Market Mantra: 10/04/2017
(08:30)
SGX-NF: 9220 (+3
points)
Key support for NF: 9195/9160-9115
Key resistance for NF:
9255-9305
Key support for BNF:
21400-21300
Key resistance for
BNF: 21675-21775
All Eyes Will Be Now Q4 Result Season
Starting This Week & Various Domestic Macro Data and Deluge Of Fed Speakers
As
par early SGX indication, Nifty Fut (Apr) may open around 9220, almost flat
following tepid global cues after terrible/mixed US NFP payroll data on Friday;
but USD is getting higher across the board as geo-political tensions in Syria
did not escalate further. US termed the “surgical strike” on Syria as “one-off”
event, just designed to destroy the alleged chemical weapons set up of Assad
regime. But, still there may be significant probability of further escalation
as US may be deeply involved in Syria to dislodge the current pro-Russian
regime. Also, on Friday an influential Fed member (Dudley) commented that
despite risks of Fed’s balance sheet tapering, Fed may hike another 2-3 times
in 2017 and that’s apparently providing some support to USD/risk trades by some
extent.
Back
to home, apart from various macro data & Infy result in this truncated
week, market may also watch progress of GST for the July’17 roll out. But, Govt
may also be planning to change the FY from March to Dec this year or next year
as par various reports; if the FY is changed in this year (2017), then for
overall convenience & simplicity, GST may also be implemented from Jan’18
(new FY ?) in lieu of July’17.
Kotak bank may be in focus after
getting nod of IDF (Infrastructure Debt Fund). For KMB, 895-910
May Be A Big Hurdle Despite “Animal Spirit” For Inorganic Growth; At TTM PE Of
35, The Stock May Be Quite Expensive Against Its Average PE Of 25
Trading Idea: KMB
LTP:
873
Sell
on rise around: 895-910
TGT:
845-830 & 790-770 and 720-690 (1-3 & 6M)
TSL>
915 OR > 925
Note:
Consecutive closing above 925 area, KMB may further rally towards 945-975 &
1000-1015 & 1045-1080 in the near to long term (FY: 18-19). Anyone having
long position in the stock, may also watch the 845-830 zone as positional
support.
As
the valuation multiple is currently quite stretched at around PE of 35 (Q3FY17
TTM) in comparison to its average PE multiple of 25, investors may wait for
some dips before fresh buying.
Investment Idea: KMB
LTP:
873
Buy/accumulate
on dips around: 770-720
TGT:
905-975 & 1015-1045 and 1080 (12-24M/FY: 18-19)
Valuation
metrics for KMB (Cons):
|
ACTUAL
Q3FY17 EPS
|
6.88
|
|
ACTUAL
TTM Q3FY17 EPS
|
24.96
|
|
PROJECTED
Q4FY17 EPS
|
7.56
|
|
PROJCTED
FY-17 EPS
|
26.78
|
|
PROJECTED
Q1FY18 EPS
|
8.3
|
|
PROJECTED
TTM Q1FY18 EPS
|
29.28
|
|
PROJECTED
FY-18 EPS
|
30.3
|
Average/median
PE: 25
Average
CAGR in EBITDA: 21%
Projected
CAGR in EBITDA (FY:18-19): 33%
Average
CAGR in EPS: 25% (Adjusted EQ dilution for ING merger)
Projected
CAGR in EPS: 23% (without factoring for latest 3.3% EQ dilution and probable
further fund raising/EQ dilution)
As
par current & implied run rate & average PE of 25, median fair
valuation of KMB may be:
Actual
Q3FY17 TTM: 625
Projected
FY-17: 670
Projected
FY-18: 760
|
Valuation
Metrics
|
Q3FY17
|
FY-17E
|
Q1FY18E
|
FY-18E
|
|
TTM
EPS
|
24.96
|
26.78
|
29.28
|
30.3
|
|
MEDIAN
PE
|
25
|
25
|
25
|
25
|
|
MEDIAN
FAIR VALUE
|
624.00
|
669.50
|
732.00
|
757.50
|
Hints for actionable
trading idea: Nifty & Bank Nifty Fut
Time & Price
action suggests that, Nifty Fut (Apr) has to sustain over 9215 area for further
rally towards 9255-9305 & 9375-9425 in the short term (under bullish case
scenario).
On the other side,
sustaining below 9195 area, NF may fall towards 9160-9115 and further 9085-9040
area in the short term (under bear case scenario).
Similarly, BNF has to
sustain over 21450 area for further rally towards 21650-21775 & 21875-21950
area in the near term (under bullish case scenario).
On the other side,
sustaining below 21400 area, BNF may fall towards 21300-21200 & 21040-20900
zone in the near term (under bear case scenario).
SGX-NF
KOTAK BK
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