MOSL: Morning India (4/May/18): 1. Bulls & Bears (India Valuations Handbook); 2. EcoScope (EAI); 3. Vedanta; 4. Marico; 5. L&T Fin. Holdings; 6. Emami; 7. Coromandel International
MOrning India (4/May/18): 1. Bulls & Bears (India Valuations Handbook); 2. EcoScope (EAI); 3. Vedanta; 4. Marico; 5. L&T Fin. Holdings; 6. Emami; 7. Coromandel International
Today’s top research theme
Bulls & Bears: India Valuations Handbook: Markets climbing wall of worry; Valuations stay rich
- After sliding 4.9% in February and 3.6% in March, the Nifty bounced back strongly and returned 6.2% in April – its highest monthly gain in 24 months. After a bout of volatility in the previous two months (rising bond yields, potential trade war concerns), global markets appear to have settled down.
- In India, continued robust domestic flows, an improvement in high-frequency data and a healthy start to 4QFY18 earnings season have calmed nerves amidst FII selling, currency depreciation (down 2.2% in April and 4.2% CYTD’18) and rising crude prices.
- Midcaps (up 8.2% in April) outperformed the Nifty in April, but lag the Nifty on a trailing 12-month basis (12% return v/s Nifty’s 15%). Note that midcaps still command a rich premium of 23% v/s large caps.
- Technology (+12%), Consumer (+10%), Real Estate (+9%), Healthcare (+8%), Autos (+7%) and Metals (+7%) were the outperformers for April. Oil & Gas (-1%), PSU Banks (-0.4%) and Telecom (-0.2%) were the laggards.
- We reiterate our long-standing positive view on Consumption recovery theme for CY18, with preference for Rural Consumption in particular. The evidence around a recovery in Rural Consumption is getting stronger with every passing quarter and early 4QFY18 result trends bolster this view.
Piping hot news
Tata Motors offloads defense and aerospace biz portfolio to Tata Advanced Systems Limited
- As part of its effort to reduce debt and monetise non-core assets, Tata Motors on Thursday sold its defense and aerospace portfolio to Tata Advanced Systems Limited to unlock their full potential. The move is likely to bring in proceeds in excess of Rs 700 crore on the Tata Motors books, subject to regulatory and other approvals.
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