1st October-2015 to 31st October-2015 www.jhaveritrade.com

Tyre IndustriesPg. 4 -5

For

Priv

ate

Cir

cula

tion

Onl

y

Indian Market:Cautiously PositivePg. 1

SRF Ltd.Pg. 7-10

Indian Market: Cautiously Positive

CHINA

EUROPE

USA

JAPAN

The expected slowdown in Chinese economy, a key driver of the global growth, and its spillover effects to other countries, Indiawould not be isolated from this slowdown because Indian Macros have just started to recover. Historically, Indias ownconsumption story saved India during last financial crisis (Lehman Brothers). This time also India will stand firm if it expedite itsreform process.

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From The MDs Desk

The much awaited rate cut decision by RBI is materialized on 29th September, 2015 and RBI has moved aggressively

with 0.50% repo rate cut to kick start the stagnating economy. The expectation of RBI on inflation front is also moderated

going forward. The reactions of this much awaited move, was mixed to positive from corporate India.

Today the elite group of corporate giants have expressed their opinion on the current state of economy and the road

ahead.All most all are cautiously optimistic and agreed on following points:

The Government is taking the steps towards right direction.

The various schemes formulated by the government and the initiative taken to project a highly positive picture of India to

the world is commendable and can change the view of the world about India with regard to taxation issues, ease of doing

business and opportunities of doing business in India

This is rightly reflected in the quantum of FDI received by India during 2nd quarter. India is No. 1 country in the world for

FDI inflows during July Sept quarter.

They expressed that there is need for greater co-ordination to address the regulatory issues amongst ministries,

regulatory and the business community to get desired result in expected time.

All of them firmly believe that the Government needs to be given time to prove its policies and commitments.

The connect and togetherness - the business persons are feeling with the Government is unprecedented and that is

the great thing ever happened in India.

The conclusion of the discussion is that the launching pad is ready; the real jump can happen within 18 to 24 months.

Kamlesh Jhaveri ( MD )Jhaveri Securities Ltd.

Corporate India is cautiously optimistic

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Issu

e Th

eme

Indian Market: Cautiously Positive

1

Temporary relief from Fed

Issues related to global growth has become more worrisome China is the biggest concern

Indian Macros : Some external indicators are gradually becoming unfavorable

Conclusion

Fed has announced that they would keep Interest rates at practically zero as 1) the country faces 1.2% inflation, well belowits optimal inflation target of 2% and 2) global economic uncertainty. With the US interest rates at ultra-low levels, moneyflowed to emerging markets (including India) for higher returns. However, as US economy has recovered, the expectationof an interest rate rise has prompted concerns of heavy capital outflows from emerging economies. We know that US dollarhas a role of a universal currency. So any change in Fed's rate hike will have a negative wide effect. Asset price shifts andfinancial market turmoil could lead to capital flow reversals in emerging economies which also affect growth prospects.

The world will have to wait for another month or possibly three months, to see if the Fed raises rates. We believe thatEmerging Markets have a temporary relief as the time will inevitably come when the emerging markets must face the effectof Fed rate hike. Historical evidence shows that almost all major financial crises since 1980 occurred after the Fed tightenedits monetary policy.

We have already told in our last issue about slower growth in China and a poses a threat to global economic growth.China's slowdown appears to have bigger repercussions (Consequence of an event ) for other countries also speciallyAsian Economies.According to IMF Current problems could lead to "Much Weaker Outlook" for global growth. IMF expectsthe global economy to expand by 3.3% in 2015 slightly lower than 3.4% in 2014.

We believe that in spite of better internal macros (CPI @ multiyear low) , weak global growth is slowly damaging externalindicators like : India's export declined in August-2015 for the ninth straight month as some of its major markets importedless due to lower global demand. If global growth further deteriorate, trade deficit will be widen.

We believe that global economic growth concern has sparked volatility in the Global as well as Indian market.Although Indiahas favorable Macro Economic factors, its not completely isolated from World Economy. Any negative circumstances /events in the global economy will definitely hurt or slowdown Indias long term growth recovery. In recent policy action, RBIhas reduce repo rate by 50 bps to four year (fourth consecutive rate cut in 2015) low which was not expected by Market. Thiswill ultimately ease borrowing costs and stimulate economic growth.All eyes on Q2 FY16 corporate results which will be kickstart from second week of October. Technically, We can expect Nifty will be hovering between 7940-8350

4.5%

4.0%

3.5%

3.0%

2.5%

2.0%2011 2012 2013 2014 2015

Forecastfor 2016

Forecastfor 2015

Forecastfor 2014Forecastfor 2013

Forecastfor 2012

Forecastfor 2011

Citi forecasts for Global GDP growth

Source: Citi Research

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Analyst Special

2

Weak rupee and its impact on Nifty companies

The Indian currency has depreciated by 4% against the dollar within a month. Usually such a fall in short period of time tendsto adversely impact India inc., given by its higher import payments and lower export receipts and exposure to foreigncurrency loans. But due to falling global commodity prices, the impact would not be as linear. Therefore, the currency impactwould be a mixed bag with net importing companies having forex loans facing higher pressure than net exporters withoutany exposure to overseas borrowings.

L&T PositiveA quarter of its order inflows are from the overseas markets. It may see margins expanding in the near term.

Lupin Positive

Lupin is likely to be a net beneficiary of the depreciation since it earns 50% of its revenues from the US. But, because yen has depreciated against rupee and company earns 10% revenues from Japan. This may marginally offset the gains from the US market.

Company Impact Remarks

Bajaj Auto Positiveexport is nearly half of its sales volume, which helps to expand margins of a weak rupee. Historically the benefit is passed on to overseas customers to boost volumes.

in case

Bharti Airtel

BPCL

Cairn India

Cipla

Coal India

Dr. Reddy's Labs

HCL Tech

Hindalco

Idea cellular

Infosys

Negative

Mixed

Positive

Positive

Positive

Negative

Positive

Positive

Negative

Positive

Weaker rupee will increase the accumulated un realized mark-to-market losses.A weak currency increases oil prices in the rupee terms, but with de-regulation of petrol & diesel. It can be passed on to end-users. But under recovery on LPG and kerosene will rise.Crude oil is billed in dollar terms. Hence, rupee depreciation helps to obtain higher realisation per barrel.Cipla earns over 60% of its revenues from outside India. Hence,it is likely to gain from the rupee depreciation.

Lower rupee will reduce the coal import volume, which may improve the demand for coal India. Also, if the rupee falls further, it may get pricing power.

Company earns 60% of its revenue from the US. However its forex benefit would be capped to the extent of hedges undertaken by it. The hedging of the rouble receipts at the rate of Rs. 1.16 will help in protecting the exposure in Russia.

Being an exporter, weaker home currency is positive for the company. However, it may have to book forex loss if rupee falls below the rate at which hedges were booked. Also,cross-currency movements may offset gains from weaker rupee.

Rupee depreciation should be positive as its billing is in dollar and cost is in rupee. it has dollar debt, but higher profitability will offset it.

With a foreign currency debt, weaker rupee would have an adverse impact.

Weak rupee will support company's revenue and margin growth. But, cross currency movements may offset some of the gains.

Weak rupee and its impact on Nifty companies

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Note: We have taken the coverage of Nifty Index which consists of 50 companies. We have covered the companies which are having positive or negativeimpact and excluded the companies which are not having much impact due to rupee depreciation. (Source: economic times)

A weak currency should benefit the exporters as their income will rise on conversion of their income from dollars to rupee.Sectors like IT, Chemicals, Pharma and textiles are having positive impact due to weaker rupee. depreciation of rupee isexpected to have mixed impact on the India's textiles exports as competition will increase from china following thedevaluation of Yuan. Apart from this, still there are some companies in the Nifty index whose majority of sales depends onthe exports. The Reserve Bank of India (RBI) is likely to keep the Indian currency from appreciating against major currenciesto give a competitive advantage for Indian exports. If the RBI will continue its intervention, the Indian currency will have agradual depreciation.

Conclusion

3

Ana

lyst

Spe

cial

Company Impact Remarks

Maruti NegativeYen appreciation against the dollar increases import cost of the components. Direct and Indirect import content comprise 21% of the total cost.

NMDC

ONGC

Reliance Ind.

Sun Pharma

Tata Power

Tata motors

TCS

Tech Mahindra

Vedanta

Wipro

Positive

Positive

Positive

Positive

Positive

Mixed

Positive

Positive

Positive

Positive

weak rupee will make NMDC Cost-competitive compared to Iron ore imports. Also, a further pressure to lower iron ore prices due to weak global ore prices will be limited.Crude oil is billed in dollar terms. Hence, rupee depreciation helps to obtain higher realisation per barrel.

The realisation for refining products as billed in dollar terms will improve. In the june15 quarter , export contributed nearly half of the total turnover.

The overall impact of a weak rupee would be positive for Sun Pharma given that half of its revenues are earned from the US. Ranbaxy's forex loans & outstanding hedges could cause some dent to these gains.

Tata power stands to benefit from lower global coal Prices. in addition, the exchange rate difference in fuel price is a pass through for power buyers or distribution companies

Over half of the JLR sales are dollar denominated while raw material is largely sourced in Euros. This may offset each other. Rupee's depreciation against pound may help earnings.

Currency depreciation should improve revenue growth and support operating margin.but,if pound and euro depreciate against the dollar it may impact revenue adversely.

At a time when the Co's revenue growth is subdued, a weaker rupee may offersome support to the top line. The extent of the benefit will depend on cross - currency moves.

Around 50% of its total debt is USD-denominated for the standalone business, but Hindustan zinc and cairn India, which are subsidiaries of Vedanta are going to benefit significantly as billing is in dollar.The company expects to grow revenue faster in the coming quarters weak rupee could come in handy as it improves realisations.

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Sector Update

Sector Outlook : Tyre Industry

Industry Structure

The Indian tyre industry has been witnessing tremendous growth for the past few years on account of growth in automobilesdemand, especially in passenger vehicles and two-wheeler segments. In fact, availability of raw material (natural rubber)and ultramodern production facilities has led the country to emerge as one of the worlds most competitive tyre markets.Driven by the strong demand in automobile OEM sector and replacement market, the India tyre industry has beenwitnessing stupendous growth from since the last two fiscal years.

The scooters (two or three wheelers ) and the Motorcycle tyre accounted for 52% of the total volumes, while the otherheavyweights (M&HCV, passenger cars, LCV, tractors, and off road highways) accounted for the balance 48%. As perindustry estimates, the key heavyweights, passenger car segment posted a healthy clip of 12.40% and the truck segmentgrew at 7.49% in volume terms in FY15. For the segments under consideration, passenger car and truck , as perestimates, OEM accounted for 42% and 17% respectively. The replacement market continued to support the tyre majorsand accounted for 45% and 78% for the mention segments.

According to ICRA, The Indian tyre industrys revenue is expected to grow by 7- 8% during fiscal year 2015- 2016, up from5.8% during last financial. The domestic tyre demand grew by 10- 12% during 2014- 15 due to a 7- 7.5% growth in theOriginal Equipment Manufacturer (OEM) segment and 12- 15% growth in the replacement segment.

Tyre imports, after recording a sequential annual decline of 5.5% during the period 2011-2014, grew by a sharp 19%(volumes) in 2014-15 led primarily by surge in 2W tyres.

According to ICRA, the tyre industry to report a growth of 4% -8% over the next three years, supported by pick up in auto OEdemand across segment. Headwinds from the motorcycle and tractor segments, weaker exports and Chinese importswould however persist over the next 12 months.

The Indian tyre sector continued to post good growth in profitability as declining raw material costs once again boosted themargins in the June 2015 quarter over a year ago. However, stiff competition from higher imports and lower-than-anticipatedrecovery in demand from the domestic automobile segment led to a decline in the top line.

Tyre Industries

4

Company Name MRF Apollo JK Tyres Ceat Tyres Others

Market Share 27% 19% 16% 12% 26%

Q1 FY16 Q1 FY15 Q1 FY16 Q1 FY15 Q1 FY16 Q1 FY15

Net Sales (` in Cr.) Net PAT (` in Cr.) EBITDA Margin (` in Cr.)

Apollo Tyres

Balkrishna Inds

CEAT

JK Tyre & Indust

MRF

2832.24

820.81

1456.26

1759.91

3535.99

3223.06

946.07

1453.10

1853.92

3335.30

290.60

151.77

121.01

118.12

446.81

227.94

115.41

51.67

55.44

230.22

18.64

36.28

15.97

16.56

23.85

14.20

25.33

9.59

10.37

15.26

Company Name

Tyre Industries

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Rubber comprises around 40% of the total cost of a tyre. Rubber prices have hit multi-year lows on persistent worries aboutslower economic growth in the main consumer, China, and oversupply. The average domestic rubber price at `125 per kg inQ1 of FY16 was lower 13% compared with Q1 of FY15, and 26% in Q1 of FY14. Other than natural rubber, the steep fall incrude oil prices has also resulted in an equally sharp decline in prices of synthetic rubber and other rubber chemicals.

Aggregate sales of 13 major tyre companies decreased 1% to ` 10377 Cr. in the June 2015 quarter versus ` 10489 Cr. a yearago. The aggregate operating profit margins (OPM) rose 670 basis points (bps) to 20.1%, leading to 49% growth inoperating profit (OP) to ` 2086 Cr. Other income (OI) more than doubled to ` 124 Cr. Interest cost fell 22% to ` 185 Cr. anddepreciation was higher by 13% to ` 333 Cr. After a huge 85% increase in tax provision to ` 567 Cr., profit after tax (PAT)rose 81% to ` 1125 Cr.

Imports of Chinese tyres into India have surged over several months after the US imposed an anti-dumping duty on them. Abasic customs duty of 10% has led to cheaper Chinese tyres flooding the Indian market. Imported tyres comprise 20% ofthe car and 25% of the truck radial replacement market, making the import segment market leader instead of localCompanies.

The value of Chinese tyre imports in the fiscal ended FY 2015 is estimated to have reached ` 800 Cr. This has addedpressure on Indian tyre makers despite low prices of natural rubber over the last year. However, the pressure from importdumping and high import duty on rubber was more than offset by the steep decline in rubber and crude prices, thus boostingprofitability.

Capacity addition in the tyre industry remains strong in anticipation of recovery in auto demand, supported by improvedaccruals generated on the back of benign rubber prices. However, there appears to be a marked shift in the capex plansof tyre majors, with the focus shifting from the commercial to the consumer segment.

With pick-up in auto demand and an improving economy, expected growth in domestic tyre volumes is 9-10% in thecurrent fiscal. The anticipated increase in exports is expected to support demand. Exports are projected to grow 4-6% inFY 2016 and a little faster thereafter as USs decision to slap anti-dumping duty on cheaper Chinese tyres have createdopportunities for Indian tyre makers. But the opportunity overseas is translating into a big threat for the industry backhome with the ever-increasing threat of Chinese imports.

The tyre industry is expected to get continued benefits of lower raw material costs, particularly in H1 of FY 2016. With fallin global demand, prices of several key inputs are currently at all-time lows, benefiting user industries.

Chinese import continue to be threat to Indian manufacturer

Outlook

Sect

or U

pdat

e

EPS (`)Company Name ROCE (%) ROE (%)

FY16E FY17E FY16E FY17E FY16E FY17EApollo Tyre

Balkrishna Indust

JK Tyres & Indust

21.20

55.70

21.90

22.80

58.50

22.10

186.65

687.70

102.00

24.20

17.70

22.00

20.50

19.00

20.30

18.40

17.80

26.90

16.80

17.70

21.80

CMP(`)

Invest small, Dream Big

Go for EQUITY S PI

Call Jhaveri Securities Ltd....Your Growth Partner

7SRF Ltd.

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Buy CMP : ` 1186 TGT : ` 1374Company Basics

BSE ID NSE Symbol Group EQUITY (` in Cr.) MKT.CAP(` in Cr.)

503806SRF

A57.42

6582.92

Financial BasicsFV ( )EPS ( ) (TTM)P/E (x) (TTM)P/BV (x) (TTM)BETARONW (%)

`

`

10.0052.7421.742.90

1.317010.52

Investment Rationale

Share Holding PatternHolder's Name

Foreign

Institutions

Promoters

Govt. Holding

Public & OthersNon Promoter Corp. Hold.

% Holding

16.04

12.59

52.38

0.00

15.17

3.82

ROI : 16%

ValuationsSRF Ltd. is currently trading at15.74x FY16E EPS of `72.80 and12.51x FY17E EPS of `91.60,valued the stock at 15xFY17E (threeyear average) with the target priceof `1374.

Investment Horizon : 12 to 15 Months

Company Overview

Product Portfolio

SRF has an edge in Fluorochemicals business

SRF Limited is multi-product, multi-business organization and industrial intermediatesegment. The company was incorporated in 1970. The business divisions of thecompany include Technical Textile Business, Chemical Business, Packaging FilmsBusiness and Engineering Plastics Business. The company has 12 production plantacross the globe. Out of 12 nine in India and the remaining in Dubai, South Africa,Thailand. It is market leader in majority of its product. SRF has strong presence ininternational market with exporting around 75 countries.

Technical Textile Segment (TTB)TTS has various application areas such mobile-tech,Indu-tech, Build-tech, Agro-tech, Sports-tech. This segments include production of tyre cord fabrics, beltingfabrics, coated fabrics, laminated fabrics and industrial yarns.

Chemicals Segment (CB)This segment includes production of fluorochemicals and fluorospecialities.

Packaging Film Segment (PF)This includes manufacturing of polyester films which is used for packaging thecommodity.

Engineering Plastic SegmentThis segment includes production of industrial plastic which has various applicationin different industry.

SRFs Fluorochemicals business derives revenue from sale of fluorine basedrefrigerants/propellants and solvents. SRF has an superior edge with 26 yearsexperience in fluorine-based refrigerants and has survived changes in the industrythrough innovation and adaptation. We believe that SRFs Ability to understand thedifficult-to-handle fluorine chemistry is a significant entry barrier for this segment.

Com

pany

Ana

lysi

s

Technical TextileBusiness Profile (% Revenue Contribution in Fy15)

Chemicals and Polymers Packaging

Nylon tyre cord fabric (75%)

Other Fabrics (25%)

Engineering Plastics (15%)

HFC 134a (13%)

Fluoro Specialities (45%)

Fluoro Chemicals (27%)

India BOPET (54%)

SA BOPP (22%)

Thailand BOEPT (24%)

SRF Ltd.

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Com

pany Analysis

Investment Rational

Global Trends and Opportunities-Specialty Chemicals (F-Chemicals)

SRF is one of the leading and sole domestic supplier of HFC 134 a and growth in passengervehicles spur sales

Specialty Chemical is on strong footing

We also believe that high sales of refrigerators and cars will spur growth of f-chemicals in India. Import substitution of R-134a will also boost sales because SRF is sole domestic manufacturer. SRF is entering next generation refrigerants thereby cementing its position as a leading domestic supplier. We estimate SRFs refrigerants/ f-chemicals revenue and EBITDAto grow significantly from FY15 to FY17E.

SRF, Navin Flourine and Gujarat Flourochem currently operate in India in fluorine space; amongst these players, SRFsR&D strength and capabilities are unmatched.

Globally, BASF, Bayer Cropscience, Syngenta, Dow Chemicals, DuPont, Mitsui Agro are the major players whoconsume fluorine-based products in agrochemicals; while on the pharma side, it includes almost all the major global names.

SRF caters to BASF, Bayer Cropscience and Syngenta in the agrochemicals space; in the pharma space, it has DrReddys Lab, Lupin and MNCs (Pfizer and others) among its customers.

SRF is still at a nascent stagewith 40-50 molecules commercialized against 17,000 molecules already known globally.Therefore, the opportunity for the company is immense.

This elements contributed 23% of SRFs fluorochemical revenues. The market-size of HFC-134a in India is 8.0KTPA, whichis expected to rise with the rise of automobile and refrigerator sales. We estimate HFC-134as consumption to clock 10.1%CAGR till FY20 as sales of passenger vehicles pick up from FY17 (HFC-134a gas is used as refrigerants in cars). With acapacity of 17.5KTPA, SRF is the sole domestic producer of R-134a and its market share increased to 41% in FY15. Importshave broadly remained flat at ~4,700 MT during the past 5 years.

SRF is on a strong footing in Specialty Chemicals, as it is knowledge driven and has high entry barriers. We expect thebusiness to grow at a CAGR of 28% over FY15-17 to `1005.40 Cr. Given that it is a niche business, we believe it will continueto enjoy PBIT margin of 35%

Year ( ` in Cr.) FY14 FY15 FY16E FY17E

Segment Sales 425.00 598.00 778.80 1005.40

9SRF Ltd.

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Technical Textile has strong incremental growthCompany's technical textiles product basket contains nylon tyre cord fabrics (NTCF),polyester tyre cord fabrics, beltingfabrics, coated fabrics, laminated fabrics, fishnet twines and industrial yarns. SRF is not only the largest manufacturer of technical textiles in India, but it also enjoys global leadership in most of the products in this business

NTCF is the primary constituent of technical textiles segment, contributing ~65% of the segments revenue. NTCF businesshas been facing radialisation headwind. However, a significant portion of demand is still met via imports and any demanddip will lead to import cuts. Incremental demand is anticipated from off the road (OTR) tyres driven by Indias increasedinfrastructure spend, along with strong trend in exports of OTR tyres.

As per AT Kearney, the earthmoving and construction equipment (ECE) (where OTR tyre is used ) industry is expected totouch USD16-20bn by FY20 from the current USD3bn. Spurt in infrastructure spending over the 12th Five Year Plan isexpected to jump from 7.2% of GDP to 9.0%, driving growth in the ECE market.

The total demand for films in India is 360,000 MT/year and is growing at 10%. Capacity utilization swings between 73% and86%. Currently, the industry is operating at peak utilization of ~86%. With higher capacity utilization, film manufacturershave begun enjoying higher margins.

SRF made its overseas foray, with two Greenfield projectsBOPET film plant in Thailand and a BOPP film plant in SouthAfrica in 2013-14 in 2013-14. This increased its BOPET film capacity to 88,000MT/year and BOPP film capacity to25,500MT/year.

Setting up a BOPP film plant in South Africa was a strategic decision, as there is a huge demand-supply gap of30,000MT/year and demand is fulfilled through imported products; domestic supply is just 4,000-5,000 MT/year.

SRF added its 28,500MT/year BOPET film capacity in Thailand, as it is at a strategic location connecting important marketslike Japan and South Korea. SRFs goods have been accepted in these markets; it can leverage this strength to introducevalue added products in future. This unit exports 63% of its production.

Packaging Business has a good strength

Com

pany

Ana

lysi

s

Growth in the ECE market to drive demand for OTR tyres

Year

USD Bn.

FY 13 FY20E CAGR

3.50 16.00 27%

Year FY14 FY15 FY16E FY17E

Capacity (MT) 97000 113500 113500 113500

Packaging Business Capacity Detail

SRF Ltd.

www.jhaveritrade.com810

FY 124000.10831.4020.80

183.70647.80117.2031.20

561.70168.7014.20

378.80

1851.503306.902075.00140.50

1332.10675.30656.80

FY 133783.00614.3016.20

208.90405.4099.8042.00

347.6056.4038.30

253.00

1968.903937.702336.90151.20

1518.10651.30866.80

FY 144018.10505.3012.60

224.80280.6096.1023.50208.0020.8024.70

162.50

2066.704567.003541.50

36.601769.30951.60817.70

Total Income from Operation EBITDAMargin (%)DepriciationEBITInt. and Finance Charges Other Income PBTCurrent TaxDeferred TaxReported PAT

Net WorthCapital Employed Net Fix AssetsTotal Investments Current Assets, Loans and AdvancesCurrent Liabilities Net Current Assets

FY 154539.80717.5015.80

245.00472.40137.6064.60

399.4031.4065.20

302.80

2296.635140.603918.80

94.301762.40813.30949.10

Consolidated Key Financials (` in Cr.)

Financial Performance

Ratio Analysis

65.8096.30316.8013.90

2.006.000.70

21.3023.60

1.277.041.0103.047.0

44.1079.00

336.9010.00

2.304.000.90

13.2013.30

1.095.046.0

106.065.0

28.3066.30

353.6010.00

1.903.001.10

8.107.70

0.9114.058.0

140.067.0

EPS (`)Cash EPS (`)BV/ Share (`)DPS (`)

Current Ratio (x)Interest Coverage Ratio (x)Debt / Equity (x)

RoE (%)RoCE (%)

Asset Turnover Ratio (x)Inventory (Days)Debtors (Days)Creditors (Days)Working Capital Turnover (Days)

52.7093.70

392.9010.00

2.203.001.10

13.9012.00

0.9110.046.0113.068.0

Key Ratios FY 12 FY 13 FY 14 FY 15

Com

pany Analysis

11

Foreign institutional investors (FIIs)

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Ana

lyst

Spe

cial

Foreign institutional investors (FIIs) are still a very dominant force in our markets. Since last few weeks, FIIs are on a sellingmode by offloading `2356.68 Cr. during the month of September from the equities and domestic institutional investors havebeen buying equities. But still there are some companies in which FIIs have increased their stake continuously in this quarteralso.We have selected sectors / stocks from BSE-200 & CNX-200 where FII has increased its stake significantly in last fourquarters.

CompanyFIIs(% of equity capital)

Motherson Sumi

Karnataka Bank

City Union Bank

Thermax

Alstom T&D India

B H E L

Shree Cement

Godrej Inds.

Bharat Electronics

REC

P & G Hygiene

Dabur India

Petronet LNG

Indraprastha Gas

Apollo Hospitals

Vakrangee

Coal India

Guj Pipavav Port

Credit Analysis

Gujarat State Petronet

Just Dial

Glaxosmit Pharma

Lupin

Wockhardt

Torrent Power

JSW Energy

Delta Corp

B P C L

Bharti Infra.

PTC India

Sector CMP*Q2 FY 15 Q3 FY 15 Q4 FY 15 Q1 FY 16Auto Ancillaries

Banks

Banks

Capital Goods

Capital Goods

Capital Goods

Cement

Chemicals

Consumer Durables

Finance

FMCG

FMCG

Gas Distribution

Gas Distribution

Healthcare

IT

Mining

Miscellaneous

Miscellaneous

Miscellaneous

Miscellaneous

Pharmaceuticals

Pharmaceuticals

Pharmaceuticals

Power

Power

Realty

Refineries

Telecomm

Trading

16.67

20.62

33.03

15.12

1.27

15.71

10.63

11.28

1.85

19.88

1.93

20.54

20.84

13.71

42.62

2.99

5.37

34.31

25.69

7.64

26.64

2.05

31.75

6.22

2.51

5.59

12.67

12.57

17.1

24.46

18.23

21.1

33.77

15.28

1.37

15.95

10.85

11.44

2.31

20.08

2.00

20.87

21.02

15.58

42.97

3.17

5.54

34.99

28.95

8.74

27.38

2.06

31.77

7.67

2.62

6.62

13.73

15.2

17.82

25.64

18.3

22.2

34.61

15.65

1.55

16.06

11.49

12.4

3.43

20.86

2.3

20.96

22.64

18.28

43.78

3.33

8.99

37.06

31.19

10.39

28.85

2.09

34.69

9.65

3.62

7.24

14.17

17.18

22.45

28.02

18.61

22.28

37.05

15.76

1.81

16.11

13.1

12.87

3.89

21.65

2.58

21.13

22.8

18.51

43.79

5.32

9.16

38.37

31.34

11.28

38.7

2.14

36.75

9.68

4.25

8.47

14.51

18.13

24.3

28.75

226

126

92

842

504

200

11968

350

1143

274

6247

279

176

467

1442

133

328

185

1104

117

983

3340

2107

1525

180

89

80

855

397

60

CMP* as on 1st October15

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Monthly Technical Picks

12

Monthly Technical Picks

: We have detected a "Head and Shoulders Top" chartpattern formed on Motherson Sumi .The price seems tohave reached the end of a period of "distribution" at thetop of a major uptrend; the break down through supportsignals a reversal to a new downtrend. Finally volumesurges as the price closes below the neckline (drawnbetween the two lows) to confirm the reversal.Also thestock has broken the rectangle on weekly charts andclosed below the lower band for two consecutive weeks.

We have detected a Rectangle pattern formed on AdaniPort. The price seems to have reached a top, showingsigns of distribution. Its a slow process of distributionspread over a longer time frame. Price will test the topagain and retrace back. It will form a rectangle at top.After that the stock has broken downward after a periodof uncertainty or consolidation and thus a sign ofreversal on weekly charts with volume.This bearishsignal indicates that the stock price may fall in comingweeks.

We have detected an "Ascending ContinuationTriangle" chart pattern formed on Lupin. It is a bullishsignal with increased volume. The increasingly higherlows and constant highs within this pattern tell us thatbuyers are more aggressive than sellers, confirmed bya breakout through a resistance level to signal acontinuation of the prior uptrend. This Pattern indicatesthat the stock price may rise in coming weeks.

We have detected an "Rising Wedge" chart patternformed on Divislab. It is a bullish signal. In a uptrend,price gives a upward run up and takes a breather. Priceforms a spiral, which is bounded by two upward slopingconverging trendlines. Volume expanding at breakoutconfirms the uptrend.This bullish pattern can be seen onthe following chart which indicates that the stock pricemay rise in next coming weeks.

MOTHERSUMI ADANI PORT

LUPIN DIVIS LAB

BUY BTWN 2000-2030 TGT 2200-2250 SL 1900

SELL BTWN 235-240 TGT 205-210 SL 260 SELL BTWN 320-325 TGT 285-290 SL 344

BUY BTWN 1075-1095 TGT 1160-1180 SL 1035

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Mut

ual F

und

DSP BlackRock Balanced Fund

This year has been especially volatile for equity a market in India.The Sensex has fallen by 10% over the past one month.Balanced funds are attractive investment options for investors with moderate risk tolerance, especially during periods ofhigh volatility. DSP Black Rock Balanced Fund, which had been underperforming in a relative sense compared to its topperforming peers in the balanced fund category, has made a smart turnaround over the past one year. In our opinion,outperformance in volatile market conditions is a good performance indicator for balanced funds. The fund has given morethan 13% returns on a trailing annualized basis over the past one year.The chart below shows the trailing annualized returnsof the DSP Black Rock Balanced Fund compared to the Balanced Fund category across several timescales.

The DSP Black Rock Balanced fund is suitable for investors looking for long term capital appreciation with moderate levelsof risk. As such the fund is suitable for investors in the moderate risk category planning for retirement or other long termfinancial objectives. The fund was launched in May 1999 and has nearly Rs 770 crores of assets under management. Theexpense ratio of the fund is slightly on the higher side at 2.76%. The asset management company, DSP Black Rock, is one ofmost respected asset management companies in India. The fund managers of this scheme are Vinit Sambre and DhawalDalal. Morningstar has a 4 star rating for this fund.

The chart below shows the 1 year rolling returns of DSP Black Rock Balanced over the last 5 years. In this chart we areshowing returns on every day during the specified period and comparing it with the benchmark. Rolling returns is the bestmeasure of a funds performance. Rolling returns, on the other hand, measures the funds absolute and relativeperformance the timescale in question, without bias. The orange line shows the 1 year rolling returns of DSP Black RockBalanced Fund (Growth Option) and the black line shows the 1 year rolling returns of the benchmark, CRISIL BalancedFund Index.

Fund Overview

Rolling Returns

13

13%

8%

18%16%

10% 10%

15%

13%

1 year 3 year 5 year 10 year

DSP BR Balanced Fund Balanced Fund

60

40

20

0

-20

Jan11 May11 Sep11 Jan12 May12 Sep12 Jan13 May13 Sep13 Jan14 May14

www.jhaveritrade.com14

Portfolio Composition

Risk & Return

Conclusion

From a risk perspective, the volatility of the fund is slightly on the higher side. The annualized standard deviations of monthlyreturns of the DSP Black Rock Balanced fund for three to ten year periods are in the range of 13% to 18% respectively, whichis on the higher side relative to the balanced funds category. However, on the basis of risk adjusted returns, as measured bySharpe Ratio, the fund has outperformed the balanced fund category.

The fund has given 15.62% compounded annual returns since inception. `1 lac investment in the NFO of the fund (growthoption) would have grown to around ` 11 lacs by September 2 2015.The chart below shows the returns over the last 10 years of `3000 monthly SIP in the DSP Black Rock Balanced Fund(growth option). The SIP date has been assumed to first working day of the month.

The chart above shows that a monthly SIP of ` 3,000 started 10 years back in the fund would have grown to over Rs 7.3 lacsby Dec 28 2014, while the investor would have invested in total only ` 3.6 lacs.

DSP Black Rock Balanced Fund has completed over 15 years and staged a smart turnaround in performance over the pastyear or so. Investors with moderate risk profiles may consider this product for their retirement planning and other long termfinancial objectives, through systematic investment plans or lump sum route.

DSP BlackRock Balanced Fund

Asset Allocation of DSP Black Rock Balanced Fund

5%

26%

69%

Equity Debt Cash Equivalent Top 5 Holdings of DSPBlack Rock Balanced Fund

79.19%

5.5% 4.9% 3.9% 3.4%3.3%

G Sec (2025) Others

HDFC Bank SRF Britannia G Sec (2004)

900,000

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013

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013

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014

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014

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015

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015

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Com

mod

ity

Commodity

15

Bullion

Recommendation

Energy

Recommendation

Gold prices last week ended with around one percent gains as a weak U.S. dollar sparked short covering whereas silver prices settled flat as upbeat U.S. second quarter growth data added to expectations for a rate hike before the end of the year.However gains were limited as investors worried over the timing of a U.S. interest rate hike. Federal Reserve Chair JanetYellen said after markets closed on Thursday that she expected the central bank to begin raising rates later in 2015, as longas inflation remained stable and the U.S. economy was strong enough to boost employment. It marked the first time Yellenpersonally supported a 2015 rate hike since July. Yellen's stance represents a stark contrast from her position last weekwhen the Federal Open Market Committee only disclosed that 13 of 17 of its members were in favor of raising rates this year.The data prompted short covering and safe-haven bids amid worries about global economic growth, which could delay thetightening of U.S. monetary policy. U.S. equities came under pressure. Data on Friday supported the view that the Fed couldbegin raising rates this year. U.S. gross domestic product rose at a 3.9 percent annual pace in the second quarter, up from3.7 percent reported last month. Earlier in the month, the Fed delayed a long-anticipated rise in U.S. rates, citing concernsover the global economy and improving investor sentiment towards gold. Holdings in SPDR Gold Trust, the world's top gold-backed exchange-traded fund, rose for a fourth straight session on Friday. Gold prices have been well-supported since theFed decided to leave short-term interest rates unchanged last week, amid concerns over soft inflation and the effects ofrecent market volatility on the U.S. economy. Russia raised its gold holdings by another 29.5 tonnes in August, adding to itsreserves for a sixth straight month, while Jordan and United Arab Emirates both emerged as buyers in July, according to International Monetary Fund data on Thursday. Hedge funds and money managers raised their bullish bets in COMEX goldfutures and in the week to Sept. 22, U.S. Commodity Futures Trading Commission data showed on Friday. Several FederalReserve officials are scheduled to speak this week, keeping the focus of the bullion market firmly on U.S. monetary policy.

Crude oil prices rallied amid indications U.S. oil drillers are cutting back on production following a collapse in prices over thesummer. Industry research group Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. decreasedby four last week to 640, the fourth straight weekly decline. A lower U.S. rig count is usually a bullish sign for oil as it signalspotentially lower production in the future. Crude oil prices have been under heavy selling pressure in recent months, asongoing worries over the health of the global economy fueled concerns that a global supply glut may stick around for longerthan anticipated. Global oil production is outpacing demand following a boom in U.S. shale oil production and after adecision by the Organization of Petroleum Exporting Countries last year not to cut production. The EIA said gasolinestockpiles rose 1.4 million barrels, compared with the Reuters poll which called for a 819,000-barrel gain. In crude oil, marketintelligence firm Genscape added to positive sentiment by estimating a draw of nearly 810,000 barrels in the week endingSept. 15 from storage tanks at Cushing, Oklahoma, the main delivery point for U.S. crude futures, according to sources whohave seen the data. Whereas natural gas prices dropped last week as demand for the fuel was likely to remain limited aftermeteorologists predicted mild fall weather in much of the U.S. in the weeks ahead. Demand for natural gas is expected to bemoderate this week as cooler weather moves across the eastern part of the U.S. Meanwhile, weather in the west will bewarmer before cooling off as the week progresses. Data released Thursday showed that U.S. natural gas supplies rosemuch more than expected last week. According to the Energy Information Administration, natural gas storage increased by106 billion cubic feet, above forecasts for a gain of 96 billion cubic feet. Supplies rose by 96 billion cubic feet in the sameweek last year, while the five-year average change is an increase of 83 billion cubic feet. The EIA's next storage report slatedfor release on Thursday, October 1 is expected to show another hefty build of approximately 100 billion cubic feet for the week ending September 25.

SELL GOLD @ 27000 SL 27450 TGT 26550-26100.SELL SILVER @ 36600 SL 37200 TGT 35800-35100.

BUY CRUDE OIL @ 2960 SL 2850 TGT 3090-3200.SELL NAT. GAS @ 178 SL 185 TGT 172-165.

Member: NSE / BSE / NSDL / MCX / NCDEX

To get registered for Online IPO,Missed Call: 080 49336 177or SMS JeTrade IPO on 9601336677

Can be Applied Anywhere Anytime

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DISCLAIMER : Trading and Investment decision taken on your consultation are solely at the discretion of the traders/investors.We are not liable for any loss, which occur as a result of our recommendations. This document hasbeen prepared on the of publicly available information, internally developed data and other sources believed to be reliable.

NSE:INB/F/E 230823233 BSE: INB/F 010823236 NSDL: IN-DP-NSDL-166-2000, MCX-SX: INE 26082333 AMFI ARN 3524 MCX: TM 29040 / FMC REG NO. MCS / TC / CORP / 0963 MCDEX: TM 00749 / FMC REG NO.NCDEX / TCM / CORP / 0736 / NSELTM 10110* Note: Dealing in Commodity Segment through its group company Jhaveri Credits & capital Ltd.Distributors for IPOs & Mutual Funds. Past performance is not a measure for future returns.

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M3 Money Supply y/yItalian Monthly Unemployment RatePrivate Loans y/yCore Durable Goods Orders m/mDurable Goods Orders m/mS&P/CS Composite-20 HPI y/yCB Consumer ConfidenceRichmond Manufacturing Index

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