j street volume 279

7/25/2019 J Street Volume 279

1/8

ex

rketView

1

mpanyUpdate 2

undthe

nomy 3

wledgeCorner 3

tualFund 4

mmodityCorner 5

exCorner 6

ortCard 7

or&Contributor

rgi Shah

cialContributors

eshTrivedi

tyaNahar

suggestions,feedback

queries

[email protected]

Market View:

Season for new stimulus???

Last Saturday the Title of our write up was Global Meltdown. We have seen remarkable meltdowcapital market world over. As we have discussed, Slowdown in China is the main reason for the flow sentiment on the street. Falling Crude prices, Falling currencies of emerging markets and exsocial unrest on back of refugee crisis in Europe and Central Asia are the major reasons for economies world over. Excessive debts created over the period of time with excess capacigenerated a vicious circle in China. People want to consume less even though the interest rateslow. This is reflected in consistent fall in our exports. The real question is whether our market hain this crisis and fallen sufficiently? Some Technical calculation suggests that the market has

near term bottom. The Same theory can be confirmed if the market sustains 7270 7230 ranconquer all important level 7450 7500 range. This fall has thrown some good opportunaccumulation of quality stocks for long term.

Uday Kotak has rightly said that I am bearish and uncertain for 6 months but bullish for five year

Kamal Jhaveri

MD- Jhaveri Securities

1 -

279January,2016


2/8

2-

Company Basics

E Code 509557

E Symbol GARWALLROP

UITY ( in Cr.) 21.88

T.CAP ( in Cr.) 866.53

Financial Basics

FV () 10.00

EPS () 19.17

P/E (x) 20.66

P/BV (x) 2.80

BETA 1.0730

RONW (%) 14.72

Share Holding Pattern

Holder's Name % Holdin

Foreign 1.91

Institutions 2.26

Promoters 50.59

Non Prom. 0.00

Public & Others 39.11

Government 6.14

mpany Overview

ware-Wall Ropes Ltd. (GWRL), is one of India's leading players in Technical Textiles with customers and end

ss the world. The company provides application-focused solutions for various sectors including Deep Sea F

uaculture, Shipping, Agriculture, Sports, Infrastructure, Defence and Transportation.

estment rational

ong products portfolio and has wide range of end users

WPL is the largest domestic player in Technical Textile industry that provides application focus solutiious traditional sectors like Fisheries, Aquaculture and also cater to new and rising sectors like ence and Transportation with its wide range of product portfolios. End-users of Company's products in

hermen, Shipping Companies, Oil Drillers, Agriculturists, Packers, Transporters, Construction compnicipalities, Government Organizations, Clubs, Universities and Manufacturing Plants. The companvide various product and solution for Water management, Waste management, erosion control applicart from being a leading player in the domestic market, GWPL has a dominant share of markets in

erica, and parts of Europe and Australia for several products.ing crude oil prices and currency devaluation work well for GWRL

st of the Raw Material (like High Density Polyethylene ,Polypropylene, Nylon Polyester Yarn) consumGWRL is crude based derivatives which constitutes ~50% of total expenditure. RM cost as % of sales rehe range of 45%-47% in last five years. Falling in crude oil price (Brent crude touched lowest level sinceds to added advantage for GWRL in the form of margin expansion. RM cost as % of Sales fell from 4FY15 to 43% in 6M FY16 leads to EBITDA margin expansion of 137bps to 11.80% in H2FY16 (v/s 10.4FY15). Rupee depreciation help s to maintain top line better due to exports revenue contributes ~49%

as company has increased its focus on USA, Canada and Europe.

uation : GARWALLROP is trading at 349. We recommend Buy with target price of 550, valuing

FY18E EPS of 27.47.The stock current ly trades at 22.27x of FY16E, 18.56x of FY17E and 15

8E.

mpany Update : Garware-Wall Ropes Ltd.

279January,2016


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eekly Market Recap :

The data released on 18 January 2016 showed that India's merchandise exports declined for the thirteenth straight month in Der 2015. Exports fell 14.7% to $22.30 billion in December 2015 over a year ago. Imports fell 3.9% to $33.96 billion. The trade

widened 27.1% to $11.7 billion in December 2015 from $9.18 billion in December 2014.

Meanwhile, the International Monetary Fund (IMF) in its latest World Economic Outlook (WEO) released on 20 January 2lobal economic growth forecast for 2016 and 2017. Global growth for 2016 is seen at 3.4% and 3.6% in 2017, the IMF said.

Data showed on 19 January 2016 that China's economy grew 6.8% in the fourth quarter from a year earlier, easing from 6.9%hird quarter.

European Central Bank (ECB) President Mario Draghi on 21 January 2016, signaled at a news conference that the ECB goouncil may provide more stimulus at its next meeting in March, noting that the outlook for inflation had weakened significantly

arket Eye Week ahead :

Volatility may increase as traders roll over positions in the futures & options (F&O) segment from the near month J2016 series to February 2016 series.

The initial public offer (IPO) of Precision Camshafts opens for bidding through the book building route on Wednesanuary 2016. The price band for the IPO has been fixed at Rs 180-186 per share.

On the global front, the FOMC is widely expected to keep US interest rates unchanged after the conclusion of a monetary policy meeting on 26-27 January 2016. A two day policy meeting of the Bank of Japan is scheduled oanuary 2016.

EVENTS/FACTORS TO WATCH

Mon : Container corporation, Eveready Industries, HDFC Bank, Intellect design arena, MRF, Kitex garments earnings

Tue-Wed: FOMC two-day meeting

Wed: Bharat Electronics, Bharti Infratel, Colgate, IDFC bank, Just Dial, Kajaria Ceramics, MPS, SKS MicrofinanceSpirits, Tata coffee earnings

Thu : Bharti Airtel, Dabur India, Emami, Glenmark, ICICI Bank, Maruti Suzuki, Vedanta, Sterlite Technology, SymGranules India earnings

Fri: Blue Star, CARE, Yes bank,JSW Steel,NTPC,Larsen & Toubro,Pidilite Industries,TVS Motor,UPL,Thermax earn

Sat :Avant i Feeds,Marico,Relaxo Footwear earnings

Relative Strength Index - RSI'

A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine ovend oversold conditions of an asset. It is calculated using the following formula:

RSI = 100 - 100/(1 + RS*)

When RSI goes above 70 or below 30, it indicates that a stock is overbought or oversold and vulnerable to a trend reversal.

round The World

279January,2016

owledge Corner :


4/8

utual Fund Corner

4-

Source : - www.valueresearchon

nd Name

heme Name SBI Bluechip Fund

C SBI Funds Management Ltd

pe Multi Cap

egory Open-ended and Equity

nch Date February 2006

nd Manager Sohini Andani

Assetsn crore )

Rs. 3624.4 crore as on Dec 31, 2015

Top 10 Sector Break-Ups

Fund

Financial 20

Healthcare 11

Automobile 10

Technology 7

Energy 7.

Engineering 6.

Construction 5FMCG 4.

Diversified 3.

Chemicals 3.

Composition (%)

Equity 87

Debt 12

Cash -0

Risk Analysis

Volatility Measures

Standard Deviation 12

Sharpe Ratio 0

Beta 0

R-Squared 0Alpha 8

tory 2013 2014 2015 2016

(Rs) 17.82 26.34 28.45 26.70

l Return (%) 7.58 47.86 7.99 -6.14

ifty 50 0.82 16.47 12.05 0.45

S&P BSE 100 1.71 15.58 11.24 1.05

k (Fund/Category) 25/73 80/145 16/187 25/200

eek High (Rs) 17.84 26.74 29.62 -

Week Low (Rs) 14.47 17.32 25.82 -

Assets (Rs.Cr) 734.51 1265.94 3163.64 -

ense Ratio (%) 2.58 2.56 2.32 -

Fund StyleInvestment StyleGrowth Blend Value

Large

Medi

Sma

279January,2016

nd Performance v/s S&P CNX Nifty

FundCNX Nify

based to 10,000)


5/8

mmodity Corner

5-

DAMENTAL: Gold dropped on Friday although booked weekly gains of 0.18% to settled at 26160 while Silver settled with gain's near to 07 as markets continue to remain risk-averse on global uncertainties. Bullion prices drifted lower last Friday as risk-sentiment improveds rebounded and closed above $ 32, while the European and US equities also rose sharply higher. Hence, the demand for low-yielding/saa beating as investors preferred to take the yield advantage. However, increasing stimulus chatter from the ECB and BOJ kept the downsn the yellow metal. On Thursday, ECB President Mario Draghi hinted strongly that more easing could be coming within months. "Fadingnflation prospects will force the central bank to review its policy stance in March," Draghi said. Meanwhile, the Bank of Japan is planning toonetary easing measures as sliding oil prices make it even harder to reach its 2% inflation target. Similarly, the People's Bank of China is ional stimulus to ease a pre-Chinese New Year cash crunch. Industrial metals were also supported by demand hope after the People's a injected 315 billion Yuan into the system this week. China's central bank made its most aggressive move in four years to pump cashtry's financial system this week, seeking to pre-empt a holiday-induced funding squeeze at a time of already-rapid capital flight. The cashes as demand for cash begins a seasonal surge ahead of the week-long Lunar New Year holiday that starts around Feb 7, when Chinese go on a shopping spree and hand out red packets containing yuan notes for friends and relatives. SPDR Gold Trust, the world's top gold

ange-traded fund, said that its asset holding rose 0.27% that is 1.79 tons to 662.09 tons on Thursday compared to 660.30 tons on Wedkets will also be looking to Fridays data on U.S. fourth quarter gross domestic product, which is expected to show that growth slowed to a% from 2.0% in the third quarter.

OMMENDATION : BUY GOLD @ 25950 SL 25600 TGT 26350-26700. BUY SILVER @ 33800 SL 33300 TGT 34800-35300.

DAMENTAL : Base metals last week posted its biggest weekly gain since early October as oil prices jump and Chinese physical premiund Copper the leaded the rally to close with the gain nearly +2.24% to settled at 301.25, while Nickel, Zinc and Lead closed with the gain'as the wider financial markets rebounded thanks to hints of more monetary policy support from the European Central Bank. Copper pricesa lick over the 301 price level after the strong dollar weighed on the metal, but the lack of demand also pressured the price as lacklund the globe and a downward revision of growth from the IMF cause the metal to weaken. Copper witnessed a weekly gain of 2.24% after tficant tumbled earlier in the week. On Monday, China's National Bureau of Statistics reported the 2015 producer-price index for manus declined 5.2 per cent. The purchasing price index for manufactured goods declined by 6.1 per cent. However, a weak trend overseas

als continued to suffer from slowing growth in China, the world's biggest consumer, restricted the gains. The metals avoided selling off two d

e equities weakened but they did manage to rally yesterday as equities rebounded. This suggests the base metals may be tired on the dowfor now. The metals closed up an average of 1.80 percent yesterday, led by zinc and lead, which climbed around 1.8 percent, Aluminum

ard, with a 0.3-percent gain. The base metals are edging higher from recent lows so perhaps sentiment is turning slightly less bearish but all too many times before that rallies have been squashed so we need to be prepared for that again. Still, generally the tighter supply fun

have largely been ignored by the relentless price declines but they will be tightening up supply at some stage prices may put in a delayedhich we need to be prepared. For now, the technical indicators look stronger than the price action so we wait to see if prices catch up. No

k ahead, investors will be looking to Wednesdays Fed policy statement for any indication that the bank is considering slowing the path ofincreases this year. Markets will also be looking to Fridays data on U.S. fourth quarter gross domestic product, which is expected to sth slowed to a modest 0.8% from 2.0% in the third quarter.OMMENDATION : SELL COPPER @ 306 SL 312 TGT 298-294. SELL ZINC @ 104.50 SL 108.50 TGT 101.50-99. SELL NICKEL @ 599582-560. BUY ALUMINIUM @ 99.50 SL 96 TGT 102.50-104.50.BUY LEAD @ 108 SL 105 TGT 110.50-114.

DAMENTAL : Energy complex was on fire last week with Crude oil prices surged more than 8% to settled at 2158 level on Friday, one of daily rallies ever, as bearish traders, who had taken out record short positions scrambled to close them, betting the market's long rout m

ver. As support seen after the onset of a massive snowstorm on the U.S. East Coast sent U.S. heating oil up more than 10 percent, helpiner cent gain in crude prices over two days that has reversed nearly half of the relentless, fund-driven selloff that had pushed crude beloel for the first time in 12 years. While Natural gas settled with the gain's near to 1.75% as market participants awaited the arrival of the firswstorm of the season on the U.S. East Coast expected over the weekend. Gains were limited amid concerns that power outages in major

cities could reduce demand for the commodity as a power generation fuel. Crude oil prices had roller-coaster ride this year a surged of neent on Thursday and Friday, erasing nearly half the losses racked up since the start of the year as bearish traders cashed out. While almoscts this to mark the start of an extended recovery amid a persistent global supply glut and worries over the Chinese economy, many arher this is finally the end of an 18-month slide. Also the surge in Iranian shipments is viewed as bearish for crude, which has fallen approxfrom its peak of $115 two summers ago, amid a glut of oversupply on markets worldwide. While Natural Gas inched up even after data natural gas supplies in storage fell less than expected last week. The U.S. Energy Information Administration said in its weekly report tha

storage in the U.S. fell by 178bcf, below expectations for a decline of 184 billion. That compared with a drawdown of 168bcf in the prior weve-year average change for the week is a withdrawal of 191bcf. Now in the week ahead, investors will be looking to Wednesdays Fed polit for any indication that the bank is considering slowing the path of interest rate increases this year. Markets will also be looking to Fridaysfourth quarter gross domestic product, which is expected to show that growth slowed to a modest 0.8% from 2.0% in the third quarter.OMMENDATION : BUY CRUDE OIL @ 2100 SL 1940 TGT 2250-2400. BUY NAT.GAS @ 140 SL 134 TGT 148-156.

BULLION

BASE METALS

ENERGY

279January,2016


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4 -

mmodity Corner

USD/INR

6-

rex Corner

EUR/INR

GBP/INR

JPY/INR

rket Eye Week ahead :

We expects the US dollar to meet supply pressure on rallies against the rupee. Utilize pullbacks in the USD/INRell January futures in the range of 67.82-67.92 The rupee posted the biggest single-session gain in over three

against the US dollar, on expectations foreign funds would surge into emerging-market assets, after the European Bank hinted at expanding the monetary stimulus and on recovery in crude oil prices.

Level S2 S1 CP R1 R2 High Low Cl

SD/INR 67.39 67.14 67.81 68.06 68.48 68.24 67.57 67


PY/INR 56.53 55.90 57.76 58.39 59.62 58.99 57.13 57


BP/INR 96.03 95.45 96.57 97.15 97.69 97.12 96.00 96


UR/INR 72.76 72.20 73.77 74.33 75.34 74.79 73.22 73

rket Recap :

The Indian rupee appreciated against the dollar onMonday, 25 January 2016 on increased selling ofhe US currency by banks and exporters. Besides,ollar's weakness against other currencies overseasupported the domestic currency.

The domestic currency opened at Rs 67.53 againsthe dollar but slipped to a low of 67.61 so far duringhe day. In the spot market, the Indian unit was lasteen at 67.60.

Rupee had recovered from its 29-month lows byising 39 paise to close at 67.63 in Friday's trade onresh selling of dollars on the back of recovery in

equities.

The U.S. dollar index, which measures thegreenback's strength against a trade-weightedbasket of six major currencies, was quoted at 99.49,own 0.11%.

279January,2016


7/8

Nifty finally closed the week at 7422.45 thereby showed a net fall of 15 points on week to week basis. Hammer has beenn the Fib-Retracement lines. Support during the week will be at 7378-7285. Resistance will be at 7515-7610. Expect nese towards the resistance further breakout and close above 7650 can trigger a pullback towards 7863-7972. Covosition at 7422 or below as the opportunity arises. Support cluster is at 7200-7119.

Next batch of Q3 December 2015 corporate earnings, trend in global markets, investment pattern of foreign portfolio investornd domestic institutional investors (DIIs), the movement of rupee against the dollar and crude oil price movement will dictate he bourses during the truncated trading week.

7-

treet Recommendations Report Card

Top Fundamental Stocks

Stocks Rec. Date CMP on Rec. CMP TargetAbsoluteReturn @

CMPSta

wareWallRopes 28/12/2015 425 349 550 -18% Bu

spunsyntaxLtd. 23/11/2015 121 127 223 5% Bu

coPharma 02/11/2015 509 544 636 7% Bu

Ltd. 21/09/2015 1140 1128 1374 -1% Bu

uwaliacontracts 24/08/2015 235 273 368 16% Bu

Pharma 03/07/2015 831 807 1041 -3% Bu

niteComputer

Sol.

20/07/2015

190 217 255 14% Bu

nSpinnersLtd. 06/07/2015 79 70 94 -12% Bu

kofBaroda 01/06/2015 163 130 217 -21% Bu

bikaCottonMills 18/05/2015 880 809 1149 -8% Bu

bhavEngineering04/05/2015 298 308 430 3% Bu

karspeciality

micals16/03/2015 152 195 251 28% Bu

L

16/02/2015

252 189 368 -25% Bu

TodayNetwork 27/01/2015 222 291 337 31% Bu

M 12/1/2015 1238 1178 1452 -5% Bu

ellsIndia 27/10/2014 274 302 346 10% Bu

IndiaFin.Ser. 07/07/2014 39 35 45 -10% Bu

niPort 05/07/2014 280 218 347 -22% Bu

snotimportantwhetheryouarerightorwrong,Itsabouthowmuchmoneyyoumakewhenyou'rerightandh

chyou

lose

when

you're

wrong.

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j street volume 279

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