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1 Disclaimer: http://www.religareonline.com/research/Disclaimer/
Religare Morning Digest
November 15, 2016
Nifty Outlook
VWAP (Expiry till date) Max OI (Call) Max OI (Put)
NIFTY 8545 8700 8200
It was an awful day for the equity markets as Nifty tanked over two and half percent, tracking weak global cues. After the US election, possibility of rate hike in US again resurfaced, which spooked the markets world over, including ours. As a result, Nifty opened with a sharp cut and finally closed around the day's low, with hardly any bounce in between. Meanwhile, broader markets also followed suit and witnessed excessive pressure as participants were not in the mood to carry positions ahead of long weekend.
Excessive volatility is causing actual damage to the trader's account at present and they're finding hard to handle their positions. And, we do not see any relief from that front amid looming uncertainty on the global front and not so encouraging domestic cues. So, we suggest restricting leveraged positions and wait for the markets to stabilise first.
Sectors to watch
Sector Name Outlook
BANKS STABLE
METALS STABLE
IT WEAK
News Religare Super Ideas**
FII & DII Cash Segment (Rs. in Cr.) Trade Stats
Category Amt. MTD YTD
FII -733 -4271 36965
DII 639 5053 7138
NO OF CON-
TRACTS
TURNOVER IN CR
IDXFUTS 381281 26025
IDXOPT 5293743 360567
STKFUTS 704444 48458
Derivative Ideas **
State Bank of India (SBI) reported a 34.6% drop in Net Profit for Q2 to Rs. 2,538.3 Cr as against Rs. 3,879.1 Cr in the corresponding quarter last year. NII increased marginally to Rs. 14,437 Cr in Q2 as against Rs. 14,253 Cr previously. Asset Quality worsened as gross NPAs stood at 7.14% of advances as compared to 6.94% in the previous quarter and net NPAs stood at 4.19% as compared to 4.05% previously.
Mahindra & Mahindra (M&M) reported a 27% in Net Profit to Rs. 1,163.3 Cr in Q2, as against Rs. 915.4 Cr in the corresponding quarter last year. The total standalone revenue from operations stood at Rs. 11,363.6 Cr in Q2 as against Rs. 9,834.4 Cr previously. Sales volumes were up by 11.6% for the quarter at 1,14,795.
Apollo Hospitals reported a marginal 2.7% increase in Net Profit for Q2FY17 to Rs. 92 Cr as against Rs. 89.6 Cr in the corresponding quarter last year. Income from operations of the company rose 16% to Rs. 1,634.1 Cr for Q2 as against Rs 1,409.7 Cr previously.
*FII & DII data as on 10th November 2016
Scrip Buy/Sell CMP Initiation
Range SL* Target
KWALITY BUY 137.75 135-136 128 152
BHEL SELL NOV
FUT 135.75 136-137 144 120
**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
IDEA NOV 70
PE BUY 5000 1.40-1.60 0.60 4
2 Disclaimer: http://www.religareonline.com/research/Disclaimer/
Religare Morning Digest
November 15, 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 223.85 338 9-12 Months 260
IDEA added 2.8% of open interest as fresh short
positions. Daily vwap is around 71.25 levels. On
charts, it is trading in lower lows—lower highs
formation since July 2015 and also trading below
50/100/200 EMAs. We expect it to test 65 levels in
short term.
Strategy: BUY IDEA NOV 70 PE BETWEEN 1.40-1.60,
SL 0.60, TARGET 4.
Derivative Ideas
Kwality Limited (KWALITY) Bharat Heavy Electricals Limited (BHEL)
Despite weakness across the board, KWALITY held
ground and settled in green on weekly basis. On
Friday too, it settled slightly lower while broader
markets crashed. Considering its past performance
and current chart pattern, we strongly believe it
has potential to outperform in near-term.
BHEL is trading sideways in narrow range from past
couple of weeks, near the confluence zone of its
100/200 EMA’s on daily chart. On Friday, i.e. 11th
November, volume backed sell-off was witnessed.
This indicates bearish bias to continue in near-term.
3 Disclaimer: http://www.religareonline.com/research/Disclaimer/
Religare Morning Digest
November 15, 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% 429.4
Kotak Mahindra Bank 19-Aug-15 688 900 30.8% 815.6
Glenmark Pharma 10-Sep-15 1,017 1,370 34.7% 882.3
Dabur India 10-Sep-15 275 325 18.1% 280.5
HUL 10-Sep-15 803 1,050 30.8% 801.8
Bajaj Corp 3-Nov-15 416 500 20.3% 393.4
Britannia Inds 23-Dec-15 2,896 3,600 24.3% 3,079.4
Nandan Denim 5-Jan-16 150 183 22.0% 130.1
Atul Auto 22-Mar-16 506 580 14.6% 465.4
Century Plyboards 5-Jul-16 207 271 30.9% 204.6
Greenply Industries 5-Jul-16 248 322 29.8% 270.4
Talwalkars Better Valkue Fitness 22-Aug-16 252 328 30.2% 263.0
Tv Today Network 29-Aug-16 300 388 29.3% 331.8
Jamna Auto 2-Sep-16 217 272 25.3% 194.3
SML Isuzu 26-Sep-16 1,300 1,560 20.0% 1,222.2
Swaraj Engines Ltd. 3-Oct-16 1,184 1,535 29.6% 1,350.8
Cigniti Technologies Ltd. 5-Oct-16 419 538 28.3% 393.7
Arman Financial Services 14-Oct-16 260 338 30.0% 223.9
4 Disclaimer: http://www.religareonline.com/research/Disclaimer/
Religare Morning Digest
November 15, 2016
Result Calendar—November 2016
Sun Mon Tue Wed Thu Fri Sat
13
SUPRAJIT
14
ARMANFIN
AUROPHARMA
CENTUM
COFFEEDAY
CORPBANK
DCM
DELTA
GODREJIND
HEIDELBERG
HSCL
KCP
KOPRAN
KRBL
MARG
MAXWELL
PRABHAT
RCOM
VETO
15
AIAENG
BALRAMCHIN
CONCOR
HINDPETRO
RENUKA
16
SCI
17
DEEPAKFERT
PETRONET
18
3MINDIA
JBCHEPHARM
NHPC
19
INDIACEM
5 Disclaimer: http://www.religareonline.com/research/Disclaimer/
Religare Morning Digest
November 15, 2016
Corporate Action Calendar — November 2016 (Cash Dividend)
Sun Mon Tue Wed Thu Fri Sat
13 14 15
Godrej Consumer Products Ltd
Aegis Logistics Ltd
Monsanto India Ltd
16
PI Industries Ltd
Marico Ltd
Gujarat Pipavav Port Ltd
Oriental Carbon & Chemicals Ltd
17
Page Industries Ltd
Larsen & Toubro Infotech Ltd
Wockhardt Ltd
Kitex Garments Ltd
Gateway Distriparks Ltd
APM Industries Ltd
TAKE Solutions Ltd
Sharda Cropchem Ltd
Credit Analysis & Research Ltd
Amrutanjan Health Care Ltd
18
19
Corporate Action Calendar — November 2016 (Stock Split)
Sun Mon Tue Wed Thu Fri Sat
13 14 15
16 17
Karur Vysya Bank Ltd
18
19
Economic Calendar — November 2016
Sun Mon Tue Wed Thu Fri Sat
13
Trade Balance
Imports YoY
Exports YoY
14 15
Wholesale Prices YoY
CPI YoY
16 17
18
19
6 Disclaimer: http://www.religareonline.com/research/Disclaimer/
Religare Morning Digest
November 15, 2016
Current Portfolio and Performance Summary as on 11th November’16
Stock Sector Entry Date Weight Reco price (`) CMP (`)
Bajaj Corp Consumer Goods May 13, 2016 9.3% 393 393
Magma Fincorp Financial Services June 30, 2016 8.7% 109 99
Apollo Hospitals
Enterprises Healthcare Services July 29, 2016 9.5% 1,362 1,266
Emami Consumer Goods August 3, 2016 9.7% 1,151 1,100
Castrol India Energy August 5, 2016 10.0% 425 420
Punjab National Bank Financial Services October 3, 2016 11.3% 143 156
Minda Corporation Auto Ancillaries October 10, 2016 10.2% 109 104
Cash 31.4%
Total Total 100%
7 Disclaimer: http://www.religareonline.com/research/Disclaimer/
Religare Morning Digest
November 15, 2016
Historical Performance as on 11th November’16
Performance Matrix 1-Month 3-Month 6-Month 1-Year Since Inception
Religare Alpha -6.7% -0.1% 8.4% 9.4% 25.9%
Nifty -4.7% -3.4% 6.2% 6.6% 5.2%
Outperformance -1.9% 3.4% 2.3% 2.8% 20.6%
8 Disclaimer: http://www.religareonline.com/research/Disclaimer/
Religare Morning Digest
November 15, 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.
9 Disclaimer: http://www.religareonline.com/research/Disclaimer/
Religare Morning Digest
November 15, 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 15, 2016
Before you use this research report , please ensure to go through the disclosure inter-alia as required under Securities and Exchange Board of India (Research Analysts) Regulations, 2014 and Research Disclaimer at the following link : http://old.religareonline.com/research/Disclaimer/Disclaimer_RSL.html
Specific analyst(s) specific disclosure(s) inter-alia as required under Securities and Exchange Board of India (Research Analysts) Regulations, 2014 is/are as under:
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 : ……………………………………………………………………………………………………………………
Name(s) with Signature(s) of RA(s).
[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]
Copyright in this document vests exclusively with RSL. This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any
other person or published, copied, in whole or in part, for any purpose, without prior written permission from RSL. We do not guarantee the integrity of any emails or attached files and are not responsible for any changes made to them by any other person.
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.