Jhaveri Street Volume 258

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: China, Fed rates to set the market in near term

Is the worst over for the stock markets? The resilience of Indian stocks last week has sparked hopes of better times in the near future. However, a spike in the National Stock Exchange's Volatility Index (VIX), a key indicator of sentiment, shows that traders are still not convinced that near-term risks have faded. The VIX rose 5.84% to 23.33 on Friday. Analysts said investors should remain cautious as long as the index stays above 20. Although shares rebounded late last week, traders are still holding on to a large chunk of bearish bets. There are reasons to remain cautious: China remains a haze; though some Fed officials said the US central bank has not decided on whether to raise rates, Wall Street is not convinced given the strength of the country's economic data, and further weakness in the rupee could trigger more foreign institutional outflows. Last week, the benchmark indices narrowed their losses to about 3.5% each following gains on Thursday and Friday. The Nifty closed just above 8,000 on Friday, while the BSE Sensex ended at 26,392.38. The BSE Mid Cap index declined 4.07% while BSE Small Cap index shed 5.31% last week. Technically, Nifty is likely to consolidate in the range of 7,800-8,200.

Kamal Jhaveri MD- Jhaveri Securities

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Vol.: 25831st August,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 : • Finance Minister Arun Jaitley on Monday, 24 August 2015, said that though the Indian economy is not impervious to global events,

yet the growth in manufacturing and services sector, as reflected by the increase in indirect tax collections and a fair monsoon indicate that the economy is showing strong revival and growth.

• China's central bank, People's Bank of China (PBOC) on Wednesday, 26 August 2015, announced that it will inject 140 billion Yuan ($21.80 billion) into the financial system through a short-term liquidity adjustment (SLO) operation.

• On 25 August 2015, PBOC announced reduction in its one-year lending rate by 25 basis points (bps) to 4.6% effective 26 August 2015.

Market Eye Week ahead : • Shares of automobile companies will be in focus as companies start announcing monthly sales volume data for August 2015 from

Tuesday, 1 September 2015. • In macroeconomic data, the government will release India's gross domestic product (GDP) data for Q1 June 2015 on Monday, 31

August 2015. India's GDP grew 7.5% in Q4 March 2015 over Q4 March 2014. • The Nikkei India Manufacturing PMI data for the month of August 2015 is due on Tuesday, 1 September 2015. The seasonally

adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) printed a six-month high of 52.7 in July 2015, up from 51.3 in June 2015.

• The Nikkei India Service PMI data for the month of August 2015 is due on Thursday, 3 September 2015. The seasonally adjustedNikkei Services Business Activity Index rose back above the 50 no-change mark in July, posting 50.8 from 47.7 in June.

KEY EVENTS/FACTORS TO WATCH 1. Mon: Q1FY16 GDP data 2. Tue: Auto sales data

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 L&T India Prudence Fund

AMC L&T Investment Management Ltd

Type Equity-oriented

Category Open-ended and Hybrid

Launch Date January 2011

Fund Manager Vikram Chopra & Soumendra Nath Lahiri

Net Assets (` In crore ) Rs. 591.6 crore as on Jul 31, 2015

Fund Performance v/s S&P CNX Nifty

Top 10 Sector Break-Ups Fund (%)

Financial 16.42 Technology 6.99 Automobile 5.97 FMCG 5.86 Construction 5.71 Engineering 5.00 Services 4.78 Healthcare 4.5 Textiles 3.85 Chemicals 3.52

Fund Style

Investment Style Growth Blend Value

Large

Medium

Small

Capitalization

Composition (%) Equity 69.99

Debt 27.89

Cash 2.12

Risk Analysis Volatility Measures Standard Deviation 10.85 Sharpe Ratio 1.57 Beta 0.91 R-Squared 0.82 Alpha 9.51

Vol.: 20418th August, 2014


History 2012 2013 2014 2015 NAV (Rs) 11.47 12.51 18.08 19.51

Total Return (%) 31.36 9.1 44.48 7.9

+/- VR Balanced 8.82 2.72 18.53 -

Rank (Fund/Category) 6/29 7/32 26/59 5/71

52 Week High (Rs) 11.47 12.51 18.19 20.36

52 Week Low (Rs) 8.76 10.58 12.11 17.95

Net Assets (Rs.Cr) 23.88 40.76 127.46 -

Expense Ratio (%) 2.5 2.97 3.03 -

Commodity Corner

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Vol.: 20418th August, 2014Vol.: 25831st August,2015

FUNDAMENTAL: Bullion prices plummeted last week with the gold off by more than 2% to settle at 26623 amid expectations the Federal Reserve will start raising interest rates at its next policy meeting in September. Comments by Federal Reserve Vice Chairman Stanley Fischer on Friday suggested that the door was still open for a rate hike at the Fed's next meeting due to take place September 16-17. Fischer said that the case for a rate increase in September was "pretty strong", though it was still too soon to say what the central bank might do. The timing of a Fed rate hike has been a constant source of debate in the markets in recent months. Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise. While Silver dropped more than -5% tracking weakness from Comex Silver plunged to $13.91 on Wednesday, a level not seen since August 2009 on the week, the biggest weekly decline since mid- February. Last week's damage was due mainly to the continued deflating of the stock market bubble in China in the early part of the week, which also triggered some dramatic movements in global equity markets. This is likely due to the fact that silver is more of an industrial metal than a monetary metal, whereas gold is viewed significantly more as a safe haven asset during times of financial distress. Last week dollar index, inched up 0.4% on Friday to close at 96.15, the strongest level since August 20. Meanwhile hedge funds and money managers hiked a bullish bet in Comex gold and raised their net long position in silver Futures and Options in the week ended Aug.25, US CFTC data showed on Friday. In the week ahead, investors will be focusing on Friday’s U.S. jobs report for August, which could help to provide clarity on the likelihood of a near-term interest rate hike. RECOMMENDATION : SELL GOLD OCT ON JUMP @ 26850 SL 27100 TGT 26450-26100. SELL SILVER DEC @ 35900 SL 36800 TGT 34800-33800. FUNDAMENTAL: Basemetals recovered sharply from the earlier falls as Chinese equity markets rebounded from a brutal selloff earlier last week, easing jitters over an ongoing stock market collapse. Aluminium lead the rally by a jump of 3.44% to settled at 106.80 as support seen after the update that loss-making aluminium smelters in China could idle another two to three million tonnes of annual capacity in coming months as metal prices trough at 6 1/2 year-lows. The closures would trim a production surplus in the world's top aluminium producer and consumer, as well as support domestic prices. Chinese spot aluminium prices have held around six-year lows since last month, falling to 11,820 yuan ($1,848) a tonne on Monday, the lowest since February 2009. Zinc prices was the next biggest gain of last week which rallied nearly 2.68% to settled above 120 mark at 120.75 tracking firm-ness from LME Zinc which had the biggest two-day gain since October 2011, Last week zinc fell to the lowest since 2010. Copper and Lead gained as worries about oversupply resurfaced, but losses were modest after the stock market in China recovered for a second day. Copper shot up on the Lon-don Metal Exchange on Friday, lifted by a bounce in global stock markets, buoyant US economic data and the announcement of production cuts by miner Freeport-McMoran Inc. Freeport lowered its copper sales estimates for 2016 and 2017 by about 150 million pounds. While still the global copper market is expected to be in surplus by 477,000 tonnes this year. Friday Shanghai Composite rallied 4.9%, with gains accelerating in the final half-hour of trade. Friday's rally followed a 5.4% surge on Thursday. China's central bank boosted liquidity, cut interest rates and lowered the reserve requirement ratio for large lenders earlier this week in a bid to boost economic growth and halt a stock market rout. In the week ahead, investors will be focusing on Friday’s U.S. jobs report for August, which could help to provide clarity on the likelihood of a near-term interest rate hike. Markets will also be watching surveys of the manufacturing and service sectors, factory orders and trade data from the world’s largest economy for fresh indications on the timing of a rate hike. RECOMMENDATION : SELL COPPER NOV @ 356 SL 364 TGT 345-336.SELL ZINC SEPT @ 123.50 SL 126 TGT 119.50-116.SELL NICKEL SEPT @ 685 SL 710 TGT 640-620.SELL ALUMINIUM SEPT @ 108 SL 110.50 TGT 105.50-102.50. SELL LEAD SEPT @ 118 SL 121 TGT 114.50-112. FUNDAMENTAL : In energy market Crude oil rose nearly 12% on geopolitical instability in Yemen and worries about weather in the Gulf of Mexico. While Natural Gas regained strength as forecasts for warm weather across key consumption regions of the U.S. in the week ahead boosted de-mand expectations for the fuel. Crude prices rallied as market was saturated with short sellers which can be seen from the drop in open interest by -49.30% to settle at 18975 against previous week’s 37472. Crude oil prices rebounded from steep declines suffered earlier in the week as Chinese eq-uity markets bounced back from a brutal selloff, easing jitters over an ongoing stock market collapse. China's central bank boosted liquidity, cut inter-est rates and lowered the reserve requirement ratio for large lenders earlier this week in a bid to boost economic growth and halt a stock market rout. 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. Crude oil prices have been under heavy selling pressure in recent months, as ongoing concerns over a glut in world markets drove down prices. Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the OPEC last year not to cut production. Worries over high domestic U.S. oil production are likely to remain in focus after industry research group Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. increased by one last week to 675, the sixth straight weekly gain. The rig count dropped for 29 straight weeks before rebounding modestly in recent weeks. While Natural gas regained strength on Friday, as forecasts for warm weather across key consumption regions of the U.S. in the week ahead boosted demand expectations for the fuel. . However, cooler weather was expected across most parts of the Great Lakes, Northeast and Midwest-regions as the week progresses. RECOMMENDATION : BUY CRUDE OIL SEPT @ 2920 SL 2800 TGT 3060-3180. SELL NAT.GAS SEPT @ 185 SL 192 TGT 177-172.

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, above 64.67 keep view for exit long positions in USDINR pair. On upside above 64.67 near term rise till 66.41-66.95 can be possible targets for traders holding long position.

• If close below 64.67 and sustain then support can be seen at 65.42-65.97 From medium to long term view, this week USDINR pair likely to remain range bond “bound” medium term investors can take long position for 66.41-66.95 targets. If breaks 64.67 then expect 65.42-65.97 as stabilization zone for dollar from long term.

Level S2 S1 CP R1 R2 WRV High Low Close

USD/INR 65.42 65.97 66.41 66.95 67.39 64.67 66.85 65.86 66.51

Level S2 S1

JPY/INR 53.72 54.37

CP

55.28

R1

55.93

R2

56.84

WRV

52.44

High

56.19

Low

54.63

Close

55.02

Level S2 S1

GBP/INR 99.95 101.08

CP

103.22

R1

104.35

R2

106.5

WRV

100.54

High

105.37

Low

102.1

Close

102.21

Level S2 S1 EUR/INR 72.93 73.94

CP 75.62

R1 76.63

R2 78.32

WRV 71.68

High 77.31

Low 74.61

Close 74.95

Market Recap :


• Rupee opened lower at Rs 66.25 against the US dollar in early trade and dropped to a low of 66.37 so far during the day.

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

seen trading at 66.34. • Rupee had shed 10 paise to close at 66.14 against

the US currency in the previous session on Friday. • The dollar index, which measures the US currency’s

strength against major currencies, was trading at 95.761, down 0.35% from its previous close of 96.106.

• Traders long and holding the same can keep the stop loss at 7748-7495. Weakness and correction may be set in for near term to short term on fall below 7748-7495. On fall and close below 7748-7495 further correction till the levels 7321-7071 of can be seen. Subsequently, deeper correction will be seen. Traders may look for rise to 8173-8344 to exit long.

• 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 coun-try'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 831 898 1041 8% Buy

Infinite Computer Sol. 20/07/2015 190 167 255 -12% Buy

Nitin Spinners Ltd. 06/07/2015 79 67 94 -16% Buy

Bank of Baroda 01/06/2015 163 185 217 13% Buy

Ambika Cotton Mills 18/05/2015 880 756 1149 -14% Buy

Sadbhav Engineer-ing Ltd. 04/05/2015 298 303 430 2% Buy

CARE Ltd. 20/04/2015 1666 1225 2250 -26% Buy

Setco Automotive Ltd. 30/03/2015 242 224 304 -7% Buy

Omkar speciality Chemicals 16/03/2015 152 176 251 16% Buy

DHFL 16/02/2015 504 458 736 -9% Buy TV Today Network 27/01/2015 222 216 337 -3% Buy M&M 12/01/2015 1238 1223 1452 -1% Buy Havells India 27/10/2014 274 260 346 -5% Buy All Cargo Logistics 05/08/2014 260 309 342 19% Buy PTC India Fin. Ser. 07/07/2014 39 41 45 6% Buy Adani Port 05/07/2014 280 355 347 27% Profit Book

Ahluwalia contracts 24/08/2015 235 245 368 4% Buy

L & T 05/07/2014 1750 1605 1866 -8% 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

Jhaveri Street Volume 258

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