J Street Volume 272

7/23/2019 J Street Volume 272

1/8

ex

rketView

1

mpanyUpdate 2

undthe

nomy 3

wledgeCorner 3

tualFund 4

mmodityCorner 5

exCorner 6

ortCard 7

or&Contributor

rgi Shah

cialContributors

eshTrivedi

tyaNahar

suggestions,feedback

queries

[email protected]

Market View:

Aggressive government reforms are required to withstand the global headw

All said and done the FIIs are selling in Indian market since last four months. Theheadwinds in form of rate hike in US, some hawkish commentary by ECB President and the growing tension in Gulf region with uncertainty in China are the reasons of connegative stance of FII in emerging markets as well as in India. Compared to the dataselling, our market has not fallen much and that is because of continued support frominstitutes and investors. Local investors and domestic institutes are keeping faith in theeconomy and the reforms the government is planning to rollout. Banking and power

reforms with some remarkable changes in FDI norms in many sectors have proved welleconomy. The rollout of GST will be a reform which can help the GDP and economytroubled times. After allowing 49% FDI in defense the government and private secfocusing very hard to bring in the FDIs in manufacturing and defense technology from tin the world. In next week the defense minister is going to USA with high profile delfrom the private sector companies like Tatas, LT, Bharat Forge, Reliance, Mahindra on. In the history of India this is the largest delegation ever going to USA only and odefense tie up. The stage is ready for the best defense companies of the world like LMartin to start manufacturing in India. These types of reforms will help Indian mawithstand the selling pressure of FIIs. The event of rate hike by US is eagerly awaited ancompletion of event the readjustment and rebalancing of portfolios by big players in thewill start. Let us hope that India will get its due share going forward.

Technically any fall below 7690 will take the market to its recent low of 7550 and any drise above 7950 will be positive for the market.

Kamal JhaveriMD- Jhaveri Securities

1 -

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2-

Company Basics

E Code 508933

E Symbol WELSYNTEX

UITY (`in Cr.) 39.24

T.CAP (`in Cr.) 434.39

Financial Basics

FV (`) 10.00

EPS (`) 11.37

P/E (x) 9.74

P/BV (x) 2.97

BETA 1.3904

RONW (%) 30.61

Share Holding Pattern

Holder's Name % Holdin

Foreign 0.66

Institutions 1.10

Promoters 70.10

Non Prom. 0.00

Public & Others 23.16

Government 5.00

mpany Overview

spun Syntex is a flagship company of the Welspun Group. Welspun group is one of the leading and largest g

ness conglomerates in India. Welspun Syntex Limited was established in 1983 and is the flagship com

der the Welspun umbrella. Since its inception WSL has grown manifold and is amongst the

nufacturers and exporters of Polyester Texturised Filament Yarn, Nylon Filament Yarn from India. With

ated at Silvassa and Palghar (Thane), India WSL is well equipped to meet the domestic as well as internmand. It has marketing offices located at Surat and Mumbai in India that facilitate big business ventures.

estment rational

ycycle- a unique kind of Yarn with unique advantages

L has unique positioning in the BCF segment with POLYCYCLE. Polycycle is a 100% recycled Polyeste

ruded (derived) from used PET bottles (plastic bottles) using patented process called ReNew. This po

same feature and better quality like normal Vargin polyester. Vargin polyester is derived crude feed sto

A and MEG. So fluctuation in crude oil prices are less concern.

ble crude oil prices helps to maintain operating margin

n made yarn mainly consumes crude oil based derivatives as Raw material (chips constitutes ~50-60% ther textures consumes ~40% -45% of total RM cost ). RM cost as % of sales fell from 68.41 to 60.95 YoY,

lowest in last five year, largely because of fall in key components like purified terephthalic acid (PTA

no-ethylene glycol (MEG) which have touched multi-year lows on account of lower crude prices.

ategically located plant in Union Territory and Maharashtracompany has two state of the art manufacturing plants in Silvasa (UT) and Palghar. Silvassa plant is pe

ated between the two most important Textiles States of India, Gujarat and Maharashtra. This locaated near sea ports of JNPT and Mumbai and it becomes possible to deliver the finished products and rimported raw materials to and from the ports. This location helps Welsun to deliver finished producttomers in India and overseas.

uation : Currently, WELSYNTEX is trading at ` 8. We recommend Buy with target price o

ing stock 13xFY18E EPS of `17.18.The stock currently trades at 10.06x of FY16E and 8.38xof

6.99x of FY18E.

mpany Update : Welspun Syntex Ltd.

272ecember,2015


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3-

eekly Market Recap :

The Reserve Bank of India (RBI) kept its benchmark interest rate viz. the repo rate unchanged at 6.75% after a mopolicy review on Tuesday, 1 December 2015.

Federal Reserve Chairwoman Janet Yellen on Wednesday, 2 December 2015 reinforced the case for an interehike during the middle of this month.

On macro front, the seasonally adjusted Nikkei Services Business Activity Index fell to 50.1 in November from Oceight-month high reading of 53.2, pointing to slowdown in growth in India's services sector

ndia's gross domestic product (GDP) rose 7.4% in Q2 September 2015 over Q2 September 2014, with growth riven by pick-up in the manufacturing sector, which has grown by 9.3% in Q2. The GDP growth has shown a prom 7% growth recorded in Q1 June 2015. The GDP growth remained below 8.4% rise recorded in the corresp

quarter of the last year. The Q2 GDP data was announced after market hours on Monday, 30 November 2015

arket Eye Week ahead :

n macroeconomic data, the government will unveil index of industrial production (IIP) data for October 2015 on FrDecember 2015. India's IIP growth moderated to 3.6% in September 2015 over a year ago compared with the growth of 6.3% in August 2015.

nvestors' focus is on whether the GST constitutional amendment bill will be passed in the Rajya Sabha. The constamendment bill for the implementation of GST, which subsumes all indirect taxes to create a unified market acr

country, has been cleared by the Lok Sabha and is awaiting legislative passage in the Rajya Sabha.

Among global cues, the Japanese government will revise its July-September GDP figures based on the capnventory investment data in the MOF Corporate Statistics, and is due to publish its second preliminary GDP estimTuesday.

On Thursday, 10 December 2015, the Bank of England (BoE) announces its policy decision.

EVENTS/FACTORS TO WATCH

Fri : IIP data for the month of December 2015

Free Float

A company's free float refers to the number of outstanding shares that are available to the public for trade.

Free float is sometimes referred to as float or public float.

Free Float = Outstanding Shares Restricted Shares

Free float is generally described as all shares held by investors, other than restricted shares held by company insiders. It dnclude restricted shares, which are owned by company management, officers and other various insiders because it's assumhose shares are being held on a very long-term basis.

round The World

272ecember,2015

owledge Corner :


4/8

utual Fund Corner

4-

Source : - www.valueresearchon

nd Name

heme Name Reliance Regular Savings Fund - Balanced Option

C Reliance Capital Asset Management Ltd

pe Equity-oriented

egory Open-ended and Hybrid

nch Date May 2005

nd Manager Amit Tripathi & Sanjay Parekh

Assetsn crore )

Rs. 1562.5 crore as on Oct 31, 2015

Top 10 Sector Break-Ups

Fund

Financial 16

Automobile 11

Technology 8.

Healthcare 6.

Energy 6.

Services 5.

Communication4.

Engineering 3.

Diversified 3.

Metals 0.

Composition (%)

Equity 68

Debt 31

Cash -0

Risk Analysis

Volatility Measures

Standard Deviation 12

Sharpe Ratio 0

Beta 1.

R-Squared 0

Alpha 6

story 2012 2013 2014 2015

V(Rs) 25.54 26.44 37.87 40.34

alReturn(%) 33.86 3.52 43.20 6.54

VRBalanced 11.32 -2.86 17.25 10.36

k(Fund/Category)

4/30 24/32 31/57 9/72

WeekHigh(Rs) 25.54 26.44 38.57 41.58

WeekLow(Rs) 19.10 21.92 25.36 37.53

Assets(Rs.Cr) 556.47 549.90 820.82 1382.11

enseRatio(%) 2.22 2.86 2.85 2.64

Fund StyleInvestment StyleGrowth Blend Value

Large

Medi

Sma

272ecember,2015

nd Performance v/s S&P CNX Nifty

FundCNX Nify

based to 10,000)


5/8

mmodity Corner

5-

DAMENTAL: Bullion prices rallied after a U.S. non-farm payrolls report, seen as likely to pave the way for the U.S. Federal Reserve to raates this month, failed to aid the dollar's ascent. Bullion prices extended bounce, buoyed then by monetary easing measures from the Eral Bank that fell short of expectations. Although Yellen indicated in a speech on Wednesday before the Economic Club of Washington tion remains well-below the Fed's targeted goal, she emphasized that the Fed has seen considerable improvement in the economy and laWhile Yellen sent strong signals that the Fed could be on the verge of approving its first rate hike in nearly a decade, she noted that unfomic and financial developments over the next few days could sway its decision. The U.S. Department of Labor reported that non-farm pa

ember increased by 211,000 on a monthly basis, above consensus estimates for gains of 190,000. It followed a robust report a month earlarm payrolls surged by 271,000, placing a December rate hike by the Fed squarely on the table. There were further indications of strengr market on Friday when the Bureau of Labor Statistics upwardly revised the October reading by 27,000 to 298,000. Even before Friday's indicated that the U.S. labor market added more than 200,000 monthly jobs on average this year. The unemployment rate in Novem

dy at 5.0%, while average hourly earnings ticked up by 0.2%. Hourly wages, which have been persistently sluggish throughout the year, wed to increase between 0.1 and 0.3% on the month. The average workweek per all U.S. employees remained unchanged at 34.5 hours. Gs by India, the worlds second-biggest consumer, more than doubled in November as a slump in global prices to a five-year low stoked

the peak festival and wedding seasons. Overseas purchases last month climbed to 101 metric tons from 45 tons in October, two financeals said, asking not to be identified citing government rules. The first back-to-back shortfall in India's monsoon rain in three decades is hurand with sales of pendants to bracelets and necklaces dwindling during the busiest quarter of the year.OMMENDATION : SELL GOLD @ 26100 SL 26600 TGT 25600-25200. SELL SILVER @ 35900 SL 36450 TGT 34800-33600

DAMENTAL : Base metals prices last week recovered and ended with good gains as investors bought back short positions after a strong Urt that helped to allay fears the world's largest economy has hit a soft patch. A surprise move by OPEC oil producers to maintain producorted metals because a lower crude price could help the global economy and boost demand for metals. Data showed U.S. job growth inly in November, which most likely will pave the way for the Federal Reserve to raise interest rates this month for the first time in nearly a stronger than expected jobs data failed to boost the dollar much, perhaps because many investors had already bought the U.S. currency n. The current uptick in metals was likely only a temporary correction before a downtrend resumes, largely due to worries about demand oversupply. An avalanche of data from China in the coming weeks is likely to show that the world's second-largest economy remains sluggng expectations Beijing will release more stimulus measures in the months ahead. Fed chair Janet Yellen sent further hints that the U.S

will raise rates in less than two weeks with hawkish comments at two closely-watched public appearances earlier this week. Combined zins in Shanghai, Tianjin and Guangdong added 10,300 to 323,800 tonnes this past week. Tianjins zinc inventories fell only slightly. Shanginventories grow on large inflows of imported zinc and normal supplies from zinc smelters. Besides, outward shipments to Tianjin declined rice spread between the two regions contracted. Total inventories in the three regions should increase further next week with continuous inrted zinc and zinc smelters liquidating stockpiles before years end. Chinese nickel production, including the refined metal and nickel pper alternative, was expected to fall 21 percent to 585,000 tons this year from 741,000 tons in 2014. Nickel smelters in China, the largest pto cut output next year by at least 20 percent in a bid to shore up prices after the metal plunged to its lowest in 12 years. In the week aheawill be looking ahead to Fridays U.S. data on retail sales and inflation for fresh indications on the strength of the economy.OMMENDATION : BUY ALUMINIUM @ 100 SL 97 TGT 104.50-107.50. BUY LEAD @ 110 SL 106 TGT 114.50-118. BUY COPPER @TGT 312.50-316. BUY ZINC @ 102 SL 99 TGT 105.50-108.50. BUY NICKEL @ 592 SL 570 TGT 610-625.

DAMENTAL :Crudeoil ended with losses as pressure seen on prices after news that the Organization of the Petroleum Exporting Countning to maintain its production near record highs despite depressed prices, as OPEC continued to guard its share of an oversupplied mar

ucer group failed to agree on a new production quota, allowing member countries to continue pumping more than 31 million barrels per der swelling a global glut that has depressed oil prices for over a year. OPEC's announcement sent ripples through wider markets anes of U.S. energy drillers already suffering from low prices, but losses in oil futures were limited as prices hit support around $40 a barreia has been under pressure from OPEC's poorer members to cut output to bolster prices, which have dropped from over $100 a barrel sin. But Saudi Arabia has been content to keep production up, which has squeezed profits for producers in non-OPEC countries, including th

es. Bullish wagers on U.S. crude oil from hedge funds and other big speculators fell to the lowest level in more than five years, data from tmodity Futures Trading Commission (CFTC) showed. Natural gas prices last week ended with losses as weather forecasts for early Deed to mild temperatures, dampening near-term heating demand expectations. Natural gas futures have closely tracked weather forecasts

ks, as traders try to gauge the impact of shifting outlooks on winter heating demand. The U.S. Energy Information Administration said in itrt that natural gas storage in the U.S. in the week ended November 27 fell by 53 billion cubic feet, compared to expectations for a declin. That compared with a build of 9 billion cubic feet in the prior week, a withdrawal of 22 billion cubic feet in the same week last year, wyear average change for the week is a drawdown of 50 billion cubic feet. Total U.S. natural gas storage stood at 3.956 trillion cubic feeer than levels at this time a year ago and 6.2% above the five-year average for this time of year. Natural gas have closely tracked weather fcent weeks, as traders try to gauge the impact of shifting outlooks on winter heating demand.OMMENDATION : SELL CRUDE OIL @ 2760 SL 2850 TGT 2650-2600. SELL NAT.GAS @ 152 SL 160 TGT 142-135

BULLION

BASE METALS

ENERGY

272ecember,2015


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4 -

mmodity Corner

USD/INR

6-

rex Corner

EUR/INR

GBP/INR

JPY/INR

rket Eye Week ahead :

Although The Indian rupee made new high of 67.28 last week but was almost flat last week closing at 66.98 leveUS dollar gained against the euro after stronger-than-expected US monthly jobs data but the demand at lower endange should emerge from oil importers. The rupee is likely to fell against the US dollar in coming week as the gre

held high ahead of key central banks' policy decisions in the coming weeks.

Level S2 S1 CP R1 R2 High Low Cl

SD/INR 66.43 66.71 66.98 67.26 67.53 67.26 66.71 66


PY/INR 53.80 54.16 54.54 54.90 55.28 54.91 54.17 54


BP/INR 98.97 100.11 100.92 102.06 102.87 101.74 99.79 10


UR/INR 69.47 71.15 72.32 74.00 75.17 73.50 70.65 72

rket Recap :

The Indian rupee commenced almost flat but edgedhigher against the dollar in early trades on Monday,07 December 2015, on fresh selling of the Americancurrency by exporters and banks.

The domestic currency opened at Rs 66.68 againsthe dollar and climbed to a high of 66.57 so faruring the day. In the spot market, rupee wasrading at 66.58.

Meanwhile, the U.S. dollar index, which measures

he greenback's strength against a trade-weightedbasket of six major currencies, was up 0.03% to98.30.

The Labor Department reported that the U.S.economy added 211,000 jobs last month, afterncreasing an upwardly revised 298,000 in October.The report hardened expectations that the Fed willhike interest rates for the first time since 2006 at itsupcoming meeting on December 15-16.

272ecember,2015


7/8

Nifty finally closed the week at 7781.90 thereby showed a net fall of 160 points on week to week basis. Bearish candle has been witneweek. An Out Bar pattern on weekly bar chart suggest that support and the last swing bottom will be under pressure. Traders short maintain the stop loss at 7990 and look for lower levels of 7714-7691-7626-7539 to cover short position. Resistance during the we at 7845-7915-7980. Traders can exit long and sell on rise to 7845-7915 if the opportunity arises with a stop loss of 7990. Breaking

weekly closing and bearish candle can lead to a correction of the rally from 5118 to 9119. Short to medium term investors chance to accumulate at 7691-7626-7539 with a stop loss of 7500.

Macro economic data, trend in global markets, flows from foreign portfolio investors (FPIs), the movement of rupee against the dollar, Wintef Parliament and crude oil price movement will dictate trend on the bourses.

7-

treet Recommendations Report Card

Top Fundamental Stocks

Stocks Rec. Date CMP on Rec. CMP TargetAbsoluteReturn @

CMPSta

spunsyntaxLtd. 23/11/2015 121 138 223 14% B

coPharma 02/11/2015 509 500 636 2% B

Ltd. 21/09/2015 1140 1219 1374 7% Accum

uwaliacontracts 24/08/2015 235 259 368 10% B

Pharma 03/07/2015 831 777 1041 6% B

niteComputerSol. 20/07/2015 190 215 255 13% B

nSpinnersLtd. 06/07/2015 79 66 94 16% B

kofBaroda 01/06/2015 163 166 217 2% B

bikaCottonMills 18/05/2015 880 854 1149 3% B

bhavEngineering04/05/2015 298 338 430 13% B

karspeciality

micals16/03/2015 152 214 251 41% B

L 16/02/2015 252 220 368 13% B

TodayNetwork 27/01/2015 222 299 337 35% B

M

12/1/2015

1238

1325

1452

7%

B

ellsIndia 27/10/2014 274 295 346 8% B

CargoLogistics 05/08/2014 260 375 342 44% Ex

IndiaFin.Ser. 07/07/2014 39 40 45 2% B

niPort 05/07/2014 280 255 347 9% B

T 05/07/2014 1750 1341 1866 23% B

snotimportantwhetheryouarerightorwrong,Itsabouthowmuchmoneyyoumakewhenyou'rerightandh

chyou

lose

when

you're

wrong.

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272ecember,2015

Documents

J Street Volume 272