Fw: Market Mantra - January 18, 2017

Market Mantra Wednesday, January 18, 2017

Market Mantra   Trump talks down US$ with equities falling in tandem as developed markets see selling dominate ahead of US President swearing -in!!   Asian markets saw weakness in early trade as the Japanese 'Nikkei' fell as selling in the US$ saw stocks fall. The fall in the US$ to Japanese yen from 118 to 113 has seen most exporters fall as the currency gains will hurt margins. Globally money is seen exiting the developed markets & value buying emerging in emerging markets which gain against US$ weakness.   Nifty closed in the red as profit booking above 8400 saw domestic mutual funds turn sellers even as foreign investors turned buyers after almost 2 months of regular selling. For today expect further consolidation around 8400 which could see an expansion till 8500 as Rupee strength sees return of foreign flows. FMCG, consumption & infra stocks to lead as GST clearance adds value to growth in the near term.   Technical view: Nifty finds strong support around 8370 levels the last 3 days low while 8440 acts as strong resistance any break either side will see further direction. Bank Nifty also finds strong resistance around 19250, while 19000 acts as strong support any break either side will see further break.   Trading ideas  (Time period: 1-3 days)     Adani Transmission (Buy above Rs 62.5 for target of Rs 66, SL at Rs 60.75): After consolidating for over six weeks, the stock has broken out from a continuation pattern. Adani Trans did dip to lows of Rs 51 but neatly sustained above the 50-DMA support zone. The breakout has also witnessed a huge expansion in volumes which further accentuates our bullish stance on the stock. Projections of the outburst implicates Adani Trans may well be on its way to its all time high of Rs66 in near term.   Derivative strategies  (Time period: Till expiry)   Buy United Spirits January future @ 2075-2085, Stop loss 2035 & Target 2115-2120.   Corporate Snippets     Reliance Industries  was confident that the Union government's penalty on producing natural gas from ONGC's share of natural gas in the Krishna-Godavari basin is "not sustainable". (BS)   A fresh round of war of words broke out between Reliance Jio and  B harti Airtel , with the former alleging that its service continues to face congestion issues with some of the large operators, including Airtel, not providing adequate points of interconnection (PoI) — a charge the incumbent operator refuted. (BS)   Pokarna Engineered Stone (PESL), the wholly owned subsidiary of Pokarna Limited, has secured exclusive rights to use Bretonstone technology in India through March 2020. (BL)   Crompton Greaves has bagged a USD105mn (Rs7.15bn) order from Indonesia's state-owned electricity firm PT PLN to make and install power transformers. (BL)   Pristine Group of companies has bought out the container train operating licence of Reliance Infrastructure. Pristine now gets the licence to operate container trains for the remaining 13 years of the 20-year period. (BL)   Cadila Healthcare has settled all outstanding patent litigation related to Livalo tablets with Kowa Co., Kowa Pharmaceuticals America Inc and Nissan Chemical Industries Ltd. (BL)   A committee under the Ministry of Environment, Forests and Climate Change has given a green signal to Cairn India for undertaking drilling works of 64 exploratory and appraisal wells in KG-OSN-2009/3 block in KG basin at Prakasam and Guntur districts of AP. (ET)   NTPC expects to cut losses from Chhabra power station that it acquired last week to one-fifth by saving on interest outgo and raising operational efficiency. The company is on lookout for more state-run stressed assets for buyouts. (ET)   ICICI Prudential Life Insurance has acquired 8.41% stake in financial technology services provider Fino Paytech Ltd (FPL) for a total consideration of Rs1bn. (ET)   The government  is seeking a dividend of up to USD2.2bn from partly state-owned Hindustan Zinc   Ltd (HZL) . (BS)   Vedanta Resources and Jain Irrigation Systems Ltd (JISL) are raising foreign funds by selling dollar bonds to overseas investors. (ET)     Economy Front Page:   The government is considering allowing 100% Foreign Direct Investment (FDI) through automatic route in single brand retail to attract a larger number of global players in the sector. (BS)   Hit by demonetisation and mounting bad loans, some public sector banks (PSBs) may skip paying dividend which will have implications for government receipts in the current fiscal. (ET)      Rs m Revenue YoY % PAT YoY % Havells 14,936 11.9 1,530 26.7            Click Here to see the entire report   Warm Regards, India Infoline Research     Please help preserve our environment. Avoid printing this report.

IIFLView   GODREJCP   We recommend a buy on the stock on account of strong volume growth and margin performance. This will be driven by improved premium product demand, increasing rural penetration and its cost saving efforts. The stock is attractive trading at ~46 FY17 P/E. (Target Price- Rs. 1720)...Read More   Click here to see the more views

Result Express

NIIT Technologies Ltd  NIIT Technologies Ltd's Q3FY17 consolidated net profit rises 5.91% qoq to Rs.62.40 crore : In-line with Estimates...Read More   Click here to see the more views   Visit website: www.indiainfoline.com Now access IIFL Markets on the go! Customer care: 022 40071000 cs@iifl.com Call Trade line 022 39440000 TT Helpdesk 022 41514151 Follow us on:      |   Complaints: customergrievances@indiainfoline.com INDIA INFOLINE LTD (Regd. Office) - IIFL House, Sun Infotech Park, Road No. 16V, Plot No. B-23, MIDC, Thane Industrial Area, Wagle Estate, Thane - 400 604. Tel: (91-22) 2580 6650 | Fax: (91-22) 2580 6654 SEBI REGN NO.: BSE (Cash) INB 011097533, BSE (F&O) INF 011097533, NSE (Cash) INB 231097537, NSE (F&O) INF 231097537, NSE (CDS) INE 231097537, DEPOSITORY: IN DP NSDL 185 2000, IN DP CDSL 352 2006 | AMFI REGN NO.: ARN-47791, MCX-SX: INB/INF 261097530 , INE261097537, India Infoline Commodities Limited: NCDEX: NCDEX-CO-04-00378 & MCX:10470

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Express Idea - GCPL, Asian Paints; Q3 FY15 Updates - Motherson Sumi, Cadila, Nalco, Radico Khaitan

Express Idea: Godrej Consumer Products – BUY CMP Rs1,064, Target Rs1,225, Upside 15.1% Impressive growth in domestic as well as international biz Strong leadership position in international business Lower crude, PFAD prices, cost saving initiatives to fuel OPM Strong earnings visibility, maintain BUY

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Express Idea: Asian Paints – BUY CMP Rs822, Target Rs938, Upside 14.1% After making double top in last week of January 2015, the stock went through a phase of sharp correction, eventually retracing 50% of its previous upmove. The same level also coincides with the support of its 50-DMA, suggesting that the current selling pressure has come to an end. We advise buying Asian Paints with stop loss of Rs763 for target of Rs938.

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Motherson Sumi (Q3 FY15) – BUY CMP Rs461, Target Rs615, Upside 33.4% Revenues at Rs91.5bn came in higher than our estimates, wherein the growth in SMP revenues were substantially higher than our estimates Standalone OPM was lower better than expectations at 17.2%, SMP margins came in at 6.9% v/s our expectations of 6.2%, SMR margins were at 10.2% in line with our estimates While margins for the SMP were higher on a yoy basis, standalone and SMR margins were lower by 183bps yoy and 20bps respectively causing consolidated OPM to fall by 29bps yoy We maintain BUY with a revised 2-year price target of Rs615

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Cadila Healthcare (Q3 FY15) – BUY CMP Rs1,514, Target Rs1,920, Upside 26.8% Cadila revenues up a strong 17.4% yoy driven by robust growth in US and emerging markets EBIDTA margin improved 108bps qoq on operating leverage tailwind while higher tax rate led to lower than estimated PAT at +6% qoq Company expects 20% growth in US business subject to approvals; pending approvals in transdermals, nasals and topicals would drive growth over next 2-3 years Retain BUY on best in class EPS cagr of 30.4% over FY15-17 with unchanged 9-12mth target of Rs1,920

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National Aluminium Co Ltd (Q3 FY15) – BUY CMP Rs49.5, Target Rs62, Upside 25.2% NALCO continued to report strong numbers for the second consecutive quarter led by higher premiums and increase in alumina prices Operating performance remained strong even though operations were impacted by cyclone Hudhud Alumina production declined by 1.3% yoy, whereas aluminium production improved by 3.8% yoy due to improving coal supply Operating profit of Rs5.3bn was higher than our estimate due to a decline in raw material and power costs; OPM at 27.7% was the highest in the last three years Strong performance to continue going ahead; Maintain BUY with a price target of Rs62

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Radico Khaitan (Q3 FY15) – Accumulate CMP Rs86, Target Rs92, Upside 7.6% Persistent input cost pressures drive 265bps yoy decline in margin while net sales growth remains tepid at +5.5% yoy Prestige and above brands share at 21.4%, up ~200bps yoy but higher ENA costs eat into benefits of improved revenue mix Elevated ENA prices and lack of revenue traction to restrict stock upside; retain accumulate with unchanged 9-12mth target of Rs92

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Warm Regards, Amar Ambani Head of Research, IIFL

Fw: IPO Note - Shemaroo Entertainment Ltd

 

Shemaroo Entertainment Ltd: Subscribe Issue opens 16-Sep-14, Issue closes 18-Sep-14, Price band Rs155-170 Shemaroo Entertainment Ltd. (SEL) is one of India's largest Film and Entertainment Content House involved in content aggregation, distribution, production and post-production. Its content library spans over 2,900 titles of which over 700+ titles are perpetual rights (wholly owned) and the remaining 2,000+ titles are aggregate rights (partially owned). SEL's primary distribution channels are Broadcast Syndication (Satellite, Terrestrial and Cable TV), which generates over 50% of the Company's revenues, New Media (Mobile, IPTV, YouTube, etc), Home Video (VCD, DVD, Blu-ray) and Others (In-flight entertainment and overseas sales). SEL has posted strong revenue growth of 26.4% and maintained profitability in the last 4 years. Valuations for the company stands at 15.4x FY14 earnings (post issue diluted equity at lower price band), which we believe to be fair given how peers such as Eros International, JMD Telefilms, Media One and! Prime Focus are currently priced, based on FY14 earnings and their respective growth and risk characteristics. We recommend clients to subscribe to the issue in the price range of Rs155- Rs165 and further avail the 10% discount available to retail investors.

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Warm Regards, Amar Ambani

Fw: Idea Cellular: Renewed vigour - BUY

 

Annual Report Analysis: Idea Cellular: Renewed vigour - BUY Idea enters a crucial period over the next 12-18 months as it seeks to renew nine licenses in the crucial 900MHz band even as FY14 performance and recent fund raising gives us confidence about its renewal capabilities. Idea ticked all the right boxes in the year gone by with 18% revenue growth, ~480bps margin expansion and 100bps increase in revenue market share. Blended (2G+3G) data volumes increased ~112% in FY14 and even though pricing/MB declined, data share of non voice revenues grew 350bps yoy through the year (and a further 140bps in Q1 FY15). Operating cash flow jumped ~86% yoy on doubling of pretax profit and easing of working capital cycle. However spectrum purchases in Feb auctions plus FY14 capex led to negative free cash flow for the year; as a corollary net D/E inched up to 1.3x to provide for the deferred spectrum payment liability. Overall license renewals remain the key near term risk but we remain optimist on Id! ea's ability to fund spectrum purchases; retain BUY with unchanged 9-12mth target of Rs200.

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Warm Regards, Amar Ambani

Fw: Express Idea: Auto Component Sector; Call Success and Updates: Oil India, Lumax Auto

 

Express Idea: Auto Component Sector - Set to Zoom Indian auto sector after witnessing tough times in the past couple of years is set to see strong revival from H2 FY15. The key drivers for this growth include 1) improvement in consumer sentiment, 2) pause in diesel price hikes, 3) peaking out of interest rates, 4) pick up in industrial and infrastructure activity and finally 5) partial lifting of ban on mining activities. Internationally too, while developing economies in Africa, Middle East and rest of Asia continue to see strong growth, US is showing robust recovery and Europe is showing signs of stability. Such scenario, we believe, provides large business opportunities for Indian Auto Component manufacturers, which over the years have built a strong reputation with domestic OEMs and also globally. The large caps auto component players, on this premise, have seen a strong re-rating in the past few months leading to widening of valuation discount for small players. Here we pick three such stocks viz Banco Products, MM Forgings and Phoenix Lamps. Recommendation Summary Company CMP (Rs) Target (Rs) Upside Exit trigger* (Rs) Banco Products 155 190 22.6% 130 MM Forgings 447 540 20.8% 375 Phoenix Lamps 133 160 20.3% 110 Horizon: 1-3 months * Exit trigger is the price level below which investor should exit position

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Call Success & Update: Oil India Reco Price Rs600, Previous Target Price Rs650, New Target Price Rs720 We had recommended a BUY on Oil India in Q3 FY14 result update released on February 13, 2014 with a price target of Rs550. We extended the target to Rs600 in a call update released on May 14, 2014 and further to Rs650 in a call update released on May 19, 2014. The stock surpassed our target in today's trading session. We advise investors to hold on to their investments in the company as we remain bullish on its future prospects for a target of Rs720.

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Call Success: Lumax Auto Technologies Reco price Rs200, Call Closure price Rs245 We had recommended a BUY on Lumax Auto Technologies in an Express Idea released on Septermber 02, 2014 with a price target of Rs245. The stock surpassed our target in today's trading session yielding 22.5% return in three trading sessions.

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Warm Regards, Amar Ambani

Fw: Equity Eagle Eye: An X wave effect

 

A Sharekhan technical research newsletter | For July 16, 2014 Contents of Eagle Eye PUNTERS CALL An X wave effect The Nifty snaps five-day losing streak. SMART CHART CALLS If you are a positional trader, Smart Charts present the best positional trading calls in the market today.  MOMENTUM SWING  We have renamed Momentum Calls as "Momentum Swing". Needless to say, short-term traders can continue to enjoy market swings by trading in the Momentum Swing calls that come with a time frame of 1 to 5 days. DAY TRADERS HIT LIST  A keen day trader? Look no further for the trading ranges of the stocks that are currently the flavour of the market. INDEX TRIGGERS  With the benchmark indices creating new all-time highs every second day, the time has come for swift trading in indices.  It appears that the benchmark indices have come out from their sideways movement and this will help traders to trade  with a high risk/reward ratio. Keeping this in mind we have come out with a new intra-day product on Nifty and  Bank Nifty named ''Index Triggers''.  Regards, The Sharekhan Research Team www.sharekhan.com

 

Fw: Union Budget 2014-15 - Good to begin with...

 

Union Budget 2014-15: Good to begin with… The most anticipated event after a record election victory is now behind us. Mr. Arun Jaitley's Budget speech evoked confused response with wild swings during and after the Budget presentation. There was a feeling among certain sections of the market that bolder reforms were warranted given the strength of this government's mandate. Akin to the Railway Budget, the details were missed although the broad picture was conveyed reasonably well. Gross tax revenue projection was cut by ~Rs15,000 crore compared to interim Budget numbers - Indirect tax revenue projected to grow by 20.3% yoy and direct tax by 15.7%. While customs and service tax projections appear reasonable, excise duty growth projections at 15.4% appear steep. On the direct tax front, personal income tax projection has been substantially reduced (by Rs22,200 crore) compared to interim Budget, but still appear high. Perhaps, the government expects additional income from advance ruling settlement in case of individual tax-payer disputes. Otherwise, there is a risk of falling short of the tax revenue target set by Rs10,000 crore. Along expected lines, spending on Plan expenditure was substantially increased to support growth. Plan expenditure growth is targeted at 21% to be spent towards agriculture, capacity creation in health and education, rural roads, national highways, rail network expansion, among others. Surprisingly, non-Plan expenditure was not projected to grow at a slower rate than set during the interim Budget. Nevertheless, non-Plan growth is much lower than what is being spent on the Plan side. Subsidies have been pegged at 2% of GDP and only marginally higher than the interim Budget – petroleum subsidy seems to be under control with continued diesel deregulation and assuming gradual increase in LPG and Kerosene prices. Food subsidy target is reasonable but fertilizer subsidy looks under-provided, which could result in a working capital crunch for the sector. On MGNREGA, the minister aims to put this money to more productive us! e. To make up for the 13% yoy growth in total expenditure and Rs9,000 crore shortage in net tax revenue, revenue from economic activities, particularly telecom auctions and other non-tax revenue targets have been raised higher. Non-tax revenue is estimated to be 18% of the total revenue composition, Rs32,000 crore higher than interim Budget numbers. By doing so, the Finance Minister stuck to the fiscal deficit target of 4.1% that his predecessor had set. This is certainly a stretched target and could be missed by 20 basis points. Yet, that would not be seen as an under-achievement. The revenue deficit is pegged at Rs378,248 crore, 2.9% of GDP. With only a few weeks to prepare, the FM announced some important steps like opening up FDI in defence and insurance sectors. Increasing the capital budget for defence by Rs5,000 crore was also an important move. A major step undertaken was to boost financial savings and provide some relief for negative real returns in the economy. As opined in our pre-Budget note, the Minister raised individual tax slabs to Rs2.5 lakhs and also hiked the deduction under Section 80C to Rs1.5 lakhs. To boost savings further, the annual ceiling on PPF was raised and Kisan Vikas Patra and National Savings Certificate with insurance cover, were introduced. The Budget was particularly positive for infrastructure, housing and agriculture. While the FM touched upon the need for capital infusion in PSU banks, the figure of Rs13,400 crore allocated this year was much lesser than Rs15,800 crore the previous year. While banks were asked to lend to infra projects for the long term, it remains unclear whether their long term borrowings attract lower CRR and SLR norms. While end of retrospective taxation was needed to build confidence for investing in India, nothing concrete came in the Budget. The biggest negative from a capital market viewpoint was the increase in rate of long term capital gains (LTCG) in debt mutual funds to 20% and the period for LTCG raised to 3 years instead of 1 year. The Budget lays a broad roadmap for economic recovery and attempts to set in order the accounts, both in terms of deficit and quality of spending. The actual implementation on the ground will propel the economy and the market to a new orbit.

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Warm Regards, Amar Ambani

Fw: Sharekhan Mutual Fund Finder - January 2014

 

Sharekhan Mutual Fund Finder  [November 27, 2013] Sharekhan www.sharekhan.com

Summary of Contents   Top equity picks Top SIP picks SIP calculator Crorepati calculator Fund of the month: Reliance Equity Fund Performance of debt funds and ETFs Sharekhan Mutual Fund Finder Click here to read report: Mutual Fund Finder

Regards, The Sharekhan Research Team