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Religare Morning Digest
December 23, 2016
Nifty Outlook
VWAP (Expiry till date) Max OI (Call) Max OI (Put)
NIFTY 8148 8300 8000
Markets upheld negative tone for seventh consecutive session and shed nearly a percent on Thursday. Feeble cues from Asian markets were weighing on sentiments in early trade, which further deteriorated with slide in select index majors as the day progressed. Besides, participants were maintaining cautious approach ahead of beginning of two-day GST Council meet. Mostly sectoral indices ended lower in line with benchmark, wherein metal and PSU banks lost maximum.
Nifty has slipped below the psychological mark of 8000 on Thursday and cues from the banking space are pointing toward further decline ahead. So, we suggest avoiding fresh long trades in index and advice keeping shorts as hedge to existing longs.
Sectors to watch
Sector Name Outlook
ENERGY STABLE
METALS STABLE
PHARMA WEAK
News
Religare Super Ideas**
FII & DII Cash Segment (Rs. in Cr.) Trade Stats
Category Amt. MTD YTD
FII -1178 -5207 181819
DII 1058 2126 22487
NO OF CON-
TRACTS
TURNOVER IN CR
IDXFUTS 275195 17558
IDXOPT 7496355 503830
STKFUTS 543394 33908
Derivative Ideas **
Sun Pharma plans to acquire a branded oncology product Odomzo from Novartis for an upfront payment of USD 175 million and additional milestone payments. Sun Pharma Advanced Research Company, was also in the news and went up 7 percent after receiving complete response letter from the US health regulator for preservative-free eye drop.
Phoenix Mills shares spiked after the Canada Pension Fund signed non-binding term sheet to buy 49 percent stake in a subsidiary of the company over a 3-year period. The funds raised by subsidiary, ISML will be utilised for business development and growth purposes.
A Delhi court has cancelled the non-bailable warrants against the two managing directors of real estate major Unitech Ltd, in a case of alleged misappropriation of Rs 500 cr collected from investors for one of its housing projects.
*FII & DII data as on 21st December 2016
Scrip Buy/Sell CMP Initiation
Range SL* Target
BEL BUY 1394.25 1390-
1400 1350 1500
JSWENERGY SELL DEC
FUT 58.70 59-59.5 63 51.5
**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 TARGET
JET AIR-
WAYS DEC BUY 1000 338 374 350
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Religare Morning Digest
December 23, 2016
Religare Super Ideas
Investment Pick - Minda Corporation
Minda Corporation is amongst the leading automotive component companies with a diversified product portfolio that encompasses Safety, Security & Restraint
Systems; Driver Information & Telematics Systems and Interior Systems for auto OEMs. These products cater to 2/3 wheelers, Passenger Vehicles, Commercial Vehicles and after-market.
We expect Minda Corp's total income to grow at CAGR of 19% between FY16-FY18E. Also profitability will improve further with recovery in demand, cost
reduction measures, localization efforts and focus on high yield products. At cmp of Rs. 95, the company is available at FY18E P/E of 12.2x, which we believe is attractive given its growth prospects and improving return ratios.
Scrip CMP Target Duration Recommendation Price
MINDACORP 89.90 117 9-12 Months 95
Jet airways has shown good long build up of
around 6.7% open interest in yesterday’s trade,
with vwap at 347.We expect the scrip to rally till
374 in the short term.
The highest Open interest is at 360 strike put and
400 strike call option.
Strategy: BUY Jet airways dec @350,sloss at
338,target 374.
Derivative Ideas
Bharat Electronics Limited (BEL) JSW Energy Limited (JSWENERGY)
BEL has retraced 61.8% of the rise 1267-1525, this
level is considered reversal level as per Fibonacci
theory. Yesterday, i.e. 22nd December, it recovered
sharply after testing these levels. Volume too
supported this up move. All this has further
strengthened our view that it will trade with
positive bias at least in near-term.
JSWENERGY is in long-term down trend and is
trading with bearish bias from quite some time.
Recently, it started drifting lower post some
retracement. Considering its over all chart pattern
and recent move, we strongly advocate short
selling this stock in mentioned range.
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Religare Morning Digest
December 23, 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% 474.0
Kotak Mahindra Bank 19-Aug-15 688 900 30.8% 713.2
Glenmark Pharma 10-Sep-15 1,017 1,370 34.7% 925.6
Dabur India 10-Sep-15 275 325 18.1% 265.5
HUL 10-Sep-15 803 1,050 30.8% 787.1
Bajaj Corp 3-Nov-15 416 500 20.3% 364.7
Britannia Inds 23-Dec-15 2,896 3,600 24.3% 2,810.7
Nandan Denim 5-Jan-16 150 183 22.0% 109.1
Atul Auto 22-Mar-16 506 580 14.6% 416.7
Century Plyboards 5-Jul-16 207 271 30.9% 155.1
Greenply Industries 5-Jul-16 248 322 29.8% 246.8
Talwalkars Better Valkue Fitness 22-Aug-16 252 328 30.2% 230.6
Tv Today Network 29-Aug-16 300 388 29.3% 258.3
Jamna Auto 2-Sep-16 217 272 25.3% 155.2
SML Isuzu 26-Sep-16 1,300 1,560 20.0% 1,022.0
Swaraj Engines Ltd. 3-Oct-16 1,184 1,535 29.6% 1,341.9
Cigniti Technologies Ltd. 5-Oct-16 419 538 28.3% 365.0
Arman Financial Services 14-Oct-16 260 338 30.0% 177.3
Castrol India Ltd. 18-Nov-16 401 504 26.0% 362.9
Garware Wall Ropes Ltd. 23-Nov-16 567 686 21.0% 631.2
Wonderla Holidays Ltd. 25-Nov-16 324 405 25.0% 342.3
Indo Count Industries Ltd. 30-Nov-16 155 207 33.5% 155.4
VIP Industries Ltd. 30-Nov-16 118 166 41.0% 116.7
LIC Housing Finance 30-Nov-16 544 700 29.0% 539.7
Manpasand Beverages 30-Nov-16 626 854 36.4% 547.7
Zee Entertainment Enterprises 30-Nov-16 457 592 29.7% 441.6
Minda Corporation 06-Dec-16 95 117 23.2% 89.9
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Religare Morning Digest
December 23, 2016
Corporate Action Calendar — December 2016 (Dividend)
Sun Mon Tue Wed Thu Fri Sat
18 19
Lycos Internet Limited
20 21
BANNARI AMMAN SUGARS LTD.
JVL AGRO INDUSTRIES LTD.
22 23
24
Corporate Action Calendar — December 2016 (Stock Split)
Sun Mon Tue Wed Thu Fri Sat
18 19 20 21
SHREE GLOBAL TRADEFIN
22 23
24
Corporate Action Calendar — December 2016 (Stock Buyback)
Sun Mon Tue Wed Thu Fri Sat
18 19 20 21 22
Infinite Computer Solutions (India)
23
24
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Religare Morning Digest
December 23, 2016
Current Portfolio and Performance Summary as on 22nd December’16
Stock Sector Entry Date Weight Reco price (`) CMP (`)
Bajaj Corp Consumer Goods May 13, 2016 9.3% 393 365
Magma Fincorp Financial Services June 30, 2016 9.8% 109 104
Apollo Hospitals
Enterprises Healthcare Services July 29, 2016 9.4% 1,362 1,159
Emami Consumer Goods August 3, 2016 9.2% 1,151 953
Castrol India Energy August 5, 2016 9.4% 425 363
Punjab National Bank Financial Services October 3, 2016 9.4% 143 119
Minda Corporation Auto Ancillaries October 10, 2016 9.6% 109 90
Pidilite Industries Chemicals November 17, 2016 10.1% 617 594
Somany Ceramics Ceramics December 20, 2016 10.1% 502 496
Cash 13.5%
Total Total 100%
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Religare Morning Digest
December 23, 2016
Historical Performance as on 22nd December’16
Performance Matrix 1-Month 3-Month 6-Month 1-Year Since Inception
Religare Alpha -2.7% -10.2% -0.9% -0.7% 15.5%
Nifty 0.6% -9.1% -1.4% 1.4% 1.2%
Outperformance -3.4% -1.1% 0.5% -2.1% 14.3%
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Religare Morning Digest
December 23, 2016
Research Product Basket
For cash market trading
Call / Product Call Frequency No. of calls Avg open call duration % funds allocated
Intraday Calls Intraday 2 - 3 < 1 day 25%
Live / RMD Calls Daily 3 - 4 3 - 4 days 30%
Master Pick Weekly 1 1 month 15%
Religare Alpha Opportunity NA 2 - 3 months 20%
Cash NA 10%
For 1L margin*
Total Per Call
25,000 8,000
30,000 4,000
15,000 5,000
20,000 As per weightage
10,000
Intraday Calls These calls are flashed live on Ms Lync and ODIN with the purpose of squaring off positions on the same day. As a policy, we restrict our
intraday cash market calls to less than 4 calls a day. Hence, funds should be allocated accordingly to have provision to trade in all calls.
Live / RMD Calls 2 super ideas are flashed in RMD daily with a view of 3-4 days. Additionally as per market opportunity, we flash live calls during the day
(including BTST calls). 3-4 such calls are made on a daily basis which might be open for 3-4 days. Funds should be allocated keeping in mind that
there will be 7-8 such open calls daily.
Master Pick This is our weekly recommendation shortlisted on the basis of techno-funda analysis. 15% of funds is recommended to be allocated for Master
Pick considering that there will be 3 open calls. The average open duration for this call will be 1 month.
Religare Alpha This is a portfolio of 8-10 stocks which are held with a view of 2-3 months. It is recommended to allocate 20% of funds for building this portfolio
which will provide stability to the overall trading portfolio.
Cash 10% surplus cash in the portfolio should be kept for the purposes of allocating it to opportunities as and when they arrive.
For derivative market trading
Call / Product Call Frequency No. of calls Avg open call duration % funds allocated
Derivative Ideas Daily 1 - 2 1 - 3 days 40%
Live calls Intraday / Daily 1 - 2 3 - 4 days 50%
Cash NA 10%
For 1L margin*
Total Per Call
40,000 40,000
50,000 50,000
10,000
Derivative Ideas 1 derivative idea is shared in RMD daily. It can be a plain vanilla F&O buy/sell call or an option strategy. Funds should be allocated assuming 2
such calls will be open at any time. These calls are open for 3-4 days on an average.
Live Calls These calls are flashed on MS Lync and ODIN during live market hours. These calls can be intraday or with a view of 2-3 days. Funds should be
allocated considering 2 such calls will be open at any time. 3/4 times, these calls will be on Nifty / Bank Nifty only.
Cash It is recommended to hold 10% cash to capitalize on any opportunity that may arise in markets.
For every client, the advisor must allocate a specific proportion of funds for trading and investing depending on the risk taking ability and willingness of the client
and their investment goals.
The below mentioned product basket tries to address the way to deal with the trading portfolio (cash/derivative) for optimum effectiveness of research calls.
It is recommended to divide your trading funds for various types of calls and not invest the entire amount for 1 or 2 calls only.
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Religare Morning Digest
December 23, 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]
Siji A Philip [email protected]
Vipin Kumar [email protected]
Team Members
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Religare Morning Digest
December 23, 2016
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S. No. Statement Answer
Yes No
I/we or any of my/our relative has any financial interest in the subject company? [If answer is yes, nature of Interest is given below this table] No
I/we or any of my/our relatives, have actual/beneficial ownership of one per cent. or more securities of the subject company, at the end of the month immediately preceding the date of publication of the research report or date of the public appearance?
No
I/we or any of my/our relative, has any other material conflict of interest at the time of publication of the research report or at the time of public appearance?
No
I/we have received any compensation from the subject company in the past twelve months? No
I/we have managed or co-managed public offering of securities for the subject company in the past twelve months? No
I/we have received any compensation for brokerage services from the subject company in the past twelve months? No
I/we have received any compensation for products or services other than brokerage services from the subject company in the past twelve months? No
I/we have received any compensation or other benefits from the subject company or third party in connection with the research report? No
I/we have served as an officer, director or employee of the subject company? No
I/we have been engaged in market making activity for the subject company? No
SS..No. Name(s) of RA.
Signtures of RA
Serial Question of question which the signing RA needs to make a separate declaration / answer
Yes No.