Religare Morning Digest

Transcription

1 Nifty Outlook After five straight sessions of robust gains, aided by strong liquidity, firm global cues and encouraging corporate earnings, the equity benchmark indices finally took a breather after achieving new milestone and ended the session on a flat note. The broader markets underperformed the benchmark indices, with BSE Midcap & Smallcap closing lower by 0.6% & 0.9% respectively. The sectoral indices exhibited a mixed trend. While Consumer Durables, Telecom and Metals witnessed some profit taking, IT, FMCG and Healthcare were the top performers. Amongst the global markets, the Asian indices ended on a mixed note, while European markets were trading lower. We remain positive on the Indian equities over medium to long term despite its premium valuations compared to other emerging markets. India would continue to remain a preferred investment destination for FIIs and DIIs on the back of its continued reforms and revival in corporate earnings. However, with indices trading at record highs, some consolidation cannot be ruled out in the coming sessions. Union Budget 2018 (on Feb 01) & RBI Monetary Policy (on Feb 07) are the key near term triggers, which would provide further direction to the markets. Meanwhile, with more results scheduled in the coming weeks, stock specific action would continue. Investors should focus on quality stocks on dips. VWAP (Expiry till date) Max OI (Call) Max OI (Put) News NIFTY Idea Cellular widened its net loss for Q3FY18 to Rs 1,284cr from Rs 1,106cr posted in Q3FY17. The company s consolidated revenue declined by 12.8% YoY to Rs 6,510cr. EBITDA declined by 18.5%, while EBITDA margins contracted by 120bps YoY to 18.8%. State-owned Vijaya Bank reported 65.5% YoY decline in net profit at Rs 79.6cr in Q3FY18, impacted by rise in provisions. Total income declined by 7.1% YoY to Rs 3,450.8cr. Gross NPAs improved to 6.17% as against 6.98% in Q3FY17, while Net NPAs also came down to 3.99% in Q3FY18 compared to 4.74% in Q3FY17. InterGlobe Aviation reported healthy Q3FY18 results. Despite rise in the fuel cost, the company s PAT grew by 56.4% YoY to Rs 762cr, aided by higher fares, passenger growth and a stronger rupee. Revenue rose 23.9% YoY to Rs 6,178cr. EBITDA increased by 34% to Rs 1,936cr while EBITDA margins expanded by 240bps YoY to 31.3%. Religare Super Ideas** Scrip Buy/Sell CMP Initiation Range SL* Target LUPIN BUY KSCL SELL FEB FUTS **Please note that the given technical and derivative recommendations are "valid for taking position" only on recommended date and in the given range. *Please note - Stoploss is on closing basis for delivery recommendation and intraday basis for futures recommendation. Derivative Ideas ** Sectors to watch FII & DII Cash Segment (Rs. in Cr.) Trade Stats Instrument B/S Lot RECLTD BUY NA INITIATION RANGE SL TAR- GET Sector Name AUTO ENERGY FMCG Outlook STABLE STABLE STABLE Category Amt.** MTD FYTD FII DII** **Provisional data as on 23rd January 2018 NO OF CON- TRACTS TURNOVER IN CR IDXFUTS IDXOPT STKFUTS

2 Religare Super Ideas Lupin Limited (LUPIN) Kaveri Seed Company Limited (KSCL) Derivative Ideas RECLTD shed around 5% in open interest as short covering was seen in it with some delivery based buying in previous session. Current chart pattern too indicate further surge in its price. We suggest buying RECLTD delivery as per below levels. Strategy: Buy RECLTD between , SL 154, TGT 169 Like other pharma counters, LUPIN is also witnessing recovery. Today, i.e. on Jan 24, it has surged strongly and witnessed a resistance breakout. Indications are in the favor of recovery to continue. Traders can accumulate fresh in the given range. KSCL has been struggling around the resistance zone of multiple moving averages for last five months and now trading on the verge of fresh breakdown. We advise using any uptick to create fresh shorts in the given range. Investment Pick - GNA Axles Scrip CMP Recommendation Price Target Duration GNA Months GNA Axles s total income and Net profit increased by 40.9% and 55.9% respectively on yoy basis. In 9MFY18, the company derived ~45% of its revenue from export market, the outlook for which remains healthy considering significant pickup in truck demand in rth American markets. Also, domestic outlook for tractors and MH&CVs continues to remain strong. GNA is also expanding its axle capacity to meet the rising demand and is likely to launch axles for LCVs and SUVs in FY19-20E, which would further add to its revenues. Thus, considering strong business outlook, capacity expansion, entry into new segments and improving margins, we recommend a Buy on the stock with a target of Rs

3 Religare Investment Calls Name of the Company Reco Date Reco Price Target Price Upside % Previous day Closing Price Indo Count Industries Ltd. 17-May % SML Isuzu 25-May-17 1,247 1, % CRISIL 01-Aug-17 1,858 2, % 1,973.7 LIC Housing Finance 09-Aug % Eicher Motors Ltd 09-Aug-17 31,630 40, % 26,404.1 Wonderla Holidays 17-Aug % The Byke Hospitality 17-Aug % Tata Communications 18-Sept % Century Plyboards 07-v % Kajaria Ceramics Ltd. 09-v % Srikalahasthi Pipes Ltd 10-v % Force Motors 13-v-17 3,328 4, % 3,285.6 Castrol India Ltd 15-v % Sutlej Textiles 17-v % Swaraj Engines Ltd 21-v-17 1,888 2, % 2,009.2 Bharat Electronics Ltd. 22-v % Asian Granito India Ltd. 29-v % Nilkamal Ltd. 29-v-17 1,791 2, % 1,950.7 Garware Wall Ropes Ltd 1-Dec , % 1,018.5 Fiem Industries 6-Dec , % Time Technoplast 28-Dec % GNA Axles 22-Jan %

4 Corporate Action Calendar January 2018 (Stock Dividend) Sun Mon Tue Wed Thu Fri Sat Excel Realty N Infra Ltd Corporate Action Calendar January 2018 (Cash Dividend) Sun Mon Tue Wed Thu Fri Sat Bajaj Corp Ltd Tata Consultancy Services India Grid Trust Mindtree Ltd 25 Siemens Ltd Economic Calendar January 2018 Sun Mon Tue Wed Thu Fri Sat Eight Infrastructure Industries

5 Result Calendar January 2018 Sun Mon Tue Wed Thu Fri Sat Advik Capital Ltd ALKALI METALS LTD. ASIAN PAINTS LTD. Aunde India Limited-$ AXIS BANK LTD. DEWAN HOUSING FI- NANCE CORPORATION GUJARAT NARMADA VALLEY FERTILIZERS & CHEMICALS LTD. GP Petroleums Limited HAVELLS INDIA LTD. HIMALYA INTERNATIONAL LTD. JUST DIAL LTD. KEY CORP LTD. LLOYDS METALS AND EN- ERGY LTD. MOREPEN LABORATO- RIES LTD. Sagarsoft (India) Ltd Sasken Technologies Ltd Vakrangee Limited-$ VALUE INDUSTRIES LTD. V-GUARD INDUSTRIES VIDEOCON INDUSTRIES VTM LTD. EXCEL GLASSES LTD. 23 ALEMBIC LTD. ARTSON ENGINEERING LTD. CAN FIN HOMES LTD. Crompton Greaves Consumer Electricals Ltd DOLAT INVESTMENTS LTD. Edelweiss Financial Services ENKEI WHEELS (INDIA) LTD. FORCE MOTORS LTD.-$ HESTER BIOSCIENCES LTD. INDIABULLS REAL ESTATE Indiabulls Housing Finance L&T Technology Services MENON BEARINGS LTD.-$ NIIT LTD. ORIENTAL HOTELS LTD. PNB Housing Finance Ltd PRIME SECURITIES LTD. RBL Bank Ltd RANE (MADRAS) LTD. Shemaroo Entertainment SWARAJ ENGINES LTD. Symphony Limited UNITED SPIRITS LTD. V R WOODART LTD. WABCO INDIA LTD. Zenlabs Ethica Ltd 24 BIOCON LTD. ADITYA BIRLA MONEY CANARA BANK CAPITAL FIRST LTD. EVEREST INDUSTRIES Indiabulls Ventures IDEA CELLULAR LTD. InterGlobe Aviation Ltd ION EXCHANGE (INDIA) IRB InvIT Fund JINDAL SAW LTD. KEI INDUSTRIES LTD. LIBERTY SHOES LTD. Larsen & Toubro Infotech MAHINDRA & MAHINDRA FINANCIAL SERVICES LTD. MPHASIS LTD. PFIZER LTD. PIDILITE INDUSTRIES LTD. RAYMOND LTD. SAGAR CEMENTS LTD.-$ SAREGAMA INDIA LTD. VIJAYA BANK 25 ABans Enterprises Ltd AJANTA PHARMA LTD. APL APOLLO TUBES LTD. Avenue Supermarts Ltd DR.REDDY'S LABORATORIES LTD. JINDAL STEEL & POWER LTD. LIC HOUSING FINANCE LTD. MARUTI SUZUKI INDIA LTD. NILKAMAL LTD. Sharda Cropchem Ltd TATA COFFEE LTD. TRANSCORP INTERNATIONAL LTD. TUMUS ELECTRIC CORPORATION LTD. UNIPHOS ENTERPRISES LTD. UPL Limited VICTORY PAPER & BOARDS (INDIA) LTD. V.I.P.INDUSTRIES LTD.-$ YASH TRADING & FINANCE AVANTEL LTD. BNK CAPITAL MARKETS LTD. DIVI'S LABORATORIES LTD. EVERLON SYNTHETICS LTD. IND Renewable Energy Ltd JASCH INDUSTRIES LTD. MAYUR FLOORINGS LTD. PERSISTENT SYSTEMS LTD. PRATIK PANELS LTD. RAMMAICA (INDIA) LTD. SRG HOUSING FINANCE LTD. 5

6 Research Product Basket For cash market trading Call / Product Call Frequency. of calls Avg open call duration % funds allocated Intraday Calls Intraday 2-3 < 1 day 25% Live / RMD Calls Daily days 30% Master Pick Weekly 1 1 month 15% Religare Alpha Opportunity NA 2-3 months 20% Cash NA 10% Intraday Calls Live / RMD Calls Master Pick Religare Alpha Cash Total For 1L margin* Per Call 25,000 8,000 30,000 4,000 15,000 5,000 20,000 As per weightage These calls are flashed live on Ms Lync and ODIN with the purpose of squaring off positions on the same day. As a policy, we restrict our intraday cash market calls to less than 4 calls a day. Hence, funds should be allocated accordingly to have provision to trade in all calls. 2 super ideas are flashed in RMD daily with a view of 3-4 days. Additionally as per market opportunity, we flash live calls during the day (including BTST calls). 3-4 such calls are made on a daily basis which might be open for 3-4 days. Funds should be allocated keeping in mind that there will be 7-8 such open calls daily. This is our weekly recommendation shortlisted on the basis of techno-funda analysis. 15% of funds is recommended to be allocated for Master Pick considering that there will be 3 open calls. The average open duration for this call will be 1 month. This is a portfolio of 8-10 stocks which are held with a view of 2-3 months. It is recommended to allocate 20% of funds for building this portfolio which will provide stability to the overall trading portfolio. 10,000 10% surplus cash in the portfolio should be kept for the purposes of allocating it to opportunities as and when they arrive. For derivative market trading Call / Product Call Frequency. of calls Avg open call duration % funds allocated Derivative Ideas Daily days 40% Live calls Intraday / Daily days 50% Cash NA 10% Derivative Ideas Live Calls Cash For every client, the advisor must allocate a specific proportion of funds for trading and investing depending on the risk taking ability and willingness of the client and their investment goals. The below mentioned product basket tries to address the way to deal with the trading portfolio (cash/derivative) for optimum effectiveness of research calls. It is recommended to divide your trading funds for various types of calls and not invest the entire amount for 1 or 2 calls only. Total For 1L margin* Per Call 40,000 40,000 50,000 50,000 1 derivative idea is shared in RMD daily. It can be a plain vanilla F&O buy/sell call or an option strategy. Funds should be allocated assuming 2 such calls will be open at any time. These calls are open for 3-4 days on an average. These calls are flashed on MS Lync and ODIN during live market hours. These calls can be intraday or with a view of 2-3 days. Funds should be allocated considering 2 such calls will be open at any time. 3/4 times, these calls will be on Nifty / Bank Nifty only. It is recommended to hold 10% cash to capitalize on any opportunity that may arise in markets. 10,000 6

7 Team Members Hitesh Agrawal Ajay Pasari, CFA Ajit Mishra Manoj M Vayalar Mehernosh Khurshed Panthaki Nirvi Ashar Rohit Khatri Suhanee Shome hitesh.agrawal@religare.com ajay.pasari@religare.com ajit.mishra@religare.com manoj.vayalar@religare.com mehernosh.panthaki@religare.com nirvi.ashar@religare.com rohit.khatri@religare.com suhanee.shome@religare.com 7

8 Before you use this research report, please ensure to go through the disclosure inter-alia as required under Securities and Exchange Board of India (Research Analysts) Regulations, 2014 and Research Disclaimer at the following link : Specific analyst(s) specific disclosure(s) inter-alia as required under Securities and Exchange Board of India (Research Analysts) Regulations, 2014 is/are as under: Statements on ownership and material conflicts of interest, compensation Research Analyst (RA) [Please note that only in case of multiple RAs, if in the event answers differ inter-se between the RAs, then RA specific answer with respect to questions under F (a) to F(j) below, are given separately] S.. Statement Answer I/we or any of my/our relative has any financial interest in the subject company? [If answer is yes, nature of Interest is given below this table] I/we or any of my/our relatives, have actual/beneficial ownership of one per cent. or more securities of the subject company, at the end of the month immediately preceding the date of publication of the research report or date of the public appearance? Yes I/we or any of my/our relative, has any other material conflict of interest at the time of publication of the research report or at the time of public appearance? I/we have received any compensation from the subject company in the past twelve months? I/we have managed or co-managed public offering of securities for the subject company in the past twelve months? I/we have received any compensation for brokerage services from the subject company in the past twelve months? I/we have received any compensation for products or services other than brokerage services from the subject company in the past twelve months? I/we have received any compensation or other benefits from the subject company or third party in connection with the research report? I/we have served as an officer, director or employee of the subject company? I/we have been engaged in market making activity for the subject company? Nature of Interest ( if answer to F (a) above is Yes : Name(s) with Signature(s) of RA(s). [Please note that only in case of multiple RAs and if the answers differ inter-se between the RAs, then RA specific answer with respect to questions under F (a) to F(j) above, are given below] Copyright in this document vests exclusively with RSL. This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any SS... Name(s) of RA. Signtures of RA Serial Question of question which the signing RA needs to make a separate declaration / answer Yes. other person or published, copied, in whole or in part, for any purpose, without prior written permission from RSL. We do not guarantee the integrity of any s or attached files and are not responsible for any changes made to them by any other person. 8