Opening Bell

March 13, 2018

Market Outlook Today’s Highlights

Indian markets are expected to open marginally lower today following US CPI YoY
a sharp surge in the previous session and on mixed global cues. The
markets are expected to react positively to the release of better
inflation (CPI) numbers as well as IIP data.
Index Movement (past month)
Markets Yesterday 12000 36500
 Domestic markets ended in the green on the back of positive global 11500 34000
cues supported by easing of geo-political tensions and concerns 11000 31500
regarding US trade wars 10500 29000
10000 26500
 US markets ended on a mixed note with upbeat jobs data largely 9500 24000
having no impact on the markets

12-Feb

15-Feb

19-Feb

21-Feb

23-Feb

27-Feb

1-Mar

6-Mar

8-Mar

12-Mar
BSE (RHS) NSE (LHS)
Key Developments
 IIP for January 2018 increased 7.5% YoY against growth of 3.5% Close Previous Chg (%) MTD(%) YTD(%) P/E (1yr fwd)
in the same period last year during demonetisation. The Sensex 33,918 33,307 1.8 -0.8 -0.4 19.6
manufacturing sector recorded growth in output by 8.7% YoY Nifty 10,421 10,227 1.9 -0.7 -1.0 18.8
driven by 14.6%, 10.5% and 8.0% YoY increase in output of
capital goods, consumer non-durable and consumer durables, Institutional Activity
respectively. In addition to this, electricity output increased 7.6% CY16 CY17 YTD CY18 Yesterday Last 5 Days
YoY while mining sector output remained flat YoY. A sharp FII (| cr) 14,049 -40,663 -5,846 375 461
increase in output of capital goods and consumer non-durable DII (| cr) 11,320 91,032 17,875 -465 -179
was led by an increase in output of bodies of trucks, lorries and
trailers (up 267.5% YoY) and steroids with hormonal preparations World Indices – Monthly performance
(including anti-fungal preparations) up 102.9% YoY. Cumulatively Nasdaq Shanghai Dow Jones Kospi France
IIP for April 2017-January 2018 recorded growth of 4.1% YoY 7,588 3,329 25,179 2,484 5,277
8.7% 5.5% 4.7% 4.1% 2.7%
 CPI inflation for February 2018 cooled sharply from previous
Germany U.K. BSE NSE Nikkei
prints, coming in at 4.44% YoY. The decline on a sequential basis
12,418 7,215 33,918 10,421 21,824
was led chiefly by a fall in food prices, especially vegetables,
1.1% 0.5% -1.1% -1.1% -2.7%
sugar and eggs. Fuel prices did not rise for a second successive
month while the core basket saw a hardening due to a rise in
house rent and service based components like health & transport

Nifty Heat Map

Bharti 421.6 Vedanta 317.4 270.1 171.2 400.7
ITC NTPC IOC
Airtel 4.8% Ltd 4.4% 4.2% 4.1% 3.9%
227.7 Tata 352.6 Hero 3,694.5 519.2 366.8
Hindalco Axis Bank HPCL
3.4% Motors 3.3% Moto 3.0% 2.7% 2.7%
ICICI 300.7 622.9 967.7 311.2 4,176.0
Tata Steel HCL Tech Yes Bank Ultratech
Bank 2.7% 2.7% 2.6% 2.6% 2.4%
Ambuja 240.9 Adani 386.6 Indusind 1,735.3 183.9 446.5 Markets Today
ONGC GAIL Close Previous Change (%) MTD(%) YTD(%)
Cement 2.3% Ports 2.3% Bank 2.2% 2.2% 2.2%
Commodities
1,858.1 290.7 1,185.8 Bharti 339.5 930.3 Gold (|/10 gm) 30,271 30,369 -0.3 -0.4 3.5
HDFC Ltd Wipro Infosys RIL
2.2% 2.0% 1.9% Infratel 1.9% 1.9% Silver (|/kg) 38,164 38,313 -0.4 -0.1 -0.5
1,324.2 8,810.3 580.7 Kotak 1,100.6 446.8 Crude ($/barrel) 64.8 65.0 -0.2 -1.5 -3.1
HUL Maruti Cipla BPCL
1.8% 1.7% 1.7% Bank 1.7% 1.7% Copper ($/tonne) 6876 6937.5 -0.9 -0.3 -4.6
Currency
1,310.1 576.3 28,316.9 737.1 Sun 512.7
L&T Zee Ent. Eicher M&M USD/INR 65.04 65.17 -0.2 0.2 -1.8
1.5% 1.4% 1.3% 1.2% Pharma 1.2% EUR/USD 1.23 1.23 0.0 1.2 2.8
Power 195.0 IBULHSG 1,210.5 HDFC 1,867.3 2,148.4 718.0 USD/YEN 106.36 106.42 -0.1 0.3 6.0
Dr Reddy UPL
Grid 1.1% FIN 0.9% Bank 0.9% 0.9% 0.8% ADRs
HDFC Bank 97.5 96.4 1.1 -0.8 -5.2
Bajaj 2,957.8 769.8 Bajaj 1,665.3 3,052.2 18,247.5
Lupin TCS BOSCH Tata Motors 27.2 26.8 1.5 -4.4 -19.0
Auto 0.8% 0.7% Finance 0.7% 0.6% 0.2%
Infosys 18.4 18.2 1.4 2.8 12.0
Asian 1,131.5 619.6 252.9 582.9 297.7 Dr Reddys Labs 33.6 33.6 -0.1 -0.9 -10.5
TECHM SBI Aurobin Coal India
Paints 0.2% 0.1% -0.2% -1.6% -2.1%

ICICI Securities Ltd. | Retail Equity Research

Key Data Points Exchange Cash Turnover (| crore)
KEY ECONOMIC INDICATORS 40000

28,521

29,914

30,909

30,327

25,975

27,068
Key Economic Indicator Period Latest Prior Values
30000
RBI Cash Reserve Ratio N/A 4.00% 4.00%
20000
RBI Repo Rate N/A 6.00% 6.00%

4,036

3,321

3,449

3,998

3,212

4,121
RBI Reverse Repo Rate N/A 5.75% 5.75% 10000
CPI YY February 4.44% 5.07% 0
Current Account Balance Q3 -7.2bln $ -14.3bln $ 5-Mar 6-Mar 7-Mar 8-Mar 9-Mar 12-Mar
Exports - USD January 24.38bln $ 27.03bln $ BSE Cash NSE Cash
FX Reserves, USD Final w/e 419.76bln $ 421.91bln $
GDP Quarterly yy Q3 7.20% 6.30%
GDP Annual 12M 6.60% 8.00% NSE Derivative Turnover (| crore)
Imports - USD January 40.68bln $ 41.91bln $ 1800000
Industrial Output yy January 7.50% 7.10%
Manufacturing Output January 8.70% 8.40% 1300000
Trade Deficit - RBI Q3 -32.8bln $ -41.2bln $

1,678,923
800000

477,604

715,138

870,651

481,492

550,661
Trade Deficit Govt - USD January 16.3bln $ 14.8bln $
WPI Food yy January 3.00% 4.72% 300000
WPI Fuel yy January 4.08% 9.16%
WPI Inflation yy January 2.84% 3.58% -200000
5-Mar 6-Mar 7-Mar 8-Mar 9-Mar 12-Mar
WPI Manufacturing Inflation yy January 2.78% 2.61% NSE Derivative

Sectoral Index Sectoral Performance – Monthly Returns (%)

Sector Close Previous Change % Change Volume
Auto 24588.62 24253.45 335.17 1.38 2159000 IT 4.3
Consumer Durables 0.6
Banks 27784.7 27347 437.7 1.60 7869000
FMCG -0.9
BSE Small Cap 11792.74 11901.39 -108.65 (0.91) 66926000
Oil & Gas -1.7
Capital Goods 18693.41 18464.71 228.7 1.24 7756000 Auto -2.9
Consumer Durables 21437 21345.14 91.86 0.43 614000 Mid Cap -4.4
FMCG 8304.6 8368.14 -63.54 (0.76) 1023000 Capital Goods -4.4
Healthcare 17870.57 18140.06 -269.49 (1.49) 1830000 Banks -4.5
IT 11396.98 11501.95 -104.97 (0.91) 1254000 Power -4.5
Real Estate -4.8
Metals 14322.2 13996.9 325.3 2.32 7778000
BSE Small Cap -5.7
Mid Cap 10993.02 11070.76 -77.74 (0.70) 64406000 Metals -6.1
Oil & Gas 15373.44 15052.16 321.28 2.13 2654000 Healthcare -6.7
Power 2170.89 2136.83 34.06 1.59 14435000 PSU -8.1
PSU 8053.49 7978.31 75.18 0.94 42456000
-10.0 -5.0 0.0 5.0
Real Estate 2397.67 2385.52 12.15 0.51 10666000 (%)

Key News for Today

Company/ News View Impact
Industry
Bharti Airtel The Bharti Airtel board has approved plans to raise We believe the resolution is largely to
up to ~| 16,500 crore through a mix of privately refinance existing loans with lower cost
placed non-convertible debentures (NCDs of up to funding. The company could effectively
~| 10000 crore) and foreign currency bonds (FCCB save ~100 bps on interest rates on
of up to ~US$1 billion) for refinancing debt and refinanced loans
spectrum liabilities
TCS According to media sources, Tata Sons plans to sell The price range of | 2,872 to | 2,925 per
its 1.48% stake in TCS stake worth $1.25 billion at a share is at ~4-6% discount to yesterday's
price range of | 2,872 to | 2,925 per share via a closing price at BSE. Hence, the stake sale
block deal. Tata Sons, which owns 73.5% of stake in of 1.48% by Tata Sons in TCS could have a
TCS as of end of December 31,2017, intends to use sentimental impact on TCS
the proceeds from the share sale to reduce debt in
the group's telecom arm

ICICI Securities Ltd. | Retail Equity Research

NBCC During the vigilance review, the Chief Vigilance This newsflow could have a sentimentally
Officer (CVO), NBCC said the CBI has filed a positive impact on the stock
chargesheet in the case regarding sub-contracting of
Pragati Maidan redevelopment project while no
charges have been established against Anoop
Kumar Mittal, CMD, NBCC as during the
investigation the allegations against him were not
found to be corroborated

Key developments (Continued…)

 ACC Ambuja plan to enter into a master supply agreement for supply of cement, clinker and raw materials at a
discount on mutually agreed terms, to maximise synergies and unlock additional values
 As per media sources, Gail and HPCL want the Andhra Pradesh (AP) government to provide a gap funding for the set-
up of a petrochemical complex at Kakinada. The gap funding is expected to be ~| 5000 crore out of the ~| 33000
crore project
 The Petroleum and Natural Gas Regulatory Board (PNGRB) has commenced the bidding process for 86 geographical
areas, which will come under the city gas distribution network
 Moody's Investor Service has assigned a provisional rating of Ba2 with a stable outlook to JSW Steel's proposed notes
issuance of US$1billion. For the same issue, Fitch Ratings have assigned a rating of BB (EXP) with a stable outlook
 Crisil Ratings has revised its rating outlook on Vedanta to positive (from stable earlier). The rating has been reaffirmed
at Crisil AA/CRISIL A1+. The outlook revision reflects Crisil's expectation of a strengthening business profile driven by
a structural improvement in aluminium profitability and expected volume ramp-up across businesses. The revision in
outlook also reflects expectation of continued deleveraging over the medium term
 The Directorate General of Civil Aviation (DGCA) has grounded eight Indigo and three Go Air A320 Neo planes
 Infosys has announced its intention to voluntarily delist its American Depositary Shares (ADS) from Euronext Paris and
Euronext London exchanges. The primary reason for seeking the proposed delisting is the low average daily trading
volume of Infosys ADS on these exchanges. The delisting is subject to approval from Euronext Paris and Euronext
London
 As per media sources, ITC has entered the liquid milk segment with pouches under Aashirvaad Svasti brand

ICICI Securities Ltd. | Retail Equity Research

 Nifty Chart Technical Outlook
Equity benchmarks posted their strongest one-
day gain since June 2016 amid strong global
cues. The Nifty settled at 10421, up 195 points
or 1.9%.
The price action formed a strong bull candle
carrying a higher high-low sequence, indicating
elevated buying demand throughout the
session. Since its February 2018 peak, the up
move has not exceeded three sessions. In the
current scenario, the Nifty has already rallied
for three sessions. It is placed near the hurdle
of 10450, as the index penetrated last week’s
gap area (10429-10447). It ended near the
falling trend line at 10430 after the 292-point
rally. Thus, a couple of days breather cannot be
ruled out. Thus, any breather towards 10300
should be used as incremental buying
opportunity, as it will form a higher base
formation that will eventually lead to extension
of pullback towards last five week’s identical
high of 10650.
Pivot Points CNX Nifty Technical Picture
Index/Stocks Trend Close S1 S2 R1 R2 Nifty 50 Intraday Short Term
S&P BSE SENSEX INDEX Positive 33917.9 33604.0 33109.0 34098.0 34592.0 Trend Up Range Bound
Nifty 50 Positive 10421.4 10334.0 10196.0 10473.0 10611.0 Trend Reversal
ACC LTD Neutral 1559.9 1532.0 1489.0 1575.0 1618.0 Support 10410-10370 10000
AXIS BANK LTD Neutral 519.2 508.0 491.0 525.0 541.0 Resistance 10450-10480 10450
HDFC BANK LTD Positive 1867.3 1857.0 1841.0 1873.0 1889.0 20 Days EMA 10424
STATE BANK IND Negative 252.9 249.0 241.0 257.0 265.0 200 days EMA 10118
HOUSING DEV FIN Positive 1858.1 1835.0 1796.0 1873.0 1911.0 Advances / Declines
MARUTI SUZUKI IN Positive 8810.3 8719.0 8574.0 8865.0 9011.0
TATA MOTORS LTD Positive 352.6 344.0 331.0 358.0 371.0 Advances Declines Unchanged
MAHINDRA & MAHIN Neutral 737.1 733.0 725.0 741.0 749.0 BSE 1346 1370 185
BAJAJ AUTO LTD Positive 3109.4 3061.0 2974.0 3149.0 3236.0 NSE 986 830 93
TATA CONSULTANCY Positive 3052.2 3030.0 2982.0 3079.0 3127.0
Daily Technical Calls
INFOSYS LTD Positive 1185.8 1174.0 1154.0 1194.0 1214.0
1. Buy NIIT Technologies in the range of 910.00-912.00
CIPLA LTD Negative 580.7 568.0 549.0 586.0 605.0
2. Sell Concor in the range of 1245.00-1250.00
OIL & NATURAL GA Neutral 183.9 180.0 174.0 185.0 190.0
RELIANCE INDS Positive 930.3 921.0 905.0 936.0 952.0
*All recommendations are of March Future
BHARTI AIRTEL Positive 421.6 410.0 389.0 430.0 451.0
DLF LTD Neutral 217.7 212.0 204.0 220.0 228.0
See Momentum Pick for more details

Nifty Call – Put Strike (No. of shares in lakh) – March 2018 Intraday Derivative Strategy
i) Hindustan Zinc
10000 54 9 Buy HINZIN Mar Fut at | 314.00-314.30
10100 29 7 CMP: 311
10200 40 16 Target 1: 316 Target 2: 318.8
10300 43 27 Stop Loss: 312.2
10400 38 39
10500 18 48
10600 11 52 ii) Biocon
10700 4 30 Sell BIOCON Mar Fut at | 589.50-590.00
10800 4 31 CMP: 596.5
60.0 40.0 20.0 0.0 20.0 40.0 60.0 Target 1: 586.7 Target 2: 581.7
Stop Loss: 593.3
Put Call
See Daily Derivatives for more details

ICICI Securities Ltd. | Retail Equity Research

Results/Events Calendar

26 February 27 February 28 February 01 March 02 March 03 March

Monday Tuesday Wednesday Thursday Friday Saturday
US New Home Sales MoM M3 Money Supply YoY Nikkei India PMI Mfg Markit US Mfg PMI Tokyo CPI YoY 0
0 0 India Fiscal Deficit Markit UK PMI Mfg Japan Monetary Base YoY 0
0 0 India GDP YoY Markit EU PMI Mfg EU PPI YoY 0
0 0 US GDP Annualized QoQ Nikkei Japan PMI Mfg 0 0
0 0 Japan Industrial Prodn YoY 0 0 0

05 March 06 March 07 March 08 March 09 March 10 March

Monday Tuesday Wednesday Thursday Friday Saturday
Markit US Services PMI 0 US Trade Balance US Initial Jobless Claims BoJ Policy Balance Rate 0
Markit US Composite PMI 0 EU GDP SA QoQ Japan GDP SA QoQ China CPI YoY 0
Nikkei India PMI Services 0 EU GDP SA YoY ECB Main Ref Rate China PPI YoY 0
Nikkei Japan PMI Services 0 0 ECB Marg Lending Rate 0 0
Markit EU PMI Services 0 0 0 0 0

12 March 13 March 14 March 15 March 16 March 17 March

Monday Tuesday Wednesday Thursday Friday Saturday
India CPI YoY US CPI YoY India Wholesale Pr YoY US Initial Jobless Claims US Industrial Prod MoM 0
India Industrial Prod YoY 0 0 0 EU CPI Core YoY 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0

19 March 20 March 21 March 22 March 23 March 24 March

Monday Tuesday Wednesday Thursday Friday Saturday
0 UK Core CPI YoY US FOMC Rate Decision US Initial Jobless Claims 0 0
0 0 0 Markit US Mfg PMI 0 0
0 0 0 Markit US Services PMI 0 0
0 0 0 Markit EU Mfg PMI 0 0
0 0 0 Nikkei Japan PMI Mfg 0 0

26 March 27 March 28 March 29 March 30 March 31 March

Monday Tuesday Wednesday Thursday Friday Saturday
0 Japan PPI Services YoY India Fiscal Deficit 0 Japan Industrial Prod YoY China Mfg PMI
0 0 US GDP Annualized QoQ 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0

Major Economic Events this Week Bulk Deals

s0063

Date Event Country Period Actual Expected

Company Client Name Type No. of shares Price (|)
12-Mar CPI YoY IN Feb 4.4% 4.7%
BSE*
12-Mar Industrial Production YoY IN Jan 7.5% 6.4%
Aditya Consumer MarketingFancos Trademart Private Limited Buy 88,000 200.5
13-Mar PPI YoY JN Feb 2.5% 2.5%
Vishal Fabrics Shanti Exports Pvt Ltd Buy 300,000 665.5

Date Event Country Period Expected Previous

NSE*
13-Mar CPI YoY US Feb 2.2% 2.1% Mcdowell Holdings Ltd Lkp Merchant Financing Ltd Sell 78,078 45.4
14-Mar Wholesale Prices YoY IN Feb 2.5% 2.8% Websol Energy System LtdGarnet International Limited Buy 150,117 88.9
14-Mar Industrial Production WDAEUYoY Jan -- 5.2%
15-Mar Trade Balance IN Feb -$14193.5m -$16298.5m
15-Mar Exports YoY IN Feb -- 9.1%
15-Mar Imports YoY IN Feb -- 26.1% Recent Releases
Date Report
28 February 2018 Monthly Update- Metals & Mining
28 February 2018 Moto Gaze- February 2018
27 February 2018 Management Meet Update- KEI Industries
27 February 2018 Initiating Coverage- Music Broadcast Ltd
23 February 2018 Result Update- KSB Pumps

ICICI Securities Ltd. | Retail Equity Research

 Pankaj Pandey Head – Research [email protected]

ICICIdirect.com Research Desk,

ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC
Andheri (East)
Mumbai – 400 093
[email protected]

ICICI Securities Ltd. | Retail Equity Research

Disclaimer

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