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Religare Morning Digest

January 04, 2017

Nifty Outlook

VWAP (Expiry till date) Max OI (Call) Max OI (Put)

NIFTY 8085 8200 8000

Nifty traded sideways on expected lines and settled on a flat note, tracking mixed domestic cues. Weak core sector data and caution ahead of GST Council meet was weighing on sentiment from the beginning. Also, underperformance from the banking majors added to the pressure at higher levels. However, buying continued in the cash segment, which kept the market breadth strongly positive.

Mostly sectoral indices have been participating in this rebound but sustainability at higher level seems difficult without banking. So, we suggest keeping a close eye on the banking counters for further cues. Meanwhile, maintain buy on dips approach in stocks and avoid contrarian trades for now.

Sectors to watch

Sector Name Outlook

ENERGY STABLE

METALS STABLE

MEDIA STABLE

News Religare Super Ideas**

FII & DII Cash Segment (Rs. in Cr.) Trade Stats

Category Amt. MTD YTD

FII -261 -261 15035

DII 21 21 29518

NO OF CON-

TRACTS

TURNOVER IN CR

IDXFUTS 225438 14977

IDXOPT 3841076 262574

STKFUTS 492756 32239

Derivative Ideas **

Hero MotoCorp reported a 33.9% dip in its total sales in December 2016 at 3,30,202 units as against 4,99,665 units in the same month last year. The Company recorded its highest-ever sales in a calendar year in 2016 with a record 67,62,980 units of two-wheelers, up by 4.3% YoY. Shares closed down 1.3%.

Bajaj Hindusthan Sugar proposed sale of its co-generation power business to their group firm Lalitpur Power Generation Company Ltd (LPGCL) for about Rs 1,800 Cr.

Balrampur Chini and Dhanuka Agritech informed bourses that their respective boards have accepted their buyback proposals. Balrampur Chini will buy back shares worth up to Rs 175 Cr at a price not exceeding Rs 175 per share. Dhanuka Agritech fixed their buyback price at Rs. 850 to buy back shares worth Rs. 80 Cr.

*FII & DII data as on 2nd January 2017

Scrip Buy/Sell CMP Initiation

Range SL* Target

BEL BUY 1423.15 1410-

1425 1365 1550

TATACHEM BUY 509.75 505-512 494 550

**Please note that the given technical and derivative recommendations are

"valid for taking position" only on recommended date and in the given range.

*Please note - Stoploss is on closing basis for delivery recommendation and intraday basis for futures recommendation.

Instrument B/S Lot INITIATION

RANGE SL TARGET

CENTURYTEX

B 840 CE 1100

34-36 4 20

S 860 CE 25-27



January 04, 2017

Religare Super Ideas

Investment Pick - Credit Analysis and Research

Credit Analysis and Research Ltd (CARE) is in the business of analysing and giving financial ratings to companies based on their financial health. Apart from this, it

rates debt and bond instruments floated by various institutions. It is the second largest rating agency in India in terms of rating revenue.

CARE is a pure play ratings agency vis-a-vis other rating agencies like Crisil, which is also into consulting, research, etc. Considering its high profit margins, the

huge cash in its books, a good dividend payout ratio and industry opportunity size, the company is on a strong footing. We recommend a BUY on CARE with a target price of Rs 1,694.

Scrip CMP Target Duration Recommendation Price

CARERATING 1,318.25 1,694 9-12 Months 1,355

CENTURYTEX added around 6% of open interest as

long positions. Daily vwap is around 831 levels. On

Tuesday, it has witnessed congestion zone breakout

on daily charts. We suggest doing a bull spread in

centurytex as per levels given below.

Strategy: BUY CENTURYTEX 840 CE BETWEEN 34-

36 & SELL 860 CE BETWEEN 25-27, NET PREMIUM

PAID 9, SL 4, TARGET 20.

Derivative Ideas

Bharat Electronics Limited (BEL) Tata Chemicals Limited (TATACHEM)

BEL posted fresh breakout on 3rd January after

trading in narrow range around 1350-1380 levels

for a week. This up move was supported by strong

volume, indicating buyers interest at current levels.

All this clearly indicates, stock is set for fresh up

move towards 1500 plus levels in near term.

TATACHEM has spent lot of time consolidating

around its important long and medium term

averages (200/100 EMA) on daily chart. And, at

current juncture, it is comfortably sustaining above

the same, indicating buyers interest at current

levels.



January 04, 2017

Religare Investment Calls

Name of the Company Reco Date Reco Price Target Price Upside % Previous day Closing Price

Tech Mahindra 7-Aug-15 534 600 12.4% 491.6

Kotak Mahindra Bank 19-Aug-15 688 900 30.8% 711.8

Glenmark Pharma 10-Sep-15 1,017 1,370 34.7% 893.2

Dabur India 10-Sep-15 275 325 18.1% 275.5

HUL 10-Sep-15 803 1,050 30.8% 829.9

Bajaj Corp 3-Nov-15 416 500 20.3% 376.9

Britannia Inds 23-Dec-15 2,896 3,600 24.3% 2,872.3

Nandan Denim 5-Jan-16 150 183 22.0% 109.7

Atul Auto 22-Mar-16 506 580 14.6% 420.3

Century Plyboards 5-Jul-16 207 271 30.9% 174.3

Greenply Industries 5-Jul-16 248 322 29.8% 247.9

Talwalkars Better Valkue Fitness 22-Aug-16 252 328 30.2% 241.6

Tv Today Network 29-Aug-16 300 388 29.3% 287.8

Jamna Auto 2-Sep-16 217 272 25.3% 179.5

SML Isuzu 26-Sep-16 1,300 1,560 20.0% 1,147.0

Swaraj Engines Ltd. 3-Oct-16 1,184 1,535 29.6% 1,352.9

Cigniti Technologies Ltd. 5-Oct-16 419 538 28.3% 408.9

Arman Financial Services 14-Oct-16 260 338 30.0% 184.4

Garware Wall Ropes Ltd. 23-Nov-16 567 686 21.0% 620.8

Indo Count Industries Ltd. 30-Nov-16 155 207 33.5% 172.2

VIP Industries Ltd. 30-Nov-16 118 166 41.0% 123.2

LIC Housing Finance 30-Nov-16 544 700 29.0% 531.3

Manpasand Beverages 30-Nov-16 626 854 36.4% 544.5

Zee Entertainment Enterprises 30-Nov-16 457 592 29.7% 458.3

Minda Corporation 06-Dec-16 95 117 23.2% 89.0

Credit Analysis and Research 23-Dec-16 1,355 1,694 25.0% 1,318.3

Fiem Industries 26-Dec-16 1,089 1,315 20.8% 1,158.2

Castrol India 26-Dec-16 358 483 34.9% 385.7

Wonderla Holidays 26-Dec-16 332 430 29.5% 339.8

Jain Irrigation Systems 26-Dec-16 82 104 26.8% 91.4



January 04, 2017

Current Portfolio and Performance Summary as on 3rd January’17

Stock Sector Entry Date Weight Reco price (`) CMP (`)

Bajaj Corp Consumer Goods May 13, 2016 9.5% 393 377

Magma Fincorp Financial Services June 30, 2016 9.7% 109 104

Apollo Hospitals

Enterprises Healthcare Services July 29, 2016 9.6% 1,362 1,205

Emami Consumer Goods August 3, 2016 9.7% 1,151 1,031

Castrol India Energy August 5, 2016 9.8% 425 386

Punjab National Bank Financial Services October 3, 2016 9.1% 143 118

Minda Corporation Auto Ancillaries October 10, 2016 9.4% 109 89

Pidilite Industries Chemicals November 17, 2016 10.1% 617 606

Somany Ceramics Ceramics December 20, 2016 9.8% 502 490

Cash 13.3%

Total Total 100%



January 04, 2017

Historical Performance as on 3rd January’17

Performance Matrix 1-Month 3-Month 6-Month 1-Year Since Inception

Religare Alpha -1.8% -11.8% -4.1% 1.2% 17.8%

Nifty 1.3% -6.2% -1.7% 5.1% 3.9%

Outperformance -3.1% -5.5% -2.4% -4.0% 13.8%



January 04, 2017

Research Product Basket

For cash market trading

Call / Product Call Frequency No. of calls Avg open call duration % funds allocated

Intraday Calls Intraday 2 - 3 < 1 day 25%

Live / RMD Calls Daily 3 - 4 3 - 4 days 30%

Master Pick Weekly 1 1 month 15%

Religare Alpha Opportunity NA 2 - 3 months 20%

Cash NA 10%

For 1L margin*

Total Per Call

25,000 8,000

30,000 4,000

15,000 5,000

20,000 As per weightage

10,000

Intraday Calls These calls are flashed live on Ms Lync and ODIN with the purpose of squaring off positions on the same day. As a policy, we restrict our

intraday cash market calls to less than 4 calls a day. Hence, funds should be allocated accordingly to have provision to trade in all calls.

Live / RMD Calls 2 super ideas are flashed in RMD daily with a view of 3-4 days. Additionally as per market opportunity, we flash live calls during the day

(including BTST calls). 3-4 such calls are made on a daily basis which might be open for 3-4 days. Funds should be allocated keeping in mind that

there will be 7-8 such open calls daily.

Master Pick This is our weekly recommendation shortlisted on the basis of techno-funda analysis. 15% of funds is recommended to be allocated for Master

Pick considering that there will be 3 open calls. The average open duration for this call will be 1 month.

Religare Alpha This is a portfolio of 8-10 stocks which are held with a view of 2-3 months. It is recommended to allocate 20% of funds for building this portfolio

which will provide stability to the overall trading portfolio.

Cash 10% surplus cash in the portfolio should be kept for the purposes of allocating it to opportunities as and when they arrive.

For derivative market trading

Call / Product Call Frequency No. of calls Avg open call duration % funds allocated

Derivative Ideas Daily 1 - 2 1 - 3 days 40%

Live calls Intraday / Daily 1 - 2 3 - 4 days 50%

Cash NA 10%

For 1L margin*

Total Per Call

40,000 40,000

50,000 50,000

10,000

Derivative Ideas 1 derivative idea is shared in RMD daily. It can be a plain vanilla F&O buy/sell call or an option strategy. Funds should be allocated assuming 2

such calls will be open at any time. These calls are open for 3-4 days on an average.

Live Calls These calls are flashed on MS Lync and ODIN during live market hours. These calls can be intraday or with a view of 2-3 days. Funds should be

allocated considering 2 such calls will be open at any time. 3/4 times, these calls will be on Nifty / Bank Nifty only.

Cash It is recommended to hold 10% cash to capitalize on any opportunity that may arise in markets.

For every client, the advisor must allocate a specific proportion of funds for trading and investing depending on the risk taking ability and willingness of the client

and their investment goals.

The below mentioned product basket tries to address the way to deal with the trading portfolio (cash/derivative) for optimum effectiveness of research calls.

It is recommended to divide your trading funds for various types of calls and not invest the entire amount for 1 or 2 calls only.



January 04, 2017

Hitesh Agrawal [email protected]

Ajay Pasari, CFA [email protected]

Ajit Mishra [email protected]

Archana Gude [email protected]

Gaurav Sharma [email protected]

Swati Saxena [email protected]

Manoj M Vayalar [email protected]

Mehernosh Khurshed Panthaki [email protected]

Siji A Philip [email protected]

Vipin Kumar [email protected]

Team Members



January 04, 2017

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Specific analyst(s) specific disclosure(s) inter-alia as required under Securities and Exchange Board of India (Research Analysts) Regulations, 2014 is/are as under:

Statements on ownership and material conflicts of interest , compensation– Research Analyst (RA)

[Please note that only in case of multiple RAs, if in the event answers differ inter-se between the RAs, then RA specific answer with respect to questions under F (a) to F(j) below , are given separately]

Nature of Interest ( if answer to F (a) above is Yes : ……………………………………………………………………………………………………………………

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[Please note that only in case of multiple RAs and if the answers differ inter-se between the RAs, then RA specific answer with respect to questions under F (a) to F(j) above , are given below]

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S. No. Statement Answer

Yes No

I/we or any of my/our relative has any financial interest in the subject company? [If answer is yes, nature of Interest is given below this table] No

I/we or any of my/our relatives, have actual/beneficial ownership of one per cent. or more securities of the subject company, at the end of the month immediately preceding the date of publication of the research report or date of the public appearance?

No

I/we or any of my/our relative, has any other material conflict of interest at the time of publication of the research report or at the time of public appearance?

No

I/we have received any compensation from the subject company in the past twelve months? No

I/we have managed or co-managed public offering of securities for the subject company in the past twelve months? No

I/we have received any compensation for brokerage services from the subject company in the past twelve months? No

I/we have received any compensation for products or services other than brokerage services from the subject company in the past twelve months? No

I/we have received any compensation or other benefits from the subject company or third party in connection with the research report? No

I/we have served as an officer, director or employee of the subject company? No

I/we have been engaged in market making activity for the subject company? No

SS..No. Name(s) of RA.

Signtures of RA

Serial Question of question which the signing RA needs to make a separate declaration / answer

Yes No.

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