20 November 2017
Market snapshot
Equities - India
Close
Chg .%
Sensex
33,343
0.7
Nifty-50
10,284
0.7
Nifty-M 100
19,643
1.0
Equities-Global
Close
Chg .%
S&P 500
2,579
-0.3
Nasdaq
6,783
-0.2
FTSE 100
7,381
-0.1
DAX
12,994
-0.4
Hang Seng
11,609
0.6
Nikkei 225
22,397
0.2
Commodities
Close
Chg .%
Brent (US$/Bbl)
62
2.1
Gold ($/OZ)
1,294
1.2
Cu (US$/MT)
6,744
0.6
Almn (US$/MT)
2,087
0.1
Currency
Close
Chg .%
USD/INR
65.0
-0.5
USD/EUR
1.2
0.2
USD/JPY
112.1
-0.8
YIELD (%)
Close
1MChg
10 Yrs G-Sec
7.0
0.0
10 Yrs AAA Corp
7.8
0.0
Flows (USD b)
17-Nov
MTD
FIIs
0.2
2.4
DIIs
0.2
0.9
Volumes (INRb)
17-Nov
MTD*
Cash
415
409
F&O
5,338
6,860
Note: YTD is calendar year, *Avg
YTD.%
25.2
25.6
36.9
YTD.%
15.2
26.0
3.3
13.2
23.6
17.2
YTD.%
12.5
12.3
22.1
22.4
YTD.%
-4.3
12.1
-4.2
YTDchg
0.5
0.2
YTD
7.9
12.3
YTD*
305
5,611
Today’s top research idea
HDFC Standard Life
(Initiating Coverage):
Another 'compounder'
Quality franchise; attractive valuations
HDFC SL has reported strong growth trends, which has enabled it to
consistently rank among India’s top three private insurers. It has steadily
improved the share of high-margin protection products to 26.4% as at Sep-17,
which has helped it to deliver best-in-class new business margins.
We estimate the company to deliver 25% CAGR in new business APE over FY17-
20E, aided by its increasing bancassurance tie-ups, improvement in agency
channel and higher direct sales.
We estimate HDFCSL to deliver average RoEV of ~19% over FY17-20E, while
new business margins are likely to improve further to 23%. We value HDFCSL at
3.5x Mar-20E EV at INR370/sh (implied new business multiple of 28x).
Research covered
Cos/Sector
HDFC Standard Life
Strides Shasun
Cement (Petcoke Ban
Update)
EcoScope
EcoScope
Healthcare
Cement
Key Highlights
Another 'compounder'; Quality franchise; attractive valuations
Divestment to focus on profitable businesses
Environment ministry prohibits usage of petcoke in U.P, Rajasthan &
Haryana
Fears of fiscal deficit slippage are exaggerated
Moody’s upgrades India to highest sovereign rating post liberalization
IPM – early signs of revival
Prices largely flattish; Hikes likely in south markets
Piping hot news
India up one place on Per Capita GDP terms to 126, Qatar No 1: IMF report
India has moved up one position to 126th in terms of per capita GDP of
countries while Qatar remains the world’s richest on this parameter, as per
IMF data. The data, which forms part of the latest World Economic Outlook
report of the International Monetary Fund (IMF),…
Chart of the Day: HDFC Standard Life – Another 'compounder'; Quality franchise; attractive valuations
Trend in APE premium and growth
Trend in new business margin
Research Team (Gautam.Duggad@MotilalOswal.com)
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.