religare morning digest · sales volumes were up by ... stoploss is on closing basis for delivery...

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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



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.



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



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



November 15, 2016

Corporate Action Calendar — November 2016 (Cash Dividend)


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)


13 14 15

16 17

Karur Vysya Bank Ltd

18

19

Economic Calendar — November 2016


13

Trade Balance

Imports YoY

Exports YoY

14 15

Wholesale Prices YoY

CPI YoY

16 17

18

19



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%



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%



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.



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



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

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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 : ……………………………………………………………………………………………………………………

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[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]

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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.

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