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Vol.

: 328
06 FEB, 2017

Index

Market View 1 MARKET VIEW

Company Update 2
NO SHOCKER BUDGET FOR THE MARKET
Around the
Economy 3

Knowledge Corner 3 With many good announcements for industry and rural development, the budget
announced by The Prime Minister has almost nothing negative for the capital market.
Mutual Fund 4 Many negative apprehensions did not find any place in the budget. The immediate re-
action to this event is positive and the market reflected the same in last three days.
Commodity Corner 5 The market is also impressed with the fiscal discipline achieved by the team FM. At
3.2%, the fiscal deficit is well received by the economists and the expectation for rate
Forex Corner 6 cut on 8th February is being built. Cutting the corporate tax by 5% for MSME sector
companies is going to give a real boost for make in India drive. Many experts feel that
Report Card 7 there is nothing in the budget to boost the consumption but a tax cut from 10% to 5%
up to the income of 5 lakhs is going to put at least Rs. 15,000/- crores in the hands of
middle and salaried class. It is definitely going to boost the consumption. It is also im-
Short Term Call Status 8
portant to note here that the 7th Pay Commission has also put significant amount in the
hands of middle class recently. The budgeted expenses for rural / agriculture uplift-
Editor & Contributor
ment is significant and will go a long way in boosting the rural / agriculture demand.
Darshana Mishra

Under the circumstances, the budget can be considered as market friendly. The real
Special Contributors action will start form July onwards as the much awaited GST will be rolled out from July
Kunal Shah 1st. Technically there is a strong resistance in the range of 8750 to 8810 and 8970 with
Dhaval Ghodasara strong support at 8600-8540.

Kamal Jhaveri

For suggestions, feedback MD- Jhaveri Securities


and queries
jstreet@jhaveritrade.com

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Vol.: 328
06, FEB 2017

Company Update : Edelweiss Financial Services Ltd.


Company Basics Financial Basics Share Holding Pattern
BSE Code 532922 FV (`) 1.00 Holder's Name % Holding
EPS (`) (TTM) 0.14 Public 57.47
NSE Symbol EDELWEISS P/E (x) (TTM) 20.4 Promoter 37.11
Others 5.42
EQUITY (` in Cr.) 79.57 P/BV (x) (TTM) 2.54
MKT.CAP (` in Cr.) 9362.17 BETA 0.7

Outlook and valuation : We forecast EPS growth of 37%/25% for FY17-18. We believe ROEs will expand 4.2 ppts
over FY16-18 to 16.4%. Despite a 90% run-up in the stock price YTD, we envisage further upside. Earnings upgrade
and higher multiple for credit business at 2x FY18F P/BV (vs. 1.5x earlier) drive our TP to Rs 150. NBFCs peers with
16-17% ROEs trade at 2.0-2.5x P/BV.

Company Overview :
Edelweiss Capital Limited (ECL) is one of India's fastest growing integrated investment banking companies. The Group's
services include investment banking, institutional equities, private client broking, asset management, wealth management,
insurance broking, wholesale financing and mutual funds. During the year 2006, the company made NBFC registration of
ECL Finance Limited and managed the first Qualified Institutional Placement under the new regulatory framework in India.
As of May 2008, the company had received final regulatory approval from the Securities & Exchange Board of India (SEBI)
to start its mutual fund business.

Investment Rational :
Strong performance in the market.

Edelweiss is one of the best pick among the NBFC space. Credit book is delivering good ROEs which I s being driven by healthy asset
quality, controlled costs and higher margins Future asset growth visibility is very high in the credit line businesses. What we specifically
like is its non monoline credit book which is well diversified across sectors.Q1 profit up by 54% YoY, and EPS by 8%. Loans grew up by
29% YOY across segments'. Credit business now forms 70% of earnings from 35% in FY11.

Edelweiss Financial Services Consolidated ROEs at 15% Ex-insurance ROEs have been improving in recent years as EDEL scales up
its credit business. Concurrently, the drag from low-yielding treasury investments has shriveled 1QFY17 annualized consolidated ROE
leapt to 15% from 12 % in FY16.Ex insurance ROE also improved to 19.4% YoY. We expect consolidated ROEs of 16-18% by FY18.

Agency business gaining strong footing

Last 7-8 years have been spent to build different agency line businesses and majority of them have gained considerable size now. In
capital market segment, broking average daily volume increased by 20% yoy to Rs60 bn for the quarter. Interestingly, broking busi-
nesses has enabled the NBFC to gain clients to whom they cross- sell wealth management, insurance products etc. Currently, nearly,
15% of its insurance products and 10-12% of housing loans are sold via its broking arm.

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Vol.: 328
06 FEB ,2017

Around The World


Weekly Market Recap :

Jaitley disclosed fiscal deficit target for FY 2017 at 3.2% of GDP. FY 2017 budget deficit target was set at 3.5% of GDP. FY 2017 reve-
nue deficit target was at 2% of GDP. FY 2018 divestment target was set at Rs 72,500 crore. Jaitley proposed to reduce income tax rate
to 5% for tax slab of Rs 250,000 to Rs 500,000. FY 2018 direct taxes revenue growth is projected at 15.3% and FY 2018 indirect tax
revenue growth is projected at 8.8%.

On the macro economic front, the Nikkei India Manufacturing Purchasing Managers' Index, or PMI, rose to 50.4 in January 2017 from
49.6 in December 2016. The Nikkei India Services Purchasing Managers' Index, or PMI, clocked in at 48.7 in January, above December's
reading of 46.8. A reading above 50 indicates economic expansion, while a reading below 50 points toward contraction.

Market Eye Week ahead :

The major domestic event in the upcoming week is the Reserve Bank of India's (RBI) sixth bi-monthly monetary policy meeting scheduled
on Wednesday, 8 February 2017. The index of industrial production (IIP) data for December 2016, will be released after market hours on
Friday, 10 February 2017. Industrial production in India rose sharply by 5.7% year-on-year in November 2016.

Markit Economics will unveil the China Services PMI for January 2017 on Monday, 6 February 2017. On the same day, China Composite
PMI data for January 2017 will be also be declared. On the global front, Asian stock markets including Indian equities will on Monday, 6
February 2017, react to the outcome of the crucial US non-farm payrolls data for January 2017 is due on Friday, 6 January 2017.

Key Events / Factors to Watch


1. Mon : Results: Gujarat Gas, Jubilant Foodworks, Abbott India
2. Tue : - Results: Ceat Ltd, Tata steel, Rajesh Exports, IDBI Bank
3. Wed : Results : Bharat Forge, Hero Moto, IGL, UBI Bank
4. Thu: Results: NCC, SAIL Ltd, ABB Ltd, BPCL
5. Fri : Results: BEML, SBI, SRF, Symphony

Knowledge Corner :
Qualified institutional placement (QIP)
These Qualified institutional placement (QIP) is a capital-raising tool, primarily used in India and other parts of southern
Asia, whereby a listed company can issue equity shares, fully and partly convertible debentures, or any securities other
than warrants which are convertible to equity shares to a qualified institutional buyer (QIB).

How much can companies raise via QIP : In a single financial year a company can raise not more than 5 times its net
worth based on the audited financial statements of the previous financial year.

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Vol.: 328
06 FEB ,2017

Mutual Fund Corner


Top 10 Sector Break-Ups
Fund Name
Sector Weights Fund (%)
Scheme Name BIRLA SUN LIFE ADVANTAGE FUND
Financial 35.34
AMC BIRLA un Life Asset Management Company Automobile 17.82
Energy 2.63
Type Open Ended & Equity-oriented
Healthcare 12.07
Category Open-ended FMCG 4.45
Launch Date Feburary 1995 Cons. Durable 2.77
Metals 4.36
Fund Manager Satyabrata Mohanty since Oct 2011 Construction 6.03
Net Assets (` Diversified 3.58
Rs. 1842.9 crore as on Oct 31,2016
In crore ) Chemicals 5.18
History 2013 2014 2015 2016 Risk Analysis
Volatility Measures
NAV (Rs) 173.66 278.11 292.67 323.30
Standard Deviation 17.14
Total Return (%) 7.23 60.14 4.77 10.47 Sharpe Ratio 1.30
Beta 1.10
Rank (Fund/Category) 27/73 9/145 61/78 18/143
R-Squared 0.80
Alpha 14.94
52 Week High (Rs) 173.76 280.58 314.86 362.13

52 Week Low (Rs) 136.14 164.16 272.70 252.92


Composition (%)
Equity 98.26
Net Assets (Rs.Cr) 278.89 393.02 580.62 1473.59 Debt 3.52
Cash -1.79
Expense Ratio (%) 2.87 2.85 2.81 -

Fund Performance v/s S&P BSE 100 Fund Style


Investment Style
Growth Blend Value
Large
Capitalization

Medium

Small

Fund
S&P BSE 200
(Rebased to 10,000) Source : - www.valueresearchonline.com

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Vol.: 328
06 FEB ,2017

Commodity Corner

BULLION
FUNDAMENTAL: Gold prices rose to around 2 percent on weekly basis as the dollar headed for a fourth weekly drop on worries about
Donald Trump's presidential style and a lack of clarity on rate hikes. The dollar came under pressure from a U.S. payrolls report that
flagged up weak wage growth last month, weakening the case for near-term interest rate hikes. While U.S. job growth surged more than
expected in January as construction firms and retailers ramped up hiring, wages barely rose. U.S. officials said the sanctions, the first
issued against Iran in more than a year, didnt violate the landmark nuclear agreement Tehran reached with the U.S. and other world
powers in 2015. President Donald Trump issued a cryptic tweet after the sanctions. Friday's report showed that January non-farm pay-
rolls rose by 227,000 jobs, the largest gain in four months. But the unemployment rate rose one-tenth of a percentage point to 4.8 per-
cent and wages increased modestly, suggesting there was still some slack in the labor market that would keep inflation in check. The
Federal Reserve held its fire on interest rates as widely expected on Wednesday, but was optimistic on the outlook for the economy in
keeping its benchmark overnight lending rate target at 0.5% to 0.75% following a 25 basis point hike in December.

RECOMMENDATION : BUY GOLD @ 28850 SL 28600 TGT 29150-29350 BUY SILVER @41600 SL 41200 TGT 42100-42600

BASE METALS

FUNDAMENTAL: Base metals prices last week seen under pressure after China wrong footed investors and boosted interest rates,
sparking concern about a clampdown on speculators, except nickel prices gained by almost 7 percent after the Philippines said it would
permanently close half its nickel production. The Philippines ordered the closure of 23 mines this week, mainly nickel producers, as part
of a government campaign to fight environmental degradation by the industry. Some affected miners said they have yet to receive a for-
mal order from Lopez's agency, while an industry group said companies would likely challenge the decision in courts if necessary. Lopez
said the nickel mines ordered to shut account for about 50 percent of the country's annual output, which analysts estimate at about 10
percent of world supply. The risk of nickel supply disruption from the Philippines should boost global prices of the metal, with the initial
mine suspensions last year and the threat of more having fueled a rally. While Copper prices dropped the most by over 4 percent as
BHP Billitons Escondida mine in Chile, has resumed work as the company has requested government mediation to avoid a looming
strike.

RECOMMENDATION : SELL ALUMINIUM @ 124.50 SL 126.50 TGT 121.80-119 SELL COPPER @ 400 SL 409 TGT 386-378 SELL ZINC @
190 SL 194.50 TGT 186.50-184 BUY NICKEL @ 680 SL 665 TGT 700-715

ENERGY
FUNDAMENTAL : Crude oil prices traded in range as fresh sanctions on Iran imposed by the U.S. Treasury were seen as a first salvo in a
wider split, while an increase in oil drilling in the U.S. held gains in check. Oil prices were boosted after U.S. President Donald Trump
suggested the possibility of imposing new sanctions on multiple Iranian entities, seeking to increase pressure on Tehran. Comments by
Russian energy minister Alexander Novak that oil producers had cut their output in accordance with a pact agreed in December also
helped support prices. Novak also said Russian companies may cut oil production quicker than had been initially agreed with OPEC and
that he expected the market to rebalance by the middle of this year. The warning came after a ballistic missile test was carried out by
Iran. Prices also strengthened after Russia's energy minister said global oil output was cut by 1.4 million barrels per day (bpd) last month
as part of the deal last year between OPEC and other producers. Oil prices have stabilized about 15 percent higher than they were be-
fore OPEC and non- OPEC producers agreed in December to curb output, National Australia Bank said. Natural gas prices dropped
heavily by almost 10 percent as investors lost faith in winters ability to drive up demand this year.

RECOMMENDATION : BUY CRUDE @ 3560 SL 3450 TGT 3680-3760 SELL NAT.GAS @ 220 SL 228 TGT 209-202

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Vol.: 328
06 FEB,2017

Commodity Corner
Forex Corner
Market Recap :

The Indian rupee on Monday strengthened


against the US dollar tracking the gains in the lo-
cal equity and Asian currencies markets.

The rupee gained for the ninth consecutive ses-


sions and this was the longest winning streak
since June 2011.

The Reserve Bank of India (RBI) will meet on


Wednesday for its bi-month policy. Seven out of
10 bank economists polled by Mint expect the
RBI to cut its repo rate by 25 basis points to 6%.
The other three expect the repo rate to remain
unchanged.

Market Eye Week ahead :

The USDINR On daily chart pair has been trading above all short term, medium term, and long term moving av-
erage which is 20, 100 and 200.Whereas on weekly chart pair has continually taking support at 50WMA. Which
suggest short term trend is bullish. So for trading perspective, one could buy up to the level 67.50-68.00 with SL
of 66.50 for target of 68.40-68.80.

USD/INR
Level S2 S1 CP R1 R2 High Low Close
USD/INR 66.83 67.15 67.73 68.05 68.63 68.31 67.41 67.41

EUR/INR
Level S2 S1 CP R1 R2 High Low Close
EUR/INR 71.79 72.16 72.86 73.23 73.93 73.57 72.50 72.52

GBP/INR
Level S2 S1 CP R1 R2 High Low Close
GBP/INR 83.01 83.62 84.80 85.41 86.59 85.97 84.18 84.24

JPY/INR
Level S2 S1 CP R1 R2 High Low Close
JPY/INR 59.00 59.34 59.77 60.11 60.54 60.19 59.42 59.69

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Vol.: 328
06 FEB, 2017

J Street Recommendations Report Card


Nifty last week opened at 8635.55, attained a low at 8537.50 and moved up to 8757.60. Nifty finally closed the
week at 8740.95 there by showed a net rise of 1.15% on week to week basis. Traders long and holding the
same can maintain the stop loss at 8500. The stop loss can be revised up to 8500. Resistance during the week will
be 8819-8889. The peak registered was 9119 and the low in the same week was 8849.

Top Fundamental Stocks


Absolute
Stocks Rec. Date CMP on Rec. CMP Target Return @ Status
CMP
Alembic Pharma-
30/08/2016 630 555 732 -18% Buy
ceuticals
Coromandel
25/07/2016 235 336 308 23% Buy
International
Capital First 06/06/2016 552 689 660 -3% Profit book
Wonderla Holidays 25/04/2016 387 382 498 -1% Accumulate
Mold-Tek Packaging 04/04/2016 138 49 179 0% Buy
Jamna Auto 22/02/2016 133 195 181 -14% Buy
MT Educare 01/02/2016 164 130 230 -2% Buy
Garware-Wall Ropes 28/12/2015 425 622 550 14% Buy
AYM Syntax 23/11/2015 121 85 223 1% Buy
Natco Parma 02/11/2015 509 761 636 29% Buy
SRF 21/09/2015 1140 1731 1374 -2% Buy

Ahluwalia contracts 24/08/2015 235 277 368 -3% Buy


Infinite Computer
20/07/2015 190 223 255 -8% Buy
Sol.
Sadbhav
04/05/2015 298 282 430 4% Buy
Engineering Ltd.
Omkar speciality
16/03/2015 152 161 251 -3% Buy
Chemicals
DHFL 16/02/2015 252 305 368 -4% Accumulate

TV Today Network 27/01/2015 222 274 337 -20% Buy


M&M 12/01/2015 1238 1262 1452 -7% Buy
Havells India 27/10/2014 274 434 346 7% Buy
PTC India Fin. Ser. 07/07/2014 39 43 45 5% Profit book
Adani Port 05/07/2014 280 306 347 1% Accumulate
It's not important whether you are right or wrong, Its about how much money you make when you're right and how
much you lose when you're wrong.
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Vol.: 328
06 FEB ,2017

J Street Short Term Call Status


Sr. BUY/ TRIGGER %
No.
DATE STOCK RANGE RANGE TGT SL STATUS
SELL PRICE RETURN
AJAN-
1 20-Dec-16
TAPHRMA
SELL 1790 1750 1770.00 1680.00 1840 TA 4.2

2 21-Dec-16 SIEMENS SELL 1095 1080 1087.50 1040.00 1125 SL -4


3 22-Dec-16 BEML BUY 920 935 927.50 971.00 894 TA 4.3
4 23-Dec-16 BHARTIARTL SELL 295 292 293.50 280.00 301 EXPIRE .
5 26-Dec-16 BIOCON SELL 892 890 891.00 848.00 930 SL -4
6 27-Dec-16 GLENMARK SELL 895 884 889.50 852.00 919 TA 4.2
7 28-Dec-16 CESC BUY 620 632 626.00 656.00 598 TA 4
8 29-Dec-16 ADANIPORT BUY 265 270 267.50 281.00 259 TA 4.2
9 2-Jan-17 ABIRLANUVO BUY 1270 1300 1285.00 1355.00 1230 TA 4

10 3-Jan-17 TECHM BUY 484 490 487.00 502.00 470 TA 4.1


11 4-Jan-17 NTPC BUY 163 166 164.50 173.00 159 TA 4.1
12 5-Jan-17 HCLTECH BUY 855 863 859.00 895.00 823 TA 4.2

13 6-Jan-17 POWERGRID BUY 187 191 189.00 199.00 182 EXPIRE .

14 9-Jan-17 SIEMENS BUY 1155 1170 1162.50 1214.00 1125 TA 4.2


15 10-Jan-17 MARUTI BUY 5650 5690 5670.00 5915.00 5485 TA 4.1
16 11-Jan-17 YESBANK BUY 1260 1285 1272.50 1335.00 1232 TA 4
17 12-Jan-17 ZEEL BUY 474 480 477.00 500.00 460 TA 4.1
18 13-Jan-17 IOC BUY 350 357 353.50 371.00 339 TA 4.2

19 16-Jan-17 TATAELAXSI BUY 1414 1416 1415.00 1488.00 1370 TA 4.8


20 18-Jan-17 SPARC BUY 325 330 327.50 344.00 313 SL -3.8
21 19-Jan-17 ULTRACMCO BUY 3470 3520 3495.00 3660.00 3390 TA 4.1
22 20-Jan-17 AMRAJABAT BUY 915 928 921.50 965.00 888 SL -3.5
23 23-Jan-17 HAVELLS BUY 398 403 400.50 419.00 388 TA 4.1
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Vol.: 328
06 FEB , 2017

J Street Short Term Call Status


BUY/ TRIGGER %
Sr. No. DATE STOCK RANGE RANGE TGT SL STATUS
SELL PRICE RETURN
24 24-Jan-17 BEML BUY 1235 1245 1240.00 1305.00 1190 OPEN 4.1

25 25-Jan-17 GRASIM BUY 900 916 908.00 952.00 875 TA .

26 30-Jan-17 PETRONET BUY 391 395 393.00 412.00 378 OPEN

27 31-Jan-17 GODREJCP BUY 1580 1610 1595.00 1680.00 1530 OPEN

28 1-Feb-17 NBCC BUY 268 272 270.00 283.00 260 OPEN

29 2-Feb-17 M&M BUY 1285 1296 1290.50 1350.00 1250 OPEN

30 3-Feb-17 UPL BUY 730 738 734.00 766.00 712 OPEN

STATUS CALLS RATIO

TA+PB 17 80.95

SL+EXIT 04 19.04

TOTAL 21 100.00

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)

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Vol.: 328
06 FEB,2017