Vol.

: 325
02 JAN, 2017

Index
Market View

Company Update

Around the
Economy

Knowledge Corner
Mutual Fund
Commodity Corner
Forex Corner
Report Card
Short Term Call Status
Editor & Contributor
Darshana Mishra

Special Contributors
Kunal Shah
Dhaval Ghodasara

MARKET VIEW
MARKET EYES SPEECH OF PM AND BUDGET EXPECTATIONS

50 Days Window to Deposit The Old Currency came to an end on Friday evening.
3 Now, The Nation is eagerly awaiting the address of PM for follow up actions. Meanwhile the preparation for Budget 2017 is going on and the initial response is encourag4 ing as the FM hinted at pro growth reformist budget with an intention to widen the tax
net and reduce the tax rate. Another Important development took place in last week.
5 India has signed DTAA with Singapore to plug the round tripping of Indian Funds and
thereby to avoid the TAX in India. The initial response to this agreement may be a
6 negative one and it will be interesting to see initial response of International Investors
in the next week. Looking to the major events to be unfolded in the year 2017 , the
7 year will be full of uncertainties and volatility. One has to be highly selective while approaching the Stock market.
8
Technically, a Strong Resistance is at 8230 - 8290 8350 / 26800 27000
with very strong Support @ 7900 / 25700.
We take this opportunity to Thank All of You for Continued Support in the Calendar
Year 2016 and Wish You A Happy and Prosperous New Year and May the Cheer ,
Mirth and Merriment of this festival surround you forever.

Kamal Jhaveri
MD- Jhaveri Securities

For suggestions, feedback

and queries
[email protected]

-1-

Vol.: 325
02 JAN 2017

Company Update : Edelweiss Financial Services Ltd.

Financial Basics

Company Basics
BSE Code
NSE Symbol
EQUITY (` in Cr.)
MKT.CAP (` in Cr.)

EDELWEISS

FV (`)
EPS (`) (TTM)
P/E (x) (TTM)

1.00
0.14
20.4

79.57

P/BV (x) (TTM)

2.54

BETA

0.7

532922

9362.17

Share Holding Pattern

Holder's Name
Public
Promoter
Others

% Holding
57.47
37.11
5.42

Outlook and valuation : We forecast EPS growth of 37%/25% for FY17-18. We believe ROEs will expand 4.2 ppts
over FY16-18 to 16.4%. Despite a 90% run-up in the stock price YTD, we envisage further upside. Earnings upgrade
and higher multiple for credit business at 2x FY18F P/BV (vs. 1.5x earlier) drive our TP to Rs 150. NBFCs peers with
16-17% ROEs trade at 2.0-2.5x P/BV.
Company Overview :
Edelweiss Capital Limited (ECL) is one of India's fastest growing integrated investment banking companies. The Group's
services include investment banking, institutional equities, private client broking, asset management, wealth management,
insurance broking, wholesale financing and mutual funds. During the year 2006, the company made NBFC registration of
ECL Finance Limited and managed the first Qualified Institutional Placement under the new regulatory framework in India.
As of May 2008, the company had received final regulatory approval from the Securities & Exchange Board of India (SEBI)
to start its mutual fund business.
Investment Rational :
Strong performance in the market.
Edelweiss is one of the best pick among the NBFC space. Credit book is delivering good ROEs which I s being driven by healthy asset
quality, controlled costs and higher margins Future asset growth visibility is very high in the credit line businesses. What we specifically
like is its non monoline credit book which is well diversified across sectors.Q1 profit up by 54% YoY, and EPS by 8%. Loans grew up by
29% YOY across segments'. Credit business now forms 70% of earnings from 35% in FY11.
Edelweiss Financial Services Consolidated ROEs at 15% Ex-insurance ROEs have been improving in recent years as EDEL scales up
its credit business. Concurrently, the drag from low-yielding treasury investments has shriveled 1QFY17 annualized consolidated ROE
leapt to 15% from 12 % in FY16.Ex insurance ROE also improved to 19.4% YoY. We expect consolidated ROEs of 16-18% by FY18.
Agency business gaining strong footing
Last 7-8 years have been spent to build different agency line businesses and majority of them have gained considerable size now. In
capital market segment, broking average daily volume increased by 20% yoy to Rs60 bn for the quarter. Interestingly, broking businesses has enabled the NBFC to gain clients to whom they cross- sell wealth management, insurance products etc. Currently, nearly,
15% of its insurance products and 10-12% of housing loans are sold via its broking arm.

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Vol.: 325
02 JAN ,2017

Around The World

Weekly Market Recap :
After falling below the psychological 26,000 level at the onset of the week, Sensex regained that mark later during the week. Nifty also
reclaimed psychological 8,000 mark. Among domestic events, public sector oil marketing companies (PSU OMCs) last weekend announced a hike in petrol and diesel prices with effect from midnight of 16 December 2016. Petrol price was hiked by Rs 2.21 per litre and
diesel price was raised by Rs 1.79 a litre at Delhi
Among global events, Chinas economy will grow at around 6.5% year-on-year in 2017, according to a forecast from government think
tank China Academy of Social Sciences (CASS) published on Monday, 19 December 2016.

Market Eye Week ahead :

Markit Economics, an independent, global provider of some of the worlds most influential business surveys will unveil the result of a
monthly survey on the performance of Indias manufacturing sector for December 2016 on Monday, 2 January 2017.Markit Economics will
also unveil the result of a monthly survey on the performance of Indias services sector on Wednesday, 4 January 2017.

Data on Markit Eurozone composite PMI will be announced on Wednesday, 4 January 2017. Data on Caixin China general services PMI
and Markit US services PMI will be announced on Thursday, 5 January 2017. Data on Markit US manufacturing PMI and Caixin China
general manufacturing PMI will be announced on Tuesday, 3 January 2017.

Key Events / Factors to Watch

1. Mon : Results: 2. Tue : - Results: 3. Wed : Results : BRD Met: NBCC India
4. Thu: Results: EGM: Hindustan Construction Co.
5. Fri : Results: EGM : HSIL Ltd

Knowledge Corner :
Qualified institutional placement (QIP)

These Qualified institutional placement (QIP) is a capital-raising tool, primarily used in India and other parts of southern
Asia, whereby a listed company can issue equity shares, fully and partly convertible debentures, or any securities other
than warrants which are convertible to equity shares to a qualified institutional buyer (QIB).

How much can companies raise via QIP : In a single financial year a company can raise not more than 5 times its net
worth based on the audited financial statements of the previous financial year.
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Vol.: 325
02 JAN ,2017

Mutual Fund Corner

Top 10 Sector Break-Ups

Fund Name

Fund (%)

Sector Weights

Scheme Name

BIRLA SUN LIFE ADVANTAGE FUND

AMC

BIRLA un Life Asset Management Company

Financial
Automobile

35.34
17.82

Energy

2.63

Healthcare

12.07

Type

Open Ended & Equity-oriented

Category

Open-ended

FMCG

4.45

Launch Date

Feburary 1995

Cons. Durable

2.77

Metals

4.36

Construction

6.03

Diversified

3.58

Chemicals

5.18

Fund Manager
Net Assets
In crore )

History

Satyabrata Mohanty since Oct 2011

(`

Rs. 1842.9 crore as on Oct 31,2016

2013

2014

2015

2016

173.66

278.11

292.67

323.30

7.23

60.14

4.77

10.47

27/73

9/145

61/78

18/143

52 Week High (Rs)

173.76

280.58

314.86

362.13

52 Week Low (Rs)

136.14

164.16

272.70

252.92

NAV (Rs)
Total Return (%)
Rank (Fund/Category)

Risk Analysis
Volatility Measures
Standard Deviation

17.14

Sharpe Ratio

1.30

Beta

1.10

R-Squared
Alpha

0.80
14.94

Composition (%)
98.26

Equity
Net Assets (Rs.Cr)
Expense Ratio (%)

278.89

393.02

580.62

2.87

2.85

2.81

1473.59
-

Debt

3.52

Cash

-1.79

Fund Performance v/s S&P BSE 100

Fund Style
Investment Style
Growth

Blend

Value

Medium
Small

Fund
S&P BSE 200
(Rebased to 10,000)
- 4-

Capitalization

Large

Source : - www.valueresearchonline.com

Vol.: 325
02 JAN ,2017

Commodity Corner
BULLION
FUNDAMENTAL: Last week bullion prices gained and also ended with year with gains as compared to the end of 2015 after strong gains

on economic uncertainty earlier in the year were pared by heavy selling as the U.S. dollar rallied following the U.S. presidential election.
U.S. economic data gave the Fed the confidence to raise rates for the first time in a year. The central bank signalled three more increases next year from the previous projection of two. A drop in the U.S. dollar index prompted good short covering in the futures market
and some bargain hunting in the cash market. However, the safe haven asset is down nearly one percent in December, and about 12
percent this quarter. While the precious metal has always been hoarded in times of trouble, a bevy of political and economic surprises in
2016 sparked a surge in buying that sent bullion to the first annual gain in four years. There are signs inflation is ticking higher, with price
gains potentially supportive of bullion as a hedge. The U.S. consumer price index rose 1.7 percent last month as energy costs climbed,
matching expectations to post the biggest year-over-year advance since October 2014. Still, investors continue to shed holdings in bullion-backed exchange traded funds, with assets down 1.1 metric tons to 1,778 tons, the lowest since May, according to data
RECOMMENDATION : SELL GOLD @ 27600 SL 27980 TGT 26850 SELL SILVER @39500 SL 40890 TGT 36850

BASE METALS
FUNDAMENTAL: Last week, base metals prices ended with losses as markets fretted about the higher dollar except copper that ended

with gains amid falling stocks and expectations of stronger demand in China persuaded buyers to return to the market. Large deliveries
of copper to LME-registered warehouses -- thought to be from China -- helped to fuel the sell-off. Deliveries between December 8 and
December 16 rose by more than 60 per cent to 345,475 tonnes. Since then stocks are down more than three per cent. Markets started
the year on a sombre note due to weak demand growth in top consumer China and massive supply overhangs. Over the course of 2016
the mood brightened as Chinese authorities pumped money into the economy, much of it into infrastructure. The copper market already
had excess supply and inventories had risen to 213,000 tonnes at the start of December. Since then, the rising price has further unbalanced supply and demand swelling inventories by over 60%. Copper has soared at a time when most commodities have been dwindling
following the Federal Reserve's decision to raise interest rates.
RECOMMENDATION : SELL ALUMINIUM @ 116.5 SL 118.50 TGT 114.50-112 SELL COPPER @ 382 SL 392 TGT 372-356 SELL ZINC @
177 SL 181 TGT 173.20-168 SELL NICKEL @ 698 SL 715 TGT 676-600

ENERGY
FUNDAMENTAL : Crude oil ended with gains and ended with their biggest annual percentage gain since 2009 on the back of an agree-

ment struck between OPEC and non-OPEC countries to cut crude production output. In a sign that producers are adhering to an agreed
production cut, Oman notified some of its term customers that it will cut term allocations by 5 percent in March, but did not state if the
reduction in supply would continue after that. The market also shrugged off an unexpected increase in U.S. crude inventories, which
rose 614,000 barrels in the week to Dec. 23, U.S. Energy Information Administration (EIA) data showed. Still, the rise in crude stocks in
the EIA data was significantly smaller than in Wednesday's American Petroleum Institute (API) data that indicated a 4.2 million barrel
build in U.S. crude oil stocks in the same period. Traders are expected a balance to return to the market by the middle of 2017, however,
as OPEC's production cuts take full effect. However, there are factors beyond the control of OPEC that could impact the price of oil.
Shale production is ramping up in the U.S., and lower-cost, synthetic oil blends could drive down the price that OPEC is seeking to
boost. A report by Ritterbusch & Associates said there is a "high probability" that U.S. shale production will break the OPEC production
pact.
RECOMMENDATION : BUY CRUDE @ 3600 SL 3480 TGT 3780-3900 BUY NAT.GAS @ 245 SL 235 TGT 256-270

- 5-

Vol.: 325
02 JAN,2017

Commodity Corner

Forex Corner

Market Recap :

The Indian rupee on Monday weakened marginally against the US dollar in opening trade on the
first trading day of year 2017.

The home currency opened at 67.98 against the

dollar. the rupee was trading at 67.94 per dollar,
down 0.03% from its previous close of 67.92.
Since 1 April to date, rupee has fallen 2.5%.

Most of the Asian currencies were trading mixed.

South Korean won was down 0.16% and Taiwan
dollar 0.08%. However, Thai baht was up 0.43%
and Japanese yen rose 0.11%.

Market Eye Week ahead :

The USDINR On daily chart pair has been trading above all short term, medium term, and long term moving average which is 20, 100 and 200.Whereas on weekly chart pair has continually taking support at 50WMA. Which
suggest short term trend is bullish. So for trading perspective, one could buy up to the level 67.40-67.50 with SL
of 67.00 for target of 68.40-68.80.

USD/INR
Level

S2

S1

CP

R1

R2

High

Low

Close

USD/INR

67.39

67.74

68.07

68.42

68.75

68.39

67.71

68.07

Level

S2

S1

CP

R1

R2

High

Low

Close

EUR/INR

70.23

71.08

71.61

72.46

72.99

74.14

70.76

71.93

Level

S2

S1

CP

R1

R2

High

Low

Close

GBP/INR

81.94

83.38

8.65

84.09

84.36

83.92

83.21

83.82

Level

S2

S1

CP

R1

R2

High

Low

Close

JPY/INR

57.26

57.82

58.34

58.90

59.42

58.85

57.77

58.34

EUR/INR

GBP/INR

JPY/INR

-- 46--

Vol.: 325
02 JAN,2017

J Street Recommendations Report Card

Nifty last week opened at 7965.10, attained a low at 7893.80 and moved up to 8197. Nifty closed the week at 8185 thereby
showed a net 8185.80 thereby showed a net rise of 2.51%. Resistance is at 8275. Further rally can be seen if breakout and weekly
close above 8275 is witnessed. On sustained rise and close above 8275 expect a rally to 8656. Sustainability at higher range above
8275 will be key at the end of the week and also for time to come. Weakness on weekly chart will resume on fall and close below
7893. Support will be at 8092-7987-7893.

Top Fundamental Stocks

Rec. Date

CMP on Rec.

CMP

Target

Absolute
Return @
CMP

30/08/2016

630

600

732

-11%

Buy

25/07/2016

235

296

308

8%

Buy

Capital First

06/06/2016

552

570

660

-19%

Profit book

Wonderla Holidays

25/04/2016

387

341

498

-11%

Accumulate

Mold-Tek Packaging

04/04/2016

138

44

179

-10%

Buy

Jamna Auto

22/02/2016

133

170

181

-25%

Buy

MT Educare

01/02/2016

164

119

230

-11%

Buy

Garware-Wall Ropes

28/12/2015

425

611

550

11%

Buy

AYM Syntax

23/11/2015

121

71

223

-15%

Buy

Natco Parma

02/11/2015

509

584

636

-1%

Buy

SRF

21/09/2015

1140

1550

1374

-12%

Buy

Ahluwalia contracts

24/08/2015

235

264

368

-8%

Buy

20/07/2015

190

230

255

-5%

Buy

04/05/2015

298

273

430

1%

Buy

16/03/2015

152

161

251

-3%

Buy

DHFL

16/02/2015

252

244

368

-23%

Accumulate

TV Today Network

27/01/2015

222

263

337

-23%

Buy

M&M

12/01/2015

1238

1175

1452

-13%

Buy

Havells India

27/10/2014

274

339

346

-17%

Buy

PTC India Fin. Ser.

07/07/2014

39

37

45

-10%

Profit book

Stocks
Alembic Pharmaceuticals
Coromandel
International

Infinite Computer
Sol.
Sadbhav
Engineering Ltd.
Omkar speciality
Chemicals

Status

268
-11%
Accumulate
05/07/2014
280
347
It's not important whether you are right or wrong, Its about how much money you make when you're right and how
much you lose when you're wrong.
Adani Port

- 7-

Vol.: 325
02 JAN ,2017

J Street Short Term Call Status

Sr.
No.

DATE

STOCK

BUY/
SELL

RANGE

RANGE

17-Nov-16

BHEL

SELL

133

130

18-Nov-16

INDIACEM

SELL

114

21-Nov-16

POWERGRID

BUY

22-Nov-16

PETRONET

23-Nov-16

SL

STATUS

%
RETURN

131.50 124.00

137

TA

4.2

111

112.50 106.00

118

TA

4.6

188

192

190.00 200.00

182

EXPIRE

BUY

365

370

367.50 386.00

354

TA

4.3

ADANIPORT

BUY

258

262

260.00 273.00

250

TA

4.2

24-Nov-16

M&M

SELL

1196

1185

1190.50 1134.00

1235

TA

5.4

28-Nov-16

SUNPHRMA

BUY

706

714

710.00 742.00

685

SL

-4.3

29-Nov-16

HINDALCO

BUY

176

180

178.00 188.00

170

OPEN

-4.2

30-Nov-16

ADANIPORT

BUY

274

278

276.00 290.00

266

TA

4.2

10

1-Dec-16

BEL

BUY

1430

1445

1437.50 1501.00

1400

TA

4.4

11

2-Dec-16

BHARTIARTL

SELL

324

316

320.00 300.00

338

TA

4.2

12

5-Dec-16

KOTAKBANK

SELL

720

732

726.00 690.00

753

OPEN

13

6-Dec-16

MOTHERSUMI BUY

312

316

314.00 330.00

301

TA

4.4

14

7-Dec-16

BEML

BUY

870

882

876.00 915.00

848

TA

4.6

15

8-Dec-16

GODREJIND

BUY

396

405

400.50 420.00

385

TA

4.1

16

9-Dec-16

HINDALCO

BUY

175

180

177.50 188.00

169

OPEN

17

12-Dec-16

TECHM

BUY

465

475

470.00 493.00

450

TA

4.2

18

13-Dec-16

AMBUJACEM SELL

210

206

208.00 196.00

216

TA

4.3

19

14-Dec-16

KSCL

BUY

425

432

428.50 448.00

410

TA

4.1

20

15-Dec-16

UPL

SELL

658

648

653.00 624.00

678

TA

4.2

21

16-Dec-16

GRANULES

BUY

114

118

116.00 126.00

109

SL

-4

22

19-Dec-16

POWERGRID

BUY

180

185

182.50 192.00

175

OPEN

23

20-Dec-16

AJANTAPHRMA

SELL

1790

1750

1770.00 1680.00

1840

TA

4.2

- 7-

TRIGGER
PRICE

TGT

Vol.: 325
02, 2017

J Street Short Term Call Status

Sr. No.

DATE

STOCK

BUY/
SELL

RANGE

RANGE

TRIGGER
PRICE

TGT

SL

STATUS

%
RETURN

24

21-Dec-16

SIEMENS

SELL

1095

1080

1087.50

1040.00

1125

SL

-4

25

22-Dec-16

BEML

BUY

920

935

927.50

971.00

894

TA

4.3

26

23-Dec-16

BHARTIARTL

SELL

295

292

293.50

280.00

301

OPEN

27

26-Dec-16

BIOCON

SELL

892

890

891.00

848.00

930

OPEN

28

27-Dec-16

GLENMARK

SELL

895

884

889.50

852.00

919

OPEN

29

28-Dec-16

CESC

BUY

620

632

626.00

656.00

598

OPEN

30

29-Dec-16

ADANIPORT

BUY

265

270

267.50

281.00

259

OPEN

STATUS

CALLS

RATIO

TA+PB

17

80.95

SL+EXIT

04

19.04

TOTAL

21

100.00

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.: 325
02 JAN,2017