Vol.

: 297
6th June,2016

Index

MarketView
1 Market View

Rain god will help the market to Conquer new heights

CompanyUpdate
2
With the help of all important positive forecast for rain by the met department and some economic data

the market has sailed pass 8000 and ready to go beyond all important range of 8250/8350. The GDP
Aroundthe
data for the last quarter was encouraging and helped the market to sustain 8200 level. During last week
Economy

3 there were two international conferences in Mumbai by Morgan Stanley and SOHN group. The

conferences were attended by the persons representing all the segments of capital market, be it
KnowledgeCorner 3 analysts, investors, fund managers, ministers and emerging market experts. The overall consensus by

them regarding Indian capital market was positive and bullish. There can be corrections in the road to
MutualFund
4 new heights but every correction will give an opportunity to invest. The emerging market guru Mark
Mobius was particularly overweight on Indian market even at this level. Majority of analysts are of the

CommodityCorner5 view that the worst is behind even in banking sector. All the good work carried out by current The
Government and the previous Government is now showing the results on ground level. The direct sub
sidy payment system has created wonders so far as Government finance is concerned. The element of
ForexCorner
6
competition amongst the states to perform at every level is also making a mark. Even though there are

many concerns at global level, the India story remains intact. The revival in commercial vehicle segment,
ReportCard
7 the commercial property segment is also beginning to receive enquires. The capital goods segment is

also coming out of slumbers as witnessed by the result of LT.

ShortTermCallStatus8
The inconsistency in the economic data released in US has put a question mark on the rate rise by Fed

in the month of June or July. Considering the situation in Europe, the ECB has left the rates at historic
Editor&Contributor
low level. The situation in China has remained a challenge for the market. In view of this development, it
MargiShah
is advisable to remain cautiously optimistic in the market.

Technically there is a strong support at 8100-8000 and strong resistance at 8250-8333.

SpecialContributors
Kamal Jhaveri
AsheshTrivedi
MD- Jhaveri Securities
AdityaNahar

Forsuggestions,feedback
andqueries
[email protected]

-1-

Vol.: 297
6th June,2016

Company Update : Capital First Ltd.

Company Basics

Financial Basics

532938

FV (`)
EPS (`) (TTM)

10.00
17.2

NSE Symbol

CAPF

P/E (x) (TTM)

31.1

EQUITY (` in Cr.)

90.98

MKT.CAP (` in Cr.)

149.74

P/BV (x) (TTM)

BETA
RONW (%)

BSE Code

181.88
1.31
8.38

Share Holding Pattern

Holder's Name
Foreign
Institutions
Promoters
Non. Promoters
Public & Others
Govt Holding

% Holding
8.37
9.91
65.2
1.43
15.09
0.00

Valuation : CAPITAL FIRST is trading at ` 552. We recommend Accumulate with target price of ` 660 , valuing

stock 30xFY18E EPS of `22.The stock currently trades at 30x of FY16E, 27.93xof FY17E and 22.98x of FY18E.
Company Overview

Capital First (CAPF) is the retail financing NBFC formed in 2012 as a result of a management buyout of an
existing NBFC. Post Mr. Vaidyanathan taking reigns in FY11 and revamping the business model, the wholesale
lending entity was catapulted to grow into a strong retail NBFC. CAPF lays greater thrust on retail, SME and
wholesale segments; within retail CAPF offers LAP, two-wheelers and consumer durable loans. Catering to the
underserved traditional market, CAPF has carved its own niche in the MSME and two-wheelers segment and is
poised to replicate success on the lines of Bajaj Finance in the consumer finance market.
Investment rational

Strong AUM growth with the shift towards retail assets

CFL has been able to manage AUM (assets under management) CAGR of 44% over FY11-FY15 on the back of focused strategy, strong processes, superior financing skills, strong promoter and the ability to raise funds on time.
Retail AUM posted 90% CAGR over FY11-FY15, whereas corporate
CFL emerging as a specialized player in financing MSMEs
CFL emerging as a specialized player in financing MSMEs by offering different products for their various financing needs. Capital First has a comprehensive product suite to meet the multiple financial needs of its customers.
Till date, the Company has financed more than 1.4 million customers, including more than 6,00,000 MSMEs.
The Company provides finance to its customers with the help of contemporary scoring solutions and
sophisticated technology. The Company, through its extensive reach, provides essential debt capital to MSMEs in
a quick, affordable and convenient manner.
Diversified loan mix translating into robust AUMs
According to the needs of the customers, CAPF has carved its own niche in the under-presented traditional
market through its extensive reach. With greater focus on MSME, two wheelers and customer finance segment
CAPF caters to the under-served market characterized.
- 2-

Vol.:
297
6th June,2016

Around The World

Weekly Market Recap :

Growth in India's gross domestic product accelerated to 7.9% in Q4 March 2016 compared with a revised reading of a
growth of 7.2% in Q3 December 2015. For the fiscal year 2015-16, GDP grew 7.6%, which was higher than 7.2% growth
recorded in 2014-15.

Meanwhile, the outcome of a monthly survey showed slight expansion in growth in India's manufacturing sector in May
2016. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) edged higher to 50.7 in
May from 50.5 in April.

Market Eye Week ahead :

The major event next week is a monetary policy review from the Reserve Bank of India (RBI). The RBI will announce the
Second Bi-monthly Monetary Policy Statement, 2016-17 on Tuesday, 7 June 2016.

The government is scheduled to unveil industrial production data for April 2016 on Friday, 10 June 2016. India's industrial production (IIP) growth moderated to 0.1% in March 2016 over March 2015 compared with 2% growth recorded in
February 2016.

Japan will unveil Q1 Gross Domestic Product (GDP) data on Tuesday, 7 June 2016.

Investors will closely watch the timing of arrival of monsoon rains. India's weather department, the India Meteorological
Department (IMD) in its second stage monsoon forecast issued on Thursday, 2 June 2016, said that rainfall over the country as a whole for the 2016 southwest monsoon season is most likely to be above normal.

Key Events / Factors to Watch

1. Tue: RBI monetary policy
2. Fri: IIP data for the month of April 2016

Knowledge Corner :
Debt to Equity Ratio

The debt-to-equity ratio (debt/equity ratio, D/E) is a financial ratio indicating the relative proportion of entity's equity and debt used to
finance an entity's assets. This ratio is also known as financial leverage.

Optimal debt-to-equity ratio is considered to be about 1, i.e. liabilities = equity, but the ratio is very industry specific because it
depends on the proportion of current and non-current assets. The more non-current the assets (as in the capital-intensive industries),
the more equity is required to finance these long term investments.

- 3-

Vol.: 297
6th June,2016

Mutual Fund Corner

Top 10 Sector Break-Ups

Fund Name

Fund (%)

Sector Weights

Scheme Name

Birla Sun Life Balanced '95 Fund

Financial

18.97

AMC

Birla Sun Life Asset Management Company Ltd

Energy

9.05

Type

Equity-oriented

Technology

6.87

Healthcare

6.12

Category

Open-ended and Hybrid

Engineering

6.02

Launch Date

February 1995

Automobile

5.85

Fund Manager

Mahesh Patil & Pranay Sinha

Services

5.14

FMCG

3.83

Net Assets
(` In crore )

Rs. 2702.4 crore as on Apr 30, 2016

Cons Durable

2.33

Chemicals

2.17

History

2013

2014

2015

2016

367.19

545.50

563.81

587.77

6.13

48.58

3.36

4.25

+/- VR Balanced

-0.13

21.81

5.54

0.85

Rank (Fund/Category)

17/32

14/57

34/65

11/82

52 Week High (Rs)

367.19

547.99

581.68

52 Week Low (Rs)

314.56

354.48

534.04

Net Assets (Rs.Cr)

620.20

1058.09

2099.74

Expense Ratio (%)

2.87

NAV (Rs)
Total Return (%)

2.75

2.50

2341.69
-

Risk Analysis
Volatility Measures
Standard Deviation

12.74

Sharpe Ratio

1.03

Beta

0.98

R-Squared
Alpha

0.89
8.18

Composition (%)
Equity

69.51

Debt

30.89

Cash

-0.39

Fund Performance v/s S&P CNX Nifty

Fund Style
Investment Style
Growth

Blend

Value

Medium
Small

Fund
CNX Nify
(Rebased to 10,000)
- 4-

Capitalization

Large

Source : - www.valueresearchonline.com

Vol.: 297
6th June,2016

Commodity Corner
BULLION
FUNDAMENTAL: Bullion prices gained last week as the entire weeks gain came on Friday itself after U.S. payrolls data fell well short of forecasts,
boosting expectations that the Federal Reserve will stand pat on interest rates. The U.S. economy created the fewest jobs in more than five years in
May, a Labor Department report showed on Friday, hurt by a strike by Verizon workers and a fall in goods-producing employment. That could make it
difficult for the Fed to raise interest rates further. The data sparked a rebound in gold, which had slid to a 3-1/2 month low of $1,199.60 on Monday on
growing expectations for a hike. Gold has fallen for the last four weeks after comments from senior U.S. central bank officials, including chief Janet
Yellen, boosted expectations of an imminent rate rise. Gold is highly sensitive to U.S. rate expectations, as rising rates lift the opportunity cost of holding
non-yielding bullion, while boosting the dollar, in which it is priced. While it remains up 14 percent so far this year, prices have fallen more than 5 percent since minutes from a Fed meeting indicated in mid-May that a summer rate rise may be on the table. Gold demand in Asia, home to the world's
biggest consumers of physical gold, was muted as a slight increase in India and Japan was offset by reductions in other trading centres as buyers
awaited further price declines. Meanwhile, demand in top-consumer China continued to be muted with the premium remaining around $3 an ounce,
down a dollar from last week. A holiday on account of the dragon boat festival is likely to keep Chinese buyers away as well. Meanwhile, the unemployment rate dropped by 0.2% to 4.7%, as an estimated 500,000 Americans left the workforce last month. The labor force participation rate inched down
0.2% to 62.6%, while average hourly wages rose by 0.2% on the month. The Federal Open Market Committee (FOMC) has left the target range of its
benchmark Federal Funds Rate unchanged at a range between 0.25 and 0.50% in each of its first three meetings this year. Last December, the FOMC
abandoned a seven-year zero interest rate policy by raising interest rates for the first time in nearly a decade. Over the last year, Fed chair Janet Yellen
has consistently reiterated that the FOMC will take a data dependent approach with the timing of its first interest rate hike this year.
RECOMMENDATION : BUY GOLD @ 29100 SL 28700 TGT 29600-29900. BUY SILVER @ 38500 SL 37600 TGT 39800-40800

BASE METALS
FUNDAMENTAL: Base metals prices last week ended with mixed to firm node where zinc prices rallied to a new 10-month high and ended with 4.66%
gains on weekly basis continuing its good fortune on expectations of a deepening global deficit. While other base metals prices seen supported boosted
by data showing the U.S. economy created the fewest number of jobs in more than 5-1/2 years in May, pointing to labour market weakness that could
make it difficult for the Federal Reserve to raise interest rates. Zinc, is the best performer on the London Metal Exchange this year with gains of nearly
25 percent after major mines closed and Chinese smelters pledged to slash output. Three-month LME zinc closed 0.5 percent higher at $1,992 a tonne,
after touching $2,013, the highest since July 23 last year, fuelled by buying from commodity trading advisors (CTAs), which run funds based on technical signals such as momentum. According to preliminary data recently compiled by the International Lead and Zinc Study Group (ILZSG), the global
market for refined zinc metal was in surplus by 42,000 metric tons over the first three months of 2016 compared to a surplus of 143,000 mt over the
same period in 2015. The numbers suggest that the metal is slowly moving into deficit territory. Indeed, thats what the ILZSG forecasts. On the other
hand, ILZSG is forecasting a 12.4% lift in Chinese production, which would translate into a 1.4% fall in global output this year. Copper inventories in
warehouses monitored by the Shanghai Futures Exchange fell again this week, having slid 47 percent since mid- March, data showed on Friday. LME
stocks have also shrunk, declining by 35 percent so far this year. Much of those inventories are likely moving into non-exchange storage depots linked
to finance arrangements. There was underlying concern, however, about demand in top metals consumer China, highlighted on Friday after data
showed growth in its services sector hit a three-month low in May. Meanwhile, the unemployment rate dropped by 0.2% to 4.7%, as an estimated
500,000 Americans left the workforce last month. The labor force participation rate inched down 0.2% to 62.6%, while average hourly wages rose by
0.2% on the month. The average work week held steady at 34.4 hours. The Federal Open Market Committee (FOMC) has left the target range of its
benchmark Federal Funds Rate unchanged at a range between 0.25 and 0.50% in each of its first three meetings this year.
RECOMMENDATION : BUY COPPER @ 309 SL 302 TGT 316-326.BUY ZINC @ 128 SL 124 TGT 134-138.BUY NICKEL @ 565 SL 550 TGT
585-610. BUY ALUMINIUM @ 102 SL 99 TGT 105.50-108.BUY LEAD @ 113 SL 109 TGT 117-120.

ENERGY
FUNDAMENTAL :Crude oil dropped last week after OPEC failed to agree on a deal for a new output ceiling, thrusting concerns related to global oversupply back into focus. Drillers added nine oil rigs in the week to June 3, Baker Hughes said. The closely followed report rekindled fears that U.S. shale
drillers would turn the spigots back on as prices flirted with $50 a barrel. Oil traders view falling U.S. output as key to reducing a global glut of crude that
has pressured prices during a steep two-year slump. Officials from OPEC's 13-member bloc broke off talks at their semi-annual meeting in Vienna without reaching a deal to cap its production ceiling. Although Saudi Arabia attempted to appease smaller members such as Venezuela, Ecuador and Nigeria by pledging to avoid major output increases in the coming months, Iran held firm on its plan to ramp up production to pre-sanction levels from 2007.
Any coordinated attempts for a comprehensive production freeze likely will not occur until at least late-November when OPEC is scheduled to meet
again. Still, there is some optimism that Saudi Arabia and Iran have mended some fences in light of laudatory comments by Iranian oil minister Bijan
Zanganeh on new Saudi counterpart Khalid alFalih. Natural gas gained by more than 10.20 percent on weekly basis amid forecasts for warmer weather
boosted demand expectations. The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week
ended May 27 rose by 82 billion cubic feet, below forecasts for an increase of 85 billion. That compares with a gain of 71 billion cubic feet in the prior
week and a fiveyear average increase of around 98 billion cubic feet. Total U.S. natural gas storage stood at 2.907 trillion cubic feet, 24.5% higher than
levels at this time a year ago and 25.9% above the five-year average for this time of year. Unless intense summer heat boosts demand from power
plants, stockpiles will test physical storage limits of 4.3 trillion cubic feet at the end of October. Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on early summer cooling demand.
RECOMMENDATION : SELL CRUDE OIL @ 3350 SL 3750 TGT 3220-3140. BUY NAT.GAS @ 156 SL 148 TGT 168-175

- 5-

Vol.: 297
6th June,2016

Commodity Corner

Forex Corner

Market Recap :

The Indian rupee weakened further in early

trades on Monday, 16 May 2016 due to continued demand for the American currency from
banks and importers.

The domestic currency opened at Rs 66.90

against the dollar but recovered back to a high
of 66.81 so far during the day.

In the spot currency market, the Indian unit was

last seen trading at 66.87.

Meanwhile, the U.S. dollar index, which

measures the greenback's strength against a
trade-weighted basket of six major currencies,
rose 0.03% to 94.63.

Market Eye Week ahead :

US dollar index is trading at 95. 55, bouncing from lower levels after a non - eventful ECB and OPEC meetings.
Non - farm payrolls data indicates rate hike could be delayed and thus INR may appreciate a little bit due to
dollar weakness. We expect the Rupee to remain range bound between 67.00-68.10 in near term.

USD/INR
Level

S2

S1

CP

R1

R2

High

Low

Close

USD/INR

67.22

67.38

67.59

67.75

67.96

67.79

67.42

67.55

Level

S2

S1

CP

R1

R2

High

Low

Close

EUR/INR

74.53

74.94

75.47

75.88

76.41

76.00

75.06

75.35

Level

S2

S1

CP

R1

R2

High

Low

Close

GBP/INR

95.92

96.67

97.96

98.71

100.00

99.25

97.21

97.42

Level

S2

S1

CP

R1

R2

High

Low

Close

JPY/INR

60.08

61.04

61.59

62.55

63.10

62.13

60.62

62.01

EUR/INR

GBP/INR

JPY/INR

-- 46--

Vol.: 297
6th June,2016

J Street Recommendations Report Card

Nifty last week opened at 8166.50, attained a low at 8134.29 and moved up to 8262 and closed the week at
8220.79 thereby showed a net rise of 64 points on week to week basis. Traders long and holding the same can maintain
the stop loss at 7800. Expect the lower top of 8336 to be tested in near term with volatility. Resistance will be at 8277
and 8336. Further rally can be seen above 8336 closing. Support is at 8205-8134. Below that support points are at
7992-7940-7890. Hold long position and correction to 7992-7890 can be used for buying with a stop loss of 7800.
Macroeconomic data, trend in global markets, investment by foreign portfolio investors (FPIs) and domestic institutional
investors (DIIs), the movement of rupee against the dollar and crude oil price movement will dictate market trend in the
near term.

Top Fundamental Stocks

Rec. Date

CMP on Rec.

CMP

Target

Absolute
Return @
CMP

Status

Capital First

06/06/2016

552

552

660

0%

Accumulate

Wonderla Holidays

25/04/2016

387

386

498

0%

Accumulate

Mold-Tek Packaging

04/04/2016

138

161

179

17%

Buy

Jamna Auto

22/02/2016

133

161

181

21%

Buy

MT Educare

01/02/2016

164

177

230

8%

Buy

Garware-Wall Ropes

28/12/2015

425

343

550

-19%

Buy

AYM Syntax

23/11/2015

121

102

223

-16%

Buy

Natco Pharma

02/11/2015

509

526

636

3%

Buy

SRF

21/09/2015

1140

1264

1374

11%

Buy

Ahluwalia contracts

24/08/2015

235

273

368

16%

Buy

Infinite Computer

20/07/2015

190

217

255

14%

Buy

Sadbhav

04/05/2015

298

283

430

-5%

Buy

Omkar speciality
Chemicals

16/03/2015

152

182

251

20%

Buy

DHFL

16/02/2015

252

196

368

-22%

Accumulate

TV Today Network

27/01/2015

222

292

337

32%

Buy

M&M

12/01/2015

1238

1370

1452

11%

Buy

Havells India

27/10/2014

274

360

346

31%

Buy

PTC India Fin. Ser.

07/07/2014

39

36

45

-7%

Buy

Adani Port

05/07/2014

280

204

347

-27%

Accumulate

Stocks

It'snotimportantwhetheryouarerightorwrong,Itsabouthowmuchmoneyyoumakewhenyou'rerightandhow
muchyoulosewhenyou'rewrong.
- 7-

Vol.: 297
6th June,2016

J Street Short Term Call Status

BUY/
SELL

SL

STATUS

%
RETURN

1010 1035.00 1055.00

960

SL

4.0

894

914

904.00 935.00

860

SL

4.2

BUY

251

255

253.00 261.00

243

SL

3.8

ASHOKLEY

BUY

103

106

104.50 111.00

100

SL

4.2

26Apr16

CEATLTD

BUY

1130

1150 1035.00 1195.00

1100

SL

3.6

27Apr16

YESBANK

BUY

902

922

912.00 960.00

875

TA

5.2

28Apr16

RCOM

BUY

59

61

60.00

66.00

56

SL

4.8

2May16

AXISBANK

BUY

471

479

475.00 495.00

455

SL

4.2

3May16

COLPAL

BUY

843

859

851.00 878.00

825

SL

3.8

10

4May16

BANKINDIA

SELL

86

89

87.50

84.00

92

TA

3.9

11

5May16

PETRONET

BUY

275

281

278.00 288.00

266

TA

5.1

12

6May16

UPL

BUY

590

600

595.00 615.00

573

TA

4.8

13

9May16

SRTRANSFIN BUY

1040

1060 1050.00 1085

1005

TA

3.4

14

10May16

HDFC

BUY

1195

1220 1207.50 1245

1165

SL

3.5

15

11May16

JUSTDIAL

SELL

700

720

710.00 675.00

750

SL

4.2

16

12May16

MCDOWELL BUY

2670

2730 2700.00 2800.00

2600

SL

3.7

17

13May16

1515

1545 1530.00 1475.00

1560

SL

2.3

18

16May16

934

952

943.00

972

905

TA

4.8

19

17May16

ZEEL

BUY

444

454

449.00

475

430

EXPIRE

0.0

20

18May16

GRASIM

BUY

4250

4350 4300.00 4450

4180

TA

3.4

21

19May16

CASTROLIND SELL

380

388

384.00

399

TA

3.7

22

20May16

BANKBARODA SELL

135

138

136.50 129.00

142

TA

5.4

23

23May16

69

70.5

69.75

72.8

SL

4.3

Sr.
No.

DATE

20Apr16

SRTTRANSFIN BUY

990

21Apr16

HINDUNILVR BUY

22Apr16

ICICIBANK

25Apr16

- 7-

STOCK

AJANTA
SELL
PHARMA
ASIANPAINT BUY

ADANIENT

SELL

RANGE

RANGE

TRIGGER
TGT
PRICE

370

65

Vol.: 297
6th June,2016

J Street Short Term Call Status

Sr.
No.

DATE

STOCK

BUY/
SELL

RANGE

SL

STATUS

CMP

%
RETURN

24

24May16

WOCK
PHARMA

SELL

895

920

855

945

TA

4.2

25

25May16

SRTRANSFIN BUY

1145

1170 1157.50 1220

1110

TA

4.1

26

26May16

TATAMTRDVR BUY

267

273

270.00

285

258

TA

4.4

27

30May16

TATACHEM

BUY

428

436

432.00

445

416

OPEN

0.0

28

31May16

HEROMO
TOCO

BUY

3050

3110 3080.00 3180

2990

OPEN

0.0

29

1Jun16

SBIN

BUY

200

206

214

192

OPEN

0.0

30

2Jun16

ACC

BUY

1535

1575 1555.00 1600

1505

OPEN

0.0

31

3Jun16

YESBANK

BUY

1035

1065 1050.00 1110.00

1005

OPEN

0.0

STAUTS

CALLS

RATIO

TA+PB

13

50

SL+EXIT

13

50

TOTAL

26

100

TRIGGER
TGT
PRICE
907.50

203.00

One call on daily basis is given keeping view of short term trading on closing basis.
Time frame and expected % of return is also mentioned with the suggested call.
This call are purely given on technical trading system generated by the Technical Research Desk.
Generally Expected Return on investment is 5-6 % with time horizon of 6-7 days.
Profit Booking update is considered if on an average expected return exceed 3.50-4.00 % against the
Expected return of 5-6%
Risk- Reward ratio percentage wise depends on the volatility of stock Normally it stands ( 3 : 9)

- 7-

Vol.: 297
6th June,2016