the money navigator may 2016
TRANSCRIPT
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8/17/2019 The Money Navigator May 2016
1/361st May-2016 to 31st May-2016 www.jhaveritrade
F o r P r i v a t e C i r c u l a t i o n O n l y
Issue ThemePg. 1
Tjhopg
Ipqf
Company AnalysisPg. 12-15
Open FuCalls Pg
We think that initial signs of recovery in earnings have started, but we have to wait for full recovery. According to onestimates, Nifty 50 companies (so far available for 13 companies ) aggregate net sales and net profit grew 4% an19% Y-o-Y respectively. As initial signs are positive, but full conclusion can only be drawn at the end of this monwhen all results will be out. Weexpectconsolidationphaseas markets have runsignificantly in anticipation.
OPENFUNDAMENTAL
CALLS
SI NS of HOPSIGNS of HOPEI NS of HOPSIGNS of HOPE
Good Monsoon
Sign of Earning Recovery
Rise ofCommodity
Prices Indian Firms Deleveraging
Fast
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From The MD’s Desk
The next trigger in the market Is the corporate earnings, which has already been started and it seems to have the old edge.The business confidence has started to improve and the guidance is also relatively better. It is true that the global problem
has not subsided meaningfully and the fear of hard landing is still looming. The Federal Reserve is also taking into account
the uncertain global situation and is clearly divided for raising the rates. Recently Fed kept the rates unchanged with some
hawkish comments but the chances of raising the rates in June clearly depend on the data of consumer spending and
unemploymentclaimsandsome experts do notsee anyrate hike duringthis fiscal.
The world market was expectingsomemore stimulus fromThe Bank of Japan whichdidn’t happen and the currencymarket
has started tobehaveviolently and created high volatility incurrencymarketand equity too.The riseofYen ofalmost 3%in a
day pushed the corporate world over to unwind their Yen carry trade positions and run for the cover. So this volatility seems
to be a temporary one for Indian market and any positive news from earnings front coupled with monsoon expectation may
revivethemarket towards uptrend.
Indianmarkethasdeclined from thepsychological level of 8000 andclosednear to its200DMA. There arecertain important
technical resistances towards the journey of 8100-8200 but we seem to be on track unless the important support of 7550-
7600 is decisivelybroken.
Kamlesh Jhaveri ( MD )
Jhaveri Securities Ltd.
Consolidation in market is expected
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I s s u e T h e m e
Tjhopg
IpqfSigns of Hope
1
Is it too early to celebratemonsoon cheer ?
We know that Indian stock markets surged to over three-month highs on a troika of positive data points. 1) Themeteorological department forecast above average monsoon rains this year 2) Retail inflation eased 3) Factory output
rebounded. But economists sounded cautious as it may be too early to celebrate on the basis of these data points.
According to economist, while the prediction of normal monsoon rains, after two years of back-to-back droughts, is a big
positivehowever monsoon forecast havegone terriblywrong in the past. It is not about the quantum of the monsoon. It is the
distributionacrosstime andspacewhich iscritical.
They also believe that drawing implications from monsoon estimates for growth or prices will be premature at this juncture.
The translation of strong/weak monsoon into production gain/loss and income gain/loss feeding into rise/fall in aggregate
demandis too early tobefactored inright now.
Uncertain global cues may continueWe believe that it is combination of global cues that may happen the market going forward. The Bank of Japan surprised
world economy bydeclining toadoptmore stimulusandalso left unchangedthe0.1% negative rate.
Rising oil prices and a more stable Chinese economy may allow the US Federal Reserve to shift its focus back to the to the
homeas it signaled thatUS jobsand inflationdata would determine whether itwill hike interest rates inJuneornot.
Corporate Earnings set thecoursefor the marketEarnings reviewof theearly birds depict some trend as most of India’s topcompanies that have reported their March quarter
financial results have exceeded investors’ expectations, indicating that an earnings turnaround is gaining traction. Example
: Out of 76 BSE 500 companies that reported their earnings by Friday and for which comparable estimates are available
showed that 64.5%, or 49 of them, beat Bloomberg consensus estimates for net profit. For net sales , 48 or 63.2% of the
firms under thereview to beat estimates. Assuming that these trendsholdup across largersamples, India Incwill be happy.
After two years of stagnation, there is finally some visibility of the so-called green shoots of recovery. If the monsoon
conforms to predictions that it will be "super-normal" andwell-distributed, the boost to consumption will contribute to growth
accelerationandhelp broaden thecyclical expansion.
ConclusionThe domestic equity market showed a smart bounce throughout March, surging as much as 10% which revived hope of a
resumption of the last bull run that ended in March 2015. Weare neither in a euphoric zone and nor in overvalued zone. One
of the mostnoticeable thing ofcurrent phase ofmarket isnew IPOsand new listings. New companies needtocomebecause
when newcompaniescome in to themarket, they bringexcitement.Thenear term bigworry forthe market isBritish Exit from
European Union. We believe that current phase of market is consolidation as market has discounted some recovery in
earningsandgood hope ofmonsoon.
Southwest Monsoon - % departure from long period averageYear
% Departure
2010
2
2011
1.6
2012
-7.1
2013
5.6
2014
-11.9
2015
-14
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Pharmaceutical Sector Overview
Global pharmaceutical indust ry
Theglobalpharmaceutical market is estimatedto reach US$ 1.3 trillion by2018, growing at a CAGR of 4-7% (between 2014and 2018), an increase of US$ 290-320 billion. The growth of developed markets will be driven by the US, Japan and five
majorEuropeanmarkets (Germany, France, Italy, Spain andtheUK).Thecontributionof pharmergingmarkets in thegrowth
pie isexpectedto increaseoverthe next fiveyears;and account for nearly50% ofabsolutegrowth in2018.
Thekey growth drivers for the global pharmaceutical industry arethe following:
Risingshareof emerging economiesin globalGDP
Aging population and rising life expectancy.
Increasingaccesstomodern healthcare.
Improvinghealthcareawarenessand improvement in medical practices.
Indian pharmaceutical industryThe Indian pharmaceuticals market is the third largest in terms of volume and thirteenth largest in terms of value, as per a
reportby EquityMaster. Branded generics dominate thepharmaceuticalsmarket, constitutingnearly70 to80 percent of the
market. India is the largest provider of generic drugs globally with the Indian generics accounting for 20 per cent of global
exports in terms of volume. Of late, consolidation has become an important characteristic of the Indian pharmaceutical
marketas theindustry is highly fragmented.
India enjoys an important position in the global pharmaceuticals sector. The country also has a large pool of scientists and
engineerswhohave thepotential tosteer theindustryahead toan even higher level.
TheKey Segments in the Indian Pharmaceutical Industry areas follows: API Manufacturers / Traders( Bulk Drugs)
Formulation Manufacturers
ContractResearchandManufacturing ServicesCompanies(CRAMs)
Biotechnology Companies
612
30
5560
50
40
30
20
10
02005 2013 2015 2020E
Revenue of IndianPharmaceutical Sector
( US$ Billion )
Revenue share of IndianPharmaceutical Sub-Segments
in 2015
Generic Drugs
OTC Medicines
Patented Drugs
9%
21%
70%
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S e c t o r U p d a t e
Pharmaceutical Sector Overview
3
API Manufacturers / Traders ( Bulk Drugs)
TheglobalAPI industry is expected togrow ata CAGRof 9.4% from 2013-2018. TheglobalAPImarket iswitnessing goodgrowth. Thismomentumis expected tocontinueconsideringpatents expiring in theUSandEurope, growthin emerging
marketand increasingdemandforessentialdrugs.Strong growthin volumes isstill expected in thesemarkets as increasing
competition from genericswill lead tocost pressureson innovatorcompanies.
Indian bulk drug exports have shifted in favour of regulated markets. The share of regulated markets in Indian bulk drug
exports to rise about 51%by 2018-19 from 43%in 2008-09, drivenby Indianmanufacturers' betterprocess chemistryskills,
low manufacturing costs, a higher number of drug master filings (DMFs), the expected expansion of key generic markets
andcost reduction initiativesby largeglobal companies.
Formulation Manufacturers
The growth story of the domestic formulations market is expected to remain strong, led by a rise in life-related diseases,better healthcare diagnostic infrastructure adding to increasing disease detection rate, new product introductions, volume
growth driven by increasing penetration, and better access to healthcare. Domestic formulation sales are set to grow at a
CAGRof 12-14%between 2013-14 and2018-19, with themarketsize crossingUSD 20billion.
Contract Research and Manufacturing Services Companies (CRAMs) According to the global CRAMS market outlook to 2018, India and China present right prospects of market size by value of
CRAMS services globally. CRAMS as a segment constitutes of Contract Research Organization (CRO) & Contract
Manufacturing Organization(CMO),of whichCMO constitutesa majorportion (>60%)of theoverall business.
The Indian Contract Research and Manufacturing Services (CRAMS) players are expected to register a strong growth rate
of 18-20%CAGR to touch $18billionby 2018, from $7.6-7.8 billion in 2013. Factors likepatentcliff, favourable currency and
focus on new product development would drive growth forCRAMsplayers.Also, patented drugs, worth nearly $85 billion in
potentialannual sales in the U.S., are expected to go off patent between 2014 and 2020.This is likely to boost the prospects
of Indiancontract manufacturing segment (CMS) companies.
Biotechnology CompaniesThe Indian Biotechnology sector is presently divided into five segments based on the products and services offered.These
segments are Bio-Pharmaceuticals, Bio-Services, Bio-Agriculture, Bio-Industrial and Bio-Informatics. Bio-Pharma is the
largest sector contributing to 62% of the total revenue followed by Bio-Services, Bio-Agri and Bio-Industrial sectors which
contribute 18%, 15% and 4% respectively. Bio-Informatics is still at a nascent stage contributing to only 1% of the total
revenue.
India is among the top 12 biotech destinations in the world and ranks second inAsia, after China. The Indian biotechnology
industry has evolved over the last three decades and the sector's revenue has rapidly increased from USD 300 million in
2002-03 toUSD 4 billionin 2013-14.
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Pharmaceutical Sector Overview
4
Pharma export to continue witnessing high growth...
IndianPharmacompaniesare capitalizingon exportopportunities in regulatedandsemi-regulatedmarkets.
Theministry of Commerce targets to exports USD25billion worth of Pharmaceuticals in 2016.Indian drugs areexported
tomorethan200 countriesin the world,withthe USas the key market.
India is theworld's largest providerofgeneric medicines; thecountry'sgeneric drugsaccount for20% of globalgeneric
drugexports.
In termsof Value, exports ofpharmaceuticalproducts increasedat a CAGRof 26.1%toUSD 10.1 billionduringFY06-13.
TheAmericasaccountedfor around34%of IndianPharmaexports in FY13,followed byEurope(26%)andAsia(20%)
Exports toAfrica increased at a CAGR of 21% from FY09 to FY13,contributed mainly by export of anti-malarial and anti-
retroviraldrugs.
Quality issues raised by USFDA and releasing alternative drugs to cope FDC bans remain
criticalThe union health ministry banned 344 fixed dose combinations (FDC) in March 2016 under section 26 (A) of the drugs and
cosmetics act, 1940.A combination drug or FDC includes twoor more active pharmaceutical ingredients (API) combined in
a single-dosageform, manufacturedand distributed in fixedassets.
ThePharmasector is expected to reportgood growthforthe fourthquarter of 2015-16 despite regulatory concerns raisedby
USFDAand therecentbanon 344fixed dose combinations imposed by thegovernment.Theprice increase,volumegrowth
andnewproduct innovation arelikely todrive thedomesticPharmamarket.
According to various committees set up by the Health Ministry, India has a very large number of drug formulations, between
60,000 and 85,000. The authority given to state governments to clear FDCs has resulted in such a high number of
formulationsbecomingavailable in themarket. TheHealthMinistryarguesthat such massive drug consumptionduetoa
12
10
8
6
4
2
0FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14*
23
45 5
7
910
8
0.4 0.6 0.7 0.9 1.1 1.2 1.7 1.8
1.2
Exports ( USD Billion ) Imports ( USD Billion )
Indian Pharma Sector Trade Data
* - From April 2014 to Dec 2014
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S e c t o r U p d a t e
Pharmaceutical Sector Overview
5
combination of various drugs leads to the body getting immune to the medicine’s effect and also carries the risk of side-
effects onvital organssuchasthe kidneyor the liver.Thedomesticsales ofPharmacompaniesareexpected to fall byanestimated4.5% dueto threemajordevelopments:
Thegovernment’s decision toban344FDCdrugs
Pricerevision of existingdrugs underpricecontrol
Arevised 2015 list of drugs under price control
OutlookThe size of the Indian Pharma is expected to touch US$ 48 billion by FY2018 and US $55 billion by FY 2020 as against the
current size of US$18 billion. The government of India has released ‘Pharma Vision 2020’ aimed at making India a global
leader in end-to-end drug manufacture. Approval time for new facilities has been reduced to boost investments. The
government has taken many steps to reduce costs and bring down healthcare expenses. Speedy introduction of generic
drugs into the market has remained in focus and is expected to benefit the Indian pharmaceutical companies.The recentsharp decline in stocks of Indian healthcare companies reflects investors’ concerns about the likely impact on earnings.
Although, the picture for Pharma companies remains good in the medium term, a lot depends on their ability to get the US
sales growth back on track. Failing that, the effect of various recent headwinds witnessed may have a magnified effect on
their earningsandstockprices.
Preferred Stocks Ajanta Pharma Ltd.
APL is mainly into exports as well as domestic formulations. As of FY15, the exports: domestic formulation ratio was at
65:35. Domestic branded formulations constitute 32.7% of the total consolidated turnover (FY15). The focus on specialty
therapies and niche products led APL to post strong growth at a CAGR of 29.6% in FY11-15. APL is currently deriving
almost its entire export revenues from emerging regions like Africa (Franco Africa), Asia and LatAm having a presence inmore than 35 countries. Overall export formulations have grown at a CAGR of 31.4% in FY11-15 to ` 978.1 crore. The
company is entering into a stretchedphase of capex ` 700-800 crore spreadacross two-threeyears) to bolster thedomestic
business aswell asexports franchise, especially theUS.
Granules India Ltd.
The company intends to expand API capacities of Paracetamol, Metfomin and Guaifenecin by 25-30%, 3.5x and 2.7x,
respectively, which will support both its base and emerging businesses. In FY16, GIL has also increased its PFI capacity by
38-40% to 18,400MTPA. This debottlenecking is likely to support 16-18% PFI revenue CAGR over the next two years.The
company is coming up with a Greenfield multi-product API capacity at Vizag to support the growing need of internal
consumption and new filings. The company has invested heavily in R&D. With the acquisition of the Virginia facility in the
US, it now has two R&D centers - one in Vizag for developing normal ANDAs and one in Virginia for developing complex ANDAs.
CMP*(`)Company FV (`) P/E (x) P/BV (x) D/E Ratio(x)EBIDTA
(%)ROCE
(%)RONW
(%)CFO
(` in Cr.)
Granules India
Ajan ta Pharma
1
2
128
1498
25.68
35.19
5.93
15.68
1.18
0.14
16.04
34.42
18.58
55.98
23.1
43.2
145.33
279.42
CMP* as on 22/04/2016Source: Capitaline,
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Wonderla Holidays Ltd.
www.jhaveritrade.com6
“ Accumulate ” CMP : ` 382 TGT : ` 498Company Basics
BSE ID
NSE Symbol
Group
EQUITY (` in Cr.)
MKT.CAP(` in Cr.)
538268
WONDERLA
B
56.50
2182.90
Financial Basics
FV ( )
EPS ( ) (TTM)
P/E (x) (TTM)
P/BV (x) (TTM)
BETA
RONW (%)
`
`
10.00
10.41
37.11
5.51
0.6705
20.00
Investment Rationale
Share Holding Pattern
Holder's Name
Foreign
Institutions
Promoters
Govt. Holding
Public & Others
Non PromoterCorp. Hold.
% Holding
12.384.38
70.99
0.00
9.01
3.25
ROI : 30%
Valuations
WONDERLA is trading at ` 382.We recommend “Accumulate” withtarget price of ̀ 498, valuing stock30xFY18E EPS of `16.62.The stockcurrently trades at 32.47x of FY16E,27.93xof FY17E and 22.98x of FY18E.
Investment Horizon : 12 to 15 Months
Company OverviewWonderla Holidays is one of the largest operators of amusement parks in India, which
owns and operates two parks under the brand name “Wonderla”, situated at Kochi ,
Bangalore, Hyderabad. In FY16, it had a cumulative annual footfall of . Company has
also developed theWonderla Resort inBangalore, a Three Star leisureresort, next to its
amusementpark,comprisingof 84 luxuryrooms.
Investment rational
WHL is a key player in IndianAmusement Park IndustryWHL is the largest amusement park company in Indiawith over a decade of successful
and profitable operations. It owns and operates three amusement parks under the
brand name Wonderla in Kochi, Bengaluru, Hyderabad and is coming up with a fourth
park inChennai (to beoperational byFY2019).
WHL’s theme parks are a value-for-money weekend entertainment option for people.
Theticketcharges of `600-1,050perpersonforentertainmentof eight toninehours is a
value proposition compared with the`200-500 spent on watching a movie in a multiplex
(entertainment for2.5-3.0hours).
Thus, the value-for-money entertainment option and proximity to southern cities
provide WHL a great edge over the other theme and entertainment parks in the key
southern towns.
Wonderla’s Bangalore amusement park has been ranked No.1 in India while its Kochi
park has been ranked No.3. InAsia, Wonderla Bangalore is ranked No.7 and Wonderla
Kochi is rankedNo.13among thetop25 amusementparks.
WONH is one of the few parks in India which is profitable due to its operational
efficiencies, in-house ride manufacturing capability and relatively less capex
requirement for expansion. It has positioned as a “value” park which allowed it to grow
with lowercapex.
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C o m p a n y A n a l y s i s
7
Wonderla Holidays Ltd.
At tract ions and Innovations- key growth driver for Amusement Park Operator Visitor experience, higher footfalls, frequent visits and Per ticket revenue are largely depend on attraction offered by
operator in dry and water rides with innovation. WHL has more than decade experience as amusement park operator and
added various attractions time to time to attract new -age visitors, 2-3 attractions per year in various categories. Other big
operators in Banglore like NeeladriAmusement and WaterParks (45), Fun World (40) have lesser attractions as compared
toWHLandvery less park in Banglorewhereboth waterand land basedridesavailable.
Variousattractions launchedduring theyears :
FY14:
1)XDMAX: This isa virtual land ride wherevisitor experience 3D film with physicalandenvironmental effects.
2)MiniCocoCups : This isa ride is for kidswhich resembles like a set ofcup and saucer.
3)Fire Brigade andMagicPlane forkids andfamily respectively.
FY15:
JungleLagoon: TheCompany hasstarted a newwaterattraction at BangalorePark in FY15. Itsan large jungle-themed
waterattraction with special features like soft flooring,shallow water levelsandfive uniquewater slidesanda large
waterplay tree-houseto increase visitor experience.
FY16:
1)RECOIL& KORNETO: Thecompany hasintroduced RECOIL-India’s first ever reverse looping RollerCoaster ride
anda thrilling waterslideattractions—KORNETO.
Footfalls ( In Lacs ) ( Park + Resort )
FY10 FY11 FY12 FY13 FY14 FY15
30.00
25.00
20.00
15.00
10.00
5.00
0FY16
16.12
20.28 22.5923.40 22.91 23.40
23.87
Location Bangalore Kochi Hyderabad
Total No. of Rides
No. of Wet Rides
No. of Dry Rides
59
20
39
62
23
39
43
18
25
Source: Company
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Ample of Land available to expand existing parks
Availability of Land is an important growth driver of Amusement park as parks require huge land at initial stage and forfurther development in existing place. Not only rides but peripheral infrastructure like resorts , restaurants and integrated
parks can be easily developed at existing land. Ample of land helps to create more revenue streams as Global Park
operatorsearns35-40%formnonticket revenue ascompared to India’s 18-20%.
WHL has huge land parcel available at Bangalore, Kochi and Hyderabad within the proximity of city area and is in free hold
mode. Company’s land acquiring process is in progress to develop new park in Chennai. This can help to increase visitor
experience and can be help to generate more non ticket revenue. Company’s Bangalore park has already a three star
leisureresort with occupancyrate of 40-45%andhasfive restaurant withinthepark.
Company has generated ` 10.12 Cr. in FY15 (v/s ` 6.56 Cr. in FY14 and ` 5.94 Cr. in FY13) from resortdivision at Bangalore
Parkandgenerated` 5.22 Cr. inFY15 from restaurant revenue ( v/s4.67 Cr. in FY14).
Other parks in Bangalore like NeeladriAmusement and Water Parks (30 Acres), Fun World (22 Acres ) , GRS Fantasy Park
(30Acres)have less land parcelavailable ascompared toBangalore
Location, Proximity and easy connectivity to CityProximity to city is another key element for higher footfalls and for popularity in amusement park. WHL’s Banglore park is
situated only 28 KMS away from Bangalore and between Bangalore & Mysore city. Bangalore park is also near to Railway
station ( 28 KMS ) and Majestic bus station. Company’s Kochi park is situated at Pallikara about 15 Kms away from Kochi
City Center and very near to airport , Railways station and bus station , only 20 Kms away from park. Company’s newly
opened Hyderabad Park is near to 28 KMS from city and closer to outer ring road. Surprisingly, WHL’ s 18-20% footfalls
are coming from other states like Tamilnadu, Andhra Pradesh and other near by states on strong popularity of the
amusementpark.
Wonderla Holidays Ltd.
8
Location Bangalore Kochi Hyderabad
Total Land Available (In Acres)
Developed Land (In Acres)
Land Availability for fu ture development ( In Acres)
81.75
39.20
42.55
93.17
28.75
64.42
49.50
27.00
22.50
Year FY15
Footfalls - Region wise Break Up ('000)
FY16
Kerala ( Kochi)
Karnataka ( Bangalore )
Tamilnadu
Andhra Pradesh
Others
4.70%
76.00%
9.70%
5.20%
4.30%
5.90%
73.40%
11.20%
5.60%
3.90%
Source: Company
Source: Company
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C o m p a n y A n a l y s i s
Wonderla Holidays Ltd.
9
WHL has strong focus on non-ticket revenue and " In Park Spending”
The Indianamusementparks generate a major share 75-80%of their revenues from admission tickets which is significantlyhigher as compared to international parks (50% total revenue).The remaining revenue comes from non ticket revenue and
this includes sale of products (F&B, Merchandising ) and other services like restaurant revenue, shop revenue and room
rental collections. Indianparksareheavily dependedonadmissionfees.
Thenon-ticketing revenue segment constitutes only ~20% of WHL ’snet revenue, as compared with 50%contribution in the
case of international amusement parks. This indicates the huge existing opportunity to grow the top line through this key
segment.There isstrongpossibility of generating more revenue streams.
WHL focuses on “Integrated Parks” to reduce this dependency on ticket revenue. Globally, integrated parks are in favor
where amusement parks include other services like resort, F&B centers , retail centers and merchandising offerings. In
India integrated parksarerelatively newconcept andslowlygainingtraction in India.
In March 2012, WHL has established resort in itsBangalore As very fewparks in India have accommodation facility, totalcontribution fromaccommodation related revenues is only 2%.with risingdisposable incomes, the in-park spending can
increase significantlyover thenext fewyears.
Accommodation-related revenues contribute a meagre ~4% to Wonderla’s top line, compared with 35-37% contribution in
the revenue mix of a typical International Amusement Park. This displays the considerable value which can be potentially
tappedbypositioning of Parksasa holiday destination.
Revenue Composition : India Revenue Composition : Global
75-80%
2%
18-23%
35-37%
35-37%
32-35%
Revenue Stream ( % of Total Revenue)
Entry Fees
Resort and Other Rentals
Foods / Beverages / Merchandising
13.53 16.4
26.56
32.39
47.50
34
FY11 FY12 FY13 FY14 FY15 9MFY160
10
20
30
40
50
Non-Ticket Revenue ( Rs. in Cr.)
13.0211.99
22.51
11.41
18.54
14.7
Sales of Produc ts (Rs in Cr. )Sales of Services (Ex-Entry Fees) (Rs. in Cr.)
25
20
15
10
5
0FY13 FY14 FY15
Source: Company
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WHL has started to focus on "OneDay Outing" to "Holiday Destination Park"
Globally, Positioning of Amusement Parks as a holiday destination, rather than as a “one-day outing”, encourages longerstayand generatessignificant revenue fromthehotel/resort.
Wonderla has already developed a three-star 84-room resort attached to its Bangalore park with the aim of creating India’s
first holiday destination park where families can come and relax, soak in the atmosphere, explore the park and city at a
leisurelypace andgain a trulycomplete andwholesomeentertainment experience.
As net spend on entertainment and leisure increases, industry models from U.S. and Europe will be replicated in India.
Parkswill market themselves asa holiday destinationandtherevenue mixwill also align itselfwith international peers.
“ WonderlaHyderabad”- next feather in Wonderla’s kitty'Wonderla', the third theme park from Wonderla Holidays in the country and the first in the State, is built in 50 acres of land
with an investment of Rs. 250 crore. It has 43 attractions, which include 25 land based and 18 water based rides.A reverse
looping roller coaster imported from Netherlands, and space themed flying theatre that is yet to be opened, would be the
major attractions. Management plans to launch a fourth park in Chennai at a cost of Rs. 300 Cr. , that wouldbe their biggest
themebasedamusementpark.
In-housemanufacturing brings cost efficiencyCompany as developed an in-house manufacturing facility in Kochi to manufacture/construct amusement rides and
attractions, apart from those being procured from manufacturers within and outside India. The in-house manufacturing
facility enables thecompany to implement innovative ideasandconcepts.
Inhouse manufacturing benefits WONH with certain cost efficiencies such as saving on import duties and other costs,
besides improving the efficiency in rides maintenance. Management indicated a cost saving of ~30% compared to
purchasingfroman outside vendor.
Strong operating experience- a key requirement as Operator WHL ’s management has rich operating experience in operating the park, which is the key requirement for success in this
industry. The first park was opened in Kochi in 2000 and the next one in Bangalore in 2005. Thus, promoters have over 14
years of rich and successful experience in park operations. Amusement parks operate for 365 days from 11am-7pm and
alcohol-based beveragesarenotallowed inside.
Strong competitive advantage- High entry barrier Development of large amusement parks typically require huge investment involving land acquisition, establishing of
infrastructure andrides,and regular investment in creation of newrides. Dueto itshighly capital intensive nature, achieving
the required footfall becomes highly critical, especially in newly developed parks, in order to break-even. ~250 Cr. capex is
required to established an amusement park .Companiesexisting parks of Wonderla at BangaloreandKochi aregenerating
sufficient revenue andhave witnessedsteadygrowthin footfallsover theyears.
Wonderla Holidays Ltd.
10
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11
Wonderla Holidays Ltd.
www.jhaveritrade.com
Amusement Park Industry is st il l in nascent stage in India
The Global Parks industry earned total revenue of $28 billion in 2012, which is expected to touch $29.5 billion by 2015.There are more than 800 parks the world over, marking an attendance of over 600 million visitors each year. United States
is the largest market with more than 400 parks with an annual attendance of 300 million, followed by Europe with
approximately 250parksandattracting 165millionvisitorsa year.
Indian Amusement Park IndustryThe Indian Amusement Parks Industry is in its incipient stage. It is growing rapidly and witnessing robust development
year on year. Currently, against a 1.2billionpopulation, India hasabout 165parks.Theratio of “park-to-people” is very low
in India, especially compared to the developed markets. India currently constitutes only about 1.7% of the global parks
industry in termsof revenue.
Classification of Indian Amusement Parks IndustryThe 165 amusement parks currently operational in India can be broadly categorized as small, medium and large parks.
This essentially depends upon parameters such as capital investments, annual revenue, number of rides, land area, and
ticketprice,amongothers. Of thetotal operational parks,only 10%canbecategorizedas largeparks.
Key growth drivers are :
Increased Discretionary Spending
The share of discretionary spending in India (rent, fuel & power, furniture, medical care, transport & communication,
recreation & education) is seen increasing from 59%in 2010 to67%by 2020. Spending on recreation and leisureactivities
is also expected to rise significantly. Leisure spending is projected to almost double from ` 4,892 billion in 2014 to Rs.
8,983.5 billion in2024– a CAGRof 6.3%.
Strong Growth Potential
Growth prospects for the amusement park industry are strong, with a 15-18% CAGR projected over the next few years.
Positive demographicsof a country like India offers a substantial potential customerbase forthe industry.
C o m p a n y A n a l y s i s
Region
Global Market Share
US Latin America Canada Asia PacificEMEA
26%21%2%1%50%
No. of Parks Annual Visitors
~ 15
~ 50
~ 100
More than 0.5 million
Between 0.3 to 0.5 mil lion
Less than 0.3 million
Type
Large Parks
Medium Parks
Small Parks
Source: Company
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8/17/2019 The Money Navigator May 2016
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Wonderla Holidays Ltd.
www.jhaveritrade.com12
Financial Analysis :
Revenues and earnings to grow at over 21%each over FY2015-18:With a steady improvement in the footfalls, the Hyderabad park getting operational, a strong growth in the non-ticket
revenues (F&B andproducts sales)andan 8-10% increase in theannual ticketprice,WHL’s revenues areexpected to grow
at a CAGR of 21% over FY2015-18. WHLhas an operating profit margin of about 45%, which is better than that of some of
themature international amusement park companies. The operating profitmargin is more or less expected to remain stable
in the comingyears (barring FY2017when the OPM isexpected todeclinedue toa higher operationalspending towards the
Hyderabadpark).
Stablebalance sheet, free cash flow positiveDespite an asset heavy model and a long pay-back period, WHL’sbalance sheet has remained in a comfortableposition for
the past few years. The debt/equity ratio has not gone up above 0.2x in the last four fiscals (remained at 0.03x in FY2015).
The free cash flows have remained positive and improved from Rs6.2 crore in FY2013 to Rs55 crore in FY2015, providing
visibility of better operating efficiencies of the company. The Hyderabad park (capital expenditure [capex] of Rs250 crore)
will be funded through a mix of internal accruals and Rs180 crore raised through an equity issuance. Thus, the balance
sheet isexpectedtoremainstable in the nearto medium term.
Key Concern :
A signif icant decline in foot fal ls:
Any significant decline in footfalls due to environment hurdles (heavy rains, flooding affecting the infrastructure)or epidemic
breakthroughs (such asswine flu) will significantly affect therevenue growth ofWHL.
Competition & Concentrated RevenueStream :
Any competition which forces the company to reduce ticket prices will have an adverse impact on its financials.
1000.00
800.00
600.00
400.00
200.00
0.00FY11 FY12 FY13 FY14 FY15
449.80 506.70
585.30681.00
796.90
Average Revenue Per FootFal l (Rs.)
FY14 FY15 FY16E FY17E FY18E
154182
220
266
322350
300
250
200
150
100
50
0
Net Revenue ( Rs. in Cr. )
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8/17/2019 The Money Navigator May 2016
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13
Wonderla Holidays Ltd.
www.jhaveritrade.com
C o m p a n y A n a l y s i s
FY 12
0.24
0.16
0.6
69.19
491.87
1.1
40.34
50.51
40.29
44.27
36.46
FY 13
0.2
0.25
0.61
59.55
399.57
1.06
21.34
46.67
38.08
40.51
31.44
FY 14
0.17
0.61
0.62
49.96
370.19
0.97
31.16
47.54
38.95
37.62
29.56
Debt-Equity Ratio (x)
Current Ratio (x)
Fixed Assets Ratio (x)
Inventory Ratio (x)
Debtors Ratio (x)
Total Asset Turnover Ratio (x)
Interest Cover Ratio (x)
PBIDTM (%)
APATM (%)
ROCE (%)
RONW (%)
FY 15
0.08
0.78
0.69
48.89
427.93
0.66
34.31
50.21
41.31
27.36
20
Consolidated Key Financials
FY 12
42
93.76
116.69
22.47
207.8
-17.04
5.95
22.99
139.68113.13
113.13
1.39
113.23
54.12
0
57.14
56.01
45.58
44.45
30.04
30.04
FY 13
42
119.95
142.44
20.97
242.03
-14.79
9.6
24.38
166.82137.85
137.85
1.52
137.97
67.57
11.99
64.33
61.87
52.49
50.03
33.59
33.58
FY 14
42
149.93
175.66
23.88
255.33
3.37
28.86
25.49
201.15153.63
153.63
2.41
153.6
73.91
17.42
73.03
71.11
59.83
57.91
39.89
39.91
Equity Paid Up
Networth
Capital Employed
Total Debt
Gross Block (Excl. Reval. Res.)
Net Working Capital ( Incl. Def. Tax)
Current Assets ( Incl. Def. Tax)
Current Liabilities and Provisions ( Incl. Def. Tax)
Total Assets/Liabilities (excl Reval & W.off)Gross Sales
Net Sales
Other Income
Value Of Output
Cost of Production
Selling Cost
PBIDT
PBDT
PBIT
PBT
PAT
Adjusted PAT
FY 15
56.5
356.44
373.61
15.13
269.52
-7.43
17.54
24.98
398.59181.87
181.87
10.25
182.45
87.36
18.77
91.32
89.13
75.13
72.94
50.63
51.09
Consolidated Key FinancialsKey Financials
Ratio Analysis
( ` in Cr
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Fundamental Stock Update
www.jhaveritrade.com
STOCK UPDATE
S e c t o r U p d a t e Financial Basics
FV (`)
EPS (`)
Book Value (`)
P/E (x)
P/BV (x)
52 Week High (`)
52 Week Low (`)
Equity ( ` in Cr.)
MKT.CAP(` in Cr.)
Share Holding Pattern
1.47
24.00
1.61
66.99
5.93
New DevelopmentsDemand is expected to remain good
After subdued demand and realization in the past few quarters, optimism started
setting in after the Budget. The government outlay to the infrastructure sector (40 per
cent of cementconsumption)andtherural economy bodeswell.
March is expected to remain good
Volume growth for many companies is expected to be higher in the March quarter, led
by demand pick-up in the north, west and central India, and price recovery. March
quarter results, while expected tobe better than that of theDecember quarter, maynot
fully reflect benefits of improved realizations as most price increases have come inMarch.Average sellingpricesare seen down six-eight percent year-on-year. This will
be eased bystrongvolumegrowth.
Valuations
we maintain Accumulate rating with a revised target price of ̀ 650 /share (i.e. at 10x
FY17E EV/EBITDA,$ 85/tonneonFY17E capacity (11.7MT).
CMP: ` 565 Target: ` 650 “ Accumulate ”JK Cements Ltd.
Foreign
Institutions
Non Prom.
Promoters
Public & Others
10.00
80.94
693.84
40.41
4.71
3454.90
2531.00
274.43
89769.25
Financial Basics
FV (`)
EPS (`)
Book Value (`)
P/E (x)
P/BV (x)
52 Week High (`)
52 Week Low (`)
Equity ( ` in Cr.)
MKT.CAP(` in Cr.)
Share Holding Pattern18.43
7.56
62.77
11.18
0.06
New Development
UltraTech cementing a stronger futureUltraTech’s definitive agreement with Jaiprakash Associates (JPA) to buy the latter ’s
21.2-million tonnes per annum (mtpa) cement capacities is positive for India’s largest
cement producer. This is a slight change compared to the February memorandum of
understanding (MoU) between the two companies, wherein UltraTech was to acquire
22.4 mtpa capacities. The new deal now leaves out JPA’s Karnataka-based 1.2-mtpa
plant,which is in closeproximity toUltraTech’sMalkhed plant.
Nevertheless, theenterprise value of ̀ 16,370 crore ($115 per tonne) is attractive and
lower than the $122 UltraTech had paid for JPA’s Gujarat-based assets. The
acquisition, which is likely to be completed in 12-15 months, will take UltraTech’s
overall capacity close to90mtpa.
Valuation
At the critical juncture demand recovery, UTCEM’s strong focus on growth and cost
efficiency make it most predictable play. Impact of JPA deal would be contingent on
paceof recoveryof the sector. It is a strongbet on the cycle upturn, and in our view, the
success in asset creation should overshadow any near-term concerns for long-term
investors. Wevalue UTCEMat` 3,850(13xFY18EEBITDA; USD220/ton).
CMP: ` 3172 Target: ` 3850 “ Buy”Ultratech Cement Ltd.
Foreign
Institutions
Non Prom.
Promoters
Public & Others
10.00
17.63
231.23
35.39
2.70
745.00
425.00
69.93
4363.63
-
8/17/2019 The Money Navigator May 2016
19/36
www.jhaveritrade.com
STOCK UPDATE
Fundamental Stock Update
Financial Basics
FV (`)
EPS (`)
Book Value (`)
P/E (x)
P/BV (x)
52 Week High (`)
52 Week Low (`)
Equity ( ` in Cr.)
MKT.CAP(` in Cr.)
Share Holding Pattern
21.39
20.62
8.68
16.24
33.07
Management aims to double balance sheet in threeyearsDCB is embarking on aggressive branch expansion taking its total to 300+. The
management has guided at doubling the bank’s balance sheet in three to four years.
We estimate the credit book will grow at 22% CAGR in FY17-18E to ̀ 19157 Cr. The
bank is aiming to broadly maintain its current credit mix of 40% retail, 15-20% SME,
15%agricultureand20-25%corporatein thelong term.
Branch expansion strategy to keep cost-to-income ratio elevated
With a view of laying thefoundation forfuture endeavourandcounter competition from
MFI who have been awarded small bank licenses, DCB in Q2FY16 announced a shift
in its strategy from stable growth to aggressive expansion. With a lag in revenue
accretion until new branches achieve break even, we expect profitability to remainsubdued in FY17-18E.
Valuation
We remain positive on the bank given the strong growth in earnings and well
capitalized and healthy balance sheet. At CMP, DCB Bank is trading at 1.35x and
1.20x FY17E and FY18E Adj. BV and 12.71x and 9.95x FY17E and FY18E EPS
respectively. We recommend BUY with a target price of ` 135 (1.8x of FY18E P/Adj.
BV).
CMP: ` 92 Target: ` 135 “ Buy ”Development Credit Bank
Foreign
Institutions
Non Prom.
Promoters
Public & Others
5.00
6.68
85.94
39.92
3.10
375.00
192.25
36.34
1938.01
Financial Basics
FV (`)
EPS (`)
Book Value (`)
P/E (x)
P/BV (x)
52 Week High (`)
52 Week Low (`)
Equity ( ` in Cr.)
MKT.CAP(` in Cr.)
Share Holding Pattern
21.39
20.62
8.68
16.24
33.07
Eveready Industries enters consumer appliances segmentEIIL announced its entry into the small consumer appliances segment tapping a new
growth area. In April, EIIL will go national with 60 products which include fans, food
processors, induction cookers, irons, OTGs, water heaters and electric
kettles. Theproductswill be unveiled with a grand advertisement campaign coinciding
with Diwali. According to Management, the process of looking beyond batteries has
begun and byMay-end, EIILwill be in a position tosee how it can leverage its brand to
enter other growth areas.Part of the sales would come through the distribution
channels of lighting and flashlight products that EIIL is presently in. It will be an asset-
light model whereby products designed in-house will be sourced out to Chinese and
domesticvendors
Valuations
We expect 16%revenue CAGR and 190bp EBITDA margin expansion over FY16-18,
driving 39%PAT CAGR.We maintain Buywitha targetpriceof ` 335(37% upside).
CMP: ` 243 Target: ` 335 “ Buy”Eveready Industries Ltd
Foreign
Institutions
Non Prom.
Promoters
Public & Others
10.00
6.84
60.83
14.33
1.60
150.90
68.40
284.55
2788.58
16
-
8/17/2019 The Money Navigator May 2016
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17
Fundamental Stocks
www.jhaveritrade.com
OPENFUNDAMENTAL
CALLS
O
p e n F u n d a m e n t a l C a l l s
Automobi le
Banks
Cement
Finance
Infrastructure
Ashok Leyland
M & M
Maruti Suzuki
Company CurrentReco
CMP*( ` )52 Week
High (`) Low (`) 3M
Abs olute Ret urn (%)
6M 12M
FaceValue
MarketCap P/E Dividend Yield
%
P/BV
(`) (` in Cr) (x) (x)
Capital Goods
ICICI Bank
Bank of Baroda
City Union Bank
DCB B ank
Havells India
TD Power Sys.
Inox Wind
Carborundum Uni.
Thermax
J K Cements
UltraTech Cem.
Dewan Hsg. Fin.
Repco Home Fin
PTC India Fin
Larsen & Toubro
Adani Ports
Ashoka Bui ldcon
Gateway Dis tr.
Al lcargo Logist.
VRL Logisti cs
Logistics
Hold
Hold
Hold
Buy
Hold
Hold
Hold
Hold
Buy
Buy
Buy
Hold
Hold
Hold
Buy
Hold
Buy
Buy
Buy
Buy
Hold
Hold
Buy
106
1327
3728
253
158
95
95
343
238
271
192
768
610
3276
200
655
39
1266
232
142
290
158
401
112.90
1442.05
4790.00
338.00
216.30
105.55
150.90
354.00
350.95
482.50
211.00
1148.00
745.00
3454.90
267.85
785.00
60.60
1888.00
374.80
221.00
399.70
217.75
479.00
63.80
1091.25
3193.25
180.75
109.35
77.80
68.40
235.30
195.10
215.00
150.10
715.00
425.00
2531.00
140.30
551.00
29.70
1016.05
169.15
111.30
205.80
128.00
261.05
22%
13%
-9%
7%
22%
21%
30%
13%
-11%
-12%
12%
-9%
20%
19%
6%
4%
12%
14%
6%
-26%
-6%
-13%
1%
12%
6%
-15%
-12%
-9%
7%
8%
33%
-17%
-32%
9%
-11%
-7%
13%
-15%
-5%
-21%
-16%
-26%
-13%
-15%
-3%
-2%
57%
13%
5%
-18%
-9%
-1%
-19%
23%
-30%
-36%
7%
-19%
-4%
21%
-11%
8%
-28%
-25%
-27%
-16%
-19%
0%
NA
1
5
5
2
2
1
10
1
10
10
1
2
10
10
10
10
10
2
2
5
10
2
10
30152
82388
112614
147091
36371
5695
2699
21408
791
6013
3620
9153
4264
89909
5830
4094
2215
117924
48005
2662
3153
3976
3654
8.64
3.19
4.63
1.74
0.83
1.95
1.55
11.77
1.60
4.32
3.33
4.26
2.64
4.27
1.23
4.62
1.30
2.88
4.46
1.43
3.41
2.08
5.69
33.96
28.76
35.34
12.51
9.65
13.45
13.87
61.42
41.17
16.67
27.33
46.31
34.58
40.48
8.31
28.70
6.19
26.66
18.37
25.72
23.90
15.02
34.38
0.42
0.90
0.67
1.97
1.95
1.15
0.00
0.88
1.11
0.00
0.65
0.91
0.66
0.29
1.38
0.23
2.54
1.28
0.47
0.91
2.41
0.63
0.94
-
8/17/2019 The Money Navigator May 2016
21/36
Fundamental Stocks
www.jhaveritrade.com18
OPENFUNDAMENTAL
CALLS
Pharmaceuticals
Company
Current
Reco CMP*( ` )
52 Week
High (`) Low (`) 3M
Abs olute Ret urn (%)
6M 12M
FaceValue
MarketCap P/E Dividend Yield
%
P/BV
(`) (` in Cr) (x) (x)
(*CMP as on 25/04/2016)
Torrent Pharma.
Sun Pharma.Inds.
Granules India
Ahluwalia Con tr.
J Kumar Infra
Garware-Wall Rop
SRF
AYM Syntex
Ambika Cot ton
Radico Khaitan
Jamna Auto Inds.
Bharat Forge
Omkar Spl.Chem.
Sadbhav Engg.
Eveready Inds .
Inox Leisure
Prabhat Dairy
Infinite Comp
Liberty Shoes
T.V. Today Netw.
CARE
Century Ply.
Hitech Plast
Mold-Tek Pack.
Torrent Power
H P C L
Skipper
Buy
Hold
Buy
Buy
Hold
Buy
Buy
Buy
Buy
Hold
Buy
Buy
Hold
Buy
Hold
Buy
Buy
Hold
Buy
Hold
Hold
Buy
Hold
Buy
Buy
Hold
Buy
1423
809
131
293
282
366
1348
105
871
92
141
794
184
286
257
208
118
216
174
317
1056
179
165
150
236
861
149
1718.40
1010.00
164.40
320.00
448.50
436.50
1498.85
163.15
1149.00
130.70
156.20
1331.75
249.90
370.00
375.00
275.90
169.00
275.80
283.25
350.00
1619.50
225.00
221.40
166.75
252.70
990.95
219.90
1135.00
704.00
75.00
188.20
233.65
172.00
899.00
85.50
706.05
78.70
88.00
720.00
138.35
197.15
192.25
145.15
71.00
122.20
125.00
165.00
883.00
135.65
80.75
81.28
136.75
556.05
117.00
2%
0%
7%
7%
-18%
5%
19%
-17%
8%
-18%
-4%
-2%
-6%
-7%
2%
-4%
2%
0%
4%
9%
-9%
9%
-3%
7%
11%
9%
-12%
-10%
-9%
-11%
14%
-27%
4%
4%
-4%
-4%
-8%
25%
-14%
-22%
-6%
-14%
-15%
-17%
18%
-17%
25%
-24%
-2%
59%
23%
31%
8%
-3%
17%
-15%
45%
15%
-14%
95%
34%
NA
0%
2%
31%
-34%
24%
-7%
-14%
27%
NA
-19%
-30%
47%
-34%
-18%
51%
42%
47%
38%
NA
5
1
1
2
5
10
10
10
10
2
5
2
10
1
5
10
10
10
10
5
10
1
10
5
10
10
1
24075
194668
2842
1965
2137
801
7737
414
512
1217
1119
18491
379
4899
1868
2005
1153
837
297
1891
3105
3967
283
416
11326
29141
1520
15.15
44.22
26.39
30.68
21.28
19.08
20.66
8.88
10.63
15.80
18.99
26.58
11.84
34.96
38.47
32.95
49.39
8.29
17.47
23.85
41.40
28.48
26.63
19.83
11.60
22.30
17.04
9.67
7.60
6.09
5.83
1.71
2.58
3.41
2.42
1.58
1.42
5.69
5.37
2.25
3.19
2.99
2.83
1.80
1.06
2.04
4.20
8.09
10.23
2.22
3.29
1.73
2.14
4.47
0.79
0.37
0.36
0.00
0.60
0.82
0.74
0.09
1.61
0.87
0.78
0.94
0.82
0.25
0.00
0.00
0.04
0.00
0.86
0.47
7.38
1.12
0.48
1.33
0.63
2.85
0.88
Realty
Textiles
Miscellaneous
-
8/17/2019 The Money Navigator May 2016
22/36
19
JSL Top Mutual Fund Picks
www.jhaveritrade.com
Scheme Name
NAV*
(Div)
NAV*
(growth)
1 Year
(%) Since Inc
Top Equity Diversified Funds
Top Balanced Funds
Mid Cap Funds
Conservative Funds
Dynamic Bond Funds
Launch
Date
3 Year
(%)
5 Year
(%)
4-Mar-15
16-May-00
5-Feb-03
11-Sep-09
4-Apr-08
29-Jul-15
27-May-99
8-Oct-9510-Feb-95
7-Feb-11
02-Dec-13
30-Mar-07
9-Jul-10
17-Mar-08
1-Jul-94
31-Mar-96
26-Dec-08
21-Jan-15
29-Dec-06
29-Dec-09
31-Oct-03
31-Oct-02
16-Dec-10
04-Oct-07
10-Oct-14
9.64
149.41
169.69
22.82
31.95
9.99
108.97
167.46564.35
19.67
14.71
26.54
30.97
34.34
97.86
12.13
37.06
10.99
34.70
29.91
63.28
180.80
16.72
21.13
10.63
NA
20.33
15.76
22.63
21.52
NA
16.96
20.6418.54
21.56
NA
30.15
34.14
28.40
30.80
22.29
20.49
NA
22.53
27.60
11.93
17.85
15.42
15.27
NA
NA
11.61
10.54
14.20
14.15
NA
10.42
15.1312.36
13.74
NA
18.49
23.07
19.39
18.06
14.04
13.1
NA
14.63
19.26
9.28
10.70
11.02
10.72
NA
-3.20
18.50
22.21
13.31
15.54
-0.13
15.17
16.4420.95
13.9
17.62
11.37
21.60
16.47
11.02
19.83
19.61
7.94
14.30
18.97
15.94
23.97
10.10
9.15
4.12
Top Saving Funds
*NAV as on 18/04/2016
9.64
23.59
33.44
18.46
16.37
9.99
22.94
71.04133.37
17.24
12.91
20.58
22.02
31.14
31.98
60.70
13.36
10.99
17.61
19.56
37.19
20.32
15.13
17.66
10.44
Launch Date NAV
(Growth) YTM (%) 3 Mon ths (%) 6 Mon ths (%) 1 y ear (%)
-4.65
-0.24
-2.18
-0.91
-2.47
NA
-0.34
-2.230.01
0.94
-7.43
0.96
3.77
-4.43
-6.09
1.95
-9.45
2.21
-2.50
-4.73
2.47
-6.48
0.48
-3.12
-1.22
14.13
9.02
15.62
14.24
6.87
4.25
8.33
6.36
7.90
5.86
9.21
6.87
M u t u a l F u n d P i c k s
DHFL Pramerica Diversifi ed Equity Fund
DSP BR Opportuni ties Fund
Kotak 50
Kotak Select Focus
Mirae Asset India Opportuniti es Fund
Mirae Asset Prudence Fund
DSP BR Balanced Fund
Tata Balanced FundBirla Sun Li fe Balanced'95 Fund
L&T India Prudence Fund
DHFL Pramerica Midcap Opportunities Fund
Kotak Emerging Equity Scheme
Mirae Asset Emerging Bluechip Fund
Religare Invesco Mid & Smallcap Fund
Tata Midcap Growth Fund
Tata India Tax Savings Fund - Div
IDFC Tax Advantage
Motilal Oswal Most Focused Long Term Fund
Religare Invesco Tax Plan
Axis Lon g Term Equ ity Fun d
Franklin India Dynamic Pe Ratio Fund
ICICI Prudential Dynamic Plan
Principal Smart Equity Fund
Religare Invesco Dynamic Equit y Fund
IDFC Dynamic Equity Fund
Ax is Dynamic Bond Fund
IDFC Dynamic Bond Fund
ICICI Pru Dynamic Bond Fund
Reliance Dynamic Bond Fund
27-Apr-11
1-Dec-08
12-Jun-09
15-Nov-04
15.39
17.96
17.09
20.30
8.13
7.71
8.59
8.37
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www.jhaveritrade.com20
Selected Macro Economic Indicators
45000
40000
35000
30000
25000
2000015000
10000
Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15
3570435704 32690 33068
3579435794
3220930937
Import & Export (in US $ Million)
2 3 8 8 4
2 1 9 9 8
2 1 2 7 4
2 1 2 7 2
2 3 1 4 3
2 1 4 0 8
Oct-15
2 2 2 6 3
2 1 7 2 0
Index of Industrial Production (%)12
10
8
6
4
2
0
-2
-4
2.48
3.01
2.51
4.24 4.34
6.26
3.84
-3.2 -1.34
9.81
Total Foreign Exchange Reserves (US $ Billion)
342.00
344.00
346.00
348.00
350.00
352.00
354.00351.48 351.83
347.20
15-Jan-16
347.56
22-Jan-16
349.15
29-Jan-16 5-Feb-16 12-Feb-16
346.78
26-Feb-16
29796
2 0 0 1 4
Nov-15
33961
2 2 2 9 7
Dec-15
28714
2 1 0 7 5
Jan-16
19-Feb-16
350.86 350.36
4-Mar-16
353.4
11-Mar-16
355.94
18-Mar-16
27280
2 0 7 3 9
Feb-16
Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16
-1.53
355.54
25-Mar-16
359.75
1-Apr-16
359.91
8-Apr-16
360.25
15-Apr-16
356.00
358.00
360.00
Mar-16
27790
2 2 7 1 9
1.99
Feb-16
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21
Selected Macro Economic Indicators
www.jhaveritrade.com
M a c
r o E c o n o m i c I n d i c a t o r s
87
6
5
4
3
2
1
D e c - 1 4
J a n - 1 5
F e b - 1 5
M a r - 1 5
A p r - 1 5
M a y - 1 5
J u n - 1 5
J u l - 1 5
A u g - 1 5
S e p - 1 5
O c t - 1 5
N o v - 1 5
D e c - 1 5
J a n - 1
6
F e b - 1
6
5.865.11
5.375.17
5.79 5.74
4.37
6.10
4.35
5.14
6.72
6.326.32
Consumer Price Index (%)
Wholesale Price Index (%)
-2.17
-2.33 -2.43-2.2 -2.13
-3.79
-4.85-4.54
-3.81
-0.73
-1.99
-0.9
0
-1
-2
-3
-4
-5
-6
Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15
FII (in Billion) DII (in Billion)250
200
150
10050
0
-50
-100
-150
-200
117 11586
-58 -33
120
537
-169
-65
10367
-14
-71
85
-28
63
123
-122
Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16
5.91
Jan-16
-0.91
Feb-16
Feb-16 Mar-16
-55
105
-157
211
5.53
Mar-16
-0.85
69
-17
Apr-16
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www.jhaveritrade.com22
Differential Voting Right Shares
Meaning
The DVR share is equity shares with lower voting rights as compared to the ordinary equity shares holders. As ordinaryequity share holders can give same number of vote as the number of shares hold and take the part in the decision making
process of the company. But DVR share holders can not castthe samevoteas the shareshold.
Purposeof DVRHostileTakeover
A takeover which goes against the wishes of the target company's management and board of directors.
DVR prevents themajorharm of hostiletakeover.As more numberof sharesare availablepublicly, there is a strong
possibilityof hostiletakeover.
As the voting right is less, so it can prevent hostile takeover.
Dilution of Voting Right
As in ordinary shares inventor can cast as many as vote, the shares posses.
It will difficult for thecompany to take decision if there isdifference of opinion byvarious shareholdersby therevoting
right that caneffect thegrowth of thecompany.
DVRprevent dilution of VotingRight.
Strategic Investor and Fund Raising
Many biginvestorswant to investa huge amountof money forcapital appreciationandwant becomea part of companies
strategicdecision.These investorsarenotinterested in control of thecompany.
DVRwill help them to fulfill therepurpose.Through this company canraise huge amountof funds.
Global and Indian scenarioGlobally, issuing a DVRis nota new. Many international companies have already issuedDVR such as Google,Via come,
Roche , BMW , Samsung electronics and others , Berkshire Hathaway and others. Asper the Section 86 of the Companies Act, 1956 from 13/12/2000, the Indian company can issue DVRSshare for various corporate purposes. Tata Motors became
the first company which issued DVR in Indian capital market in 2008 after eight years of gap followed by Pantaloon Retail,
Jain Irrigation,Gujarat NRECoke.
Ordinary Share Holders
100 ordinary shares holds = 100 Voting Right( Applicable to all the company )
DVR Share Holders
100 DVR Holds = 1 voting right
Basic Difference
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Differential Voting Right Shares
www.jhaveritrade.com
J S L C l a s s r o o m
Why should investors invest in DVR ?
Various DVRSissued by Indian companiesTataMotors
In November 2008, Tata Motors Limited issued 6.4 Cr. equity shares with differential voting rights as a part of its ` 4,145Cr. rights issue topayback theloan taken forthe acquisition ofJaguar-LandRover. Therightsissueportion comprising of
normal equity shares was priced at ` 340 per share whereas the DVRS with 1:10 voting rights were priced at ` 305 per
share, i.e., ata discountof10.29 per cent.
FutureRetail DVR
In February 2009, the company issued bonus equity shares with differential voting rights to the existing equity
shareholdersof thecompany in theratio ofonebonus DVRSforeverytenequitysharesheld.ThesebonusDVRS were
termedas ‘ClassB shares’.TenClassB sharesentitled theholders thereof tocast onevote.
ConclusionThe shares with inferior voting rights may be beneficial for the retail investors as these shares would not only be issued at a
discount to the prevailing market price of the normal equity shares but also provide better dividend yield. So the investors
interested in high dividedandcanwait forlong time forcapital appreciationcango forDVRS.
Advantages Disadvantages
High Divided : As Investors are not getting propervoting right, companies which are issuing DVR will givemore divided to DVR share holders as compared toordinary share holders.
For Example : Tata Motors gives 205% divided to DVRholders as compared to 200% to ordinary share holdersin FY12
Capital Appreciation : As the difference between theshare price of ordinary equity and DVR will be narrow ,
investors can sell their holdings and earn return on that.
Best instrument for Retail Investors : The investorswho are not interested in the voting or do not want totake part in the company’s decision making process cango for the DVR.
Avai lable at discount pr ice : Its available at discountprices as compared to ordinary shares.
Lack of Awareness : This is the new instrument for theinvestors so many investors are mot aware about it andits benefits and this leads to illiquidity in the stocks.
ROI is slow as compared to ordinary shares : Thelack of awareness and low liquidity will become hurdle totargeted price.
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JSL Ideal Portfolio ( Small Cap )
www.jhaveritrade.com24
Objective of Ideal Portfolio :
Theobjectiveof this portfolio is to generate long term capital appreciationby investing in concentrated portfolioof large capandgrowthoriented midcapcompanies. Thiswill help togeneratemeaningfulwealthforInvestors from EquityMarket.
Stock Selection Methodology : Based on various fundamental parameters andvaluationcheck along with certain themes
likeCyclical,BottomUp,Sector specific,PolicyInitiative/ push , Evergreen.
Key Risks : Macroeconomic / political conditionandsystematic risk, corporateperformance risk
Comparative Portfoli o Returns
Particulars Return Since Inception Particulars Return Since Inception
Notes : *CMP as on 25/04/2016., Price ** on recommendation and as on 01/01/2016 , Return since inception indicates
from 1st Jan -2016
Investment Horizon : 9-12 Months
Stock Weights Price** CMP* Target Potential UpsideSuggestions
Maruti Suzuki
KEC International
Bharat Forge
Ultratech Cement
Dewan Housing Finance
Sun Pharma
Inox Wind
Torrent Power
State Bank of India
Ax is Bank
VRL Logistics
Torrent Pharma
Ashoka Buidcon
Ah luwal i Cont racts
Everday Industries
Automobi le
Capital Goods
Casting and Forgins
Cement
Housing Finance
Pharma
Power
Power
PSU Bank
Public Bank
Logistics
Pharma
Infrastructure
Infrastructure
7%
5%
8%
7%
8%
7%
8%
8%
7%
7%
5%
8%
5%
5%
5%
Accumulate
Accumulate
Accumulate
Buy
Buy
Accumulate
Buy
Buy
Accumulate
Accumulate
Buy
Buy
Buy
Buy
Accumulate
4639
157
888
2824
236
815
360
181
228
450
432
1479
200
282
300
3734
126
796
3277
199
808
270
235
197
470
399
1426
142
291
255
5200
180
1200
3400
368
1041
488
280
325
620
457
1840
205
368
287
39%
43%
51%
4%
85%
29%
81%
0%
65%
32%
15%
29%
44%
26%
13%
Ideal Portfolio Return
Value Buy (100%)
CNX Small Cap
-6.34%
-15.43%
-9.34%
Nifty
Sensex
CNX Mid Cap
-1.84%
-1.36%
-2.75%
WeightsSector
Consumer Non-Durable
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25
JSL Ideal Portfolio ( Diversified Equity )
www.jhaveritrade.com
I d e a l P o r t f o l i o
Objective : The aim is togenerate long termcapital appreciation from a portfoliothatis not partof the leading stocksby
market capitalization. The aim is to include and invests in companies that have immense growth potential as they areoperatingona smallerbase.
Stock Selection Methodology : Based on various valuation parameters and finding out early stage companies
based onsoundbusinessmodel andavailable at cheapvaluation
Key Risks :Small-cap stocks are not tracked closely by market/ equity analysts and that is why the real value of good small-cap stocks
can remain undiscovered for long. This makes investing in them risky. The risk associated with large cap funds also
associated with small cap ( see last page). Small companies are relatively weak in terms of governance, dividend policies
andprofessionalismof theboard.Thismakes them risky.
Stock Sector Weights CMP* Target Potential Upside
Diversified Equity Portfolio Allocation
Power
Pharmaceuticals
Banks
Infrastructure
Casting and Forgings
Housing Finance
Automobi le
Cement
Capital Goods
Consumer Non-Durable
Logistics
16%
15%
14%
10%
8%
8%
7%
7%
5%
5%
5%
Small Cap Portfolio Allocation
Textile
Computer - Hardware
Education
Food Processing
Pharmaceuticals
Printing and Stationery
Retail
Tyre
30%
10%
10%
10%
10%
10%
10%
10%
Notes : *CMP as on 23/04/2016.
Investment Horizon : 18 - 24 Months
Suggestions
AYM Syntex
Good Year
KPR Mills
KRBL
Garwale Wall Ropes
Smartlink Network
MPS
MT Educare
Shaily Engineering Plastics
Ambika Cotton Mil ls Ltd.
Textile
Tyre
Textile
Food Processing
Textile
IT- Hardware
Printing
Education
Capital Goods
Textile
10%
10%
10%
10%
10%
10%
10%
10%
10%
10%
106
507
857
215
365
103
689
173
607
871
223
868
1120
360
550
156
1150
220
890
1149
110%
71%
31%
67%
51%
51%
67%
27%
47%
32%
Accumulate
Accumulate
Accumulate
Accumulate
Accumulate
Accumulate
Accumulate
Accumulate
Accumulate
Accumulate
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SRTRANSFIN ABAN
We have observed a double bottom formed on weekly charts. It’s avery strong bullish pattern. The stock has given breakout aboveneckline which is placed at 950 levels. The Directional moving indexhas given positive crossover and ADX has started rising on weeklycharts. We advise the stock to buy on every dip for a strong up movefromcurrent levels.
ICICI BANK
We have observed that stock has made lows in February and thenbounced back to test its 21 Day moving average at 100 Rs levels. Butagain stock given negative crossover in Stochastics and its ADX ismoving continuously above 40 levels suggests stock is weak andeveryriseshouldbe used topositionalsellthe stock.
We had observed a Rounding Top pattern on Monthly Charts. Arounding top represents a sell signal. The initial upwards trendbecomes exhausted as the demand for the stock dries up. Thereversal to the downward slope of the rounding top indicates thatdemand has tapered off and a surplus supply is present, basicallythere are more sellers than buyers. A rounding top represents abearish take onthe stock.
Wehaveobserveda Channel breakout onweeklycharts.The channelpattern consists of two parallel trend lines which serve as boundariesfor price action. The lower trend line serves as support and the upper trend line serves as resistance. Important note about channel is themore times thechannel’s trend lines arevalidated (pricetouches themandretracesto theoppositedirection), thestrongerthe pattern is.Thestock has given breakout above 210 levels.The pattern is confirmedwith rise involume.
SELL BTWN 220-230 TGT 170 SL 260
BANKINDIA
SELL BTWN 88-90 TGT 74 SL 98
BUY BTWN 210-220 TGT 300 SL 170BUY BTWN 1030-1050 TGT 1215 SL 950
Monthly Technical Picks - Equity
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27
Monthly Technical Picks - Currency
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M
o n t h l y T e c h n i c a l P i c k s GBP INR USD INR
We had said last month that Doji is formed and range for month is 94-98 for April month. On Monthly Chart, Stochastics was oversold lastmonth and the pair has made low of 93.70 and bounced back from93.70 to 98 levels. Moreover, Pair has been trading above its 50 daymoving average 94 and below is 21 Day moving average at 97.95,which shows that near to medium term trend is up. The short termmomentumisup andcangoto 99.50-100levels.
EUR INR
Pair has crossed 61.80 levels which was strong resistance till lastmonth on daily charts. The pair has given close above that level on
monthly closing basis. On weekly chart JPY INR pair is showingstrength and has strong support at 58.00 levels and on monthly chartJPY INR pair has strong support at 56.00 level. The upside targetremains 64.5-65 levels. The Pair is trading above its 21 Day Movingaverage (56.74) and50DayMoving average(57.42) levels.
EURINR has formed Bullish Candlestick pattern on Daily chartsindicating for upside movement. Moreover, Pair has been trading
above its 21 & 50 day moving average, which shows that near tomedium term trend is up. On broader basis, EURINR has been facingstrong resistance which comes at 76.30 level since last 3-4 weeks,which shows any close above this level, Pair could give good upsidemovement upto the level of 77.40-77.95. Meanwhile, Pair has goodsupport at 73.80 level which is a 100 week moving average, whichshowsthat short tomediumtermtrendis up.
Last Month, We had said that Pair is in strong uptrend in monthlychartsso will find support at 65 levelsand wecanexpect consolidationfor the pair between 65-67 in whole month. The pair has strongsupport at 66.30-66.00 levels and strong resistance at 67.10-67.30levels. The ADX had entered below 20 on daily and weekly charts sowe expect further consolidation between 66-68 levels for comingmonth till thereis breakoutoneitherside.
JPY INR
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Monthly Technical Picks - Index
www.jhaveritrade.com28
Nifty
The index opened at 7718, made a high of 7992, made a low of 7516 and closed the month at 7849. Last month we hadclearly mentioned that Nifty is in Uptrend above 7550 but it should face stiff resistance at 7700-7780 zone where supply is
expectedtocomeand if Nifty manages toclose above thiszoneonweeklyclosing basis, thennifty might head towards 7930
levels. The next crucial resistance is at 7970-8000 levels which is 50% retracement of fall from high of 9119 in Mar 2015 to
lowof 6825 inFeb 2016. Ifnifty manages toclose above thiszone for consecutively2 days thenNifty will beheading towards
8250 levels. Nifty is in uptrend and has strong support at 7700 levels. Stochastics indicator is suggesting positive
momentumtocontinue.We advisebuyondipsstrategyin largecapswith positional stop loss of 7700.
Bank NiftyThe index opened at 16099, made high of 17029, made a low of 15440 and closed the month at 16795. Last month we had
said that Banknifty should face stiff resistance at 16300-16400 zone where supply is expected to come and if Banknifty
manages to close above this zone on weeklyclosing basis, then it might head towards 17000-17500 levels. Banknifty made
high of 17029 level in April. Banknifty is in strong uptrend and buy on dips is recommended with positional stop loss of
16000. The crucial resistance remains at 17150 levels But Stochastics indicator is suggesting positive momentum to
continue.IfBankniftymanages tocloseabove that for2 consecutivedays, then thenext target remains 18000 levels.
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Bullion
Bullion prices last week settled with gains where bullionpricesended with littlegains as traders were waited for further cluesfrom on interest rates from the Federal Reserve while Silver prices reached the 11 month top helped by optimism over Chinese growth, anda break above keychart resistance. Metal traders continued todigest relatively dovishcomments fromEuropean Central Bank president Mario Draghi regarding the likelihood of future easing measures from the central bank. Itcame after the ECB's Governing Council left its benchmark interest rate for the euro zone at a record-low of zero and itsdeposit rate unchanged at Minus0.4%. More critically, Draghi noted that the ECB could continue to hold interest rates atcomparative low levels beyond the expiration of a comprehensive €80 billion a month Quantitative Easing program inMarch, 2017. The decision came days before the start of the Federal Open Market Committee's (FOMC) two-day meetingon April 26-27. At the meeting, the Federal Reserve is widely expected to leave its benchmark Federal Funds Rate at atargeted range between 0.25 and 0.50%. Elsewhere, factory conditions in the U.S. remain soft as the PMI ManufacturingIndex flash reading for April fell 0.6 to 50.8, sharply below expectations of 52.0. The dollar remained higher against the yenon speculation the Bank of Japan was considering applying negative rates to its lending program for financial institutions,effectively starting to pay banks to borrow its cash. The precious metal lost momentum as the greenback began to climbfollowing inaction by theEuropean Central Bank (ECB)on Thursday. TheUS dollarbooked further gains, especiallyagainst
the yen, after rumors emerged on Friday that the Bank of Japan (BoJ) could add a negative loan rate to its arsenal nextweek. The BoJ has been charging lenders a 10-basis-point levy for parking cash, undermining profits in the financialindustry. Factory conditions in the U.S. remain soft as the PMI Manufacturing Index flash reading for April fell 0.6 to 50.8,sharply below expectations of 52.0. Nevertheless, April's flash reading represents its lowest level since the start of therecoveryof global financialmarkets. Gold demandin India improved this week as jewellery retailers reopenedstoresafterastrike, but the world's second biggest bullion market remained at a discount to the global benchmark as purchases acrossthe region were curbed by higher prices. Indian jewellers went on an indefinite strike since the start of March in protest overthe reintroduction of a sales tax on gold jewellery after four years. They started opening shops from last week. India's goldimports inMarchslumped 80.5 percent from a year agoto$973 million, thegovernment said.
Recommendation
BUYGOLD@ 28800 SL 28400 TGT 29500.BUYSILVER @39500 SL 38700 TGT 40800-41500
Energy
Last week crude oil prices ended with around 8.82 percent gains as prices notched their third straight week of gains asmarket sentiment turned more upbeat amid signs a persistent global supply glut may be easing. Strong gasolineconsumption in the United States, increasing signs of declining production around the world and oilfield outages haveunderpinned a return to investment in the sector. Traders also pointed to strong crude imports to China in March assupporting prices. Still, some warned that the oil market was still far from balancing supply and demand. Falling output,especially in the United States, where many producers have reeled from an up to 70 percent oil price rout since mid- 2014,has helped to lift the market. U.S.energy firms cut oilrigsfor a fifth week ina row to the lowest level since November2009, oilservices company Baker Hughes said. Despite the recent rally, oilmarkets remain oversupplied as between 1 millionand 2million barrels of crude are being pumped out of the ground every day in excess of demand, leaving storage tanks aroundthe world filled to the brimwithunsold fuel.Russia and SaudiArabia have since said they would consider producingmoreoilif they seesufficient demand. Natural gashadtheir best week of theyear gaining by 11.67 percent on signs that summer-liketemperatures in the East will help trim a supply glut. Above-normal temperatures across most of the lower 48 states will risein the South at the start of May, stoking demand for the power-plant fuel to run air conditioners. Preliminary pipeline datashows that stockpiles may increase by about 55 billion cubic feet this week, “way lower” than the year-earlier gain of 84
billion. Agas surplus to the five-year average has narrowed for two straight weeks from a four-year high on an unexpectedlychilly start toApril. Futures extended gains after the government’s midday Global Forecast System showedcooler weather late next week in the Midwest to the East followed by an unusually warm start to May in the South, adding both heating andcooling demand, according to Commodity Weather Group LLC. Gas inventories totaled 2.484 trillion cubic feet on April 15,48.5 percent above the fiveyear average, according to the U.S. Energy InformationAdministration. Inventories are on trackto reach an all-time high of 4.112 trillion by the end of October after the contiguous states experienced an unusually warmwinterand production rose toa record.
Recommendation
BUYCRUDEOIL @2800SL 2680TGT 2950-3080.BUYNATURAL GAS@ 138 SL 130 TGT 145-152
29
Monthly Technical Picks - Commodity
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M o n t h l y T e c h n i c a l C o m m o d i t y
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Balanced Funds
www.jhaveritrade.com27
Balanced funds are a combination of equity and debt. Equity oriented Balanced Funds maintain at least 65% of exposure in
domestic equities and can invest upto 35% in debt securities depending upon the fund objective. In fact from the taxationperspective, the long term capital gains tax (Investments period of more than one year) is free for this category of Balanced
Funds.The dividendsearnedon these funds arealso taxfree.
There are many types of Hybrid or Balanced Funds like MIPs, Asset Allocation Funds and Capital Protection Funds. But
funds which are equity oriented with 65%-80% exposure in equity market but with some debt portfolio as well are called
Balanced Funds. They basically try to mix the benefits of both the worlds so as to provide a one-for-all solution to its
customers. It is quite a good choice for someone who wants to invest in equity market but is not too keen in taking risk on the
entireportfolio.BalancedFundsusuallyhave a good large capstockportfoliowith a mixture of good quality debt securities.
Why Balanced Funds?Good for first timers
Balanced funds are especially good for first time investors so that they avoid the market volatility by not opting for a 100%
equity fund andyetget thereturnof theequitymarkets with a hedging opportunity with thedebt portfolio. Some experts sayit
is very good fornew-to-equitieskind of investors.
Investing Cushion
When themarkets are in doldrums, balanced funds have alwayscreated a cushion as against equity funds when themarket
corrects. This can also be considered as a hedging technique as 35% of the portfolio is almost at all times in debt securities
which is unaffected by the equity market volatility. Therefore, by having lesser equity exposure, the risk is definitely under
control but the returns also do not match with that of the equity returns. For example when the market crashed in 2008, an
average well diversified equity fund fell about 53% whereas a balanced fund fell by about 42% only. So, it could save the
fund by about 11% on an average but when the markets recovered, the equity funds would recover much faster whereas
balanced fundswould have more consistent lower returns.
Equity Taxation with Lesser Risk
With debt long term capital gain taxation be