The Money Navigator April 2016

8/18/2019 The Money Navigator April 2016

1/361st April-2016 to 30th April-2016 www.jhaveritrade.co

F o r P r i v a t e C i r c u l a t i o n O n l y

Issue ThemePg. 1

Company AnalysisPg. 12-15

Open FuCalls Pg

Thecurrent rally from 6825 is largely liquidity drivenwithout major changes in fundamentals. Inflowfrom FIIs hasbeetepid since the beginning of CY2016 on global growth concern as FII has sold ` 177 Bn from equity market. HoweveFII has poured ̀ 167 Bn in March on recovery in global commodity prices and positive cues from Union Budget. Wthis rally besustainable ornot isquestionable.According tous, the bottomhas been formedand upside iscapped.

Merits Awaited

Liquidity Driven Rally

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2/36

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From The MD’s Desk

Based on the fiscal performance by The Central Government last year and the confidence shown by The Finance Minister

while presenting thebudgetabout achieving the fiscal targets, theRBI has reduced keypolicy rates.TheFinance Secretary

hasreiterated that all fiscal targets areachieved forthe year 2016.

Recently, TheGovernment hasalso provided thesignal toRBIby reducing interest rates in almostall government schemes.

The data announced in USAwerequite positive and the ISMmanufacturing data rose after 8 monthsshowing improvement

in manufacturing activity. The data of unemployment are also improving giving positive signals. There are talks that the

market is getting exhausted at this level but there are certain points to be considered at this level which suggest that the

marketwill remainrangedbound with positivebias.

Themarketup move isaccompanied by fundamental improvement.

Thebanking systemhas flushed out themistakesand is ready with cleanplatform.

Economic indicators have bottomedoutandnowgradually improving.

The gradual decline in interest rate is helping corporate revenue. The decline in commodity prices with crude oil is also

helping thecorporatebottomline.

The expectation of good monsoon is providing a platform for rural sector to perform. The rural consumption scripts are

likely to outperform.

The government is really performing and coming out with lots of reforms in every sector. The road and rail sectors are

feeling theeffectsof aggressive government move.

Make In India movement is showing itscolor. The allocations of defense contracts to Indian led companies areproviding

tremendousopportunity foroverall growth in theeconomy including employmentgeneration.

Off course, there are worries so far as China is concerned. But many economists suggest that Chinese market seems to

have bottomed out. The rise of US market also suggest that the investors are decoupling the oil prices and are giving

importance to the economic data. Considering all this it is rational to pick selected stocks at every decline and wait for

mediumto long term.

Technically themarket is nothavingstrength to go beyond7750 decisivelywhich is a cause of concern.A healthy correction

after a remarkable run of 1000 Nifty points from the low of 6825 on the day of budget is always welcome but it should not

breachtheall importantsupport of7600 & 7400-7450range.

Kamlesh Jhaveri ( MD )

Jhaveri Securities Ltd.

RBI has reduced key policy rates


4/36


I s s u e T h e m e

Liquidity driven rally : Merits Awaited

1

Is current rally driven by liquidity rather than fundamentals ?

The markethas gained significant upside in March after the government stuck to its fiscaldeficit targets in the Budgetand onhopes of a rate cut by the Reserve Bank of India in its upcoming monetary policy review. We believe that a lot of the current

up-move in India has been driven by liquidity and bargain buying rather than any firm conviction of changing underlying

fundamentals.

Commodity prices in global markets have been rising almost continuously since February. The CRB index, a widely used

index of commodities, shows a 10per cent rise since mid-February. Copper, to takea specific example, is also uparound10

per cent during this period. Currencies of major commodity producers like Russia, Brazil and Indonesia have recovered

sharply. It was expected that crude oil would touch 20 or even 10 dollars a barrel, seems to be impossible as of now. Since

nothing much has happened to demand (there aren't any signs that growth in the major commodity countries like China, is

picking up), this is just a case of easy liquidity chasing a bubble.

Is India is still favorable among EM’s ?India is still relatively well placed from the perspective of several external macro factors such as a supportive interest rate

cycle and cumulative effects of various reforms undertaken by the government. The perspective of corporate performance

or valuation is not supportive yet. Neither thevaluation becomes cheap or bargain norcorporateperformance will improve.

Whether foreigninvestorswill make thedistinction between India andotherEMsremains tobeseen in comingmonths.

If the current rallyin the market may spoil, then the centreproblemaroundUS, China, commodity prices and the potential for

UK's exit from the European Union will rise. The chances of negative surprises might be decreasing but still has enough

potential to trigger sell-offs.

Corporate performance still in doldrums but H2FY17E could be better According to various market analyst corporate earnings downgrades could continue for some more quarters due to various

structural reasons .

However, given the base effect and indications of economic recovery, the pace of result downgrades is expected to be

relatively lower. We believe that there have been interest rate cuts by the RBI, the transient effect of these is yet to be seen.

With the evolution of lending rate calculation (new calculation ) , the economy and subsequently the corporates are likely to

benefit from lower rates.

Conclusion

We believe that the current rally in commodities and currencies is likely to be limited. Global demand is still subdued andwhile supply corrections can help improve the balance, it cannot take prices up much further. The base effect could lead to

better year-on-yearcorporateperformance in the second half of this financial year and, hence, a pick-up in earnings growth

might be visible from FY17. The corporate profit cycle is close to all-time lows and valuations appear reasonable at the

current stage. Technically, the market is not having strength to go beyond 7750 decisively which is a cause of concern. A

healthy correction after a remarkable run of 1000 Nifty points from the low of 6825 on the day of budget is always welcome

but it shouldnotbreach theall importantsupport of 7600 & 7400-7450range.


5/36

www.jhaveritrade.com2

Indian Civil Aviation Sector

Overview of the Indian Air Travel Market

India is oneof theworld’s largest andfastest-growingair travelmarkets, accordingto theCAPA Report.

Starting in2003, theIndiangovernment introduced several measures to further liberalizetheair travelmarket, including

a reduction in fuel excise taxes, elimination of the 15% Inland Travel Tax and the awarding of new airline licenses to

private operators. Since 2003, a number of Low Cost Carriers (LCC) have entered the Indian air travel market and

stimulated prices through their low-cost business models. By using price stimulation as a core business strategy, LCCs

were able to cater to India’s middle class segment, according to the CAPA Report. In the decade that followed, Indian air

travelentered a periodof considerable growth.

ByCY2014, India’s air travelmarkethad becomethesixth largest in theworld asmeasuredby total domestic seats (97.3

million) andninth largest in theworld by total domestic andinternational seats (155.9million),according to theCAPA

Report.

Going forward, thedomestic Indianaviationmarket is forecasted tobe theworld’s fastest growing aviationmarketwith

revenue passengerkilometers (“RPKs”)growingat a CAGR of9.5% between 2013 and2033,according to theAirbus

Report.

IndianAir Travel Market Growth and Growth Drivers ( ImageFormat)TheIndianair travelmarketexperiencedrapid growthbeginningin 2003 following liberalizingactions by theIndian

Government,which is reflectedin thegrowth of domestic passengervolumeat a CAGR of 19.4%between FY2004and

FY2010, accordingtoDGCAdata.

Following the global financial crisis, between FY2010 and FY2015, domestic passenger volume grew at a CAGR of

9.1%, according to DGCA data. Over the same period, domestic carrier capacity, as measured in available seat

kilometers,orASKs, grew at a CAGRof 6.8%, while domestic passengertraffic, asmeasuredbyRPKs,grew at a higher

CAGRof 8.7%.

This growth wasattributable to increasedtourism andbusiness-related travel, aswell as thestimulationofnewtraffic

demandthrough lowfaresoffered byLCCs, according to theCAPA Report.

Sector Outlook : Avoid

Top Airline Origin and Destination Routes in the World

8.20%8.40% 8.40%

8.30%

9.50% 9.50%

8.90%

8.60%

Domestic India Indina Sub-PRC North Africa

PRC

Sub-Sahara

Africa PRC

Indian-Sub

South America

Asia Emerging

Indian Sub

Middle East

Russia

Asia Emerging

South America


6/36


S e c t o r U p d a t e


3

Indian Domestic Available Seat

Kilometers Forecast (Billion)

Domestic Passengers Forecast (Million)

154.40

138.00

119.70

103.4092.80

84.90

FY15 FY16E FY17E FY18E FY19E FY20E

70.00

81.00

92.00103.00

115.00

128.00

FY15 FY16E FY17E FY18E FY19E FY20E

Real GDP CAGR from CY2014 to CY2019E7.1

6.4

4.53.6

2.8 2.4

1.9 1.8

3

India China APAC Middle East &

North Africa

Latin

America

Morth

America

Eastern

Europe

Western

Europe

World

Average

Continued Population Growth

Country Population CY2014(Million )Population CAGR

( CY 14 - CY19)

China

India

USA

Indonesia

Brazil

Russia

Japan

Mexico

Philippines

Germany

1367.8

1259.7

319

251.5

202.8

143.7

127.1

119.7

99.4

81.1

0.50%

1.30%

0.70%

1.40%

0.80%

0.01%

-0.03%

1.10%

2.00%

0.20%

Continued Population Growth

Country CY2014

Middle Class Households (Million)

CY2019 CAGR

China

India

Indonesia

Thailand

Vietnam

Philippines

Malaysia

170.40

53.60

20.60

11.40

2.70

8.20

5.40

237.70

107.90

30.20

13.50

4.40

10.90

6.20

6.90%

15.0%

7.90%

3.40%

10.40%

6.00%

2.70%

Source: Indigo RHP


7/36



4

Strong Growth in Tourism

Year CY2009 CY2010 CY2011 CY2012 CY2013 CY2014

Domestic nationals’ visits wit hin India (Mn)

Indian nationals’ departures from India (Mn)

Foreign to urist arrivals 2009-2014 (Mn)

Year

Forecast foreign tou rist arri vals 2015-2019 (Mn)

668.80

11.10

5.20

CY2015

8.50

747.70

13.00

5.80

CY2016E

9.20

864.50

14.00

6.30

CY2017E

10.10

1045.10

14.90

6.60

CY2018E

11.00

1145.30

16.60

7.00

CY2019E

12.00

1282.00

18.30

7.70

CY2020E

13.00

Comparison of duration o f rail service versus LCC air service (One-way trip from New Delhi to Mumbai)

Average Train

Fastest Rail Services

Average LCC

21 Hours 55 Minutes

16 Hours 10 Minutes

02 Hours 07 Minutes

Low Aircraft Penetration Rates

Country

Annual domest ic seatsper capi ta CY2014

GDP per Capita basedon PPP CY2014 (USD)

India Malaysia Brazil Turkey Colombia Norway USA Canada Japan

0.08

5,777

1.03

24,521

0.65

15,153

0.63

19,556

0.53

13,459

4.79

65,896

2.59

54,678

1.58

44,519

1.12

37,683

Expansion in Aviation InfrastructureIndia continues to invest in aviation infrastructure to enable growth in air transport and India’s aviation infrastructure is

improving. Public-private partnerships, have yielded state-of the-art Greenfield airports in Hyderabad and Bangalore, as

well as new airport infrastructure investments in New Delhi and Mumbai, both of which have ranked among the top five

airports (25 to 40 million passengers category) globally for airport service quality in 2014. There are also two ongoing

Greenfield airport public-private partnership tenders for the construction of new airports in Mumbai and Goa, according to

theCity andIndustrial Development Corporationof MaharashtraLimited andtheGovernment of Goa.

Expansion of middle class

India’s annual per capita income has grown at a CAGR of 12.6%, from `46,249 in FY2010 to `74,380 in FY2014, accordingto data from the Ministry of Statistics and Programme Implementation. India’s growth in per capita income and overall

population has caused the rapid expansion in the size of India’s middle class, defined as households with a disposable

income of more than USD 5,000 per year (more than 0.3mm per year), according to the CAPA Report. The number of

Indian middle class households is expected to increase from 53.6 million in CY2014 and reach 107.9 million

households by CY2019, according to the EIU, implying a CAGR of 15.0%.In addition, Mumbai and New Delhi are

expected to become the 25th and 30th largest cities by household disposable income globally by CY2030, according to the

Oxford EconomicsGlobal Cities 2030.

Source: Indigo RHP


8/36




5

Key Cost Metrics

Operating metrics, including on-time departures andarrivals, flight cancellations, andnumberof complaints, areoften usedin theair travel industry toevaluateoperatingperformanceof carriers,accordingto theCAPAReport.

Cost CompetitivenessUnitCost:

CASK measures the unit costs of a carrier and is calculated as costs divided by ASK. CASK excluding fuel cost is an

alternative measure for comparing cost management of carriers operating in different geographies, as fuel costs can vary

between geographies due to taxation,government fuel pricing regulations andother reasons . In India, jet fuel prices tend to

behigher than many othercountriesduetohigher taxation imposed by local governments.

Average fleet age

Theaverage ageof a carrier’s fleet is impacted by itsbusiness model, fleet composition andoverall fleet management.Fleetagecanimpactthe operatingcostsof a carrier, including fuel costsandmaintenancecosts.

Unit profitability

RASK, a measurement of unit revenue, minusCASK, is a measure of a carrier’sunitprofitability. Excludingfuel cost from the

analysis provides an indicatorof a carrier’sunit profitabilitybefore taking in toaccount fuel costs,whichcanvary significantly

from regiontoregion.

Despitefavorable macros,competition is intensifying in thesector

Plummeting oil prices are benefiting flyers as well as airlines. Airlines are passing on the fall in aviation turbine fuel (ATF)

prices topassengersby reducing fares.The windfall gain from lowerATF prices are also beingdeployed to reduce debt and

makethemuch-neededreinvestments in infrastructure.

Fuel prices are down two-thirds from the US$ 100 plus highs of mid 2014, resulting in an average drop of 14% in air fares.

Fuel makes up 40-50%of an airline’s total costs.Airlines can expect to reduce their overhead by about 20%.A 4%reduction

in fuel cost adds around2%to theoperatingmargins ofairlines.

Aviation fuel prices fell

from `77,632 in 2013 to

` 38,425 in 2015.Aviation Fuel Price (`/K1)90000

80000

70000

60000

50000

40000

30000

20000

10000

0

1 - S e p - 1 3

1 - O c t - 1 3

1 - N o v - 1 3

1 - D e c - 1 3

1 - J a n - 1 4

1 - F e b - 1 4

1 - M a r - 1 4

1 - A p r - 1 4

1 - M a y - 1 4

1 - J u n - 1 4

1 - J u l - 1 4

1 - A u g - 1 4

1 - S e p - 1 4

1 - O c t - 1 4

1 - N o v - 1 4

1 - D e c - 1 4

1 - J a n - 1 5

1 - F e b - 1 5

1 - M a r - 1 5

1 - A p r - 1 5

1 - M a y - 1 5

1 - J u n - 1 5

1 - J u l - 1 5

1 - A u g - 1 5

1 - S e p - 1 5

1 - O c t - 1 5

1 - N o v - 1 5

1 - D e c - 1 5

1 - J a n - 1 6

1 - F e b - 1 6

1 - M a r - 1 6


9/36


Oil marketing companies (OMC) reduced ATF price for February 2016 in line with the soft trend in international crude oil

prices. Pricesof theATFaredirectly linked to crudeoilprices.AkilolitreofATF will cost ` 1765.50 or11.9%, lessat ` 35126.82in Delhi from1 February 2016, This is the third monthly reduction in a row. Prices were cut 10% in January 2016 and 3% in

December2015.

InterglobeAviation needs to win back investors’faith after IPODespite strong quarterly performance, sharp sell off in Indigo because of...

Indigo’s nine-month performance in FY 2016 was much below estimates due to a sharp fall in profitability in Q2FY16,

when netprofitdeclined to` 112 Cr. from` 640 Cr. inQ2ofFY2015. Q2 is typicallya leanseasonfor travel. Indigohad to

cut ticket prices amid lower passenger volumes, which resulted in lower profitability. Lower Q2 profit pulled down the

9MFY 2016 figureto`

1410 Cr. comparedwith`

1304.17 Cr. in the9MFY 2015.

Another reason for the fall in Indigo’s shares post its blockbuster IPO was attributed to the delay in deliveries ofA320 Neo

aircraft.Boeing’sA320 aircraft isconsidered more advancedandoffers higher fuel efficiency andcouldhave added 10-

15%tooverall fuel cost savingsin addition to thewindfallbenefit theairline industry is reaping dueto lowerglobalcrude

oilprice.

Thecompany hadalso paidvarious incentivesto itsstaffbeforeIPOand spent onotheroverheadsinanticipationof

highercapacity that didnotmaterialize.

At this point, there is no clear visibility of its futureA320 Neo delivery schedule. The potential additional delays exist.

Management saidin theearningscall that theairline wasin talkswithAirbusandenginemakerPratt& Whitney forearly

delivery of thenewaircraft.

OutlookIn theDecember2015 quarter results season, a shift in investorpreference wasobserved, from IndigotoSpiceJetand

JetAirways, primarilybecause of a mismatchbetween expectationsandreality. However, it remains tobe seen how

durable andhowstrong is SpiceJet’s turnaround andhowthe globaloilpricesplay out.

Aviationstocks are now highly sensitive to oil prices that are at multi-year lows currently. Commodity traders expect

crude torecover another 15-20%inoneor twoquarters. This canaffect themargins significantly. Competition in the

aviationsectoris soaring high with theentryof newplayers in thesector, triggering pricewars.

Domestic airlines are expected to add 50-60 planes in FY 2017. The capacity addition can put pricing pressure on

airlines. IndigoandGoAirareexpected toadd30planesbut thecapacity addition will dependon thedeliveryschedule of

AirbusA320neo aircraft.


6


10/36



7

Banking Sector

Asser quali ty worsen

The banking sector witnessed one of the most challenging quarters as the asset quality derailed ,with a steep surge in freshslippagesof advances in thequarterendedDecember2015 (Q3) of thefinancialyear endingMarch2016 (Fy2016).

Q3FY16 Key highlights ( PSBs +PVBs )On NIM

PSBs’ net interest margins (NIMs) fell as the interest income was affected by a surge in fresh slippages of advances and full

effectofbaseratereductionsof50-80 basis points (bps),negating the benefit of fall in the costoffunds, inH1ofFY 2016.

Ontheotherhand, PVBsmaintained theNIMs, with strongloansgrowthand higherCDandCasa ratio.

On Bad Loans

Because of Reservebank of India (RBI)undertook anasset quality review(AQR)of thebanking systemandadvised banks

to classify certain weak accounts as bad loans and make provisions About 55-60% of the total slippages in Q3 of FY2016

owed to theimplementationof RBI’sAQR.

As provisions for loan losses more than doubled and revenue growth slowed down sharply, public sector banks (PSBs)

recorded net losses in the quarter. The aggregate net losses of 26 PSBs stood at ` 11416.87 Cr. , led by a 1% decline in net

interest income (NII) and more than doubling of provisions towards loan losses in the December 2015 quarter over a year

ago.

Private sectorbanks (PVBs) were also hit by asset quality pressure andhigher loan loss provisions. However, retail private

banks are better off with lower exposure to leveraged corporate accounts than PSBs. Total 15 PVBs maintained a double-

digit profitgrowth at12%, with healthy NII growth andcontrol onexpenses.

On Provision

The provisions burden of PSBs remained elevated due to higher loan loss provisions. Meanwhile, PVBs witnessed

acceleration in theprovisions burdenin Q3of FY2016.

Outlook : Neutral

The Shares of PSU Banks in overall bad loans has steadily increased from 76% in 2010-11 to 90% in 2015-16

Total Bad Loans (Rs. in Cr. ) Share of PSU Bank as % of Total Bad Loans

450942

98233142903

193496263371 323342

76%

82%

85%86% 86%

90%

FY11 FY12 FY13 FY14 FY15 FY16E

95%

95%

95%

90%

80%

70%

65%

500000

450000

400000

350000

300000

250000

200000

150000

100000

50000

0


11/36


RBI’s relief on recapitalization

RBI has relaxed the criteria to improve the tier-I capital structure for banks, in line with its earlier indication to align thedefinitionof regulatorycapital with theBASELIII framework. Thesechanges are

Revaluation reserve wouldbe part of CET-I (tier-I capital structure) with 55%haircut

Foreigncurrencytranslation reserve asa part of tier-Iwithdiscount of 25%

DTAarising dueto timingdifferencesup to10%of CET-1

We believe this is positive for PSU banks which are under capital constraint due to elevated asset quality stress and

transition to theBASELIIIregulatorynorms.Thiscould improve theCET-Iby 20-70bps forcompaniesof various banks

.

Outlook remains weakThe loan growth of the banking system remains subdued in the absence demand for corporate loans. PSBs with limited

capacities toboost their retail loan book arefacingchallenges of loangrowth andlossof marketshare toPVBs.

The Union Budget 2016-17 has disappointed PSBs by maintaining the allocation of capital funds unchanged at ` 25000 Cr.

for FY2017 in line with the Indradanush plan announced in August 2015, considering higher NPAs and weak earnings.

However, the budget has announced that the Bank Board Bureau will become operational in FY 2017, which will spell out a

roadmap forconsolidation ofPSBs.

Thebudget hasensured thepassage of Insolvency andBankruptcy lawpending with the Parliament. The law will provide a

specialized resolution mechanism to deal with bankruptcy situations in banks, insurance companies and financial sector

entities.

More pain ahead for the banking system in FY17E

Banking Sector

8

Chart1 : NPAs and Slippages to remain high for banking system7.7

4.1

5.2

6.8

3.2

4.3

3.23.8

2.93.3

Gross NPAs Slippages

FY13 FY14 FY15 FY16

EstimatedFY17

ProjectedChart2 : Stressed assets continue to rise for banking system

NPA in one bank,

but not in others

1.4

Trillion

Assets identified

as stressed but not

currently NPA

40,000

Crore30,000

Crore

Assets identified

as stressed among

restructured

standard assets

Total stressed assets that

could slip into NPA from top

100 corporate accounts

2.1

Trillion


12/36



STOCK UPDATE

Fundamental Stock Update

9

2.00

12.62

51.98

18.96

4.60

374.70

169.65

414.19

49557

Financial Basics

FV (`)

EPS (`)

Book Value (`)

P/E (x)

P/BV (x)

52 Week High (`)

52 Week Low (`)

Equity ( ` in Cr.)

MKT.CAP(` in Cr.)

Share Holding Pattern

32.11

6.38

1.69

56.26

3.53

New Developments Adani ports is looking for acquisit ion

The company is looking to expand its presence in Maharashtra and West Bengal. In

overseas markets, the company is scouting for port opportunities in Sri Lanka,

Bangladesh, theUS andEurope, apart from theports planned inAustralia. Theoverall

objective is to make the group a trans-shipment port company. Adani Ports plans to

turn India’s biggest commercial port at Mundra in Gujarat into a regional trans-

shipment hubbypartnering with Terminal Investment LtdSA.

Some of the company’s key acquisitions so far include Vizhinjam port in Kerala and

Dhamra port in Odisha. In addition, the company has won the bid for a container terminal at Ennore port in Tamil Nadu. It also has a joint venture with shipper CMA

CGMgroupof Francefordeveloping a terminal at Mundra.

Valuation: Currently, ADANIPORTS is trading at ` 227. We recommend “Buy” with

target price of ̀ 347, valuing stock 22xFY17E EPSof ̀ 15.5.The stockcurrently trades

at 27.76xofFY16E and22.38xof FY17E.

CMP: ` 227 Target: ` 347 “ Buy ” Adani Ports and Special Economic Zone Ltd.

Foreign

Institutions

Non Prom.

Promoters

Public & Others

5.00

13.26

92.57

21.95

3.15

392.65

231.55

99.76

5808

Financial Basics

FV (`)

EPS (`)

Book Value (`)

P/E (x)

P/BV (x)

52 Week High (`)

52 Week Low (`)

Equity ( ` in Cr.)

MKT.CAP(` in Cr.)

Share Holding Pattern9.55

0.24

5.37

72.85

11.99

New Developments

Godrej Properties partners with APGGodrejProperties partners withAPG to setup $275 Mn. fundGPL created a dedicated

real estate funds management business in India and Singapore GFM has raised a

USD275 million(Rs 19 billion) pool of capital, GodrejResidential Investment Program

II (GRIP II), with Dutch pension fund asset manager APG Asset Management NV

(APG) as the lead investor. The new fund will advise GRIPII investors on investments

into a residential development platform with GPLin India. GRIP II is a follow-up to the

USD 200 million residential development platform GPL had set up with an APG-led

investor consortiumin 2012.

Godrej Properties eyes Rs 700-crore revenue from new projectGodrej Properties expects a sales revenue of about Rs 700 crore from the second

phase of its luxury housing project at Vikhroli in Mumbai. The company launched the

firstphaseof itshousing project 'The Trees' comprising 374units.

Valuations: Currently, GODREJPROP is trading at `302. We recommend “Buy” with

target price of `368, valuing stock 27.22xFY17E EPS of `14.77.The stock currently

tradesat 28.63xofFY16E and24.90xof FY17E.

CMP: ` 302 Target: ` 368 “Buy”Godrej Properties Ltd .

Foreign

Institutions

Non Prom.

Promoters

Public & Others


13/36


STOCK UPDATE

Fundamental Stock Update

10

1.00

0.00

8.44

0.00

8.44

105.00

63.85

284.59

29440

Financial Basics

FV (`)

EPS (`)

Book Value (`)

P/E (x)

P/BV (x)

52 Week High (`)

52 Week Low (`)

Equity ( ` in Cr.)

MKT.CAP(` in Cr.)


25.52

10.49

2.97

50.38

10.56

New Developments ASHOKLEY’s market share expect to expands

There are three reasons for Ashok Leyland to expand its market share : First, the

MHCV segment has witnessed higher growth for the tractor trailers, which carry load

of more than 35.2 tonnes. This segment has been a forte of the company. In the last

one and half years, the share of heavy trucks, which carry more than 16 tonne, has

increasedby10per cent to65 per centof the total truck sales volume.

Second, the company is a dominant player in South India, which has seen relatively

higheconomic activity compared with therest of India.Hence, thecompany'svolumes

pickedup faster.

The third factor is that the company is planning to expand contribution from exports,

defense, andbuses to reducethecyclicality of thetruckbusiness.

Valuation: Valuation: CurrentlyALL is tradingat `108 . We recommend "Accumulate"

witha targetprice of `125, assigning targetmultiple of 20xEV/EBITDAfor FY2018E.

CMP: ` 108 Target: ` 125 “ Accumulate ” Ashok Leyland Ltd.

Foreign

Institutions

Non Prom.

Promoters

Public & Others

10.00

11.65

70.33

33.05

5.47

478

261

91.24

3513.33

Financial Basics

FV (`)

EPS (`)

Book Value (`)

P/E (x)

P/BV (x)

52 Week High (`)

52 Week Low (`)

Equity ( ` in Cr.)

MKT.CAP(` in Cr.)


12.75

11.78

1.17

69.57

4.74

VRL Logistics buys 51Volvo busesLeading bus service provider VRL Logistics bought 51 luxury intercity coaches from

Swedish transport major Volvo Buses India Ltd at a cost of Rs.61 crore.The order

includes a mix of 9400 XL and 9400PX multi-axle models, as we also operate on the

longest routes (2,146km)connectingBengaluru to Jaipur.

Pricecorrection—an opportunity to Invest

The current price of discounts VRL’s trailing 12-month earnings by 29 times. This is

lower than the 36 times multiple for local peer Gati and VRL’sown valuation of over 35

times after listing. Thestock is fairlypricedand investorscantake comfort in theVRL’s

established track record of revenue and earnings growth 17 and 15 per cent

respectively in the last five years. Its operating margin is robust at 17-18 per cent,

comparedwith theaverage margins of 7-9percent in thesector.

Valuation: Currently, VRLLOG is trading at ` 369. We recommend “Buy” with target

price of ̀438, valuing stock 37.75xFY17E EPS of `11.6.The stock currently trades at

29.44xofFY16Eand31.72xof FY17E.

CMP: ` 369 Target: ` 438 “ Buy”VRL Logistics Ltd.

Foreign

Institutions

Non Prom.

Promoters

Public & Others


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Open Trading cum Demataccount & get

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08049336177

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15/36

Mold-Tek Packaging Limited


“ Buy ” CMP : ` 138 TGT : ` 179Company Basics

BSE ID

NSE Symbol

Group

EQUITY (` in Cr.)

MKT.CAP(` in Cr.)

533080

MOLDTKPAC

B

13.85

382.14

Financial Basics

FV ( )

EPS ( ) (TTM)

P/E (x) (TTM)

P/BV (x) (TTM)

BETA

RONW (%)

`

`

5.00

7.57

18.23

3.02

1.0354

20.06

Investment Rationale


Holder's Name

Foreign

Institutions

Promoters

Govt. Holding

Public & Others

Non PromoterCorp. Hold.

% Holding

2.6817.15

33.91

0.00

46.27

0.00

ROI : 30%

Valuations

MOLDTEKPAC is trading at `138.We recommend “Buy” with targetpr ice of `179, valuing stock18.23xFY18E EPS of `9.84. Thestock currently trades at 20.17x of FY16E,16.81x of FY17Eand14.01xof FY18E.

Investment Horizon : 12 to 15 Months

Company OverviewEstablished in 1986, Mold-Tek Packaging Limited (MTPL) is the leader in rigid plastic

packaging in India. Mold-Tek Packaging Limited is involved in the manufacturing of

injection molded containers for lubes, paints, food and other products. The Company

designs and manufactures standard airtight and pilfer - proof pails as well as

customized containers to meet customer's packaging requirements. MTPL has seven

processing plants, threestockpointsandaround70 injectionmolding machines.

TheCompany designs andmanufacturesstandardairtight andpilfer - proof pails aswell

as customizedcontainersto meetcustomer'spackaging requirements.

Investment rational

Global Rigid Packaging industry is expected to grow CAGR5.3%to

$ 174.30billion from 2013-18E

Global Rigid Packaging Industry is expected to grow on back of global manufacturing

output increasedconsumer spending on packaged goods worldwide, anddemographic

trends such as increasing urban populations, as urban consumers tend to use more

packaged foods than their rural counterparts. The most rapid gains in demand for rigid

packaging will be seen in the world's developing regions like Indonesia, China, and

India.

Rigid plastic packaging is often favored over traditional pack types for a combination of

properties, including lighter weight, lower comparative cost, design flexibility and the

ease of recycling. Food and Beverage industry is the largest consumer for rigid

packaging because of Cost, performance advantage and development of food gradematerials.Pharmaceuticals applicationis alsousingRigidplastics.

Country

Global Per Capita PlasticConsumption (kg)

USA

109

Europe

65

China

45

Brazil

32

India

9.5

Source : Company, JSL Research


16/36

13



MTPL is catering to wide range of industries andhasstrong clienteleportfolio that mainly includes industry leaders in their

respective industries andhassignificant volumemarketshare.MTPL is largely focusing on domestic clients but hassmall

portion of global customers also in its kitty like ExxonMobil (USA) ,Shell (Anglo-Dutch Multinational), GS Caltex ( South

Korean Oil Refiner ). The company largely exports to UAE, Singapore and Malaysia, Bangladesh and Nepal. MTPL ’s

domestic business expansion is largely depended on the growth of respective industry and creation of various Stock

Keeping Units (SKUs)and expansionofvolumemarketshareby industry players.

MTPL has completed backward integration capabilities and has strong competitive advantage

MTPLprovides end to end services and entire gamut of packaging solution to its clients that includes product inception toMold designing, processing and decorating the products. This strong backward integration reduces down time /

dependency on imports and provide on time delivery to customers.

MTPL has seven processing plants, three stock points and around 70 injection molding machines spread across India

and has wide range of sales and distribution network in order to reduce transportation cost. MTPL ’s has widest range of

product application that suits across the industry and offers offer flexible order volumes ranging from very low to huge

quantities. MTPL has started to focus on edible oil industry along with traditional Paint and Lube with its new

innovation -SquarePail.

MTPL is a pioneer in In Mold Labeling technologyMTPL uses various labeling and decoration techniques from economical screen printing to advance In Mold Labeling

(IML) and has first mover advantage in IML. IML technique has unique advantages like photographic quality and

completecontainercoverage ascompared toconventionaldecorative packagingandis premium decoration globally. IML

eliminates the cumbersome decoration step by clubbing it with the production of pail. This results in better

efficiencies (50%better leadtime).

C o m p a n y A n a l y s i s

Large and blue chip clientele portfolio

Packaging Types

Lubes

Paint

Food

Bulk

Industry

Chemical

Ice Cream, Drink

Powders, Dairy Products

Lubricant / Grease

Paint

Key Clients

Castrol, Indian Oil, Shell, Volvoline, Bharat Petroleum

Akzo Nobel , Kansai Nerolac, Asian Paint , Berger Paints

ITC, Hindustan Unilever, Himalaya, Amul, Vadilal, Kraft

Various Chemical Companies


17/36



MTPL ’s IML is unique decorative printing technology that uses Robot in the process. The Company has moved into high

value added IML decorated containers for not only its traditional clients but also for Food (Dairy Products, Dry Fruits,Chocolates and others) and FMCG industries where IML is proved to be the best option for hygienic and food safety

standard packaging. In FY15, MTPL has received 5 Yrs 100% supply contract from Shell India as Shell’s majority brand

shifting to IMLdecoration.

MTPL has entered in to ` 1000 Cr. edible oil packagingsegment with its innovative solution SquarePail packagingwith IML

decoration. This leads to expanding its arena of operations beyond its traditional paint and lube industry. These square

containers aresuitable notonly foredibleoil,but also forGhee,Pastes, Seeds,Basmati Rice.

Company’s latest innovation square edible oil pails are gradually being accepted by many oil producers’ such as ConAgraFoods, Ghodawat Foods,Allana Group andAdani Wilmar. To meet the growing demand from Square container, company

has expanded its capacity of Hydrabad Plant , Daman and Satara. According to management, higher capacity utilization

andsalesvolume leads to improvement in EBITDA.

Strategically located manufacturing plant facilities in IndiaMTPL has seven strategically located plant near to client’s location which help to optimizing logistic cost as transportation

cost consist of significant part of total expenditure and reduction in delivery time as supply of large size of Pail is not cost

effective.

New Expansion is on trackThecompany hassetup itsa newproduction plant at RasAl-Khaimah , UAE. Themajor industries that company expect to

cater are Food, Lubricant , ConstructionandPaint Industry. This plant is expected to cater various industry leaders like Gulf

OilMiddle East, MarmumDairy, Caparol and otherswill start itsproduction from June 2016. The expansion is largely focus

on traditional as well as newly value added IML containers. The company is also expanding its tool room and IMLprinting

facility to handle increasing demand of its new products. Webelieve that MTPLhas done enough capacity expansion in last

two years that will yield benefits from FY16 onwards.

Unique Features of Square Pail Packaging

Flexi Spout

Dispense Contents

with Ease

Easy to Cleanto reuse

Durability

Attract ive Look

Brand visibility

IML-Premium Look and Feel

EverlastingDecoration

Square Shape

Suitable for wholesale

and retail display

Save onTransport Cost

Space SavingShape

Bar Coding & RFID

Ease of billi ng

Credibility

Variant

5 Liter

10 Liter

“ Square Pail “- a new pail packaging innovation for Edible Oil industry


18/36

15



C o m p a n y A n a l y s i s

Sales grew CAGR13% from FY11 to FY16E

MTPL ’s sales grew from ` 150 Cr. in FY11 to ` 280 Cr. in FY16E , an impressive growth of CAGR 13% , largely

supportedby NonIMLpail products (contributes80%in total revenue) and significant growth of paint industry, in term of

volumegrowth, as Paint segment contributes>50% followed byLubes in total NonIMLrevenue followedbyLubes.

The company significantly reduce its concentration from traditional Non- IML products to higher margin accretive IMLproducts and increasing its existing capacity to meet the growing demand. Non IML products contribution in total

revenue reduces from 81% in FY14 to 71% in FY15 there by IML Pail’s contribution increases from 17% in FY14 to 25%

in FY15. Currently, food andFMCG contributes less than


19/36

Fundamental Stocks


OPENFUNDAMENTAL

CALLS

Auto Ancil lar ies

Suprajit Engg.

Automobi le

Banks

Capital Goods

Cement

Finance

Infrastructure

Ashok Leyland

M & M

Maruti Suzuki

ICICI Bank

Bank of Baroda

City Union Bank

DCB B ank

Havells India

TD Power Sys.

Inox Wind

Carborundum Uni.

Thermax

J K Cements

UltraTech Cem.

Dewan Hsg. Fin.

Repco Home Fin

PTC India Fin

Larsen & Toubro

Adani Ports

Ashoka Bui ldcon

Company CurrentReco

CMP*( ` )52 Week

High (`) Low (`) 3M

Abs olute Ret urn (%)

6M 12M

FaceValue

MarketCap P/E Dividend Yield

%

P/BV

(`) (` in Cr) (x) (x)

Jamna Auto Inds Buy

Hold

Hold

Hold

Hold

Buy

Hold

Hold

Hold

Hold

Buy

Buy

Buy

Hold

Hold

Hold

Buy

Hold

Buy

Buy

Buy

Buy

141

132

106

1249

3736

234

144

92

76

304

214

267

173

759

632

3198

190

588

35

1243

238

183

156

152

107

1442

4790

338

216

106

151

322

414

494

197

1148

745

3369

268

785

62

1888

375

221

88

111

64

1091

3193

181

109

78

68

235

195

215

150

716

425

2531

140

551

30

1016

169

147

10%

-7%

21%

0%

-19%

-11%

-9%

0%

-9%

0%

-32%

-27%

-5%

-21%

2%

13%

-17%

-10%

-9%

-4%

-7%

-11%

29%

0%

17%

3%

-17%

-14%

-24%

0%

-45%

21%

-29%

-25%

7%

-15%

-2%

15%

-8%

-16%

-20%

-17%

-23%

11%

20%

8%

55%

5%

4%

-25%

-15%

-3%

-29%

-3%

-29%

NA

-6%

-33%

-5%

13%

-20%

-8%

-33%

-26%

-22%

11%

5

1

1

5

5

2

2

1

10

1

10

10

1

2

10

10

10

10

10

2

2

5

1099

1703

29811

77255

109925

131082

31970

5264

2052

18994

698

5724

3259

8815

4524

87185

5398

3644

1905

112369

48802

3250

5.59

4.36

8.54

2.99

4.52

1.55

0.73

1.80

1.26

10.45

1.41

4.11

3.00

4.11

2.80

4.58

1.14

4.11

1.12

2.75

4.53

1.75

18.66

23.62

33.57

26.97

34.50

11.15

8.48

12.43

10.92

54.50

36.35

15.87

24.61

44.59

36.70

39.25

7.69

25.55

5.32

25.41

18.67

31.40

0.79

0.67

0.43

0.96

0.69

2.21

2.22

1.25

0.00

0.99

1.26

0.00

0.72

0.95

0.62

0.28

1.49

0.26

2.95

1.34

0.47

0.74


20/36

17

Fundamental Stocks


OPENFUNDAMENTAL

CALLS

O

p e n F u n d a m e n t a l C a l l s

Logistics

Pharmaceuticals

Textiles

Company CurrentReco

CMP*( ` )52 Week

High (`) Low (`) 3M

Abs olute Ret urn (%)

6M 12M

FaceValue

MarketCap P/E Dividend Yield

%

P/BV

(`) (` in Cr) (x) (x)

Realty

Gateway Distr.

Al lcargo Logistics

VRL Logis tics

Torrent Pharma.

Sun Pharma. Inds.

Granules India

Ahluwalia Con tr.

J Kumar Infra

Garware-Wall Rop

SRF

AYM Syntex

Ambika Cot ton

T.V. Today Netw.

CARE

Century Ply.

Hitech Plast

Interglobe Aviat

Radico Khaitan

Bharat Forge

H P C L

Omkar Spl.Chem.

Sadbhav Engg.

Eveready Inds.

Inox Leisure

Prabhat DairyTorrent Power

Infinite Comp

Liberty Shoes

Hold

Hold

Buy

Buy

Hold

Buy

Buy

Hold

Buy

Buy

Buy

Buy

Hold

Hold

Buy

Hold

Buy

Hold

Buy

Hold

Hold

Buy

Hold

Buy

BuyBuy

Hold

Buy

269

156

374

1398

846

122

271

276

331

1250

101

826

312

910

168

172

899

95

889

749

173

274

240

195

109217

203

148

425

218

479

1718

1201

164

303

449

437

1499

163

1149

350

1806

252

221

1395

131

1363

991

250

373

375

276

169253

323

295

-17%

-19%

-9%

-5%

7%

-18%

-2%

-22%

-22%

2%

-32%

2%

0%

-28%

-4%

-8%

-24%

-15%

4%

-11%

-26%

-20%

-19%

-21%

-29%24%

-7%

-27%

-24%

7%

-6%

1%

-6%

-11%

6%

-29%

0%

11%

-13%

0%

33%

-18%

5%

65%

NA

13%

-3%

-5%

5%

-5%

-16%

-11%

-4%20%

16%

-26%

-36%

1%

NA

23%

-17%

37%

11%

-11%

96%

36%

NA

17%

45%

-40%

-32%

87%

NA

9%

-31%

20%

19%

-20%

-8%

17%

NA31%

-12%

-39%

10

2

10

5

1

1

2

5

10

10

10

10

5

10

1

10

10

2

2

10

10

1

5

10

1010

10

10

2990

3872

3387

23121

194765

2509

1806

2133

714

7281

382

485

1824

2671

3584

254

31733

1258

20458

25409

364

4781

1706

1871

105510365

797

245

3.24

2.03

5.28

9.28

7.60

5.38

5.36

1.71

2.30

3.21

2.24

1.50

4.05

6.96

9.24

2.20

18.68

1.46

5.94

1.87

2.16

3.11

2.73

2.64

1.651.58

1.01

1.68

22.67

14.63

31.87

14.55

44.25

23.31

28.20

21.24

17.03

19.44

8.21

10.08

23.00

35.62

25.73

23.95

15.96

16.33

29.41

19.44

11.38

34.11

35.13

30.74

45.2110.61

7.89

14.44

2.55

0.65

1.01

0.82

0.37

0.41

0.00

0.60

0.92

0.79

0.10

1.70

0.49

8.58

1.24

0.54

0.00

0.85

0.85

3.27

0.85

0.25

0.00

0.00

0.050.68

0.00

1.04

Miscellaneous

206

128

261

1120

704

75

188

253

170

875

86

706

165

883

136

81

698

79

720

556

138

197

192

145

71137

122

125

CMP* as on 23/03/2016


21/36

JSL Top Mutual Fund Picks


Scheme Name

NAV*

(Div)

NAV*

(growth)

1 Year

(%) Since Inc

Axis Focused 25 Fund

BSL MNC Fund

BSL Manufacturing Equity Fund

DSP BR Focus 25 Fund

Franklin India Prima Plus

Birla sun life 95 fund

DSP BR balanced fund

Franklin India balance fundICICI Prudential Balance Advantage fund

L&T India Prudence fund

DSP BR Micro Cap Fund

Franklin India Smaller Co Fund

ICICI Prudential Value Discovery Fund

Kotak Emerging Equity Fund

Mirae Asset Emerging Bluechip Fund

BSL Tax Relief'96 Fund

Religare Invesco Tax plan

Axis long term equ ity fund

IDFC tax advantage

Franklin Indi a Taxshield

Franklin India Dynamic PE Ratio Fund

ICICI Prudential Dynamic Plan

Principal Smart Equity Fund

Religare Invesco Dynamic Equi ty Fund

IDFC Dynamic Equity Fund

Axis Dynamic Bond Fund

IDFC Dynamic Bond Fund

ICICI Pru Dynamic Bond Fund

Reliance Dynamic Bond Fund

Top Equity Diversified Funds

Top Balanced Funds

Mid Cap Funds

Conservative Funds

Dynamic Bond Funds

Launch

Date

3 Year

(%)

5 Year

(%)

29-Jun-12

27-Dec-99

3-Feb-15

10-Jun-10

29-Sep-94

10-Feb-95

27-May-99

10-Dec-9930-Dec-06

7-Feb-11

14-Jun-07

13-Jan-06

16-Aug-04

30-Mar-07

9-Jul-10

10-Mar-08

29-Dec-06

29-Dec-09

26-Dec-08

10-Apr-99

31-Oct-03

31-Oct-02

16-Dec-10

04-Oct-07

10-Oct-14

27-Apr-11

1-Dec-08

12-Jun-09

15-Nov-04

16.40

551.99

9.37

16.02

424.15

543.65

104.34

89.1725.33

18.97

40.12

37.15

106.75

24.53

29.25

20.54

32.96

28.76

35.48

404.75

61.75

172.60

16.27

20.09

21.92

8.43

8.04

8.52

8.20

13.27

31.84

NA

16.66

21.27

17.86

16.08

19.0915.09

20.46

39.31

33.12

25.78

26.91

32.09

23.12

20.67

26.62

19.02

20.94

11.46

15.99

14.76

14.13

9.87

NA

22.63

NA

9.21

14.08

11.96

9.89

12.9013.18

13.45

22.59

21.83

17.93

17.77

22.74

13.35

14.07

18.78

12.82

14.19

8.97

9.99

10.61

10.01

6.17

14.11

18.26

-5.51

8.45

19.03

20.80

14.93

14.3610.57

13.27

17.11

13.72

22.60

10.48

20.63

9.51

13.76

18.42

19.07

24.35

15.79

23.65

9.65

8.57

8.33

Top Saving Funds

NAV* as on 28/03/2016

13.79

137.79

9.37

12.02

32.58

128.48

22.19

21.2514.96

16.71

24.36

21.74

27.79

19.03

20.79

122.11

16.72

18.81

12.79

38.60

36.28

19.40

14.73

16.79

11.62

15.20

29.66

16.87

20.03

Launch Date NAV

(Growth) YTM (%) 3 Mon ths (%) 6 Mon ths (%) 1 y ear (%)

-7.19

-2.43

-5.54

-7.67

-2.49

-1.78

-0.70

0.010.79

-0.32

5.70

-1.07

-5.50

-2.49

1.71

-3.34

-6.68

-5.84

-9.62

-3.14

1.08

-7.48

-1.09

-7.63

-10.56

9.92

6.36

12.15

9.29

7.41

4.74

9.06

6.9

6.94

4.86

8.17

5.84


22/36

19

Selected Macro Economic Indicators


M a c

r o E c o n o m i c I n d i c a t o r s

45000

40000

35000

30000

25000

20000

15000

10000

Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15

28220

3570435704 32690 33068

3579435794

3220930937

Import & Export (in US $ Million)

2 1 8 2 6

2 3 8 8 4

2 1 9 9 8

2 1 2 7 4

2 1 2 7 2

2 3 1 4 3

2 1 4 0 8

Oct-15

2 2 2 6 3

2 1 7 2 0

Index of Industrial Production (%)12

10

8

6

4

2

0

-2

-4

2.83

4.81

2.483.01

2.51

4.24 4.34

6.26

3.84

-3.2 -1.34

9.81

Total Foreign Exchange Reserves (US $ Billion)

342.00

344.00

346.00

348.00

350.00

352.00

354.00

351.1352.04

350.36

348.93

347.20 347.56

349.15

351.48 351.83

350.36

346.78

18-Dec-15 25-Dec-15 1-Jan-16 8-Jan-16 15-Jan-16 22-Jan-16 29-Jan-16 5-Feb-16 12-Feb-16 19-Feb-16 26-Feb-16

29796

2 0 0 1 4

Nov-15

33961

2 2 2 9 7

Dec-15

28714

2 1 0 7 5

Jan-16

350.86

353.4

355.94

4-Mar-16 11-Mar-16 18-Mar-1

2728

2 0 7 3 9

Feb-1

Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16

-1.53


23/36


Selected Macro Economic Indicators

8

7

6

5

4

3

2

1

6.3

S e p - 1 4

O c t - 1 4

N o v - 1 4

D e c - 1 4

J a n - 1 5

F e b - 1 5

M a r - 1 5

A p r - 1 5

M a y - 1 5

J u n - 1 5

J u l - 1 5

A u g - 1 5

S e p - 1 5

O c t - 1 5

N o v - 1 5

D e c - 1 5

J a n - 1

6

4.98

4.12

5.865.11

5.375.17

5.79 5.74

4.37

6.10

4.35

5.14

6.72

6.326.32

Consumer Price Index (%)

Wholesale Price Index (%)

-1.28

-1.17 -2.33 -2.43-2.2 -2.13

-3.79

-4.85-4.54

-3.81

-0.73

-1.99

-0.9

0

-1

-2

-3

-4

-5

-6

Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

FII (in Billion) DII (in Billion)

200

150

100

500

-50

-100

-150

-200

121 117 115

2

86

-58 -33

120

53

7

-169

-65

10367

-14

-71

85

-28

63

123

-122

Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16

5.9

Jan-16

-0.91

Feb-

Feb-16 Mar-16

-55

105

-119

167


24/36

21

Real Estate Regulatory Bill


J S L C l a s s r o o m

Key Takeaways

History So Far

OverviewThe much-awaited Real Estate (Regulation and Development) Bill was finally passed by the Upper House and Lower

House.The Bill, whichaims at protecting theinterest of thebuyersandbring in transparency to thesystem, hasbeen waiting

in the wings for the nearly 10 years. Strange though it may sound, but India's ̀12 lakh Cr. real estate sector was a largely

unregulated sector till dateand would onlynow get a regulator asa resultof the Bill.

However, the Bill even though not full proof wouldguard the home buyers from any unscrupulous builder and would bring in

themuch-neededconfidence andinvestment in thereal estate in India.

Key HighlightsThislaw vestsauthorityon thereal estateregulator togovernboth residential andcommercial real estatetransactions.

This Act obliges the developer to park 70% of the project funds in a dedicated bank account. This will ensure that

developers are not able to invest in numerous new projectswith the proceeds of the booking money for one project, thus

delaying completionandhandover toconsumers.

This law makes it mandatory for developers to post all information on issues such as project plan, layout, government

approvals, land title status, subcontractors to theproject, schedule forcompletion with theState Real EstateRegulatory

Authority (RERA)and then in effect to pass this information on to the consumers.

Currently, if a project is delayed, then the developer does not suffer in any way. Now, the law ensures that any delay in

project completion will make the developer liable to pay the same interest as the EMI being paid by the consumer to thebank back to theconsumer.

The maximum jail term for a developer who violates the order of the appellate tribunal of the RERAis three years with or

without a fine.

The buyer can contact the developer in writing within one year of taking possession to demand after sales service if any

deficiency in theproject is noticed.

August 2013

May 2015

September 2013

July 2015

December 2014

December 2015

Bill Introduced in

Rajya Sabha by UPA Govt.

Bill passed to

standing Committee

For the second time,

Cabinet deferred the bill with

amendments

Opposition force government to

refer bill to Rajya Sabha

Select committee

Select Committee panel

publishes report

Union cabinet approves the

Real Estate Bill, 2015


25/36


Real Estate Regulatory Bill

The developer cannot make any changes to the plan that had been sold without the written consent of the buyer. This

puts paidto a commonandunpopularpracticebydevelopers to increase thecost ofprojects.

Every project measuringmore than 500 square metres or more than eight apartments will have to be registered with the

RERA.

It establishes the State Real Estate Regulatory Authority for that particular state as the government body to be

approached for redressal of grievances against any builder. This will happen once every state ratifies this Act and

establishes a state authority on the linesset up in the law.

ConclusionPassing of the Bill leads towards bringing transparency and accountability in the real estate sector and ensure timely

executionof projects.Thesaid move shouldbewelcomedbyconsumersanddevelopers alike.

The success in passing the real estate bill comes at a time when the government and the Congress have been at

loggerheads on a series of issues and the latter making it clear at the start of the budget session that “no contentious bill”

will becleared in the first halfof the session.

The move is significant because the National Democratic Alliance (NDA) is in a minority in the upper house with just 64

members ofParliament(Mps),while theCongressalone has66MPsout ofa total strengthof245.

Moreover, thesector shouldnowfind it easier toclaim 'infrastructure' statusandreap benefitsattached to it andpave way

formore investmentsandprovide a fillip to theailing real estatesector.

Stocks to Watch

Market Cap

8077.13

1731.93

5812.86

Company Name

Oberoi Realty

Mahindra Life.

Godrej Properties

D/E ratio

0.11

0.96

1.66

ROCE (%)

9.65

16.8

5.45

RONW (%)

7.02

20.7

10.43

0.18

0.37

0.36

Total AssetTurnover Ratio

PBIDTM (%)

57.58

44.72

14.9

APATM (%)

34.37

26.08

10.3

Company Name

Oberoi Realty

Mahindra Life.

Godrej Properties

CMP (`)

239

424

291

TP (`)

345

590

368

P/E (x) EV/EBITDA(x) P/BV(x) ROE (%)FY16E FY17E FY16E FY17E FY16E FY17E FY16E FY17E

17.5

22.3

28.64

8

15.8

24.90

11.3

11.4

15.5

5.3

8.8

13.2

1.5

1.3

2.9

1.3

1.2

2.20

8.7

5.9

12.0

16.3

7.9

13.0

( ̀in Cr.)


26/36

23

JSL Ideal Portfolio ( Diversified Equity )


Objective of Ideal Portfolio :

Theobjectiveof this portfolio is to generate long term capital appreciationby investing in concentratedportfolioof large capandgrowthoriented midcapcompanies. This will help togeneratemeaningfulwealthforInvestors from EquityMarket.

Stock Selection Methodology : Based on various fundamental parameters and valuation check along with certain

themes likeCyclical, Bottom Up,Sector specific, PolicyInitiative/push,Evergreen.

Key Risks : Macroeconomic / political conditionandsystematic risk,corporateperformancerisk

Comparative Portfoli o Returns

Particulars Return Since Inception Particulars Return Since Inception

Notes : *CMP as on 23/03/2016., Price ** on recommendation & Given at different t ime intervals , Return since inception

indicates from 1st Jan

Investment Horizon : 9-12 Months

Stock Weights Price** CMP* Target Potential UpsideSuggestions

I d e a l P o r t f o l i o

Maruti Suzuki

KEC International

Bharat Forge

Ultratech Cement

Diwan Housing Finance

Sun Pharma

Inox Wind

Torrent Power

State Bank of India

Ax is Bank

VRL Logistics

Torrent Pharma

Ashoka Buidcon

Ah luwal i Cont racts

Everday Industries

Automobi le

Capital Goods

Casting and Forgins

Cement

Housing Finance

Pharma

Power

Power

PSU Banks

Public Bank

Logistics

Pharma

Infrastructure

Infrastructure

Consumer Non-Durable

7%

5%

8%

7%

8%

7%

8%

8%

7%

7%

5%

8%

5%

5%

5%

Accumulate

Accumulate

Accumulate

Buy

Buy

Accumulate

Buy

Buy

Accumulate

Accumulate

Buy

Buy

Buy

Buy

Accumulate

4550

136

868

2835

252

831

388

185

228

454

381

1555

161

235

209

3735

120

886

3197

189

846

267

217

196

437

373

1397

183

266

239

5200

180

1200

3400

368

1041

488

234

325

620

457

1840

205

368

287

39%

50%

35%

6%

95%

23%

83%

8%

66%

42%

23%

32%

12%

38%

20%

Ideal Portfolio Return

Value Buy (100%)

CNX Small Cap

-7.20%

-15%

-15%

Nifty

Sensex

CNX Mid Cap

- 3.14%

-3.10%

-7%

WeightsSector


27/36

JSL Ideal Portfolio ( Small Cap )


Objective: The aimis to generate long termcapital appreciation from a portfolio that is not part of the leading stocks by

market capitalization. The aim is to include and invests in companies that have immense growth potential as they areoperatingona smallerbase.

Stock Selection Methodology : Based on various valuation parameters and finding out early stage companies

based onsoundbusinessmodel andavailableat cheapvaluation .

Key Risks :Small-cap stocks are not tracked closely by market/ equity analysts and that is why the real value of good small-cap stocks

can remain undiscovered for long. This makes investing in them risky. The risk associated with large cap funds also

associated with small cap ( see last page). Small companies are relatively weak in terms of governance, dividend policies

andprofessionalismof theboard.Thismakes them risky.

Stock Sector Weights CMP* Target Potential Upside

Diversified Equity Portfolio Allocation

Power

Pharmaceuticals

Banks

Infrastructure

Casting and Forgings

Housing Finance

Automobi le

Cement

Capital Goods

Consumer Non-Durable

Logistics

16%

15%

14%

10%

8%

8%

7%

7%

5%

5%

5%

Small Cap Portfolio Allocation

Textile

Computer - Hardware

Education

Food Processing

Pharmaceuticals

Printing and Stationery

Retail

Tyre

30%

10%

10%

10%

10%

10%

10%

10%

Notes : *CMP as on 23/03/2016.

Investment Horizon : 18 - 24 Months

Suggestions

AYM Syntex

Good Year

KPR Mills

KRBL

Garwale Wall Ropes

Smartlink Network

MPS

MT Educare

Shaily Engineering Plastics

Ambika Cotton Mil ls Ltd.

Textile

Tyre

Textile

Food Processing

Textile

IT- Hardware

Printing

Education

Capital Goods

Textile

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

100

483

805

213

331

97

680

165

496

825

223

868

1120

360

550

156

1150

220

890

1149

123%

80%

39%

69%

66%

61%

69%

33%

79%

39%

Accumulate

Accumulate

Accumulate

Accumulate

Accumulate

Accumulate

Accumulate

Accumulate

Accumulate

Accumulate


28/36

25

Monthly Technical Picks - Equity


M

o n t h l y T e c h n i c a l P i c k s AMBUJA CEMENT INDRAPASTHA GAS

We have detected a "Double Bottom" chart pattern formedonAmbujaCements. The price seems to have reached a bottom after failing tobreak through a support level and ultimately rising higher in a sign of reversal to a new uptrend. The Double Bottom pattern forms during adowntrend as the price reaches two distinct lows at roughly the samepricelevel.Finally thepricebreaks upwardabovethe highest high andabove200 days EMAtoconfirm thebullishsignal.

BANK OF BARODA

We have identified that stock has made lows in Mar ’16 and thenbounced back but the stock has tried quite a few times but not able tocross its 50 EMAon weeklycharts. Stock is in primary downtrendwithnegative directional moving index (DI crossover) with ADX above 35levels. Stockshould foundsupplyvolumes on rise. Wesuggest sellingthestockon anyrise.

We have identified that stock has made lows in February’16 and thenbounced back but the stock has tried quite a few times but not able tocross its 200 EMA on weekly charts. Stock is in primary downtrendwith negative directional moving index (DIcrossover) with ADXabove25 levels. Stock should found supply volumes on rise. We suggestselling thestockon anyrise.

We have detected a "Symmetrical Continuation Triangle” which isbullish chart pattern formed on Indraprastha Gas limited. The pricehas broken upward out of a consolidation period, suggesting acontinuation of the prior uptrend. This pattern shows two convergingtrendlines as prices reach lower highs and higher lows. Volumediminishes asthe priceswings back andforthbetweenanincreasinglynarrow range reflecting uncertainty in the market direction. Then wellbefore the triangle reaches its apex, the price breaks out above theupper trendline with a noticeable increase in volume, confirming thepattern asa continuationof theprioruptrend.

SELL BTWN 140-150 TGT 120-115 SL 160

BUY BTWN 530-550 TGT 620-630 SL 490

ORIENTAL BANK

SELL BTWN 95-97 TGT 80 SL 103

BUY BTWN 220-230 TGT 250-255 SL 210


29/36

Monthly Technical Picks - Currency


GBP INR USD INR

On Monthly chart, GBPINR has formed Doji candlestick which isindecisive in nature and doesn’t indicate any particular direction.However,this type of candlestick shows that Pair might trade betweenthe range of 94.00-98.00 range in medium term. Either side breakoutof this range, Pair could strongly react towards that direction.Meanwhile, Pair has given close above its 21 day moving averagewhich is placed at 95.84 level, which shows that near term trend is up.On weekly chart, after giving downside breakout of its lower band of symmetrical triangle pattern, Pair witnesseda healthy correction from99.62 level to 94.54 level butrecent fallhas haltedat 94.40 level whichis a 200 week moving average support which shows that if Pair manages to sustain above this level on weekly basis then bounceback isexpectedin comingtradingdays.

EUR INR

On Daily chart, JPYINR is in consolidation as ADX is below 20 levels.Pair has been facing resistance of its 21 day movingaverage which isplaced at 59.46 level, which shows that for further upside movement,Pair need to sustain above this level. On weekly chart, JPY INR pairhas corrected from highs but is showing strength. Pair has strongsupport at 58.00 levelsand On monthly chart, JPYINR pair hasstrongsupport at 56.00 level which shows that Pair will get good demand attheselevels forstrong upside movement

OnDaily chart,EURINR hasformed dragonfly Doji shapecandlestickwhich is a bullish reversal candlestick and indicating for upsidemovement. Moreover, Pair has been trading above its 21 & 50 daymoving average, which shows that near to medium term trend is up.On broader basis, EURINR has been facing strong resistance whichcomes at 75.65 level since last three weeks,which showing anycloseabove this level,Pair could give good upsidemovement upto the levelof 77.40-77.95. Meanwhile, Pair has good support at 73.80 levelwhich is a 100 week moving average, which shows that short tomedium term trend is up. So one should wait rather for buyingopportunitythen for selling sidefor positionalbasis.

On daily chart, USDINR has formed Bearish candlestick with aboveaverage volume. Besides, Pair faced strong resistance at 67.10 levelwhichis a 100day movingaverage,whichshows that short to mediumterm trend is still down. So any rise up to the level of 67.10, wouldbecome the best-selling opportunity. On weekly chart, USDINR Pair has given close below its 21 week moving average which is placed at67.00 levels, whichshowsthat near to mediumterm trend isdown.Butthe Pair is in monthly buying so we find support at 65 levels. So at thislevel, we can expect consolidation for pair between 65-67 in wholemonth.

JPY INR


30/36

27

Monthly Technical Outlook - Index


M o n

t h l y T e c h n i c a l O u t l o o k

Nifty

The index openedat 7038, madea highof7777,made a low of 7035and closed the month at7738.Last month wehad saidthat retracement can be seen up to 7200-7350-7420-7480 levels, downside support is at 6850-6700 levels and Positive

trend will only began if nifty manages to close above 7550 on weekly basis. Spot Nifty has taken support at 50 EMA

(indicated by moving average line) on monthly charts. It has bounced back to 7700 -7750 which is exactly 38% retracement

of the fall from high of 9119 in Mar 2015 to low of 6825 in Feb 2016. The 200 DMA of Nifty is at 7780 on Daily charts. The

Stochastics has also entered in overbought zone in weekly charts. So our view is nifty should face stiff resistance at 7700-

7780 zone where supply is expected to come. If Nifty manages to close above this zone on weekly closing basis, then nifty

might head towards 7930 levels. If nifty does not manages to close above this level on weekly basis then Nifty will enter in

consolidationandwesuggest tobuyondeclineswith strictstop loss of 7500 levels.

Bank NiftyThe index opened at 14064, madea high of 16282, madea low of 14062 and closed the month at 16141. Last weekwehad

advised to buy on declines with huge support at 13200 levels for targets of 14500-15100-15500 levels. It has bounced backto16300 level which isexactly 38% retracement ofthe fall fromhighof 20907 inJan 2015 to low of 13407 inFeb 2016. . The

200 DMAof Banknifty isat 16400 onDailycharts. The Stochastics has also entered in overbought zone in weekly charts. So

our view is Banknifty should face stiff resistance at 16300-16400 zone where supply is expected to come. If Banknifty

manages to close above this zone on weekly closing basis, then it might head towards 17000-17500 levels. If Banknifty

does not manages toclose above this level on weekly basis then Banknifty will enter in consolidation and we suggest tobuy

ondeclinewithstrictstop loss of 15500 levels.


31/36

Monthly Technical Outlook - Commodity


Bullion

Bullion ended the week with losses after U.S. March payrolls data beat expectations, allaying some fears about the U.S.economy andstoking speculation about the timing of likely interest rate hikes by theFederal Reserve this year. U.S. interestrate futures suggested traders are now betting the Fed will next raise rates as soon as November, versus December aheadof the report. U.S. employers added 215,000 jobs in March, the payrolls report showed, against expectations for 205,000.U.S. interest rate futures suggested traders are now betting the Fed will next raise rates as soon as November, versusDecember ahead of the report. The metal saw its biggest quarterly rise in nearly 30 years in the three months to March,rallying more than 16 percent as expectations faded that the Fed would move to normalize interest rates after their firstincrease innearly a decade inDecember. Goldhad risen asmuchas2 percent earlier last weekafter Fed Chair Janet Yellensaid the U.S. central bank should proceed only cautiously with further interest rate increases. "The remarkable U.S.recovery continues, as total nonfarm employment increased by 215,000 in March. Beginning just a year after PresidentObama inherited the worst economic crisis in generations, businesses have been adding jobs at an extended, record-setting clip: a total of 14.4 millionjobsover thelast73 consecutive monthsof private-sector jobgrowth,"U.S. labor secretarysaid in a statement.Although the unemployment rate inched up by 0.1 to 5.0%, it still remains near eightyear lows from theprevious two months. The U-6 unemployment rate, which factors in workers marginally attached to the labor force, as well

aspart-time workers, roseslightly to9.8%. India'sgolddemand in the March quarter isset todropbyabout two-thirds fromayear ago to its lowest in seven years, as higher prices and a strike by jewellers curbed sales in the world's second-biggestconsumer. The sluggish demand could weigh on global prices, which are headed towards their biggest quarterly gain innearly 30 years, but will help the country bring down its trade deficit. Twothirds of India's gold demand comes from villages,where jewellery is seen as a mode of investment and wealth creation. Rural demand is slack after the first back-to-backdrought in nearly threedecades squeezed farmers' earnings.

Recommendation:

SELL GOLD @28600 SL 29000 TGT 28100.SELL SILVER@ 36400 SL 37000 TGT 35200

Energy

Last week crude oilprices tumbledwhere major fall came on Friday after a Saudi prince reportedly said the kingdom will notfreezeoutput without Iran and other major producers doing so and data showed the global crude glut was likely to grow. Thedollar firmed after stronger-than-expected U.S. jobs data, which also weighed on oil early in the first session of the second

quarter. U.S. employment increased solidly in March and wages rebounded. It was a dismal start to the second quarter and April for a market that finished the first quarter up 6 percent and March 15 percent higher. Prices barely reacted to datashowing U.S. oil and gas rigs falling for a 15th straight week, reaching the lowest levels since at least the 1940s. Over thepast six weeks, oil rallied in a rebound from 12-year lows, after major producers within and outside the Organization of thePetroleum Exporting Countries floated the idea of freezing output at January's highs. But Saudi Deputy Crown PrinceMohammed binSalmansaid onThursday theOPEC kingpin will not jointheprogramme without theparticipationof Iran andother major producers, Bloomberg reported.Ameeting to discuss theproduction freezehasbeen scheduled in Doha, Qataron April 17. Iran has maintained that it will not contribute to any freeze until its crude exports return to pre-sanction levels.Saudi Arabia and Kuwait said this week they will resume production at the jointly operated 300,000-barrel-per-day Khafjifield. A monthlysurvey from showed OPEC output rose in March on higher supply from Iran after the lifting of sanctions andnear-record exports from southern Iraq. Natural gas prices last week ended with more than two percent gainsamid shiftingoutlooks for gas-fired heating and cooling demand in the coming weeks. With temperatures wavering in the so-calledshoulder seasonbetween winterandspring, themarket is gyrating along with them as traders assess fadingdemand levelsfor gas-fired heating but rising demand in some areas. However upside seen limited after a government report showed the

inventory surplus to the five-year average climbed to 51.9 percent last week, the biggest in four years. Rising springtemperatures will erode heating demand, leaving even more of the fuel in storage. Lackluster winter heating demand failedto trim the supply overhang, sending futures to historic lows as gas production from shale basins flooded the market.Without a sweltering summer or a sharp decline in output, prices are poised to remain under pressure. Government datashowed stockpiles ended last week nearly 52% above average for this time of year and virtually tied for the record high atwinter’s end. A tepid U.S. winter has suppressed demand for gas-fired heating, and robust domestic production has led toabundant supplies.

Recommendation:

BUYCRUDEOIL @2350SL 2220TGT 2650-2900.BUYNAT.GAS @124 SL 115TGT 135.


32/36


F i n a n c i a l P l a n n i n g

DSP BlackRock Opportunities Fund

If you had invested Rs 1 lac in DSP BlackRock Opportunities Fund at the time of its inception (NFO) in the year 2000 the

value of your investment today would be Rs 14 lacs. The performance of this diversified equity fund in the recent years hasalso been quite consistent. The fund has consistently been in the top quartile, in terms of SIP returns over the last 3 to 5

years.

The rolling returns of the DSP BlackRock Opportunities fund showcase the consistent performance of the fund. Rolling

returns are the total returns of the schemetaken for a specified period onevery day and taken till the last day of the duration.

In thischart weare showingthe3 year returns ofDSP BlackRock Opportunities fundonevery day during the last5 years.

In this chart you can see that the 3 year rolling returns of the fund was above 50% (14.4% annualized) for nearly 75% of the

times over the last 5 years. The last 5 years included 2 bear market periods and two bull market years. The strong 3 year

rollingreturns given bythe fundoverthe last5 years is the hallmark ofa wellmanaged diversifiedequity fund.

Fund OverviewDSP BlackRock Opportunities Fund was launched in May 2000. It has Rs 711 crores of assets under management. The

expense ratio of the fund is 2.82% (as on 29-02-2016). The fund manager of this scheme is Rohit Singhania. The chart

below showstheNAV movement ofDSPBlackRockOpportunitiesFund over thelast 10years.

29

100

50

0

May’11 Jul’11 Sep’11 Nov’11 Jan’12 Mar’12 May’12 Jul’12 Sep’12 Nov’12 Jan’13 Mar’13

The 3 year returns of DSP BlackRock Opportunities fund on every day during the last 5 years

The NAV movement of DSP BlackRock Opportunities Fund over the last 10 years

+200%

0%

-200%2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

20052010 2015


33/36


Portfolio Construction

The fund has a large cap, growth oriented focus. The fund manager has a bottoms-up portfolio construction approach. Theportfolio is overweight on cyclical sectors likeBFSI, Oil& Gas,Automobile &AutoAncillaries, Cement& Constructionetc. To

balance its exposure to cyclical, the portfolio also has allocations to defensive sectors, with IT and Pharmaceuticals

comprising more than 20% of the portfolio holdings. With cyclical sectors poised to do well with the revival in economic

growthandcapex cycle, theDSP BlackRockOpportunitiesFund hasthepotential todelivergood returns in themediumand

long term.Theportfolio is very well diversified in terms of company concentration. The top5 companies in thefund portfolio,

Documents

The Money Navigator April 2016