06-07-2015 to 11-07-2015

Format No: RH/ETE/WR Revision No: 0

Date: 2 Jul 2012

RH in Media

Market Commentary

BSE Sensex moved down slightly by 1.94% closing at 27,661.40 this week while Nifty dropped by 1.89% closing at 8,360.55.

The top gainer of the week is Asian paints Ltd., while top loser is Kotak Mahindra Bank.

7-8

-20

14• Importance of having your home insured

CEO’s Desk

For the second consecutive week market experienced a gap down opening. Market

posted a positive closing on Monday, however for the consecutive trading sessions

markets experienced a negative momentum. All the sectors traded negative except

Healthcare, and sectors like Metal, Oil & Gas, IT and Auto were the major losers.

Support level for the Nifty is 8352.72/8182.5

Resistance level for Nifty is 8448.51/8654.72

Market Summary

RH in Media

Top Economy News

Top Corporate News

Market Statistics

Stock idea- Grindwell Norton

Ltd

Learning center-Purchasing

power loss/gain

Market Indicators

Index 06 July 10 July

% Change

Re / $ 63.12 63.25

0.20%

Crude INR 3,315.69 3,335.80

0.60%

Gold INR 2,7957.8 2,7742.5

-0.77%

Capital Market Round-up

Index 06 July 10 July

% Change

Sensex 28,208.76 27,661.40

-1.94%

Nifty 8,522.15 8,360.55

-1.89%

BSE Midcap 10,962.77 10,870.45

-0.84%

BSE Small cap 11,426.99 11,335.94

-0.79%

The dream for many people is

to own a house, build a home

and raise a family there. Most

of us end up doing this, but

there is always the threat of

external events…

Read More

Format No: RH/ETE/WR Date: 2 July 2012

Top E Economy News

FM Arun Jaitley assures on-time payment of tax refund to exporters

Finance Minister Arun Jaitley today assured exporters of timely payment of tax refund and promised steps to boost

shipments, exporter’s body FIEO said. (ET)

Government mulls raising Rs 15,000 crore through gold bond scheme

Government is looking at raising Rs 15,000 crore in the current fiscal through the gold bond scheme, for which a

cabinet note is likely to be moved for consideration later in the month. (ET)

India to contribute $18 billion to BRICS' $100-billion foreign exchange reserves pool

India will contribute $18 billion to the $100 billion foreign-exchange reserves pool that is being set up by five

nations of the BRICS grouping to help each other "in case of any problems with dollar liquidity". (ET)

RBI issues Rs 100 notes with new numbering pattern

Reserve Bank of India (RBI) today said it has issued Rs 100 denomination banknotes in the Mahatma Gandhi

Series-2005 with a new numbering pattern. (ET)

India's manufacturing, services growth outpaced China in April: HSBC Manual scrutiny of Service Tax

returns from August 1: CBEC

Seeking to strengthen compliance and verification, the CBEC has said that beginning August 1 it will start manual

scrutiny of Service Tax returns of select assesses who have paid less than Rs 50 lakh of total tax during 2014-

15. (ET)

Top Corporate News

Ferrari IPO filing to come in days, says Fiat Chrysler CEO

Ferrari SpA, the supercar maker being spun off by Fiat Chrysler Automobiles NV, is close to filing for an initial

public offering, Fiat Chrysler chief executive officer Sergio Marchionne said..(Live Mint).

BRICS $100 billion lender seeks riskier projects than World Bank

The BRICS New Development Bank, formed by five of the world’s bigger emerging markets, is seeking to tackle

more riskier and challenging projects than traditional global finance institutes, such as the World Bank. (Live Mint)

Croma to sync online with offline to take on e-commerce retailers

Croma, the Infiniti Retail Ltd-controlled electronic products retail chain, is reworking its strategy to integrate its

online presence with physical stores. The chain, part of the Tata Group, is battling online retailers such as

Flipkart and Amazon for customers. (Live Mint)

Rosneft agrees to buy 49% of Essar Oil

Essar Group agreed to sell as much as 49% of Essar Oil Ltd to Russia’s OAO Rosneft, the world’s largest publicly

traded oil company, in a deal that would be worth about Rs.13,400 crore at Wednesday’s market price. (Live Mint)

SBI to spend Rs4,000 crore on digital services upgrade

The country’s largest lender State Bank of India (SBI) has raised its information technology (IT) budget by a third

this financial year as part of its strategy to improve its digital offerings. Live Mint)

Format No: RH/ETE/WR Date: 2 July 2012

Market Statistics

Grindwell Norton Ltd

Economic uptick could propel business prospects

We initiate coverage on Grindwell Norton Ltd (GWN), which has over 25% market share in Indian

abrasives industry and enjoys leading position with Corborundum Universal Ltd (CUMI). Strong parental

backing from Saint Gobain, which has a well-diversified product portfolio of variety of construction and

high performance materials, has worked well for GWN in cross selling products in global market. In

addition, better financial track record maintained in a sluggish market, a strong balance sheet and good

product mix, makes GWN a well-positioned player to get the benefit from industrial recovery, expected in

coming years down the line. Going ahead, given its focus over niche segment, customized product portfolio

and strong network of channel partners, we expect revenue and earnings CAGR of 18-20% and 20-22%

over FY16-20.

Duopoly advantage; economic uptick could propel growth

GWN, combined with CUMI, caters over 50% market share in Indian abrasive industry. Abrasive is a

segment which is mostly common across all kind of industrial activities for machining, polishing, designing,

etc. Though, company has been growing at a CAGR of 9-10% over the last 5 years due to sluggish industrial

activity in India; however, during FY15 GWN reported a strong 17.6% revenue growth and 23.4% net

profit growth, which reflects the signs of green shoots. In addition, launch of new products in PPL division

and commencement of new facility in HPR division could sustain financial performance going ahead. GWN

is currently operating at EBITDA and net margin of 15.9% and 9.1% respectively. Profitability has

improved over past 12 months due to control over material cost and operating expenses. Decline in

Major Gainers & Losers of the Week

Gainers Rs. %

Asian Paints Ltd. 817.00 + 7.09%

Dr. Reddy's Labs 3,767.10 + 6.18%

Sun Pharma. 923.75 + 6.04%

Losers Rs. %

Kotak Mahindra Bank 715.50 -50.15%

Vedanta 147.60 -14.95%

Cairn India Ltd. 171.85 -7.71%

Major Market Indices Round Up

Index 06 July

10 July % Change

Bankex 21,612.03

21,472.41 -0.64%

CG 17,982.64

18,427.92 2.74%

HC 16,940.61

17,055.35 0.67%

IT 10,593.24

10,156.38 -4.12%

Metal 9,182.94

8,871.54 -3.39%

Oil & Gas 10,115.86

9,775.30 -3.36%

Power 2,064.45

2,051.97 -0.60%

MFs - Top returns

Fund Name Last Week (% gain)

Religare Pan European Equity-RP (G) 3.2

Religare Pan European Equity-DP (G) 3.2

JPMorgan Europe Dynamic Equity -Reg 2.5

Global Market update

Index 06 July

10 July

% Change

Dow Jones 17,683.58

17,760.41

0.43%

Nikkei 20,112.12

19,779.83

-1.65%

Hang Seng 25,236.28

24,901.28

-1.32%

Format No: RH/ETE/WR Date: 2 July 2012

commodity prices including Crude oil aided operating margin and we are expecting the trend to continue

in rest of FY16.

Valuation: Premium value on performance in tough times

GWN is currently trading at TTM P/E of 39.7x and 1 year forwarded P/E of 28.2x (FY16 estimated Basic

EPS of INR27.9). We believe that the premium valuation of GWN is driven by its ability to deliver better

than expected numbers in tough times, which it sustained due to consumable nature of abrasives and its

leading position in domestic market. In addition, virtually debt free balance sheet and healthy cash flow

from operations could keep the fundamentals strong. With the positive outlook on industrial recovery and

better economic performance, we expect surge in revenue in coming years down the line. Using DCF and

FY16 forwarded P/E of 35x, we would suggest BUY with the target price of INR900.

Format No: RH/ETE/WR Date: 2 July 2012

Learning Center

PURCHASING POWER LOSS/GAIN

An increase or decrease in how much consumers can buy with a given amount of money. Consumers lose

purchasing power when prices increase, and gain purchasing power when prices decrease. Causes of

purchasing power loss include government regulations, inflation and natural and man-made disasters.

Causes of purchasing power gain include deflation and technological innovation.

One official measure of purchasing power is the Consumer Price Index, which shows how the prices of

consumer goods and services change over time. As an example of purchasing power gain, if laptop

computers cost $1,000 two years ago and today they cost $500, consumers have seen their purchasing

power rise. In the absence of inflation, $1,000 will now buy a laptop plus an additional $500 worth of

goods.

Retirees must be particularly aware of purchasing power loss, since they are living off of a fixed amount

of money. They must make sure that their investments earn a rate of return equal to or greater than the

rate of inflation, so that the value of their nest egg does not decrease each year.

Source: Investopedia

Disclaimer:

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note that the past performance may or may or may not be sustained in future. Insurance is the subject matter of the solicitation for the Insurance

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