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ValueGuide

February 2018

More global than local
More global
than local
 

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CONTENTS

 

From the Editor’s Desk

   

EQUITY

Come February, the

equity markets have

turned volatile. Yes,

the levy of long-term

capital gains tax (LTCG)

and rising inflationary

Come February, the equity markets have turned volatile. Yes, the levy of long-term capital gains tax

FUNDAMENTALS

Stock Idea

12

REGULAR FEATURES

Stock Update

14

Report Card

4

Sector Update

27

Earnings Guide

41

Sharekhan Special

29

TECHNICALS

DERIVATIVES

expectations post the

Nifty

30 View

31

Union Budget did dent sentiments ....

06

ADVISORY DESK

DERIVATIVES

RESEARCH-BASED EQUITY PRODUCTS

MID Trades

38 Derivatives Ideas

38

 
Top Picks Basket 07

Top Picks Basket

07

 

CURRENCY

FUNDAMENTALS

USD-INR

32 GBP-INR

32

EUR-INR

32 JPY-INR

32

 

TECHNICALS

 

USD-INR

33 GBP-INR

33

 

PMS DESK

EUR-INR

33 JPY-INR

33

WealthOptimizer PMS ProPrime - Diversified Equity ProTech - Index Futures Fund ProTech - Trailing Stops 34

WealthOptimizer PMS

ProPrime - Diversified Equity

ProTech - Index Futures Fund

ProTech - Trailing Stops

34

35

36

37

 

MUTUAL FUND DESK

Top MF Picks (equity) Top SIP Fund Picks 39 40

Top MF Picks (equity)

Top SIP Fund Picks

39

40

 
 

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NSE: INB/INF/INE231073330 ; MSEI: INB/INF261073333 / INE261073330 ; DP: NSDL-IN-DP-NSDL-233-2003 ; CDSL-IN-DP-CDSL-271-2004; PMS-INP000005786 ; Mutual Fund-ARN

NSE: INB/INF/INE231073330 ; MSEI: INB/INF261073333 / INE261073330 ; DP: NSDL-IN-DP-NSDL-233-2003 ; CDSL-IN-DP-CDSL-271-2004;

PMS-INP000005786 ; Mutual Fund-ARN 20669 ; Research Analyst: INH000000370; For any complaints email at igc@sharekhan.com ;

 

Disclaimer: Client should read the Risk Disclosure Document issued by SEBI & relevant exchanges and the T & C on www.sharekhan.com ; Investment in securities market are subject to market risks, read all the related documents carefully before investing.

DISCLAIMER: This document has been prepared by Sharekhan Ltd. (SHAREKHAN) and is intended for use only by the person or entity to which it is addressed to. This Document may contain confiden- tial and/or privileged material and is not for any type of circulation and any review, retransmission, or any other use is strictly prohibited. This Document is subject to changes without prior notice. This document does not constitute an offer to sell or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. Though disseminated to all customers who are due to receive the same, not all customers may receive this report at the same time. SHAREKHAN will not treat recipients as customers by virtue of their receiving this report.

The information contained herein is obtained from publicly available data or other sources believed to be reliable and SHAREKHAN has not independently verified the accuracy and completeness of

the said data and hence it should not be relied upon as such. While we would endeavour to update the information herein on reasonable basis, SHAREKHAN, its subsidiaries and associated compa-

disclaimer

nies, their directors and employees (“SHAREKHAN and affiliates”) are under no obligation to update or keep the information current. Also, there may be regulatory, compliance, or other reasons that

may prevent SHAREKHAN and affiliates from doing so. This document is prepared for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision.

Recipients of this report should also be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The user assumes the entire risk

of any use made of this information. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of

companies referred to in this document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. We do not undertake to advise you as to any change of our views. Affiliates of Sharekhan may have issued other reports that are inconsistent with and reach different conclusions from the information presented in this report.

This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject SHAREKHAN and affiliates to any registration or licencing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

The analyst certifies that the analyst has not dealt or traded directly or indirectly in securities of the company and that all of the views expressed in this document accurately reflect his or her personal views about the subject company or companies and its or their securities and do not necessarily reflect those of SHAREKHAN. The analyst further certifies that neither he nor his relatives has any direct or indirect financial interest nor have actual or beneficial ownership of 1% or more in the securities of the company nor have any material conflict of interest nor has served as officer, director or employee or engaged in market making activity of the company. Further, the analyst has also not been a part of the team which has managed or co-managed the public offerings of the company and no part of the analyst’s compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this document.

Either SHAREKHAN or its affiliates or its directors or employees / representatives / clients or their relatives may have position(s), make market, act as principal or engage in transactions of purchase or sell of securities, from time to time or may be materially interested in any of the securities or related securities referred to in this report and they may have used the information set forth herein before publication. SHAREKHAN may from time to time solicit from, or perform investment banking, or other services for, any company mentioned herein. Without limiting any of the foregoing, in no event shall SHAREKHAN, any of its affiliates or any third party involved in, or related to, computing or compiling the information have any liability for any damages of any kind.

 

2017 2018

Compliance Officer: Mr. Joby John Meledan; Tel: 022-61150000; For any queries or grievances kindly email igc@sharekhan.com or contact: myaccount@sharekhan.com

33
33

Sharekhan ValueGuide

Sharekhan

ValueGuide

June

February

 
FUNDAMENTALS
FUNDAMENTALS
EQUITY
EQUITY

REPORT CARD

STOCK IDEAS STANDING (AS ON FEBRUARY 01, 2018)

 

COMPANY

CURRENT

PRICE AS ON

PRICE

52 WEEK

ABSOLUTE PERFORMANCE

 

RELATIVE TO SENSEX

 

RECO

01-FEB-18

TARGET

HIGH

LOW

1M

3M

6M

12M

1M

3M

6M

12M

Automobiles

Apollo Tyres

Buy

 

292

  • 262 -6.7

  • 289 -10.2

172

 

5.2

 

36.9

-10.1

0.7

-17.1

8.8

Ashok Leyland

Buy

 

157

  • 123 -1.8

  • 134 -0.9

81

   

11.8

30.9

-4.4

-6.1

3.3

4.0

Bajaj Auto

Buy

3413

3625

3473

2695

-1.6

0.0

15.6

17.8

-5.2

-4.3

6.8

-6.4

Gabriel India

Buy

172

222

223

109

-17.0

-16.7

-0.6

48.6

-20.0

-20.3

-8.2

18.1

Hero MotoCorp

Buy

3733

4200

4200

3049

-3.2

-3.0

-4.7

15.0

-6.7

-7.2

-12.0

-8.6

M&M

Buy

799

**

803

607

2.3

15.4

8.9

22.9

-1.4

10.4

0.5

-2.3

Maruti Suzuki E

Buy

9402

11085

10000

5800

-5.9

9.3

16.5

47.8

-9.3

4.6

7.5

17.4

Rico Auto Industries

Buy

88

130

111

44

-20.8

-17.6

5.7

30.2

-23.6

-21.1

-2.4

3.4

TVS Motor

Buy

671

825

795

388

-16.7

-8.7

9.6

66.6

-19.7

-12.6

1.2

32.4

BSE Auto Index

 

26120

 

27031

21221

-5.1

0.1

2.0

14.0

-8.5

-4.3

-5.8

-9.4

Banks & Finance

Axis Bank

Buy

593

680

628

448

1.0

6.2

9.3

18.2

-2.7

1.6

0.9

-6.1

Bajaj Finance

Buy

1729

1900

1989

1019

-5.6

-10.0

-4.6

54.9

-9.0

-13.9

-11.9

23.1

Bajaj Finserv

Buy

5038

6050

5835

3400

-3.2

-0.9

-1.3

42.6

-6.7

-5.2

-8.9

13.3

Bank of Baroda

Buy

152

220

207

134

-3.0

-9.6

-6.2

-13.1

-6.5

-13.5

-13.4

-31.0

Bank of India

Hold

154

215

217

123

-11.8

-24.0

-8.7

17.8

-15.0

-27.3

-15.7

-6.4

Capital First

Buy

726

930

902

627

-2.4

-7.8

-12.7

-1.2

-5.9

-11.8

-19.4

-21.5

Federal Bank

Buy

98

135

128

80

-13.3

-21.0

-18.7

12.1

-16.4

-24.4

-25.0

-10.9

HDFC

Buy

1968

2200

1986

1361

11.8

8.0

7.8

37.4

7.8

3.4

-0.5

9.2

HDFC Bank E

Buy

1991

2300

2015

1293

4.0

6.9

8.7

51.0

0.3

2.3

0.4

20.0

ICICI Bank

Buy

346

400

366

240

8.2

5.8

11.0

30.0

4.3

1.3

2.5

3.3

LIC Housing Finance

Hold

532

620

794

505

-9.0

-15.5

-25.5

-7.7

-12.3

-19.1

-31.2

-26.7

Max Financial

Buy

541

660

684

512

-6.8

-6.3

-10.7

-9.5

-10.2

-10.3

-17.6

-28.1

PTC India Financial Services

Buy

35

45

51

33

-11.1

-21.5

-15.0

-18.5

-14.3

-24.9

-21.5

-35.2

Punjab National Bank

Buy

168

240

232

128

-2.7

-18.0

1.8

13.5

-6.2

-21.6

-6.0

-9.8

SBI

Buy

306

370

352

241

-1.9

-5.4

-3.4

9.8

-5.5

-9.5

-10.8

-12.8

Union Bank of India

Hold

132

150

205

124

-10.2

-25.5

-15.0

-15.9

-13.4

-28.7

-21.6

-33.2

Yes Bank

Buy

360

410

383

275

12.0

8.9

-4.6

26.9

8.0

4.2

-11.9

0.8

BSE Bank Index

 

30788

 

31376

22929

4.6

3.8

5.5

30.9

0.9

-0.6

-2.6

4.0

Consumer goods

Britannia

Buy

4741

5500

4964

3045

1.5

1.5

22.3

47.1

-2.1

-2.9

12.9

16.9

Emami

Buy

1142

1330

1428

990

-15.7

-12.0

0.0

-3.2

-18.7

-15.8

-7.7

-23.0

GSK Consumers

Hold

6717

**

6940

4851

2.2

22.7

21.5

30.8

-1.5

17.5

12.1

4.0

Godrej Consumer Products E

Buy

1053

1250

1128

768

7.1

7.6

14.5

33.0

3.3

3.0

5.7

5.7

Hindustan Unilever

Hold

1371

1440

1411

838

2.5

10.5

18.2

64.9

-1.2

5.8

9.1

31.0

ITC

Hold

275

325

368

250

5.6

3.7

-3.5

1.9

1.8

-0.8

-10.9

-19.0

Jyothy Laboratories

Buy

365

420

443

325

-3.8

-6.9

-2.6

6.7

-7.2

-10.9

-10.1

-15.2

Marico

Buy

311

365

349

253

-6.5

-2.0

-6.1

20.9

-9.9

-6.2

-13.3

-3.9

Zydus Wellness

Hold

1008

**

1167

809

-2.9

6.7

11.1

15.7

-6.4

2.1

2.6

-8.0

BSE FMCG Index

 

10780

 

11047

8717

0.8

3.8

6.9

22.0

-2.9

-0.7

-1.4

-3.0

IT / IT services

Firstsource Solution

Hold

41

45

49

30

-5.8

-9.0

7.7

-4.4

-9.2

-12.9

-0.6

-24.0

HCL Technologies

Buy

985

1050

1042

796

11.2

15.7

13.1

21.4

7.2

10.7

4.4

-3.5

Infosys

Hold

1145

1180

1221

860

11.0

23.9

16.7

25.8

7.0

18.5

7.8

-0.1

Persistent Systems

Buy

784

900

821

558

11.6

20.9

22.4

33.1

7.6

15.7

13.0

5.8

Tata Consultancy Services

Hold

3139

**

3259

2191

20.1

20.4

28.1

45.6

15.8

15.2

18.3

15.7

Wipro

Reduce

301

290

335

227

-5.4

2.8

2.7

32.4

-8.8

-1.6

-5.2

5.2

BSE IT Index

 

12546

 

13126

9565

11.8

20.4

21.7

32.5

7.7

15.3

12.4

5.3

Capital goods / Power

CESC

Buy

1045

1165

1190

749

-4.9

-1.6

5.2

33.1

-8.3

-5.9

-2.9

5.8

CG Power & Ind. Solutions

Hold

91

**

99

64

-5.0

0.6

2.4

29.2

-8.4

-3.7

-5.5

2.7

Finolex Cable

Hold

724

**

750

 

1.9

12.0

  • 418 -1.8

46.8

58.5

 

7.2

35.6

26.0

Greaves Cotton

Hold

139

**

179

 
  • 112 -3.7

4.7

-16.3

0.5

-7.2

0.2

-22.7

-20.1

Kalpataru Power Transmission

Hold

462

 
  • 510 -8.8

536

   

11.5

  • 275 -12.0

23.2

53.3

 

6.7

13.8

21.8

KEC International

Buy

350

 

395

  • 410 -10.8

   

11.1

  • 150 -14.0

14.0

124.9

 

6.3

5.3

78.7

PTC India

Hold

104

 
  • 130 -23.5

130

83

-18.5

 

-16.2

 
  • 16.4 -21.5

-26.8

-22.6

-7.5

Skipper

Buy

237

 

293

  • 275 -6.4

140

-13.5

 

2.1

 
  • 46.3 -16.6

-10.5

-5.7

16.3

FUNDAMENTALS
FUNDAMENTALS
EQUITY
EQUITY

REPORT CARD

STOCK IDEAS STANDING (AS ON FEBRUARY 01, 2018)

 

COMPANY

 

CURRENT

PRICE AS ON

PRICE

52 WEEK

ABSOLUTE PERFORMANCE

 

RELATIVE TO SENSEX

 

RECO

01-FEB-18

TARGET

HIGH

LOW

1M

3M

6M

12M

1M

3M

6M

12M

Thermax

Hold

1284

**

1375

 

0.9

25.0

39.2

  • 803 -2.7

51.3

 

19.7

28.6

20.2

Triveni Turbine

Hold

130

140

 
  • 167 -2.6

-2.3

 

-9.6

  • 117 -5.8

7.2

 

-6.8

-16.5

-14.8

V-Guard Industries

Buy

229

265

 
  • 251 -4.4

-9.1

 
  • 146 -12.4

18.5

45.3

 

-8.5

9.4

15.5

Va Tech Wabag

Buy

590

660

 
  • 750 -4.3

-9.4

 
  • 480 -12.7

-8.0

18.1

 

-8.5

-15.1

-6.2

BSE Power Index

 

2321

 

2450

2135

-7.4

-5.3

-3.1

4.1

-10.7

-9.4

-10.6

-17.3

BSE Capital Goods Index

 

20682

 

20883

14931

4.3

8.4

13.2

34.4

0.6

3.7

4.5

6.8

Infrastructure / Real estate

 

Gayatri Projects

Buy

213

263

 
  • 231 -5.8

 

11.5

  • 126 -9.2

25.9

56.5

 

6.7

16.3

24.3

IRB Infra

Buy

243

270

 
  • 273 -7.1

-2.1

 
  • 194 -5.7

-0.8

-3.2

 

-11.1

-8.4

-23.1

Jaiprakash Associates

Hold

20

**

30

9

-24.9

0.6

-30.8

39.7

-27.6

-3.8

-36.1

11.0

Larsen & Toubro

Hold

1456

1520

1470

971

13.3

16.9

21.8

45.6

9.2

11.9

12.4

15.7

NBCC

Buy

 

310

  • 229 -16.6

292

156

-10.1

 

2.4

20.3

-13.3

-20.2

-5.5

-4.4

Sadbhav Engineering

Buy

 

443

  • 410 -8.5

440

261

 

25.8

34.6

37.8

-11.8

20.4

24.2

9.5

CNX Infra Index

     

3749

  • 3648 -2.4

2947

-2.5

 

4.6

20.1

-6.0

-6.6

-3.4

-4.5

BSE Real estate Index

     
  • 2586 -6.5

2828

1416

 

2.4

11.5

69.2

-9.9

-2.0

2.9

34.4

Oil & gas

Oil India

Hold

 

390

389

  • 358 -4.1

257

-7.6

 

24.4

6.0

-11.0

-8.2

14.8

-15.7

Petronet LNG

NEW
NEW

Buy

 

320

  • 252 -7.3

276

186

-3.7

 

15.5

27.4

-7.2

-11.3

6.6

1.3

Reliance E

Buy

 

1110

  • 944 -4.5

991

511

-0.7

 

11.0

74.6

-4.3

-8.6

2.5

38.7

Selan Exploration Technology

Hold

 

250

  • 223 -8.9

270

154

-7.6

 

33.2

19.4

-11.0

-12.8

23.0

-5.1

BSE Oil and gas Index

     
  • 16159 -4.9

16727

12848

-2.7

 

10.8

22.9

-6.2

-9.0

2.3

-2.4

Pharmaceuticals

Aurobindo Pharma

Buy

 

905

809

  • 611 -23.1

503

-9.8

 

-17.0

-11.9

-13.1

-26.4

-23.4

-29.9

Cadila Healthcare

Hold

 

485

  • 418 -19.1

560

356

-4.1

 

-24.0

13.3

-7.5

-22.6

-29.9

-10.0

Cipla

Hold

 

685

  • 587 -8.6

663

479

-4.4

 

2.2

-0.2

-7.8

-12.6

-5.6

-20.7

Divi's Labs

Buy

1044

1275

1142

533

-4.9

-4.2

55.5

41.0

-8.3

-8.3

43.5

12.1

Glenmark Pharmaceuticals

Hold

 

730

  • 588 -9.1

973

526

-0.5

 

-15.9

-34.9

-4.1

-13.0

-22.4

-48.3

Lupin

Reduce

 

**

  • 860 -20.2

1574

806

-3.2

 

-18.2

-42.5

-6.7

-23.6

-24.4

-54.3

Sun Pharmaceutical Industries

Hold

 

600

729

  • 554 -2.2

433

-3.7

 

6.0

-13.5

-7.1

-6.4

-2.1

-31.2

Torrent Pharma

Hold

 

1480

  • 1355 -2.6

1575

1142

 

2.5

6.6

6.7

-6.1

-1.9

-1.6

-15.2

BSE Health Care Index

     
  • 14359 -3.7

15612

12513

-4.3

 

-0.4

-5.7

-7.8

-7.9

-8.0

-25.1

Building materials

 

Grasim

Buy

 

1380

  • 1189 -12.7

1300

784

-0.9

 

2.6

42.7

-4.5

-16.5

-5.3

13.4

Shree Cement

Hold

17453

19600

20560

14915

-5.2

-11.0

-7.4

9.1

-8.7

-14.9

-14.5

-13.3

The Ramco Cements

Hold

759

775

840

616

-5.0

2.6

5.3

5.2

-8.5

-1.8

-2.8

-16.4

UltraTech Cement

Hold

4391

4750

4600

3634

-1.7

-5.0

2.3

12.6

-5.3

-9.1

-5.6

-10.5

Discretionary consumption

 

Arvind

Buy

 

500

479

  • 406 -6.6

353

-13.7

 

3.4

1.4

-16.8

-10.6

-4.5

-19.4

Century Plyboards (India)

Hold

 

**

  • 323 -8.6

363

206

 

10.2

9.1

51.1

-11.9

5.5

0.7

20.1

Cox and Kings

Buy

 

325

  • 244 -10.4

306

183

-15.0

 

-15.1

22.4

-18.1

-14.3

-21.6

-2.7

Info Edge (India)

Hold

1327

1425

1460

796

1.8

11.4

37.3

66.0

-1.9

6.6

26.8

31.9

Inox Leisure

Buy

284

320

310

213

0.7

9.1

11.0

28.4

-2.9

4.4

2.4

2.1

KKCL

Hold

1710

1950

2200

1575

-11.7

-13.2

-2.1

-5.5

-14.9

-16.9

-9.6

-24.9

Orbit Exports

Hold

 

177

190

  • 156 -1.2

116

 

3.5

6.3

3.6

-4.8

-0.9

-1.8

-17.7

Relaxo Footwear

Buy

 

735

  • 633 -8.9

725

410

 

4.6

31.9

39.2

-12.1

0.1

21.8

10.6

Thomas Cook India

Buy

 

270

  • 234 -10.3

274

186

-10.7

 

0.7

14.5

-13.9

-14.2

-7.1

-9.0

Wonderla Holidays

Hold

 
  • 382 425

385

 

330

3.7

1.1

5.8

1.8

0.0

-3.3

-2.3

-19.1

Zee Entertainment E

Buy

 
  • 595 619

680

 

458

1.4

10.7

8.5

16.1

-2.3

6.0

0.1

-7.7

Diversified / Miscellaneous

 

Bajaj Holdings

Buy

2802

3595

3036

1750

-2.1

-5.7

15.3

37.2

-5.6

-9.8

6.4

9.1

Bharat Electronics E

Buy

 

220

193

  • 162 -18.0

135

-16.4

 

-7.7

9.3

-19.4

-21.6

-14.8

-13.1

Bharti Airtel E

Buy

 

600

  • 438 -21.7

565

326

-17.7

 

2.2

20.6

-20.7

-25.1

-5.6

-4.1

Gateway Distriparks

Hold

 

250

292

  • 227 -16.7

211

-4.1

 

-16.8

-8.5

-7.6

-20.3

-23.2

-27.3

PI Industries

Hold

 

**

  • 914 -5.9

1035

674

 

8.4

17.7

-2.7

-9.3

3.7

8.6

-22.7

Ratnamani Metals and Tubes

Buy

 

1250

  • 1021 -8.9

1217

655

 

11.9

19.6

51.3

-12.2

7.1

10.4

20.2

Supreme Industries

Buy

 
  • 1363 1490

1450

 

946

0.6

12.9

18.2

37.9

-3.0

8.1

9.1

9.6

UPL E

Buy

759

980

903

680

-5.2

-5.9

-17.5

-0.1

-8.6

-10.0

-23.9

-20.6

BSE500 Index

   
  • 15330 15661

 

11885

0.0

1.9

 
  • 7.5 -3.6

26.4

 

-2.5

-0.8

0.4

CNX500 INDEX

 

9687

 

9895

7520

-0.1

1.9

 
  • 7.4 -3.6

26.3

 

-2.5

-0.8

0.3

CNXMCAP INDEX

 

20657

 

21841

15770

-5.7

0.3

 
  • 7.2 -9.1

26.4

 

-4.0

-1.1

0.5

E

In Top Picks basket

 

** Price target under review

From the Editor’s Desk

More global than local

Come February, the equity markets have turned volatile. Yes, the levy of long-term capital gains

tax (LTCG) and rising inflationary expectations post the Union Budget did dent sentiments. The

steep correction is, however, driven more by the global rout in equities rather than domestic

issues. And this is not surprising at all. After all, the rally in global equities was one of the key

pillars that drove up Indian equities to record highs in the past 15 months. Expectations of an

economic recovery and a strong revival in corporate earnings in the latter part of this fiscal were

other enablers.

Though corporate earnings for Q3 are showing healthy signs of a turnaround (with the benefit

of a low base effect), a sudden and sharp correction in equity markets globally has pulled down

Indian equity markets also. Interestingly, it is good economic news that is causing the turmoil.

Strong economic data points in the US (especially sudden surge in wages in January) led to

concerns related of aggressive interest rate hikes by the US Federal Reserve under its new

Chairman Jerome Powell and higher-than-expected inflation eating into profits of US corporates.

Moreover, a spike in bond yields and meltdown in cryptocurrencies played their role in driving

the change in investor sentiments globally.

Given the not so serious reasons for the global turmoil, the situation is likely to stabilise over a

period of time. The scenario in India is also supportive for equity markets both in terms of an

improvement in corporate earnings and the sustainable trend of financialisation of household

savings as real interest rates remain positive.

Having said this, the Sharekhan Fundamental Research team retains its view that 2018 would

be full of twists and turns rather than a one-way rally seen last year. Global tremors along with

important state elections in India in the latter half of the year would keep sentiments grounded.

It does not imply in any way that 2018 would not be profitable for investors. However, it would

require much more careful selection of stocks. Secondly, investors would have to take volatility

in their stride. After all, volatility is your friend. Market fluctuations and volatile phases throw

open opportunities for investors to enter at more reasonable price points and valuations.

EQUITY
EQUITY
FUNDAMENTALS
FUNDAMENTALS

Sharekhan Top Picks

Sharekhan Top Picks

Year 2018 began on a high note but ended with increased

volatility especially in the broader markets. This is clearly

reflected in the gains of 4.6-5.4% in benchmark indices,

Nifty and Sensex, whereas the CNX Midcap 100 declined

by 2.4% in the same period.

The volatility also impacted returns from the Top Picks

basket

and

it

ended

with

a

marginal loss this month.

Profit booking in some of the mid-size companies, KEC

International and Sundram Fasteners, added to the

decline in Bharti Airtel, which is faced with another round

of unexpected pricing aggression from Reliance Jio.

This month, we are replacing Sundram Fasteners and KEC

International with Tech Mahindra and Godrej Consumer

Products. Both the companies have announced healthy

Q3 results and are showing promising growth prospects.

Consistent outperformance (absolute returns; not annualised)

(%)

(%) 1 month 3 months 6 months 1 year 3 years 5 years
(%)
1 month
3 months
6 months
1 year
3 years
5 years

Sharekhan Top Picks

 

-1.0

  • 4.9 44.3

7.8

 

81.3

282.8

 

Sensex

5.4

  • 8.1 29.9

10.5

22.8

90.6

Nifty

4.6

  • 6.6 29.0

9.6

25.5

94.0

CNX MIDCAP 100

-2.4

  • 5.3 33.8

11.4

57.1

178.6

Absolute returns (Top Picks Vs Benchmark indices)

 

(%)

Constantly beating Nifty and Sensex (cumulative returns since April 2009)

             
 

Sharekhan

Sensex

Nifty

CNX Mid-

 

1000

(Top Picks)

 

cap 100

900

(Top Picks) cap 100 900

YTD CY2018

 

-1.0

 

5.4

 
  • 4.6 -2.4

800

CY2017

 

58.0

 

28.0

29.0

 

47.3

700

CY2016

 

8.8

 

1.8

 

3.2

 

7.1

600

         

500

CY2015

 

13.9

 

-5.1

 

-4.1

 

6.5

400

 

CY2014

 

63.6