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             Editor & Contributor Margi  Shah    Special Contributors Ashesh Trivedi Aditya Nahar          For suggestions, feedback and queries jstreet@jhaveritrade.com 

Market View: Leave aside Bihar and watch the reforms and international trend

The earning season is over and the much debated Bihar election is out of way. As expected and stated by The Finance Minister, important reforms are being rolled out by the central government. We have seen the power sector reforms in form of “UDAY”, we have also seen the proposed bankruptcy law which may go a long way in addressing the problems of banking sector. The Government has accepted the modifications proposed in the Reality Act by the opposition party and the same will be a reality in the coming session of parliament. The Government has also seriously attempted to address the concerns of opposition for the pro-posed GST Act, without disturbing the soul of the Act government has successfully accepted the changes proposed by the states also and now all the states are on board and ready to accept and rollout GST. The Finance Ministry and The Commerce Ministry are ready and prepared to rollout GST. Yesterday in a much surprising move, some FII have arranged a meeting with Mr. Rahul Gandhi to convince him about the urgency and seriousness to implement GST to boost the economy. FII have sold equities worth 6,500 crore in the month of November indicating their displeasure for slow reforms, spoiled political atmosphere and muted earnings. They are also concerned and adjusting their equity exposure in view of dull earning performance and the most likely rate hike by Fed on December 15th. Only some big bang reforms in the parliament session and executive actions in Cabinet coupled with very moderate rate hike by Fed will prompt them to halt the selling spree in the Indian market. The international atmosphere is also causing threat to the equity market world over. Any remarkable escalation in the war like situation will heat the global sentiment and the risk assets in the form of emerging market equity. Another threat is from the US Dollar. Any rise in Dollex from the sentimental level of 100 and fall in oil prices below USD 40 will affect the sentiment in the equity market. It will be interesting to watch the budget preparation by The Government as some important changes are expected. Technically 7690-7700 is a very important support zone below which the market may test the recent low of 7540. The sustainability of 7850 level may take the market to higher levels. Still it is a stock pickers’ market and one should remain selective with medium to long term view. Kamal Jhaveri MD- Jhaveri Securities

- 1 -

Vol.: 270 23rd November,2015

- 2-

Company Basics

BSE Code 508933

NSE Symbol WELSYNTEX

EQUITY (` in Cr.) 39.24

MKT.CAP (` in Cr.) 434.39

Financial Basics FV (`) 10.00 EPS (`) 11.37 P/E (x) 9.74 P/BV (x) 2.97 BETA 1.3904 RONW (%) 30.61

Share Holding Pattern Holder's Name % Holding Foreign 0.66 Institutions 1.10 Promoters 70.10 Non Prom. 0.00 Public & Others 23.16 Government 5.00

Company Overview Welspun Syntex is a flagship company of the Welspun Group. Welspun group is one of the leading and largest growing business conglomerates in India. Welspun Syntex Limited was established in 1983 and is the flagship company under the Welspun umbrella. Since its inception WSL has grown manifold and is amongst the largest manufacturers and exporters of Polyester Texturised Filament Yarn, Nylon Filament Yarn from India. With plants located at Silvassa and Palghar (Thane), India WSL is well equipped to meet the domestic as well as international demand. It has marketing offices located at Surat and Mumbai in India that facilitate big business ventures. Investment rational Polycycle- a unique kind of Yarn with unique advantages WSL has unique positioning in the BCF segment with POLYCYCLE. Polycycle is a 100% recycled Polyester yarn extruded (derived) from used PET bottles (plastic bottles) using patented process called ReNew. This polyester has same feature and better quality like normal Vargin polyester. Vargin polyester is derived crude feed stock like PTA and MEG. So fluctuation in crude oil prices are less concern. Stable crude oil prices helps to maintain operating margin Man made yarn mainly consumes crude oil based derivatives as Raw material (chips constitutes ~50-60% where as other textures consumes ~40% -45% of total RM cost ). RM cost as % of sales fell from 68.41 to 60.95 YoY, one of the lowest in last five year, largely because of fall in key components like purified terephthalic acid (PTA) and mono-ethylene glycol (MEG) which have touched multi-year lows on account of lower crude prices. Strategically located plant in Union Territory and Maharashtra The company has two state of the art manufacturing plants in Silvasa (UT) and Palghar. Silvassa plant is perfectly located between the two most important Textiles States of India, Gujarat and Maharashtra. This location is situated near sea ports of JNPT and Mumbai and it becomes possible to deliver the finished products and receive the imported raw materials to and from the ports. This location helps Welsun to deliver finished products to its customers in India and overseas.

Valuation : Currently, WELSYNTEX is trading at `120. We recommend “Buy” with target price of `171,

valuing stock 10xFY18E EPS of `17.18.The stock currently trades at 10.06x of FY16E and 8.38xof FY17E

and 6.99x of FY18E.

Company Update : Welspun Syntex Ltd.

Vol.: 270 23rd November,2015

 

- 3-

 

Weekly Market Recap :

• The Cabinet Committee on Economic Affairs (CCEA) on Wednesday, 18 November 2015, approved the disinvestment of 10% paid up equity capital of CIL.

• On the macro economic front, data released by the government after market hours on Monday, 16 November 2015 showed that India's merchandise exports continued to decline for the eleventh straight month at 17.5% to $21.35 billion in October 2015 over October 2014. Meanwhile, merchandise imports also dipped 21.2% to $31.12 billion.

• Data released by the government during trading hours on Monday, 16 November 2015 showed that the annual rate of inflation, based on monthly wholesale price index (WPI) stood at minus 3.81% for the month of October 2015 as compared to minus 4.54% for the previous month and 1.66% during the corresponding month of the previous year.

Market Eye Week ahead : • The market may remain volatile as traders roll over positions in the futures & options (F&O) segment from the near month November

2015 series to December 2015 series. • Among global events, Eurozone Market PMI Composite data for November 2015 is due on Monday, 23 November 2015. • US Q3 gross domestic product (GDP) data is due on Tuesday, 24 November 2015. US Market PMI composite data for November

2015 is due on Wednesday, 25 November 2015. On the same day, US initial jobless claims data for November 2015 is due. • Japan unemployment data for the month of October 2015 is due on Thursday, 26 November 2015. KEY EVENTS/FACTORS TO WATCH 1. Thu : expiry of F&O segment

Put-Call Ratio • The Put/Call Ratio is an indicator that shows put volume relative to call volume. Put options are used to hedge against market

weakness or bet on a decline. Call options are used to hedge against market strength or bet on advance. • The Put/Call Ratio is above 1 when put volume exceeds call volume and below 1 when call volume exceeds put volume. • Typically, this indicator is used to gauge market sentiment. Sentiment is deemed excessively bearish when the Put/Call Ratio is trad-

ing at relatively high levels, and excessively bullish when at relatively low levels.

Around The World

Vol.: 270 23rd November,2015

Knowledge Corner :

Mutual Fund Corner

- 4-

Source : - www.valueresearchonline.com

Fund Name Scheme Name Birla Sun Life MNC Fund

AMC Birla Sun Life Asset Management Company

Type Others

Category Open-ended and Equity

Launch Date April 1994

Fund Manager Ajay Garg

Net Assets (` In crore ) Rs. 2569.2 crore as on Sep 30, 2015

Top 10 Sector Break-Ups Fund (%)

Automobile 21.85 Financial 16.66 FMCG 14.87 Healthcare 12.86 Engineering 10.41 Chemicals 9.80 Cons Durable 4.15 Services 3.86 Construction 1.70 Technology 0.73

Composition (%) Equity 97.11

Debt 3.98

Cash -1.08

Risk Analysis Volatility Measures Standard Deviation 16.44 Sharpe Ratio 1.42 Beta 0.83 R-Squared 0.48

Alpha

18.99

History 2012 2013 2014 2015 NAV (Rs)   267.14 294.26 502.89 585.51

Total Return (%)   42.37 10.15 70.90 16.43

+/‐CNX  Nifty   14.67 3.39 39.51 19.05

+/‐ CNX MNC   14.08 2.41 28.43 8.60

Rank (Fund/Category)   7/33 6/32 6/55 -

52 Week High (Rs)   267.14 294.26 502.89 630.80

52 Week Low (Rs)   187.34 235.76 270.73 503.55

Net Assets (Rs.Cr)   - - 852.49 -

Expense Ratio (%)   2.35 2.92 2.72 2.65

Fund Style

Investment Style Growth Blend Value Large

Medium

Small

Capitalization

Vol.: 270 23rd November,2015

Fund Performance v/s S&P CNX Nifty

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

Commodity Corner

- 5-

FUNDAMENTAL: Bullion prices dropped on the firm dollar and comments from a Federal Reserve policy maker who said the U.S. central bank should "soon" be ready to raise interest rates. Speculation that the Fed will lift interest rates for the first time in nearly a decade this year has intensified since the release of strong U.S. jobs data earlier this month. Federal Reserve Bank of St. Louis president James Bullard argued that he expects inflation to move back to the Fed's targeted goal of 2%, if the cost of oil stabilizes and other prices continue to increase at its current rate over the next year. In a speech on the economy and monetary policy in Fort Smith, Arkansas, Bullard also warned that U.S. job growth may slow as the Fed begins policy normalization. A host of FOMC members have offered strong hints that it will raise short-term rates next month following a stellar U.S. jobs report in October. The greenback remained supported after the minutes of the Federal Reserve's October meeting showed on Wednesday that a majority of board members are in favor of a December rate hike. "While no decision had been made, it may well become appropriate to initiate the normalization process at the next meeting," the minutes said. Upbeat U.S. economic reports released on Thursday added to expectations for a U.S. rate hike before the end of the year. The U.S. Department of Labor reported that the number of individuals filing for initial jobless benefits in the week ending November 14 declined by 5,000 to 271,000 from the previous week’s total of 276,000. India's gold jewellery exports fell by 20.7% from $1051.81 million last year to $834.1 million in October 2015, according to data released by the Gem & Jewellery Export Promotion Council (GJEPC). Meanwhile, exports of silver jewellery increased by 6.97% to $ 174.27 million in October 2015 as against $162.92 million last year. Gold jewellery exports were down 22.68% to $ 4.65 billion in the first seven months of FY 2016, while that of medallions & coins more than doubled to $ 2.72 billion in the same period. Chinese banks are growing alarmed by a rising number of defaults among jewellery manufacturers, prompting them to review new gold lending more carefully, according to sources with direct knowledge of the issue. RECOMMENDATION : SELL GOLD @ 25300 SL 25700 24950-24700. SELL SILVER @ 33800 SL 34600 TGT 32900-32250 FUNDAMENTAL: Base metals prices last week ended with heavy losses where nickel prices dropped heavily by more than 8 percent as China's slowing growth, and a poor outlook for its struggling steel sector ramped up pressure on the gluthit metal. Chinese steel demand shrank around 6 per-cent in January- October, according to the China Iron and Steel Association while other base metals also seen under as investors fret over faltering Chinese demand and a stronger dollar. Investors worry that China's demand for copper will slow at a time when mine supply continues to expand, lead-ing to a prolonged glut of the metals. Zinc prices also dropped while prices recovered some of losses on Friday after top Chinese smelters agreed to cut output next year by 500,000 tonnes, sparking worries about shortages. Zinc, mainly used in galvanizing steel, rebounded a day after sinking to the multi-year lows, jumping on the back of the joint announcement by Chinese zinc producers to slash production. A surge of refined output from China has been weighing on the whole zinc market all year. There are the low prices but also perhaps some recognition of the fact that due to mine closures concentrate supply was set to tighten. The latest statistics published by the International Lead and Zinc Study Group (ILZSG) indicates that global refined zinc market remained balanced during the third quarter of the year. The market had recorded a supply surplus of 150kt and 38kt during Q1 and Q2 respectively. The total reported zinc inventories at LME declined by 95,000 tons during the first nine months of the year. Global nickel markets ended in small deficit of39,000 tonnes in January-September 2015 with apparent demand exceeding production. The calculated full year surplus had stood at 241,800 tonnes in the whole of 2014, according to the latest data released by the World Bureau of Metal Statistics (WBMS). The statistics indi-cate that that reported stockpiles maintained by LME were 37,700 tonnes higher at the end of September this year from the closing levels of 2014. World Nickel mine production was 1,404 kt in January-September 2015, 118 kt lower when compared with the corresponding period during previous year. The ban on exports by Indonesian administration has led to reduced mine output from the country. RECOMMENDATION : SELL ALUMINIUM @ 99 SL 102 TGT 96-93.50.SELL LEAD @ 106 SL 109 TGT 102-99. SELL COPPER @ 306 SL 315 TGT 294-285. SELL ZINC @ 104 SL 109 TGT 99-96. SELL NICKEL @ 590 SL 615 TGT 560-525. FUNDAMENTAL : Crude oil prices last week ended with gains after Baker Hughes reported the number of US oil rigs fell to a fresh five-and-a-half-year low. Data from oilfield services company Baker Hughes showed the number of rigs fell by 10 to a total 564 over the past week. There is little likelihood Russia will work with OPEC on cutting oil output ahead of or on the sidelines of a meeting of the exporter group in Vienna next month, officials said. OPEC made a historic policy shift late last year, led by Saudi Arabia and backed by its Gulf allies, and refused to cut production to prop up sliding prices in order to defend market share. The group confirmed the strategy at a meeting in June. Organization of the Petroleum Exporting Countries ministers will meet on Dec. 4 to coordinate the group's production, and a delegation from Russia, which accounts for about 12 percent of global oil output, may take part in a pre-meeting consultation once again. Oil prices also weakened after the U.S. Energy Information Administration said Wednesday that crude oil supplies rose by 252,000 barrels last week, disappointing market players who had hoped for a modest decline. Global oil production is outpac-ing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production. Natural gas dropped heavily by more than 7 percent as pressure seen due to the prospect of the biggest seasonal supply gain in six years. A government report showed stockpiles soared to an all-time high of 4 trillion cubic feet. Production continues to outpace supply as mild weather delays the start of the peak heating demand season, when consumers typically start to draw inventories down. U.S natural gas production may climb 6.3 per-cent this year to a record 79.61 billion cubic feet a day, according to the U.S. Energy Information Administration. Stockpiles may total 1.862 trillion cubic feet at the end of March, 240 billion above the five-year average, the EIA said. "Increases in drilling efficiency will continue to support growing natural gas production in the forecast despite low natural gas prices and declining rig activity," the agency said Nov. 10 in its monthly Short-Term Energy Out-look report. RECOMMENDATION : BUY CRUDE OIL @ 2680 SL 2580 TGT 2850-2980. SELL NAT GAS DEC @ 160 SL 168 TGT 146-132

BULLION

BASE METALS

ENERGY

Vol.: 270 23rd November,2015

- 4 -

Commodity Corner

USD/INR

- 6-

Forex Corner

EUR/INR

GBP/INR

JPY/INR

Market Eye Week ahead :

• The USD-INR was almost flat last week and ended marginally lower last week at 66.23 after opening and making high at the start of week at 66.46. The euro fell against the dollar after two days of gains, pressured by comments from ECB chief Mario Draghi who expressed willingness to add more stimulus to the euro zone economy to raise inflation thus giving some upside room to dollar index. The local government banks will probably buy dollar on dips towards 66.10 limiting the downside there. Currently the USD INR seems to be in consolidation in charts but price structure on the daily chart appears to be bullish.

Level S2 S1 CP R1 R2 High Low Close

USD/INR 66.01 65.80 66.24 66.45 66.68 66.46 66.02 66.23

Level S2 S1 CP R1 R2 High Low Close

JPY/INR 53.55 53.17 53.90 54.28 54.63 54.24 53.51 53.94

Level S2 S1 CP R1 R2 High Low Close

GBP/INR 100.50 99.75 100.93 101.68 102.11 101.36 100.18 101.25

Level S2 S1 CP R1 R2 High Low Close EUR/INR 70.21 69.52 70.74 71.43 71.96 71.28 70.06 70.89

Market Recap :

• The Indian rupee dropped lower against the dollar on Monday, 23 November 2015 due to appreciation in the US currency overseas. Besides, fresh demand for the US currency from importers and banks led to rupee depreciation.

• The domestic currency opened at Rs 66.24 against the dollar and fell to a low of 66.33 so far during the day. In the spot currency market, the Indian unit was last seen trading at 66.31.

• The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, rose 0.08% to 99.73.

• The Federal meeting was called to review the advance and discount interest rates charged to commercial banks and other financial institutions,

Vol.: 270 23rd November,2015

• The macroeconomic data, trend in global markets, investment by foreign portfolio investors (FPIs), the movement of rupee against the dollar and crude oil price movement will dictate trend on the bourses in the truncated week ahead.

• Nifty last week opened at 7732.95 and closed the week at 7856.55. Nifty last week showed a positive candle and gain of 94 points on week to week basis. Resistance will be seen at higher range of 7906-7937-7954. A rise and close above these resistance will show near term reversal for pullback of the fall from 8336. Any rise at current situation is expect to form a lower top in relation to the earlier lower top of 8336. Weakness will continue on fall and close below 7714. Support cluster points are in the range of 7691-7626-7539.

- 7-

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  719 1041  -14% Buy

Infinite Computer Sol.   20/07/2015  190  220 255  16% Buy

Nitin Spinners Ltd.  06/07/2015  79  60 94  -24% Buy

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

Ambika Cotton Mills  18/05/2015  880  881 1149  0% Buy Sadbhav Engineering Ltd. 

04/05/2015  298  315 430  6% Buy

CARE Ltd.  20/04/2015  1666  1294 2250  -22% Buy

Setco Automotive Ltd.  30/03/2015  242  214 304  -12% Buy Omkar speciality Chemicals 

16/03/2015  152  197 251  30% Buy

DHFL   16/02/2015  252  219 368  -13% Buy

TV Today Network  27/01/2015  222  267 337  20% Buy

M&M   12/1/2015  1238  1323 1452  7% Buy

Havells India  27/10/2014  274  294 346  7% Buy

All Cargo Logistics  05/08/2014  260  385 342  48% Exit

PTC India Fin. Ser.  07/07/2014  39  42 45  7% Buy

Adani Port  05/07/2014  280  277 347  -1% Buy

Ahluwalia contracts  24/08/2015  235  268 368  14% Buy

L & T  05/07/2014  1750  1369 1866  -22% Buy

SRF Ltd.  21/09/2015  1140  1254 1374  10% Accumulate

Natco Pharma  02/11/2015  2546  2596 3183  2% Buy

Welspun syntax Ltd.  23/11/2015  121  121 171  0% 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.” 

Vol.: 270 23rd November,2015

Vol.: 270 23rd November,2015