icici bank q4 net profit halves to rs 10.2 bn, loan...

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Market Outlook May 08, 2018


Market Cues

Indian markets are likely to open positive tracking global indices and SGX Nifty.

U.S. Stocks showed After an early move to the upside, stocks gave back ground in afternoon trading on Monday but managed to end the day higher. With the gains on the day, the major averages extended the rally seen in the previous session. The Dow Jones rose to 24,357 and the Nasdaq was up by 0.8 percent to 7,265.

U.K. stock market was closed on Monday on account of a bank holiday.

On domestic front, Indian shares rose sharply on Monday as mixed U.S. jobs data helped ease fears of faster rate hikes by the Federal Reserve amid a caution ahead of Karnataka state elections scheduled to be held on May 12. The BSE Sensex ended on a positive of 0.8% at 35,208.

News Analysis ICICI Bank Q4 net profit halves to Rs 10.2 bn, loan provisions surge

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 796 867 8.9

Dewan Housing Finance Financials Accumulate 628 720 14.7

Century Plyboards Forest Product Buy 309 400 29.4

Navkar Corporation Others Buy 170 265 56.2

KEI Industries Capital Goods Accumulate 428 485 13.4 More Top Picks on Pg4

Key Upcoming Events Date Region Event Description

Previous Reading

Consensus Expectations

May 08, 2018 US Unnemployment rate 4.10 4.00

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

May 10, 2018 UK Industrial Production (YoY) 2.20 3.10

May 10, 2018 US Initial Jobless claims 211.00

May 10, 2018 US Consumer price index (mom) (0.10) 0.30 More Events on Pg7

Domestic Indices Chg (%) (Pts) (Close)

BSE Sensex 0.8 293 35,208

Nifty 0.9 97 10,716

Mid Cap 0.6 91 16,652

Small Cap 0.6 100 18,092

Bankex 1.1 321 28,983

Global Indices Chg (%) (Pts) (Close)

Dow Jones 0.4 95 24,357

Nasdaq 0.8 56 7,265

FTSE 0.9 64 7,567

Nikkei (0.0) (6) 22,467

Hang Seng 0.2 68 29,994

Shanghai Com 1.5 46 3,137

Advances / Declines BSE NSE

Advances 1,427 970

Declines 1,288 834

Unchanged 145 86

Volumes (` Cr)

BSE 3,363

NSE 28,640

Net Inflows (` Cr) Net Mtd Ytd

FII (1,579) (2,015) 5,383

*MFs 294 534 46,287

Top Gainers Price (`) Chg (%)

VIDEOIND 11 10.0

IBVENTUREPP 328 9.6

LAKSHVILAS 95 6.5

EQUITAS 165 6.4

IBVENTURES 512 6.2

Top Losers Price (`) Chg (%)

WOCKPHARMA 740 -7.8

ICIL 84 -7.3

UJJIVAN 395 -5.9

STAR 558 -4.8

RAJESHEXPO 668 -4.2 As on May 07, 2018

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News Analysis

ICICI Bank Q4 net profit halves to Rs 10.2 bn, loan provisions surge

ICICI Bank Ltd reported a 50% drop in its fiscal-fourth quarter profit as it set aside cash to cover a surge in bad loans, a fallout of the central bank’s revised scheme on resolution of stressed assets. The bank posted a net profit of Rs 10.2 billion for the quarter ended March 2018, against Rs 20.2 billion a year agoThe bank’s profit was boosted by a one-time income arising from the sale of shares in its capital market arm, ICICI Securities, to the tune of Rs 33.20 billion.Additionally, three loan accounts in the gems and jewellery sector with fund-based outstanding of Rs 7.95 billion were classified as fraud and non-performing, and during the fourth quarter, the bank made a provision of Rs 2.89 billion through its profit and loss account, and Rs 5.05 billion by debiting reserves and surplus as permitted by the Reserve Bank of India (RBI.

The March-quarter profit is the lowest for the bank in the last eight quarters. he bank's asset quality deteriorated sharply as gross non-performing assets (NPAs), as a percentage of gross advances, stood at 9.9 per cent during the January-March quarter, against 8.55 per cent in the previous quarter. Slippages grew four-fold to Rs 157.37 billion, the highest ever for the bank, during the quarter, compared to Rs 43.8 billion in the previous quarter.

Economic and Political News

Rupee plunges to 67 per dollar as crude oil spikes

Power surplus Odisha buys from external sources to meet summer demand

Hyperloop Technologies proposes 700-800 km project for AP in three phases

PM reviews launch preparations for health scheme covering 100 mn households

Corporate News

ICICI Bank Q4 net profit halves to Rs 10.2 bn, loan provisions surge

DSP parts ways with BlackRock, to buy 40% stake in MF venture

ONGC gas output up 6.3% in FY18, looks to double production by 2022

Reliance to invest Rs 600 bn in Jio this year, may borrow Rs 1 trn more





Quarterly Bloomberg Brokers Consensus Estimate

ABB Ltd – May 08, 2018

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

Sales 2,702 2,166 24.7 2,799 (3.4)

EBIDTA 233 160 45.6 293 (20.5)

% 8.6 7.4 10.5

PAT 128 89 43.8 171 (25.2)

Godrej Products Ltd – May 08, 2018

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

Sales 2,620 2,389 9.6 2,630 (0.3)

EBIDTA 619 541 14.4 586 5.6

% 23.6 22.6 22.3

PAT 445 387 14.9 429 3.7





Top Picks Company Market Cap

(` Cr) CMP

(`) Target

(`) Upside

(%) Rationale

Alkem Laboratories 23,770 1,988 2,441 22.8

Strong growth in domestic business due to its leadership in acute therapeutic segment. Alkem expects to launch more products in USA, which bodes for its international business.

Blue Star 7,643 796 867 8.9

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 19,682 628 720 14.7

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.

ICICI Bank 1,86,047 289 416 43.7

Well capitalized with CAR of 18.1% which gives sufficient room to grow asset base. Faster resolution of NPA would reduce provision cost, which would help to report better ROE.

KEI Industries 3,351 428 485 13.4 High order book execution in EPC segment, rising B2C sales and higher exports to boost the revenues and profitability

Music Broadcast Limited 2,110 370 475 28.4 Expected to benefit from the lower capex requirement and 15 year long radio broadcast licensing.

Navkar Corporation 2,554 170 265 56.2 Massive capacity expansion along with rail advantage at ICD as well CFS augur well for the company

Siyaram Silk Mills 3,066 654 851 30.1 Strong brands and distribution network would boost growth going ahead. Stock currently trades at an inexpensive valuation.

TV Today Network 2,693 452 603 33.6

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 2,64,091 8,742 10,619 21.5 GST regime and the Gujarat plant are expected to improve the company’s sales volume and margins, respectively.

GIC Housing 2,269 421 655 55.5 We expect loan book to grow at 24.3% over next two year; change in borrowing mix will help in NIM improvement

Century Plyboards 6,866 309 400 29.4

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 2,927 92 128 39.9 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.

Safari Industries 1,355 609 750 23.2

Third largest brand play in luggage segment Increased product offerings and improving distribution network is leading to strong growth in business. Likely to post robust growth for next 3-4 years

HSIL Ltd 2,734 378 510 34.9

We expect HSIL to report PAT CAGR of ~15% over FY2017-20E owing to better improvement in operating margin due price hike in container glass segment, turnaround in consumer business.

Source: Company, Angel Research





Top Picks Company Market Cap

(` Cr) CMP

(`) Target

(`) Upside

(%) Rationale

Aditya Birla Capital 34,964 157 218 37.1 We expect financialisation of savings and increasing penetration in Insurance & Mutual fund would ensure steady growth.

Parag Milk Foods 2,531 315 333 5.7

One of the leading Indian dairy products companies in India created strong brands in dairy products. Rising revenue share of high-margin Value Added Products and reduction in interest cost is likely to boost margins and earnings in next few years.

Matrimony.com Ltd 1,930 831 984 18.8

We expect MCL to report net revenue CAGR of ~15% to ~`450cr over FY2018-20E mainly due to strong growth in online matchmaking & marriage related services. On the bottom-line front, we expect a CAGR of ~28% to `82cr over the same period on the back margin improvement.

HDFC Bank 5,15,032 1,977 2,315 17.1

HDFC Bank maintained its steady growth in the 4QFY18. The bank’s net profit grew by 20.3%. Steady growth in interest income and other income aided PAT growth. The Strong liability franchise and healthy capitalisation provides strong earning visibility. At the current market price, the bank is trading at 3.2x FY20E ABV.






Fundamental Call Company Market Cap

(` Cr) CMP

(`) Target

(`) Upside

(%) Rationale

CCL Products 4,123 310 360 16.2 CCL is likely to maintain the strong growth trajectory over FY18-20 backed by capacity expansion and new geographical foray

Nilkamal 2,504 1,678 2,178 29.8

We forecast Nilkamal to report top-line CAGR of ~9% to `2,635cr over FY17-20E on the back of healthy demand growth in plastic division. On the bottom-line front, we estimate ~10% CAGR to `162cr owing to improvement in volumes.

Prism Cement 5,969 119 160 34.5

The prism has diversified exposure in the different segment such as Cement, Tile & ready mix concrete. Thus we believe, PCL is in the right place to capture ongoing government spending on affordable housing and infrastructure projects.

Elantas Beck India Ltd 1,804 2,276 2,500 9.9

Elantas Beck India is the Indian market leader in liquid insulation segment used in electrical equipments like motors, transformers etc. It derives demand from several industries which are expected to register 10%+ CAGR in demand in the coming years.

Greenply Industries 3,789 309 395 27.9

Greenply Industries Ltd (GIL) manufactures plywood & allied products and medium density fibreboards (MDF). GIL to report net revenue CAGR of ~14% to ~`2,478cr over FY2017-20E mainly due to healthy growth in plywood & lamination business on the back of strong brand and distribution network

GMM Pfaudler Ltd 1,133 802 861 7.3

GMM Pfaudler Limited (GMM) is the Indian market leader in glass-lined (GL) steel equipment. GMM is expected to cross CAGR 15%+ in revenue over the next few years mainly led by uptick in demand from user industries and it is also expecting to increase its share of non-GL business to 50% by 2020.

L&T Finance Holding 35,173 176 210 16.2 L&T Fin’s new management is on track to achieve ROE of 18% by 2020 and recent capital infusion of `3000cr would support advance growth.


2


Market Outlook

May 08, 2018


Key Upcoming Events

Result Calendar

Date Company

May 08, 2018 Automotive Axle, ABB, Godrej Consumer, Vesuvius India, Aventis

May 09, 2018 Oriental Bank, Federal Bank, Jindal Steel

Source: Bloomberg, Angel Research

Global economic events release calendar

Date Time Country Event Description Unit Period

Bloomberg Data

Last Reported Estimated

May 08, 2018 6:00 PM US Unnemployment rate % Apr 4.10 4.00

May 09, 2018

US Producer Price Index (mom) % Change Apr 0.20

May 10, 2018 2:00 PM UK Industrial Production (YoY) % Change Mar 2.20 3.10

6:00 PM US Initial Jobless claims Thousands May 5 211.00

6:00 PM US Consumer price index (mom) % Change Apr (0.10) 0.30

7:00 AM China Consumer Price Index (YoY) % Change Apr 2.10 1.90

4:30 PM UK BOE Announces rates % Ratio May 10 0.50 0.50

May 11, 2018 5:30 PM India Industrial Production YoY % Change Mar 7.10

May 14, 2018 12:00 PM India Monthly Wholesale Prices YoY% % Change Apr 2.47

May 15, 2018 2:30 PM Euro Zone Euro-Zone GDP s.a. (QoQ) % Change 1Q P 0.40

2:00 PM UK Jobless claims change % Change Apr 11.60

7:30 AM China Industrial Production (YoY) % Change Apr 6.00 6.40

India Imports YoY% % Change Apr 7.15

India Exports YoY% % Change Apr (0.66)

2:30 PM Euro Zone Euro-Zone CPI (YoY) % Apr F 1.20


3


Market Outlook

May 08, 2018


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


Exhibit 6: Key policy rates

Source: RBI, Angel Research

7.3 7.6

8.0

7.2

9.1

8.1

7.6

6.8

6.1

5.7

6.5

7.2

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

4Q

FY15

1Q

FY16

2Q

FY16

3Q

FY16

4Q

FY16

1Q

FY17

2Q

FY17

3Q

FY17

4Q

FY17

1Q

FY18

2Q

FY18

3Q

FY18

(%)

3.2 2.9

(0.3)

1.0

4.8

4.1

1.8

8.5

7.1 7.4

7.1

(1.0)

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-17

Oct-17

Nov-17

Dec-17

Jan-18

Feb-18

(%)

3.0

2.2

1.5

2.4

3.3 3.3

3.6

4.9

5.2 5.1

4.4 4.3

-

1.0

2.0

3.0

4.0

5.0

6.0

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-17

Oct-17

Nov-17

Dec-17

Jan-18

Feb-18

Mar-18

(%)

40.0

42.0

44.0

46.0

48.0

50.0

52.0

54.0

56.0 M

ar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-17

Oct-17

Nov-17

Dec-17

Jan-18

Feb-18

Mar-18

Apr-18

Mfg. PMI Services PMI

(10.0)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-17

Oct-17

Nov-17

Dec-17

Jan-18

Feb-18

Mar-18

Exports yoy growth Imports yoy growth(%)

3.00

3.50

4.00

4.50

5.00

5.50

6.00

6.50

Jun-17

Jun-17

Jul-17

Aug-17

Aug-17

Sep-17

Oct-17

Nov-17

Nov-17

Dec-17

Jan-18

Jan-18

Feb-18

Mar-18

Mar-18

Repo rate Reverse Repo rate CRR (%)

4


Market Outlook

May 08, 2018


Global watch

Exhibit 1: Latest quarterly GDP Growth (%, yoy) across select developing and developed countries


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 as on 07 May, 2018

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

.4

6.1

19

.2

12

.3

15

.8

15

.5

15

.5

15

.8

13

.4

15

.7

13

.4

14

.6

14

.0

-

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


Market Outlook

May 08, 2018


Exhibit 4: Relative performance of indices across globe

Returns (%)

Country Name of index Closing price 1M 3M 1YR

Brazil Bovespa 83,118 (2.0) (2.6) 26.5

Russia Micex 4,515 1.4 7.1 11.4

India Nifty 10,618 5.8 (3.0) 15.1

China Shanghai Composite 3,091 (0.4) (11.2) 0.3

South Africa Top 40 50,874 6.2 (2.9) 9.4

Mexico Mexbol 46,992 (2.1) (7.8) (6.1)

Indonesia LQ45 920 (9.0) (17.5) (2.2)

Malaysia KLCI 1,842 (0.5) (1.4) 4.3

Thailand SET 50 1,176 0.4 (0.8) 18.0

USA Dow Jones 24,263 (0.6) (4.6) 15.9

UK FTSE 7,567 7.6 1.0 3.1

Japan Nikkei 22,473 4.7 (4.9) 19.1

Germany DAX 12,820 8.3 (0.4) 2.0

France CAC 5,516 7.6 1.4 2.7

Source: Bloomberg, Angel Research as on 07 May, 2018 68in4

6


Market Outlook

May 08, 2018


Exhibit 7: Historical Angel Top Picks/Fundamental Calls

Date Added Top Picks/Fundamental Stocks Current Status

02-05-2018 Top Picks HDFC Bank Open

20-04-2018 Top Picks Matrimony.com Ltd Open

16-04-2018 Top Picks Parag Milk Foods Limited Open

06-04-2018 Fundamental GMM Pfaudler Limited Open

07-03-2018 Fundamental Ashok Leyland Ltd Closed (26/04/2018)

03-03-2018 Fundamental Greenply Industries Open

21-02-2018 Top Picks Safari Industries Open

16-02-2018 Top Picks HSIL Ltd Open

07-02-2018 Fundamental Elantas Beck India Ltd. Open

01-02-2018 Top Picks ICICI Bank Open

01-02-2018 Top Picks Aditya Birla Capital Open

04-01-2018 Fundamental CCL Products Open

03-01-2018 Fundamental Nilkamal Ltd Open

01-01-2018 Fundamental Capital First Ltd Closed (15/01/2018)

30-12-2017 Fundamental Shreyans Industries Ltd Closed

21-12-2017 Fundamental Prism Cement Ltd Open

18-12-2017 Fundamental Menon Bearings Limited Closed (17/01/2018)

14-12-2017 Top Picks Ruchira Papers Ltd. Closed (09/02/2018)

28-11-2017 Top Picks Century Plyboards India Open

06-11-2017 Top Picks LT Foods Open

16-10-2017 Fundamental Endurance Technologies Ltd Closed (01/12/2017)

11-Sep-17 Top Picks GIC Housing Open

20-07-2017 Top Picks Music Broadcast Limited Open

07-07-2017 Fundamental L&T Finance Holdings Ltd Closed (28/8/2017)

06-07-2017 Fundamental Syngene International Closed (1/3/2018)

05-07-2017 Top Picks Maruti Open

03-01-2017 Top Picks Alkem Lab Open

30-12-2016 Top Picks KEI Industries Open

04-08-2016 Top Picks TV Today Network Open

05-04-2016 Top Picks DHFL Open

05-01-2016 Top Picks Navkar Corporation Open

08-12-2015 Top Picks Blue Star Open

06-11-2015 Top Picks Siyaram Silk Mills Open


7


Market Outlook

May 08, 2018


Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com

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icici bank q4 net profit halves to rs 10.2 bn, loan...

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