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Religare Morning Digest
November 10, 2016
Nifty Outlook
VWAP (Expiry till date) Max OI (Call) Max OI (Put)
NIFTY 8575 9000 8200
Markets remained volatile and ended lower, on the historic day of US Presidential election result. In line with global counterparts, Nifty opened with a sharp cut, tracking exit polls results, showing Donald Trump lead over Hilary Clinton, which finally turned into reality. Sentiments also took a hit with sudden announcement of demonetisation of larger bank notes by the government. However, bargain hunting in index majors significantly pared the intraday losses as the session progressed and aided Nifty to settle above 8400.
We expect overhang of the US Election results at least for a session or two; however, today's recovery in index indicates strong buying interest at lower levels. Keeping the scenario in mind, we suggest maintaining stock specific trading approach and using decline to accumulate fundamentally sound counters for investment.
Sectors to watch
Sector Name Outlook
FINANCIAL STABLE
METAL STABLE
FMCG STABLE
News Religare Super Ideas**
FII & DII Cash Segment (Rs. in Cr.) Trade Stats
Category Amt. MTD YTD
FII 87 -1443 39793
DII 294 3298 5383
NO OF CON-
TRACTS
TURNOVER IN CR
IDXFUTS 688848 45751
IDXOPT 9365679 637462
STKFUTS 886518 56710
Derivative Ideas **
Lupin reported a 57.7% increase in Net Profit to Rs. 662.2 Cr in Q2 as against Rs. 419.8 Cr in the corresponding quarter last year. Revenue in Q2 grew by 28.5% to Rs. 4,290.5 Cr against Rs. 3,329.7 Cr previously. Good results were accounted on the back of strong growth in North American sales, which grew by 73.1% to Rs. 1,997.8 Cr in Q2.
Ujjivan Financial Services reported an 89.7% rise in Net Profit to Rs. 73 Cr in Q2FY17 as against Rs. 38.5 Cr in the corresponding quarter last year. Total Income stood at Rs. 357 Cr, reporting an increase of 46.7% over Q2FY16. Gross NPA and Net NPA stood at levels of 0.17% and 0.04% respectively.
Apollo Tyres reported a Net Profit of Rs. 260 Cr in Q2FY17 as against Rs. 280.07 Cr in the corresponding quarter of the previous fiscal. Total Income stood flat at Rs. 3,312.3 Cr for the quarter, as against Rs. 3,270.4 Cr previously.
*FII & DII data as on 8th November 2016
Scrip Buy/Sell CMP Initiation
Range SL* Target
CROMPGREAV BUY 82.25 80-81 77 89
GAIL BUY 446.50 435-440 418 485
**Please note that the given technical and derivative recommendations are
"valid for taking position" only on recommended date and in the given range.
*Please note - Stoploss is on closing basis for delivery recommendation and intraday basis for futures recommendation.
Instrument B/S Lot INITIATION
RANGE SL
TAR-GET
PNB NOV FUTS BUY 7000 138-139 133 151
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Religare Morning Digest
November 10, 2016
Religare Super Ideas
Investment Pick - Arman Financial Services Ltd.
Incorporated in 1992, Ahmedabad based Arman Financial Services (ARFL) lends primarily in the micro-finance and two wheeler space. ARFL operates in
micro-finance through its subsidiary Namra Finance (Rs 117cr, 68% of AUM) while Vehicle financing amounts to Rs 55cr (32% of AUM).
Key rationales: i) Multi-year growth in micro-finance business ii) Value creating opportunities in newer geographies in micro-finance and foray into SME lending iii)
Steady AUM growth of 35% CAGR over FY12-FY16 iv) Stable asset quality, High NIMs and Strong ROAAs. We feel the gradual and focused growth in micro-finance, conservative lending and focus on newer geographies will drive ARFL’s AUMs while sustained NIMs and controlled costs will improve profitability.
Scrip CMP Target Duration Recommendation Price
ARMANFIN 245.15 338 9-12 Months 260
PNB added 9.5% of open interest as long positions.
Daily vwap is around 138 levels. On charts, stock is
trading above 50/100/200 EMAs on daily charts. We
recommend buying the stock with levels given
below.
Strategy: BUY PNB NOV FUTS BETWEEN 138-139,
SL 133, TARGET 151.
Derivative Ideas
Crompton Greaves Limited (CROMPGREAV) GAIL (India) Limited (GAIL)
CROMPGREAV is in long-term uptrend, it remained
side ways when broader markets were declining.
Yesterday, i.e. 9th November, when broader
markets tumbled, it settled on flat note. All this
indicates strength; hence, we recommend buying
with mentioned levels.
GAIL has performed well in past couple of weeks,
rallied from 360 till 450 levels. It settled at day’s
top after gaining 1.5% on Wednesday, while Nifty
index settled a percent lower. Along with price
movement, volume too is supporting up move. All
this indicates bullish bias is here to last.
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Religare Morning Digest
November 10, 2016
Religare Investment Calls
Name of the Company Reco Date Reco Price Target Price Upside % Previous day Closing Price
Tech Mahindra 7-Aug-15 534 600 12.4% 434.5
Kotak Mahindra Bank 19-Aug-15 688 900 30.8% 822.1
Glenmark Pharma 10-Sep-15 1,017 1,370 34.7% 899.5
Dabur India 10-Sep-15 275 325 18.1% 298.5
HUL 10-Sep-15 803 1,050 30.8% 828.3
Bajaj Corp 3-Nov-15 416 500 20.3% 404.2
Britannia Inds 23-Dec-15 2,896 3,600 24.3% 3,124.2
Nandan Denim 5-Jan-16 150 183 22.0% 132.7
Atul Auto 22-Mar-16 506 580 14.6% 471.4
Century Plyboards 5-Jul-16 207 271 30.9% 212.1
Greenply Industries 5-Jul-16 248 322 29.8% 276.1
Talwalkars Better Valkue Fitness 22-Aug-16 252 328 30.2% 248.8
Tv Today Network 29-Aug-16 300 388 29.3% 328.7
Jamna Auto 2-Sep-16 217 272 25.3% 212.6
SML Isuzu 26-Sep-16 1,300 1,560 20.0% 1,251.2
Swaraj Engines Ltd. 3-Oct-16 1,184 1,535 29.6% 1,392.5
Cigniti Technologies Ltd. 5-Oct-16 419 538 28.3% 404.5
Arman Financial Services 14-Oct-16 260 338 30.0% 245.2
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Religare Morning Digest
November 10, 2016
Result Calendar—November 2016
Sun Mon Tue Wed Thu Fri Sat
06 07
8K MILES SOFTWARE SERVICES LTD.
ABAN OFFSHORE LTD.
AEGIS LOGISTICS LTD.
BRITANNIA INDUSTRIES LTD.
Bansal Roofing Products Ltd
BSL LTD.
CEAT LTD.
GODREJ CONSUMER PRODUCTS LTD.
HSIL LTD.
ICICI BANK LTD.
INDIA CEMENTS CAPITAL LTD.
J.J.FINANCE CORPORATION LTD.
Minda Finance Ltd
PTL ENTERPRISES LTD.-$
Surana Telecom And Power Lim-ited
Ultracab (India) Ltd
UNITED BANK OF INDIA
UNIVERSAL PRIME ALUMINIUM LTD.
Vakrangee Limited-$
VAMSHI RUBBER LTD.
WINRO COMMERCIAL (INDIA) LTD.
ZEN TECHNOLOGIES LTD.
HINDUSTAN HOUSING CO.LTD.
SARASWATI COMMERCIAL (INDIA) LTD.
08
ASHOK LEYLAND LTD.
BHARAT FORGE LTD.
BHARAT HEAVY ELECTRI-CALS LTD.
BOMBAY DYEING & MFG.CO.LTD.
LLOYD ROCKFIBRES LTD.
NESCO LTD.
SML ISUZU LIMITED
TATA COMMUNICATIONS LTD.
VINYL CHEMICALS (INDIA) LTD.
VISHVPRABHA TRADING LTD.
VA TECH WABAG LTD.
WABCO INDIA LTD.
WALCHAND PEOPLEFIRST LTD.
WANBURY LTD.
WILLIAMSON MAGOR & COMPANY LTD.
WILLIAMSON FINANCIAL SERVICES LTD.
Z.F.STEERING GEAR (INDIA) LTD.-$
09
AARTI DRUGS LTD.
APOLLO TYRES LTD.
BOSCH LTD.
CIPLA LTD.
EMAMI INFRASTRUCTURE LTD.
EMKAY GLOBAL FINANCIAL SERVICES LTD.
EVEREADY INDUSTRIES INDIA LTD.
Godrej Properties Ltd
INDIAN BANK
JAMNA AUTO INDUSTRIES LTD.
JK TYRE & INDUSTRIES LTD.
KESORAM INDUSTRIES LTD.
Larsen & Toubro Infotech Ltd
LUPIN LTD.
NCC Limited
Parag Milk Foods Ltd
POWER GRID CORPORA-TION OF INDIA LTD.
PUNJAB & SIND BANK
Snowman Logistics Ltd
UCO BANK
V.I.P.INDUSTRIES LTD.-$
10
ADITYA BIRLA NUVO LTD.
BLUE STAR LTD.
FINOLEX CABLES LTD.
L&T Technology Services Ltd
MOTHERSON SUMI SYSTEMS LTD.
SUN PHARMACEUTICAL INDUSTRIES LTD.
Talwalkars Better Value Fitness Ltd
TATA CHEMICALS LTD.
TCFC FINANCE LTD.
THERMAX LTD.
TIMEX GROUP INDIA LTD.-$
TIPS INDUSTRIES LTD.
VOLTAIRE LEASING & FINANCE LTD.
WOCKHARDT LTD.
CHANAKYA INVESTMENTS LTD.
KHANDELWAL EXTRACTION LTD.
MANSOON TRADING CO.LTD.
11
AARTI INDUSTRIES LTD.
ANDHRA BANK
BANK OF BARODA
BHARAT PETROLEUM COR-PORATION LTD.
GABRIEL INDIA LTD.-$
IPCA LABORATORIES LTD.
LIBERTY SHOES LTD.
MAHINDRA & MAHINDRA LTD.
MT EDUCARE LTD.
MUTHOOT FINANCE LTD.
Quick Heal Technologies Ltd
RMG Alloy Steel Limited
SUN TV NETWORK LTD.
12
ABC INDIA LTD.-$
APOLLO FINVEST (INDIA) LTD.
ASIAN FERTILIZERS LTD.
ATUL AUTO LTD.-$
PTC INDIA LTD.
ZENITH FIBRES LTD.-$
ZENITH HEALTH CARE LTD.
GOVIND POY OXYGEN LTD.
KOVALAM INVEST-MENT & TRADING CO.LTD.
ZODIAC CLOTHING CO.LTD.
SARVAMANGAL MERCANTILE CO.LTD.
SATYAM SILK MILLS LTD.
SHERATON PROPER-TIES & FINANCE LTD.
SPEEDAGE COMMERCIALS LTD.
WELCAST STEELS LTD.
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Religare Morning Digest
November 10, 2016
Corporate Action Calendar — November 2016 (Cash Dividend)
Sun Mon Tue Wed Thu Fri Sat
06 07
Supreme Industries Ltd
Vedanta Ltd
08
Colgate-Palmolive India Ltd
PI Industries Ltd
09
Astral Polytechnik Ltd
Sonata Software Ltd
10
Sundaram-Clayton Ltd
Transport Corp of India Ltd
11
12
Corporate Action Calendar — November 2016 (Stock Buyback)
Sun Mon Tue Wed Thu Fri Sat
06 07
R Systems International Ltd
08 09 10 11 12
Corporate Action Calendar — November 2016 (Stock Split)
Sun Mon Tue Wed Thu Fri Sat
06 07
08 09 10 11
Indo Count Industries Ltd
12
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Religare Morning Digest
November 10, 2016
Economic Calendar — November 2016
Sun Mon Tue Wed Thu Fri Sat
06 07 08 09
Local Car Sales
10
Trade Balance
Imports YoY
Exports YoY
11
Industrial Production YoY
12
Corporate Action Calendar — November 2016 (Acquisition)
Date Target Company Acquirer Company
10/30/2016 Yatra Online Inc Terrapin 3 Acquisition Corp
10/31/2016 One97 Communications Ltd Multiple acquirers
10/31/2016 Spirotech Heat Exchangers Pvt Ltd LU-VE SpA
10/31/2016 IIInspection & Export Pvt Ltd Iii Co Ltd
10/31/2016 Discountseniorsupply.com domain Health Advance Inc
11/2/2016 Anka India Ltd Private Investor
11/10/2016 BCC Fuba India Ltd Private Investor
11/10/2016 Kwality Credit & Leasing Ltd Private Investor
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Religare Morning Digest
November 10, 2016
Current Portfolio and Performance Summary as on 9th November’16
Stock Sector Entry Date Weight Reco price (`) CMP (`)
Bajaj Corp Consumer Goods May 13, 2016 9.3% 393 399
Magma Fincorp Financial Services June 30, 2016 8.8% 109 102
Apollo Hospitals
Enterprises Healthcare Services July 29, 2016 9.6% 1,362 1,297
Emami Consumer Goods August 3, 2016 10.2% 1,151 1,169
Castrol India Energy August 5, 2016 10.3% 425 435
Indiabulls Housing
Finance Financial Services August 8, 2016 9.0% 808 722
Punjab National Bank Financial Services October 3, 2016 10.2% 143 142
Minda Corporation Auto Ancillaries October 10, 2016 10.0% 109 102
Cash 22.7%
Total Total 100%
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Religare Morning Digest
November 10, 2016
Historical Performance as on 9th November’16
Performance Matrix 1-Month 3-Month 6-Month 1-Year Since Inception
Religare Alpha -6.0% -0.3% 9.5% 10.3% 27.0%
Nifty -3.1% -2.8% 6.7% 8.3% 6.9%
Outperformance -2.9% 2.5% 2.7% 2.0% 20.0%
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Religare Morning Digest
November 10, 2016
Research Product Basket
For cash market trading
Call / Product Call Frequency No. of calls Avg open call duration % funds allocated
Intraday Calls Intraday 2 - 3 < 1 day 25%
Live / RMD Calls Daily 3 - 4 3 - 4 days 30%
Master Pick Weekly 1 1 month 15%
Religare Alpha Opportunity NA 2 - 3 months 20%
Cash NA 10%
For 1L margin*
Total Per Call
25,000 8,000
30,000 4,000
15,000 5,000
20,000 As per weightage
10,000
Intraday Calls These calls are flashed live on Ms Lync and ODIN with the purpose of squaring off positions on the same day. As a policy, we restrict our
intraday cash market calls to less than 4 calls a day. Hence, funds should be allocated accordingly to have provision to trade in all calls.
Live / RMD Calls 2 super ideas are flashed in RMD daily with a view of 3-4 days. Additionally as per market opportunity, we flash live calls during the day
(including BTST calls). 3-4 such calls are made on a daily basis which might be open for 3-4 days. Funds should be allocated keeping in mind that
there will be 7-8 such open calls daily.
Master Pick This is our weekly recommendation shortlisted on the basis of techno-funda analysis. 15% of funds is recommended to be allocated for Master
Pick considering that there will be 3 open calls. The average open duration for this call will be 1 month.
Religare Alpha This is a portfolio of 8-10 stocks which are held with a view of 2-3 months. It is recommended to allocate 20% of funds for building this portfolio
which will provide stability to the overall trading portfolio.
Cash 10% surplus cash in the portfolio should be kept for the purposes of allocating it to opportunities as and when they arrive.
For derivative market trading
Call / Product Call Frequency No. of calls Avg open call duration % funds allocated
Derivative Ideas Daily 1 - 2 1 - 3 days 40%
Live calls Intraday / Daily 1 - 2 3 - 4 days 50%
Cash NA 10%
For 1L margin*
Total Per Call
40,000 40,000
50,000 50,000
10,000
Derivative Ideas 1 derivative idea is shared in RMD daily. It can be a plain vanilla F&O buy/sell call or an option strategy. Funds should be allocated assuming 2
such calls will be open at any time. These calls are open for 3-4 days on an average.
Live Calls These calls are flashed on MS Lync and ODIN during live market hours. These calls can be intraday or with a view of 2-3 days. Funds should be
allocated considering 2 such calls will be open at any time. 3/4 times, these calls will be on Nifty / Bank Nifty only.
Cash It is recommended to hold 10% cash to capitalize on any opportunity that may arise in markets.
For every client, the advisor must allocate a specific proportion of funds for trading and investing depending on the risk taking ability and willingness of the client
and their investment goals.
The below mentioned product basket tries to address the way to deal with the trading portfolio (cash/derivative) for optimum effectiveness of research calls.
It is recommended to divide your trading funds for various types of calls and not invest the entire amount for 1 or 2 calls only.
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Religare Morning Digest
November 10, 2016
Hitesh Agrawal [email protected]
Ajay Pasari, CFA [email protected]
Ajit Mishra [email protected]
Archana Gude [email protected]
Gaurav Sharma [email protected]
Swati Saxena [email protected]
Manoj M Vayalar [email protected]
Mehernosh Khurshed Panthaki [email protected]
Vipin Kumar [email protected]
Team Members
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Religare Morning Digest
November 10, 2016
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Statements on ownership and material conflicts of interest , compensation– Research Analyst (RA)
[Please note that only in case of multiple RAs, if in the event answers differ inter-se between the RAs, then RA specific answer with respect to questions under F (a) to F(j) below , are given separately]
Nature of Interest ( if answer to F (a) above is Yes : ……………………………………………………………………………………………………………………
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[Please note that only in case of multiple RAs and if the answers differ inter-se between the RAs, then RA specific answer with respect to questions under F (a) to F(j) above , are given below]
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S. No. Statement Answer
Yes No
I/we or any of my/our relative has any financial interest in the subject company? [If answer is yes, nature of Interest is given below this table] No
I/we or any of my/our relatives, have actual/beneficial ownership of one per cent. or more securities of the subject company, at the end of the month immediately preceding the date of publication of the research report or date of the public appearance?
No
I/we or any of my/our relative, has any other material conflict of interest at the time of publication of the research report or at the time of public appearance?
No
I/we have received any compensation from the subject company in the past twelve months? No
I/we have managed or co-managed public offering of securities for the subject company in the past twelve months? No
I/we have received any compensation for brokerage services from the subject company in the past twelve months? No
I/we have received any compensation for products or services other than brokerage services from the subject company in the past twelve months? No
I/we have received any compensation or other benefits from the subject company or third party in connection with the research report? No
I/we have served as an officer, director or employee of the subject company? No
I/we have been engaged in market making activity for the subject company? No
SS..No. Name(s) of RA.
Signtures of RA
Serial Question of question which the signing RA needs to make a separate declaration / answer
Yes No.