DOMESTIC:

RIL arm to invest Rs1,300cr in Haryana for electronics hub.

New order boosts Indian Hume Pipes. SPARC's Rs250cr rights issue to open on March 28. Lupin shares tumble on reports of USFDA observations

on Goa plant. Suven Life Sciences gets patents for neurodegenerative

disease drug. L&T bags orders worth Rs1,672cr. Aurobindo Pharma gets final USFDA nod for

osteoporosis drug. Cipla invests additional USD3mn in US's Chase

Pharmaceuticals. ONGC Videsh Ltd, IOC consortium to buy Russian oil

fields for USD4.2bn.

ECONOMY:

India Inc's January overseas investment rises 40% at USD3.14bn.

Exports from SEZs slump 1.89% in April-December 2015. Govt may need an extra Rs25,000cr in risk to fiscal

deficit goal. Tough to achieve double-digit growth given global

headwinds: FM Arun Jaitley

INDUSTRY:

Car exports from India decline nearly 4% in April-Feb period.

Government ban on 350 drugs jolts 4% of pharma retail market.

Opec sees lower 2016 demand for its oil, pointing to higher surplus.

India is the largest three-wheeler industry globally. Chemical industry likely to reach USD224bn in FY17

TM

THE WEEKLY WRAP-UP 18th March 2016

One Year Sensex Performance

*Castrol India– December Ending | ** Supreme Petrochem—June Ending

Coverage Universe Valuations

Company CMP Reco. Tgt price Upside Mcap EV/Sales (x) EV/EBITDA (x) PE(x)

(Rs) (Rs) (%) (Rs bn) FY16E FY17E FY16E FY17E FY16E FY17E

Supreme Petrochem Ltd 115 BUY 150 30.6 11.1 15.5 10.5 0.3 0.2 6.6 4.4

Indian Hume Pipe Co. Ltd 327 BUY 475 45.2 7.9 15.1 10.6 8.6 7.7 8.0 6.5

Shanthi Gears Ltd 80 BUY 150 87.5 6.5 57.6 45.3 3.4 3.6 22.8 21.3

Hind Rectifiers Ltd 61 BUY 110 80.3 0.9 50.7 11.5 1.0 0.8 19.9 8.6

KCP Limited 76 BUY 105 37.8 9.8 24.7 17.6 1.9 1.7 10.9 9.2

Navneet Education Ltd 82 BUY 130 59.4 19.4 13.2 11.4 2.0 1.8 8.0 7.1

Harita Seating System Ltd 445 BUY 600 34.8 3.5 35.2 25.8 1.2 1.1 22.3 17.4

Camlin Fine Sciences 92 BUY 140 52.6 8.8 11.3 8.6 1.6 1.3 8.5 6.9

GEE Limited 38 BUY 70 84.2 0.9 16.5 11.9 0.7 0.6 6.4 5.7

Hester Biosciences Ltd 437 BUY 750 71.6 3.7 26.8 22.0 4.0 3.2 13.8 11.3

West Coast Paper Mills Ltd 62 BUY 110 76.4 4.1 11.8 3.2 0.6 0.5 3.7 3.0

Rallis India Limited 175 BUY 260 49.0 33.9 22.2 17.4 2.0 1.8 12.5 10.3

The Hitech Gears Limited 248 BUY 450 81.5 4.7 17.4 13.3 1.0 0.8 7.4 6.3

Bharat Bijlee Limited 804 BUY 1100 36.9 4.5 80.3 37.2 0.8 0.7 27.6 23.6

Castrol India Limited 371 BUY 650 75.1 183.6 28.1 26.2 4.7 4.5 17.9 16.7

Engineers India Limited 162 BUY 325 100.4 54.7 15.5 14.8 1.7 2.7 11.0 17.7

TNPL 208 BUY 350 68.2 14.4 6.7 5.7 1.4 1.4 5.5 5.0

Triveni Turbines Limited 100 BUY 135 35.3 32.9 32.3 27.1 0.4 0.4 2.1 1.8

Rajoo Engineers Limited 16 BUY 24 50.5 0.9 12.5 9.0 0.8 0.6 6.6 5.0

Price Performance (%)

Company 1M 3M 12M

Supreme Petrochem Ltd 12% 2% 72%

Indian Hume Pipe Co.Ltd 10% -22% 22%

Shanthi Gears Ltd -3% -22% -34%

Hind Rectifiers Ltd -11% -28% -18%

KCP Limited 23% -12% 25%

Navneet Education Ltd -4% -2% -25%

Harita Seating System Ltd 17% 1% 163%

Camlin Fine Sciences 10% -6% 0%

GEE Limited 0% -7% 52%

Hester Biosciences Ltd 6% -24% -10%

West Coast Paper Mills Ltd 4% -4% 21%

Rallis India Limited 15% -1% -25%

The Hitech Gears Limited 3% -17% -15%

Bharat Bijlee Limited 11% 1% 27%

Castrol India Limited -6% -13% -22%

Engineers India Limited 6% -28% -22%

TNPL -3.2% -15% 60%

Triveni Turbines Limited 6% -3% -31%

Rajoo Engineers Limited 7.0% -34% 15%

15000

20000

25000

30000

35000

40000

The week that went by: After the first two days’ winning streak, the markets snapped mid-week. The domestic bourses mirrored the slide in global stocks. The overall market depicted weakness for the week. There was minuscule buying in the latter part of the week. The markets were flat on the last trading day of the week. Not much action witnessed in the same. But the closing was on a decent note for the week leaving the hopes for the following week to open on a positive stance.

CORPORATE ACTION: Below are mentioned the interim dividend status of our coverage stocks. It definitely indicates the strength in the company and conviction in the management.

Source: BSE India website

TM

Dividends snapshot

Company Interim Dividend Face value Rs Ex Date Record

Rajoo Engineers Limited Rs 0.25 1 NA on or before 3/31/2016

Supreme Petrochem Limited Rs 1.50 10 22-Mar-16 23-Mar-16

17-Mar-16 19-Mar-16

17-Mar-16 19-Mar-16

KCP Limited Rs 1.00 1 17-Mar-16 18-Mar-16

Harita Seatings Limited Rs 3.5 10 21-Mar-16 22-Mar-16

Castrol India Limited Rs 5.0 5 27-Apr-16 NA

Hester Biosciences Limited Rs 3.00 10 17-Mar-16 18-Mar-16

Triveni Turbines Limited Rs 0.70 1 22-Mar-16 24-Mar-16

Shanthi Gears Limited Rs 0.50 1 08-Feb-16 09-Feb-16

The Hitech Gears Limited Rs 1.5 10 25-Feb-16 26-Feb-16

Engineers India Limited Rs 2.00 5 08-Mar-16 09-Mar-16

Navneet Education Limited Rs 2.20 2 14-Mar-16 15-Mar-16

Hind rectifiers Limited NA 2 NA NA

Rallis India Limited NA 1 NA NA

Bharat Bijlee Limited NA 10 NA NA

Tamil Nadu Newsprint Limited NA 10 NA NA

Camlin Fine Sciences Limited NA 1 NA NA

Gee Limited NA 2 NA NA

West Coast Paper Limited NA 2 NA NA

Indian Hume Pipes Limited Rs 3.00 2

India Inc's January overseas investment rises 40% at USD3.14bn Overseas investment by the Indian companies rose by 40.4% to USD3.14bn in January 2016, as per the Reserve Bank data. In January 2015, Indian companies had invested USD2.24bn in overseas markets. The investments were in the form of issuance of guarantees (USD 1.41bn), loan (USD193.05mn) and of equity (USD1.54bn).

Our Comments: The major investors include Emcure Pharma, Glenmark Pharma, Edelweiss Financial, Shree Renuka Sugara, Living Entertainment, Gujarat State Fertilisers and Chemicals and Infosys.

Exports from SEZs slump 1.89% in April-December 2015 Exports from special economic zones (SEZs) declined 1.89% y-o-y to Rs3.41lakh crore in April-December 2015. In 2014-15 too, exports from these zones fell 6.13% to Rs4.63 lakh crore. In order to boost exports from SEZs, the government periodically reviews the policy and operational framework of these zones and takes necessary steps to facilitate speedy and effective implementation of SEZs

Our Comments: During the last three years and current financial year (up to February 2016), the Board of Approval has granted more time to as many as 132 developers of SEZs across the country to complete projects.

Govt may need an extra Rs25,000cr in risk to fiscal deficit goal Prime Minister Narendra Modi’s administration plans to ask Indian lawmakers later this year for about Rs25,000cr more to cover a proposed salary increase, according to finance ministry officials with knowledge of the matter. The budget unveiled last month has accounted for about 70% of the Rs.1.02trillion (USD15bn) salary hike proposed by the Seventh Pay Commission. The plan to implement the once-in-a-decade wage increase for 4.7mn workers and 5.2mn pensioners has been seen as crucial to the budget’s credibility.

Our Comments: Without generating extra revenue or cutting spending to pay for salaries, Modi risks failing to meet his goal of narrowing the budget gap to a nine-year low of 3.5% of GDP in the next fiscal year. Slippage threatens to stoke inflation and reduce room for the central bank to lower borrowing costs.

Tough to achieve double-digit growth given global headwinds: FM Arun Jaitley Asserting that its "extremely difficult to achieve double-digit growth in the current global environment, Finance Minister Arun Jaitley said there is a scope for improvement from the current rate if reforms are carried on. He also said that "I don't claim that it is possible in this global environment to come anywhere close to double-digit growth.

Our Comments: It is possible for India to get a significant amount of growth if all the policy changes, taxation and otherwise about in India, we have better monsoon, step up investment in agriculture and private sector and the supportive global environment.

TM

KEY NEWS ANALYSIS

India overseas investments on up rise

SEZ exports slump

Fiscal deficit goal at risk

FM on the growth in economy

Car exports from India decline nearly 4% in April-Feb period Passenger car shipments from India declined 3.71% to 4,84,602 units in April-Feb period of this fiscal due to challenges in top export markets like Algeria, Europe and neighbouring countries. Car makers had shipped 5,03,292 units in the same period of the previous fiscal.

Our Comments: According to SIAM, the decline in car exports from India is due to issues in one of the biggest markets Algeria, which has brought in changes in technical regulations.

Government ban on 350 drugs jolts 4% of pharma retail market The ban on irrational 350-odd fixed dose combination drugs including wide-selling pain-killers, anti-diabetic medicines and respiratory therapies, will impact nearly 4% or Rs3,800cr of the organised pharma retail market.

Our Comments: The ban on FDCs over safety and efficacy concerns will adversely affect MNCs like Pfizer and Abbott and domestic companies including Alkem, Ipca and MacLeods. Top brands which will face a ban include popular analgesics Zerodol and Sumo, dermatology drug Panderm Plus, anti-diabetic medicine Tripride, and gastro-intestinal drug Zenflox, besides cough syrups Phensedyl and Corex.

Opec sees lower 2016 demand for its oil, pointing to higher surplus The Organization of the Petroleum Exporting Countries predicted global demand for its crude oil will be less than previously thought in 2016 as supply from rivals proves more resilient to low prices, increasing the excess supply on the market this year. Demand for Opec crude will average 31.52mn barrels per day this year, Opec said in a monthly report, down 90,000bpd from last month’s forecast.

Our Comments: Opec pumped 32.28mn bpd in February, the group said citing secondary sources, down about 175,000 bpd from January. The report points to a 760,000-bpd excess supply in 2016 if the group keeps pumping at February’s rate, up from 720,000 bpd implied in last month’s report.

India is the largest three-wheeler industry globally As indicated by an ICRA report, India has emerged as the largest 3W industry with a large domestic market and export base on the back of strong demand from local as well as international markets. With industry volumes of 9,40,000 units in FY2015, India is positioned as the largest manufacturer as well as market for three wheelers, globally.

Our Comments: In contrast to domestic demand, exports of 3W from India have grown at much higher pace (i.e. 20.4%) during the same period. As a result of this trend, the share of exports in 3W industry volumes rose from 18% in FY2006 to almost 43% to 10mn units in FY2016.

Chemical industry likely to reach USD224bn in FY17 As per a senior government official, country's chemical industry has tremendous scope to increase share in global trade and is expected to reach USD224bn in next financial year from USD144bn at present. India is an important player in the global trade of chemicals, plastics and allied products. There is tremendous scope to increase our share in the global trade.

Our Comments: Finding new markets for exports is a part of government's vision of achieving exports of USD900bn by 2020 and raise India's share from 2% to 3.5%.

TM

KEY NEWS ANALYSIS

Car exports decline mode

Pharma sector gets the hit

India the leader in 3W industry

globally

Lower oil demand in 2016

Targets set for the chemical industry

growth

RIL arm to invest Rs1,300cr in Haryana for electronics hub Reliance Industries' wholly-owned arm Model Economic Township Ltd will develop an electronics manufacturing hub and footwear park at Jhajjar, Haryana with an investment of Rs1,300cr. Model Economic Township Ltd, formerly known as Reliance Haryana SEZ Ltd, also expects that the electronic hub and footwear park would attract a further investment of Rs2,600cr from units to be established inside it.

Our Comments: The project cost for electronic manufacturing cluster would be Rs500cr and for footwear park Rs800cr. Total project cost for both would be Rs1,300cr.

SPARC's Rs250cr rights issue to open on March 28 Sun Pharma Advanced Research Company (SPARC) said its Rs250cr rights issue will open on March 28 and closes on April 11, 2016.

Our Comments: The proceeds of the issue will be utilised for meeting costs related to pharmaceutical research and development, clinical trials and for other general corporate purposes.

Lupin shares tumble on reports of USFDA observations on Goa plant The United States Food and Drug Administration (USFDA) cited nine observations in its inspection of the company's Goa facility last week.

Our Comments: In this regard, exchange has advised the company to provide clarification/confirmation on the news item in detail. The response from the company is awaited.

Suven Life Sciences gets patents for neurodegenerative disease drug Suven Life Sciences Ltd has been granted a patent each by China, Eurasia and Hong Kong for a drug used in the treatment of neurodegenerative diseases. The company has been granted “one product patent from China, one product patent from Eurasia and one product patent from Hong Kong corresponding to the new chemical entities for the treatment of disorders associated with neurodegenerative diseases. The patents will be valid till 2032.

Our Comments: With these new patents, Suven has 20 granted patents from China, 16 from Eurasia and 19 from Hong Kong. “These granted patents are exclusive intellectual property of Suven and are achieved through internal discovery research efforts. Products out of these inventions may be out-licensed at various phases of clinical development like phase-I or phase-II.

Wipro bags deal from Danish utility provider NRGi Wipro said it has bagged a multi-year engagement with NRGi, one of the top 5 utility providers in Denmark. The financial details of the deal are not disclosed. As part of the contract, Wipro will develop a new IT platform to transform the utility company's CRM, billing and Service Bureau operations.

Our Comments: Currently, Denmark is opening up its energy sector and reworking the regulatory framework to bring in more transparency for customers and pave the way for setting up a competitive market for energy suppliers and utility companies.

TM

STOCKS NEWS ANALYSIS

RIL to invest in electronic hub

Right issue of SPARC

Lupin under USFDA scanner

Grant of patent for Suven

Wipro bags deal

L&T bags orders worth Rs1,672cr Larsen & Toubro said its construction arm has bagged orders worth Rs1,672cr across various business verticals. The first order is worth Rs967cr, received from UP Avas Vikas Parishad, for a multi-storey residential project in Lucknow. The firm's power and distribution business has bagged Rs580cr project in international markets. The company said it has also received Rs125cr order from ongoing jobs of L&T Construction's water and effluent treatment business.

Our Comments: The orders that have been received have a long execution lead time.

Aurobindo Pharma gets final USFDA nod for osteoporosis drug Aurobindo Pharma has received final approval from USFDA to manufacture and market Ibandronate Sodium tablets,150mg used for the treatment and prevention of osteoporosis in women, in the American market. The company said that this product is expected to be launched in the first quarter of next fiscal. The approved ANDA is bioequivalent and therapeutically equivalent to the reference listed drug product Boniva Tablets of Hoffman-La Roche Inc.

Our Comments: The approved product has an estimated market size of USD55mn for the twelve months ending January 2016 according to IMS.

Cipla invests additional USD3mn in US's Chase Pharmaceuticals Cipla Ltd has made an additional investment of USD3mn in US-based Chase Pharmaceuticals engaged in developing novel approaches to improve treatments for Alzheimer's disease. The company in May 2014 had invested USD1.5mn to acquire 14.6% stake in Chase Pharmaceuticals.

Our Comments: Cipla UK's total investment in Chase would aggregate to approximately USD5.12mn for a 16.7% stake on a fully diluted basis.

ONGC Videsh Ltd, IOC consortium to buy Russian oil fields for USD4.2bn IOC, Oil India Ltd and a unit of Bharat Petroleum Corp Ltd signed sale purchase agreement for 29.9% stake in Tass-Yuriakh oilfield from Russia's Rosneft for USD1.28bn. The consortium also signed Heads of Agreement with Rosneft for taking 23.9% stake in Vankor oilfield for just over USD2bn. Simultaneously, OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), which had in September last year bought 15% in the Vankor for USD1.26bn, signed a MoU envisaging its stake going up in the Siberian oilfield to 26% by paying an additional USD925mn.

Our Comments: The pacts allow India partners to participate in Russian upstream sector, whilst opening the growing India market to Rosneft.

KEC International bags orders worth Rs1,041cr KEC International has bagged orders worth Rs1,041cr from both domestic and international markets. In transmission and distribution business, the company has secured orders in India, Africa and the America amounting to Rs933cr. In cable business, the company has secured orders of Rs108cr.

Our Comments: KEC International said in the domestic market, it has received orders worth Rs246cr from Power Grid Corporation of India for the construction of transmission lines in various parts of India and an order worth Rs83cr from West Bengal State Electricity Transmission Co Ltd for construction of transmission lines. In the international market, the company has received orders worth Rs404cr and Rs200cr.

TM

STOCKS NEWS ANALYSIS

Final approval for Aurobindo

Order for L&T

Investment by Cipla

ONGC, IOC consortium to buy

Russian fields

KEC bags order

IPO Watch:

Four companies in queue to hit D-Street

HealthCare Global Enterprises (HCG), Bharat Wire Ropes, Khemani Distributors & Marketing and Infibeam will hit the market going forward in the near term.

Details:

The IPO of HCG comprises a fresh issue of up to 1.16cr equity shares

and an offer for sale of up to 1.82cr shares by its existing shareholders.

The issue of Bharat Wire Ropes will open on March 18 and close on

March 22. The company aims to raise Rs70cr through its IPO. Equity shares worth Rs3.5cr will be reserved for subscription by eligible employees.

The initial public offer of Khemani Distributors & Marketing will open on

March 16 and close on March 18 under the SME segment. The company aims to raise Rs15.84cr through its issue.

On March 21, Infibeam Incorporation will hit the market to mop up

Rs450cr through an initial share sale. The issue will close on March 23.

Initiating report on Rajoo Engineers Limited

We initiated a fundamental research report on Rajoo Engineers Limited Rajoo Engineers Limited (REL) is one of the leading extrusion machinery manufacturer in India and has emerged as an undisputed global player in blown film and sheet extrusion lines. Owing to its focused efforts in blown film and sheet extrusion lines, the company enjoys premium market position in this

segment. Being a technology driven company, product innovations, world‐class

quality, state‐of‐the‐art workmanship, increased energy efficiency and high levels of sophistication and automation have become the hallmark of REL’s products during all these years, positioning the company's products on a global platform, competing with the established world leaders. Owing to the innovation skills and the ability to meet the technical demand, REL has substantial sales coming from exports leading to successful and satisfied customer base across the globe. We have initiated a BUY on the stock with a target price of Rs24 from a 12 months’ perspective.

Coverage news:

New order boosts Indian Hume Pipes Indian Hume Pipes has secured a water supply contract worth Rs145.15cr in Alwar, Rajasthan from the government of Rajasthan.

Our Comments: This is the second order that the company has received this month. On the corporate action, IHP has announced a higher interim dividend, thereby indicating that the third quarter results were just an aberration. Stock is giving an excellent opportunity to long investor.

TM

STOCKS NEWS ANALYSIS

Fundamental pick of the month

Contract for IHP

IPO’s in the pipeline

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TM