J Street Volume 259

Index Market View 1 Company Update 2 Around the Economy 3 Knowledge Corner 3 Mutual Fund 4 Commodity Corner 5 Forex Corner 6 Report Card 7 Positional Call Status 8 Editor & Contributor Margi Shah Special Contributors Ashesh Trivedi Vimul Solanki For suggestions, feedback and queries [email protected]

Market View: The slowdown of world economy is impacting the market

The slowdown in the world market lead by China is impacting the whole world. Even after unprecedented stimulus announced by major economies of the world, the economists fear that the world economy is slowing down. India has clocked the GDP growth of 7% for the first quarter compared to the expectations of 7.5%. The credit growth in last quarter was the slowest in last 20 years, suggesting the slowdown in the economy. The government is trying to speed up the stalled projects, expedite the processes involved in setting up the business, trying hard to scale down the subsidy burden, making India a digitalized country and so on. However, these efforts will take some time to materialize and impact the real economy. During this time, Indian economy will not be excluded from the recent slow down and its impact on the capital market. As per the theory of Buffet and Benjamin, these types of crisis provide an excel-lent opportunity for value buyers in the market. For investors, who have long term view and patience, the falling prices provide a good entry point for staggered investment. Technically, any sustained fall below 7650 may take the market to 7475 and beyond that. The market is waiting for Fed decision on 17th September, 2015. The rain deficit and consequent rise in inflation may stop RBI for rate cut on 29th September, 2015. However, all this possibili-ties are being discounted by the market at present.

Kamal Jhaveri MD- Jhaveri Securities

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Vol.: 2597th September,2015

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Company Basics

BSE Code 532811

NSE Symbol AHLUCONT

EQUITY (` in Cr.) 13.40

MKT.CAP (` in Cr.) 1594.97

Financial Basics FV (`) 2.00 EPS (`) 9.56 P/E (x) 24.91 P/BV (x) 4.74 BETA 1.6817 RONW (%) 3.55

Share Holding Pattern Holder's Name % Holding Foreign 15.49 Institutions 5.92 Promoters 66.87 Non Prom. 6.44 Public & Others 5.29 Government 0.00

Company overview

ACIL is an integrated construction company, offering turnkey solutions in engineering and designing to public and private sectors. The company is primarily in the business of construction of wide range of structural building and manufacture of Ready Mix Concrete. They are having business interests in varied segments including IT Parks, Retail, Multi Storied Housing Complexes, Industrial Complexes, Luxury Hotels, Hospitals and Commonwealth Games Village & Stadium. In the past five years, ACIL has executed more than 50 projects.

Investment Rational

Strong Order book ACIL has a robust order book built on the strengths of its strategically focused direction, expertise and strong exe-cution capabilities. The order book comprises of 65% orders from Government sector against 32% as on 31st March, 2014. The company is also currently L1 in projects worth Rs3.5 bn which includes projects like Indraprastha Institute of Information Technology (IIIT), Delhi of Rs2.6 bn Hospital building (HSCC) at Kolkata of Rs800 mn.

Tie-up with Russian company Ahluwalia contracts ltd. has entered into technology tied up with KUB STROY Russia to build structures using a patented high speed pre-cast construction technology. The company expects huge opportunity in the institutional and affordable housing segment and expects this technology to play a key role the mass housing projects.

Increasing urbanisation trend Today, about 31% of India’s population lives in the urban areas. It is much lower than its emerging market peers-49% in china, 54% in Indonesia, 78% in Mexico, and 87% in Brazil. However, Indian economy is in quest of a rapid change in the pace of urbanisation that will dominate what it has witnessed in the past decade. Indian econ-omy is slated to grow to 43% , housing a population of about 540 million. This will help the company to receive more order inflows and thereby improving the margins of the company.

Valuation : AHLUCONT is currently trading at 17.76X FY16E EPS of `13.20 and 14.43x FY17E of `16.00, Valued the

stock at 22x FY17E with target price of ` 368.

Company Update : Ahluwalia Contracts (India) Ltd


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Weekly Market Recap :

• India's gross domestic product (GDP) grew 7% in Q1 June 2015, slower than 7.5% expansion registered in Q4 March 2015, accord-ing to the data released by the government on Monday, 31 August 2015.

• The government on Tuesday, 1 September 2015, announced that it has accepted the recommendation of the Justice A.P. Shah Committee not to levy minimum alternative tax (MAT) on stock market transactions of foreign institutional investors (FIIs) for the pe-riod prior to 1 April 2015.

• China's official manufacturing purchasing managers index (PMI) slipped to 49.7 in August, the weakest level since August 2012, down from 50 in July.

Market Eye Week ahead : • The government is scheduled to unveil industrial production data for July 2015 on Friday, 11 September 2015. Index of industrial

production (IIP) rose at an accelerated pace of 3.8%, a four month high level, in June 2015 over a year ago compared with the revised growth of 2.5% in May 2015.

• China will unveil its trade balance data for August 2015 on Monday, 7 September 2015. The trade balance measures the difference in

value between imported and exported goods and services over the reported period. • UK will unveil manufacturing production data for July 2015 on Wednesday, 9 September 2015. • Bank of England (BoE) will hold monetary policy committee meeting and disclose interest rate decision on Thursday, 10 September

2015. KEY EVENTS/FACTORS TO WATCH 1. Fri : IIP data for July 2015

Reverse Takeover - RTO' A type of merger used by private companies to become publicly traded without resorting to an initial public offering. Initially, the private company buys enough shares to control a publicly traded company. The private company's shareholder then uses their shares in theprivate company to exchange for shares in the public company. At this point, the private company has effectively become a publicly traded one. Also known as a "reverse merger" or "reverse IPO" RTOs are undertaken by private companies in order to become publicly traded without having to go through an initial public offering (IPO). While this move heavily reduces the costs of migrating from a private to a public listing, a reverse takeover does not generate the capital inflow characteristic of an IPO.

Around The World


Knowledge Corner :

Mutual Fund Corner

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Source : - www.valueresearchonline.com

—– Fund —– CNX Nifty (Rebased to 10,000)

Fund Name Scheme Name Franklin India Balanced Fund

AMC Franklin Templeton Asset Management India Pri-vate Ltd

Type Equity-oriented

Category Open-ended and Hybrid

Launch Date December 1999

Fund Manager Sachin Padwal-Desai & Anand Radhakrishnan

Net Assets (` In crore ) Rs. 571.6 crore as on Jul 31, 2015

Fund Performance v/s S&P CNX Nifty

Top 10 Sector Break-Ups Fund (%)

Financial 19.75 Automobile 9.33 Technology 7.65 Healthcare 7.31 Services 4.61 Diversified 3.93 Communication 3.02 Engineering 2.92 Energy 2.55 Chemicals 1.91

Fund Style

Investment Style Growth Blend Value

Large

Medium

Small

Capitalization

Composition (%) Equity 65.92

Debt 31.24

Cash 2.84

Risk Analysis Volatility Measures Standard Deviation 11.41

Sharpe Ratio 1.23

Beta 0.93

R-Squared 0.87 Alpha 8.10

Vol.: 20418th August, 2014


History 2012 2013 2014 2015 NAV (Rs) 54.84 58.48 86.00 87.95

Total Return (%) 24.21 6.64 47.05 2.27

+/- VR Balanced 1.67 0.26 21.10 7.64

Rank (Fund/Category) 20/29 14/32 16/59 24/71

52 Week High (Rs) 54.84 58.51 86.26 94.03

52 Week Low (Rs) 44.12 49.55 57.04 85.34

Net Assets (Rs.Cr) 209.15 202.27 307.10 -

Expense Ratio (%) 2.34 2.73 2.90 -

Commodity Corner

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Vol.: 20418th August, 2014Vol.: 259

7th September,2015

FUNDAMENTAL: Bullion closed with the mixed note where by Gold continued its downtrend during the week dropping nearly -0.34% at 26532 after witnessing a massive sell off in the past week which is being seen as a huge negative. While Silver managed to closed with a gain of nearly 0.85% to settled at 35388 as some support seen from the Rupee weakness, in line with equity market, the rupee continued to fall against the dollar for the 4th consecutive week, slipping by another 32 paise to settle at 66.46 on persistent demand for the green currency from banks and importers coupled with sustained foreign capital outflows. Many traders believe that the strength of the dollar which continues to trade near 11 year highs and the lack of physical demand from countries like China and India are the key reasons for the precious metal to trend lower at the current moment. Reports suggesting an apparent slowdown in China is being seen as a huge negative for Gold prices as China continues to remain one of the biggest consumers of the precious metal. The dollar has been in a strong uptrend over the past few weeks ever since the Chinese au-thorities decided to devalue its currency and saw investors moving away from emerging market currencies towards safe haven currencies like the dollar and the Japanese yen. All are now eyeing on the Federal Reserve as many players believe that the slew of positive economic reports coming out of the Meanwhile, Richmond Fed President Jeffrey Lacker said that the U.S. economy no longer needs interest rates near zero, fueling further speculation over a possible rate hike as soon as this month. In the week ahead, investors will be looking ahead to Friday’s U.S. reports on producer prices and consumer sentiment for further indications on the strength of the economy and the likelihood of a near-term interest rate hike. RECOMMENDATION : SELL GOLD @ 26850 SL 27100 TGT 26400-26150. SELL SILVER @ 36000 SL 36800 TGT 35200-34400. FUNDAMENTAL: Base metals recovered last week despite unnerved by prospects of an increase in US interest rates and the re-opening of the hard-hit Chinese stock market. Out of all metal Aluminum gained sharply to closed up by +4.88% proved its sturdiness as the metal traded on the positive path for most part of the week as the inventories dropped by 38275MT giving a mixed cue to negative for the metal. While Copper and Nickel gained more then +1.5% with Zinc by 0.97% and Lead by 0.50% despite Global shares declined after data showed US job growth slowed in August, though a fall in the unemployment rate to a near seven-and-a-half-year low kept alive prospects of a Federal Reserve rate rise later this month. A rate rise could boost the US dollar, eroding the purchasing power of commodities buyers paying with other currencies. Short-covering has been the main driver that lifted copper while the Chinese stock market, which will re-opens on Monday after a two-day holiday, has taken a battering on recent economic signals. Market is expected to be weak as turmoil in markets began when China unexpectedly devalued the yuan on August 11, sparking fears that the econ-omy may be slowing at a faster than expected rate. China's National Bureau of Statistics on Monday said it has revised down the 2014 GDP growth rate to 7.3% from the previously announced 7.4%. For this year, China has set a growth target of about 7%, the slowest pace in 25 years. Also the Euro-pean Central Bank lowered its forecast for growth and inflation, citing oil prices and slowing growth in China, on Thursday and indicated that it could expand its quantitative easing program amid increased downside risks to its inflation outlook. In the week ahead, investors will be looking ahead to Fri-day’s U.S. reports on producer prices and consumer sentiment for further indications on the strength of the economy and the likely hood of a near-term interest rate hike. Markets will also be watching a raft of Chinese economic data, including a report on the trade balance as well as data on consumer price inflation. RECOMMENDATION : SELL COPPER @ 355 SL 370 TGT 342-330.SELL ZINC @ 121 SL 124 TGT 118.50-116. BUY NICKEL @ 640 SL 618 TGT 670-695.SELL ALUMINIUM @ 109 SL 111.50 TGT 104.50-101.50. SELL LEAD @ 113 SL 115.50 TGT 110.50-108.50. FUNDAMENTAL : Crude oil gained on Friday and posted a gain of 3.49% for the week to settle above 3100 at 3110 level pared losses after Baker Hughes data showed a weekly decline in the number of active US rigs drilling for oil. While Natural gas fell by -1.44% to settled at 178.40 as forecasts for cooler weather across key consumption regions of the U.S. in the week ahead dampened demand expectations for the fuel. Crude oil sentiments still remain weak on demand concerns and amid lingering fears over volatility in China’s markets after Asia’s top oil consumer cut its growth rate for last year. Meanwhile Nymex crude has risen for two consecutive weeks and Brent crude has fallen for eight of the past 10 weeks; both oil benchmarks are down by around 13%-14% year-to- date. Crude oil traders are now hoping some action by OPEC member Saudi Arabia to reduce production after the King’s meeting in the US. Last week the ECB lowered its growth forecast and inflation outlook on Thursday, citing slowing growth in China and weak oil prices. Meanwhile, data in the U.S. on Friday showed that the economy added fewer jobs that expected last month, despite a decline in the unemployment rate. The Labor Department reported that the U.S. economy added 173,000 jobs in August, below forecasts for an in-crease of 220,000 and slowing from gains of 245,000 a month earlier. The turmoil in markets began when China unexpectedly devalued the yuan on August 11, sparking fears that the economy may be slowing at a faster than expected rate. Natural gas outlook for this week also remain weak as market players weighed shifting weather forecasts to assess the outlook for U.S. demand and supply levels. On Thursday, prices rallied after data showed that U.S. natural gas supplies rose less than expected last week. According to the U.S. EIA, natural gas storage rose by 94bcf. The data included a reclassification from working gas to base gas of 8bcf, which brought the number to 86bcf. Now in the week ahead, investors will be looking ahead to Friday’s U.S. reports on producer prices and consumer sentiment for further indications on the strength of the economy and the likelihood of a near-term interest rate hike. RECOMMENDATION : BUY CRUDE OIL @ 3000 SL 2850 TGT 3220-3450.SELL NAT.GAS @ 182 SL 188 TGT 174-165.

BULLION

BASE METALS

ENERGY

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Commodity Corner

USD/INR

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Forex Corner

EUR/INR

GBP/INR

JPY/INR

Market Eye Week ahead :

• For this week, keep view for invested long positions in USDINR pair. On upside above near term rise till 67.12 can be possible targets for traders holding long position. If breaks 66.50 then expect 66.38-66.15 as near term support.

Level S2 S1 CP R1 R2 High Low Close

USD/INR 66.15 66.38 66.50 67.05 67.50 66.86 66.43 66.77


JPY/INR 54.46 55.25 55.69 56.48 56.92 56.13 54.9 56.04


GBP/INR 99.50 100.50 101.60 102.15 102.60 103.08 101.23 101.62

Level S2 S1 CP R1 R2 High Low Close EUR/INR 72.93 73.64 74.58 75.29 76.23 75.51 73.86 74.36

Market Recap :


• The Indian rupee dipped slightly at commencement on Monday, 07 September 2015 as the US currency strengthened in overseas markets.

• The domestic currency opened lower at Rs 66.57

against the US dollar and dropped to a low of 66.80 so far during the day.

• In the spot currency market, the Indian unit was last

seen trading at 66.73, as compared to Friday;s close at 66.46.

• The dollar index, which measures the US currency’s

strength against major currencies, was trading at 96.234, up 0.01% from its previous close of 96.229.

• Weakness and correction may be set in for near term to short term on fall below 7586. On fall and close below 7550 further correction till the levels7520-7506 of can be seen. Subsequently, deeper correction will be seen. Traders may look for rise after 7940.

• Macroeconomic data, the performance of the monsoon rains, trend in global markets, flows from foreign portfolio investors (FPIs), the movement of rupee against the dollar and crude oil price movement will dictate trend on the markets.

• The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.

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J Street Recommendations Report Card

Top Fundamental Stocks

Stocks Rec. Date CMP on Rec. CMP Target Absolute Return @

CMP Status

Sun Pharma 03/07/2015 831 836 1041 1% Buy

Infinite Computer 20/07/2015 190 149 255 -22% Buy

Nitin Spinners Ltd. 06/07/2015 79 58 94 -26% Buy

Bank of Baroda 01/06/2015 163 170 217 4% Buy

Ambika Cotton Mills 18/05/2015 880 721 1149 -18% Buy

Sadbhav Engineer-ing Ltd. 04/05/2015 298 283 430 -5% Buy

CARE Ltd. 20/04/2015 1666 1196 2250 -28% Buy

Setco Automotive Ltd. 30/03/2015 242 220 304 -9% Buy

Omkar speciality Chemicals 16/03/2015 152 164 251 8% Buy

DHFL 16/02/2015 504 426 736 -15% Buy TV Today Network 27/01/2015 222 212 337 -4% Buy M&M 12/01/2015 1238 1111 1452 -10% Buy Havells India 27/10/2014 274 260 346 -5% Buy All Cargo Logistics 05/08/2014 260 286 342 10% Buy PTC India Fin. Ser. 07/07/2014 39 38 45 -2% Buy Adani Port 05/07/2014 280 323 347 15% Accumulate

Ahluwalia contracts 24/08/2015 235 219 368 -7% Buy

L & T 05/07/2014 1750 1511 1866 -14% Buy

It's not important whether you are right or wrong, It’s about how much money you make when you're right and how much you lose when you're wrong.”


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J Street Short Term Call Status

Sr. No. DATE STOCK

BUY/SELL

RANGE TRIGGER PRICE

TGT SL STATUS CMP %

RETURN 1 17/07/15 HEXAWARE BUY 274‐277 274.00 293‐315 263 PB 287.85 5.05

2 20/07/15 M&M BUY 1285‐1298 1285.00 1369‐1434

1240 TA 1369.00 6.54

3 21/07/15 MINDTREE BUY 1280‐1293 1280.00 1377‐1467

1222 PB 1323.80 3.42

4 22/07/15 CAIRN SELL 161.50‐163.50

162.80 150.55‐138

171 SL 171.00 ‐4.80

5 23/07/15 HCLTECH BUY 974‐987 974.00 1038‐1087

939 SL 939.00 ‐3.59

6 24/07/15 TATAMOTORS BUY 398‐402 398.00 425‐451 380 SL 380.00 ‐4.52

7 27/07/15 IBREALEST BUY 55‐58 56.50 63.50‐69 50.05 TA 69.00 22.12

8 28/07/15 ASIANPAINT BUY 846‐855 850.00 902‐941 816 TA 902.00 6.12

9 29/07/15 KOTAKBANK BUY 722‐730 722.00 770‐803 696 SL 696.00 ‐3.60

10 30/07/15 BHEL BUY 281‐284 281.00 300‐318 270 PB 289.65 3.08

11 03/08/15 SIEMENS BUY 1443‐1458 1454.00 1552‐1632

1378 TA 1552.00 6.74

12 04/08/15 BHARAT‐FORGE

BUY 1155‐1168 1160.00 1248‐1337

1103 TA 1248.00 7.59

13 05/08/15 YESBANK BUY 835‐843 835.00 889‐939 805 SL 805.00 ‐3.59

14 06/08/15 INFY BUY 1078‐1089 1078.00 1148‐1203

1040 TA 1148.00 6.49

15 07/08/15 GLENMARK BUY 1037‐1048 1048.00 1105‐1158

1001 SL 1001.00 ‐4.48

16 10/08/15 BPCL BUY 948‐958 948.00 1011‐1057

914 SL 914.00 ‐3.59

17 11/08/15 JINDALSTEL BUY 81‐82.30 81.65 91‐101 74 PB 87.45 7.10

18 12/08/15 M&MFIN BUY 261‐264 261.00 279‐295 251 SL 251.00 ‐3.83

19 13/08/15 SUNPHARMA BUY 859‐868 863.50 916‐946 828 TA 946.00 9.55

20 14/08/15 CIPLA BUY 719‐727 723.00 769‐803 690 PB 748.00 3.46

21 17/08/15 ARVIND BUY 291‐294 291.00 314‐339 275 SL 275.00 ‐5.50 22 18/08/15 ICICIBANK BUY 299‐303 299.00 319‐334 288 SL 288.00 ‐3.68

23 19/08/15 ULTRACEMCO BUY 3100‐3130 3100.00 3302‐3458

2991 SL 2991.00 ‐3.52

24 20/08/15 LT BUY 1798‐1816 1798.00 1915‐2006

1735 SL 1735.00 ‐3.50


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J Street Short Term Call Status

Sr. No. DATE STOCK

BUY/SELL

RANGE TRIGGER PRICE

TGT SL STATUS CMP %

RETURN

25 21/08/15 DRREDDY BUY 4260‐4300 4260.00 4536‐4751

4110 SL 4110.00 ‐3.52

26 24/08/15 KOTAKBANK SELL 685‐695 685.00 637‐599 727 TA 637.00 7.54

27 25/08/15 NMDC BUY 92‐94 93.00 99‐104 87 TA 104.00 11.83

28 26/08/15 VEDL SELL 86‐84 84.00 79‐72 91 SL 91.00 ‐7.69

29 27/08/15 LUPIN SELL 1800‐1815 1808.00 1775‐1740

1835 SL 1835.00 ‐1.47


• One call on daily basis is given keeping view of short term trading on closing basis. • Time frame and expected % of return is also mentioned with the suggested call. • This call are purely given on technical trading system generated by the Technical Research Desk. • Generally Expected Return on investment is 5-6 % with time horizon of 6-7 days. • Profit Booking update is considered if on an average expected return exceed 3.50-4.00 % against the

Expected return of 5-6% • Risk- Reward ratio percentage wise depends on the volatility of stock Normally it stands ( 3 : 9)

STAUTS CALLS RATIO

TA+PB 14 48.28

SL+EXIT 15 51.72

TOTAL 29 100.00

J Street Volume 259

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Transcript of J Street Volume 259