*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).*
<https://4.bp.blogspot.com/-Z_z9oYLZsTA/WOsAGt9zvVI/AAAAAAAALQk/K-c1lyKrsKcZLCssARXRYoWgTT0VsBEswCLcB/s1600/SGX-NF-10-04-2017.png>
SGX-NF
<https://1.bp.blogspot.com/-UI0Lx3yBynY/WOsAJEdTTiI/AAAAAAAALQo/fxueWqBsFAAlb2Xh-M7V2gG60qq8QDXXACLcB/s1600/KOTAK-PATTERN-07-04-2017.png>
KOTAK BK*
*
--
Thanks & Regards,
Asis Ghosh
--
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