VOLUME V ISSUE 04 Re. 1/-

February 16-28, 2017FORTNIGHTLY MAGAZINE

Investment magazine for Retail InvestorsInvestment Update

Integrated Investment Update February 16-28, 2017 Page 02

Editorial

Plan for your retirement years while saving taxes too!Tax planning is the important aspect to be considered by every tax payer, especially in the highest tax bracket. It is not about saving taxes alone, but an important part of overall financial planning. One of the biggest investment errors we make is investing just to avail the tax deductions. Judicious investments will ensure that the investments made are relevant to our needs. One of the most important need which is being ignored is planning for retirement as we all get entangled with housing loan, child's educational planning and other family commitments. All these financial activities push retirement planning to the last in priority list. The ideal practice is to start saving for retirement, the moment a person starts earning a regular income. Sooner you start, more you accumulate to retirement fund. The cost of delay is significant and the amount to be saved doubles for every 5 year delay. For example, to save for a retirement corpus of Rs. 1 Crore, a person aged 40 has to save around Rs. 10000 per month for 20 years at an assumed return of 12%. Had he started 5 years earlier, Rs. 5500 per month would have been sufficient for reaching Rs. 1 Crore mark.

The best way to start for retirement saving is to set a financial goal and a roadmap to lead to that goal. The following rules would lead to a comfortable retirement years:

Set aside 10 percent of pay for retirement years

The basic rule of retirement planning is to set aside 10 percent of pay for retirement years. Both employer and self contribution is accumulated in EPF account which is a compulsory nest egg by law. It helps to save taxes under section 80C. Investors can open a NPS account as an alternative. NPS is a voluntary, retirement savings scheme with lowest management cost. NPS offers additional tax benefit upto Rs. 50000 in 80CCD(1B). The lock in attached with these schemes make them an ideal choice for building the retirement corpus.

As income increases, increase your investment too

As your income increase, you should increase investment too to meet up with inflation and increased cost of living. Though there are other reasons for increased expenses, never forget to increase investment

amount. For a raise of 10% every year in pay, increase investment accordingly to accumulate an impressive sum of money in retirement fund.

Try not to utilize corpus before retirement

Incase of switching job, the two options are to transfer the balance in PF account or withdraw the same. If there is a dip in corpus, the full benefit of compounding cannot be enjoyed. Moreover withdrawals within five years are taxable. Once it is withdrawn, it is spent on other areas poking the retirement planning.

Save for retirement and borrow (if required) for education

Children education and wedding is the first priority for all parents pushing retirement to next in order of importance. Retirement planning is a crucial aspect which requires smartness to manage both children and retirement requirements. There is no loan for retirement, it’s better to go for education loan for children instead of using the retirement corpus.

Post retirement, start withdrawal with 5% a year and increase gradually

We should not outlive our savings ignoring rising cost of living and increasing life expectancy. Each one of us should have a clear plan in place. The general thumb rule is not to withdraw more than 5% of corpus in the first five years of retirement. This can be increased gradually to 10% at the age of 70 years. At 80, even a 20% annual drawdown rate would be considered safe. The retirees should be prepared for a depletion of their corpus to beat inflation in the long run.

The rich are not rich because they earn a lot . But because they saved & invested wisely. If saving is the key to wealth, then time is the hand that turns the key to unlock the door to Wealth. If you are patient, and if you are disciplined, you can produce a golden nest egg. Extraordinary power of compound interest can give you magical returns. Hence plan early for retirement and develop a disciplined habit of saving to accumulate a huge sum as retirement corpus.

Mutual Funds

Popular Diversified Equity Funds

5 Yr

FUND NAME LaunchDate

AUMas on

31.01.2017Rs.in Crores

Return as % as on 10.02.2017 Value

ResearchRatings

Lumpsum SIP

1 Yr 3 Yr 5 Yr 1 Yr 3 Yr

Lock-in / Exit Load : # 3 years/NIL * AUM as on 31.12.2016 Calculations based on NAV as on 10.02.2017 Returns for more than one year are annualised Details Pertains to Growth Option

Large CapBirla Sun Life Frontline Equity Aug-02 14,884 27.53 21.00 17.17 21.90 13.02 16.15 *****Birla Sun Life Top 100 Oct-05 2,393 28.05 21.57 17.30 24.12 13.37 16.59 *****DSP BlackRock Focus25 Jun-10 * 1,868 29.49 23.63 14.33 23.55 14.31 16.33 ****Franklin India Bluechip Dec-93 7,923 24.81 18.61 13.06 18.86 11.77 13.65 ***HDFC Top 200 Sep-96 13,123 38.98 20.28 13.82 29.53 12.79 14.63 ***ICICI Prudential Focused Bluechip Equity May-08 12,260 28.61 19.09 14.88 24.08 12.49 14.94 ****SBI Bluechip Feb-06 * 10,104 22.44 22.61 18.65 17.41 13.78 17.15 *****SBI Magnum Equity Jan-91 1,629 22.18 19.02 14.31 14.40 10.70 13.60 ****UTI Equity May-92 5,019 19.63 18.70 14.93 13.95 9.53 13.71 ****UTI Mastershare Oct-86 3,801 22.36 18.08 13.18 17.53 9.86 12.96 ***

Multicap Birla SunLife Equity Aug-98 3,770 40.67 28.37 20.63 34.64 19.32 21.23 *****Franklin India Prima Plus Sep-94 9,930 23.93 24.64 17.99 19.58 14.34 17.74 ****Franklin India High Growth Companies Jul-07 5,385 35.18 30.34 23.27 28.75 17.21 21.72 *****HDFC Equity Jan-95 16,653 39.51 21.88 15.01 30.50 12.77 15.59 **ICICI Prudential Value Discovery Aug-04 15,588 24.21 28.57 21.56 18.59 14.04 20.08 *****Kotak Select Focus Sep-09 *7,181 32.82 26.78 19.65 28.73 17.33 19.54 ****Mirae Asset India Opportunities Apr-08 *2,557 32.24 24.23 18.74 26.64 15.51 18.49 *****SBI Magnum Multicap Sep-05 *1,392 29.92 27.86 20.07 26.74 18.07 19.91 *****

Mid Cap DSP Blackrock Small and Mid Cap Nov-06 * 2,499 41.04 34.52 23.25 38.11 23.07 24.41 ***Franklin India Prima Dec-93 4,812 33.12 33.81 25.59 29.11 20.49 24.24 ****Franklin India Smaller Companies Jan-06 4,542 35.00 37.59 29.94 29.45 22.39 27.48 ****HDFC Midcap Opportunities Jun-07 13,827 37.37 32.96 24.29 33.80 21.17 24.29 ****Sundaram Select Midcap Jul-02 4,501 39.33 36.46 24.74 34.77 22.81 25.01 ***

Balanced FundDSP Blackrock Balanced May-99 * 2,530 28.27 23.04 14.46 24.69 15.78 16.19 ***Franklin India Balanced Dec-99 1,760 19.13 21.15 15.77 14.69 12.77 15.62 ***HDFC Balanced Sep-00 8,983 26.53 22.42 16.91 22.02 14.39 17.19 ****HDFC Prudence Feb-94 16,469 33.81 22.92 15.62 28.67 14.48 16.50 ***ICICI Pru Balanced Advantage Dec-06 17,368 20.34 16.36 15.41 17.20 11.59 13.88 ***L&T India Prudence Jan-11 3,329 21.19 22.65 17.76 21.66 14.58 17.30 ****SBI Magnum Balanced Dec-95 * 7,547 16.26 20.11 17.82 13.24 11.72 15.77 *****Tata Balanced Oct-95 6,565 18.83 21.99 17.39 15.63 12.41 16.03 ****

Goal Based Funds - RetirementHDFC Retirement Savings Fund - Hybrid Equity Equity 87 33.81 (Since inception) - - - Not ratedReliance Retirement Fund - Wealth Creation Equity 612 23.69 - - 22.66 - - Not rated

Goal Based Funds - ChildrenHDFC Childrens Gift Fund – Investment Plan Equity 1,315 23.08 18.87 16.49 19.02 12.45 15.77 ****UTI CCP Advantage Fund Equity 152 27.48 19.65 13.41 16.08 12.37 13.43 **

Special Funds - Unit LinkedLIC MF ULIS # Jun-89 206 15.92 12.00 9.66 13.77 6.71 9.19 *

Mutual Fund

31.01.2017(Growth Option)

Axis Long Term Equity Dec-09 11,144 14.36 24.70 20.94 12.52 11.57 18.63 *****Birla SunLife Tax Relief'96 Mar-96 2,624 22.15 25.50 19.20 19.42 14.87 18.67 ****DSP BlackRock Tax Saver Jan-07 # 1,494 36.18 26.62 20.11 30.08 17.95 19.81 *****Franklin India Taxshield Apr-99 2,495 22.82 24.05 17.57 18.08 13.66 17.28 ****HDFC Long Term Advantage Jan-01 1,284 35.20 21.13 16.21 28.47 14.25 16.42 ***HDFC Taxsaver Mar-96 5,589 39.14 22.42 15.19 34.27 13.89 16.30 *ICICI Pru Long Term Equity Aug-99 3,794 21.87 21.97 17.46 20.11 12.40 16.78 ****IDFC Tax Advantage Dec-08 500 26.88 21.61 17.79 24.35 13.44 17.10 ***Invesco India Tax Plan Dec-06 343 23.72 23.60 18.07 19.04 13.22 17.42 ****L&T Tax Advantage Feb-06 1,870 31.94 23.34 16.11 30.30 17.81 18.76 ***Tata India Tax Saving Mar-96 486 27.20 25.43 18.30 23.91 - - ****

MF ELSS - An ideal investment for Tax Savings & Sound Returns

Consider investing up to Rs.1.50 lakhs in MF ELSS and avail Income Tax benefit of up to Rs.46,350/-.

5 Yr

Return as % as on 10.02.2017

Lumpsum SIP

1 Yr 3 Yr 5 Yr 1 Yr 3 Yr

Ÿ ELSS is one among the investment options u/s 80C with 100% exposure to equity. It offers tax savings along with creation of wealth over long term. Its average return is much higher than fixed-income schemes like PPF, EPF and NSC.

Ÿ Before investing in any ELSS, check its track record by comparing its return over medium and long term horizon with its benchmark and category average. Ensure, return from the fund is always ahead of benchmark and category average.

Performance details of select ELSS:

54EC Bonds - Capital Gains Bonds54EC Capital Gain Bonds or Capital Gains Bonds as they are known, offer tax exemption on long term capital gains tax. These bonds are specifically meant for the investors who have earned long term capital gains & would like to save capital gains tax on them. However, these bonds do not allow any tax exemption on short term capital gains tax. Companies that issue these bonds (54EC Capital Gain Bonds) enjoy high credit rating as they are mostly government backed entities.

REC Bond & NHAI BondMinimum Application Rs.10,000/- Maximum Application : Rs.50 lacs Coupon rate 5.25% w.e.f. 01.12. 2016Maturity : 3 years from the date of allotment Interest payment - Annual Non-Transferable

# AUM as on 31.12.2016

Rs.3,00,000/-

3,00,000

3,00,000

2,40,000

6,00,000

8,40,000

Rs.30,000

Rs.50,000 p.a.

Rs.24,000 p.a.

Rs.24,000

Income Benefit – Option A

10

Life Insurance

ICICI Pru iProtect Smart

Key Benefits : Enhanced protection: Coverage against death, terminal illness and disability

Comprehensive additional benefits: Boost your protection cover by choosing Accidental Death Benefit and Critical Illness Benefit.Four Benefit Options - Life / Life Plus / Life & Health / All-in-OneSpecial premium rates for non-tobacco usersFlexibility to pay premiums for a limited period or throughout the policy termNeed based benefit payout: Choose to receive the benefit amount as a lump sum or as monthly income for 10 years

Plan at a Glance Minimum / Maximum age at entry 18 / 65 yearsMinimum / Maximum age at maturity 23 / 75 yearsPolicy Term : Minimum MaximumBenefit Option Regular Pay Limited Pay Life / Life Plus 5 - 40 years 10 - 40 years Life & Health / All in one 5 - 30 years 10 - 30 years Premium Payment Term Same as Policy Term Policy Term Less 5 years

Only protection product to offer multiple benefits like...

Term Plan

Benefit OptionCoverage Life Life Plus Life & Health All-in-OneDeath þ þ þ þ

Terminal Illness þ þ þ þ

Waiver Premium on disability due to accident þ þ þ þ

Accidental Death ý þ ý þ

Critical Illness ý ý þ þ

Maturity / Survival benefit : As this is a term plan, there is no maturity / survival benefit available.Tax benefits: on premiums paid and benefits received as per the prevailing tax laws

Indicative PremiumAge 40Policy Term 15 years Limited Pay option 10 YearsSum Assured on Death / Terminal Illness Rs. 50 LakhsAccidental Death Benefit Rs. 50 Lakhs (equivalent to sum assured)Critical illness Rs. 10 LakhsWaiver of Premium on YesPermanent Disability

Benefit Premium (Rs.) Life Option 10,805

Life Plus Option 14,255

Life & Health 19,365

All in one 22,815

* Premium excl. S.T. Insurance is the subject matter of the solicitation.

Non-Participating Money Back Plan

Ÿ Reliance Super Money Back Plan provides a regular income and security for family.

Ÿ Get life cover of at least 10 times the annualised premium for the entire policy term.

Ÿ Policy terms of 10/20/30/40/50 years and premium payment for only half of the policy term.

Ÿ Guaranteed Money Back (GMB)- A percentage of Sum Assured ranging between 10% to 50% paid at the end of every five policy years till maturity.

Regular Monthly Payouts (MP):Ÿ 1% of Sum Assured for the first payout year paid monthly

after the end of the premium payment term.Ÿ Increase by 0.25% in subsequent years, at a simple rate.Ÿ For example 1% x 12 for 1st payout year / 1.25% x 12 for 2nd

payout yearGuaranteed Loyalty Addition (GLA) - (1% of Sum Assured x Premium Payment Term) paid at the time of maturity.Guaranteed Maturity Addition (GMA) - (1% of Sum Assured x Policy Term) paid at the time of maturity.Death BenefitHighest of the following amounts is payable (i) 10/ 7 times of the Annualised Premium (or )(ii) 105% of all the premiums paid (or)(iii) Sum AssuredTax Benefit as per prevailing tax laws.

Benefit IllustrationPolicy Holder Age: 40 years Sum Assured: Rs.2,00,000Premium : Rs.51,600 p.a. Policy Term : 20 years PPT : 10 yearsBenefit Amount RemarksTotal GMB 2,00,000 25% of 2,00,000 (Rs.50,000/- paid in 4 installments)Total Regular MP 5,10,000 Payout starts at 11th year. (1% x 12 x 200000) and increased by 0.25% for following years.GLA 20,000 1% x 2,00,000 x 10GMA 40,000 1% x 2,00,000 x 20Maturity Benefit 60,000 (GLA + GMA)Total Benefit 7,70,000 (GMB + MP + GLA + GMA)

09

Stock Report

NHPC Ltd.

NHPC Limited (National Hydroelectric Power Corporation),a Government of India Enterprise, was incorporated in the year 1975 with an authorised share capital of Rs. 2,000 million and with an objective to plan, promote and organise an integrated and efficient development of hydroelectric power in all aspects. Later on NHPC expanded its objects to include development of power through conventional and non-conventional sources in India and abroad.

At present, NHPC is a Mini Ratna Category-I Enterprise of the Govt. of India with an authorised share capital of Rs. 1,50,000 million.

Company Details

Industry Power Generation/Distribution

Chairman & MD K M Singh

Company Secretary Vijay Gupta

ISIN INE848E01016

NSE Symbol NHPC

BSE Code 533098

Key Market Indicators (Standalone)

Latest Date 10-Feb-17 Latest Price (Rs) 30.25

Previous Close (Rs) 30.85 Beta 0.86

Face Value (Rs) 10 Industry PE 14.46

TTM Period 201612 TTM EPS(Rs) 2.47

TTM CEPS(Rs) 3.73 Price/TTM CEPS(x) 8.1

TTM PE (x) 12.26 TTM Price/BV(x) 1.05

EV/TTM EBIDTA(x) 8.26 EV/TTM Sales(x) 6.45

MCap/TTM Sales(x) 4.52 TTM Latest Book Value (Rs) 28.7

Market Cap (Rs.Cr.) 33489 EV (Rs. In Crores) 47754

Latest no. of shares (In Crores) 1107

Profit & Loss Statement(Standalone) (Rs in Crore)

Description 201603 201503 201403 201303 201203Net Sales 7434 6802 5537 5311 5919

Total Income 9017 8347 7083 6474 6933

Total Expenditure 3259 2892 3244 2142 2248

PBIDT 5758 5455 3839 4332 4685

PAT 2440 2124 979 2348 2772

Dividend % 15 6 3 6 7

Adj. EPS(Rs) 2.2 1.92 0.88 1.91 2.25

Balance Sheet (as on 27.01.2017) Rs In Crore Mar '16 Mar '15 Mar '14 Mar '13 Mar '12

Equity Share Capital 11070 11070 11070 12300 12300

Reserves 17681 17215 14996 15539 14052

Networth 28751 28286 26067 27840 26353

Secured Loans 13885 13962 14374 13604 12478

Unsecured Loans 4499 4208 4206 3812 3974

Total Debt 18385 18171 18580 17417 16452

Total Liabilities 47137 46457 44648 45258 42806

Gross Block 34538 32913 32867 25661 23005

Less: Accum.Depn. 11654 10217 8788 7621 6637

Net Block 22883 22695 24079 18039 16368Capital W-in-Progress 16575 16054 14657 19709 19349Investments 1597 2235 2478 2651 2749

Inventories 85 82 72 57 43

Sundry Debtors 2017 2497 1863 2049 2052

Cash &Bank Balance 5876 5422 5303 5616 6003

Total Current Assets 7979 8001 7239 7722 8099

Loans and Advances 6129 6451 5520 6382 6191

Current Liabilities 5466 5313 5511 5112 5176

Provisions 2562 3667 3816 4134 4777

Net Current Assets 6080 5472 3432 4857 4338

Total Assets 47137 46457 44648 45258 42806

Key Financial Ratios

Per Share Ratios (Rs.)

16-Mar 15-Mar 14-Mar 13-Mar 12-Mar

Basic EPS 2.2 1.92 0.82 1.91 2.25

Diluted EPS 2.2 1.92 0.82 1.91 2.25Cash EPS 3.52 3.21 1.98 2.7 2.98Book Value 25.97 25.55 23.55 22.63 21.42

CMP: Rs. 29 (as on 13.02.2017)Term: Long TermTarget: Rs. 42

10

Dividend / Share 1.5 0.6 0.3 0.6 0.7Rev. from Operations/Share 6.72 6.14 5 4.31 4.6

PBDIT/Share 4.63 4.38 3.9 3.51 3.85PBIT/Share 3.32 3.1 2.81 2.72 3.13PBT/Share 2.85 2.5 1.88 2.6 2.91Net Profit/Share 2.2 1.92 0.88 1.91 2.25

Profitability Ratios (%)PBDIT Margin 77.45 80.2 69.33 81.57 79.14PBIT Margin 57.92 59.24 47.46 67.83 65.2PBT Margin 43 41.55 28.59 60.3 59.41Net Profit Margin 32.82 31.23 17.68 44.22 46.82RoN / Equity 8.56 7.82 3.63 8.67 10.88ROCE 8.88 8.57 5.69 7.96 9.28Return on Assets 4.41 3.9 1.8 4.38 5.52Total Debt/Equity (x) 0.7 0.7 0.76 0.67 0.67Asset Turnover Ratio 0.13 0.12 0.1 0.1 0.12Liquidity Ratios (x)Current Ratio 1.78 1.88 1.8 1.91 1.76Quick Ratio 1.76 1.87 1.78 1.91 1.75

Valuation Ratios (x)EV/EBITDA 7.64 7.17 7.97 8.4 7.3MarketCap/ Net OperatingRevenue 3.59 3.24 3.82 4.61 4.27

Price/BV 0.93 0.78 0.81 0.88 0.92

Peer Group Comparison (Rs in Crore)

Company Name

Year End 201603 201603 201603 201603 201603Net Sales 6493 6669 7434 10131 11633PBIDT 1820 2742 5758 4457 3135PAT 707 1204 2440 1986 816Adj. EPS(Rs) 53.34 7.18 2.2 75.51 16.98PBIDTM% 28.03 41.07 77.45 44.00 26.87PATM% 10.89 18.04 32.82 19.6 6.99ROCE% 11.3 11.41 8.88 11.37 16.05ROE% 9.35 7.93 8.56 9.46 11.35

Top Holdings as on 201612Name Category Holding %President Of India Promoters 74.51LIC of India Child Fortune Plus Balanced Fund Non - Promoters 8.51Power Finance Corporation Ltd Non - Promoters 2.35Rural Electrification Corporation Ltd Non - Promoters 2.35

Share Holding Pattern as on 201612Category 3 0-Sep-16 31-Dec-16Promoter & Promoter Group 74.60 74.51Public 25.40 25.49Shares held by Employee Trusts - -Total 100 100

Price Summary (as on 10.02.2017)Ÿ Moving Averages: Stock has traded higher than 20 day, 50

day, 100 day and 200 day moving average.Ÿ Rising Investor Participation: Delivery Volume of 1.10 crore on

10 Feb which has increased by 67.36%.Ÿ High Dividend Yield: 4.96% at the current price.Ÿ Consecutive Rise: Stock has been gaining for the last 10 days

and has risen 17% in the period.Ÿ Price Increase with Higher Volumes: Price has risen by 17%

and Volume has risen by 109% (Volume compared with 10 day average volume).

Ÿ 1 Year return: The stock has witnessed 42% of price return.

Return Analysis

Ÿ Dividend Yield 4.96% Ÿ Latest Dividend: Rs. 1.7 per share Ÿ Ex-Dividend Date – 19-Jan-2017Ÿ Risk Return – NHPC Limited has given better returns per unit

of risk v/s SENSEX during 1 year period with medium risk.Ÿ Beta of Stock – NHPC Limited has low beta of 0.87 with

SENSEX.

Things You Should Know : In the last one month there is no Insider Trade, Pledged Shares, Bulk Deal and Block Deal.

DISCLAIMER : The suggestions made here are only for information purpose. They are not recommendations to buy or sell any securities.

CESC Neyveli Lignite NHPC Reliance

InfraTorrentPower

11

Door No 14, R.K. Plaza, 1st Floor, 1st Shop, Lake View Road, Adambakkam, Chennai - 600 088 98407 75631

12

Hyd - Kukatpally

13

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Integrated Investment Update February 16-28, 2017 Page 16