J Street Volume 267

7/24/2019 J Street Volume 267

1/8

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rket

View

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mpany

Update

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wledge

Corner

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tual

Fund

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mmodity

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Card

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Contributor

rgi

Shah

cial

Contributors

esh

Trivedi

tya

Nahar

suggestions,feedback

queries

[email protected]

Market View:

Major events w ill keep the market volatile with negative bias

Last week, The Federal Reserve kept the rates unchanged with some strong commenraise the rates in December. The comments made by The Fed Chairperson pushed currency up in the international market and Dollex made the high of 97 plus oIncidentally our market could not go beyond the 200 dma and corrected from the sameIt broke the important level of 100 dma. The market closed near to 50 dma of 8015 whivides strong support to the market. The result season is in full swing. But the market is for the Bihar election outcome which may provide short term trigger of either side. Durdevelopment the government announced draft aviation policy which is equipped with proto push the ailing sector and enthused the market and the sector. The banking gianBank, pharma giant Dr. Reddys and power sector giant NTPC performed well in last giving hopes to the market but the disappointing data of Q2 by infra giant Larson is rmatter to be worried about. Consistent selling by FIIs in cash market will keep the nervous and the Bihar uncertainty will add to it. Considering the above factors it is advisremain cautious in short term.

Technically any fall below 8000 may trigger further fall. The recent statements by F

Minister about the challenging international atmosphere and resultant uncertainty for

export are also a cause of concern. An investor having cash on hand wi ll be able t

the benefits at the time of volatility around Bihar election result.

Kamal JhaveriMD- Jhaveri Securities

1 -

267November,2015


2/8

2-

Company Basics

E Code 524816

E Symbol NATCOPHARM

UITY ( in Cr.) 34.83

T.CAP ( in Cr.) 8921.90

Financial Basics

FV () 10.00

EPS () 40.25

P/E (x) 63.63

P/BV (x) 7.52

BETA 1.1454

RONW (%) 18.98

Share Holding Pattern

Holder's Name % Holdin

Foreign 21.26

Institutions 5.90

Promoters 51.29

Non Prom. 0.00

Public & Others 18.94

Government 2.61

mpany Overview

was established in 1981 in Hyderabad with a single unit and 20 employees. At present Natco Pharma h

nufacturing facilities spread across India with dedicated modern research laboratories and more tha

ployees. NATCO Pharma exports both APIs and Finished Dosage Forms that comply with Interna

ndards to various markets across the globe. Exports contribute about 50% of the companys total revenue

estment Rational

ding Oncology player in Indian Pharmaceutical space

co has strong presence in Indian Oncology space with focusing launching of the generic versions of ecancer medications at a low cost of existing therapies. Natco pioneered the launch of several generic verugs in the domestic oncology segment and holds a leading market share in their operated portfolios.

co has strong international presence

: For US market Natco has created niche in therapeutic areas and focusing on generic space. The Compang Para IV products pipeline for US market which is expected to commercialize over the next few yearsMarket and most of them strong market and revenue visibility such as Copaxone 20 / 40 mg has a marktunity of $ 2410 Mn and $342 Mn. respectively.

PCINAT : A game changer for Natco

co mainly associated with oncology and its related business. In FY15, company has launched HEPC

fosbuvir) in India which makes Natco one of the few companies globally to launch Hepatitis C

dicines. With the launching of this medicine, Natco has started to focus on non-oncology therapy se

ch spur the growth in India and Rest of World. According to WHO, HEPCINAT has robust opportun

ume growth as India has ~15-20 Mn. people who have infested HCV infected people and more than 1

ple in developing countries. According to management, this product will contribute significantly in FY1

Natco.

uation : Currently, NATCO is trading at 2545. We recommend Accumulate with target price of

ing stock 48xFY17E EPS of 66.32.The stock current ly trades at 53.71 x of FY16E and 38.37x of F

mpany Update : Natco Pharma Ltd.

267November,2015


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eekly Market Recap :

The Fed kept its benchmark interest rate unchanged near zero after the conclusion of a two-day monetary policy mon Wednesday, 28 October 2015. The next monetary policy review from the Fed is scheduled on 15-16 December

Trading was volatile as traders rolled over positions in the futures & options (F&O) segment from the near month O2015 series to November 2015 series. The October 2015 derivatives contracts expired on Thursday, 29 October 20

Cipla rose 1.25% to Rs 689.85. The company has entered into a definitive agreement to sell its entire remainintake in Biomab Holding Limited, Hong Kong (BHL) to Biomab Brilliant Limited, British Virgin Islands for

consideration of $25.77 million.

rket Eye Week ahead :

Shares of automobile companies will be in focus as companies start announcing monthly sales volume data for October 20Sunday, 1 November 2015.The Nikkei India Manufacturing Purchasing Managers' Index (PMI) data for the month of October 2015 is due on Monday, 2 er 2015. The seasonally adjusted Nikkei India Manufacturing PMI slipped to a seven-month low of 51.2 in September 20ared with 52.3 in August 2015.

The Nikkei India Service PMI data for the month of October 2015 is due on Wednesday, 4 November 2015. The seasonally Nikkei Services Business Activity Index fell to 51.5 in September 2015 from 52.6 in August 2015.

Bank of England (BOE) monetary policy committee members will take interest rate decision on Thursday, 5 November 2015.

EVENTS/FACTORS TO WATCH

Mon: Adani ports, CARE, Escorts, AIA engineering, Adani Enterprises, United Spiri ts earningsTue: ABB India, Adani Power, DLF, GAIL, Den Networks, IOC, PVR, Reliance Power, Tech Mahindra earningsWed: Ashok Leyland, Bata India, Canara Bank, IDBI bank, Marico, P&G, Repco home finance, SPARC, SadbhaSadbhav engineering earningsTurs: Allcargo logistics, ICRA, Cipla, Arvind, Gujarat Gas, Future retail, Tata steel, Jubilant Food, Bajaj Electricals earFri: BHEL, Bank of Baroda, Aurobindo Pharma, M&M, ONGC, Bosch, PNB, SAIL, SBI, Tata motors earningsSat: Avanti Feeds, Dena Bank, SREI Infra, UCO Bank, Va Tech Wabag earnings

Market Capitalization

Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of oneThe investment community uses this figure to determine a company's size, as opposed to sales or total asset figures.

Frequently referred to as "market cap."

Stocks of companies are of three types. The stocks with a market cap of Rs 10,000 crore or more are large cap stocks. Ctocks with a market cap between Rs 2 crore and 10 crore are mid cap stocks and those less than Rs 2 crore market cap aap stocks.

round The World

267November,2015

owledge Corner :


4/8

utual Fund Corner

4-

Source : - www.valueresearchon

nd Name

heme Name Birla Sun Life MNC Fund

C Birla Sun Life Asset Management Company

pe Others

egory Open-ended and Equity

nch Date April 1994

nd Manager Ajay Garg

Assetsn crore )

Rs. 2569.2 crore as on Sep 30, 2015

Top 10 Sector Break-Ups

Fund

Automobile 21

Financial 16

FMCG 14

Healthcare 12

Engineering 10

Chemicals 9.

Cons Durable 4.Services 3.

Construction 1.

Technology 0.

Composition (%)

Equity 97

Debt 3

Cash -1

Risk Analysis

Volatility Measures

Standard Deviation 16

Sharpe Ratio 1

Beta 0

R-Squared 0

Alpha 18

story 2012 2013 2014 2015

V(Rs) 267.14 294.26 502.89 585.51

alReturn(%) 42.37 10.15 70.90 16.43

CNX Nifty 14.67 3.39 39.51 19.05

CNXMNC 14.08 2.41 28.43 8.60

k(Fund/Category) 7/33 6/32 6/55 -

Week

High

(Rs) 267.14 294.26 502.89 630.80

WeekLow(Rs) 187.34 235.76 270.73 503.55

Assets(Rs.Cr) - - 852.49 -

enseRatio(%) 2.35 2.92 2.72 2.65

Fund StyleInvestment StyleGrowth Blend Value

Large

Medi

Sma

267November,2015

nd Performance v/s S&P CNX Nifty

FundCNX Nify

based to 10,000)


5/8

mmodity Corner

5-

DAMENTAL: Bullion dropped last week GOLD has fallen to a three-week low to closed at 26499 while Silver dropped to settled at 36490extending losses and heading for its biggest weekly drop since August on the chance the US Federal Reserve may still raise interest r The Fed indicated after a two-day policy meeting this week that a December rate rise is still on the table, curbing talk that a run of domic data and worries about the global economy would push a hike back to 2016. The U.S. central bank left interest rates unchanged follday policy meeting on Wednesday, as widely expected, but surprised the market with a hawkish statement, which included a direct referenpolicy meeting. The Fed's statement did not repeat that global risks would have a likely impact on the U.S. economy, as it warned a

ting in September. Investors interpreted that omission as a hawkish signal in deciding when to raise rates. In recent weeks, investors hadexpectations for a rate increase to March 2016 due to weakness in the global economy and its impact on U.S. growth prospects. Marketbeen trying to gauge when the Federal Reserve will raise interest rates for the first time in nearly a decade after recent economic reports o

d picture of the U.S. economy. The Commerce Department reported on Thursday that the U.S. economy grew at an annual rate of 1.5e months to September, missing expectations for growth of 1.6%. The timing of a Fed rate hike has been a constant source of debakets in recent months. The U.S. central bank has one more scheduled policy meeting before the end of the year in mid-December. The go

rose back to 73.8 on Friday, recovering further from the four-month low of 71.3 hit earlier in October. While demand outside of Asia also rUS Mint American Eagle gold coin sales slumped 73 per cent in October. Markets will also be watching surveys of the manufacturing andors, factory orders and trade data from the worlds largest economy for fresh indications on the timing of a rate hike.OMMENDATION : SELL GOLD @ 26700 SL 27000 TGT 26400-26100. SELL SILVER @ 37200 SL 38000 TGT 36400-35600.

DAMENTAL : Base metals prices last week ended with losses as investors zeroed in on a combination of oversupply and weak demand als consumer China. Prices marched lower after Federal Reserve officials said an interest-rate increase was still a viable policy option fighting their December meeting as the venue for reviewing whether the U.S. economy can shoulder higher borrowing costs. The market harbed the latest news from the U.S. and European central banks and the focus is now back on the fundamentals of metals markets. Tped a reference to global risks and referred to its next meeting on Dec. 15-16 as it discussed liftoff timing in a statement released Wedaring investors for the first rate rise since 2006. Combined zinc inventories in Chinas major markets, including Shanghai, Tianjin and Gua

ed 4,700 to 324,700 tonnes this past week. Guangdong reported further growth in zinc stocks, though the increase is smaller. Shipmeters were stable under term contracts, but decreased under small orders, reducing overall arriving shipments. Tianjins zinc inventor

bed due to continuous arriving shipments of Zijin zinc and weak consumption. Stocks in Shanghai also increased with additional inflows of

Chinas economic growth slowed to 6.9% in the third quarter, the slowest pace in more than two decades, sparking concerns that the cer purchases will be cut back. Reflecting improving spot demand for nickel, the discount for cash against is the lowest since May 2014p drop in exchange inventory since mid-September. Still, China has stepped up imports as stainless steel makers use more nickel in the low prices have forced makers of substitute nickel pig iron out of business. An announcement by the Federal Open Market Committee menesday that an interest rate hike could still come this year gave a boost to the dollar, putting pressure, which becomes less affordable for ing other currencies. Investors had begun to believe that a hike to the interest rate this year is increasingly unlikely. In the week ahead, i

be focusing on Fridays U.S. jobs report for October, which could help to provide clarity on the likelihood of a near-term interest rate hikeers will also be watching data on China's manufacturing sector, amid ongoing concerns over the health of the world's second biggest econoOMMENDATION : SELL ALUMINIUM @ 98 SL 101 TGT 94.50-92.SELL LEAD @ 115 SL 118T GT 112.50-110.SELL COPPER @ 339332-325.SELL ZINC @ 114 SL 118 TGT 110-106.BUY NICKEL @ 650 SL 630 TGT 675-695.

DAMENTAL : In energy complex Crude prices jumped more than +4.5% and were up 3.3% for October, while Natural gas contract lost -7.casts pointed to unseasonably warm readings for early November. Crude rally supported amid of indications that US oil drillers are cutting

uction following a collapse in prices over the summer. While Industry research group Baker Hughes said late Friday that the number of rigl in the U.S. decreased by 16 last week to 578, the ninth straight weekly decline and the lowest level since June 2010. Over the prior niners in the U.S. have cut 97 rigs. A lower U.S. rig count is usually a bullish sign for oil as it signals potentially lower production in the futurs helped largely by Wednesday's 6% rally, driven by a smaller-than-expected rise in U.S. crude inventories and sharper-than-expecteline and diesel stockpiles. The oil market has been volatile in recent months amid uncertainty about how quickly the global glut of crude k. As Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of P

orting Countries last year not to cut production. Despite this tighter outlook for North America, output remains robust in other countries. Sauother Gulf OPEC members have indicated they will continue to stick to their policy of defending market share by keeping production high. Olost nearly 60% since last summer as lingering concerns over a glut in world markets drove down prices. Natural gas dropped while supp

riday on the forecasts for chilly temperatures across key consumption regions of the U.S. boosted demand expectations for the fuel and trid of short-covering. Updated weather forecasting models released Friday afternoon showed that a cold front will impact the northernNovember. In the week ahead, investors will be focusing on Fridays U.S. jobs report for October, which could help to provide clarity on th of a near-term interest rate hike. Market players will also be watching data on China's manufacturing sector, amid ongoing concerns h of the world's second biggest economy.OMMENDATION : BUY CRUDE OIL @ 2980 SL 2850 TGT 3080-3200. SELL NAT.GAS @ 156 SL 165 TGT 145-134.

BULLION

BASE METALS

ENERGY

267November,2015


6/8

4 -

mmodity Corner

USD/INR

6-

rex Corner

EUR/INR

GBP/INR

JPY/INR

rket Eye Week ahead :

The USD-INR ended strong last week at 65.61 and is likely to trade positive for coming week. Dollar has madbase against INR and broken higher from there suggesting further rise ahead. However, with European Centrahinting to ease rates further and boost its asset purchase program probably in December, focus has shifted to Euequities, which look by far attractive and may lead to outflow from India to EMoreover US Federal Reserve hinted that December hike possibility is still on the table, referring directly as next mwhich makes emerging market currencies little out of favor, which includes Rupee too.

Level S2 S1 CP R1 R2 High Low Cl

SD/INR 65.13 64.65 65.39 65.87 66.13 65.65 64.91 65


PY/INR 53.77 53.31 54.03 54.49 54.75 54.30 53.58 54


BP/INR 99.64 99.24 99.87 100.27 100.50 100.09 99.46 10


UR/INR 71.66 71.33 71.85 72.18 72.37 72.04 71.52 71

rket Recap :

The Indian rupee declined in early trades onMonday, 02 November 2015 on sustained foreignund outflows amid increased demand for the US

currency from importers.

The domestic currency opened lower at Rs 65.38against the dollar and registered an intra-day highand low of 65.36 and 65.52 so far during the day. Inhe spot currency market, the Indian unit was lasteen trading at 65.47.

Meanwhile, the U.S. dollar index, which measureshe greenback's strength against a trade-weighted

basket of six major currencies, was last quotedown 0.15% at 96.85.

The dollar came under pressure after data on Fridayhowing that U.S. consumer spending ticked up just

0.1% in September, the smallest gain in eightmonths.

267November,2015


7/8

Macroeconomic data, next batch of Q2 results of India Inc., trend in global markets, flows from foreign portfolio inFPIs), the movement of rupee against the dollar and crude oil price movement will dictate trend on the market.

We had clearly advised last week traders long to revise up the stop loss to 8200 And profit booking aange of 8343-8454 range was suggested. Nifty last week opened at 8333.65 and finally closed the week at 8hereby showed a net fall of 229 points on week to week basis. Engulfing bear candlestick pattern was formed

care of 2 weeks of range. Expect 7990-7850 to be tested in coming two weeks. For near term initial rise to weekance of 8148-8253 can be used to exit long and sell with a stop loss of 8336.

7-

treet Recommendations Report Card

Top Fundamental Stocks

Stocks Rec. Date CMP on Rec. CMP TargetAbsoluteReturn @

CMPStatu

Pharma 03/07/2015 831 866 1041 4% Buy

niteComputerSol. 20/07/2015 190 189 255 -1% Buy

nSpinnersLtd. 06/07/2015 79 61 94 -23% Buy

kofBaroda 01/06/2015 163 162 217 -1% Buy

bika

Cotton

Mills

18/05/2015

880 869 1149 -1% BuybhavEngineering

04/05/2015 298 314 430 5% Buy

ELtd. 20/04/2015 1666 1296 2250 -22% Buy

oAutomotiveLtd. 30/03/2015 242 216 304 -11% Buy

karspeciality

micals16/03/2015 152 217 251 43% Buy

L 16/02/2015 252 220 368 -13% Buy

TodayNetwork 27/01/2015 222 241 337 9% Buy

M

12/1/2015 1238 1209 1452 -2% Buy

ellsIndia 27/10/2014 274 253 346 -8% Buy

CargoLogistics 05/08/2014 260 315 342 21% Buy

IndiaFin.Ser. 07/07/2014 39 46 45 18% Buy

niPort 05/07/2014 280 295 347 6% Hol

uwaliacontracts 24/08/2015 235 242 368 3% Buy

T 05/07/2014 1750 1388 1866 -21% Buy

Ltd. 21/09/2015 1140 1327 1374 16% Buy

co

Pharma

02/11/2015

2546 2546 3183 0% Accumu

s

not

important

whether

you

are

right

or

wrong,

Its

about

how

much

money

you

make

when

you're

right

and

h

ch

you

lose

when

you're

wrong.

267November,2015


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267November,2015

Documents

J Street Volume 267