Jhaveri Street Voume 257

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 Panic Grips the World Market

The sentiment in equity, bond and currency market is badly affected due to the devaluation of Chinese currency and the reasons for the same. The devaluation of Chinese currency by about 5% has created “the currency war” situation in the world market. To repair the falling economy, the central bank of any country and the government are resorting to the tools which can create ripples in the world market. Dr. Rajan has warned the central banks of the world before one year or so that they must restrict the temptation to resort to the techniques which can have the cascading effects over the world. The econ-omy of China is having great influence in the economy of the world and they must act with responsibility while taking drastic steps to revive their economy. The Chinese devaluation has caused fall up to 10% to 30% in the value of currencies of many emerging countries like Brazil, South Africa and South East Asian countries. The US Dollar, Euro and Pound have gained substantially in last week putting the US Fed to rethink the interest rate hike in September. The hot money invested in emerging countries includ-ing India is being withdrawn on back of falling value in currency. On Friday, the Dow Jones has fallen by more than 500 points. Why this is happening? The facts and figures announced in last one month or so in China are really of concern. The Chinese economy seems to be facing recession. The concern of this recessionary trend in other economies is increasing day by day. The falling price of commodities and crude oil are an evidence of this situation. As India is the biggest importer of oil & commodities, it will be most beneficial for the country like India. But if the world economy shrinks, India cannot get away and that is the reason why the Indian Rupee depreciates only by 4% till to date but the falling currencies and nervous sentiment has triggered selling spree in the In-dian market by FIIs as they stand to lose in the environment of falling Indian Rupee. Under this circum-stances, the short term scenario is volatile and unpredictable with negative bias. But for long term investors, this is a golden opportunity to accumulate the stocks which is in growth trajectory and can take the advantage of falling currency. The Pharma and Tech sector are the real beneficiaries in the cur-rent scenario. But those investors, who are leveraged and having short term view are the ones to take the heat of the situation. So reduce leverage and have long term view in the current economic scenario of the world and India. Technically, any fall below 7940 may take the market to 7740. Any rise above 8350 / 8530 may bring back some confidence in the market.

Kamal Jhaveri MD- Jhaveri Securities

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Vol.: 25724th 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 : • The Reserve Bank of India (RBI) on 19 August 2015 granted in-principle approval to a total of 11 applicants including RIL for setting

up payments banks. • Global credit rating agency Moody's Investors Service reportedly trimmed its forecast for India's economic expansion for the current

fiscal year to 7% from its previous forecast of 7.5% due to drier-than-usual weather conditions. • The Federal Reserve is inching closer to the first interest rate increase in nearly a decade, minutes of the central bankers' latest

meeting indicated on 19 August 2015. • In global news, Chinese manufacturing activity shrank for a sixth straight month in August. The Caixin/Markit flash purchasing man-

agers' index dropped to 47.1 in August from July's final reading of 47.8.

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 August

2015 series to September 2015 series. • World equity markets and emerging market currencies have recently witnessed selling pressure as investors fretted over slowdown in

China's economic growth. China's decision last week to devalue its yuan has intensified investor concerns that weakness in theworld's second-largest economy will crimp global growth, particularly among China's northern Asian competitors in the exports market.

KEY EVENTS/FACTORS TO WATCH 1. Mon-wed: Navkar Corporation IPO 2. Tue- Thu: Pennar engineering building systems India Ltd. IPO, Shree Pushkar Chemicals & fertilizers IPO

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 Private 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 11.03 Sharpe Ratio 1.39 Beta 0.94 R-Squared 0.86 Alpha 7.50

Vol.: 20418th August, 2014


History 2012 2013 2014 2015 NAV (Rs) 54.84 58.48 86.00 92.27

Total Return (%) 24.21 6.64 47.05 7.30

+/- VR Balanced 1.67 0.26 21.10 6.40

Rank (Fund/Category) 20/29 14/32 16/59 17/71

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.: 25724th August,2015

FUNDAMENTAL: Bullion prices rallied last week where gold gained by around 5.70% and silver gained by more than two percent supported by weak-ness in rupee and with investors seeking the safe haven appeal of the precious metal as the riskier equity assets continued to decline sharply globally on mounting evidence that China is having a rough patch economically. The FOMC appears sharply divided on whether inflation is moving close to a level it deems appropriate to start raising shortterm rates. World stocks tumbled towards their worst week of the year, while the dollar in-dex hit its lowest in two months after Chinese factory data added to doubts that the U.S. Federal Reserve will raise interest rates next month. Gold had already rebounded last week from July's 5-1/2 year low, boosted by minutes of the Fed's last policy meeting, which dented expectations for an immi-nent rise in U.S. rates. Gold has come under heavy pressure this year from expectations that the Fed would raise rates for the first time in nearly a dec-ade, lifting the opportunity cost of holding non-yielding bullion while boosting the dollar. Colombia slashed its gold holdings by two-thirds last month, adjusting its reserves for the first time in years, as spot prices sank in a bullion rout, International Monetary Fund data showed. The South American country slashed its holdings by 6.5 tonnes, leaving just 3.77 tonnes, the data showed. It was the first time in at least two years the country had changed its reserves of bullion, according to sources. latest study report published by GFMS Thomson Reuters forecasts Indian gold demand to jump by 11% in 2015. The report states that the rupee price of gold will decline by 15% during the year, which will trigger fresh purchases of the yellow metal. The yearly gold demand in India is likely to touch 936 tonnes in 2015, 11% higher when compared with the country’s gold demand of 842.7 tonnes during the entire year 2014. RECOMMENDATION : BUY GOLD @ 27100 SL 26600 TGT 27800-28200.BUY SILVER @ 35800 SL 34800 TGT 36600-37500. FUNDAMENTAL: Bullion prices rallied last week where gold gained by around 5.70% and silver gained by more than two percent supported by weak-ness in rupee and with investors seeking the safe haven appeal of the precious metal as the riskier equity assets continued to decline sharply globally on mounting evidence that China is having a rough patch economically. The FOMC appears sharply divided on whether inflation is moving close to a level it deems appropriate to start raising shortterm rates. World stocks tumbled towards their worst week of the year, while the dollar index hit its lowest in two months after Chinese factory data added to doubts that the U.S. Federal Reserve will raise interest rates next month. Gold had already re-bounded last week from July's 5-1/2 year low, boosted by minutes of the Fed's last policy meeting, which dented expectations for an imminent rise in U.S. rates. Gold has come under heavy pressure this year from expectations that the Fed would raise rates for the first time in nearly a decade, lifting the opportunity cost of holding non-yielding bullion while boosting the dollar. Colombia slashed its gold holdings by two-thirds last month, adjusting its reserves for the first time in years, as spot prices sank in a bullion rout, International Monetary Fund data showed. It was the first time in at least two years the country had changed its reserves of bullion, according to sources. The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Shares, reported an inflow of 3.6 tonnes, its first rise in more than a week. latest study report published by GFMS Thomson Reuters forecasts In-dian gold demand to jump by 11% in 2015. The report states that the rupee price of gold will decline by 15% during the year, which will trigger fresh purchases of the yellow metal. The yearly gold demand in India is likely to touch 936 tonnes in 2015, 11% higher when compared with the country’s gold demand of 842.7 tonnes during the entire y ear 2014. Looking ahead to next week, fresh commentary coming out of the Fed Economic Symposium in Jackson Hole, Wyoming may fuel further volatility in interest rate expectations amid the ongoing deterioration in global market sentiment. In addition, the second revision on 2Q GDP will also be in focus with consensus estimates calling for an upward revision to an annualized rate of 3.2% q/q, up from 2.3%. With the threshold for a 2015 rate hike driftin g higher, a weaker-than-anticipated print could further RECOMMENDATION : SELL COPPER @ 340 SL 348 TGT 332-324.SELL ZINC @ 118 SL 122 TGT 114.20-111. SELL NICKEL @ 685 SL 710 TGT 645-620.SELL ALUMINIUM @ 103 SL 106 TGT 100-98.50.SELL LEAD @ 114 SL 117 TGT 111-109. FUNDAMENTAL : Crude oil prices ended with around 3.45% losses followed by more than two and half percent losses in natural gas prices. Where crude oil dropped on signs of U.S. oversupply and weak Chinese manufacturing and notching the longest weekly losing streak in almost three decades. Crude dipped below the $40 threshold following weekly data that showed U.S. energy firms added two oil drilling rigs last week, the fifth in-crease in a row. The rise in the number of rigs emerging after a second quarter lull in prices is adding to concerns U.S. shale production is prov-ing slow to respond to falling prices, prolonging a global glut. Energy markets slid early in the day as world stock and currency markets joined an ex-tended rout across raw materials this week, a slump accelerated on Friday by data showing activity in China's factory sector, a huge user of many commodities, shrank at its fastest pace in almost 6-1/2 years in August. With deepening gloom over demand growth from the world's second-biggest oil user, and expectations for a significant build-up in surplus oil stocks this autumn, most oil traders were unwilling to fight the tide. The current collapse in oil prices, the second this year, has raised alarm within the OPEC, including some of its core Gulf members. However, there is no indication they will reverse their policy of keeping production wide open to defend market share, delegates told. Naturalgas settled down as moderat-ing heat forecast for the U.S. will cut air conditioner use and fuel demand from power plants. Gains in gas inventories will accelerate in the com-ing weeks with the waning summer heat, pressuring prices. Surging production has helped stockpiles climb 21 percent faster than the five-year average since inventories began a seasonal increase in April. Gas futures have traded mostly between $2.60 and $2.95 since the start of the third quarter. Gas stockpiles have expanded by 1.569 trillion cubic feet from the end of March to 3.03 trillion cubic feet on Aug. 14, a U.S. Energy Informa-tion Administration report Thursday showed. The five-year average for the same period is 1.299 trillion. RECOMMENDATION : SELL CRUDE OIL @ 2720 SL 2850 TGT 2620-2550.SELL NAT.GAS @ 182 SL 190T GT 172-165.

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, above 65.94 keep view for exit long positions in USDINR pair. On upside above 65.94 near term rise till 66.23-66.52 can be possible targets for traders holding long position.

• If close below 65.94 and sustain then support can be seen at 65.44-64.93. From medium to long term view, this week USDINR pair likely to remain range bond “bound” medium term investors can take long position for 66.23-66.52 targets. If breaks 65.94 then expect 65.44-64.32 as stabilization zone for dollar from long term.

Level S2 S1 CP R1 R2 WRV High Low Close

USD/INR 64.93 65.44 65.72 66.23 66.52 64.32 66.01 65.21 65.94

Level S2 S1

JPY/INR 51.85 52.83

CP

53.35

R1

54.32

R2

54.84

WRV

52.04

High

53.86

Low

52.37

Close

53.81

Level S2 S1

GBP/INR 101.32 102.33

CP

103.00

R1

104.02

R2

104.69

WRV

100.22

High

103.67

Low

101.99

Close

103.35

Level S2 S1 EUR/INR 71.07 72.72

CP 73.60

R1 75.24

R2 76.12

WRV 71.15

High 74.47

Low 71.95

Close 74.37

Market Recap :


• The Indian rupee tumbled to its lowest level in two years on Monday, 24 August 2015 following sus-tained capital outflows even as the US currency weakened overseas. Rupee slumped to as low as 66.52 per dollar, it’s lowest since September 2013, as Asian markets came under fears of a China-led global economic slowdown.

• Besides, strong dollar demand from importers and

banks, and heavy losses in domestic equity markets weighed on the local currency.

• Last week, the dollar fell more than 1% against the

euro and the yen on Friday as weak factory data from China added to concerns over slowing global growth and added to worries that the Federal Reserve may delay hiking interest rates.

• Traders long and holding the same can keep the stop loss at 7735-7700. Weakness and correction may be set in for near term to short term on fall below 7735-7700. On fall and close below 7735-7700 further correction till the levels 7590-7500 of can be seen. Subsequently, deeper correction will be seen. Traders may look for rise to 8312-8453 to exit long.

• Macroeconomic data, the progress of monsoon rains, 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 market.

• Investors continue to watch the progress of the monsoon rains which will have a bearing on food prices and rural income.

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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 831 891 1041 7% Buy

Infinite Computer 20/07/2015 190 182 255 -4% Buy

Nitin Spinners Ltd. 06/07/2015 79 72 94 -9% Buy

Bank of Baroda 01/06/2015 163 183 217 12% Hold

Ambika Cotton Mills 18/05/2015 880 777 1149 -12% Buy

Sadbhav Engineer-ing Ltd. 04/05/2015 298 315 430 6% Buy

CARE Ltd. 20/04/2015 1666 1209 2250 -27% Buy

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

Omkar speciality Chemicals 16/03/2015 152 173 251 14% Buy

DHFL 16/02/2015 504 424 736 -16% Buy TV Today Network 27/01/2015 222 192 337 -13% Buy M&M 12/01/2015 1238 1240 1452 0% Buy Havells India 27/10/2014 274 248 346 -10% Buy All Cargo Logistics 05/08/2014 260 282 342 8% Buy PTC India Fin. Ser. 07/07/2014 39 39 45 0% Buy Adani Port 05/07/2014 280 335 347 20% Hold

Ahluwalia contracts 24/08/2015 235 235 368 0% Buy

L & T 05/07/2014 1750 1633 1866 -7% 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 13/07/15 IDFC BUY 154‐155.50 154.00 164‐175 148 PB 163.60 6.23

2 14/07/15 CANBK BUY 295.50‐298.50

295.50 316‐334 282 SL 282.00 ‐4.57

3 15/07/15 HINDUNILVR BUY 920‐929 920.00 975‐1012

887 SL 887.00 ‐3.59

4 16/07/15 KSCL BUY 752‐760 752.00 809‐874 714 PB 782.00 3.99 5 17/07/15 HEXAWARE BUY 274‐277 274.00 293‐315 263 PB 287.85 5.05

6 20/07/15 M&M BUY 1285‐1298 1285.00 1369‐1434

1240 TA 1369.00 6.54

7 21/07/15 MINDTREE BUY 1280‐1293 1280.00 1377‐1467

1222 PB 1323.80 3.42

8 22/07/15 CAIRN SELL 161.50‐163.50

162.80 150.55‐138

171 SL 171.00 ‐4.80

9 23/07/15 HCLTECH BUY 974‐987 974.00 1038‐1087

939 SL 939.00 ‐3.59

10 24/07/15 TATAMOTORS BUY 398‐402 398.00 425‐451 380 SL 380.00 ‐4.52 11 27/07/15 IBREALEST BUY 55‐58 56.50 63.50‐69 50.05 TA 69.00 22.12

12 28/07/15 ASIANPAINT BUY 846‐855 850.00 902‐941 816 TA 902.00 6.12

13 29/07/15 KOTAKBANK BUY 722‐730 722.00 770‐803 696 SL 696.00 ‐3.60

14 30/07/15 BHEL BUY 281‐284 281.00 300‐318 270 PB 289.65 3.08

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

1378 TA 1552.00 6.74

16 04/08/15 BHARAT‐FORGE

BUY 1155‐1168 1160.00 1248‐1337

1103 TA 1248.00 7.59

17 05/08/15 YESBANK BUY 835‐843 835.00 889‐939 805 SL 805.00 ‐3.59

18 06/08/15 INFY BUY 1078‐1089 1078.00 1148‐1203

1040 TA 1148.00 6.49

19 07/08/15 GLENMARK BUY 1037‐1048 1048.00 1105‐1158

1001 SL 1001.00 ‐4.48

20 10/08/15 BPCL BUY 948‐958 948.00 1011‐1057

914 SL 914.00 ‐3.59

21 11/08/15 JINDALSTEL BUY 81‐82.30 81.65 91‐101 74 PB 87.45 7.10

22 12/08/15 M&MFIN BUY 261‐264 261.00 279‐295 251 SL 251.00 ‐3.83

23 13/08/15 SUNPHARMA BUY 859‐868 863.50 916‐946 828 TA 946.00 9.55

24 14/08/15 CIPLA BUY 719‐727 723.00 769‐803 690 PB 748.00 3.46


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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 17/08/15 ARVIND BUY 291‐294 291.00 314‐339 275 SL 275.00 ‐5.50

26 18/08/15 ICICIBANK BUY 299‐303 299.00 319‐334 288 SL 288.00 ‐3.68

27 19/08/15 ULTRACEMCO BUY 3100‐3130 3100.00 3302‐3458

2991 SL 2991.00 ‐3.52

28 20/08/15 LT BUY 1798‐1816 1798.00 1915‐2006

1735 SL 1735.00 ‐3.50

29 21/08/15 DRREDDY BUY 4260‐4300 4260.00 4536‐4751

4110 SL 4110.00 ‐3.52


• 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 Voume 257

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