PAT 1,944 1,819 6.9 1,950 (0.3)

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Market Outlook
April 27, 2018

Top Picks
Mar ket Cap CMP Tar get Upside
Company Rationale
(` Cr ) (`) (`) (%)
Strong growth in domestic business due to its
leaders hip in acute therapeutic segment . Alkem
Alkem Laborat ories 22,956 1,920 2,441 27.1
expects to launch more pr oducts in USA , which
bode s for it s internati onal business.
Favorable outlook for the AC industry t o augur well
for Cooling products business which is out pacing
Blue Star 7,610 793 867 9.4 the mar ket growth. E MPPAC division's pr ofitability
to impr ove once oper ating environme nt turns
around.
With a focus on the low and me dium income (LMI )
consumer se gment , the company has increase d its
Dewan Housi ng Finance 19,492 621 720 15.9
presence in tier-II & III cities where the growt h
opportunity i s immense.
Well capitalized with CAR of 18.1% which give s
sufficient r oom t o grow asset base. F aster re solution
ICICI Bank 1,79,185 279 416 49.2
of NPA woul d reduce provi sion cost, which woul d
help to re port better ROE.
High or der book execution in EPC segme nt, rising
KEI Industrie s 3,338 426 485 13.9 B2C sales and hi gher export s to boost the revenue s
and pr ofitability
Expected to benefit from the lower capex
Music Broadcast Limited 2,214 388 475 22.4 requirement and 15 year long radio br oadcast
licensing.
Massive capacity expansion along with rail
Navkar Cor por ation 2,665 177 265 49.7 advantage at I CD as well CFS augur well for the
company
Strong brands and di stribution networ k w ould boost
Siyaram Silk Mills 3,031 647 851 31.6 growth goi ng ahe ad. Stock currently trades at an
inexpensive valuation.
Mar ket leadership in Hindi news genre and no. 2
viewership ranking in English news genre, exit from
TV Today Networ k 2,841 476 603 26.6
the radio busine ss, and anticipated gr owth in ad
spends by cor porate to benefit the stock.
After GST, the company is expected to see higher
volume s along with improving product mix. The
Maruti 2,70,295 8,948 10,619 18.7
Gujarat plant will also enable higher operating
leverage which will be mar gin accretive.
We expect loan book t o grow at 24.3% over next
GIC Housing 2,296 426 655 53.6 two year; change in borr owing mix will help in NIM
improve ment
We expect CPIL to report net Revenue/PAT CAGR of
~17%/ 16% over FY2017-20E mainly due to
Century Plyboards 7,468 336 400 19.0 healthy gr owth in plywood & lamination busine ss,
forayed int o MDF & Particle boar ds on back of
strong brand & distribution networ k.
We expect sales/PAT to grow at 13.5%/ 20% over
LT Foods 2,952 92 128 38.7 next two years on t he back of strong di stribution
network & addition of new pr oduct s in portfolio.
Third large st brand play in luggage segment
Increase d product offerings and improvi ng
Safari Industries 1,464 658 750 14.0 distribution networ k is leading t o strong gr owth in
busine ss. Likely to post robust gr owth for next 3-4
years
We expect HSIL to report PAT CAGR of ~15% over
FY2017-20E owing to better improve ment in
HSIL Ltd 2,761 382 510 33.5
operating margi n due price hi ke in cont ainer glass
segment, tur nar ound in consumer busine ss.
Source: Company, Angel Research

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Market Outlook
April 27, 2018

Top Picks
Mar ket Cap CMP Tar get Upside
Company Rationale
(` Cr ) (`) (`) (%)
We expect financi alisation of savings and
Aditya Birla Capital 34,391 156 230 31.33 increasing penetration in Insurance & Mutual fund
would ensure steady gr owth.
One of the leading Indi an dairy product s
companie s in India create d strong br ands in dairy
products. Rising revenue share of hi gh-mar gin
Parag Milk F oods 2,611 311 333 7.1
Value Added Products and reduction in interest cost
is likely to boost mar gins and e arnings in next few
years.
We expect MCL to report net revenue CAGR of
~15% to ~`450cr over FY2018-20E mainly due t o
strong growth in online matchmaking & marriage
Matrimony.com Ltd 1,946 857 984 14.8
related services. On the bottom-line front, we
expect a CA GR of ~28% t o `82cr over the same
period on t he back margin improve ment.
Source: Company, Angel Research

Fundamental Call
Mar ket Cap CMP Tar get Upside
Company Rationale
(` Cr ) (`) (`) (%)
CCL is likely to maintain the strong growth trajectory
CCL Products 4,005 301 360 19.6 over FY18-20 backed by capacity expansion and
new geographical foray
We forecast Nilkamal to report top-line CAGR of
~9% to `2,635cr over FY17-20E on the back of
Nilkamal 2,533 1,698 2,178 28.3 healthy demand growth in plastic divi sion. On the
bottom-line front, we esti mate ~10% CAGR to
`162cr owing t o improve ment in volumes.
The prism has diversified exposure in the different
segment such as Ceme nt, Tile & ready mix concrete.
Prism Ce ment 5,892 117 160 36.7 Thus we believe, PCL is in t he right place t o capture
ongoing government spendi ng on affordable
housing and infr astr ucture pr ojects.
Elantas Beck India i s the Indi an mar ket leader in
liquid insul ation segment used in electrical
equipme nts like motor s, tr ansfor mers etc. It derives
Elantas Beck India Lt d 1,773 2,236 2,500 11.8
demand fr om several industries which are expected
to register 10%+ CAGR in demand in the coming
years.
Greenply Industries Ltd (GIL) manufacture s plywood
& allied product s and me dium density fibreboards
(MDF). GIL t o report net revenue CAGR of ~14% to
Greenply Industries 3,768 307 395 28.5
~`2,478cr over FY2017-20E mainly due to healthy
growth in plyw ood & lamination busine ss on the
back of strong brand and di stribution networ k
GMM Pfaudler Li mited (GMM) is the Indian market
leader in glass-line d (GL) steel equipment. GMM is
expected to cross CA GR 15%+ in revenue over the
GMM Pfaudler Ltd 1,102 754 861 14.2
next few years mainly led by uptick in demand from
user industries and it is also expecting t o increase its
share of non-GL business t o 50% by 2020.

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 4QFY2018 Result Update | Banking
April 26, 2018

HDFC Bank BUY

CMP `1,930
Performance Highlights Target Price `2,315
Particulars (` cr) 4QFY18 3QFY18 % chg (qoq) 4QFY17 % chg (yoy) Investment Period 12 Months
NII 10,656 10,314 3.3 9,055 17.7
Pre-prov. profit 8,835 8,451 4.5 7,279 21.4
Stock Info
PAT 4,799 4,642 3.4 3,990 20.3
Source: Company, Angel Research Sector Banking
Market Cap (` cr) 5,00,787
Beta 1.1
HDFC Bank maintained its steady growth in the 4QFY18. The bank’s net profit
52 Week High / Low 2,014/1,524
grew by 20.3%. Steady growth in interest income and other income aided PAT Avg. Daily Volume 14,97,970
growth. Other income grew by 23%, which was driven by a 32% rise in income Face Value (`) 2
from fees & commission. Apart from the top-line growth, the bank managed to BSE Sensex 34,568
reduce its expenses and brought down the cost/income ratio from 42% in 4QFY17 Nifty 10,575
to 41% in 4QFY18 Reuters Code HDBK.NS
Bloomberg Code HDFCB:IN
Healthy operating profit growth; Asset quality stable

During 3QFY18, the bank’s advances grew by 19% yoy, of which retail loan book Shareholding Pattern (%)
increased by 27.4% yoy to constitute 57% of the total advances. The wholesale
Promoters 20.9
loans inched up by just 9.4%. The net interest income during this period grew by
18%, in line with loans & advances. Moreover, a slower rise in opex helped lower MF / Banks / Indian Fls 12.3

cost/income by 180bps yoy to 41% in Q4FY18. FII / NRIs / OCBs 51.7

Indian Public / Others 9.7
The growth momentum in deposits was stronger than that of advances. Total
deposits surged by 22.5% yoy and 10.1% qoq compared to 17.8% yoy growth in
4QFY17. CASA deposits accounted for 43.5% of the total deposits.
Abs. (%) 3m 1yr 3yr
On asset quality front, continues to maintain strong asset quality with a
Sensex (3.7) 15.2 26.5
GNPA/NPA ratio of 1.3%/0.4% of loans. The bank has grown unsecured retail
HDFC Bank (2.7) 24.8 90.5
loans by 40% yoy which is riskier but generate higher yield.

Outlook & Valuation: Credit growth beat the industry growth rate, driven by strong
3-year price chart
retail business. The Strong liability franchise and healthy capitalisation provides 2500
strong earning visibility. At the current market price, the bank is trading at 3.2x 2000
FY20E ABV. We recommend a Buy rating on the stock, with a target price of 1500
`2,315/-. 1000
500
Key financials (Standalone) 0
Y/E March (` cr) FY16 FY17 FY18 FY19E FY20E
Apr-15

Apr-16

Apr-17
Jan-16

Oct-16
Jan-17

Jan-18
Oct-15

Oct-17
Jul-15

Jul-16

Jul-17

NII 27,592 33,139 40,092 48,833 56,694

% chg 23.6 20.1 21.0 21.8 16.1
Source: Company, Angel Research
Net profit 12,296 14,549 17,486 21,765 25,734
% chg 21.2 18.3 20.2 24.5 18.2
NIM (%) 4.5 4.5 4.4 4.4 4.4
EPS ( Rs) 48.6 56.8 67.5 80.0 94.6
P/E (x) 39.7 34.0 28.6 24.1 20.4
P/ABV (x) 6.8 5.9 4.8 3.6 3.2
RoA (%) 1.9 1.9 1.8 1.9 1.8 Jaikishan Parmar
RoE (%) 18.3 18.3 18.2 17.1 16.3 022 – 39357600 Ext: 6810
Jaikishan.parmar@angelbroking.com
Note: CMP as of April 26, 2018

Please refer to important disclosures at the end of this report 1

Market Outlook
April 27, 2018

Key Upcoming Events

Result Calendar

Date Company
April 27, 2018 Axis Bank, Shriram Tr ans, Reliance Industries, Maruti, United Phosphorus

April 28, 2018 L G Balakri shnan & Bros

Source: Bloomberg, Angel Research

Global economic events release calendar

Bl oomberg Dat a
Date Time Country Event Descripti on Unit Period
Last Reporte d E stimate d

Apr 27, 2018 6:00 PM US GDP Qoq (Annualise d) % Change 1Q A 2.90 2.00

2:30 PM Euro Zone Euro-Zone Consumer Confidence Value Apr F 0.40 (0.10)

1:25 PM Germany Unempl oyment change (000's) Thousands Apr (19.00) (15.00)

2:00 PM UK PMI Manufacturing Value Apr 55.10

Apr 30, 2018 2:00 PM UK GDP (YoY) % Change 1Q A 1.40 1.40

May 01, 2018 6:30 A M China PMI Manufacturing Value Apr 51.50 51.30

May 02, 2018 1:25 PM Germany PMI Manufacturing Value Apr F 58.10

11: 30 PM US FOMC rate decision % May 2 1.75 1.75

2:30 PM Euro Zone Euro-Zone GDP s.a. (QoQ) % Change 1Q A 0.70

May 04, 2018 1:25 PM Germany PMI Services Value Apr F 54.10

6:00 PM US Change in N onfarm payrolls Thousands Apr 103.00 190.00

6:00 PM US Unnemploy ment rate % Apr 4.10 4.00

May 08, 2018 China Exports YoY% % Change Apr (2.70)

May 09, 2018 US Producer Price Index (mom) % Change Apr 0.20

May 10, 2018 6:00 PM US Consumer price index (mom) % Change Apr (0.10)

Source: Bloomberg, Angel Research

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Market Outlook
April 27, 2018

Macro watch

Exhibit 1: Quarterly GDP trends Exhibit 2: IIP trends

(%) (%)
10.0 8.5
9.1 9.0
8.0 7.1 7.4 7.1
9.0 8.1
8.0 7.0
8.0 7.6 7.6
7.3 7.2 7.2 6.0
6.8 4.8
7.0 6.5 5.0 4.1
6.1
5.7 4.0 3.2
6.0 2.9
3.0 1.8
5.0
2.0 1.0
4.0 1.0
3.0 -
(1.0) (0.3)
4QFY15

1QFY16

4QFY16

1QFY17

2QFY17

4QFY17

1QFY18

2QFY18
2QFY16

3QFY16

3QFY17

3QFY18

Jul-17

Feb-18
Sep-17
May-17

Dec-17
Jun-17

Jan-18
Aug-17
Apr-17

Nov-17
Oct-17
Source: CSO, Angel Research Source: MOSPI, Angel Research

Exhibit 3: Monthly CPI inflation trends Exhibit 4: Manufacturing and services PMI
56.0 Mfg. PMI Services PMI
(%)
6.0 54.0
5.2 5.1
4.9 52.0
5.0 4.4 4.3
50.0
4.0 3.6
3.3 3.3
3.0 48.0
3.0 2.4
2.2 46.0
2.0 1.5 44.0

1.0 42.0
40.0
-

Feb-18
Feb-17

Jul-17

Sep-17
May-17

Dec-17
Jun-17

Jan-18
Aug-17
Mar-17

Mar-18
Apr-17

Oct-17

Nov-17
Dec-17
Jun-17

Jan-18
Aug-17

Mar-18
Apr-17

Nov-17
Oct-17

Feb-18
Sep-17
Jul-17
May-17

Source: Market, Angel Research; Note: Level above 50 indicates expansion

Source: MOSPI, Angel Research

Exhibit 5: Exports and imports growth trends Exhibit 6: Key policy rates
(%) Exports yoy growth Imports yoy growth (%) Repo rate Reverse Repo rate CRR
60.0 6.50
50.0 6.00
40.0 5.50
30.0 5.00
20.0 4.50
10.0 4.00
0.0 3.50

(10.0) 3.00
Feb-18
Sep-17
Jul-17

Dec-17
Jun-17

Jun-17

Jan-18

Jan-18
Aug-17
Aug-17

Mar-18

Mar-18
Oct-17

Nov-17

Nov-17
Feb-18
Sep-17
Jul-17
May-17

Dec-17
Jun-17

Jan-18
Aug-17
Apr-17

Mar-18
Oct-17

Nov-17

Source: Bloomberg, Angel Research Source: RBI, Angel Research

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Market Outlook
April 27, 2018

Global watch
Exhibit 1: Latest quarterly GDP Growth (%, yoy) across select developing and dev eloped countries
(%)
8.0
6.9
7.0
5.8
6.0 5.3
5.0
5.0
1.1
4.0 3.7
2.5
3.0
2.2
1.8
2.0 1.5 1.4
0.8
1.0
0.3
-

France
China

Japan
Indonesia

Thailand

USA
UK
Africa
Russia
Brazil

India

Malaysia

Germany
South

Source: Bloomberg, Angel Research

Exhibit 2: 2017 GDP Growth projection by IMF (%, yoy ) across select dev eloping and developed countries
8.0
(%)
6.7 6.8
7.0
6.0 5.4
5.2
5.0
3.7
4.0
3.0 2.2
1.8 2.0
2.0 1.7 1.6 1.5
0.7
0.7
1.0
-
Russia

Malaysia
Indonesia
China

Germany
South Africa

USA

France
Thailand
Brazil

UK
India

Japan
Source: IMF, Angel Research

Exhibit 3: One year forward P-E ratio across select developing and dev eloped countries
(x)
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
15.6

16.0

12.9

14.6
12.8

18.9

12.0

15.6

15.7

13.5

15.7

14.1
6.1

2.0
-
Thailand
Russia

Africa

Malaysia
India

Indonesia
China

Germany

France
USA

Japan
Brazil

South

UK

Source: IMF, Angel Research as on 26 April, 2018

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Market Outlook
April 27, 2018

Exhibit 4: Relative performance of indices across globe

Returns (%)
Country Name of index Closing price 1M 3M 1YR

Brazil Bovespa 85,824 2.3 7.6 33.4

Russia Micex 4,442 1.4 7.1 11.4

India Nifty 10,565 4.7 (1.7) 16.0

China Shanghai Composite 3,117 (6.3) (10.3) (6.2)

South Africa Top 40 50,729 (1.3) (6.2) 10.8

Mexico Mexbol 48,745 1.9 (1.3) (0.3)

Indonesia LQ45 1,040 0.7 (5.9) 10.0

Malay sia KLCI 1,895 2.1 3.8 9.2

Thailand SET 50 1,189 0.2 0.7 19.2

USA Dow Jones 24,665 0.2 (5.6) 19.9

UK FTSE 7,329 2.3 (5.1) 3.0

Japan Nikkei 22,191 3.3 (7.0) 19.6

Germany DAX 12,567 2.9 (5.3) 4.4

France CAC 5,392 3.7 (1.4) 2.4

Source: Bloomberg, Angel Research as on 26 April, 2018 68in4

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