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Religare Morning Digest

June 27, 2016

Uncertainty ends; UK exits the EU…

After weeks of uncertainty and anxiety, the UK people have voted their stand on the referendum. British voters have voted to leave the European Union (EU), which has

come as a surprise to the majority. While this development has considerable implications for the EU in general and the UK in specific, the impact of this development on

the Indian stock market is what is of greater relevance for us at the current juncture.

As was already known that a BREXIT would trigger a global risk-off trade, stock markets across the globe have witnessed a knee-jerk reaction in trade today ranging

between 2-8%, as capital is finding comfort in traditional safe haven assets like Gold (up 5%+). On the global front, this development will not only force the ECB and the

BoE to look at measures to lend greater support to the region, but now the probability of a US Fed rate hike has been pushed forward to December, post the US

Presidential election, which was always a concern for capital flows into emerging markets, including India.

Amidst all this mayhem, the Nifty cracked ~4% in opening trade, with support at lower levels helping the Indian stock market to nearly halve its losses as the trading day

progressed. Having said this, while the market witnessed an intra-day recovery, UK’s exit has created uncertainty for equities as an asset class, albeit only for the

short-term.

Thus, for now, while the few Indian companies, exposed to Europe and the UK, are most vulnerable in terms of some pressure on their businesses depending upon the

extent of their exposure, we see little fundamental risk to the market as a whole, notwithstanding the sentimental whipsaws that could prevail over the next few

trading sessions.

The companies that have business exposure to the regions in question include IT majors like Infosys, TCS, HCL Tech, Wipro and Tech Mahindra; Tata group majors like

Tata Motors and Tata Steel, Auto companies like Bharat Forge, Apollo Tyres and Motherson Sumi; Divis Lab, Torrent Pharma and Aurobino Pharma in the Pharma space;

etc.

Notably, some of the companies mentioned above are part of the Nifty, and with probability of an earnings downgrade possible in these as more clarity emerges, the

full year FY17 earnings estimate for the Nifty for could be scaled down a bit. However, above average monsoon, good FDI inflows, further pass through of lower

interest rates into the economy and passage of GST are the levers currently, which could counter the jitters emanating from Europe.

In conclusion, while the materialization of a BREXIT calls for much more caution for traders and short-term investors, we have little doubt in the fundamental strength

of the Indian market over the medium-to-long-term, which implies accumulating quality companies – both in large-caps and mid-caps – which have witnessed collateral

damage in their stock price and are insulated from the UK’s vote to leave the EU.

By - Hitesh Agrawal



June 27, 2016

Nifty Outlook

Equity markets witnessed a knee-jerking reaction on Friday and lost over two percent; citing

global worries post the Britain’s exit from the European Union. Traders really had a tough

time especially in the initial hours as lot of negative news were pouring in from across the

global, which pushed the markets further lower. However, they got some encouragement

from the statements of Union Finance Minister and the RBI governor, wherein they stated

India’s position to handle any liquidity crisis or currency fluctuation in near future. And, that

helped index and stocks to trim the intraday losses significantly in the later half.

We expect volatility to remain high in the coming week too as participants would be

unwinding and rollover their positions ahead of derivative expiry. In addition, cues from the

global front will further add to choppiness. Hence, we suggest traders to hold cautious

approach and let the markets stabilise first. Investors, on the other hand, should continue

with buy on dips approach but stay away from the stocks with European markets exposure.

VWAP (Expiry till date) Max OI (Call) Max OI (Put)

NIFTY 8175 8400 8000

Sectors to watch

Sector Name Outlook

CEMENT STABLE

FMCG STABLE

PHARMA STABLE

News Religare Super Ideas**

FII & DII Cash Segment (Rs. in Cr.) Trade Stats

Category Amt. MTD YTD

FII 82 3714 13795

DII 204 -1779 3125

NO OF CON-

TRACTS

TURNOVER IN CR

IDXFUTS 728414 42089

IDXOPT 8601875 513844

STKFUTS 1016870 52628

Tata Motors’ shares went down by 8.25% due to the Brexit poll results. Tata Motors

generates more a majority of its revenue from their British unit Jaguar Land Rover (JLR). In

2014-15, JLR contributed 83.2% to the total automotive revenue. Companies with a lot of

exposure to Britain are likely to be impacted due to currency fluctuations.

Reliance Communications and Aircel are set to ink a pact in a bid to merge their wireless

businesses. This would be the first of a kind merger of telecom companies with a pan-India

presence.

Shares of Omax Auto gained more than 4% after the company secured an order for supply of

railway parts by the Indian Railways. The estimated value of the order is between 90-100

crores.

Derivative Ideas **

Instrument B/S Lot INITIATION

RANGE SL TARGET

NIFTY JULY

8500 CE SELL 38

115 30 75 NIFTY JULY

7600 PE SELL 48

*FII & DII data as on 23rd June 2016

Scrip Buy/Sell CMP Initiation

Range SL Target

IOC BUY 419.05 418-420 408 450

DABUR BUY 310.85 308-310 298 335

**Please note that the given technical and derivative recommendations are

"valid for taking position" only on recommended date and in the given range.



June 27, 2016

Religare Super Ideas

Investment Pick - Atul Auto Ltd

ATULAUTO

Atul Auto is one of the fastest growing three wheeler companies in India. It caters to diverse group of customers in Cargo and Passenger segment with 0.35

tonnes and 0.5 tonnes capacity platform. The company has strong distribution network of 200 primary dealers and 120 secondary dealers across India.

Net sales and Net profit have grown @ CAGR of 32.7% and 55% respectively from FY10 to FY15. The company has stable dividend payout history, strong cash

flows and healthy return ratios. The management has ambitious plan to sell 1,00,000 vehicles annually in next 3-5 years.

Scrip CMP Target Duration Recommendation Price

ATULAUTO 479.70 580 9-12 Months 506

Vix has started cooling down. Call writing was seen

at 8200 & 8100 strikes and Put writing was seen at

7900 strike.

Strategy: SELL NIFTY JULY 8500 CE @ 38 & SELL

JULY 7600 PE @ 48, NET PREMIUM RECEIVED @ 86,

STOPLOSS 115, TARGET 30.

Derivative Ideas

Indian Oil Corporation Limited (IOC) Dabur India Limited (DABUR)

We reiterate buy call of IOC as it was not initiated

in previous trading session.

DABUR took the initial down tick due to gap down

opening of broader markets and later kept

recovering and finally settled at day’s top after

gaining over 1%. This clearly indicates strength;

hence, we advocate buying in mentioned range.



June 27, 2016

Corporate Action Calendar— June 2016 (Cash Dividend)

Sun Mon Tue Wed Thu Fri Sat

26 27

Pfizer Ltd/India

Capital First Ltd

28 29

HDFC Bank Ltd

Dabur India Ltd

Havells India Ltd

30

Birla Corp Ltd

South Indian Bank Ltd

Rishiroop Ltd

01

Century Enka Ltd

Modern Shares & Stockbrok-ers Ltd

Mayur Uniquoters Ltd

02

Corporate Action Calendar— June 2016 (Stock Dividend)


26 27 28 29 30 01 02

Corporate Action Calendar— June 2016 (Stock Buyback)


26 27 28 29

Sobha Ltd

30 01 02

Corporate Action Calendar— June 2016 (Acquisition)

Date Target Company Acquirer Company

6/27/2016 ADC India Communications Ltd CommScope Holding Co Inc

6/27/2016 Shiva Medicare Multiple acquirers

6/29/2016 Naman Mall Management Co Pvt Ltd Future Market Networks Ltd

6/30/2016 Pininfarina SpA Multiple acquirers

6/30/2016 IdeaBox Tech Ventures Pvt Ltd Private Investor

6/30/2016 Sistema Shyam TeleServices Ltd Reliance Communications Ltd

6/30/2016 Sampo-Rosenlew Oy Mahindra & Mahindra Ltd

6/30/2016 Interchange Industria a Comercio de Produtos Veterinarios SA Sequent Scientific Ltd



June 27, 2016

Economic Calendar — June 2016


26 27

Eight Infrastructure Industries

28 29

30

Fiscal Deficit INR Crore

01

Nikkei India PMI Mfg

02



June 27, 2016

Market Snapshot

Sectoral Indices Performance

Index Closing % Change % MTD % YTD

NIFTY Auto 8,632 -2.69% -1.0% 4.6%

NIFTY Bank 17,426 -2.61% -1.1% 3.0%

NIFTY Energy 8,428 -2.02% 0.7% -1.8%

Nifty Financial Services 7,090 -2.42% -1.4% 0.4%

NIFTY FMCG 20,790 -1.31% 1.3% 3.0%

NIFTY IT 11,203 -2.47% -1.7% -0.1%

NIFTY Media 2,543 -0.85% 0.4% -3.4%

NIFTY Metal 2,087 -3.76% 2.7% 14.2%

NIFTY Pharma 10,748 -0.42% -2.3% -10.2%

NIFTY PSU Bank 2,619 -2.48% 5.0% -8.6%

NIFTY Realty 185 -4.07% 1.0% 7.2%

Top Gainers - Nifty

Stock CMP (INR) % Chg % MTD % YTD

M&M 1,388.90 1.03% 5.0% 9.2%

BAJAJ-AUTO 2,678.80 1.01% 2.3% 5.8%

INFRATEL 324.75 0.85% -13.3% -24.1%

ASIANPAINT 989.55 0.55% 0.5% 12.0%

GAIL 377.15 0.43% 1.8% 0.5%

Top Losers - Nifty

Stock CMP (INR) % Chg % MTD % YTD

TATAMOTORS 449.40 -7.90% -2.2% 14.8%

TATAMTRDVR 298.25 -6.64% -5.2% 3.1%

TATASTEEL 312.65 -6.38% -6.5% 20.3%

HINDALCO 117.30 -5.33% 11.4% 38.4%

TECHM 507.05 -4.57% -6.2% -2.8%

Bulk Deals - NSE

Security Name Client Name Buy/Sell Quantity Price Value (in Cr.)

Upper Ganges Sug & Ind N.K. SECURITIES SELL 58729 338.72 1.99

Upper Ganges Sug & Ind N.K. SECURITIES BUY 58729 338.51 1.99

TPL Plastech Limited MARFATIA NISHIL SURENDRA SELL 40977 431.5 1.77

Opto Circuits (India) Lim YUGA STOCKS AND COMMODITIES PRI- BUY 1424470 10.83 1.54

TPL Plastech Limited MARFATIA NISHIL SURENDRA BUY 34811 429.47 1.50

Rana Sugars Ltd ADROIT FINANCIAL SERVICES PRIVATE BUY 1036400 12.89 1.34

Rana Sugars Ltd ADROIT FINANCIAL SERVICES PRIVATE SELL 1036400 12.86 1.33

Opto Circuits (India) Lim YUGA STOCKS AND COMMODITIES PRI- SELL 1224469 10.8 1.32

BPL Ltd. ADROIT FINANCIAL SERVICES PRIVATE BUY 268996 34.57 0.93

BPL Ltd. ADROIT FINANCIAL SERVICES PRIVATE SELL 269228 34.52 0.93

Delivery Spurt stocks

Stock Name Day's del. Vol. Del. Vol. Price

Shrenuj & Co. 833,968 8883% 4.72%

ITD Cem 218,430 2358% -0.08%

Nava Bharat 407,907 2231% -4.03%

Sanofi India 194,145 2033% 0.06%

Omaxe 786,039 611% -1.02%

Maruti Suzuki 790,264 565% -2.36%

Rel. Comm. 12,638,011 562% -5.03%

Tata Coffee 686,648 546% -3.75%

Motherson Sumi 5,831,875 508% -8.77%

Simplex Infra 209,774 493% -0.79%

*Bulk deals data as on June 23, 2016



June 27, 2016

Current Portfolio and Performance Summary as on 24th June’16

Stock Sector Entry Date Weight Reco price (`) CMP (`)

Dewan Housing Finance

Corporation Financial Services Feb 10, 2016 14.3% 193* 195

Heritage Foods Consumer Goods Apr 25, 2016 9.7% 515 514

GIC Housing Finance Financial Services May 02, 2016 8.2% 268 283

Talwalkars Better value

Fitness Miscellaneous May 12, 2016 10.5% 199 211

Bajaj Corp Consumer Goods May 13, 2016 9.8% 393 386

Reliance Industries Energy May 27, 2016 9.8% 970 951

City Union Bank Financial Services May 31, 2016 10.1% 107 107

Cash 27.7%

Total Total 100%

*Weighted average price

*7.5% DHFL was bought at 237



June 27, 2016

Historical Performance as on 24th June’16

Performance Matrix 1-Month 3-Month 6-Month 1-Year Since Inception

Religare Alpha 2.17% 8.09% 0.27% 1.10% 16.53%

Nifty 4.38% 4.82% 2.89% -3.68% 2.59%

Outperformance -2.21% 3.27% -2.62% 4.78% 13.94%



June 27, 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.



June 27, 2016

Hitesh Agrawal [email protected]

Ajay Pasari, CFA [email protected]

Ajit Mishra [email protected]

Gaurav Sharma [email protected]

Swati Saxena [email protected]

Manoj M Vayalar [email protected]

Vipin Kumar [email protected]

Team Members



June 27, 2016

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