religare morning digest generation company limited (lpgcl) for a lump sum consideration in cash of...
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Religare Morning Digest
December 22, 2016
Nifty Outlook
VWAP (Expiry till date) Max OI (Call) Max OI (Put)
NIFTY 8148 8300 8000
Nifty settled marginally lower in a dull trading session on Wednesday, in absence of any major cue. After flat start, it hovered in a narrow range till late but slide in last one hour of the trade pushed it into negative territory. Mostly sectoral indices followed suit and closed on flat note.
Markets are drifting gradually lower with every passing day and badly need some major positive trigger, preferably from domestic front to ease this pressure. As quoted earlier also, we feel banking holds the key for any sustainable recovery so closely watch development on that front. Meanwhile, maintain a balanced trading portfolio - a mix of long and short both.
Sectors to watch
Sector Name Outlook
ENERGY STABLE
METALS STABLE
PHARMA WEAK
News
Religare Super Ideas**
FII & DII Cash Segment (Rs. in Cr.) Trade Stats
Category Amt. MTD YTD
FII -686 -4029 19367
DII 419 1068 21429
NO OF CON-
TRACTS
TURNOVER IN CR
IDXFUTS 144354 9406
IDXOPT 3567148 239192
STKFUTS 420246 26669
Derivative Ideas **
Reliance Communications signed a binding agreement with the US asset management company Brookfield Group to sell its tower business. The company will receive an upfront cash payment of Rs. 11,000 Cr (USD 1.6 billion) on completion of the transaction, which will be used for debt reduction. Shares closed up 6.7%.
Bajaj Hindusthan Sugar Ltd announced that its board approved the sale and transfer of co-generation power business of a capacity of 449 MW located at 14 locations to Lalitpur Power Generation Company Limited (LPGCL) for a lump sum consideration in cash of approximately Rs. 1,800 Cr.
Pharma Major Sun Pharmaceuticals completed the acquisition of 85.1% stake in Russia based JSC Biosintez.
*FII & DII data as on 20th December 2016
Scrip Buy/Sell CMP Initiation
Range SL* Target
CESC BUY 622.65 615-620 600 660
LT SELL DEC
FUT 1344.95
1340-
1350 1385 1250
**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.
Instrument B/S Lot INITIATION
RANGE SL TARGET
NIFTY DEC
8050 PE BUY 75 18 60 30-32
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Religare Morning Digest
December 22, 2016
Religare Super Ideas
Investment Pick - Minda Corporation
Minda Corporation is amongst the leading automotive component companies with a diversified product portfolio that encompasses Safety, Security & Restraint
Systems; Driver Information & Telematics Systems and Interior Systems for auto OEMs. These products cater to 2/3 wheelers, Passenger Vehicles, Commercial Vehicles and after-market.
We expect Minda Corp's total income to grow at CAGR of 19% between FY16-FY18E. Also profitability will improve further with recovery in demand, cost
reduction measures, localization efforts and focus on high yield products. At cmp of Rs. 95, the company is available at FY18E P/E of 12.2x, which we believe is attractive given its growth prospects and improving return ratios.
Scrip CMP Target Duration Recommendation Price
MINDACORP 91.5 117 9-12 Months 95
Nifty dec futures has seen some short buildup of
around 3-5% Open interest in the last 2 trading
session. Huge call writing was seen at 8100
strike, we expect Nifty to be 8150-8000 range in
the short term.
Strategy: BUY nifty 8050 pe@30-32,stoploss at
18,target 60.
Derivative Ideas
CESC Limited (CESC) Larsen & Toubro Limited (LT)
We reiterate buy call of CESC as it was not initiated
in previous trading session.
LT is trading weak below its important moving
averages (100/200 EMA) from past couple of
weeks, indicating down trend. Yesterday, too it
traded with negative bias and settled at day’s low.
All this goes to show bearish bias is here to last and
the stock will more likely head southwards in
coming sessions.
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Religare Morning Digest
December 22, 2016
Religare Investment Calls
Name of the Company Reco Date Reco Price Target Price Upside % Previous day Closing Price
Tech Mahindra 7-Aug-15 534 600 12.4% 474.5
Kotak Mahindra Bank 19-Aug-15 688 900 30.8% 719.8
Glenmark Pharma 10-Sep-15 1,017 1,370 34.7% 941.0
Dabur India 10-Sep-15 275 325 18.1% 271.5
HUL 10-Sep-15 803 1,050 30.8% 796.8
Bajaj Corp 3-Nov-15 416 500 20.3% 358.7
Britannia Inds 23-Dec-15 2,896 3,600 24.3% 2,847.7
Nandan Denim 5-Jan-16 150 183 22.0% 111.7
Atul Auto 22-Mar-16 506 580 14.6% 421.0
Century Plyboards 5-Jul-16 207 271 30.9% 160.9
Greenply Industries 5-Jul-16 248 322 29.8% 249.3
Talwalkars Better Valkue Fitness 22-Aug-16 252 328 30.2% 233.4
Tv Today Network 29-Aug-16 300 388 29.3% 263.7
Jamna Auto 2-Sep-16 217 272 25.3% 155.3
SML Isuzu 26-Sep-16 1,300 1,560 20.0% 1,052.7
Swaraj Engines Ltd. 3-Oct-16 1,184 1,535 29.6% 1,337.4
Cigniti Technologies Ltd. 5-Oct-16 419 538 28.3% 368.0
Arman Financial Services 14-Oct-16 260 338 30.0% 175.2
Castrol India Ltd. 18-Nov-16 401 504 26.0% 371.8
Garware Wall Ropes Ltd. 23-Nov-16 567 686 21.0% 626.6
Wonderla Holidays Ltd. 25-Nov-16 324 405 25.0% 340.0
Indo Count Industries Ltd. 30-Nov-16 155 207 33.5% 158.7
VIP Industries Ltd. 30-Nov-16 118 166 41.0% 116.2
LIC Housing Finance 30-Nov-16 544 700 29.0% 543.3
Manpasand Beverages 30-Nov-16 626 854 36.4% 547.4
Zee Entertainment Enterprises 30-Nov-16 457 592 29.7% 441.5
Minda Corporation 06-Dec-16 95 117 23.2% 91.5
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Religare Morning Digest
December 22, 2016
Corporate Action Calendar — December 2016 (Dividend)
Sun Mon Tue Wed Thu Fri Sat
18 19
Lycos Internet Limited
20 21
BANNARI AMMAN SUGARS LTD.
JVL AGRO INDUSTRIES LTD.
22 23
24
Corporate Action Calendar — December 2016 (Stock Split)
Sun Mon Tue Wed Thu Fri Sat
18 19 20 21
SHREE GLOBAL TRADEFIN
22 23
24
Corporate Action Calendar — December 2016 (Stock Buyback)
Sun Mon Tue Wed Thu Fri Sat
18 19 20 21 22
Infinite Computer Solutions (India)
23
24
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Religare Morning Digest
December 22, 2016
Current Portfolio and Performance Summary as on 21st December’16
Stock Sector Entry Date Weight Reco price (`) CMP (`)
Bajaj Corp Consumer Goods May 13, 2016 9.1% 393 359
Magma Fincorp Financial Services June 30, 2016 9.8% 109 104
Apollo Hospitals
Enterprises Healthcare Services July 29, 2016 9.5% 1,362 1,180
Emami Consumer Goods August 3, 2016 9.4% 1,151 988
Castrol India Energy August 5, 2016 9.6% 425 372
Punjab National Bank Financial Services October 3, 2016 9.4% 143 121
Minda Corporation Auto Ancillaries October 10, 2016 9.7% 109 92
Pidilite Industries Chemicals November 17, 2016 9.9% 617 591
Somany Ceramics Ceramics December 20, 2016 10.1% 502 500
Cash 13.4%
Total Total 100%
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Religare Morning Digest
December 22, 2016
Historical Performance as on 21st December’16
Performance Matrix 1-Month 3-Month 6-Month 1-Year Since Inception
Religare Alpha -4.4% -9.8% -1.9% 0.8% 16.6%
Nifty -0.2% -8.1% -2.5% 3.5% 2.2%
Outperformance -4.3% -1.6% 0.6% -2.7% 14.3%
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Religare Morning Digest
December 22, 2016
Research Product Basket
For cash market trading
Call / Product Call Frequency No. of calls Avg open call duration % funds allocated
Intraday Calls Intraday 2 - 3 < 1 day 25%
Live / RMD Calls Daily 3 - 4 3 - 4 days 30%
Master Pick Weekly 1 1 month 15%
Religare Alpha Opportunity NA 2 - 3 months 20%
Cash NA 10%
For 1L margin*
Total Per Call
25,000 8,000
30,000 4,000
15,000 5,000
20,000 As per weightage
10,000
Intraday Calls 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.
Live / RMD 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.
Master Pick 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.
Religare Alpha 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.
Cash 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 No. of calls Avg open call duration % funds allocated
Derivative Ideas Daily 1 - 2 1 - 3 days 40%
Live calls Intraday / Daily 1 - 2 3 - 4 days 50%
Cash NA 10%
For 1L margin*
Total Per Call
40,000 40,000
50,000 50,000
10,000
Derivative Ideas 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.
Live Calls 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.
Cash It is recommended to hold 10% cash to capitalize on any opportunity that may arise in markets.
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.
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Religare Morning Digest
December 22, 2016
Hitesh Agrawal [email protected]
Ajay Pasari, CFA [email protected]
Ajit Mishra [email protected]
Archana Gude [email protected]
Gaurav Sharma [email protected]
Swati Saxena [email protected]
Manoj M Vayalar [email protected]
Mehernosh Khurshed Panthaki [email protected]
Siji A Philip [email protected]
Vipin Kumar [email protected]
Team Members
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Religare Morning Digest
December 22, 2016
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S. No. Statement Answer
Yes No
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] No
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?
No
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?
No
I/we have received any compensation from the subject company in the past twelve months? No
I/we have managed or co-managed public offering of securities for the subject company in the past twelve months? No
I/we have received any compensation for brokerage services from the subject company in the past twelve months? No
I/we have received any compensation for products or services other than brokerage services from the subject company in the past twelve months? No
I/we have received any compensation or other benefits from the subject company or third party in connection with the research report? No
I/we have served as an officer, director or employee of the subject company? No
I/we have been engaged in market making activity for the subject company? No
SS..No. Name(s) of RA.
Signtures of RA
Serial Question of question which the signing RA needs to make a separate declaration / answer
Yes No.