Religare Morning Digest

Transcription

1 Nifty Outlook Nifty opened with an uptick and ended with modest gains after four days of sideways move. Initially, firm global markets boosted the sentiments which further improved with encouraging auto sales figure and rebound in the select index majors. ticeable recovery was witnessed on broader front too while sectoral indices traded mixed. Participants are pining hopes on monsoon after the recent favorable updates and we do not expect this to fade away soon. Also, rotational buying on sectoral front is added positive. Put together, markets are likely to extend the prevailing momentum and any intermediate dip should be considered as buying opportunity. w, Nifty has immediate support at News VWAP (Expiry till date) Max OI (Call) Max OI (Put) NIFTY Bajaj Auto disappointed the street reporting a 10% YoY decline in total sales for the month of May, which stood at 3.14lac units, impacted by domestic as well as exports businesses. Domestic sales fell by 15%, while exports declined by 3%. Its motorcycle sales fell by 10% to 2.77lac units. Hero MotoCorp reported 8.7% YoY increase in sales at 6.34lac units in May. Further, TVS Motors posted a growth of 15.7% YoY in sales during the month of May 2017 at 2.82lac units. Its two wheelers sales grew by 15.6%, while scooters and three wheeler sales were up 30.9% & 20.5% respectively. Exports grew by 14.3%. Shares of GMR Infrastructure closed higher by 13.7% after news on significant reduction in its gross debt and improvement in Debt / EBITDA ratio. Reflecting its turnaround efforts and improvement of financial health of the group, the management informed that its gross debt reduced to Rs. 19,856cr in FY17 from Rs. 37,480cr in FY16. Also, the company s debt to EBITDA ratio for FY17 improved to 4.3 from 10.2 in FY16. Religare Super Ideas** Scrip Buy/Sell CMP Initiation Range SL* Target SUNTV BUY VGUARD BUY **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 YESBANK BUY FUTS SELL 1560 CE 350 INITIATION RANGE SL TAR- GET Sector Name AUTO FMCG PHARMA Outlook STABLE STABLE WEAK Category Amt. MTD FYTD FII DII *FII & DII data as on 1st June 2017 NO OF CON- TRACTS TURNOVER IN CR IDXFUTS IDXOPT STKFUTS

2 Religare Super Ideas Sun TV Network Limited (SUNTV) V-Guard Industries Limited (VGUARD) Derivative Ideas YESBANK added around 10% of open interest as fresh long positions. On charts, it has rebounded from 50% Fibonacci retracement levels of last upmove from 1090 to At current juncture, it is trading on verge of breakout from Inverted Head & Shoulder pattern on intraday charts. Hence, we suggest doing a covered call in YESBANK as per levels mentioned below. Strategy: BUY YESBANK JUNE FUTS AT & SELL 1560 CE AT 10-12, SL 1425, TARGET Post decline from its record high, SUNTV has registered a fresh buying pivot on 2nd June, after hovering in narrow range near to its short term moving averages on daily chart. Hence, we advocate buying this stocks as per mentioned levels. After a sharp up move in price, VGUARD has witnessed marginal profit taking from its 52-week high, and now consolidating in narrow range near to its support zone. We feel this is a healthy pause to initiate fresh longs in the given range. Investment Pick - TV Today Network Ltd Scrip CMP Recommendation Price Target Duration TVTODAY Months TV Today reported healthy Q4FY17 result as advertising revenue is back on growth track, post subdued growth in Q3FY17 due to demonetisation. Net sales increased by 16.2% yoy. The company's prudent operating cost management led EBITDA improvement by 45.6% yoy. Advertising revenue for broadcasting industry is expected to grow at a healthy rate in FY18E/19E. TVToday's strong positioning in news genre will benefit the company to garner higher ad revenue. The company would be a key beneficiary of ad industry growth in news segment, considering its reach and positioning. We expect revenue, EBITDA and net profit to grow at a CAGR of 15.0%, 20.6% and 11.1% over FY17-19E. We maintain BUY on the stock with a price target of Rs

3 Religare Investment Calls Name of the Company Reco Date Reco Price Target Price Upside % Previous day Closing Price Nandan Denim 5-Jan % Atul Auto 22-Mar % Cigniti Technologies Ltd. 5-Oct % Fiem Industries 26-Dec-16 1,089 1, % Greenply Industries 3-Feb % Talwalkars Better Value Fitness 20-Feb % Arman Financial Services 22-Feb % Castrol India 7-Mar % Berger Paints (I) Ltd 15-Mar % The Byke Hospitality 11-Apr % Mayur Uniquoters Ltd 18-Apr % CRISIL 26-Apr-17 1,911 2, % 1,906.5 LIC Housing Finance Ltd 28-Apr % Zee Entertainment Enterprises 12-May % Force Motors 17-May-17 4,497 5, % 4,318.0 Indo Count Industries Ltd. 17-May % Huhtamaki PPL Ltd 19-May % Bajaj Finance Ltd 22-May-17 1,268 1, % 1,361.3 SML Isuzu 25-May-17 1,247 1, % 1,237.2 Jamna Auto 26-May % Sutlej Textiles 29-May , % Swaraj Engines Ltd. 29-May-17 1,810 1, % 1,898.5 Century Plyboards 29-May % Jain Irrigation Systems Ltd. 30-May % NRB Bearings 30-May % Srikalahasthi Pipes Ltd 30-May % Wonderla Holidays 31-May % Tv Today Network 2-June %

4 Corporate Action Calendar June 2017 (Dividend) Sun Mon Tue Wed Thu Fri Sat GRUH FINANCE LTD. ITC LTD. MAHINDRA HOLIDAYS VTM LTD Corporate Action Calendar June 2017 (Interim Dividend) Sun Mon Tue Wed Thu Fri Sat MANAPPURAM FINANCE LTD. 06 IRB INFRASTRUCTURE DEVELOPERS LTD. 07 MAN INFRACONSTRUCTION LTD. 08 AUROBINDO PHARMA LTD Corporate Action Calendar June 2017 (Final Dividend) Sun Mon Tue Wed Thu Fri Sat BOSCH LTD. BHARAT PETROLEUM CORPORATION LTD. TORRENT POWER LTD. 09 INDAG RUBBER LTD.-$ KITEX GARMENTS LTD. RALLIS INDIA LTD. 10 Corporate Action Calendar June 2017 (Special Dividend) Sun Mon Tue Wed Thu Fri Sat LLOYD ELECTRIC & ENGINEERING LTD. 10 4

5 Current Portfolio and Performance Summary as on 2 nd June 17 Stock Sector Entry Date Weight Reco price (`) CMP (`) Emami Consumer Goods August 3, % 1,151 1,139 Castrol India Energy August 5, % Sml Isuzu Auto February 6, % 1,265 1,237 Amara Raja Batteries Auto March 22, % Power Grid Corporation of India Energy April 12, % Bajaj Finance Financial Services May 5, % 1,292 1,361 TV Today Network Media & Ent. May 10, % Tata Motors Auto May 26, % Capital First Financial Services May 26, % Cash 10.5% Total 100% 5

6 Historical Performance as on 2 nd June 17 Performance Matrix 1-Month 3-Month 6-Month 1-Year Since Inception Religare Alpha -1.0% 10.3% 14.9% 17.3% 37.9% Nifty 3.6% 8.5% 19.4% 17.5% 22.4% Outperformance -4.7% 1.8% -4.4% -0.2% 15.4% 6

7 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 7

8 Team Members Hitesh Agrawal Ajay Pasari, CFA Ajit Mishra Archana Gude Manoj M Vayalar Mehernosh Khurshed Panthaki Siji A Philip Suhanee Shome Swati Saxena Vipin Kumar hitesh.agrawal@religare.com ajay.pasari@religare.com ajit.mishra@religare.com archana.gude@religare.com manoj.vayalar@religare.com mehernosh.panthaki@religare.com siji.philip@religare.com suhanee.shome@religare.com swati.saxena@religare.com vipin.k@religare.com 8

9 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. 9