Ashika Monthly Insight March 2016

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Transcript of Ashika Monthly Insight March 2016

  • 8/17/2019 Ashika Monthly Insight March 2016

    1/52NTPC Ltd. | Marico Ltd.

    Market Overview

    Monthly Insight Performance

    Stock Picks

    Valuation at a Glance

    Q3FY16 Report Card

    Sector Outlook: Consumer Durables

    Economy Review

    Mutual Fund Overview

    Technical View

    Market Diary

    Commodity Monthly Round-Up

    World Economic Event Calender

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    Inside this issue

    28 Economy Review 

    01 Market Overview

    23 Sector Outlook 

    44 Market Diary

    12 Valuation at a Glance

    38 Technical View

    37 Mutual Fund Overview

    45 Commodity Monthly

    Round up

    48 World Economic

    Event Calender

    08 Stock Picks •NTPC Ltd.

    •Marico Ltd.

     

    04 Monthly

    Insight

    Performance

    14 Q3FY16 Report Card

    MARCH 2016

    Disclosure The Research Analysts and /or Ashika Stock Broking Limited do hereby certify that all the views expressed in this research report accurately reflect their views about the subject issuer(s) or securities. Moreover, they also certify the followings:- • The Research Analyst or Ashika Stock Broking Limited or his/its Associates or his/its relative, has any financial interest in the subject company (ies) covered in this report.   No • The Research Analyst or Ashika Stock Broking Limited or his/its Associates or his/its relative, have actual/beneficial ownership of 1% or more in the subject company, at the end of the month immediately preceding the date of the publication of the research report. No

    Name Designation Email ID Contact No.

    Paras Bothra VP Equity Research [email protected] +91 22 6611 1704

    Krishna Kumar Agarwal Equity Research Analyst [email protected] +91 33 4036 0646 Partha Mazumder Equity Research Analyst [email protected] +91 33 4036 0647

    Tirthankar Das Technical & Derivative Analyst [email protected] +91 33 4036 0645

    Disclaimer This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. Ashika Stock Broking Ltd. is not soliciting any action based upon it. This report is not for public distribution and has been furnished to you solely for your information and should not be reproduced or redistributed to any other person in any form. The report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon such. Ashika Stock Broking Ltd. or any of its affiliates or employees shall not be in anyway responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Ashika Stock Broking Ltd., or any of its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement. The recipients of this report should rely on their own investigations.

    • The Research Analyst or Ashika Stock Broking Limited or his/its Associates or his/its relatives has any material conflict of interest at the time of publication of the research report.No • The Research Analyst or Ashika Stock Broking Limited or his/its Associates have received any compensation or compensation for investment banking or merchant banking or brokerage services or for product other than for investment banking or merchant banking or brokerage services from the companies covered in this report in the past 12 months.No • The Research Analyst or Ashika Stock Broking Limited or his/its Associates have managed or co managed in the previous 12 months any private or public offering of securities for the company (ies) covered in this report. No

    • The Research Analyst or Ashika Stock Broking Limited or his/its Associates have received any compensation or other benefits from the company (ies) covered in this report or any third party in connection with the Research Report. No • The Research Analyst has served as an officer, director or employee of the company (ies) covered in the research report.No • The Research Analyst or Ashika Stock Broking Limited has been engaged in Market making activity of the company (ies) covered in the research report. No

    SEBI Registration No. INH000000206

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    1

    BUDGET 2016-17

    Budget 2016-17 presented by our honorable finance

    minster Mr Arun Jaitely is a well thought out budget

    document where an attempt has been made to make it an

    all inclusive budget. The focus of the budget has been

    clearly to boost the rural economy, targeted public

    investments in roads and railways and maintaining fiscal

    prudence. It can well be said in the words of finance

    minster expressing in some its forum post the budget isthat the Budget 2016-17 reflects the realty of India. It

    address the agriculture sector, emphasizes the rural India,

    social and physical infrastructure commitments for the

    people of India and also a combination of various other

    factors including the housing sector.

    If we look at the totality of things major key takeaways as

    far as the spending allocation is considered is for

    Infrastructure at Rs 2,21,246 crore of which road and

    railways almost covers up the larger share in the pie.

    Allocation for social sector including education and health

    care is at Rs 1,51,581 crore and allocation for rural sector

    at Rs 87,765 crore and allocation for agriculture and

    farmers’ welfare is Rs 35,984 crore. Other part on which

    government tried to focus on is the simplification and

    rationalization of taxes and certainty in taxation. One

    important measure in the taxation front is that domestic

    taxpayers can declare undisclosed income or such income

    represented in the form of any asset by paying tax at 30%,

    and surcharge at 7.5% and penalty at 7.5%, which is a

    total of 45% of the undisclosed income. Declarants will

    have immunity from prosecution. This is an important step

    to curb black money and one needs to look at the

    measures and its effectiveness. Other measures have been

    on new dispute resolution scheme and other schemes of

    penalty and interest and i ts waiver and also the

    retrospective tax issues. This is important to address tax

    litigations in a timebound manner.

    One more important issue is the governments focus and

    thrust on the affordable housing sector. 100% deduction

    for profits to an undertaking in housing project for flats

    upto 30 sq. metres in four metro cities and 60 sq. metres

    in other cities, approved during June 2016 to March 2019

    and completed in three years. MAT to apply. Deduction for

    additional interest of Rs. 50,000 per annum for loans up to

    Rs. 35 lakh sanctioned in 2016-17 for first time home

    buyers, where house cost does not exceed Rs 50 lakh.

    Other relief measures for small tax payers have been of Rs

    6600/- i.e., an Increase in the limit of deduction of rent

    paid under section 80GG from Rs. 24000 per annum to Rs.

    60000, to provide relief to those who live in rented housesand also the raising of the ceiling of tax rebate under

    section 87A from Rs. 2000 to Rs. 5000 to lessen tax

    burden on individuals with income upto Rs 5 lacs.

    Other important is with the Service tax where there has

    been no tinkering and hence is also indicative of the fact

    that the government is in no hurry to raise it to a level so

    as to comply with the upcoming GST (indicating that GST is

    not likely to come up as easily as was anticipated earlier).

    Other important untouched area where the market feared

    was with the tinkering of the Long-term capital gain tax

    which was left untouched.

    The negatives have been that the Dividend Distribution Tax

    and the STT have been hiked. Also EPF and PF have been

    aligned with the superannuation fund. In case of

    superannuation funds and recognized provident funds,

    including EPF, the same norm of 40% of corpus to be tax

    free will apply in respect of corpus created out of

    contributions made on or from 1.4.2016. This EPF and PF

    taxation is a negative for the middle income salaried

    people and who are hit by such measures.

    For the Corporate tax it has maintained the same as 30%

    and there are certain tweaking with regard to newly set up

    manufacturing companies and start-up companies which

    are as follows:

    New manufacturing companies incorporated on or after

    1.3.2016 to be given an option to be taxed at 25% +

    surcharge and cess provided they do not claim profit

    linked or investment linked deductions and do not avail

    of investment allowance and accelerated depreciation.

    Lower the corporate tax rate for the next financial year

    for relatively small enterprises i.e companies with

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    MARCH 2016

    MARKET OVERVIEW

    2

    turnover not exceeding Rs 5 crore (in the financial year

    ending March 2015), to 29% plus surcharge and cess.

    100% deduc