· PDF filedairy business.Strong product pipeline and entry in new categories will help Britannia outperform ... commericial and industrial projects

CHANAKYANI POTHIIndia’s Top Selling English Investment Newspaper with very high Success Ratio26-06-2017

Cigniti Tech

One can buy

with target of

Rs. 323

Hitech Corp

can buy with

target of

Rs. 237

ISFT

may give good

profits in the

short term

Polaris

interest

continues,target

Rs.280.57

What this issue covers....

n n n n n Exclusive!! Chanakya’s IPO GreyMarket report and Analysis

n n n n n Chart and Technical Analysis - TheONLY Newspaper in India to give suchanalysis with targets and stop loss

n n n n n Ranchhodbhai’s Profitable thoughtson Page no. 6

n n n n n Research reports of Prabhat Dairyand others on Page No. 6-7-8

n n n n n Midcap Mania on Page no. 12

n n n n n Detailed coverage of AU FinanciersIPO on Page no. 12

n n n n n SURE SHOT & SIXER !! Our SpecialRecommendations on Page no. 13.

n n n n n Commodity trend analysis with targetsand stop loss on Page no. 15

... and much much more !!

Market Whispers !! ?? !!

The Scrip closed at

Rs.526 and the scrip

shows space for forther

uptrend.

50-day SMA, which

is at Rs.480, has shows a

positive crossover over

the 20 day SMA which is

at Rs. 513.

The 30-week SMA,

at Rs 428, has shown a


the 10 week SMA, at Rs.

483. All the four moving

average indicators show a

bullish trend.

RSI is at 60 and

the Signal line which is at

Continued on Page 2

17.07 has shown a

crossover over the MACD

which is at 15.44.

Both the Stochastic

Indicator and the

Stochastic RSI are

showing a possibility of

bullish upmove in this

stock.

You can take a buy

position in this stock with

a stop loss of Rs.32518

and target of Rs 5. The

next expected level is

Rs.552

MMMMM AuotLite Ind: This autoancillary company is

engaged in the manufacturing of Halogen bulbs, head

lamps, universal lamps, LED lamps, Auxillary lamps,

Earthmoving lamps etc. Share is in a good uptrend right

now and at Rs. 62.45 a small risk can be taken. Target of

Rs. 67.32

MMMMM Himatsingka Seide: The Himatsingka Group is a

vertically integrated Home Textile major with focus on

the manufacturing, retailing and distribution of Home

Textile products. Can buy with target of Rs. 375.

Note : The scrips in this column are recommended for a

time period of 4 weeks to 8 weeks

BULL’S EYE !!

Read how our

recommendations have

performed over a period

of one month..

Go to Page no 4

Stop Loss Rs. 518

Target Rs. 552

The countdown for GST

has begun and whatever

one may say, no one has

any clarity on what will

happen post Mr. Jaitley

rings the bell on the

midnight of 30th June.

However, it is like people

are willingly going towards

the gallows with the

expectation that there will be

heaven after a few years of

hell.Larger Businesses are

gearing up for the transition

but smaller businesses are

still floundering.

But since the overall

acceptance level towards

GST is high, markets are not

expected to get a rude

shock.

The Sensex made a smart

recovery of 255 points to

close at a new peak of 31,312

on Monday and the Nifty

reclaimed the 9,600 level,

riding piggyback on goods

and services tax (GST)

headway and expectations

of reforms by Securities and

Exchange Board of India.

The markets saw a flurry of

buying as investors sensed

non-performing assets

(NPA) resolution gaining

traction after the Reserve

Bank asked lenders to

initiate bankruptcy

proceedings against large

defaulters.

After a strong opening,

Research done by :

Ms. Jainee P. Gordhandas

CA , B.Com

SEBI Registered Research

Analyst

& her team

IPO Grey Market Discussion

The last whole week

traders and investors havefocused solely on CDSLIPO and grey markets haveseen some superb action.

This IPO saw only onedeficiency that in the

beginning market playerswere expecting a lowerprice and and due to thatGMP started at Rs. 125-130and Koshtak was Rs. 700.

But price band came

higher and hence GMP

the BSE 30-share index hit a

high of 31,362.15, before

closing at a record high of

31,311.57, up 0.82 per cent,

breaking its previous record

closing of 31,309.49 on June

5. The gauge had lost 99.51

points in the previous two

sessions.

The 50-share Nifty too

scaled a high of 9,673.30

before ending 69.50 points

up, or 0.72 per cent, at

9,657.55.

However, the point of

worry was foreign portfolio

investors (FPIs) who sold

stocks worth Rs 764.48

crore.

The market fell sharply

on last day of the week, with

the Sensex down more than

150 points as investors

preferred profit booking

ahead of long weekend.

They also maintained

cautious stance as GST

implementation date is

approaching fast and ahead

of Modi-Trump meet on

Monday.

Return on equity (RoE)

of Sensex companies rose to

a three-year high of 11.27%

in 2016-17, while return on

capital employed (RoCE) hit

a five-year high of 15.1%,

data showed.

The 10-year data,

sourced from Capitaline,

does not include banks,

Continued on Page 2

Continued on Page 2

Buy Cadila HC @ Rs.526. Sell @ Rs.552

went down to 110-113 and

koshtak came at Rs. 600.In the following days

inspite of the number oftrades increasing in themarket the premium startedgoing down. The reason

behind this , as believed bymost of the investors wasthat a large number of retailinvestors had come out tosell in the market and greymarket traders wanted to

cover these shares at a

CDSL sees huge subscription figures

Top shares available at bottom prices !!

Vimta Labs

can buy with

target of

Rs. 140.42

Sanwaria

can prove to be

profitable,

target Rs 16.88

lower price and then bring

the listing at a premiumresulting in huge gains forthem.

When subscriptionclosed premium was Rs. 87and koshtak was Rs. 450

and in two sessions afterthat premium was Rs. 88-89 and koshtak was Rs.500.

Listing is on 30th Junewhich means that this is

CHANAKYANI POTHIIndia’s Top Selling English Investment Newspaper with very high Success Ratio

Market Whispers !! ?? !!

Editor: Ranchhod N. Shah, Printed and Published by Ranchhod N. Shah for Jainee Publishers(Owners). Place of Publication: 105, Kamal Complex, Swastik Char Rasta, Navrangpura, Ahmedabad : 380009, Printed at Allied Offset Printers, 14\2

Kalidas Mill Compound, Gomtipur, Ahmedabad : 380021. Subject to Ahmedabad Jurisdiction. Vol. 24 Issue no. : 74 26-06-2017 20 Paise RNI No. / 67324/94

MMMMM GIPCL : Promoted by a joint venture between

Gujarat Urja Vikas Ltd., GSFC, GACL and Petrofils

Co-op Ltd., GIPCL is engaged in the business of

Electrical Power Generation and is based in Vadodara.

Share is in a good uptrend right now and one can

buy 50-100 shares with target of Rs. 117.53. Q4 results

have been good.

MMMMM Gillette : As you read this column further, a

pattern will emerge that FMCG shares are doing really

well compared to other sectors right now. We had

recommended Gillete at Rs. 4898 in 12th June issue

and price has now touched Rs. 4936. Going ahead ,

next target will be Rs. 5017.

MMMMM Venkeys : Venky's Limited is a subsidiary of V

H Group, a company that specialises in chicken meat

processing, pharmaceutical products for both poultry

and human usage. From Rs. 390 in last June, share

price is currently near Rs. 1466. On 15th June, share

has also marked a 52 week high of Rs. 1502. Share is

expected to move upto Rs. 1502-1538 from the current

level of Rs. 1466.

MMMMM Britannia : Consolidated and standalone sales

grew 5.2% and 6.6% YoY,respectively in Q4.

Consolidated sales were lower as international

business was impacted by tough geopolitical

situation in Middle East & Africa and soft growth in

dairy business.Strong product pipeline and entry in

new categories will help Britannia outperform

industry. For long term holding buy on dips. Short

term target of Rs. 3702.

MMMMM Visaka Ind : Visaka Ind is currently focusing on

V-Board a product which has usage in residential,

commericial and industrial projects. For GST, the

current level of taxation is 28 percent. GST rate now

has come down to 18 percent, so there is a 10 percent

financial companies and

energy companies.

RoE measures a

company’s profitability by

showing how much profit

a company generates with

shareholders’ money.

RoCE measures the

efficiency with which a

company employs its

capital.

The primary markets

are going through a

buoyant phase, with

fundraising through initial

public offers (IPO) of

equity having crossed Rs

10,000 crore in the first six

months of the year, only

the third time ever. During

January-June, around a

dozen firms, including two

issues which are set to

launch, raised Rs 11,783

crore through IPOs, show

data.

World Markets

U.S. stock index futures

pointed to a flat to lower

open on Friday, as

investors await the latest

economic releases and

speeches from Federal

Reserve members, while

maintaining a close eye on

oil.

On the other hand ,

though China is said to be

more developed than India,

its stock markets are ages

behind.

China's stock markets

are notoriously volatile and

largely led by less-savvy

retail investors who

sometimes trade on wild

speculation. While global

markets are often affected

by rumor-mongering,

mainland markets are still

developing and so are

characterized by giant

swings. For instance,

trading is automatically

halted if a stock moves up

or down by 10 percent.

European bourses were

under pressure during mid-

morning trade on Friday, as

investors monitored oil

prices and focused on

developments from the EU

Summit in Brussels.

The pan-European

Stoxx 600 edged down 0.1

percent with most sectors

and major bourses in

negative territory.

Looking to data, France

and Germany both released

flash PMI figures for June

on Friday morning.

Germany's manufacturing

and services sector - which

accounts

for over

t w o -

thirds of

i t s

economy

- dipped

to a

f o u r -

m o n t h

low in

June.

Markit's flash composite

PMI fell to 56.1 from 57.4 in

May.

Euro zone PMI growth

unexpectedly slowed to 55.7

in June, down from 56.8 in

May.

On the political front,

European leaders were

getting ready for the second

day of talks at a European

Council meeting on Friday;

with terrorism, Brexit, and

globalization expected to be

discussed.

Crude

Oil prices edged up on

BFF ?!?!?

Best Friend Forever

Buy with Full Force

Autolite Ind

@ Rs. 62.45

saving in the tax. Share price have already run up ad

hence one can hold with target of Rs. 545 and a stop

loss of Rs. 492.

MMMMM HIL : Formerly known as Hyderabad Industries

Ltd, the company is the flagship company of the CK

Birla Group. HIL has 12 manufacturing facilities across

India. This company is also engaged in the

manufacturing of Cement products like Visaka. Share

is now at a very high level and one can hold with

target of Rs. 1011 but a strict stop loss of Rs. 918

needs to be maintained.

MMMMM MonteCarlo: Company has declared loss in the

last quarter of Q4 but share is in a good uptrend right

now. So not advisable to take much risk but 10 shares

can be bought with target of Rs. 573 and then Rs. 591.

MMMMM HUL : Another FMCG company which is just

kicking off its uptrend. Share has recently made a 52

week high of Rs. 1128. Currently at Rs. 1097.90 and

one can buy with target of Rs. 1119.

MMMMM Tata Steel : Share has made a 52 week high of Rs.

525 and is currently trading at Rs. 507. Germany's

Thyssenkrupp wants to decide by the end of

September whether to pursue a European steel merger

with India's Tata Steel. Target of Rs. 513.

IPO Grey Market Discussion

Continued from Page 1 blocked for 7 days theinterest cost comes to Rs.11507 and hence per share

the interest cost comes toRs. 97. So adding that tothe upper price band of Rs.149 , cost for HNI comes toRs.246.

As per Chanakya’s

discussion with the bigheads at grey market andfund managers , listing isexpected at Rs. 260 andduring the day due to thevolume buying share price

will go upto Rs. 285 andthen Rs. 290.

On the other hand, ErisLifescience will be listedon 29th June and there isnot much response in this

the last issue beforelisting and hence we willgive our listing estimatein this issue.

As you can see fromthe tables, thesubscription figures aresuperlative. Almost Rs.4003 crores have beencollected through retail

investors. In HNI, Rs.43370 crores have beencollected and hence thenumber of shares allottedto these HNIs will be lessand their interest outgo

will be high. If the fundgets blocked for 6 daysthe interest cost comes toRs. 9863 and if it gets

CDSL subscription figures

No. of

shares

offered

19th

June20th

June

QIB

HNI

Retail

Total

6893442

5170081

12063523

24827046

0.97

0.61

3.48

2.09

6.54

3.35

10.32

7.55

21st

June

148.72

563.03

22.27

169.40

Eris Lifescience subscription figures

No. of

shares

offered

16th

June19th

June

QIB

HNI

Retail

Total

8617500

4308750

2872500

15948750

0.07

0.02

0.41

0.12

0.82

0.03

1.68

0.75

20th

June

4.69

0.45

3.49

3.29

Friday, recovering some of

their steep losses made this

week, but crude remained on

course for its worst first-half

decline in almost two

decades as production cuts

have failed to sufficiently

reduce oversupply.

Brent crude futures were

up 28 cents at $45.50 a barrel

at 0830 GMT. U.S. West

Texas Intermediate (WTI)

crude futures traded at

$43.04 a barrel, up 30 cents

on their previous close.

Oil prices have fallen

about 20 percent this year

despite an effort led by the

Organization of the

Petroleum Exporting

Countries (OPEC) to cut

production by 1.8 million

barrels per day (bpd).

That puts the market on

course for its biggest first-

half percentage fall since the

late 1990s, when rising

output and the Asian

financial crisis led to sharp

price falls.

Analysts expects prices

to bottom out between $40-

45 per barrel before returning

to $50 until the end of the

year, buoyed by higher

demand and continued

OPEC and non-OPEC

production cuts.

GTPL subscription figures

No. of

shares

offered

21st

June22nd

June

QIB

HNI

Retail

Total

5830336

4315689

10069941

20215966

0.68

0.00

0.15

0.27

0.68

0.15

0.36

0.41

23rd

June

-

-

-

-

IPO.HNI have not

subscribed to this issue dueto the negative sentimenttowards the companyfundamentals in the market.

It is expected that Eriswill see a negative listing. If

it is positive , it will be by asmall margin. Because,

selling pressure will be onsince the day begins from

the retail investors.But Ahmedabad

traders might becomeactive and may show somespeculative movementafter a few months and at

that time prices maybecome high.


Buy Reliance Cap @ Rs. 651 , Sell @ Rs. 714

Buy Auro Pharma @ Rs.672. Sell @ Rs.704

the MACD.Both the Stochastic

Indicator and theStochast ic RSI areshowing a possibility ofbullish upmove in thisstock.

You can take a buy


a stop loss of Rs.661 and

target of Rs 679. The next

expected level is Rs. 704

The Scrip closed at

Rs. 672 and the scr ip


uptrend.

50-day SMA, which




at Rs. 612.

The 30-week SMA,

at Rs. 658, has shown a



610.All the four moving

average indicators show abullish trend.

RSI is at 70.84and the Signal line hasshown a crossover over

The Scrip closed at

Rs. 651 and the scrip


uptrend.

50-day SMA, which




at Rs. 586.

The 30-week SMA,



Buy Reliance @ Rs.1436. Sell @ Rs.1459

Stop Loss Rs. 661

Target Rs. 704




bullish trend.

RSI is at 67 and

the Signal line has shown a

crossover over the

MACD.

Both the Stochastic

Indicator and the

Stochastic

RSI are showing a

poss ibi l i ty of bul l i sh

upmove in this stock.

You can take a buy


a stop loss of Rs. 628 and

target of Rs.664.

The next expected

level is Rs. 714

Stop Loss Rs. 628

Target Rs.714

The Scrip closed at

Rs.1436 and the scr ip


uptrend.

50-day SMA, which




at Rs.1362.

The 30-week SMA,



the 10 week SMA, a t

Rs.1362. Al l the four

moving average indicators

show a bullish trend.

RSI is at 70.35

and the Signal line has

shown a crossover over

the MACD.

Both the Stochastic

Indicator and the

Stochast ic RSI are



stock.

You can take a buy



target of Rs.1442.

The next expected

level is Rs.1459

Stop Loss Rs. 1430

Target Rs. 1459

24-06-2017

The Scrip closed at



uptrend.

50-day SMA, which




at Rs. 2600.

The 30-week SMA,






bullish trend.

RSI is at 53.44



the MACD.

Both the Stochastic

Indicator and the

Stochast ic RSI are



stock.

You can take a buy



target of Rs.2664.

The next expected

level is Rs. 2728.

Stop Loss Rs. 2619

Target Rs. 2728

Buy Dr. Reddy @ Rs.2644. Sell @ Rs.2728


Buy HDFC @ Rs.1651. Sell @ Rs.1689

Buy HDFC Bank @ Rs.1679. Sell @ Rs. 1740

Buy Kotak bank @ Rs.985. Sell @ Rs. 1035

The Scrip closed at



uptrend.

50-day SMA, which




at Rs. 975.

The 30-week SMA,

at Rs.839, has shown a



Rs.947. Al l the four



RSI is at 59.73



the MACD.

Both the Stochastic

Indicator and the

Stochast ic RSI are



stock.

You can take a buy



target of Rs.999.

The next expected

level is Rs.1035.

Stop Loss Rs. 977

Target Rs. 1035

The Scrip closed at



uptrend.

50-day SMA, which




at Rs.1625.

The 30-week SMA,






bullish trend.

RSI is at 61.63



the MACD.. Both the

Stochastic Indicator and

the Stochastic RSI are



stock.

You can take a buy

pos i t ion in th i s s tock

wi th a s top loss o f

Rs. 1642 and target of Rs.

1661.

The next expected

level is Rs.1689.

Stop Loss Rs. 1642

Target Rs. 1689

Both the Stochastic

Indicator and the

Stochast ic RSI are



stock.

You can take a buy

pos i t ion in th i s s tock

with a stop loss of Rs.

1668 and ta rge t o f

Rs.1696.The next expected

level is Rs.1740

The Scrip closed at



uptrend.

50-day SMA, which




at Rs. 1660.

The 30-week SMA,






bullish trend.

RSI is at 66.47



the MACD.

Stop Loss Rs. 1668

Target Rs. 1740



The Scrip closed at



uptrend.

50-day SMA, which




at Rs. 536.

The 30-week SMA,






bullish trend.

RSI is at 49.17



the MACD.

Both the Stochastic

Indicator and the

Stochast ic RSI are



stock.

You can take a buy



target of Rs.544.

The next expected

level is Rs. 553.

Stop Loss Rs. 538

Target Rs. 553

Buy Cipla @ Rs.541. Sell @ Rs.553


23-06-2017

Buy Powergrid @ Rs.206. Sell @ Rs.214

Buy ITC @ Rs. 311 . Sell @ Rs. 319

Buy GMR Infra @ Rs.21.35. Sell @ Rs. 23.95

Buy JP Associate @ Rs.18.75 . Sell @ Rs.24.60

The Scrip closed at

Rs.21.35 and the scr ip


uptrend.

50-day SMA, which

is at Rs.17.17, has shows a



at Rs.17.89.

The 30-week SMA,

at Rs.15.18, has shown a



17.52. All the four moving


bullish trend.

RSI is at 80.86



the MACD.

Both the Stochastic

Indicator and the

Stochast ic RSI are



stock.

You can take a buy


a stop loss of Rs.20.55 and

target of Rs. 21.95. The

next expected level i s

Rs. 23.95.

Stop Loss Rs. 20.55

Target Rs. 23.95

The Scrip closed at

Rs.18.75 and the scr ip


uptrend.

50-day SMA, which




at Rs.13.58

The 30-week SMA,



the 10 week SMA, at Rs

13.51. All the four moving


bullish trend.

RSI is at 57 and


crossover over the

MACD.

Both the Stochastic

Indicator and the

Stochast ic RSI are



stock.

You can take a buy


a stop loss of Rs.16.95

and target of Rs.20.10. The


Rs.24.60.

Stop Loss Rs.16.95

Target Rs. 24.60

The Scrip closed at



uptrend.

50-day SMA, which




at Rs. 207.

The 30-week SMA,






bullish trend.

RSI is at 48.86



the MACD .

Both the Stochastic

Indicator and the

Stochast ic RSI are



stock.

You can take a buy




expected level i s

Rs.214.

Stop Loss Rs.203

Target Rs. 214

Both the Stochastic

Indicator and the

Stochast ic RSI are



stock.

You can take a buy



target of Rs. 313. The next

expected level i s

Rs.319.

The Scrip closed at



uptrend.

50-day SMA, which




at Rs.310.

The 30-week SMA,






bullish trend.

RSI is at 59.05



the MACD.

Stop Loss Rs. 308

Target Rs. 319


Prabhat Dairy : Strong institutional player

buyEditor: Ranchhod N. Shah, Printed and Published by Ranchhod N. Shah for Jainee Publishers(Owners). Place of Publication: 105, Kamal Complex, Swastik Char Rasta, Navrangpura, Ahmedabad : 380009, Printed at Allied Offset Printers,

14\2 Kalidas Mill Compound, Gomtipur, Ahmedabad : 380021. Subject to Ahmedabad Jurisdiction. Vol. 24 Issue no. : 72 23-06-2017 26 Paise RNI No. / 67324/94

Ranchhodbhai’s Profitable thoughtsl Kirloskar Oil Engines

which was at Rs. 252 in June last

year is now trading at Rs. 400.

Earnings are strong and the

recent news of the company

acquiring 100% equity shares of

La Gajjar Machineries have given

fillip to share prices. Share prices

have potential to move upto Rs.

417 in the coming days.

l Stock of UPL hit its all

time high at Rs. 892 on the BSE

on Tuesday, on expectation that

a normal monsoon will improve its

volumes and boost revenue

growth. India accounts for about

20% of the company’s

consolidated revenue. Also a shift

in crop pattern towards cotton,

rice and maize will benefit the

sector. Can buy a few shares on

dips. Long term holding is

recommended.

l Earnings of Graphite

India are at an inflection point

with improved industry demand

supply outllok led by closures,

consolidation and reduced

Chinese exports of both steel and

electrodes. Healthy balancesheet

with Rs. 400 cr net cash, high

dividend payout and strong

management pedigree are added

positives. Share prices have

already run up a lot right now so

wait for dips before buying.

l Tata Group company

NELCO has recently made a 52

week high of Rs. 109.45.

Established in 1940, NELCO is

into telecommuications

equipment manufacturing.

Company has earned an EPS of

Rs.1.10 compared to Rs.0.11 in the

year ago period. Share is now

trading at a price of Rs. 98 and

can buy a 50 shares with target of

Rs. 98-108.

l Electronic Equipment

maker Bharat Bijlee has moved

to Rs. 1498 in this week from Rs.

719 in the year ago period. EPS of

the company came in at Rs. 18.17

in Q4 compared to Rs. 4.35 in the

year ago period. Share prices are

in a strong uptrend supported by

a big surge in volumes. Can buy

a few shares but keep a strong

stop loss. Target of Rs. 1538 and

then Rs. 1618 with stop loss of

Rs. 1417.

l Laurus Lab which came

with an IPO in Dec 2016, has

repaid Rs.226.3 crore debt –

halving the finance cost to Rs 15

crore on sequential basis.Laurus

Laboratories posted 39 percent

rise in net profit to Rs 74 crore in

the fourth quarter ended March

on account of reduced finance

costs. The company said it has

spent Rs 315.5 crore on capital

expansion in FY17. The company

said Unit IV expansion is in

progress and the facility will add

capacity to Generics API,

Synthesis and Ingredients

business.Share prices are on a

strong uptrend and we advise

you to buy now.

l From Rs. 200 a year ago,

share price of Escorts has

touched Rs. 700. Still the share is

in a strong uptrend. Escorts saw

strong sales growth in many as

improved monsoon outlook

boosted tractor sales.Company

has seen 15 percent volume

growth in April and

May.Management expects that a

temporary demand deferral due to

goods and services tax (GST) may

happen.However, overall

sentiment on the ground remains

strong and industry should

deliver double-digit growth.

l Agrochemical maker

Insecticides (India) is aiming to

become debt-free by end of 2017-

18 fiscal by focusing on

bottomline growth and maximising

sales with launch of new products.

Many new products, mostly in

insecticides for all agri- crops, are

in the pipeline. With the advent

of good monsoon, sales will be

good in Q1 too. In Q4 of FY17,

net profit was Rs. 5.95 crores

compared to Rs. 0.48 cr in the year

ago period. Share is in a very

bullish phase right now and we

advise buy.

l This PSU Miniratna should

be kept in focus. MOIL reported

a five-fold jump in net profit at Rs

115.80 crore for the fourth quarter

ended March 31, 2017. The

largest manganese ore producer

in India, MOIL is among the very

few state-owned companies that

command a return-on-equity in

excess of 30 percent. It’s a debt-

free company consistently

making high positive operating

cash flows with a generous

dividend distribution track

record. Strongly recommend buy.

l From around Rs. 70 in

last June, share prices recently

made a 52 week high of Rs. 211. I

am talking about West Coast

Paper. Net profit has increased

515% over a period of one year.

paper shares have been doing

well and going ahead, share

prices to see a steady climb. Buy

10-20 shares and keep watch.

l While TVS Motors has a

bright future, an eye should also

be kept on TVS Electronics.Sales

have gone upto Rs. 941 crores in

Q4FY7 compared to Rs. 98.18

crores in the year ago period. At

Rs. 188, one can buy a few shares

and keep watch.

Incorporated in 1998 by the

Nirmal family, Prabhat Dairy

(Prabhat) is a fully integrated milk

& dairy products company

engaged in the sale of products

to institutional and retail

customers.

The company sells specialty

and co-manufactured products to

its institutional customers, as well

as branded dairy products under

the brand names of Prabhat,

Prabhat Flava, Prabhat Milk

Magic and Volup (a recently

launched brand for ice-cream). It

aims to become a larger and

stronger regional player with a

good mix of liquid milk, fresh

value-added products and longer-

shelf-life products.

Branded business to be

revenue and margin driver

Prabhat is one of the emerging

names in the value-added dairy

products space, launching a

range of products under the

Prabhat brand over past two

years.

The focus on the B2C

business will not only help grow

revenues, but also aid margins as

it commands higher gross

margins. The company sells

pouched milk & fresh dairy

products in and around

Maharashtra, while it sells long-

shelf-life products (like ghee and

UHT milk) across the country.

Management aims to increase the

contribution of the B2C segment

to 50% of overall revenues, mainly

led by growth in value-added

products like cheese, ghee, dahi

and paneer.

In terms of distribution, the

company now has presence

across 26 states (was present in

just Maharashtra in 2012), with

around 1,200 distributors and 0.1m

retail outlets. It plans to expand

its reach to 0.2m outlets by FY19.

Stable institutional business

The institutional business

contributes ~70% of revenues (as

of FY17). State-of-art

manufacturing facilities, strict

quality control & food standards

and a marquee list of clients have

helped the business grow

impressively in the past.

Apart from developing

products for its existing clients,

the company has also struck deals

with many new customers in India

and globally. As majority of its

clients operate on a cost-plus

model, the business is somewhat

immune to fluctuations in milk

prices.

Expansion of direct milk

procurement network

Prabhat currently procures

9llpd of milk, which management

expects to increase to 14llpd by

FY20. Around 60% of milk is

sourced from milk-rich

Ahmednagar, while the rest is

sourced from Pune, Nashik and

adjoining districts in

Maharashtra.

Five years back, it procured

>90% of its milk requirement

directly from agents. However, it

now sources 70% of milk directly

from 85,000 farmers across 1,700

villages twice a day (i.e. >700

procurement cycles a year). The

company is targeting to increase

the proportion of direct sourcing

to 80% by FY20, which will help it

get higher volumes of milk for use

in value-added products.

We believe that it is logical for

Prabhat to have some portion of

procurement from agents, given

the sizable portion of its B2B

business.

Improving capacity utilization

and operational efficiencies

We believe capacity utilization

will improve but only gradually

over next few years, aided by

demand growth and distribution

expansion.

Prabhat expects to increase

utilization at its recently set-up

cheese manufacturing facility

(capacity of 30MT/day) from 20%

currently to around 40% by FY18,

led by higher sales to the HoReCa

and QSR segments, as well as

exports.

Gradual improvement in

utilization, coupled with

operational efficiencies from the

cogeneration plant, will aid

margins in the near term, in our

view.

Expect RoCE to improve with

no major capex over next 2-3

years

The company has delivered a

strong operating performance

over past four years, with

revenue, EBITDA and PAT CAGR

of 22%, 15% and 25%,

respectively. Management aims to

exceed revenue of INR20b by

FY20, led by growth in fresh and

long-shelf-life value-added

products. This would only be

possible with an increase in milk

procurement, distribution

expansion and brand-building

initiatives. Increased

contribution of higher-margin

B2C products to the portfolio,

operating leverage and

operational efficiencies are

expected to lead to EBITDA

margin expansion to 10% by

FY20, from 9% in FY17.

We, however, believe that

EBITDA margin expansion could

be somewhat restricted due to

higher spending toward the B2C

business. Management has

guided for lower capex and a

further reduction in debt over next

2-3 years.

We believe that these

initiatives will help to gradually

improve RoE and RoCE over

FY17-FY20 to 11.9% and 10.8%,

respectively. Net working capital

days are expected to remain in the

range of 80-85, as (1) inventory

days will increase with better

cheese salience (cheese needs

ageing before being sold), (2)

debtor days will decline with

improved B2C salience (has lower

receivable days compared to B2B)

and (2) creditor days are unlikely

to see any major change from

current levels.


22-06-2017

Minda Industries : JV’s to boost revenue growthMinda Industries Ltd, UNO

Minda Group has the following

main divisions:

- Switch Division

- Lighting Division

- Electronics Division

- Acoustics Division

Minda Industries Limited -

Switch Division is the largest

manufacturer, by volume, of two

wheeler automotive switches in

the world, nominated as a global

supplier to Honda, Japan. The

division also has a major share of

business in all Indian two wheeler

OEM's.

The Switch Division operates

nine plants in India and two

overseas plants in Indonesia and

Vietnam.

Lighting Division is one of the

leading automotive lamps

manufacturers in India,

developing top notch products

for two, three, four wheeler and

off-road vehicles.

Lighting division operates out

of different locations across the

country- Pantnagar, Hardwar,

Sonepat, Manesar and two

locations in Pune, catering to

most OEM customers like

Yamaha, Suzuki, Swaraj Mazda,

New Holland, Eicher, Mahindra ,

Tafe, Royal Enfield, Maruti,

General Motors, Fiat,

Volkswagen, Toyota, Tata, Ford

etc.

Founded in 2005, Minda

Industries Limited - Electronics

Division operates from Pune,

supplying to most OEM

customers like Mahindra, Royal

Enfield, Tata, Bajaj, General

Motors, Ashok Leyland, Piaggio

etc.

Established in 2004, Minda

Industries Limited - Acoustics

Division is the leading

manufacturer of automotive

horns in India. With a 47%

marketshare, the company is the

most preferred supplier of horns

to Indian OEMs.

Result highlights

•In Q4FY17, Minda Industries

Ltd (MIL) reported consolidated

sales of INR 9,481 Mn which (was

above our estimates of INR 8,958

Mn) increased by 32.17% Y-o-Y

and 7.18% Q-o-Q.

Top-line growth was primarily

driven by consolidation of Roki

Minda, Minda TG, Minda Kosei

Aluminum Wheels Pvt Ltd &

Acquisition of Rinder group

which resulted in overall top-line

growth. For FY17 revenues stood

at INR35,050Mn.

Growth was driven by across

the categories mainly led by Alloy

Wheels & Die Casting (116% Y-

o-Y), Lighting Systems (93% Y-

o-Y), etc.

•The consolidated EBIDTA

for the quarter stood at INR 1,108

Mn which (increased 35.89% Y-

o-Y and improved 3.37% Q-o-Q)

and reported above our estimate

of INR 986 Mn. EBITDA margins

came in at 11.7% in Q4 FY17 (up

by 32bps Y-o-Y but declined by

43bps Q-o-Q) due to better

operational performance coming

from Minda Kosei, Minda TG and

Roki Minda.

Company’s employee cost

rose (42.85% Y-o-Y & 2.43% Q-o-

Q) which was affected by

consolidation. For the year,

EBITDA stood at INR 3,840 Mn

and margins expanded by 150bps

Y-o-Y. Margin expansion was led

by drop in RM cost resulting out

of better product mix, achieving

higher operational efficiency

through restructuring and

consolidation of its key

subsidiary.

•PAT came in at INR 578Mn

(which grew by 35.79% Y-o-Y and

29.15% Q-o-Q). PAT Margin

stood at 6.1% up by 32 bps Q-o-

Q and declined by 22bps Y-o-Y.

The PAT saw an increase led by

lower finance cost (declined by

22.5% Q-o-Q) and lower tax

provision (declined by 1.21% O-

o-Q). PAT for the year came in at

INR 1,680 Mn as against INR

1,110 of FY16 recording a growth

of 51% Y-o-Y. Margins improved

by 40bps, dented by higher

finance cost and increase in

depreciation.

Strong product portfolio to

drive sales growth forward:

Management’s target of

achieving 25% CAGR growth

between FY17 to FY19E seems

achievable on back of increasing

no. of products, strong

relationship with 2-Wheelers

(~61% of FY17) and Passenger

Vehicles (39% of FY17) OEM’s

(Global and domestic).

During FY17, MIL expanded

its product portfolio to include

Alloy wheel, Brake Hoses & Fuel

Hoses. To cater the increasing

demand for alloy wheels,

company has set-up Minda Kosei

Aluminum Wheel Pvt Ltd

(MKAWL) , which will be setting

up a new plant in Gujarat with total

investment outlay of INR 3,000

Mn.

Through this investment

MIL is expecting to manufacture

60,000 wheels per month by FY18.

Its Marquee Customers in alloy

wheel segment include Maruti

Suzuki, M&M etc.

During FY17, Switch division

grew by 3% Y-o-Y to INR11,216

Mn & contributed ~32% Q-o-Q

to its revenue despite adverse

impact of demonetization &

reduction in 2W volume.

However, Lighting division

grew strongly by 93% Y-o-Y to

INR 8,763 Mn & 25% Q-o-Q

which was mainly on account of

higher exposure from Passenger

Vehicle OEMs. Horn division

grew at 17% Y-o-Y to INR 5,959

Mn & contributed 17% Q-o-Q to

its revenues.

Going ahead, we believe alloy

wheels segment is going to be

another major revenue

contributor with the new plant at

Bawal, Haryana, supplying to

Maruti Suzuki (Brezza and

Baleno) and M&M. In alloy

wheel business the production,

which started in April 2016 has

now reached 90,000 units /month

in March 2017.

MIL aims to ramp up the

capacity up to 120,000 units alloy

wheels per month by FY18E. We

believe, implementation of BS4

motorcycles, push for the rural

economy in fiscal budget and

improvement in overall economic

growth should translate in healthy

growth for MIL’s products.

Additionally, MIL’s product

portfolio of offering a complete

mix and increasing contribution

from PV segment is likely to be a

major growth driver. We also

believe company’s foray in

offering in security system will

help company improve its product

mix.

JV’s to boost revenue growth:

MIL has recently formed a 50-

50% Joint Venture (JV) agreement

with Tung Thih Electronic Co.

(TTE), Taiwan for manufacturing

of reverse parking systems and

facilities, which will be set up in

Manesar within 9 months.

As per current regulation it is

not mandatory to install these

systems in car but company

expects regulation to be changed

to that effect in due course. MIL

expects to generate INR 2,000 to

3,000 Mn revenue within three

years on assumption that product

will not be mandatory.

MIL has also entered into JV

agreement with Katolec

Corporation, Japan. The initial

investment outlay is INR 400 Mn.

The JV Company is proposed to

be set up in Pune.

The products to be

manufactured include high end

electronics like Printed Circuit

Boards (PCB) and Box Build

Assemblies. The company is

expected to achieve additional

synergies in areas of Product

Development & Technology

which will result in stronger

customer footprints including

both OEM as well as end

Customers.

We believe JV’s will help MIL

to make a deeper foray into the

fast growing and dynamic Indian

automotive electronic space with

a specific focus on passenger and

safety products. We believe,

these JV’s will help MIL to further

strengthen its product portfolio

and offer value added products to

customers. We expect the ramp-

up of this facilities to boost MIL’s

growth going forward.

CMP : Rs. 601 (22-06-2017)Target Rs. 678

Consolidation in JVs to

negate rise in input cost: Rising

input cost is expected to weigh

on margins in near term as

commodity prices are seen rising.

However, MIL’s consolidation

with its subsidiaries should result

in cost efficiency and better

operational mix along

We expect the margin to

remain stable in near future till

MIL completes its consolidation

phase. Hence, we expect

consolidated EBITDA to rise at

22.4% CAGR (FY17-19E) to INR

5,750 Mn by 2019E with margins

improving gradually from 10.9%

in FY17 to 12.1% by FY19E.

Valuations & Views: We

remain positive on MIL because

of tie up with global brands,

innovative product portfolio and

large order inflow. Also, with the

consolidation of the group

business coupled with inorganic

growth puts the company on a

stronger footing. Besides,

sustained improvement in

business which should lead to

higher revenue and profitability

going forward.

Company’s on-going

restructuring process will lead to

better financial strength and

enable company to optimize

resources resulting in elimination

of overlapping activities.

Furthermore, we believe pick-up

in domestic automobile market

will help company achieve higher

volume growth thereby helping

in utilizing its capacity. We expect

consolidated revenues to rise at

16.4% CAGR (FY17-19E) to

47,528.2Mn by 2019E and expect

consolidated Adj. PAT to rise at

33.4% CAGR (FY17-19E) to INR

2,990 Mn by 2019E.

At CMP of INR 595, the stock

is trading at 26.8x FY17 EPS of INR

21.2, 19.9x FY18E EPS of INR 28.5

and 15.1x FY19E EPS of INR 37.7

We recommend “Accumulate”

rating on the stock and value the

stock at 18x FY19E EPS of INR

37.3 with a target price of INR 678

indicating 13.94% upside from

CMP.




Tata Retirement Savings Fund - Moderate Plan - Regular Plan

Manappuram Finance : Asset quality to improve

83%

The fund seeks to provide a

financial planning tool for long

term financial security for

investors based on their

retirement planning goals.

It is good to have certain

hybrid funds in your mutual

fund portfolio as it gives some

assured returns against equity

returns which tend to be volatile

and subject to market

conditions.

Past Performance

Last one month

Last 3 months

Last One year

Three years

Five years

From launch till date

Fund

2.21 %

8.09 %

26.41 %

20.71 %

20.21 %

18.95 %

Benchmark

Index0.61%

2.12 %

5.11 %

15.39 %

8.46 %

11.99 %

--

The fund is managed by

Murthy Nagarajan since Arpil

2017.

The fund has 55 stocks in its

portfolio with the top 10 stocks

forming 31.01% of the portfolio.

The fund has 76.17% of the

AUM invested in Equity,4.08% in

Debt and 19.75% in Cash and

Cash Equivalent. Debt holdings

are invested in 8.4% GOI 2024.

Minimum initial investment is

Rs. 5000 and follow on amounts

can be investments can be in

multiples of Rs. 1000.

Investment can also be done

through SIP and for that

minimum amount is Rs. 500.

Exit load is 3% if redeemed

before the age of 60. This feature

may alienate investors as 3% is

on much higher side and a

person investing at the age of

30 may find the tenure too long.

This fund can be compared

to HDFC Balanced Fund, ICICI

Prudential Balanced Fund, L&T

India Prudence Fund and SBI

Magnum Balanced Fund.

Important Information

Rs. 26.62 (Growth)

2.80 %

1 %

Hybrid: Equity Oriented

Open ended

Nov 2011

Average

High

Rs. 132 crore

VR Balanced

Latest NAV

Expense Ratio

Turnover Ratio

Fund Category

Type

Launch Date

Risk grade

Return grade

Assets under Mgmt.

Benchmark

Top Holding

Yes Bank 5.22 %

ITC 4.20 %

Future Retail 2.98 %

Power Grid 2.96 %

HDFC Bank 2.58 %

Giant - %

Large Cap - %

Mid Cap - %

Small Cap - %

Portfolio Break-up

Mutual Fund Corner

Rs

CMP : Rs. 97 (22-06-2017)Target Rs. 105-113

Promoted by Shri. V.P.

Nandakumar, Manappuram

Finance Ltd (MFL) was

incorporated in 1992 and today is

the second largest gold loan

company in India. The

Manapurram Group was started in

1949 by Late Mr. V. C.

Padmanabhan, with focus

primarily on money lending

activities. To reduce its

concentration risk in gold loans,

MFL over the last two years, has

diversified into new business

areas like microfinance, vehicle and

housing finance, and SME

lending.

In February 2015, the company

acquired Asirvad Microfinance

Pvt. Ltd. with AUM a little short

of Rs 300 cr which has grown 6-

fold to Rs 1800 cr by the end of

FY17.

Investment Rationale

Re-engineered business model

to de-risk gold loan business

MFL has its re-aligned its gold

loan portfolio and added shorter

tenure loans of 3-6-9 months as

compared to a single product

offering of 12 months loan. It has

also linked the product LTVs to

the tenure of the loan thereby

reducing its risk.

The introduction of shorter

duration of loans and linking the

LTV to the tenure has resulted in

margin of safety for a 12 month

loan increasing to 23% from 4%

earlier.

Huge untapped potential in

gold loans

The Gold Loan Market in India

is the biggest market in the world

probably due to large demand of

gold by Indians. Every year India

imports around 800-900 tonnes of

gold for consumption and it has

the largest gold stock of 22000

tonnes which is privately held by

domestic households and

temples. The low income groups

in India are the major customers

of gold loan.

The low income groups in

India are the major customers of

gold loan. The centuries-old

practice of lending money against

security of gold has been

continuing in India in an

unorganized manner. Farmers and

peasants buy gold during the

months of prosperity and stock it

in the form of jewelleries and

ornaments and then pledge it to

the local money lender or pawn

brokers during tough times to

meet their financial requirements.

This peculiar phenomenon in India

has given rise to the gold loan

market.

With the increase in prices of

gold the gold loans market

flourished in India and the

organized market penetration has

increased from 1% in FY07 to 4%

in FY15. The vast holdings of gold

in private hands offers ample

opportunities for growth in gold

loan business.

The Gold Loan business went

through a rough patch between

FY2012 and FY2014 due to adverse

regulatory changes by RBI;

declining gold prices; slowdown

in the economy; rural stress and

higher auctions denting

profitability and return ratios.

FY2015 onwards, however,

market conditions started

improving. RBI increased the LTV

Ratio for Gold Loans by NBFCs

to 75% from 60% and gold loan

players started reaching out to

customers, with the help of

advertising and branch

activations.

Competitive advantage over

Banks and Moneylenders in gold

loans

Specialized gold loan

companies enjoy competitive

advantage particularly in terms of

their last mile connectivity,

availability vis-à-vis the other

organized lenders in the market.

Strong growth in new

businesses

The non-gold loan businesses

of MFL continue to witness

strong growth aiding in product

diversification and reducing

dependence on gold loans for

business growth.

Asset quality to improve going

forward

MFL observed higher gold

loan defaults during the testing

times of gold price fluctuations

leading to higher auctions of

pledged ornaments.

Many times the recovery

amount exceeded the value of

gold pledged leaving the loan

product out-ofmoney.However,

MFL has cleansed its legacy gold

loan portfolio by auctioning the

gold.

Online gold loans launched

leading to lower operating costs

Having invested in an

extensive network of 3,300

branches across India for

delivering gold loans, MFL

became the first player to launch

Online Gold Loan (OGL) in

September 2015 where customers

with access to an internet enabled

device can avail a gold loan

anytime, from anywhere in the

world.

Shift to organized sector to

benefit MFL

Out of the total market size,

organized players like Muthoot

Finance, Manappuram, other gold

loan NBFCs and few banks cater

to 10% with the balance being

catered by the unorganized

players like jewelers who double

up as moneylenders.

The push towards a cashless

economy is likely to set off a long-

term trend of shift in business

away from the informal and

unorganised players and towards

the organised sector.

View and Recommendation

MFL’s financial profile is on

the way to further improvement

and its return ratios are likely to

improve. A large RoAA (5.4% for

FY17) and a large RoAE (24.8%

for FY17) leads us to believe that

MFL deserves to trade at a higher

valuation. However given the

difference in size,

Manappuram would typically

quote at a discount to Muthoot

Finance.

We feel investors could buy

the stock at the CMP and add on

declines to Rs. 82-85 band (1.55x

FY19E ABV and 6.8x FY19E EPS)

for sequential targets of Rs. 105

(1.95x FY19E ABV and 8.6x FY19E

EPS) and Rs. 113 (2.1x FY19E ABV

and 9.2x FY19E EPS) in 2-3

quarters.


21-06-2017

Company News and Analysis

Ashok Leyland bets on fully built

trucks to boost top line

SpiceJet to buy more planes from

Bombardier for shorter routesBudget airline SpiceJet

Ltd plans to buy more

Bombardier-made Q400

regional planes.

The airline said it

signed a letter of intent

(LoI) with Bombardier at the

ongoing Paris Air Show to

buy as many as 50

Q400 turboprop

planes, which

include 25 Q400

turboprops along

with purchase

rights for the rest.

A i r l i n e s

typically do not

pay when they sign

a letter of intent,

but have to make a

small payment of

up to 5% of cost of the

plane for firming up the

order.

SpiceJet operates a fleet

of 35 Boeing 737s and 20

Bombardier Q400s. The

existing Q400 aircraft have

a 78-seat configuration

while the new planes will

be 86 seaters, SpiceJet

said.

“This order will help us

further increase

connectivity to smaller

towns and cities,” said

Ajay Singh, chairman and

managing director,

SpiceJet.

The airline did not say

As the battle for market

share in the medium and

heavy commercial vehicles

(MHCV) gains momentum,

players like Ashok Leyland

Ltd (ALL) are enhancing

focus on fully built units

(FBUs) in the trucks

segment. From a current

share of 20 per cent, ALL

aims to take the share of

FBUs in its overall sales

to 50 per cent within the

next two to three years.

FBUs are basically

ready-to-use trucks

customised for the type

of good to be transported.

The company is in talks

with its supplier partners to

develop more FBUs.

Anuj Kathuria,

president, global trucks,

ALL said, "We plan to

offer more and more ready

to use vehicles to our

customers. We are already

working with our supplier

partners on the same. This

would help improve the

topline as the ticket size

would increase."

At present, FBUs

account for nearly 20 per

cent of its truck sales, and

in the next two to three

years ALL plans to take

this up to 50% of its vehicle

sales, Kathuria informed.

ALL has a manufacturing

capacity of about 160,000

units per annum for MHCV,

and around 70,000 units

per annum for light

commercial vehicles

(LCVs). It is currently

utilising around 60-70 per

cent of its capacity and

sold 84,255 trucks last year.

The chassis of a truck

is usually sold to a

customer who then makes

an additional investment to

customise the body to suit

his requirement.

This typically requires

an investment of 20-25 per

cent of the value of the

vehicle, sometimes higher.

ALL plans to make dry

containers, reefers

(refrigerated vehicles), LPG

bullet trucks, bulkers

among others.

Subrata Ray, senior

group vice-president,

ICRA felt that making

FBUs might not be very

high margin, but the

greater degree of value

addition is likely to ensure

Reliance Defence

Ammunition, a wholly

owned subsidiary of

Reliance Infrastructure, and

Yugoimport, a Serbian

state-owned company,

have inked a strategic

partnership to manufacture

ammunition in India.

The partnership aims to

target a business

opportunity estimated at

Rs.20,000 crore over the

next 10 years.

Yugoimport is an

intermediary company

which deals in the import

and export of defence-

related equipment, and has

its headquarters in

Belgrade, Serbia. Reliance

Defence holds industrial

licences for the full

spectrum of military

platforms and caters to the

development, manufacture

and supply of defence

aerospace, land and naval

platforms and equipment.

Following his meeting

with Aleksandar Vucic,

President of Serbia, Anil

Ambani, Chairman of

Reliance Group,

announced the

partnership, which aims to

cover wide areas of

cooperation in the defence

sector.

The proposal

envisages transfer of

technology by the original

when it will give firm orders.

SpiceJet will introduce

its first flight under the

Udan scheme to Porbandar

and Kandla next month

Aviation secretary R.N.

Choubey, who has steered

the government’s

ambitious subsidy-led

regional air connectivity

scheme Udan, was also

present at the event.

“This latest aircraft

order by SpiceJet, which

has been an enthusiastic

supporter and participant

of India’s regional

connectivity scheme, will

help further take forward the

government’s vision to

provide air connectivity to

the common man,”

Choubey said in the same

statement.

Rival IndiGo has

already announced plans to

tap the regional space and

participate in the

government’s Udan

scheme. The airline has

announced it plans to buy

50 ATR turboprop planes

that will be inducted from

the end of the year.

It showcased its new

ATR planes

w i t h

multicoloured

engine blades

at the Paris Air

Show.

S p i c e J e t

will introduce

its first flight

under the Udan

scheme to

Porbandar and

Kandla in

Gujarat next month, joining

Air India and TruJet in

starting such flights.

To be sure, regional

airlines are having a tough

time to scale up and

sustain.

In the last one year,

three airlines have shut

shop, including Air Costa,

Air Carnival and Air

Pegasus.

Chanakya’s Take

Spicejet has hit a 52

week high on Thursday.

Ranchhodbhai has been

recommeding airline stocks

since a long time. Buy a few

shares and then hold.

Reliance Defence signs deal with

Serbian firm Yugoimportequipment manufacturer

(OEM) and indigenous

manufacturing in India.

Yugoimport has offered a

fully compliant technical

solution to meet the

Centre’s Make in India

requirements, noted a

statement from Reliance

Defence.

Chanakya’s Take

Prices have corrected in

the May June period. We

have been suggesting

defence stocks strongly,

however, you also have to

keep in mind that this is an

Anil Ambani Group

company and hence it is

advisable to keep limited

exposure.

better demand.

ALL feels that as these

fully built trucks would

come with OEM warranty

and would be ready to use

from Day 1 thereby saving

body building time.

MHCV segment is

the key segment for

ALL. It accounts for 70-

71 per cent of its

revenues. In the MHCV

space, it currently has

30% market share (as on

May) which is a 2.5 per

cent gain over last year

first two months of

FY18.

In the MHCV goods

segment, market leader Tata

Motors had 47.6% market

share as on Q4FY17, while

ALL had 36.3 per cent

share.

While Tata Motors

share has slipped from 53.9

per cent in Q4FY16, ALL

share has gained from 31.6

per cent.

Chanakya’s Take

Majority of the growth

is expected in the

refrigeration trucks over the

next few years and there is

where the maximum

potential lies.

From investors point of

view, we recommend a buy

in this share with time

period of holding from 1 to

3 years.

Raymond arm sets up Rs.140-cr suit-

making plant in Ethiopia Silver Spark Apparel

Ethiopia PLC, a wholly

owned subsidiary of

Raymond, has started first

phase of production at its

greenfield garment facility

in Ethiopia.

Set up at Hawassa

Industrial Park with an

investment of over Rs. 140

crore, the company can

produce 600 suits per day

for different brands and

will employ 2,500 people.

The production will go

up to 4,000 suits per day,

when the entire 18

production lines is

commissioned in 18

months.

The modern facility,

which will primarily cater to

United States and European

markets, was inaugurated

by the Prime Minister of

Ethiopia Hailemariam

Desalegn along with

Gautam Hari Singhania,

Chairman and Managing

Director, Raymond.

The company, which

will import fabrics from

India, can tap the

developed markets duty-

free by exporting from the

special Ethiopian export

zone.

It has set up special

training centre at the unit

to skill local people.

The fresh capacity

addition will make

Raymond’s the top five suit

manufacturers in the world.

It has three units in

Bengaluru with capacity of

7,000 suits per day.

To ensure price

competitiveness, Ethiopia

makes a compelling

business case and helps

serve international

customers better, he added.

Leveraging the skill-

sets of garment

manufacturing facilities on

the domestic front, which

were acquired over a period

of time, the quantum leap

into an international

location for manufacturing

has been triggered by both

core competence and

business considerations,

he said.

Share prices stable .





Gitanjali’s Nakshatra, Capacit’e get

nod for public issuesD i v e r s i f i e d

conglomerate ITC will be

rolling out new product

categories every quarter in

perishable foods like fruits

and vegetables, going

forth. “There is a lot of work

in process right now.

Essentially, there are two

vectors along which

rollouts are going to

happen.

First, new categories

that require climate-

controlled ecosystem will

be launched, like fruits

and vegetables.

That will happen

every quarter. Second,

within existing

categories, there would

be value addition,” S

Sivakumar, group head, agri

and IT businesses, said.

Leveraging a 45-year

experience in prawn exports,

ITC waded into the frozen

foods segment with Master

Chef prawns. Currently

available in Hyderabad and

New Delhi, the product will

be launched to five more

metro cities by October.

The market for frozen

prawns is evolving. While

the size of the packaged

frozen prawns segment in

India is small at Rs300 crore

and yet to mature, the fresh

unpackaged segment is

Shares of Lanco

Infratech continued to

witness a steep fall,

touching an all-time low of

Rs.1.70, down 9.57 per cent,

on the BSE on Tuesday.

This is in addition to the

fall of over 20 per cent over

the past two days on news

of bankruptcy

proceedings making the

rounds.

RBI move

Earlier, the RBI had

directed IDBI Bank, the

lead manager of Lanco to

initiate the Corporate

Insolvency Resolution

Process under the

Insolvency and Bankruptcy

Code, 2016.

The company had in a

communication informed

that the amounts mentioned

include Rs.8,146 crore for

fund-based outstanding

ITC to venture into new FMCG

category every quarter

RCom puts Mumbai, Delhi real

estate assets on the block to pare debt

around Rs7,700 crore;

prawns account for the

majority of seafood exports

from India, valued at around

Rs22,000 crore. The total

value of prawns cultivated

in India is Rs30,000 crore, a

bulk of which is exported.

Sivakumar said the

objective was to create

markets for products that

have so far been defined by

availability. “At a macro

level, this chain can

contribute to minimising the

post-harvest wastages in

agricultural produce,” he

explained.

Following prawns, ITC

will foray into fruits and

vegetables. “We are

evaluating a number of

vegetable and vegetable-

based products as well as

fruits. We are looking at

both processed and fresh

fruits and vegetables. This

will address the challenge of

enormous wastages of agri-

produce in the country,”

Sivakumar added.

The next set of

launches will include potato

and potato-based value-

added products,

dehydrated onions, mango

pulp, tomato and tomato

puree, among others. The

aim is to venture into a

new category every

quarter. Would ITC be

building a cold-chain

infrastructure? “Our

task in building the

cold chain is ensuring

the throughput. We

will plug the gap

wherever there is a

gap,” Sivakumar said.

Typically, there are

three elements in a cold

chain — transportation,

intermediate storage and

retail stores. “Storage and

transportation have

developed and with the

evolution of modern trade

even the retail shelves have

improved. The key lubricant

now is to ensure

throughput,” he added.

Chanakya’s Take

Share has been

performing well since some

time now. A good time to

enter this stock both with

short term and long term

perspective.

exposure and Rs.3,221 crore

for non-fund-based

outstanding exposure as on

March 31, 2016.

The government has

initiated a process to

address bad debts and had

recently chosen 12

corporate entities under the

Insolvency and Bankruptcy

Code Proceedings.

Under the initiative, the

government and the

Reserve Bank of India RBI

plan to expeditiously

address these cases,

Crisis-hit Reliance

Communications Ltd

(RCom) hopes to raise over

Rs10,000 crore by selling

two of its prime properties

in order to pare debt, said

two people familiar with the

matter.

The company has

sought offers from

interested buyers and

partners through

advertisements in

newspapers over the past

few days.

The Anil Ambani-led

firm has hired real estate

services company JLL to

broker a deal for its

corporate office in central

Delhi and Dhirubhai

Ambani Knowledge City

(DAKC) in Mumbai. The

firm is also exploring the

option of co-developing

these properties, said one

of the two people cited

above. Neither wanted to be

identified.

Both RCom and JLL

declined to comment.

RCom has bought time

till December for a strategic

restructuring plan,

receiving a seven-month

breather to service loans

amounting to Rs45,000

crore.

The company has

claimed that its debt burden

will be reduced to Rs20,000

crore with two deals by

September, well before the

December deadline. RCom

said its merger with Aircel

and sale of tower assets to

Brookfield will close by 30

September, subject to

approvals, and will reduce

debt by nearly 60%, or

about Rs25,000 crore.

The company has been

reeling under a slew of

rating downgrades over the

last few days that have

battered its stock.

The Delhi property,

Reliance Centre (formerly

Hotel Ranjit) on Maharaja

Ranjit Singh Marg, is

spread over approximately

3.7 acre and estimated to be

valued at up to Rs800 crore.

The constructed area of the

building is 318,759 sq. ft.

The property is owned by

Campion Properties Ltd, a

100% subsidiary of RCom.

The Mumbai property,

DAKC, is spread over 133

acres in Navi Mumbai, and

has a development potential

of 13 million sq. ft, including

a captive residential area. So

far, around 2 million sq. ft

has been developed

according to the

advertisements.

A property consultant

who also did not want to be

named found RCom’s

expectations from these

assets “overvalued”.

The company is also

trying to sell its Delhi office

at Connaught Place.

The group has been

planning to sell most of its

real estate assets to raise

cash and pare debt. In 2015,

it sold nearly 150 residential

flats in Navi Mumbai for

Rs330 crore.

Some other properties

that the group has been

looking to sell include those

at Kolkata’s Chowringhee

Road, 19 acres in Bengaluru

and properties in Ambattur,

an industrial area near

Chennai.

Chanakya’s Take

All shares of Anil

Ambani group are a no go

as of now.

wherein Lanco Infra is one

such company chosen for

resolution of long pending

dues.

According to the

proposed move to address

these stretched

companies, over the next

six months the company

and the lenders would

regularly interact and

keep a close watch on

debt and seek to address

them by thrashing out an

amicable solution.

The Joint Lenders

Forum or the consortium of

banks that have extended

loans to the company will

meet regularly and try and

find a solution.

Chanakya’s Take

Company’s slogan of

always inspiring rings

hollow now. Stay away as

of now.

PVR Cinemas to open more than 200

screens in three yearsMultiplex chain

operator PVR Cinemas is

planning to open between

210 and 220 screens across

the country over the next

three years, said a top

official.

“We will be opening at

least 75 screens every

year,” said Gautam Dutta,

chief executive officer, PVR

Cinemas. “Each screen calls

for an investment of Rs.2.5

crore each.”

Presently, PVR Cinemas

operates 584 screens in 127

properties in 50 cities. With

its proposed plan, it would

have at least 850 screens

operating in 60-65 cities.

The investment would be

met through internal

accruals and debt.

“We can easily add 225-

240 screens through

organic route in next three

years to propel our future

growth. Touching 1,000

screens is our dream. It will

take at least five years. We

are also looking at

inorganic growth,” Mr.

Dutta said.

On Wednesday, Mr.

Dutta inaugurated the third

outlet in Chennai with five

screens.

In Chennai, “we will add

15 more screens in the next

18 months taking the total

to 32 screens. In Chennai,

we have 4,100 seats. It is a

great fertile market,” Mr.

Dutta said.

According to Mr.

Dutta, PVR Cinemas has a

big presence in West

(41%), followed by North

34% and South 22%. Last

year, the company reported

topline of Rs.2,200 crore.

North and West region

accounted for 65% of the

total income and South

about 28%.

Chanakya’s Take

PVR is one share which

can give multifold return

during the next few years.

So inspite of the fact that

share prices have increased

a lot in the last few months,

it would be prudent to add

a few shares on dips.

Currently would be a good

time to enter.


20-06-2017


Tech Mahindra bets on telecom strength to

grow IoT, connected devices bizThe government

decision to go for

consolidation among the

oil public sector

undertakings has fuelled

ambitions of at least three

of them.

Oil and Natural Gas

Corporation (ONGC) and

GAIL India had earlier

shown interest in taking

over Hindustan Petroleum

Corporation Ltd (HPCL)

and OIL India, respectively.

HPCL is now also casting

an eye on Mangalore

Refinery and

Petrochemicals (MRP).

According to sources,

HPCL has expressed its

interest to the government

in acquiring the

M a n g a l o r e - b a s e d

company.

Second largest in the oil

retailing segment, it already

holds stake in MRP, a

subsidiary of ONGC. “We

have expressed our interest

to grab stake. If it works out,

it will be a clear synergy in

terms of our business,"

said a senior HPCL official.

ONGC holds a 71.63 per

cent stake in MRP and

HPCL has 16.97 per cent.

Tech Mahindra, India’s

fifth-largest IT services firm,

looks to tap on its traditional

strength in serving telecom

customers to expand its

business in connected

networks and Internet of

things. It plans to drive

growth through small

platforms to solve problems

of clients in a targeted

approach.

For example, Tech

Mahindra is offering

software-defined network

(SDN) solution with an

additional layer of the

internet of things (IoT) in the

communication technology

services business, wherein

the company saw sharp fall

in revenue in the fourth

quarter of last fiscal. The

company is planning to offer

bundled packages on digital

technology areas through

focused teams and skills.

The company has

developed “more than 30

small platforms and all of

them function like individual

start-ups” to improve the

customer experience of its

clients faster.

“We have built more

than 30 platforms as one big

platform will not solve all the

problems. And the whole

objective for is to be able to

IDBI Bank to raise up to Rs 5,000 crore

HPCL sets sights on Mangalore

Refinery for acquisitionThe public stake is 11.42 per

cent. With the current

market capitalisation of Rs

22,232 crore of MRP, the

additional 34 per cent HPCL

will have to buy from ONGC

to take a majority would cost

Rs 7,558 crore.

“If this happens, it will

be advantageous for HPCL

in terms of crude sourcing

and product availability in

South India. MRP can

create an incremental

capacity, too, for HPCL in

the south, reducing

dependence on private

players, where its demand is

higher than refining

capacity," said Dhaval

Joshi, research analyst at

Emkay Global Financial

Services.

However, industry

experts believe that this is

unlikely to happen. Both

because it might not help

the government in meeting

its divestment target and

also because ONGC might

be reluctant to sell its stake.

ONGC acquired 37.38

per cent stake of Aditya Birla

Group in MRP in March

2003 for Rs 60 crore. At the

time, HPCL owned 37 per

cent in MRP. Following this,

ONGC infused equity capital

of Rs 600 crore, making

MRP its subsidiary. “It was

ONGC that turned around

the company, talking to the

lenders and coming up with

a debt restructuring

package, which even

included conversion of debt

into equity. Hence, it is

highly unlikely that ONGC

will give up its stake," said

R S Sharma, former ONGC

chairman and head of the

hydrocarbon committee at

business chamber Ficci.

There are reports of

resentment within the HPCL

management and employees

over the ONGC wishing to

take it over. And, that the

plan to acquire MRP might

have been mooted for this

reason.

Chanakya’s Take

Despite of whether the

oil giants like it or not,

consolidation in this space

is bound to happen sooner

or later.

HPCL is in a bearish

trend right now, better

option would be IOC. Rather

than buying ONGC, MRPL

would be a better option.

make changes faster. Our

focus has been on a 360-

degree approach and it is

important that a culture is

created, as we cannot do it

in isolation. So we have

created a young CEO

programme who will run

these small platforms as

start-ups within the

organisation,” said Jagdish

Mitra, chief strategy officer,

Tech Mahindra.

He added that the

company has taken a “very

significant bet” in building

SDN and network function

virtualisation for the

communication services

vertical and it would offer a

combined experience to the

clients consisting of styling,

design, technology and

operation.

The company’s fourth-

quarter profits declined

more than 30 per cent on the

back of poor performance in

communication business

amidst restructuring of

LCC, a US firm it acquired in

2015.

Tech Mahindra’s net

profit stood at Rs 2,813 crore

on revenues of Rs 29,141

crore in the last financial

year.

Mitra believes the in

long-term Tech Mahindra

will drive growth through

agile Devops platforms ( a

combination of software

development and IT

operations) and people will

be skilled accordingly to

ensure better customer

experience through

dedicated platforms.

The platforms within

Tech Mahindra are largely

segregated into two

categories - horizontal and

vertical platforms. “While

horizontal are those can cut

across multiple

nonlinearities and vertical

ones are industry specific

and we are building them

through a mix of buy and

build.”

The company has built

something called a “Second

Nest” in the Silicon Valley

to partner with startups and

work on customer problems.

“We have created a small

unit in the (Silicon) Valley

that focuses on partnering

with startups. We take

customer problems and

jointly work with the

startups.”

Chanakya’s Take

Even if you want to take

a contrarian call and buy IT

we advise you to wait as it

will take some time before

bottom is reached,

Mumbai-based public

sector lender IDBI Bank is

seeking shareholders’ nod

to raise equity capital of up

to Rs 5,000 crore through

various routes, including

qualified institutional

placement (QIP), to meet

capital adequacy norms.

In addition, the ailing

bank will tap market to raise

up to Rs 5,000 crore through

infrastructure bonds and

b a s e l - I I I - c o m p l i a n t

additional tier-I and tier-II

bonds.

The bank will put the

proposal for raising equity

capital before shareholders

at its annual general

meeting (AGM) on July 18.

The special resolution

passed at the last AGM

(held on July 22, 2016) for

raising capital through QIP,

Petronet LNG Ltd,

India’s biggest importer of

liquid gas, is in talks to buy

25% stake in Gujarat State

Petroleum Corp.’s (GSPC)

almost complete Rs 4,500

crore Mundra LNG import

terminal in Gujarat.

The 5-million tonne a

year import terminal, the

third facility in Gujarat for

import of natural gas in its

liquid form in ships, is

nearing completion and

GSPC is keen to shed some

of its stakes to lighten its

debt burden.

GSPC first offered its

50% stake in the project to

state refiner Indian Oil

Corporation (IOC), but the

company was willing to

take no more than 25-26%.

So now, GSPC is talking to

Petronet for selling 25%

stake, people privy to the

Petronet in talks to buy stake in

GSPC’s Mundra LNG terminaldevelopment said.

The Adani group holds

25% interest in the LNG

import terminal. GSPC LNG,

a unit of GSPC, will hold 25%

stake, similar to IOC and

Petronet once the deal

concludes, they said.

With a view to expanding

its gas business, IOC is keen

to buy a stake in the Mundra

terminal. Petronet, too, is

keen to raise its import

capacity. Petronet operates

a 15 metric tonne a year LNG

import facility at Dahej in

Gujarat and has another 5-

mt a year terminal at Kochi

in Kerala.

IOC, the country’s

largest oil company, is

building a 5- mt a year LNG

import terminal at Ennore in

Tamil Nadu by 2018 -end.

Besides the Dahej liquefied

natural gas (LNG) import

facility of Petronet, Gujarat

has another 5 mt terminal of

Shell at Hazira.

Initially, GSPC was to

hold 50% stake in the

Mundra LNG terminal and

Adani 25%. The remaining

25% was to be offered to a

strategic partner.

GSPC is looking at a

partner which can bring in

LNG or consume the

imported liquid gas, people

said. The Mundra terminal,

which is to be financed with

a debt to equity ratio of

70:30, is expandable up to

10 mt per annum in the near

future.

Chanakya’s Take

Rather than buying

stake in GSPC as of now,

Petronet LNG is a good

option. Currently you can

buy and get good returns

in 3 -4 quarters.

is valid only for one year,

till July 21, 2017. As for debt

(bonds) issuance, the

proposal will be valid for

one year from the date of

passage of proposal. The

bank, which has been

struggling with losses for

the past two years, is under

the corrective action plan

(CAP). In the year ended

March 31, the bank posted

a net loss of Rs 5,158 crore,

as against a net loss Rs

3,665 crore in the previous

financial year.

The capital adequacy

ratio was 10.70 per cent,

with tier-I of 5.64 per cent.

Its capital conservation

buffer (CCB) stood at 0.14

per cent against regulatory

requirement of 1.25 per

cent.

IDBI is discussion with

the government for a

turnaround plan, which

entails milestone and

commitment from the bank

in areas like cost control,

reorganisation of structure

and improving financial

profile. The government has

a 73.98 per cent stake in IDBI

Bank as on March.

Rating agencies,

including CRISIL, ICRA and

Moody’s, have

downgraded various debt

instruments of the bank on

the back of weak

profitability and

deteriorating asset quality,

which have resulted in

erosion of its capital.

Chanakya’s Take

Bad times continue to

roll for this share and hence

not advisable to buy

currently.




Midcap Mania

QQQQQ KIOCL : We had recommended previously but

it was in constant circuit and hence difficult to

buy.Now it is out of circuit and government hold 99%

stake in this company. Can surely buy. At Rs. 100 and

government has sold at Rs. 800 in private placement

previously. So you can understand the potential.

QQQQQ IOC : Currently share in moving in the trading

range of Rs. 380 - 425. Currently at bottom level and

one can buy at this level.

Q Q Q Q Q GAIL : Another share which is available at bottom

levels is Rs. 354.At Rs. 354, share is available at very

cheap levels if you can hold for sometime.

QQQQQ ONGC : ONGC is currently trading at an RSI of

24.78 , which is rock bottom. Buy and hold for atleast

1 year. India's largest natural gas field Bassein in the

Arabian Sea has seen a remarkable turnaround with

the natural decline that had set in at the 28-year old

field reversed and output slated to rise by a quarter to

a record high in 2018. The field is India’s fastest

growing company.

Q Q Q Q Q Tata Motors : Tata Motors is likely to save Rs

300-400 crore from its mega restructuring plan that

involves workforce reshuffle, and even layoffs.Nearly

1300 white-collar employees have been moved to

different roles, transferred to other units, or discharged

of their services. Share is currently in downtrend and

one can buy on dips.

QQQQQ HEG : From a low of Rs. 144 in Nov 2016, share

price is now at Rs. 315. HEG Ltd, a premier company of

the LNJ Bhilwara group, is today India's leading

graphite electrode manufacturer. It has one of the

largest integrated Graphite Electrode plants in the

world, processing sophisticated UHP (Ultra High

Power) Electrodes.The company exports over 80% of

its production to more than 25 countries of the world.

Share will now move towards Rs. 335.

QQQQQ Seamec Ltd.: India's leading provider of diver

support vessel-based diving services along with utility

services and provider of Bulk Carrier

Services.Company has moved from loss to profit in

Q4 and share prices have moved up quite a lot. Now

share price is at Rs. 138 and can move upto Rs. 142.

Another option is Essar Shipping or Shipping

Corporation of India as government has now put 5%

tax on shipping.

QQQQQ Supreme Ind : Share in a strong uptrend and

once it goes beyond Rs. 1260 , another leg of its strong

uptrend will start and may move upto Rs. 1282. India’s

No.1 company in plastic furniture. Nilkamal has seen

its share of uptrend in the past few months and now it

is the turn of Supreme Industries. If this share is too

expensive buy Supreme Petrochemical which is

available at Rs. 370-377.

QQQQQ GMR Infra: Bengaluru-based diversified GMR

group plans to bid for airport projects in Serbia and

Jamaica as it seeks to expand its airports business to

more overseas countries. At Rs. 21 share is worth the

risk. Speculators are saying price of Rs. 26-27. Be ready

to make a quick exit.

QQQQQ Reliance Capital : IPO of Reliance’s insurance

business and mutual fund business are in the pipeline

and value unlocking will be good at that time.

Shareholders will also get free share of Reliance Home.

Short term target of Rs. 664.

QQQQQ Bank of India : After making a high of Rs. 197,

now share has come down to Rs. 134. Now it is at

bottom level. Soon there will be news of some merger

and at that time prices will rise.

IPO Coverage

AU expected to see good subscription figuresJaipur based Chartered

Accountant, Sanjay Agarwal started

a small NBFC after passing out in 1995.

He started out by offering loans

against vehicles and in the 22 years

since then the company has spread

to Gujarat, Madhya Pradesh,

Maharashtra along with increasing

footprint in Rajasthan.

India is the fourth largest economy

in the world and in 2016 financial

sector, insurance and professional

services sector has seen a double digit

growth rate. Industry has seen a

growth of 7.3% and in order to

increase the rate of growth the

government in 2012 had talked about

financial inclusion.

Under financial inclusion, it was

planned that the entire country would

be covered by the banking sector and

for this purpose during april 2015 to

March 2016 1670 bank branches were

opened in rural areas.

Due to economy growing at a

good rate, the demand for vehicles and

vehicle finance is growing. During the

next two years, demand for vehicle

finance will show a rise of 15% as per

expectations.

RBI has given small finance bank

license to AU Financiers in December

2016 and since then company has

converted its 300 branches into

banking branches. AU Small Finance

Bank started its working on 19th April

2017.

AU is the symbol for gold and the

company currently gives vehicle

finance, micro , small and medium

enterprise is the company’s focus.

Spread in 10 states of the country

and having 8515 employees this bank

bank had 269 branches and 121 asset

centers by the end of May 2017. The

company has plans to open another

162 branches and 7 central processing

centers in 2018.

In 2016-17, company’s figures

reflects its business as a finance

company and it has given total loans

of Rs. 6730 crores and on income of

Rs. 1417 crores had shown a net profit

including exceptional items of Rs.

842.71 crores.

AU Financiers

IPO Highlights

Issue Opens 26-06-17

Issue Closes 30-06-17

Price Band Rs. 355-358

Retail Priceband Rs. 0

Issue Size Rs. 1913 cr

Share on offer534 lac share

Retail portion 10% of net

offer

HNI portion 15% of net

offer

Facevalue Rs.10

For Rs. 1 lac 246 shares

application Rs.88068

For Rs. 2 lac 533 shares

application Rs.1908144

Lisitng BSE-NSE

Grey market

premium Rs. 110

Koshtak Rs.850

Chanakya’s Speciality :

Expected Listing Price :

Rs. 440

How Retail investor can subscribe to

AU Financiers IPO

No. of

SharesAmount

Rs.

No. of

SharesAmount

Rs.

41

82

123

164

205

246

-

14678

29356

44034

58712

73390

88068

-

278

328

369

410

451

492

533

102746

117424

132102

146780

161458

176136

190814

But that includes the profit of

selling the housing finance business

but if that figure is subtracted than

company has earned EPS of Rs. 11.96.

Share is being offered at a price

band of Rs. 355-358. So the PE comes

to around 30 if the upper price band

of Rs. 358 is considered. Hence in

normal circumstances, one would

consider this offer price to be very

expensive.

But currently the way the Sensex

and Nifty are making new highs

everyday, investors are in a very

bullish mood and the generally

tendency of being left out is felt. So

they have become ready to lap up

shares even when offered at such high

valuations. Only because of this

reason, there is attraction towards AU

Financier shares in the grey market

by the retail investors.

Bank is offering 5.34 crore equity

shares in offer for sale and so the

entire proceeds will go in the pocket

of the selling parties and if you pay

this high price for the shares it will

not be utilised towards the working

AU Financiers Timetable

27th June, Anchor Investment

28h June, Offer Opens

30th June , Offer Closes

05th July, Finalisation ofBasis

of Allotment

06th July , Unblocking of

ASBA

07th July, Credit to DEMAT

Account

10th July, Listing

of the bank.

Some analysts are

comparing this bank with

RBL Bank and expecting

that AU will see a

spectacular listing like

RBL. But RBL Bank was in

a different strata due to its

last 5 years earnings figure

and almost zero NPA

levels.

However, topline and

bottomline of AU

Financiers are not that

impressive . Also, the

company which considers itself to be

an expert in finance business has

gross NPA of Rs. 107 crores in end of

March 2017 and net NPA of Rs. 69

crores. And hence one cannot expect

a solid valuation like RBL Bank.

The share will list at a premium

of Rs. 60-70, just because the

broader markets are in a bullish

mode.

Tejas Network will see listing with

nominal premiumTelecom networking company

Tejas Network has not been seeing

any movement in the grey market

and hence retail investors have not

shown much interest in subscribing.

Along with retail investor, QIB and

NII also showed a weak response.

QIB portion were offered 94.34

lac shares and that portion was

subscribed 2.16 times. HNI were

offered 46.06 lac shares and it was

subscribed only 48%. In retail 30.31

lac shares were offered and it was

subscribed 3.10 times and overall the

issue was subscribed 1.88 times.

Fundamentally, Tejas has a

very strong business set up. The

way the government is focusing

on digital India and also with the

advent of GST and Aadhar based

payment, the government will

need strong telecom network and

hence the company has a good

future.

But it has to be kept in mind

that HNI was not subscribed even

1 time and there is no fancy in the

grey market and hence we believe

that company will list with a

nominal premium.


Buy KEI Industries @ Rs.230 Sell @ Rs. 238-249 Buy Speciality Restaurant @ Rs.91.30 Sell @ Rs. 94-97

Technical ViewThe Scrip closed at

Rs .93.95 and the scr ip


uptrend.

50-day SMA, which




at Rs. 82.01.

The 30-week SMA,




Rs.87.23. Al l the four



RSI is at 71.06



the MACD.

Both the Stochastic

Indicator and the

Stochast ic RSI are



stock.

You can take a buy


a stop loss of Rs.89.87

and target of Rs.98.37.

The next expected

level is Rs.102.

Stop Loss Rs. 89.87

Target Rs.102

The Scrip closed at

Rs 228.45 and the scrip


uptrend.

50-day SMA, which

is at Rs.214.90, has shows

a positive crossover over


at Rs. 218.50.

The 30-week SMA,




Rs.216.20. All the four



RSI is at 62.22

and the Signal l ine at

2.71,which has shown a

crossover over the MACD

which is at 3.84.

Both the Stochastic

Indicator and the

Stochast ic RSI are



stock.You can take a buy



target of Rs.232.

The next expected

level is Rs.235.

Stop Loss Rs. 224

Target Rs. 235

Fundamental view

Sure Shot !!! Sixer !!!

Started by Anjan

Chatterjee in 1992,

Speciality Restaurant

began with a standalone

restaurant Only Fish in

Mumbai.

Today the

company has 116

restaurants with many

different brands which

concentrate on

different cuisines. The

brands include

Mainland China, Asia

Kitchen, Oh Calcutta,

Sweet Bengal,

Hoppipola, Machan,

Sigree etc.

The company came out

with an IPO in 2012 at the

issue price of Rs. 155.

Which means that

currently the share price is

trading below the issue

price. Share has recorded

a 52 week high of Rs. 101 in

June 2016 and then went

Established as a

partnership firm in 1968,

KEI Industries came out

with an IPO in the year 1992.

KEI Industries Ltd. is

one of India's leading

Electrical Cable and Wire

Manufacturers that

specialise in manufacturing

Power Cables, Electrical

Cables

KEI manufactures high

and low tension cables

(EHV, HT & LT), control

and instrumentation

cables, house wires and

stainless steel wires. Its

unique product range is

known pan India and

across the globe.

KEI has also been

awarded the ' Superbrand '

status for the year 2014-

2015 further strengthening

the consumer 's trust. To

follow the present demands

of the market, KEI set foot

into the manufacturing of

24-06-2017

down to Rs. 59.50 in March

2017. Since then share

prices have recovered a lot

since then and are showing

good momentum

supported by volume in

trades.

Rajesh Kumar Mohta,

CFO of Speciality

Restaurants said that

things are looking better

and he is seeing signs of

recovery.

Expect single digit

revenue growth and hope

to turn profitable in FY18,

he added.

The company is

looking at smaller formats

to help reduce manpower

costs, electricity cost and

other indirect cost. The

company is in the

process of revamping

Mainland China and

changing its name to

Asia Kitchen by

Mainland China.

The company

derives 47 percent of its

revenue from Mainland

China, 14-15 percent

from Hoppipola, and

the balance from other

brands like Sigree and Oh!

Calcutta.

However, revenues has

decline in Q4 and loss has

widened. Keeping this in

mind it would be prudent

only to buy a few shares and

take benefit of the ongoing

uptrend and exit quickly.

EHV cables up to 400kV in

collaboration with Brugg

Cables, a century old Swiss

company.

Company provides

products to sectors such as

Marine, Coal/Mines,

Railways, Wind and Power,

and Smart Building. This in

addition to domestic

household requirements.

Copper being a major

raw material, in a recent

interview, CMD Anil Gupta

said that the company

maintains 2-3 months

copper inventory in its

factories and a pipeline of

1.5-2 months under

shipping, adding, any rise

in copper prices won’t

impact margins.

Q4 results have been

good with company

recording a total sales of Rs.

739 crores compared to

Rs. 636 crores in the year

ago period.

Net profit went upto

Rs.31.62 crores compared

to Rs. 20.28 crores in the

year ago period. In Q3 the

net profit was Rs. 27.18

crores.

EPS in Q4 was Rs. 4.06

and it was Rs. 2.63 in the

year ago period. Share has

a face value of Rs. 2 and

book value of Rs. 60.90.

Share trades at a PE of

17 compared to Finolex

cables which trades at a PE

of 24.50.EPS for the full year

was Rs. 12.70. Share prices

expected to show strong

uptrend.


Buy Adani Port @ Rs.365. Sell at Rs.384

Buy Pidilite @ Rs.830. Sell at Rs.875

The Scrip closed at



uptrend.

50-day SMA, which




at Rs.358.

The 30-week SMA,






bullish trend.

RSI is at 57 and


crossover over the

MACD.

Both the Stochastic

Indicator and the

Stochast ic RSI are



stock.

You can take a buy



target of Rs.370.The


Rs.384

Stop Loss Rs.361

Target Rs.384

The Scrip closed at



uptrend.

50-day SMA, which




at Rs.800.

The 30-week SMA,




769 All the four moving


bullish trend.

RSI is at 70 and

the Signal line has shown

a crossover over the

MACD.

Both the

Stochastic Indicator and

the Stochastic RSI are



stock.

You can take a buy



target of Rs.841. The next

expected level i s

Rs.875

Stop Loss Rs. 817

Target Rs. 875


Kalidas Mill Compound, Gomtipur, Ahmedabad : 380021. Subject to Ahmedabad Jurisdiction. Vol. 24 Issue no. :73 24-06-2017 20 Paise RNI No. / 67324/94

Both the Stochastic

Indicator and the

Stochast ic RSI are



stock.

You can take a buy



target of Rs. 442. The next

expected level i s

Rs 452

The Scrip closed at



uptrend.

50-day SMA, which




at Rs.437.

The 30-week SMA,






bullish trend.

RSI is at 51.89



the MACD.

Stop Loss Rs. 435

Target Rs. 452

Buy Petronet @ Rs.438 . Sell @ Rs.452

Buy L&TFH@ Rs.140 . Sell @ Rs.155

The Scrip closed at



uptrend.

50-day SMA, which




at Rs. 105.

The 30-week SMA,






bullish trend.

RSI is at 51.89



the MACD.

Both the Stochastic

Indicator and the

Stochast ic RSI are



stock.

You can take a buy




expected level i s

Rs.155

Stop Loss Rs.137

Target Rs. 155


Commodity Corner

26-06-2017

Gold Silver

ZincCopperLondon copper rose on Thursday, holding onto hefty overnight gains triggered by

data showing the metal's shift to a global supply deficit.

The global world refined copper market showed a deficit of 5,000 tonnes in March,

compared with a 102,000 tonne surplus in February, industry data released this week

showed.

Traders said light profit-taking by some investors led to a minor retreat late in the

Asian trading day, with losses softened by a weaker U.S. dollar against other currencies

Three-month copper on the London Metal Exchange was flat at $5,745 a tonne by

0100 GMT after climbing 1.6 percent overnight.

The most-traded copper contract on the Shanghai Futures Exchange opened 1.32

percent higher at 46,100 yuan ($6,752.11)a tonne.

RSI is at 53.25 and short term and medium term trend is bullish.

The value of India’s gold demand in the first two months of the current fiscal year

exceeded its total imports in the first six months of 2016-17, when demand was muted due

to government’s drive against black money, impact of drought in the previous year and a

42-day strike by jewellers protesting introduction of one per cent excise duty on gold.

The World Gold Council, in a couple of India specific reports in the last few months,

expected the country’s gold demand to rebound in the current calendar year after the

squeeze experienced in 2016. However, it cautioned that the implementation of GST “may

be disruptive in the short term as the industry adjusts to the new tax regime”.Among the

disruptions it had identified were working capital problems for manufacturers and retailers

due to inter-State gold stock transfers. Retail prices are likely to rise due to higher tax

liabilities for manufacturers and retailers.

Silver prices wrested control of the Rs39,000-per kg level again by surging Rs 300 on

Thursday, highlighting a firm trend overseas and increased offtake by consuming

industries.Traders attributed the rise in silver prices to positive global cues and pick-up

in demand from industrial units. Besides, increased offtake by coin makers at the domestic

spot market supported the upside.

Globally, silver rose by 0.97% to $16.59 an ounce and gold by 0.51% to $1,252.60 an

ounce in Singapore. In the national capital, silver ready rallied by Rs 300 to Rs 39,000 per

kg and weekly-based delivery by Rs 225 to Rs 38,355 per kg.Silver coin prices also jumped

by Rs 1,000 to Rs 72,000 for buying and Rs 73,000 for selling of 100 pieces. On the other

hand, gold of 99.9% and 99.5% purity shed Rs 5 each to Rs 29,100 and Rs 28,950 per 10

grams, respectively. It had gained Rs 105 yesterday.

Technical Analysis

Rs. Stop Loss Target 1 Target 2 Target 3

Zinc MCX 1M 170.50 176.25 178.45 184.20

Technical Analysis


Copper-MX-1M 367.27 373.32 376.03 382.08

Technical Analysis


Silver MCX 1M 38035.67 38468.67 38717.33 39150.33

Technical Analysis


Gold MCX 1M 28583 28712 28795 28924

Zinc is currently the fourth most widely consumed metal in the world after iron,

aluminum, and copper. Zinc is used primarily to galvanize steel which is the process of

adding thin layer of zinc to steel to make it rust proof.

Talking about zinc’s supply and demand, an unlikely scenario that we have heard in

todays world is supply deficit. It is a concept which is uncommon.It is indeed rare to see

supply deficit in metals let alone showing signs of wider supply deficit in years to come.

Zinc had incredible year in 2016. It gained 63 per cent and in 2017 corrected 6 per cent.

It is estimated that 42% of world’s zinc is consumed by China. We expect zinc to

bounce back to 168-169 in MCX. The oscillators have also started to correct and point in

the buy direction.

However we expect fair bit of resistance around 171-172 levels in Zinc



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