Вы находитесь на странице: 1из 10

Vol.

: 306
8th Aug,2016

Index

MarketView
1 Market View

Is the market overvalued?


CompanyUpdate
2 Finally The Constitutional Amendment to roll out GST is passed by the parliament. It has enabled The

Government to start the exercise to implement GST by introducing set of rules and regulations for states
and center both. The analysts world over have praised India for adopting the GST at very right time. In
Aroundthe
fact during the last ten years the actual shape and picture of GST has widely improved compared to the
Economy

3 original draft introduced before ten years. So the time lapsed has benefited the country. The country will

have major benefits on back of GST over long period of time. The ease of doing business will be greatly
KnowledgeCorner 3 improved, the revenue leakages will be minimized and the aggregate revenue to The Government will
be increased without increasing the tax burden.

MutualFund
4 The common question arises at this point of time is weather the market is overvalued? There are certain parameters to evaluate the market.

CommodityCorner5 1. Markets on the basis of PE

The market currently trades at PE of 19.3 which is also a ten year average valuation and is well below
ForexCorner
6 then the peak of 22.6 seen in 2007-08.

2. The markets on the basis of dividend yield


ReportCard
7 The dividend yield is an important indicator of how heated the valuations are. The current dividend yield

stands at 1.46% which is third highest in last decade. In 2012-13 the yield was 1.64% and in 2008-09 it
ShortTermCallStatus8 was 1.52% so the markets do not look expensive by this parameter also.

3. Markets on the basis of market cap to GDP ratio


Editor&Contributor
This ratio is made popular by Warren Buffett who described this indicator as possibly the best single
MargiShah
measure of where valuations stand at any given point of time. The FY16 market cap to GDP ratio stands
at 70%, well below the long term average of 78% and at a much more comfortable level compared to

103% in 2008.

The market does not look over heated. Yet it is extremely important to evaluate the script thoroughly
SpecialContributors
before investing as the market is not cheap also at this level. It is also important to take into account the
AsheshTrivedi
effect of good monsoon and the sustained infrastructure spending by The Government. Last year The
AdityaNahar
Government completed the roads of 6000 kms and issued orders for 10000 kms. This year the target is
to order 25000 kms and finish 15000 kms. If 80% of this target is achieved it is a big jump over the ten

years average. Recently in an interview, Ridham Desai of Morgan Stanley said that the market is up

20% since February but if one compares it with last August it is down by 1%. We look rich compared to

other emerging markets. In 2007 India traded at 2.2 times the EM book multiples. The Indias own book

multiple was 6.5 times and the rest of EMs was at 3.3 times. Today India is trading at 2.2 times EM
book multiple but Indias own book multiple is 3X which is half what it was in December 2007. Other

emerging markets have their own structural issues that is why their book multiple is drastically reduced.

It is also interesting to know that out of two companies, one company has surprised the market with

earnings. Considering the good growth prospects going forward, it is widely expected that the corporate
earnings will improve further. Technically the market has strong support at 8480-8500 range and

Forsuggestions,feedback resistance at 8680-8700 range above which, 8900 will be a resistance level.
andqueries
jstreet@jhaveritrade.com K a m a l J h a v e r i
MD- Jhaveri Securities

-1-

Vol.: 306
8th Aug,2016

Company Update : Coromandel International Ltd.


Financial Basics

Company Basics
BSE Code
NSE Symbol
EQUITY (` in Cr.)
MKT.CAP (` in Cr.)

506395

FV (`)
EPS (`) (TTM)

1.00
11.81

COROMANDEL

P/E (x) (TTM)

20.29

P/BV (x) (TTM)


BETA
RONW (%)

2.88
0.6040
15.90

29.14
6984.20

Share Holding Pattern


Holder's Name
Foreign
Institutions
Promoters
Non. Promoters
Public & Others
Govt Holding

% Holding
6.33
9.47
62.10
0.00
13.16
8.95

Valuation : COROMANDEL is trading at `259. We recommend Buy with target price of `308, valuing stocks
17.5xFY19E EPS of `17.61.The stock currently trades at 18x of FY17E, 15.65x of FY18E and 13.61x of FY19E.
Company Overview

Coromandel is a flagship company of the Murugappa Group and is a subsidiary of E.I.D. Parry (India) Limited
(EIDP) which holds 60.81% of the equity share capital in the Company. The Company is engaged in the business
of farm inputs comprising of Fertilisers, Crop protection, Specialty Nutrients and Organic compost.
Investment rational
Pioneer in introducing and promoting the concept of Crop Specialty Nutrition in India
With its presence across water Soluble fertilizers, Sulphur products and Micro Nutrients segments, Coromandel ranks
among the market leader, providing crop specific solutions and quality agri inputs to the farming community. Government
introduced number of measures ranging from micro irrigation, balanced crop nutrition and soil health awareness which
bodes well with business objectives. Though the adverse seasonal conditions impacted the industrys performance in 201516, the segment continues to offer attractive growth opportunities.
Leader in the complex fertilizer segment
Coromandel has further fortified its leadership position in the Complex fertilizer segment, by enhancing its market share
from 23% in 2013-14 to 26% in 2014-15. It is now the market leader in Complex segment. The overall market share in
Phosphatics segment improved from 16.0 to 16.3% with a healthy volume growth of 15% over last year. Coromandel has
been at the forefront of providing unique farming solutions since its inception in 1961.

Improving quality perception and positioning of Single Super Phosphate (SSP)


With the integration of erstwhile Liberty Phosphate, Coromandels SSP Business will focus on brand and product
differentiation by providing value added offering to the customers. During FY15, SSP Business engaged in brand
building initiatives for integrating Double Horse brand with Gromor through mass media campaigns. The SSP
Business has enhanced its raw material procurement efficiency by tying up rock and acid sources.

- 2-

Vol.:
306
8th Aug,2016

Around The World


Weekly Market Recap :

On the macro front, data released by the government after market hours on Monday, 1 August 2016 showed that eight core
industries comprising nearly 38% of the weight of items included in the Index of Industrial Production (IIP) increased 5.2% in
June 2016.
The outcome of a monthly survey released on Wednesday, 3 August 2016 showed that Indian service providers enjoyed a
welcome upturn in demand during July, with a faster increase in new business underpinning stronger growth of output and
boosting confidence.
The Rajya Sabha on Wednesday, 3 August 2016 passed the Goods and Services Tax (GST) constitutional amendment bill. The
amended GST bill once again will have to be ratified by the Lok Sabha.
The Bank of England on Thursday, 4 August 2016 cut its benchmark interest rate by 25 basis points to 0.25% from 0.5%.

Market Eye Week ahead :

The major domestic event in the upcoming week is the Reserve Bank of India's (RBI) third bi-monthly monetary policy
meeting scheduled on Tuesday, 9 August 2016. The central bank had left its benchmark repo rate unchanged at 6.5% in its
last meeting.

The government will announce data on industrial production for June 2016 on Friday, 12 August 2016. India's industrial
production (IIP) increased 1.2% in May 2016 over May 2015.

On Friday,12th August the inflation based on the consumer price index (CPI) for July 2016 is scheduled to be released by
the government. CPI inflation accelerated to 5.77% in June 2016 from 5.76% in May 2016.

Key Events / Factors to Watch


1. Mon : Idea cellular, Inox leisure, Hero MotoCorp, Colgate, SRF, Max Financial earnings
2. Tue : RBI monetary policy, Adani Ports, Adani Power, Apollo Tyres, Lupin, Natco Pharma, Uco Bank, PFC earnings
3. Wed : Adani Enterprise, Thermax, M&M, Rajesh exports, ITD cementation, Suven Life science earnings
4. Thu : Aditya Birla Nuvo, Bank of Baroda, IPCA laboratories, MRF, Va Tech Wabag, KRBL, IRB infrastructure earnings

5. Fri: IIP data for the month of June 2016, CPI data for the month of July 2016, SBI. Avanti Feeds, Sun Pharma, Cipla, Bank of
India, BEL, Oriental Bank earnings

Knowledge Corner :
Enterprise Value

Enterprise Value, or EV for short, is a measure of a company's total value, often used as a more comprehensive alternative to equity
market capitalization. The market capitalization of a company is simply its share price multiplied by the number of shares a company
has outstanding.

Enterprise value is calculated as the market capitalization plus debt, minority interest and preferred shares, minus total cash and cash
equivalents. Often times, the minority interest and preferred equity is effectively zero, although this need not be the case.

- 3-

Vol.: 306
8th Aug,2016

Mutual Fund Corner


Top 10 Sector Break-Ups

Fund Name
Birla Sun Life Balanced '95 Fund

AMC

Birla Sun Life Asset Management Company Ltd

Type

Equity-oriented

Category
Launch Date

Financial
Automobile

19.91
8.04

Energy

7.92

Healthcare

6.99

Open-ended and Hybrid

Engineering

5.29

February 1995

Technology

5.07

Services

4.22

FMCG

3.42

Diversified

3.01

Chemicals

2.37

Fund Manager

Mahesh Patil & Pranay Sinha

Net Assets
(` In crore )

Rs. 3501.9 crore as on Jul 31, 2016

History

Fund (%)

Sector Weights

Scheme Name

2013

2014

2015

2016

367.19

545.50

563.81

631.77

Total Return (%)

6.13

48.58

3.36

12.05

Sharpe Ratio

1.40

+/- VR Balanced

-0.13

21.81

5.54

3.49

Beta

0.96

Rank (Fund/Category)

17/32

14/57

34/65

9/89

R-Squared
Alpha

0.90

52 Week High (Rs)

367.19

547.99

581.68

631.77

52 Week Low (Rs)

314.56

354.48

534.04

504.22

Net Assets (Rs.Cr)

620.20

1058.09

2099.74

2797.01

2.87

2.75

2.50

NAV (Rs)

Expense Ratio (%)

Risk Analysis
Volatility Measures
Standard Deviation

12.44

9.65

Composition (%)
Equity

70.09

Debt

23.48

Cash

6.43

Fund Performance v/s S&P CNX Nifty

Fund Style
Investment Style
Growth

Blend

Value

Medium
Small

Fund
CNX Nify
(Rebased to 10,000)
- 4-

Capitalization

Large

Source : - www.valueresearchonline.com

Vol.: 306
8th Aug,2016

Commodity Corner
BULLION
FUNDAMENTAL: Last week bullion dropped where silver dropped by 2.64% followed by over 1% losses in gold prices where major loss came on Friday as the dollar rose after U.S. data showed employment increased more than expected in July, raising the probability of an interest rate hike from the
Federal Reserve this year. Nonfarm payrolls increased by 255,000 jobs last month as hiring rose broadly after an upwardly revised 292,000 surge in
June, the Labor Department said. U.S. employment increased more than expected in July and wages picked up, which should bolster expectations of
an acceleration in economic growth and raise the probability of a Federal Reserve interest rate hike this year. Nonfarm payrolls rose by 255,000 jobs
last month as hiring increased broadly after an upwardly revised 292,000 surge in June, the Labor Department said. Last month's strong job growth
should reinforce the Fed's confidence in a labor market that officials view as at or near full employment. Fed Chair Janet Yellen has said the economy
needs to create just under 100,000 jobs a month to keep up with population growth. The second straight month of robust job gains is a boost to the
economy after growth averaged a tepid 1.0 percent annual rate in the last three quarters. After a policy meeting last month, the Fed described the labor
market as having "strengthened" and said it appeared it was still tightening. The Bank of England cut interest rates to the lowest level in history. Interest
rates around the world have fallen into negative territory, providing a boost to bullion prices this year. Bullion prices in top consumer China were seen at
a premium of $1-$2 an ounce to the global spot benchmark, unchanged from last week. Premiums in Hong Kong also stayed at 20-60 cents an ounce.
In India, dealers were offering a discount of up to $58 an ounce, compared with last week's discount of $52. India's gold imports fell for a sixth straight
month in July as weak demand and record high discounts prompted banks and refineries to reduce overseas purchases of bullion. In the week ahead,
investors will continue to focus on U.S. economic reports to gauge if the world's largest economy is strong enough to withstand a rate hike in the coming
months, with Fridays retail sales data in the spotlight.
RECOMMENDATION : BUY GOLD @ 30950 SL 30650 TGT 31250-31600. BUY SILVER @ 45800 SL 45200 TGT 46800-47600

BASE METALS
FUNDAMENTAL: Last week, base metals prices ended with mixed node where zinc prices gained by around 2 percent followed by more than 2 percent
gains in nickel prices and 1.5 percent gains in aluminium prices while copper prices dropped over 3 percent and lead prices settled flat. Zinc prices
gained as support seen as mine-output cuts including those at Glencore Plc reduced supply. Nickel prices gained as Philippines suspends operation of
a seventh local nickel miner. Copper prices dropped amid mounting concern that economic stimulus planned around the world wont be enough to push
up demand. Goldman Sachs Group Inc., forecasts that the price may slump to $4,000 a metric ton over 12 months as mine supply picks up, producers
enjoy lower costs and demand growth softens. The closure of zinc mines in Australia and overseas is pushing up the price of zinc, which has already
risen 60 per cent this year to around $US2,240 a tonne. That makes zinc, which is primarily used to galvanise steel with a protective coating, the best
performing base metal of 2016. Recent closures include the giant Century mine in Australia and the Lisheen mine in Ireland. Output cuts, such as those
undertaken by Glencore, due to previously low prices have also contributed to expectations of shortages this year and next. A recent survey showed the
zinc market deficit this year at 221,000 tonnes this year and 269,000 next year. One sign of a tighter market are zinc stocks, which in LME approved
warehouses have fallen about 30 percent since September last year to 430,075 tonnes. The Philippine government has suspended the operations of
nickel miner Claver Mineral Development Corp, Environment and Natural Resources Secretary Regina Lopez said. The announcement raises the number of Philippine miners under suspension to seven, all of them nickel producers, as the government has launched a crackdown against those alleged
to cause environmental harm. The Philippines supplied 95 percent of China's nickel ore imports in the first six months of 2016, according to Chinese
customs data, and while global stocks are high a suspension or closure of more mines could drive refined nickel prices up further. Adding further optimism to July's reading, the labor participation rate ticked up by 0.1 to 62.8% while the unemployment rate remained flat at 4.9%.
RECOMMENDATION : SELL ALUMINIUM @ 111 SL 113.50 TGT 109.50-107. SELL LEAD @ 122 SL 124 TGT 119-117.ELL COPPER @ 328 SL
336 TGT 320-312 SELL ZINC @ 154 SL 158 TGT 149-146. SELL NICKEL @ 730 SL 756 TGT 705-685

ENERGY
FUNDAMENTAL : Crude oil prices settled flat recovering from lows as prices seen under pressure as a glut of crude and refined products weighed on
markets and investors eyed a possible stutter in China's imports. Downward pressure returned as overproduction in crude and refined products has left
onshore storage tanks brimming and triggered the chartering of tankers to store unsold fuel. Oil production from the Middle East swelled to a new high
while US output continued to shrink, the International Energy Agency (IEA) said on Wednesday, suggesting that the strategy deployed by the Organization of Petroleum Exporting Countries (OPEC) was starting to bear fruit. Near record high OPEC output has been a drag on oil prices over recent
months, with the cartel's members continuing to boost crude production. The latest data revealed that Iraq's oil output reached 4.6 million barrels per
day in July, its highest level since January. Crude oil stockpiles expanded by 1.41 million barrels over the week to July 29, following a 1.67 million barrels rise a week before, while had forecast a drop of 1.74 million barrels. Natural gas prices dropped by 3.53% as concerns about an uptick in production and forecasts of milder weather pressured the market. It was the first drawdown in a summer week since August 2006, and many analysts and
traders had expected natural gas to rally after the unexpected withdrawal. Weather reports have forecasted moderating temperatures over the next six
to 10 days, which could be putting downward pressure on natural gas prices. While hotterthan- average temperatures tend to lift demand for natural gas
as people look to cool their buildings, milder temperatures can do the reverse. U.S. natural gas supplies fell for the first time in the summer in a decade.
Supplies have only declined twice before in the summer, both times in 2006. While gas has rebounded after tumbling to a 17-year low five months ago
amid surging production from shale formations, inventories remain on course to reach an all-time high.
RECOMMENDATION : BUY CRUDE @ 2720 SL 2600 TGT 2850-2940. BUY NAT.GAS @ 183 SL 175 TGT 190-198

- 5-

Vol.: 306
8th Aug,2016

Commodity Corner

Forex Corner

Market Recap :

The Indian rupee on Monday was trading little


changed against the US dollar, ahead of the
Reserve Bank of Indias (RBI) bi-monthly policy on
Tuesday.

The home currency was trading at 66.77 a dollar, up


0.01% from its previous close of 66.78.

The rupee opened at 66.83 a dollar and touched a


high and a low of 66.71 and 66.83.

The dollar index, which measures the US currencys


strength against major currencies, was trading at
96.355, up 0.16% from its previous close of 96.194.

Market Eye Week ahead :

The prices have been trading in rising channel pattern form past few weeks and price has shown breakdown of its lower
band of channel pattern at 67.40 levels on daily chart. Prices have been facing resistance of horizontal trend line at 67.50
levels on daily chart. Moreover, price have been trading below its 50 daily moving average which suggest near term
trend is weak. So any rally in the prices towards 67.50 level, used as selling opportunity. A momentum indicator RSI has
remained below 60 levels on daily chart, which suggest bearishness in the prices. A momentum indictor MACD has given
negative sign on hourly chart, which gives negative confirmation to the prices. For now we expect prices to move lower
towards 66.75 levels in few trading sessions.

USD/INR
Level

S2

S1

CP

R1

R2

High

Low

Close

USD/INR

66.77

66.89

67.08

67.20

67.39

67.28

66.97

67.00

Level

S2

S1

CP

R1

R2

High

Low

Close

EUR/INR

74.08

74.44

75.00

75.36

75.92

75.57

74.65

74.79

Level

S2

S1

CP

R1

R2

High

Low

Close

GBP/INR

86.77

87.51

88.69

89.43

90.61

89.88

87.96

88.24

Level

S2

S1

CP

R1

R2

High

Low

Close

JPY/INR

64.71

66.50

66.03

66.82

67.35

66.57

65.25

66.28

EUR/INR

GBP/INR

JPY/INR

-- 46--

Vol.: 306
8th Aug,2016

J Street Recommendations Report Card

Nifty last week opened at 8654.30, attained high at 8711.30 and fell to a low of 8518.15. Nifty finally closed the week at
8683.15 thereby showed a net rise of 0.52% on week to week basis. The buying range was 8610-8545. The low
registered last week was 8518.15 and closed at 8683. Traders long and holding the same can maintain the stop loss at
8467. Expect a rise towards 8849-9119 range in time to come. The supply zone on week chart is 8849-9119. Support will
be at 8637-8563.

Top Fundamental Stocks


Rec. Date

CMP on Rec.

CMP

Target

Absolute
Return @
CMP

Status

Coromandel
International

25/07/2016

235

259

308

10%

Buy

Capital First

06/06/2016

552

740

660

34%

Profit book

Wonderla Holidays

25/04/2016

387

402

498

4%

Accumulate

Mold-Tek Packaging

04/04/2016

138

204

179

48%

Buy

Jamna Auto

22/02/2016

133

199

181

50%

Buy

MT Educare

01/02/2016

164

147

230

-10%

Buy

Garware-Wall Ropes

28/12/2015

425

492

550

16%

Buy

AYM Syntax

23/11/2015

121

93

223

-24%

Buy

Natco Pharma

02/11/2015

509

636

636

25%

Buy

SRF

21/09/2015

1140

1538

1374

35%

Buy

Ahluwalia contracts

24/08/2015

235

290

368

23%

Buy

Infinite Computer
Sol.

20/07/2015

190

198

255

4%

Buy

Sadbhav

04/05/2015

298

285

430

-4%

Buy

Omkar speciality
Chemicals

16/03/2015

152

153

251

1%

Buy

DHFL

16/02/2015

252

247

368

-2%

Accumulate

TV Today Network

27/01/2015

222

296

337

33%

Buy

M&M

12/01/2015

1238

1498

1452

21%

Buy

Havells India

27/10/2014

274

404

346

47%

Buy

PTC India Fin. Ser.

07/07/2014

39

40

45

4%

Buy

Adani Port

05/07/2014

280

240

347

-14%

Accumulate

Stocks

It'snotimportantwhetheryouarerightorwrong,Itsabouthowmuchmoneyyoumakewhenyou'rerightandhow
muchyoulosewhenyou'rewrong.
- 7-

Vol.: 306
8th Aug,2016

J Street Short Term Call Status


Sr.
No.

DATE

STOCK

BUY/
SELL

RANGE

RANGE

21Jun16

GODREJIND

BUY

367

373

22Jun16

BANKINDIA

BUY

95

97

23Jun16

HDFC

BUY

1228

24Jun16

BAJAJAUTO

BUY

27Jun16

BAJAJAUTO

TRIGGER
TGT
PRICE

SL

STATUS

%
RETURN

370.00 380.00

358

TA

3.70

96.00

92

TA

4.10

1252 1240.00 1275.00

1200

OPEN

0.0

2654

2705 2679.50 2750.00

2600

TA

3.00

BUY

2654

2705 2750.00 2810.00

2600

TA

3.00

ULTRACEMCO BUY

3365

3433 3500.00 3565.00

3300

OPEN

0.0

100.00

28Jun16

29Jun16

BRITANNIA

SELL

2723

2777

2680 2663.00

2830

SL

3.60

30Jun16

SKSMICRO

BUY

725

745

760.00 775.00

705

TA

5.00

4Jul16

LT

BUY

1525

1555 1540.00 1615.00

1485

TA

3.20

10

5Jul16

ICICIBANK

BUY

245

250

247.50 262.00

236

TA

5.50

11

7Jul16

RELINFRA

BUY

565

575

570.00 597.00

550

EXPIRE

0.0

12

8Jul16

DRREDDY

BUY

3500

3550 3525.00 3700.00

3400

EXPIRE

0.0

13

11Jul16

ASIANPAINT BUY

1005

1025 1015.00 1065.00

975

TA

4.80

14

12Jul16

CANBK

BUY

232

238

235.00 248.00

224

TA

5.50

15

13Jul16

VEDL

BUY

158

162

160.00 169.00

154

TA

5.60

16

14Jul16

GAIL

BUY

387

394

390.50 400.00

375

TA

3.80

17

15Jul16

BANKBARODA BUY

160

166

163.00 170.00

156

EXPIRE

0.0

18

18Jul16

LICHSFGFIN

BUY

520

532

526.00 557.00

500

EXPIRE

0.0

19

19Jul16

BHARTIARTL SELL

365

359

362.00 346.00

375

TA

4.40

20

20Jul16

CUMMINSIND BUY

823

838

830.50 870.00

800

TA

4.80

21

21Jul16

SIEMENS

BUY

1329

1355 1342.00 1410.00

1300

OPEN

0.0

22

22Jul16

KSCL

SELL

405

395

400.00 380.00

417

TA

5.20

23

25Jul16

GODREJIND

BUY

442

452

447.00 470.00

430

SL

3.90

- 7-

Vol.: 306
8th Aug,2016

J Street Short Term Call Status


Sr.
No.

DATE

STOCK

BUY/
SELL

RANGE

24

26Jul16

HDFC

BUY

1365

25

27Jul16

AJANTPHRMA BUY

26

28Jul16

HCLTECH

27

1Aug16

28

STATUS

CMP

%
RETURN

1390 1377.50 1445.00

1335

OPEN

0.00

1685

1715 1700.00 1785.00

1645

TA

5.00

BUY

743

757

750.00 785.00

723

TA

4.40

BRITANNIA

BUY

2900

2960 2930.00 3120.00

2780

OPEN

0.00

3Aug16

MARICO

BUY

297

303

300.00 309.00

288

OPEN

0.00

29

4Aug16

AJANT
PHARMA

BUY

1800

1830 1815.00 1905.00

1750

OPEN

0.00

30

5Aug16

CADILAHC

BUY

364

372

350

OPEN

0.00

STAUTS

CALLS

RATIO

TA+PB

16

93.33

SL+EXIT

6.66

TOTAL

30

100

TRIGGER
TGT
PRICE

SL

368.00 390.00

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)

- 7-

Vol.: 306
8th Aug,2016