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1 July 2016 CONTENT 03 Monthly Wrap-up 04 Dividend Yield Stocks 05 Technical Monthly Outlook 06 Technical - Stock Recommendation 07 Derivatives Monthly Report

2 Team Members Hitesh Agrawal Ajit Mishra Ajay Pasari, CFA Gaurav Sharma Manoj M Vayalar Swati Saxena Vipin Kumar hitesh.agrawal@religare.com ajit.mishra@religare.com ajay.pasari@religare.com gaurav.sh@religare.com manoj.vayalar@religare.com swati.saxena@religare.com vipin.k@religare.com Dear Investor, An unexpected outcome of the UK referendum, which saw the UK voters opt for an exit from the Eurozone took global financial markets by surprise. The impact of this was visible across all asset classes like equities, commodities, currencies, bonds, etc. all of which saw considerable knee-jerk reactions. However, the week after saw some stability return as the UK voters verdict was digested by various markets. Last month, global central banks kept their policy rates unchanged citing feeble economic conditions globally. Even the RBI kept status quo in its monetary policy due to higher inflation and important global events, but maintained its accommodative stance. Despite the intra-month volatility, the Nifty gained 1.6% in June aided by expectations of an above normal monsoon this year coupled with the government s focus on reforms with announcements in sectors like aviation and pharma, Mining policy and 7th pay commission hike clearance. tably, the action was broad-based during the month with Small-cap and Mid-cap indices gaining ~6% and ~3% respectively. Among sectoral indices Metals, FMCG, Oil & Gas surged between 4-8%, whereas IT sector declined 3.2%. FIIs continued to buy Indian stocks with a net buy figure of nearly Rs5,175cr in June. Domestics MFs were marginal net sellers in June of about Rs86cr. On macro front, the IIP growth for April shrank 0.8% compared to a growth of 0.3% in March 2016 led by contraction in manufacturing activities and lack of private capex. CPI inflation zoomed to 5.8% in May due to high food inflation. WPI for May increased by 0.8% compared to 0.3% in the previous month. Trade deficit for May stood at $6.3 bn, where exports shrank 0.8% to $22.2 bn and imports declined 13.2% to $28.4 bn. June saw the government taking steps to boost FDI in various sectors and also approve new policies, which supported investor sentiments in the backdrop of global volatility. Also, even though the monsoon for June was below average, it picking up pace in the last week of the month was welcomed. Coupled with a good monsoon, the 7 th Pay commission hike will aid in revival of consumption in the coming months. Global situation continues to remain weak with the recent decision of UK to leave the European Union. This will not only force ECB and BoE to lend more support to the region, but now the probability of a US Fed rate hike has been pushed forward to December, post the US presidential elections in vember. So far, the Indian market is giving indications of the momentum sustaining as was evident in the manner in which both the events BREXIT and REXIT were taken in stride. Going forward, we believe, that the impact of a BREXIT on Indian equities could be more on account of global capital flows getting affected, as investors may get risk averse, rather than a trade related impact on the Indian economy. However, in the near term, Q1 earnings season, progress of monsoon and monsoon parliament session will lend cues to the market. Hitesh Agrawal EVP & Head Retail Research Religare Securities Limited 2

3 FUNDAMENTAL MONTHLY WRAP-UP Indian Indices BSE Sectoral Indices Close 1 Month 1 Year BSE Metal 8, BSE Cons Durable 11, BSE Cap Goods 14, BSE FMCG Sector 8, BSE Healthcare 15, BSE IT Sector 11, BSE PSU 6, BSE Teck 6, BSE Auto 19, BANKEX 20, BSE Oil&Gas 9, BSE Power 1, BSE Realty Index 1, Close price as on June 30, 2016 FIIs Investments In Indian Equities Net Investment (` Crore) Close 1 Month 1 Year SENSEX 26, CNX NIFTY 8, BSE MIDCAP 11, BSE SMLCAP 11, BANK NIFTY 17, Month Jan 22, Feb 24, , Mar 10, , Apr 5, , , May 22, , Jun -11, , Nifty PE Movement Market Overview Overcoming the impact that BREXIT may have on India and Indian equities over the medium-to-long-term, the Nifty staged a smart ~400-points rally to scale the 8,300 mark in June. The surge was supported by gains in FMCG, Metals and Oil & Gas indices. IT index, however, declined 3.2% due to concerns of slowdown in business from the Eurozone in wake of the uncertain scenario post Brexit. Expectations of an above normal monsoon this year coupled with the government s focus on reforms with announcements in sectors like aviation and pharma, Mining policy and 7th pay commission hike clearance also supported sentiments. Market Outlook The major near-term factors that would guide the Indian stock market would be the progress of monsoon and June quarter earnings season. GST Bill passage in the monsoon session of Parliament is also on investors radar. Globally, while the markets have taken Brexit in their stride, volatility in the coming months cannot be ruled out as global economic conditions continue to remain challenging. A US Fed rate hike is unlikely in our view in July in wake of the unprecedented verdict given by the UK voters. However, every volatility will throw up great investment opportunities for investors with a medium-to-long-term investment horizon. As far as the short-term is concerned, we see the Nifty s range at 8,200 8,600, implying that the Nifty has scope to rise to higher levels in the near-term. Net Investment (` Crore) Month July -6, , , Aug -5, , , Sept 13, , Oct 15, , v 8, , Dec 16, Nifty Dividend Yield Chart 3

4 Dividend Yield Stocks Dividend yield is one of the main factors to consider when investing in dividend-paying stocks. It is an indicator of the return that the investors are earning on their shares. In this list we have selected 16 stocks based on their financial performance. Investors interested in dividend income may consider the stocks in this list. Company Name Industry Financial Year End Mcap (Rs cr.) Equity (Rs cr.) Price June 30, 2016 Face Value Book Value EPS P/E (x) Div. / Share [FY16] Div. / Share [FY15] Div. / Share [FY14] Div. Yield (%) Rural Elec.Corp. Finance , Coal India Mining , Oil India Oil Drilling , Sun TV Network Entertainment , Neyveli Lignite Power , O N G C Oil Drilling , SJVN Power , Balmer Lawrie Diversified , Chambal Fert. Fertilizers , Manappuram Finance Finance , Tata Chemicals Fertilizers , R C F Fertilizers , Nava Bharat Vent Diversified , Infosys IT , J B Chem & Pharm Pharmaceuticals , Cadila Health. Pharmaceuticals , Source - Capitaline 4

5 TECHNICAL MONTHLY OUTLOOK The Month That Was:- Nifty gained points in the month of June, Outlook for Nifty 50 ( ) Support 8200/8090/8000 Resistance 8470/8600/8680 Below is a summary of Top Nifty Gainers & Losers: Top Nifty Gainers June 2016 Scrip Name Close Price* (`) HINDALCO AMBUJACEM BPCL NTPC POWERGRID Top Nifty Losers for June 2016 Scrip Name Close Price* (`) INFRATEL IDEA TATAMTRDVR TECHM AUROPHARMA *Closing of last trading day of the month Breadth of Nifty stocks was positive 41 stocks closed in green while 10 stocks closed in red in the month of June, Relative comparison shows Realty, PSU and Metal Index were the outperformers whereas IT and TECk Index were the underperformers in June, Sector Relative Performance In an eventful month, Nifty upheld its positive tone amid volatility and gained over one and half percent. It remained sideways within for most part of the month and witnessed breakdown post Brexit. However, things again turned favorable and markets not only recovered the losses in the last week but also inched higher, supported by firm domestic cues and tracking rebound across the global markets. This month, progress of monsoon and fate of GST bill in upcoming session of the parliament will be in focus. Besides, participants will keep a close watch on the earning season, schedule to begin shortly alongside development on the global front. Amid all, charts are in the favor of positive momentum to continue and Nifty has potential to test 8600 in the near future. On downside, any decline to 8200 should be considered as buying opportunity. We believe Midcap and Smallcap are likely to outperform in days to come so traders should add quality stocks during any intermediate corrective moves. * All the sectors have been compared with Nifty & the zero line represent Nifty. The movement of the sector vis -a-vis Nifty whether they outperform or underperform is shown in the above chart. It shows which sectors have attracted inflows and also the sectors from where money has exited. *Close price as on July 05,

6 TECHNICAL Outlook for Bank Nifty ( ) Support 17750/17430/17000 Resistance 18250/18500/19000 Bank Nifty, in line with Nifty index, also ended higher and gained nearly two percent. It remained in range for most part of the month and settled at in the end. After prolong corrective phase, the PSU banking counters also witnessed swift rebound in the passing month and posted exceptional gain; however, their broader trend is still down. At the same time, private banking counters maintained their outperformance, helping banking sector to sustain at higher levels. Despite the rebound in PSU banks, we still suggest preferring private banking counters for trading and investment. Among private banking pack, Kotakbank, HDFC bank and Indusindbk can be considered at current level but wait for some consolidation in Yesbank for fresh buying with short term trading view. Stock Recommendations For July PI Industries Limited (PIIND) CMP ` * Stop Loss ` 670 Target ` 880 Buy Range ` Bajaj Auto Limited (BAJAJ-AUTO) CMP ` * Stop Loss ` 2400 Target ` 3200 Buy Range ` PIIND is reputed name within Agri input product market in India, having experience of over five decades; this company is very popular among Indian farmers. In recent past, it has gained nearly 50% ( ) and is currently trading at all-time highest levels. As per report released by Indian meteorological department, above average rainfall is expected this year. This in itself is a booster for the companies driving business form rural market, among them agro-chemical sector is at the top. On technical front, it posted breakout from declining channel formation on monthly chart (shown above) in June-16. It is an upside continuation formation indicating bullish bias to persist. Hence, one can accumulate in range with 670 stop loss for 880 targets. BAJAJ-AUTO is in long-term uptrend and has performed exceptionally well in past couple of months. It has rallied form 2180 till 2700 mark during March-June-16, i.e. return of 23% in just four months. Considering overall scenario, the domestic stock markets are trading higher in anticipation of a better monsoon and proposed 7 th pay commission for central government employers. Both these factors have direct/ indirect impact on the two-wheeler market. Hence, we advocate buying in range with stop loss placed at 2400 for the target of *Close price as on July 05,

7 DERIVATIVES DERIVATIVES MONTHLY ROLLOVER REPORT June Expiry Derivatives Summary Sector Rollover (%) Nifty Index closed up at 8287, after some volume weighted average price (VWAP) selling of points on Nifty futures led to the closing of trade in Nifty index below 8300 in the last 30 min of the trade. The Nifty futures long roll cost (difference between current and next month futures) was at around 38 bps vs 18 bps, indicating fresh long rollovers. Nifty futures July contract started with around 1.84 cr vs 1.94 Cr open interest. Bank Nifty futures have also seen an open interest at 18.3 lkh vs lkh, last series. At expiry, VIX was at 16.7% levels implying a 312 odd points swing in the Nifty in next 30 days. The highest open Interest is at Nifty 8000 PE and 8500 CE. 8000put Open interest stands at 42 lkhs and 8500call Open interest at 43lk. July Series Outlook Rollover Synopsis Rollover % Nifty Futures has rolled around 78% vs 73% with respect to last month, and the open interest for the new july contract is lower by around 10 lkh due to some short covering. Bank Nifty Futures rolled at around 77% vs 71% compared to last month. Fresh long buildup in bank nifty has led to open interest of July contract at 18.3lk up by around 2lkh with respect to last month. The July weighted average price for Nifty and BankNifty futures are at 8260 and respectively. These might act as the support for indices for the month of July. Highest open interest is at 8000 PE and 8500 CE. Vix is likely to be at 14% on lower side and around 18.8% on the higher side. The range for Nifty in July series might be Bank nifty July futures has a resistance near 18400, if this levels is breached on closing basis, Bank nifty can rally till Sector-wise Realty, Textile, Cement, Pharma and Oil & Gas gained the most in the June series. 87%, Fertilisers, Infrastructure and 86% each, are the sectors where highest rollover was witnessed, whereas 78%, Capital 77%, 74% and 73% are the sectors where lower rollovers were witnessed. Sector wise we expect Pharma to lead in this series at least for first half of the July contract. CNX Pharma index might rally till Lupin and Cipla are likely to outperform the Pharma index. The range that we advocate for July first fortnight is for Nifty and for Bank nifty it is at Banks have been outperforming in the month of June. Fresh long buildup was seen in bank nifty futures and short covering in Nifty futures implying the downside might be limited in the short term. Bank Nifty has a very good support at 17400, and for the Nifty the best support is seen at 8200 levels. Vix is currently at 15.65% and is likely to be in 14% to 18.8% for the major part of July. Bank Nifty falling only below 17600, some long unwinding can be expected. We advocate buying selective pharma stocks as we are bullish on pharma in July series. STRATEGY: BUY CIPLA JULY 515, SL 505, TARGET

8 Open Interest (in lakhs.) DERIVATIVES NIFTY July Series Option Data Nifty Open Interest Call Put TOP 5 PRICE GAINERS Expiry-to-Expiry TOP 5 PRICE LOSERS Expiry-to-Expiry STOCK NAME ABIRLANUVO 18.1 JPASSOCIAT 15.7 ALBK 15.3 DRREDDY 10.6 PNB 9.7 STOCK NAME TATAMTRDVR -8.9 JUSTDIAL -7.8 TECHM -7.1 IDFC -5.4 TATAELXSI -5.3 TOP 5 STRONG ROLLOVERS STOCK NAME BEL 93 ADANIPORTS 93 COLPAL 93 SUNTV 92 DHFL 92 TOP 5 WEAK ROLLOVERS STOCK NAME PFC 46 PCJEWELLER 48 OFSS 58 IDEA 60 RELCAPITAL 63 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 Tick appropriate 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? 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). Yes [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] SS... Name (s) of RA. Signtures of RA Serial Question of question which the signing RA needs to make a separate declaration / answer Yes. 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 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

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