the money navigator march 2016

8/19/2019 The Money Navigator March 2016

1/361st March-2016 to 31st March-2016 www.jhaveritrade.co

F o r P r i v a t e C i r c u l a t i o n O n l y

Issue ThemePg. 1-6

Company AnalysisPg. 12-16

Value BuPg. 17-19

V A L U E B U Y

Markets have given a Thumbs-Up to the Union Budget which was extremely comprehensive & covered nearly evepart of theeconomy such as Infrastructure,agriculture, rural,housing, health insurance, markets. What hassupportethis upmove is also the fact the lot ofperceived negatives suchas tinkering withLTCG orsuper-rich tax orbasic excishike have not made it into the final budget draft. Crucial take-away is that the government is focused on the quality fiscaldeficit and stuck to their target of3.9%(FY16) & 3.5%(FY17).

Market Welcomes

UNION BUDGET 2016 17UNION BUDGET 2016-17

Fiscal Discipline

Agriculture

Rural Development

Infrastructure

Skill Developme

A Balanced Approac

ANALYSISBudget


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From The MD’s Desk

UnionBudget is one of the most awaited events for the Indian economy and the honorableFinance Minister, MrArun Jaitley

announced the 2nd Union Budget of the Modi Government. Government has been under extreme pressure as it has faced

criticism for failing to provide adequate relief to rural India reeling under the impact of two back-to-back droughts. Thus the

budgetpresentedin theparliament wasmore rural India focused compared to theurbanIndia.

The budget revolved around 9 themes – agriculture, social programs, rural development, education (emphasis on skill

development), infrastructure, financial reforms, policy reforms (emphasis on ease of doing business), fiscal discipline, and

tax reforms.

We believe that, the budget is neither very reformist nor very dull. The finance minister has delivered a balance budget

whichhaslong term solutionsof many issues.

As the market was down around 25% from its peak and many scripts were down by more than 50% in last three months, a

trigger wasrequired forbuying.Anaggressive shortcoveringcoupled with deliverybuyinghashappened in last fewdays.As

far as PSU Banks are concerned, RBI has allowed PSU banks to show their real estate holdings as tier-1 capital subject to

certain conditions. This move sparked the rally in PSU banks as the sector was oversold and closed to their long term

support zone.

Technically, theworld market, thecommoditymarketandeven Indianmarkets have formeda mediumterm bottom. TheFIIs

have aggressively sold emergingmarketequities including in India in last coupleof months. Whenever there is turnaround in

worldmarket, Indiawill be first to recover with crediblesustainability.

Turnaround in Earnings is still a question for the market. The chances of rate cut and bigger rural sector outlay in budget will

providethe platformforturnaround in corporateearnings.

Globally, the consensus is building in USA that the fed may not raise the rates in March considering the fluctuation in

economic data. Anystimulus byECBis also providingsupport to theequitymarket. Lookingat these international situations

andpossibility of passingsome importantbills, Indianmarket lookspositive from mediumterm perspective.

Technically, anysustainable rise above 7550-7600mayprovide theplatform to scale 8000. The important supports are

7400-7250.

Kamlesh Jhaveri ( MD )Jhaveri Securities Ltd.

The Budget has given necessary trigger to the market


4/36


I s s u e T h e m e

ANALYSISBudget

Post Budget Analysis: 2016-17

1

Managing the trio Consumption + Investment + Fiscal Discipline: A BalanceBudget

TheUnion Budget for2016-17 lays down thegovernments long term growthagenda for thecountry, emphasizing structuralchanges andimprovementsacrosssegments that would transformthe nationanditseconomy.

The Union Budget has signaled the government's intention to remain responsible to fiscal targets, while being mindful of

investment andconsumption challenges to theIndianeconomy. Sticking to the3.5% fiscaldeficit target forFY17 hasbeen a

positive. In the budget, an inclusive growth strategy has been adopted with the farm and rural sector, social sector,

infrastructure sector, employment generation and recapitalization of the banks along with the vulnerable sections (rural

economy ) beingpriorityareas forexpenditure forthe government.

We believe that the finance minister has chosen and taken right steps in Union Budget. In the face of threatening globalfinancialproblems, theBudgetprovides credibility, a steadycourseforsteering theeconomy andwelcome improvements in

tax administration. However, what will go wrong on his agenda and perception is the weak global economy. If external

macroconditionwill weakenfurther what it wastoday, mayincorrecthis assumption.

Foreign investors withdrawn billions out of India in the current panic markets. They will be reassured by Jaitley's trio

measures. This fiscal ( stick to deficit target of 3.5%) prudence opens the way for interest rate cuts by the Reserve Bank of

India .

Conclusion

The Budget abstained from imposing any long-term capital gains tax and increasing service tax, which were muchanticipated by the market. In that sense, it's a positive. Moreover, the Budget should be taken positively by consumption,

agriculture, financial and infrastructure oriented sectors. On the flip side, the Budget may be viewed negatively by the

automobilesector. However, a revival in consumption augurswell from a long-termperspective. Though there's no major

surprise, the Budget should be taken positively by both equity and the bond markets. As the event is behind us, the market

shouldnowfocusoncues from globalmarkets andincremental economic data andcorporateearnings.

Rural Consumption Boost

` 35984 Cr. allot ted for agriculture sector

` 17000 Cr. for irrigation projects

` 9 Lakh Cr. Agriculture Credit Target

` 38500 Cr. for MANREGA, highest ever

` 2.87 Lakh corers to be spent on Villages in total

Meaningful Infrastructure

` 19000 Cr. for Gram Sadak Yojana

` 9000 crores for Swach Bharat Mission

` 97000 Crores for Roads

` Total Outlay on Roads

` 2.18 Lk Cr. on Railways

Fiscal Discipline

Fiscal deficit targets 2015-16 (RE)

at 3.9% and 2016-17 (Budget

Estimate) at 3.5%.

Revenue Deficit reduced to 2.5%

in 2015-16 (RE) from 2.8%

Plan expenditure of `5.50 lakh

Cr. / Non-Plan expenditur e of `14.28

lakh Cr.


5/36


ANALYSISBudget

2


Post BudgetAnalysis : Major Trends

Fiscal Deficit TargetExpected tohave fiscaldeficit target range

FY17 fiscaldeficittarget at 3.5% of GDP

FY16 fiscaldeficitpegged at3.9% ofGDP

Prudence liesin adhering to fiscal targets

FY17Revenue and Expenditure Estimates in Fy17FY17 totalexpenditure19.78 trillion rupee / FY17 total spend at19.78 trillion rupees

FY17non-plan expenditure14.3 trillion rupees

FY17 plan expenditure5.5trillion rupee

Total resourcestostates in FY17 at 996billionrupees

To scrapplan,non-plan expendituredistinction

To doaway with plan, non-planclassificationof spending

Plan allocation tostresson rural, infra,socialsectors

The union Budget with an aim to boost investment in Agriculture, Social Sector, Infrastructure and employment generation

on the one hand and simultaneously sticking to the fiscal consolidation path. This is substantiated by a huge 15.3% jump in

plan outlay and 9% increase in non plan outlay in 2016-17. Besides additional allocation to meet the obligations of 7th pay

commission recommendationandimplementationof onerank onepension (OROP) inDefence have also been provided.

Summary of Accounts

FY13

879,232

582,152

1,243,514

166,858

1,410,372

1,410,372

365,896

490,597

177,428

` in Cr.

Revenue Receipts

Capital Receipts

Capital Expenditure

Total Receipts

Total Expenditure

Revenue Defici t

Fiscal Deficit

Primary Deficit

Revenue Expenditure

FY14

1,014,724

563,894

1,371,772

187,675

1,578,618

1,559,447

357,048

502,858

128,604

FY15

1,101,472

562,201

1,466,992

196,681

1,663,673

1,663,673

365,519

510,725

108,281

FY16 (RE)

1,206,084

579,307

1,547,673

237,718

1,785,391

1,785,391

341,589

535,090

92,469

FY17(BE)

1,377,022

601,038

1,731,037

247,023

1,978,060

1,978,060

354,015

533,904

41,234


6/36


I s s u e T h e m e

ANALYSISBudget


Increasedallocation forroads, railwaysandurban development –24% increase in budgetaryallocation forroads,12%

increase formetroprojects,13%increase forrailways

Increasedallocation forportsandshipping - 24%increase inbudgetaryallocation forsugarmela project , 70%increase

inallocation forinlandwater transport

` 800crallocated towards theSagarmala& NationalWaterways Project

Stocks to watch : Sadbhav Engineering, PNC Infratech ,NCC,MBL infra

Service taxincreasedfrom 14.5%to15.0%owing to levy of 0.5% towards Krishi Kalyancess

Basic Customs Duty onwood chips andparticlesused in manufactureof paperandnews printsreduced from 5%tonil.

Stocks to watch : Dish TV, Den Networks

Highercapital outlay towards thedefense sector(up 6.9% yoyto` 69,705cr)

Higherallocation towards MinistryofUrbanDevelopment (focusonMetro,SmartCities,AMRUT;up 34%yoy to

`24,523cr)

Higherallocationof ` 8,500cr towards theRuralElectrificationprogram

12.5%CVD leviedonRoad ConstructionEquipments

Stocks to watch : BEL,L&T, Bharat forge,BEML

Increase in exciseduty on cigarettes by10%

Increase in exciseduty on mineral waterandaerated water containingaddedsugar

Cumulativeallocation of ` 87,765cr for ruraldevelopmentactivitiesandMGNREGA

Stocks to watch : ITC,VST Industries,and Godfrey Phillips.

Customduty onzinc alloys increasedfrom 5%to7.5%

Exportdutyon ironore lumps (below58% Fecontent)reduced tonil from30%

Basic customduty increasedonprimary aluminiumfrom 5%to7.5%

Stocks to watch : Hindalco, Nalco, Vedanta

Reductionin basiccustomduty forcoal, lignite, etc. increase inclean environment cess on inputssuch as coal, lignute on

thecement input costs

100% deductionof profits from development of housing projects& exemptionof service taxon development of

affordablehousing

Stocks to watch : UltraTech, Prism Cement

3

Infrastructure Outlook: Positive

Media Outlook: Positive

Capital Goods Outlook: Positive

FMCG Outlook: Neutral

Metals & Mining Outlook: Neutral

Cement Outlook: Positive


7/36


ANALYSISBudget


4

Tax rebateof 10%on earnings from globalpatent filings.

Weighteddeductionsfor R&D proposed tobe revised to150% fromApril1, 2017 and100% fromApril1, 2020.

Tax rate of 10%(as against 35%) on incomefrom worldwideexploitation ofpatents developedandregistered in India.

3,000storesunderPrimeMinister’sJanAushadhiYojana will beopenedduring2016-17.

Stocks to watch : Sun Pharma,Dishman Pharma,Lupin, and Cadila Healthcare

100%deductionforprofits toanundertaking inhousing project for flats upto30 sq. metres in fourmetro citiesand 60sq.

metresin othercities, approvedduringJune 2016 toMarch2019 andcompletedin three years

Deduction foradditional interestof Rs.50,000perannumforloansup toRs.35 lakh sanctioned in 2016-17 for first timehome buyers, wherehousecost does notexceedRs.50 lakh

Stocks to watch : DLF, Prestige Estates

Capital infusionof Rs.25000Cr. inPSU banks in2016-17.

Allocation of Rs. 250 bn towards recapitalization of PSBs.

Debt recovery tribunalswill be strengthened.

Government owned general insurancecompanies tobe listed

Foreign investmentswill beallowed in theinsuranceandpension sectors in automaticrouteup to49%

Service taxonservicesprovided byassessingbodiesempanelled centrally reduced from 14.0%tonil

Toolsand tool kits formaintenance, repair, andoverhauling of aircrafthave been exempted from exciseduty

Stocks to watch : InterglobeAviation,Spice Jet and Jet Airways

Introduction of infrastructurecess:

1% forsmallPetrol/LPG/CNG cars;

2.5% forsmalldieselcars;

4%formid-size,largecars andSUVs

1%luxury tax oncarscostingRs.10 lakhormore

Central Government towork in coordinationwith Statestowards abolitionof permitregime thereby resultinginto

liberalization of passenger roadtransportsegment

Stocks to watch : Ashok Leyland, Eicher motors, Bajaj Auto and Tatamotors

Pharmaceuticals Outlook: Negative

Real Estate Outlook: Positive

Banking & Financial Services Outlook: Neutral

Aviation Outlook: Negative

Automobi le Outlook: Positive


8/36


I s s u e T h e m e

ANALYSISBudget


5

Theexemptions from customs dutiesonspecifiedgoods imported forpetroleumexploration

Oil Industries Development cess reduced from Rs.4,500per tonne to20%advalorem

Withdrawal of deductionu/s80-IBof Income-taxActfor production of mineral oilandnatural gas

Stocks to watch : ONGC, Cairn India

Allocation of ` 1,804cr forskilldevelopment

Service taxonservicesprovidedbyassessingbodiesempanelledcentrally reduced from 14.0%tonil

Stocks to watch : MT Educare and NIIT

Basiccustomduty on refrigeratedcontainers reduced from 10%to 5%andexciseduty on thesame reduced from 12.5%

to6%.

Stocks to watch : Snowman Logistics, Gati and Navkar Corp

Basiccustomduty onelectrolysers,membranesandtheir parts requiredbycaustic soda/potash units (usingmembrane

cell technology) reduced from 2.5% tonil.

Stocks to watch : TataChemicals

An additional tax at the rate of 10% of gross amount of dividend will be payable by the recipients receiving dividend in

excessof `10 lakh per annum

Most ITcompaniesarecash rich andarehenceprospectivecandidates forhigh dividend payouts. Investors in these

companiessubject to receiptof dividend in excessof thesaid amountwill be impacted.

Stocks to watch : Budget is Negativefor thesector

Thegovernment expects revenue receiptsof `98,995cr inFY2017from thetelecom sectorby wayof spectrumreceipts

Telecomcompaniescould becompelled tobidaggressivelywhichcould lead to further deterioration in their financial

positions

Stocks to watch : TheBudget is Negative for theTelecom sector.

‘CleanEnvironment Cess’ increased from`200/ton to` 400/ton

Stocks to watch : Negative for power producers such as NTPC, JSW Energy etc.

Note : Our“StocksTo Watch” section isnotour stocks recommendation.We have mention thosestocks whicharelikely togetbenefits/

disadvantagesfromGovt.’smoves in thebudget in broader sense. Kindly, contactResearchDept.for stock recommendations.

Oil & Gas Outlook: Negative

Education Outlook: Positive

Logistics Outlook: Positive

Chemicals Outlook: Positive

Information Technology Outlook: Negative

Telecom Outlook: Negative

Power Outlook: Negative


9/36


Railway BUDGET

Passenger Centric and Optimistic but implementation is Key

OverviewIndian Railway has presented a Railway Budget 2016-17 maintaining status quo on passenger fare rates and freight rates.

The railways have continued to focus on capacity expansion and improving the services. The plan outlay has been hiked by

21% to `1.21 lakh Cr. for FY2017. The railways has focused on improving customer services, whilealso laid down the plan

for reorganizing, restructuringand rejuvenation of the Indian Railways.

Performance

Therailways have exhibited sharp slippages from FY2016 targets. The freight loading target is revised down to 1107 million

tonnes forFY2016 from budgeted level of 1186 million tonnes. Theestimate forgross traffic receipts is scaleddown sharply

to ` 1.68 lakh Cr. from 1.84 lakh Cr.

Meanwhile, the operating ratio is showing improvement from 91.3% in FY2015 to 90% in FY2016, but it has overshoot the

budgeted levelof 88.5%.

Budget Estimates 2016-17

1) Gross TrafficReceipts estimated to rise 10.1% to ` 1,84,820 Cr. 2) Passenger earnings growthhasbeen peggedat 12.4

% to ` 51,012 Cr. 3) The freight traffic is pegged at incremental traffic of 50 million tonnes. Goods earnings is accordingly

proposed at ` 1,17,933 Cr. 4) Railways are preparing a Plan size of `1,21,000 Cr. in 2016-17. 5) Targets Operating Ratio

(OR) - 92%, restrictgrowth of OrdinaryWorkingExpensesby11.6% afterbuilding in immediate impactof7thPC

Investments and Resources

As per investments proposed under 5-year plans (FY2015-19), Railways envisage capex of ` 8.5 lakh cr, translating to

yearly run-rate of `1.7 lakh Cr. Capital outlay budgeted for FY2017 stands at ` 1.17 lakh cr, much lower than the `1.7 lakhcr/year targetsetunder the5-yearplan.

However, if we compare FY2017 budgeted numbers, to that of revised FY2016 numbers, than capex outlay has increased

by42.3%(vs40%increase in FY2016revisedbudgeted numbers in comparison toFY2015actual).

Railway Budget Update

6

Some Stocks from Rail budget

Key Initiatives Company Name Key Initiatives Company Name

50% more electrification

No hike in freight charges

Locomoti ve Factories for` 40,000 Cr.

CCTV for Surveillance

Three new freight corridors

KEC International, Kalpataru Power Transmisson, Siemens

Coal India, Ultratech Cement

BHEL, BEML

ZICOM

COCOR and Gateway

Wifi Services

Elevated Rail Corridors

Cold Storages on rail land

Multi model logistic park

17000 bio to ilets in t rains

D-Link, Smart Link

L&T, HCC, NCC, GammonInfra, Simplex Infrastructure

Snowman Logistics

Gateway DistriparksNavkar Corp

Sahyadri Industries,Stone India


10/36


S e c t o r U p d a t e

7

Ceramic Sector

Global Ceramic Tiles Industry

Global ceramic tiles market is expected to reach USD 125.32 billion by 2020, according to a new study by Grand ViewResearch Inc. Demand for ceramic tiles has been driven by thegrowing construction and infrastructure industry, mainly in

the Asian economies of china, India and Indonesia. However, volatility in raw material prices and tightening of regulatory

guidelines to address growing environmental concerns have increased the production costs for ceramic tiles

manufacturers.

With the introduction of modern technology in designing and manufacturing, the market new verticals have emerged such

as 3D tiles, Germ-free tiles and designer tiles. Floor tiles are expected tobe the fastest growingsegment of the ceramic tiles

market growing at an estimated CAGR of 9.4% over the next five years. The wall tiles segment is expected to lose its pole

position to floor tiles by 2018. Government of India and china have increased spending on infrastructure improvement,

which is expected to promote the demand for residential and commercial structures and boost ceramic tiles market in thecoming years.

Indian ceramic IndustryIndia remains oneof thefastest growing ceramic tiles market in theworld. India’s share in theglobalceramic tiles production

iscontinuously increasing andhasreached 6.3% in 2013 from 5.7% in 2009.

India has not grown much in terms of exports of ceramic tiles and currently consists of less than 0.5% of the global market.

As per ICCTAS, in the year 2014 India has exported ceramic tiles of around USD 441 million. India exports ceramics to

markets acrossEurope,Asia, USandAfricaandthekeyexportmarketsareUAE,SaudiArabia andMalaysia.

A significant portion of the tiles’ manufacturers’ sales is to the institutional segment comprising builders and dealers. while

therest isdirectsales to theend consumersalso called thereplacement market. Thereplacement marketconstitutes15%-

20%of thetotal tiles marketIn India comparedwith around75%inwestern countries.

Theorganizedsegment makes up approximately 50%of thesectorand thetopeight manufacturers constitute over 75%of

theorganizedmarket.

Top 10 Countries by product ion of Ceramic Tiles (Million Square Meters)

60007050

6050

5050

4050

3050

2050

1050 903 825

425 420 410 382 360 315 230

50

C h i n a

B r a z

i l

I n d i a

S p a i n

I n d o

n e s i a

I r a n

I t a l y

V i e t

n a m

T u r k

e y

M e x

i c o

Ceramic Tiles importing Nations ( Million Square Meters)160

170

150

121

96 84 83 8068 65

53

U S A

S a u d

i A r a b i a

I r a q

F r a n

c e

N i g e

r i a

G e r m

a n y

R u s s

i a

T h a i l

a n d

S o u t h

K o r e

a

U A E

150

130

110

90

70

50

30

10


11/36


Morbi development….structural shif t towards organized players

Morbi (Gujarat) is a hubof ceramic tile manufacturers in India with 500manufacturing units.Theregionproduces 65-70%ofthe total ceramic products in the country. One of the key reasons behind Morbi being the ceramic city is easy availability of

key raw materials like various types of clay, red and black soil, minerals (including calcite and wollastonite) with frits and

glazes readily available either locally or from neighboring Rajasthan. It is also cost effective since Gujarat State Petroleum

Corporation (GSPC)has installed industrial gasoline in theregion.

Also, since beginning of FY14, Gujarat Pollution Control Board (GPCB) restricted cargo handling at the Navlakhi port

(whichhandles 60%of coal for theceramic industry), leading toa severeshortage of coal. Moreover, post theclosure, Morbi

players have to bring coal from Kandla and Mundra ports where transportation cost is higher by 50%. Consequently,

unorganized players had to shift back to gas fired furnaces and the cost parity enjoyed by unorganized players went away.

Hence, these developmentswere structurallypositive fororganizedplayersandprovideda level playing field to them.

Growth driversUrbanization rate

India’s urban population has grown 2.47% annually over the last decade, making it the most rapidly urbanizing country.

India’s urban population is expected to increase from 32% today to 40% by 2020, strengthening the prospect s for tile

manufacturers.

By 2030, India is likely to emerge as the world’s largest middle class consumer market with aggregate consumer spends of

nearly US$13 trillion. Nuclear families are the overwhelming norm in India with 70% of households comprising just one

married couple, drivingthe need forquality housing.

Ceramic Sector

8

Country

Per capita consumption(square meter)

Brazil China Europe India Indonesia Iran Russia Vietnam

4.0 3.1 5.5 0.5 1.0 4.8 1.1 3.7

Urbanisation Rate (%)

1961 1971 1981 1991 2001 2011 2011 2020E

18.0 19.9

23.325.7

27.8

31.2 32.0

40.045.0

40.0

35.0

30.0

25.0

20.0

15.0

10.0

5.0


12/36


S e c t o r U p d a t e

Ceramic Sector

Low per capita consumption

India currently has one of the lowest per capita consumption of 0.5 sqm as against the world average of 1.4 sqm Hence,there isa great scope ofgrowth for the ceramic industry in India.

Government initiativesThe new government has initiated a number of ambitious projects such as 100 smart cities, housing for all by 2022 and

swachh Bharat Abhyaan. several policy initiatives taken by the government to help the real estate and housing sector

includes the amendment of the FDI policy , setting up of real estate investment trusts, increase in deduction limit on housing

loan, relaxed normsfor issuing term bonds bybanks for financingaffordable housing etc. would actasa bigpush in demand

forthe ceramics industry in India over thecomingyears.

Change in demographicsThe youth population in India is fast growing and it is estimated that by 2020 Indiawill be the world’s youngest country. This

would lead to a shift in preference from low cost products from unorganized players to high end branded ceramic products.

this would leadto bettergrowth prospectsforthe organizedceramic industry.

Rapid growthIndia is witnessinga growing middleclass population.Thisbudding middleclass population would actas a keygrowthdriver

for the ceramic industry in India. 89 millionconsumingclass households and 45 million first time aspirer households in India

will bea major thrust for the housing sector in the nextdecade.

Increase in disposable income

Rapid industrialization and associated growth in income will propel the income level of India to those currently enjoyed by

global middle income countries, will boost the industry growth. With rising disposable income in India the demand for

replacementmarket forceramic tiles isexpected to further increase.

The per capita disposable income has grown at 13% CAGR in the last decade to ` 74920 in 2013-14. India has a young

populationwithan average age of24years, leading tohigherdisposable incomes in the hands of those withaspirations for a

better lifestyleandstylish interiors.

Falling interest ratesWith the falling interest rates and falling inflation, RBI may further ease the repo rate. This would lead to higher demand for

thereal estatesector andforthe ceramic tiles industry.

Swachh Bharat mission likely to boost thedemand of ceramic industryThe swachh Bharat campaign launched by Prime Minister Narendra Modi will have a positive impact on the Indian

ceramic industry as the initiative is likely to generate demand for tiles and sanitary ware. The ceramic sector in India saw a

dip in growth last fiscal due to overall economic scenario and lesser than expected investment in construction sector. the

new government at the Centre is focusing on infrastructure sector, which will boost construction and eventually help

ceramic sector.

9


13/36


Opportunities in the ceramic tiles market in India

Buyers are increasingly looking beyond the functionality of ease, hygiene and maintenance and competing foraesthetically appealing tiles in orderto reflect their individualistic lifestyles.

Use of nano technology helps in increasing the shelf lives and strength of tiles by making them resistant to dirt and

bacteria. These tiles are gaining popularity in areas where hygiene is important, such as hospitals, labs and food

processingunits,amongothers.

Usageof eco-friendly tiles is expected to increaseasconsumersbecomemoreenvironment-conscious. Recycled eco-

friendly tilesareusually made from natural andrenewablesubstances.

Constructionof newhousesdrivenby risingincomelevelshave increasedtile usage in theresidential constructionand

thecommercial real estateverticals. Largecompaniesareincreasingly focusing on theretail front,whichwill enablethem toearn highermargins.

Verified tiles,comprising nearly50%of theceramic tilesmarket, have witnesseda robustgrowth in thelast five yearsdue

to their high durability andeasy maintenance.

Preferred stocks Asian Granito India Ltd. (AGL)

AGLhas emerged as one of India’s largest groups, with a global footprint across 50 countries. Its capacity has grown 40 fold

ina spanof just14years,it is India’sfastest growing Ceramic Tile, Vitrified Tile , Marbleand QuartzCompany and among the

world’s 50most profitable Ceramic tile Companies.

AGLhas an extensive marketing and distribution networkwhich comprises of more than 4000 Dealers and Sub-Dealersand

more than 75 ExclusiveDealerShowroomscoveringeach andeverystateof thecountry, this helps thecompany to promote

itsrangeof products to theconsumers.

Kajaria ceramics Ltd.

Kajaria Ceramics is the largest manufacturer of ceramic/vitrified tiles in India. It has an annual aggregate capacity of 68.60

mn.sq.meters, distributed acrossnineplants - Sikandrabad in UttarPradesh, Gailpur & Malootana in Rajasthan, five plants

inGujarat andoneatVijayawada inAndhra Pradesh.

Kajaria's the manufacturing units are equipped with cutting edge modern technology. Intense automation, robotic car application and a zerochancefor human error are few reasons for Kajaria tobethe numberone in the industry.

Ceramic Sector

10

KajariaCeramics 2.00 898.20 33.23 9.63 0.38 33.91 29.11 14.73 180.27

CompanyName

FV (`) CMP* (`) P/E (x) P/BV (x) D/E Ratio

(x) ROCE (%) RONW (%) PBIDTM

(%) CFO (` in Cr.)

AsianGranito 10.00 112.55 17.13 0.88 0.71 8.45 4.71 6.52 104.21

CMP* as on 29/02/2016( Source: Capitaline )


14/36

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Jamna Auto Industries Ltd.

www.jhaveritrade.com12

“Buy” CMP : ` 133 TGT : ` 181Company Basics

BSE ID

NSE Symbol

Group

EQUITY (` in Cr.)

MKT.CAP(` in Cr.)

520051

JAMNAAUTO

B

39.74

1030.03

Financial Basics

FV ( )

EPS ( ) (TTM)

P/E (x) (TTM)

P/BV (x) (TTM)

BETA

RONW (%)

`

`

5.00

7.41

17.48

5.17

1.3666

11.63%

Investment Rationale

Share Holding Pattern

Holder's Name

Foreign

Institutions

Promoters

Govt. Holding

Public & Others

Non PromoterCorp. Hold.

% Holding

0.522.89

46.45

0.00

50.14

0.00

ROI : 36%

Valuations

JAMNAAUTO is trading at `133. Werecommend “Buy” with target priceof `181,valuing stocks 20xFY18EEPS of `9.07.The stock currentlytradesat 17.60xof FY16E,16.12xof FY17Eand14.66x ofFY18E.

Investment Horizon : 12 to 15 Months

Company OverviewJamna Auto Industries Limited is the largest manufacturer of Tapered Leaf and

Parabolic Springs for Commercial Vehicles (CVs) in India. It has been a trusted and

preferredsupplier ofLeaf andParabolicSpringsto allmajorCVmanufacturers.

JAI is the only Indian company to provide a complete range of automotive suspension

solution forcommercial vehicles. The company hasattained leadership in conventional

spring suspension products in home market and now the company is developing new

technology in suspension system and target new market segments (including the

aftermarket andexports).(Suspension : Suspension is the system that connects a vehicle to its wheels and

allowsrelativemotionbetween thetwo.)

Product PortfolioJAIhas tied up with Ridewell Corporation of USA to manufactureAir Suspension, Bogie

Suspension and Lift Axles in India. Ridewell has more than 42 patents for various

suspensionproductsandis considered a leader in this field.

Multi-Leaf Springs

JAI is the market leader in Multi-leaf Springs with a domestic OEM volume share of 64%. Company is manufacturing a comprehensive range of Multi-leaf Springs ranging

from3Kg to200 Kg.

Parabolic Sprigs

JAI was among the first to introduce Parabolic Springs in India and currently market

leader in themarket. Parabolic technology improves theride comfort, gives much better

vehicle life andcosts less.

Air Suspension

JAI launched its air suspension in FY13 and has begun supplying to leading players like

SMLIsuzu.

LiftAxle

JAIintroducedLiftAxles in FY13 andis already supplying this product toAshokLeyland.


16/36

13



Investment rational

Commercial Vehicles move towards recovery in FY15Indian CV sales, including exports sales, reduced its decline to 1.3% in FY15, after a steep fall of -18.7% in FY14, with

signs of recovery in the domestic CV segment and strong growth in CV exports to reach 700,743 units as per SIAM.

Domestic CV sales narrowed down it’s de-growth to 2.8% in the year after falling down 20.2% in FY14. Amongst CV sub-

segments Medium & Heavy Commercial Vehicle (M&HCV) showed robust growth while the Light Commercial Vehicle

(LCV) continued to experience slowdown.CV exports reboundedback to positive growth territory reporting 11.3% growth

in FY15. The CV exports have grown at 5-year CAGR of 13.8% generating a healthy 12.2% share of CV production in

FY15. Consistent growthin theauto componentexports is an indication of growing credibility of ‘Indiamade’components.

M&HCV-fastest growing amongst all automotive segmentsTheMedium& Heavy Commercial Vehicle (M&HCV)subsegment, includingexportsales,bounced back to robustgrowth

of 17.4% YoY in FY15 after two years of decline. This was presence of MNC players, the industry will place increased

importance on technologically advanced and value added products.Also, theaftermarket will be an important growth and

profitability driverfor the industry withcustomers’preference forquality branded products.

India is becoming global manufacturing hub continuesIndia is fast becoming a global manufacturing hub for leading OEMs across the world. Major global CV giants such as

Daimler, Man Trucks, Navistar, Volvo, and Hino have entered into Indian market attracted by the low CV penetration and

stronggrowthpotential. GlobalCV majors like Daimler MotorsandScania Motorshave already committed in India.TheseOEMs have a strongfocus towards localizationinitiatives that bodeswell forthe auto componentsector.

C o m p a n y A n a l y s i s

1,000,000

800,000

600,000

400,000

200,000

40.00%

30.00%

20.00%

10.00%

0.00%

-10.00%

-20.00%

-30.00%

FY10 FY11 FY12 FY13 FY14 FY15

582,721 684,905 809,499 793,211 632,851

45,00974,043

92,258 80,027

77,050 85,782

Export CV Sales Domestic CV Sales YoY Growth

614,961

Year FY11 FY12 FY13 FY14 FY15

CV Production 760,735.00 923,136.00 832,649.00 699,035.00 697,083.00

YoY Growth (%) 34% 22.10% -10.40% -16.00% -0.30%

( Source: Company )

( Source: Company )


17/36



JAL is a leader in spring manufacturer in India

JAI is one of the world's leading players in automobile suspension solutions and amongst the world's top threemanufacturers of Multileaf springs with a growing presence in Parabolic Springs, Lift Axles and Air Suspensions. The

company is Supplying to Global and Domestic Commercial Vehicle Original Equipment Manufacturers with a successful

track recordof consistentlydelivering best in classquality.

Strong distribution network and marquee clients portfolios

Jamna has built up a strong dealer network, through its subsidiary - Jai Suspension Systems LLP (JSS LLP), all over the

country to support growing domestic After Market demand. The company sells springs under the "JAI" brand in the After

Marketand itsproductscommand premium.

The company is consistently improving aftermarket network to penetrate new markets. JAI has a significant network with

tie-ups with more than 1,310 primary distributors to supply products to more than 5,500 dealers. During the year, revenue

from newmarketsalso increased.

Project Lakshya: Medium term strategy that focuses on valuecreation

The Company aims to achieve a de-risked business model, higher returns and consistent shareholder payouts as a part of

the ‘Lakshya’mission.

Duringtheyear, To achivethis goal, JAL’sexportsalesgrew to reach `10.80 Cr. Realizing thepotential in theexports market,

company is investing in the capacity at Hosur near Banglore, primarily to cater to demand for new generation products and

exports.Thefacility with a capacity of 30,000MTPAis expected tobeoperational byQ1FY17.

Highest market Share among Indian spring manufacturer

Company Jamna Auto Toyo Friends Auto Soni Agya Auto Vikrant Others

Market Share 66% 14% 7% 3% 3% 3% 4%

Domestic Customers International Customers

AMW

Ashok Leyland

Bharat Benz

Force

Kamat Benz

Renault Nissan

SML ISUZU

Tata Motors

VOLVO

VL Commercial Vehicles

GM

ISUZU

UD Trucks

-

-

Operational Goals

Financial Goals

Product De-risking

33% Revenue from New Products

33% ROCE

Diversifying Markets

33% Revenue from New Market

33% Divided Payout

Maximizing Efficiency

33% Break Even Point

Net Block to be funded by net worth

( Source: Company )

( Source: Company )

( Source: Company )


18/36

15



C o m p a n y A n a l y s i s

Strategically located Plant Close to customer and exports hubs

JAI - Pantnagar

JAI - Yamuna Nagar

JAI - Gwalior

JAI - Jamshedpur

JAI - Pune

JAI - Hosur

JAI - Chennai

JAI - Bhuj

Pant Nagar

TATA Motors | Ashok Leyland

LucknowTATA Motors

Ropar

SML - ISUZU

Alwar

Ashok Leyland

IndoreVECV | Force Motors

MTI

Bhuj

AMW

Pune

TATA Motors

Bangalore

Volve

Ashok Leyland

Kamaz Vectra

Leyland Nissan

Scania

Chennai

Ashok Leyland

Bharat Benz ( Diamler )

Renault Nissan

Ford India

ISUZU

JamshedpurTATA Motors

OEM Plants

JAI Existing Plants

Al l major truck manufacturer uses JAI’s products

Domestic Customers

Exports Customers

( Source: Company & JSL Research )


19/36



FY 12

1.10

0.40

0.80

3.51

9.91

9.27

3.853.72

8.49

16.80

15.39

FY 13

1.06

0.27

0.73

2.55

7.88

8.96

3.082.20

8.32

13.66

10.90

FY 14

0.82

0.25

0.76

1.92

7.69

8.31

2.731.03

5.68

6.15

0.47

Debt-Equity Ratio (x)

Current Ratio (x)

Fixed Assets Ratio (x)

Inventory Ratio (x)

Debtors Ratio (x)

Total Asset Turnover Ratio (x)

Interest Cover Ratio (x)PBIDTM (%)

APATM (%)

ROCE (%)

RONW (%)

FY 15

0.50

0.24

0.81

2.51

11.30

14.39

4.113.63

8.14

18.54

11.60

Consolidated Key Financials

FY 12

39.4

152.6

341.23

182.74

363.96

19.27

316.32

297.05

638.28

1204.271119.65

1.97

1128.48

980.51

39.37

102.19

83.37

70.04

51.22

42.19

FY 13

39.5

171

344.1

166.19

463.25

16.25

277.81

261.55

605.66

1055.76980.15

2.34

991.18

858.19

36.39

87.85

61.11

58.9

32.16

27.73

FY 14

39.5

179.86

311.14

125.28

467.06

16.96

250.41

233.45

544.59

893.83833.3

22.27

817.19

775.35

31.27

66.69

42.62

40.78

16.71

13.84

Equity Paid Up

Networth

Capital Employed

Total Debt

Gross Block (Excl. Reval. Res.)

Net Working Capital ( Incl. Def. Tax)

Current Assets ( Incl. Def. Tax)

Current Liabilities and Provisions ( Incl. Def. Tax)

Total Assets/Liabilities (excl Reval & W.off)

Gross SalesNet Sales

Other Income

Value Of Output

Cost of Production

Selling Cost

PBIDT

PBDT

PBIT

PBT

PAT after Minority Interest & P/L Associate Company

FY 15

39.62

196.42

266.03

64.28

478.6

-23.61

208.28

231.9

497.93

1185.221095.01

2.01

1105

993.64

34.71

96.5

78.48

65.4

47.38

29.38

Consolidated Key Financials

Key Financials

Ratio Analysis

( ` in Cr )


20/36

17

Fundamental Stocks


V A L U E B U Y

O

p e n F u n d a m e n t a l C a l l s

Auto Ancil lar ies

Suprajit Engg.

Automobi le

Banks

Capital Goods

Cement

Finance

Infrastructure

Ashok Leyland

M & M

Maruti Suzuki

ICICI Bank

Bank of Baroda

City Union Bank

DCB Bank

Havells India

TD Power Sys.

Inox Wind

Carborundum Uni.

Thermax

J K Cements

UltraTech Cem.

Dewan Hsg. Fin.

Repco Home Fin

PTC India Fin

Larsen & Toubro

Adani Ports

Ashoka Bui ldcon

Company CurrentReco

CMP*( ` )52 Week

High (`) Low (`) 3M

Absolu te Return (%)

6M 12M

FaceValue

MarketCap

P/E Dividend Yield

%

P/BV

(`) (` in Cr) (x) (x)

Jamna Auto Inds Buy

Hold

Hold

Hold

Hold

Buy

Hold

Hold

Hold

Hold

Buy

Buy

Buy

Hold

Hold

Hold

Buy

Hold

Buy

Buy

Buy

Buy

134

137

92

1237

3521

198

139

84

74

281

229

237

165

758

455

2923

150

596

32

1150

206

184

156

152

100

1442

4790

362

216

106

151

322

414

494

200

1318

745

3398

285

785

67

1894

375

221

88

111

64

1091

3386

189

109

78

68

235

225

217

150

716

425

2531

140

555

30

1016

169

143

22%

-4%

-1%

-4%

-24%

-26%

-17%

-4%

-11%

2%

-19%

-36%

-5%

-14%

-30%

6%

-30%

-13%

-22%

-15%

-24%

7%

23%

-7%

-3%

-6%

-23%

-33%

-30%

-13%

-46%

6%

-18%

-39%

-3%

-26%

-31%

-2%

-38%

-21%

-29%

-34%

-44%

0%

22%

1%

35%

-1%

-1%

-40%

-24%

-15%

-34%

4%

-40%

NA!

-11%

-39%

-38%

-3%

-39%

-12%

-46%

-31%

-37%

23%

5

1

1

5

5

2

2

1

10

1

10

10

1

2

10

10

10

10

10

2

2

5

1016

1618

25385

75071

105347

111607

30634

4935

2051

17451

749

5090

3107

8999

3323

77288

4411

3629

1813

105271

42289

3378

5.17

6.72

7.28

2.90

4.33

1.32

0.70

1.83

1.33

9.60

1.52

3.66

2.86

4.19

2.06

4.06

0.95

4.47

1.26

2.57

3.93

1.82

17.25

21.17

28.59

26.21

33.06

9.50

8.13

11.65

10.91

50.07

38.98

14.11

23.44

45.52

26.95

34.80

6.28

25.44

5.06

23.80

16.18

32.64

0.86

0.70

0.50

0.99

0.72

2.60

2.32

1.33

0.00

1.07

1.17

0.00

0.76

0.93

0.84

0.32

1.83

0.26

3.10

1.43

0.54

0.72


21/36

Fundamental Stocks


V A L U E B U Y

Logistics

Pharmaceuticals

Textiles

Company CurrentReco

CMP*( ` )

52 Week

High (`) Low (`) 3M

Absolu te Return (%)

6M 12M

FaceValue

MarketCap

P/E Dividend Yield

%

P/BV

(`) (` in Cr) (x) (x)

CMP* as on 22/02/2016

Realty

Gateway Dis tr.

Al lcargo Logis tics

VRL Logistic s

Torrent Pharma.

Sun Pharma. Inds.

Granules India

Ahluwal ia Contr.

J Kumar Infra

Garware-Wall Rop

SRF

AYM Syntex

Ambika Cot ton

Nitin Spinners

CARE

Century Ply.

MT Educare

Interglobe Aviat

Radico Khaitan

Bharat Forge

Omkar Spl.Chem.

Sadbhav Engg.

Eveready Inds .

Inox Leisure

Prabhat Dairy

Infinite CompLiberty Shoes

T.V. Today Netw.

Hitech Plast

Torrent Power

H P C L

Miscellaneous

Hold

Hold

Buy

Buy

Hold

Buy

Buy

Hold

Buy

Buy

Buy

Buy

Buy

Hold

Buy

Buy

Buy

Hold

Buy

Hold

Buy

Hold

Buy

Buy

HoldBuy

Hold

Hold

Buy

Hold

209

153

315

1350

882

110

230

297

309

1092

97

778

57

912

148

148

820

102

787

151

230

222

206

94

201147

314

157

223

677

455

218

479

1718

1201

164

303

449

437

1499

163

1149

108

1806

262

200

1395

131

1363

250

385

375

276

169

323310

350

221

247

991

206

128

261

1030

704

75

188

253

166

875

87

518

26

900

136

96

698

79

720

129

206

192

145

90

122125

165

81

137

556

-38%

-22%

-24%

-12%

19%

-27%

-16%

-20%

-13%

-14%

-15%

-11%

-4%

-31%

-17%

12%

-28%

-16%

-9%

-22%

-27%

-21%

-8%

-32%

-7%-27%

17%

39%

19%

-15%

-38%

-2%

-15%

-18%

-6%

-15%

-10%

-23%

-5%

-14%

-29%

-8%

-25%

-26%

-16%

2%

NA

9%

-36%

-23%

-31%

-31%

-14%

NA

6%-36%

40%

48%

28%

-21%

-52%

-8%

NA

21%

-3%

38%

-1%

14%

53%

18%

NA

47%

88%

-44%

-30%

29%

NA

18%

-39%

-7%

-26%

10%

16%

NA

7%-51%

26%

31%

30%

12%

10

2

10

5

1

1

2

5

10

10

10

10

10

10

1

10

10

2

2

10

1

5

10

10

1010

5

10

10

10

2262

3712

2847

22143

209650

2258

1519

2136

660

6195

381

450

244

2673

3267

565

29191

1330

17858

306

3928

1585

1909

887

763239

1875

221

10754

21794

2.45

1.95

6.02

8.89

8.18

4.84

4.51

1.78

2.13

2.73

2.60

1.49

1.46

6.96

8.43

4.49

17.18

1.62

5.19

1.81

2.56

2.54

2.69

1.38

0.971.64

4.17

1.90

1.64

1.60

17.15

14.02

26.78

13.94

47.63

20.97

23.71

21.27

15.74

16.54

8.18

9.35

5.41

35.63

23.45

17.40

14.69

17.26

25.67

9.56

28.03

32.64

31.36

37.99

7.5514.09

23.65

20.76

11.01

16.68

3.36

0.68

1.20

0.86

0.34

0.45

0.00

0.60

0.99

0.93

0.10

1.83

1.88

8.57

1.36

1.87

0.00

0.80

0.98

1.01

0.31

0.00

0.00

0.05

0.001.07

0.48

0.62

0.66

3.81


22/36

19

JSL Top Mutual Fund Picks


Scheme Name

NAV*

(Div)

NAV*

(growth)

1 Year

(%) Since Inc

Axis Focused 25 Fund

BSL MNC Fund

BSL Manufacturing Equity Fund

DSP BR Focus 25 Fund

Franklin India Prima Plus

Birla sun life 95 fund

DSP BR balanced fund

Franklin India balance fundICICI Prudential Balance Advantage fund

L&T India Prudence fund

DSP BR Micro Cap Fund

Franklin India Smaller Co Fund

ICICI Prudential Value Discovery Fund

Kotak Emerging Equity Fund

Mirae Asset Emerging Bluechip Fund

BSL Tax Relief'96 Fund

Religare Invesco Tax plan

Axis long term equ ity fund

IDFC tax advantage

Franklin Indi a Taxshield

Franklin India Dynamic PE Ratio Fund

ICICI Prudential Dynamic Plan

Principal Smart Equity Fund

Religare Invesco Dynamic Equi ty Fund

IDFC Dynamic Equity Fund

HDFC Monthly Income Plan LTP

FT India MIP

IDFC Monthly Income Plan

Reliance Monthl y Income Plan

ICICI Pru MIP-25

Top Equity Diversified Funds

Top Balanced Funds

Mid Cap Funds

Conservative Funds

MIP Funds

Launch

Date

3 Year

(%)

5 Year

(%)

29-Jun-12

27-Dec-99

3-Feb-15

10-Jun-10

29-Sep-94

10-Feb-95

27-May-99

10-Dec-9930-Dec-06

7-Feb-11

14-Jun-07

13-Jan-06

16-Aug-04

30-Mar-07

9-Jul-10

10-Mar-08

29-Dec-06

29-Dec-09

26-Dec-08

10-Apr-99

31-Oct-03

31-Oct-02

16-Dec-10

04-Oct-07

10-Oct-14

26-Dec-03

28-Sep-00

25-Feb-10

12-Jan-04

30-Mar-04

15.05

515.91

8.69

14.78

389.45

504.22

96.99

82.9523.57

17.81

36.10

34.56

97.50

22.57

27.04

19.00

30.17

27.01

32.59

372.06

58.70

158.83

15.48

18.93

10.16

33.33

42.92

16.45

32.81

29.88

-16.67

-8.20

-13.45

-15.86

-11.10

-10.82

-9.11

-7.61-7.09

-7.25

-4.32

-8.62

-15.01

-11.29

-7.21

-12.48

-16.01

-11.97

-16.63

-11.66

-4.35

-17.95

-7.25

-12.89

-6.09

-3.85

-0.57

-0.10

-1.81

-1.43

8.97

27.86

NA

12.08

16.63

13.80

11.98

15.1611.59

16.89

31.71

28.07

20.80

20.90

27.21

18.77

16.08

23.42

14.34

16.28

8.82

11.46

11.46

11.14

NA

8.14

9.68

8.21

9.00

9.58

NA

22.12

NA

8.64

13.79

11.37

9.34

12.3312.27

12.91

21.23

21.49

16.70

17.14

22.41

12.80

13.21

18.82

12.03

13.8

8.51

9.25

10.11

9.82

NA

8.28

9.52

9.48

9.23

9.49

11.82

17.87

-12.40

7.07

18.64

20.47

14.52

13.939.81

12.1

15.89

13.03

21.83

9.56

19.30

8.55

12.81

17.50

17.91

23.88

15.44

23.06

8.77

7.89

1.13

10.39

9.91

8.64

10.29

9.62

Top Saving Funds

NAV* as on 25/02/2016

M u t u a l F u n d P i c k s

13.58

127.79

8.69

11.09

32.41

121.62

20.84

19.7713.92

15.75

21.92

20.23

27.63

17.51

19.22

119.10

15.31

17.66

13.11

35.26

34.49

17.85

14.01

15.94

9.97

NA

NA

NA

NA

NA


23/36


Selected Macro Economic Indicators

45000

40000

35000

30000

25000

20000

15000

10000

Jan-15 Feb-14 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15

32152

28220

3570435704 32690 33068

3579435794

3220930937

Import & Export (in US $ Million)

2 3 7 7 6

2 1 8 2 6

2 3 8 8 4

2 1 9 9 8

2 1 2 7 4

2 1 2 7 2

2 3 1 4 3

2 1 4 0 8

Oct-15

2 2 2 6 3

2 1 7 2 0

Index of Industrial Production (%)12

10

8

6

4

2

0

-2

-4

3.57

Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

2.83

4.81

2.483.01

2.51

4.24 4.34

6.26

3.84

-3.2 -1.34

9.81

Total Foreign Exchange Reserves (US $ Billion)

4-Dec-15342.00

344.00

346.00

348.00

350.00

352.00

354.00352.09 352.50

351.1352.04

350.36

348.93

347.20 347.56

349.15

351.48 351.83

350.36

346.78

11-Dec-15 18-Dec-15 25-Dec-15 1-Jan-16 8-Jan-16 15-Jan-16 22-Jan-16 29-Jan-16 5-Feb-16 12-Feb-16 19-Feb-16 26-Feb-16

29796

2 0 0 1 4

Nov-15

33961

2 2 2 9 7

Dec-15

28714

2 1 0 7 5

Jan-16


24/36

21

Selected Macro Economic Indicators


M a c

r o E c o n o m i c I n d i c a t o r s

8

7

6

5

4

3

2

1

6.3

S e p - 1 4

O c t - 1 4

N o v - 1 4

D e c - 1 4

J a n - 1 5

F e b - 1 5

M a r - 1 5

A p r - 1 5

M a y - 1 5

J u n - 1 5

J u l - 1 5

A u g - 1 5

S e p - 1 5

O c t - 1 5

N o v - 1 5

D e c - 1 5

J a n - 1

6

4.98

4.12

5.865.11

5.375.17

5.79 5.74

4.37

6.10

4.35

5.14

6.72

6.326.32

Consumer Price Index (%)

Wholesale Price Index (%)-0.28

-1.28

-1.17 -2.33 -2.43 -2.2 -2.13

-3.79

-4.85-4.54

-3.81

-0.73

-1.99

-0.9

0

-1

-2

-3

-4

-5

-6

Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

FII (in Billion) DII (in Billion)

200

150

100

500

-50

-100

-150

-200

129 115 121 117 115

-79

17 2

86

-58 -33

120

53

7

-169

-65

10367

-14

-71

85

-28

63

123

-122

Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16

5.9

Jan-


25/36


JSL Classroom - Gross Domestic Product

What is GDP?

Gross domestic product is the broadest quantitative measure of the nation’s total activity. GDP measures the monetaryvalue of final goods and services—that is, those that are bought by the final user-produced in a country in a given period of

time. GDP is composed of goods and services produced for sale in the market and also includes some non market

production. CalculatingGDPby addingup expenditure iscalledasexpenditureapproach.

GDP=C+I+G+(X-M)

Where,C = personal consumption expenditure

I = gross privateinvestment

G = Government spending

(X—M) = Net exports

Nominal GDPand Real GDP

Real GDP is a measure of the value of economic output adjusted for the price changes (i.e. inflation or deflation). It isAlsoknown as constant dollar GDP. Nominal GDP measures market value of final goods produced in a geographical region,

usually a country.

Why GDP is important ?

GDP enables policymakers and central banks to judge whether the economy is contracting or expanding. GDP helps the

investorstomanagetheir portfoliosby providing them guidance about thestateof theeconomy.

Calculation of GDP provides with the general health of the economy. A negative GDP growth represent bad signals for the

economy. Economists analyze GDPto find outwhether theeconomy is in recession, depression orboom.

What are theimplications of theGDPgrowth rate ?

The GDP growth rate reflects the change in the inflation adjusted GDP from one period to the next and therefore GDP

indicates how fast or slow the economy is growing. If the country is producing more, then additional workers are employed,

more services and manufacturing products are consumed, and potentially more profits are generated for shareholders.

Hence, stock prices have reason to increase.A negative GDP growth rate for two consecutive quarters is one of the factors

used todeterminethat theeconomy is ina recession.

Releasing Time

Government releases theGDP data quarterlywith the

time lagof three months.

(Note : base year changed to2011-12, changefrom GDP

at factorcostto GDP atmarketprice)

(Source : CentralStatisticsOffice)

GDP at Constant Prices (%)


26/36

23

JSL Ideal Portfolio ( Diversified Equity )


Objective of Ideal Portfolio :

Theobjectiveof this portfolio is to generate long term capital appreciationby investing in concentratedportfolioof large capandgrowthoriented midcapcompanies. This will help togeneratemeaningfulwealthforInvestors from EquityMarket.

Stock Selection Methodology : Based on various fundamental parameters andvaluationcheck along with certain themes

likeCyclical,BottomUp,Sector specific,PolicyInitiative/ push , Evergreen.

Key Risks : Macroeconomic / political conditionandsystematic risk,corporateperformance risk

Comparative Portfolio Returns

Particulars Return Since Inception Particulars Return Since Inception

Notes : *CMP as on 22/02/2016., Price ** on recommendation , Return since inception indicates from 1st Jan

Investment Horizon : 9-12 Months

Stock Weights Price** CMP* Target Potential UpsideSuggestions

I d e a l P o r t f o l i o

Maruti Suzuki

KEC International

Bharat Forge

Ultratech Cement

Diwan Housing Finance

Sun Pharma

Inox Wind

Torrent Power

State Bank of India

Axis Bank

VRL Logistics

Torrent Pharma

Ashoka Buidcon

Ahluwal i Contracts

Everday Industries

Automobi le

Capital Goods

Casting and Forgins

Cement

Housing Finance

Pharma

Power

Power

PSU Banks

Public Bank

Logistics

Pharma

Infrastructure

Infrastructure

Consumer Non-Durable

7%

5%

8%

7%

8%

7%

8%

8%

7%

7%

5%

8%

5%

5%

5%

Accumulate

Accumulate

Accumulate

Buy

Buy

Accumulate

Buy

Buy

Accumulate

Accumulate

Buy

Buy

Buy

Buy

Accumulate

4550

136

868

2835

252

831

388

185

228

454

381

1555

161

235

209

3520

102

786

2923

150

882

236

223

164

397

314

223

183

229

214

5200

180

1200

3400

368

1041

488

234

325

620

457

1840

205

368

287

48%

76%

53%

16%

145%

18%

107%

5%

98%

56%

46%

725%

12%

61%

34%

Ideal Portfolio Return

Value Buy (100%)

CNX Small Cap

-14.70%

-22%

-20.98%

Nifty

Sensex

CNX Mid Cap

-9%

-9.07%

-12.15%

WeightsSector


27/36

JSL Ideal Portfolio ( Small Cap )


Objective of Ideal Portfolio :

The aim is to generate long term capital appreciation from a portfolio that is not part of the leading stocks by marketcapitalization. Theaimis to include and invests in companies that have immense growthpotentialas they areoperatingon

a smallerbase.

Stock Selection Methodology : Based on various valuation parameters and finding out early stage companies based on

sound business model andavailableat cheap valuation

Key Risks : Small-cap stocks are not tracked closely by market/ equity analysts and that is why the real value of good

small-cap stocks can remain undiscovered for long. This makes investing in them risky. The risk associated with large cap

funds also associated with small cap( see last page).Small companiesarerelatively weak in termsof governance, dividend

policies andprofessionalismof theboard.Thismakes them risky.

Stock Sector Weights CMP* Target Potential Upside

Diversified Equity Portfolio Allocation

Power

Pharmaceuticals

Banks

Infrastructure

Casting and Forgings

Housing Finance

Automobi leCement

Capital Goods

Consumer Non-Durable

Logistics

16%

15%

14%

10%

8%

8%

7%7%

5%

5%

5%

Small Cap Portfolio Allocation

Textile

Computer - Hardware

Education

Food Processing

Pharmaceuticals

Printing and Stationery

Retail

Tyre

30%

10%

10%

10%

10%

10%

10%

10%

Notes : *CMP as on 22/02/2016.

Investment Horizon : 18 - 24 Months

Suggestions

AYM Syntex

Good Year

KPR Mills

KRBL

Garwale Wall Ropes

Smartlink Network

MPS

MT Educare

Shaily Engineering Plastics

Amb ika Cotton Mil ls Ltd.

Textile

Tyre

Textile

Food Processing

Textile

IT- Hardware

Printing

Education

Capital Goods

Textile

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

97

477

653

188

308

87

630

148

513

778

223

868

1120

360

550

156

1150

220

890

1149

129%

82%

72%

91%

79%

79%

83%

49%

73%

48%

Accumulate

Accumulate

Accumulate

Accumulate

Accumulate

Accumulate

Accumulate

Accumulate

Accumulate

Accumulate


28/36

25

Monthly Technical Picks - Equity


M

o n t h l y T e c h n i c a l P i c k s SBI APOLLOHOSP

We have detected positional buying in Supertrend on SBI in dailycharts. The stock has been beaten down badly and now after twoweeks of consolidation it has risen with volumes. The past 2 weeksvolume is higher than average weekly volume of stock. All other momentum indicators like directional moving index are suggestingpossible up move in stock. Any decline should be used to buy thestock.

IBULHSGFIN

We have detected that stock is in lower top & lower bottom formationfrom previous few weeks. HDFC has made a low of 1011 and hastechnically bounced back and came back to touch its 200 EMAaround1180 levelsin Daily charts. This rise in stock shouldbe used tosell.

We have detected a "Top Triangle" chart pattern formed on IndiabullsHousing Finance. The price seems to have reached a top, showingsigns of reversal as it have broken downward after a period of consolidation. A Top Triangle shows two converging trend lines asprices reach lower highs and higher lows. Volume diminishes as theprice swings back and forth between an increasingly narrow rangesreflecting uncertainty in the market direction. Then well before thetriangle reaches its apex, thepricebreaksdown below the lower trendline with a noticeable increase in volume, confirming this bearishpattern asa reversalof theprioruptrend.

We have detected an ascending continuation triangle chart patternformedonApollohospitalcharts. It’s a bullish signalwithgood volume.The increasingly higher highs within this pattern tells us that buyersare more aggressive than sellers, confirmed by a breakout through aresistancelevel withpositivedirectionalmoving indexcrossover.

BUY BTWN 175-180 TGT 215 SL 158

SELL BTWN 650-670 TGT 570-550 SL 710

BUY BTWN 1480-1500 TGT 1640 SL 1400

HDFC

SELL BTWN 1160-1180 TGT 1100 SL 1200


29/36

Monthly Technical Picks - Currency


GBP INR USD INR

The IMF has predicted strong growth from India over the next twofiscal years, boosting INR and weakening GBP in long term. After aconfident Indian 2016 Budget, with the Rupee (INR) strengtheningagainst the British Pound (GBP). Although the initial flurry of ‘Brexit’debate has subsided the pound to rupee (GBP/INR) exchange ratehas remained on a softer footing so far this week, in spite of somestronger UK data. The GBP INR pair will be range bound with strongsupport at91.50and strongresistanceat 105levels.

EUR INR

JapaneseYenis expected to tradesideways in short term as optimismseen in the Asian markets will further act as a negative factor for theJapanese Yen as investorspreferto place risky bets. For a medium tolong term horizon, we suggest buy on declines in pair as it has hugesupport at 56.90 levels which is 100 EMA.The upside target remainsat 62-64levels.

The pair is in monthly consolidation as Average directional movingindex (ADX) is below 20 on monthly charts. Long term trend linesupport is at 73.10 levels for month of March. We expect pair to movein range and have support at 73.10 on downside and resistance at 78on upside.

Improved oil and commodity prices and pick-up in US economic datahas changed the sentiment to risk-on. Dollar has weakened againstcommodity currencies and the Rupee has gained against Dollar onbuoyant equity markets following the Union Budget. OMO buybackandexpectationsof mid-term policyratecutby RBIhas changed bondmarket sentiment to positive. Weexpect the USD-INR to in a range of Rs 64.20-69.20

JPY INR


30/36

27

Monthly Technical Outlook - Index


M o n

t h l y T e c h n i c a l O u t l o o k

Nifty

The index opened at 7589, made a high of 7600, made a low of 6825 and closed the month at 6987. Last month we hadclearly mentioned that Nifty is in medium downtrend and is taking supports at long term trend line at 7550. We had also

clearly mentioned that once thetrend line is broken, Nifty will find monthly cluster support at 6700-7200. Nifty touched lowof

6825 in January. Directional moving index has already given negative crossover which confirms the downtrend. Nifty will

give some technical bounce back as it’s oversold and retracement can be seen up to 7200-7350-7420-7480 levels.

Downside support is at 6850-6700 levels. Positive trend will only began if nifty manages to close above 7550 on weekly

basis.

Bank Nifty

The index opened at 15547, made a high of 15565, made a low of 13407 and closed the month at 13946.Last month wehadclearly mentioned that Banknifty is in medium term downtrend. Earlier monthly support was 16100 levels where Banknifty

was continuously taking support from past 4 months. It had broken that support and we had mentioned last month

momentum of sell will rise on break of 15760 levels. Banknifty made lowof 13760 in February. Next Monthly cluster support

comes at 13200-12000 levels. We advise to buy on declines with huge support at 13200 levels for targets of 14500-15100-

15500levels.


31/36

Monthly Technical Outlook - Commodity


Bullion

Energy

Last week bullion prices ended with losses where gold prices dropped by over half percent losses and silver prices droppedby more than 3% slipped as the dollar and global shares rose, but fund buying persisted as investors expected a G20summit would produce little in the way of a coordinated stimulus program. Prices have largely remained in consolidationafter stretching into a high at 1263 earlier in the month. U.S. Commerce Department report showed that the economyexpanded at a 1% rate in the fourth quarter, up from an estimate of 0.7% growth last month. Concerns that a slowing globaleconomy could eventually push the United States into recessioneased as data showed U.S. economic growth slowed lessthan expected in the fourth quarter. Financial leaders from G20 nations gathered in Shanghai against a backdrop of worseningeconomic conditions and a lack of wider consensus on how to fix the problems. Worries about the strength of theU.S. economy, andthepace of further rate increasesby theU.S. Federal Reserve, continue toprovide support forthe metal.Since the start of the year, tumbling Chinesestock markets havealso stoked demand for gold, as fears about the strengthoftheworld’s second-largest economy fueledhaven buying. But those fears have cooledas economic data andmarkets therehave stabilized in recent weeks. Gold demand in Asia remained subdued this week as buyers were sceptical about thesustainability of therecentprice rally, with theIndianmarket fallingto recorddiscounts as consumerspostponedpurchasesin ex pectation of a cut in the import tax. Asian buyers have curbed purchases since mid-January as spot gold prices have

spiked to a one-year high amid a tumble in global stocks that stoked demand for the safe-haven metal. A stronger-than-expected revision toU.S. 4QGDP anda pickupin thePersonal Consumption Expenditure (PCE), theFed’spreferredgaugeof inflation, fueled strength in the greenback as market participants repriced expectations for higher rates from the centralbank. Fed fund futures inched up on the back of the release, pricing a 30% chance of a 25basis pointhike at the June policymeeting. Looking ahead to next week, traders will be closely eyeing U.S. pending home sales, ISM data and the all-important February Non-Farm Payrolls report. With this week’s uptick in PCE, a stronger print on the employment reportcould further bring-in interest rate expectations as thecentral bank looks to achieve its dual mandate of fostering maximumemployment & pricestability (i.e. 2% inflation).

Recommendation

BUYGOLD@ 29200 SL 28980 TGT 29800-30200.BUYSILVER ONDROP@35500 SL 34700 TGT 36500-37800

Last week, crude oil prices ended with over 5% gains driven by disruptions to crude supplies and Wall Street's gains from

U.S. economic data. In international market prices turned negative soon after the release of weekly U.S. oil rig data byindustry firm Baker Hughes that showed a 10th weekly drop in the rig count. The data was positive to oil, but traders andinvestors chose to lock in profits. Oil was up from the start of the week after data showing a slide in shale crude output andstrong gasoline demand in the United States. Also bolstering prices was a meeting scheduled for mid-March by at least fourmajor oil producers, including SaudiArabia, to discuss a production freezeat January'shighs.On Friday, themarket initiallysurgedonnewsthat pipeline outages in Iraqand Nigeria will removemore than800,000 barrels of crude per day fromglobalsupply for at least two weeks. The disruptions should offset recent increases to supply from Iran. Investors on Fridaycontinued to react to comments from EulogioDelPino, a dayafter theVenezuelanoilminister reiterated that OPEC will hosta meeting nextmonth todiscuss a potential production freezeamong a group of major exporters.The summit, Del Pino, toldbroadcast network Telesur, will include 10 nations, including Saudi Arabia, Russia and Qatar. The aforementioned trio, aswell as Venezuela, agreed in principle to an agreement last week, in which the four nations have pledged to limit their production this year to levels reached in January. While natural gaspricesended with over 6%lossesas concerns about theheavily oversupplied market continued to keep pressure on prices. Warmer-than-average temperatures have cut demand

for natural gas as an indoor-heating fuel, forcing producers to keep more gas in storage. Natural-gas inventories fell by 117billion cubic feet of natural gas in the week ended Feb. 19, the Energy InformationAdministration said Thursday, less thanthe 138-bcf decline expected. Stockpiles as of Feb. 19 stood 29% above the five-year average for this timeof year. Weatherforecasts for the next two weeks continue to call for moderate heatingdemand. Market participants have long expected thestartof U.S. natural-gas exports toboost themarket, as thedomesticglutcouldbeabsorbedbyoverseas demand. Buta glutof natural gasaround theworld haspusheddown international pricesand made U.S. liquefied natural gas less competitive.Meanwhile,updatedweather forecastscalledformild weather in theU.S. northeast through thefirst week of March.

Recommendation

BUYCRUDEOIL @2150SL 2000TGT 2280-2400.SELL NAT.GAS @125 SL 132 TGT 116-108


32/36


F i n a n c i a l P l a n n i n g

Plan your Investments

Welove knowing what is cookingat our neighbour’splace. Some might even point out and say we are more interested what

is happening next door than in our lives. Some of us are also forced to become engineers because Sharma Ji ka beta is anengineer. Nobody asked if Sharma Ji ka beta if he wanted to be an engineer and nobody asked you either. Hate it or love it,

you dealt with four years of it. You lived someone else’s plans and with every passing year you realized maybe you could

have some thingsdifferently.A plan tailormade foryou, tosuit your needsandpassions.

That is the drawback of going along with someone else’s plans. It simply is not designed to cater you our needs. Nobody

understands your needs better than you! Your investment plans are connected to your current income, your financial or life

goals and your personal circumstances. Your age and the conditions around you determine how you will go forward with

your investments.How doyoucreateyour ownfinancialplan?

Assessing Your Current Situation

Current Age & Your Investment Options

Age is one of the determinants of your investments.Young investors invest differently from middle aged or old investors. The

former goes for high risk instruments because of the long investment period ahead of them. Aged or middle aged investors

have to keep incline towards moderate to less risky investment products due to the gradual shortening of their investment

horizon.

Current Financial Situation

Another factor that determines your investments are your current income. Your current income and expenses determine

how much you will be able to save and invest. It is imperative that the transition from savings to investments has to happen

otherwise the money remains stagnant and deprived of its potential. Young investors who have just started earning may

investsmall amounts compared toexperienced investorswhohas been working and investing fora longerperiodof time.

Risk profile

This determines the amount of risk you wish to take on your investments. A young investor could be wary of risk while an

experienced investormaytake high calculated risk. Calculated risk inequities often lead tohigherreturns. However, it poses

the threat of loss as well. This may push some investors to take risk and some prefer not to. Risk profiling allows you to

understand the kind of investor you are and the extent to which you allow your exposure to equity investments to generate

desired andsuperior returns.

Inclining Investments to Your Goals

Start Investments for Goals

Blindly investing will not reap you any benefits because there is no motivation or intrinsic factor to keep investing. If your

goals are aligned to the ongoing investments, it provides a sense of direction. For example, you have been investing in an

Equity Linked Savings Scheme or ELSS fund and suddenly because of a salary hike your taxes have also increased. The

goalofan ELSSfundis tosaveon taxes and an increased investment in the ongoing fundfulfilsthegoalof tax saving.

29


33/36


Hence,you alignedyour investmentswith your personal goal.

Timeline for Goals

The “why” of an investment determines the reason for your investment. Most of the reasons orgoalsare timebound and the

valueof investment is only to the extent it enables you to fulfill your goals. Intermediate goals are ten to twelve years usually

for child education where once the feeshavebeenpaidyou neednot keep investing for the same

goal. Some goals are long term andlifelong, likeretirement goals.You have to keep investing foryour retirement to maintain

the same standard of living and cover medical expenses. Hence, the time of investment determines the amount you will

needtoput inevery month orall atonce.

Emergency & Liquid Funds

Time and emergency waits for none. It is only wise to be prepared for any kind of emergency that may befall you or your

family members, if youare theonly bread earner. Investorsoften make short term investments in MutualFund Liquid Funds

foremergency fundsandstay invested rather than letting thesum stagnant in a bank account.

Apart f rom emergency requi rements, you may also decide on the ratio of liquid assets to investments. For example - If

you wanta partof yourinvestments tobe liquidthenyoucannotinvestin ELSSFunds as ithas a lock inperiodof three years.

Creating & Monitoring Your PlansDeciding upon Diversification

Allocating your assets further within an asset class is called diversification. Diversification is done to regulate risk in a

portfolio.Yourinvestmentswill be in moderaterisk equityoptions likeBalancedFunds,Diversified Fundsand if youarea low

risk takeryouwill invest inLargeCapMutualFunds.

Consulting a FinancialAdvisor

You may not understand the process of investment as well as you would like to. It does require a certain amount of time and

effort which you may not have or do not want to give. This may result in lack of information or misinformation both of which

could be fatal to your investments. A financial advisor is supposed to give you neutral investment advice based on your

investment needs and income. Having a financial advisor makes the task of investing much easier and hassle free. Some

advisors may chargefor services thatheorshe isofferingbut it isa smallprice topay for the convenience you are availing.

TimeFramefor Reviewing

Kick starting theprocess of investing is an immenselysatisfying one. However, youhave to take some personal interest in to

this process. However, a quickglance once in six months or annually will assure you that your investments are still in track.

Youalso have tomake some more investmentsorwatch theaverage performers.Thus, seta time periodwithinwhichyou

will monitor your portfolioandkeep boostingyour investments.

Deciding upon Your AssetAllocation

There arevarious classes of assetsanddeciding upon theratio of investments in thoseasset classes your futurereturns are

determined in thelong run. Investingin a mixedsetof asset classes isa risk regulating factorfor your investments.Yourage


30


34/36


F i n a n c i a l P l a n n i n g


andthedegreeof risk youwish to take determineyour asset allocation.

The table above shows the various asset allocation possibilities depending on the age and risk profile. One can also see

how different the asset allocation for a 20yearoldis comparedto the asset allocation ofa 45yearold investor.

ConclusionInvestment is an individualistic activity that needs tobe carried out in a manner that isbest suitable for you.You cannot allow

the noise of other investors to determine your investments. A financial plan needs to be made depending on who you are

professionally, how much you earn and what are your future goals and if all your investments have been done with that

objective. If you wish to get some guidance getting professional advice is the wise way to go. Your plans determine your

investments.

31

Life Stage Investment Mantra InvestmentHorizon

Asset Al locat ions

Equity Funds Debt Funds Cash

Risk

21-30 years

Young

Investor

Aggressive Investment

Low Surplus > 15 Years

85%

75%

65%

75%

65%

55%

65%

55%

45%

55%

45%

35%

40%

30%

20%

10

20%

30%

20%

30%

40%

30%

40%

50%

35%

45%

55%

45%

50%

55%

% 5

5%

5%

5%

5%

5%

5%

5%

5%

10%

10%

10%

15%

20%

25%

% H

M

C

H

M

C

H

M

C

H

M

C

H

M

C

31- 40 years

ModeratelyYoung

Investor

41- 50 years

Matured

Investors

51- 60 years

Seasoned

Investors

60 onwards

Retired

In

the money navigator march 2016

Documents