religare morning digest · religare morning digest february 1, 2017 nifty outlook ... emami paper...

1 Disclaimer: http://www.religareonline.com/research/Disclaimer/

Religare Morning Digest

February 1, 2017

Nifty Outlook

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

NIFTY 8595 9000 8400

Nifty inched lower in a volatile session today and lost nearly a percent, taking cues from weak global markets and caution ahead of the Union Budget. The fall was led by IT stocks in reaction to the news of H1-B visa bill tabled in the US House of Representatives. Besides, participants took note of the Economic Survey report wherein they lowered the GDP growth estimates for the current fiscal while maintaining a positive tone for the FY18.

It's a healthy correction before the event and now the Union Budget will decide the next move. Indications are in the favour of further consolidation in Nifty within a broader range i.e. 8450-8700 while stocks will continue to surprise on both sides. We suggest maintaining cautious view and pre-plan your exits in advance.

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 607 -248 14778

DII 40 4085 33586

NO OF CON-

TRACTS

TURNOVER IN CR

IDXFUTS 233383 16038

IDXOPT 3006116 211975

STKFUTS 701594 47702

Derivative Ideas **

Bajaj Auto reported a 9% drop in Total Income to Rs. 5,354.1 Cr in Q3, against Rs. 5,884.3 Cr in the corresponding quarter last fiscals. Net Profit fell 4.8% to Rs. 924.1 Cr, against Rs. 970.5 Cr in the corresponding quarter last fiscal. Volumes were down by 10.5% to 8.51 lac units.

ICICI Bank reported a sharp 19.1% drop in standalone Net Profits to Rs. 2,441.8 Cr in Q3, against Rs. 3,018.1 Cr in the corresponding quarter last year. Net Interest Income (NII) declined 1.6% to Rs. 5,363.4 Cr against Rs. 5,453 Cr in the corresponding period last fiscal. Asset Quality worsened as Gross NPAs stood at 7.91% against 6.82% in the last quarter (Q2), and Net NPAs increased to 4.35% against 3.57% in the previous quarter.

A legislation to increase the minimum wages for the H1B visa program was introduced in the US House of Representatives. The new proposed minimum wage stands at USD 1,30,000 as against the existing USD 60,000. IT index closed down by 3% led by selling in IT majors – Tech Mahindra, Infosys, Wipro, TCS and HCL Tech.

*FII & DII data as on 30th January 2017

Scrip Buy/Sell CMP Initiation

Range SL* Target

HINDUNILVR BUY 855.40 840-845 820 900

VOLTAS SELL FEB

FUTS 326.20 328-330 342 300

**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

TAR-GET

BANKNIFTY

NIFTY

B 2 FEB

19000 PE 40 50

57 125

B 8900 CE 75 28



February 1, 2017

Religare Super Ideas

Investment Pick - Swaraj Engines Ltd

Swaraj Engines Ltd (SEL) reported impressive numbers for Q3FY17 with a strong growth of 46.6% & 82.5% YoY in Net Revenue and PAT, above our estimates. A

274bps YoY expansion in EBITDA margins was overwhelming. We remain upbeat on SEL’s growth prospects, given healthy demand uptick in the domestic tractor industry, new launches and consistent capacity additions.

We are upgrading our revenue, operating profit and PAT estimates by 8.5-14% for FY17E and by 6.8-7.5% for FY18E. Further, we are incorporating projections for

FY19E, wherein we expect SEL’s revenue and PAT to grow by 14.3% and 14.9% respectively, thus arriving at an estimated EPS of Rs. 75.5. We maintain a BUY with revised target price of Rs 1,736.

Scrip CMP Target Duration Recommendation Price

SWARAJENG 1413.4 1,736 9-12 Months 1,406

Event Strategy— We are anticipating VIX to shoot

up around 19%-19.50% levels in short term which

will provide a possible move of 250+ points in nifty

or 500-600 pt in bank nifty in any direction.

Considering the present scenario, we suggest doing

a option pair strategy in BANKNIFTY and NIFTY as

per levels given below.

Strategy: BUY BANKNIFTY 2 FEB 19000 PE @ 50 &

BUY NIFTY FEB 8900 CE @ 28, NET PREMIUM PAID

78, STOPLOSS AT 58, TARGET 125.

Derivative Ideas

Hindustan Unilever Limited (HINDUNILVR) Voltas Limited (VOLTAS)

Post recent rise (782-875), HINDUNILVR went into

consolidation phase, just above its 50/100/200 day

EMA’s. Consolidation post up move is considered a

healthy sign and is like a pause before further up

move. Hence, we recommend buying this stock in

mentioned range.

VOLTAS was struggling near its important moving

averages (50/100/200 EMA’s) from past couple of

sessions. Yesterday, i.e. 31st January, it witnessed

steep sell off on back of decent volume, indicating

weakness to continue. Hence, we suggest utilizing

bounce to create fresh short positions.



February 1, 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% 452.2

Kotak Mahindra Bank 19-Aug-15 688 900 30.8% 774.2

Glenmark Pharma 10-Sep-15 1,017 1,370 34.7% 893.9

Dabur India 10-Sep-15 275 325 18.1% 276.0

HUL 10-Sep-15 803 1,050 30.8% 855.4

Bajaj Corp 3-Nov-15 416 500 20.3% 373.1

Britannia Inds 23-Dec-15 2,896 3,600 24.3% 3130.5

Nandan Denim 5-Jan-16 150 183 22.0% 118.5

Atul Auto 22-Mar-16 506 580 14.6% 422.2

Century Plyboards 5-Jul-16 207 271 30.9% 196.1

Greenply Industries 5-Jul-16 248 322 29.8% 261.4

Talwalkars Better Valkue Fitness 22-Aug-16 252 328 30.2% 228.0

Tv Today Network 29-Aug-16 300 388 29.3% 272.4

Jamna Auto 2-Sep-16 217 272 25.3% 181.2

SML Isuzu 26-Sep-16 1,300 1,560 20.0% 1188.0

Cigniti Technologies Ltd. 5-Oct-16 419 538 28.3% 437.7

Arman Financial Services 14-Oct-16 260 338 30.0% 186.7

Garware Wall Ropes Ltd. 23-Nov-16 567 686 21.0% 585.3

Indo Count Industries Ltd. 30-Nov-16 155 207 33.5% 179.9

VIP Industries Ltd. 30-Nov-16 118 166 41.0% 129.9

Manpasand Beverages 30-Nov-16 626 854 36.4% 628.6

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

Credit Analysis and Research 23-Dec-16 1,355 1,694 25.0% 1390.8

Fiem Industries 26-Dec-16 1,089 1,315 20.8% 1066.8 Castrol India 26-Dec-16 358 483 34.9% 405.3 Wonderla Holidays 26-Dec-16 332 430 29.5% 373.4

Jain Irrigation Systems 26-Dec-16 82 104 26.8% 94.4

Sutlej Textiles 12-Jan-17 812 1,032 27.1% 829.5

LIC Housing Finance 25-Jan-17 526 667 27.0% 553.6

Force Motors 25-Jan-17 4,274 5,210 21.9% 4141.9

Zee Entertainment Enterprises 27-Jan-17 498 592 18.8% 489.2

Swaraj Engines Ltd. 31-Jan-17 1,406 1,736 23.5% 1413.4



February 1, 2017

Result Calendar — January 2017

Sun Mon Tue Wed Thu Fri Sat

29 30

BAJAJ FINSERV LTD.

Bajaj Finance Limited

Dalmia Bharat Sugar and Industries Ltd

DISH TV INDIA LTD.

EMAMI LTD.-$

EMKAY GLOBAL FINANCIAL SERVICES LTD.

ENTERPRISE INTERNATIONAL LTD.

GODREJ CONSUMER PRODUCTS LTD.

GRASIM INDUSTRIES LTD.

HOUSING DEVELOPMENT FINANCE CORP.LTD.

INDRAPRASTHA MEDICAL CORP.LTD.

KITEX GARMENTS LTD.

MAHINDRA LIFESPACE DEVELOP-ERS LTD.

NAVA BHARAT VENTURES LTD.

OMAX AUTOS LTD.

PFIZER LTD.

SAINT-GOBAIN SEKURIT INDIA LTD.

SHREE CEMENT LTD.

SHRIRAM CITY UNION FINANCE LTD.

SIMPLEX MILLS COMPANY LTD.

SHRIRAM ASSET MANAGEMENT CO.LTD.

TECH MAHINDRA LTD.

V-GUARD INDUSTRIES LTD.

ZYDUS WELLNESS LTD.-$

31

BAJAJ AUTO LTD.

BAJAJ HOLDINGS & INVESTMENT LTD.

BPL LTD.

CADILA HEALTHCARE LTD.

CENTURY PLYBOARDS (I) LTD.-$

CENTURY TEXTILES & INDUS-TRIES LTD.

DABUR INDIA LTD.

EMAMI PAPER MILLS LTD.

FIRSTSOURCE SOLUTIONS LTD.

GTL LTD.

HAWKINS COOKERS LTD.-$

HCL INFOSYSTEMS LTD.

ICICI BANK LTD.

IDFC LIMITED

INDIAN OIL CORPORATION LTD.

JSW STEEL LTD.

KANSAI NEROLAC PAINTS LTD.

KEC INTERNATIONAL LTD.

BANK OF MAHARASHTRA

MPHASIS LTD.

OIL AND NATURAL GAS COR-PORATION LTD.

SHOPPERS STOP LTD.

UCO BANK

WELSPUN INDIA LTD.

Wonderla Holidays Ltd

01

APOLLO TYRES LTD.

CUMMINS INDIA LTD.

EICHER MOTORS LTD.

PIDILITE INDUSTRIES LTD.

PTL ENTERPRISES LTD.-$

SHREE RENUKA SUGARS LTD.

STATE BANK OF TRAV-ANCORE

SIRHIND STEEL LTD.

SUVEN LIFE SCIENCES LTD.

TAJGVK HOTELS & RE-SORTS LTD.

Tata Global Beverages Limited

02

AEGIS LOGISTICS LTD.

GABRIEL INDIA LTD.-$

GLENMARK PHARMACEUTICALS LTD.

HSIL LTD.

K.M.SUGAR MILLS LTD.

MARICO LTD.

Sharda Motor Industries Ltd

VIJAYA BANK

WALCHAND PEOPLEFIRST LTD.

Z.F.STEERING GEAR (INDIA) LTD.-$

03

ABAN OFFSHORE LTD.

Aditya Birla Fashion and Retail Ltd

ACC LTD.

DALMIA BHARAT LTD.

Gulf Oil Lubricants India Ltd

Manpasand Beverages Ltd

MCLEOD RUSSEL INDIA LTD.

MRF LTD.

Quick Heal Technologies Ltd

TORRENT PHARMACEUTICALS LTD.

Zee Media Corporation Limited

04

DIVI'S LABORATORIES LTD.

DR.REDDY'S LABORATORIES LTD.

FINOLEX INDUSTRIES LTD.

J.K.CEMENT LTD.

SHILCHAR TECHNOLOGIES LTD.

VINATI ORGANICS LTD.-$

YUKEN INDIA LTD.-$



February 1, 2017

Corporate Action Calendar — January 2017 (Cash Dividend)


29 30

31

Siemens Ltd

Persistent Systems Ltd

DB Corp Ltd

01

HCL Technologies Ltd

GMM Pfaudler Ltd

Rane Brake Lining Ltd

02

Zensar Technologies Ltd

Bharat Electronics Ltd

VRL Logistics Ltd

Gandhi Special Tubes Ltd

Wipro Ltd

IIFL Holdings Ltd

IRB Infrastructure Developers Ltd

GAIL India Ltd

Rane Madras Ltd

JM Financial Ltd

Ashoka Buildcon Ltd

03 04

Corporate Action Calendar — January 2017 (Stock Buyback)


29 30

31 01 02

Hexaware Technologies Ltd

03 04

Corporate Action Calendar — January 2017 (Stock Split)


29 30

Ushdev International Ltd

31 01 02

Khemani Distributors & Marketing Ltd

Kallam Spinning Mills Ltd

Stellant Securities India Ltd

Rasoi Ltd

03 04



February 1, 2017

Corporate Action Calendar — January 2017 (Stock Dividend)


29 30

31

01

02

03

Ambition Mica Ltd

04

Corporate Action Calendar — January 2017 (Acquisition)

Date Target Company Acquirer Company

1/31/2017 BSS Microfinance Pvt Ltd Kotak Mahindra Bank Ltd

1/31/2017 OFD Holding BV Mahindra & Mahindra Ltd

1/31/2017 Pricol Ltd Altran Technologies SA

1/31/2017 Keystone Business Solutions Pvt Ltd TeamLease Services Ltd

2/1/2017 Vantage Corporate Services Ltd Private Investor

2/3/2017 Generic Engineering Construction and Projects Ltd Multiple acquirers

Economic Calendar — January 2017


29 30

31

Fiscal Deficit INR Crore

GDP Annual Estimate YoY

Eight Infrastructure Industries

01

Nikkei India PMI Mfg

02

03

Nikkei India PMI Services

Nikkei India PMI Composite

04



February 1, 2017

Current Portfolio and Performance Summary as on 31st January’17

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

Bajaj Corp Consumer Goods May 13, 2016 8.9% 393 373

Magma Fincorp Financial Services June 30, 2016 8.7% 109 98

Apollo Hospitals

Enterprises Healthcare Services July 29, 2016 9.4% 1,362 1,230

Emami Consumer Goods August 3, 2016 9.3% 1,151 1,031

Castrol India Energy August 5, 2016 9.8% 425 405

Punjab National Bank Financial Services October 3, 2016 10.0% 143 136

Minda Corporation Auto Ancillaries October 10, 2016 8.9% 109 89

Pidilite Industries Chemicals November 17, 2016 10.7% 617 674

Cash 24.3%

Total Total 100%



February 1, 2017

Historical Performance as on 31st January’17

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

Religare Alpha 7.1% -8.6% -2.4% 13.1% 23.6%

Nifty 4.6% -0.9% 0.2% 13.3% 8.6%

Outperformance 2.6% -7.7% -2.6% -0.2% 15.0%



February 1, 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.



February 1, 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



February 1, 2017

Before you use this research report , please ensure to go through the disclosure inter-alia as required under Securities and Exchange Board of India (Research Analysts) Regulations, 2014 and Research Disclaimer at the following link : http://old.religareonline.com/research/Disclaimer/Disclaimer_RSL.html

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 : ……………………………………………………………………………………………………………………

Name(s) with Signature(s) of RA(s).

[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]

Copyright in this document vests exclusively with RSL. This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any

other person or published, copied, in whole or in part, for any purpose, without prior written permission from RSL. We do not guarantee the integrity of any emails or attached files and are not responsible for any changes made to them by any other person.

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.

http://old.religareonline.com/research/Disclaimer/Disclaimer_RSL.html

religare morning digest · religare morning digest february 1, 2017 nifty outlook ... emami paper...

Documents