Index MarketView 1CompanyUpdate 2AroundtheEconomy 3KnowledgeCorner 3MutualFund 4CommodityCorner5ForexCorner 6ReportCard 7 Editor&ContributorMargiShahSpecialContributorsAsheshTrivediAdityaNaharForsuggestions,feedbackandqueriesjstreet@jhaveritrade.com

Market View:

Policy action and reforms will be the key driver After postponing the rate hike by Federal Reserve and an easy monetary policy in Europe and Japan, the broader picture encourages buying in equity and some benefited emerging economies like India. Now the scenario has emerged whereby there will be a differentiation in emerging countries so far as the selection for investment by FII is concerned. Falling crude-oil prices and commodity prices coupled with domestic demand and chances of rate easing will put India as the shining star amongst the EM economies. With this beneficial background, In-dia needs reforms / easing to withstand the global slowdown and attract international investors. The Finance Minister in his interview mentioned that many reforms are in pipeline and will exceed the expectations of the market. The market is also keenly watching the final countdown of monsoon and the resultant picture of rural economy. The late surge in monsoon may also improve the overall scenario. But the key trigger will be the rate cut expectations on 29th September, 2015and the delayed policy tightening by US Fed has increased the chances of rate cut by RBI on 29th September,2015. It is also important to note that many prominent bankers including Mr. Aditya Puri opined that irrespective of the rate cut by RBI, the lending rates are going to fall in India paving the way for cheap availability of finance to corporate India. The market expects improvement in corporate earnings within two quarters which is underpinning the market at present and going forward. It is advisable for medium to long term investors to start putting their money in installments in sound scripts where there is minimum leverage, reasonable cash generation and relatively sta-ble future business scenario. Technically any rise above 8150 will take the market to 8350 with strong support at 7850 / 7950. Kamal Jhaveri MD- Jhaveri Securities

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Vol.: 26121st September,2015

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Company Basics

BSE Code 503806

NSE Symbol SRF

EQUITY (` in Cr.) 57.42

MKT.CAP (` in Cr.) 6582.92

Financial Basics FV (`) 10.00 EPS (`) 52.74 P/E (x) 21.74 P/BV (x) 2.90 BETA 1.3170 RONW (%) 10.52

Share Holding Pattern Holder's Name % Holding Foreign 16.04 Institutions 12.59 Promoters 52.38 Non Prom. 0.00 Public & Others 15.17 Government 3.82

Company overview SRF Limited is multi-product, multi-business organization and industrial intermediate segment. The company was incorporated in 1970. The business divisions of the company include Technical Textile Business, Chemical Business, Packaging Films Business and Engineering Plastics Business. The company has 12 production plant across 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 in international market with exporting around 75 countries. Investment Rational SRF is one of the leading and sole domestic supplier of HFC 134 a and growth in passenger vehicles spur sales

This elements contributed 23% of SRFs fluorochemicals revenues. The market-size of HFC-134a in India is 8.0KTPA, which is 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 a capacity of 17.5KTPA, SRF is the sole domestic producer of R-134a and its market share increased to 41% in FY15. Imports have broadly remained flat at ~4,700 MT during the past 5 years.

Specialty Chemical is on strong footing

SRF is on a strong footing in Specialty Chemicals, as it is knowledge driven and has high entry barriers. We expect the business 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 continue to enjoy PBIT margin of 35%.

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

Valuation : SRF Ltd. is currently trading at 15.74x FY16E EPS of Rs.72.80 and 12.51x FY17E EPS ofRs. 91.60, valued the stock at 15xFY17E (three year average) with the target price of Rs. 1374.

Company Update : SRF Ltd.

Vol.: 26121st September,2015

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Weekly Market Recap :

On the macro front, the latest data showed that inflation based on the consumer price index (CPI) remained benign last month. The headline CPI inflation eased to 3.66% in August 2015 from 3.69% in July 2015.

The data announced on Monday, 14 September 2015, showed that the annual rate of inflation based on monthly

wholesale price index (WPI) remained in negative zone. The WPI inflation stood at minus 4.95% (provisional) for the month of August 2015 compared to minus 4.05% (provisional) July 2015.

On global front, at the end of the two-day monetary policy meeting on 17 September 2015, the US central bank held

rates steady amid concerns about the global economic growth, financial market volatility and sluggish inflation at home, but it left open the possibility of a modest policy tightening later this year.

Market Eye Week ahead : The market may remain volatile as traders roll over positions in the futures & options (F&O) segment from the near month

September 2015 series to October 2015 series. The near month September 2015 derivatives contracts expire onThursday, 24 September 2015.

Among global news, a preliminary reading of China's Caixin general manufacturing PMI index for September 2015,

indicating health of China's manufacturing activity will be announced on Wednesday, 23 September 2015. The data on new home sales in US, measuring the number of newly constructed homes with a committed sale during

August month will be out on 24 September 2015. Final second quarter US GDP data will be unveiled on Friday,25 September 2015.

Systematic Risk

The risk inherent to the entire market or an entire market segment. Systematic risk, also known as un diversifiable risk, volatility or market risk, affects the overall market, not just a particular stock or industry. This type of risk is both unpredictable and impossible to completely avoid. It cannot be mitigated through diversification, only through hedging or by using the right asset allocation strategy.

For example, putting some assets in bonds and other assets in stocks can mitigate systematic risk because an interest rate shift that

makes bonds less valuable will tend to make stocks more valuable, and vice versa, thus limiting the overall change in the portfolios value from systematic changes. Interest rate changes, inflation, recessions and wars all represent sources of systematic risk because they affect the entire market. Systematic risk underlies all other investment risks.

Around The World

Vol.: 26121st September,2015

Knowledge Corner :

Mutual Fund Corner

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Source : - www.valueresearchonline.com

Fund CNX Nify (Rebased to 10,000)

Fund Name Scheme Name Birla Sun Life MNC Fund

AMC Birla Sun Life Asset Management Company

Type Others

Category Open-ended and Equity

Launch Date December 1999

Fund Manager Ajay Garg

Net Assets (` In crore ) Rs. 2400.4 crore as on Aug 31, 2015

Fund Performance v/s S&P CNX Nifty

Top 10 Sector Break-Ups Fund (%)

Automobile 20.96 Financial 17.41 FMCG 14.87 Healthcare 12.16 Engineering 10.74 Chemicals 9.78 Cons Durable 4.15 Services 3.87 Construction 1.85 Technology 0.82

Fund Style

Investment Style Growth Blend Value

Large

Medium

Small

Capitalization

Composition (%) Equity 96.83

Debt 4.57

Cash -1.40

Risk Analysis Volatility Measures Standard Deviation 16.42

Sharpe Ratio 1.58 Beta 0.79 R-Squared 0.48 Alpha 19.37

Vol.: 20418th August, 2014

Vol.: 26121st September,2015

History 2012 2013 2014 2015 NAV(Rs) 267.14 294.26 502.89 589.14

TotalReturn(%) 42.37 10.15 70.90 17.15

+/CNXNifty 14.67 3.39 39.51 20.78

+/CNXMNC 14.08 2.41 28.43 9.86

Rank(Fund/Category) 7/31 6/32 6/55 -

52WeekHigh(Rs) 267.14 294.26 502.89 630.80

52WeekLow(Rs) 187.34 235.76 270.73 503.55

NetAssets(Rs.Cr) 364.13 412.78 852.49 -

ExpenseRatio(%) 2.33 2.91 2.72 -

Commodity Corner

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Vol.: 20418th August, 2014Vol.: 26121st September,2015

FUNDAMENTAL: Last week, bullion prices ended with gains where silver prices rallied by more than three percent gains followed by around two per-cent gains in gold prices as the Federal Reserve's decision to leave U.S. interest rates unchanged rattled investors' outlook on the global econ-omy and weighed on equity markets in developed economies. The Federal Reserve kept interest rates unchanged on Thursday, but losses were limited as the central bank left open the possibility of a rate hike later this year. Speaking after the rate statement, Fed Chair Janet Yellen said global economic developments played a major part in the central bank's decision. In deciding when to raise interest rates, the Fed repeated it wanted to see "some further improvement in the labor market" and be "reasonably confident" that inflation will increase. The Fed also forecast that inflation would creep only slowly toward its 2 percent target, which could be seen as a negative for gold, often bought as an inflation hedge. On the physical side, gold discounts in India, the world's second-biggest consumer, widened this week as dealers struggled to offload stocks amid sluggish demand. Chi-nese premiums held steady at $5-$6 despite the overnight jump in prices. On the economic front, a report from the Conference Board showed a slight uptick in its index of leading U.S. economic indicators in August, suggesting economic growth will remain moderate into next year. The Conference Board's leading economic index inched up 0.1 percent in August, while revised data showed no change in July. Gold discounts in India, the world's second-biggest consumer, widened this week as dealers struggled to offload stocks amid sluggish demand. The value of India's August gold imports jumped 140 percent from the same month a year ago to $4.96 billion, the trade ministry said this week. In top consumer China, premiums rose this week to $5-$6 an ounce from around $4 last week. In the week ahead investors will be focusing on U.S. durable goods data as well as reports on U.S. home sales for further indications on the strength of the economy and the likelihood of a near-term interest rate hike. RECOMMENDATION : BUY GOLD @ 26200 SL 25900 TGT 26600-26900. BUY SILVER @ 35500 SL 34800 TGT 36200-37000. FUNDAMENTAL: Base metals prices last week dropped heavily where zinc prices dropped by around 8.86% on prospects of rising global stocks. LME zinc stocks have soared by nearly 200,000 tonnes or 50 percent from early August. Whereas other base metals also dropped as jitters lingered over the health of the global economy after the U.S. Federal Reserve last week delayed an interest rate rise. The Fed's move to delay raising rates because the global economic recovery was not sufficiently entrenched to withstand potential turbulence has soured risk appetite and amplified worries that China's slowdown could derail global growth. The two-day Federal Open Market Committee meeting ended with a decision not to raise interest rates this month. The central bank said a hike will likely come later this year and it has two more scheduled policy meetings before the end of 2015, in late October and mid-December. European and other developed market equities fell after the Fed kept rates unchanged, a decision driven by worries about the global economy, financial market volatility and sluggish inflation at home. Substantial amounts of base metal zinc could be released onto world markets, weighing further on fast falling prices, as major producer Glencore implements a plan to liquidate some of its commodity inventories to help pay off debt. The overhang of inventories in London Metal Exchange (LME) storage facilities, which has surged more than 40 percent since early August, has wrong- footed investors who had earlier this year targeted zinc as a top bet in metals due to closures of big mines that would create shortages. LME zinc inven-tories have surged 43 percent to 608,885 tonnes since August 7, with the bulk of metal arriving at warehouses in New Orleans. Nickels fundamentals remain lacklustre as slow demand improvement in China feeds a feeble downward trend in LME inventories. While nickel prices started September near 2009 lows, there have been signs of promise for the metal as various global factors, including Indonesias decision to continue to ban unprocessed ores, could lead to a price hike as the month draws to a close. Nickel producers face a unique dilemma with many reluctant to put their stock on the market due in part to both near-historic low prices and an oversupply in the market. Demand from stainless steel producers, however, is not expected to be strong, due to low production, previous stocking at lows in earlier September, and no price advantages over NPI. ECOMMENDATION : SELL COPPER @ 355 SL 365 TGT 348-340. SELL ZINC @ 114 SL 116.50 TGT 111-107. SELL NICKEL @ 660 SL 685 TGT 640-620.SELL ALUMINIUM @ 109 SL 111 TGT 107.50-105.00.SELL LEAD @ 113 SL 115.50 TGT 110-107.50. FUNDAMENTAL: Energy prices last week ended with losses where natural gas prices dropped more than four percent on concerns the market will become more oversupplied in the coming weeks as demand fades whereas crude oil prices dropped by around one percent losses after the U.S. cen-tral bank warned on the health of the global economy and bearish signs persisted that the world's biggest crude producers would keep pumping at high levels. Oil services firm Baker Hughes's report on the weekly U.S. oil rig count showed a drop of eight rigs this week. It was the third weekly decline of the rig count, a sign that a renewed fall in crude prices since July may be slowing some drillers from returning to the well pad in a bigger way. Oil started the session lower after OPEC member Kuwait said it would take time for the oil market to balance, indicating that the producer group would continue defending market share over production cuts to bolster prices. Other sources at OPEC backed this view, saying they expected oil prices to rise by no more than $5 a barrel per year to reach $80 by 2020, with a slowing in rival non-OPEC production growth not enough to absorb the current oil glut. Russia acknowledged for the first time it would cut production if oil prices fall below $40 a barrel, floating the possibility that one of the biggest oil pro-ducers may resort to proactive measures to prop up prices. Natural gas prices also seen on pressure after weekly inventory data showed that sup-plies grew more than expected last week. Stockpiles now stand at 3.334 trillion cubic feet, 3.9% above the five- year average for this week. The government data showed that the natural gas in storage rose by 68 Bcf (billion cubic feet) for the week ending September 4, 2015. Market surveys project that natural gas stocks could rise by 80 Bcf for the week ending September 11, 2015. Total gas held in US storage hubs amounted to 3.334 trillion cubic feet, slightly narrowing a surplus over the five-year average of 3.209 trillion from 4.1% a week earlier. Supplies were also 15.8% above the year-ago stockpiles level of 2.878 trillion cubic feet. In the week ahead investors will be focusing on U.S. durable goods data as well as reports on U.S. home sales for further indications on the strength of the economy and the likelihood of a near-term interest rate hike. Recommendation : SELL CRUDE OIL @ 3100 SL 3220 TGT 2950-2850. SELL NAT.GAS @ 176 SL 184 TGT 170-165.

BULLION

BASE METALS

ENERGY

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Commodity Corner

USD/INR

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Forex Corner

EUR/INR

GBP/INR

JPY/INR

Market Eye Week ahead :

The Indian Rupee appreciated during the previous week as Fed left interest rates unchanged as concerns eased over capital outflows.

The domestic currency opened lower at Rs 66.63 and made low of 65.76 against the US Dollar and then closed near to

lows of the week. Dollar last weeks uptrend has reversed on daily chart and lower levels of 65.50 and 65.20 can be seen in coming week.

Level S2 S1 CP R1 R2 High Low Close

USD/INR 65.17 65.50 66.08 66.41 66.99 66.67 65.76 65.82

Level S2 S1 CP R1 R2 High Low Close

JPY/INR 54.66 54.96 55.36 55.66 56.06 55.77 55.07 55.25

Level S2 S1 CP R1 R2 High Low Close

GBP/INR 101.34 102.08 102.66 103.40 103.98 103.23 101.91 102.83

Level S2 S1 CP R1 R2 High Low Close EUR/INR 74.12 74.67 75.16 75.71 76.20 75.65 74.61 75.22

Market Recap :

Vol.: 26121st September,2015

The Indian rupee dropped down sharply against the US dollar early on Monday, 21 September 2015 on foreign funds outflows amid fresh demand for the American currency from importers.

On Friday, rupee had surged 79 paise, its biggest single-day gain so far this year -- to settle at the one-month high of 65.67 following heavy selling of the greenback after worries over US interest rate hike abated.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was quoted up 0.07% to 95.43.

Last week, the dollar regained lost ground against most of the other major currencies, rebounding from multi-week lows hit in the previous session in the wake of the Federal Reserve's decision to hold off from hiking interest rates

The macroeconomic data, trend in global markets, investment by foreign portfolio investors (FPIs), the movement of

rupee against the dollar and crude oil price movement will dictate trend on the bourses in the coming week. India's weather office, the India Meteorological Department (IMD), said in a daily report issued on 17 September 2015 that

for the country as a whole, cumulative rainfall during this year's monsoon season was 15% below the Long Period Average (LPA) until 17 September 2015. The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.

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J Street Recommendations Report Card

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SRFLtd. 21/09/2015 1140 1140 1374 0% Buy

It'snotimportantwhetheryouarerightorwrong,Itsabouthowmuchmoneyyoumakewhenyou'rerightandhowmuchyoulosewhenyou'rewrong.

Vol.: 26121st September,2015

Vol.: 26121st September,2015