T I M E S: Markets To Struggle at Higher Levels

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T I M E S
A TIME COMMUNICATIONS PUBLICATION
VOL XXVI No.27 Monday, 8 – 14 May 2017 Pgs.23 Rs.18
Markets to struggle at higher levels Now follow us on Instagram, Facebook &

By Sanjay R. Bhatia Twitter at moneytimes_1991 on a daily basis
to get a view of the stock market and the
After an extended weekend, the markets opened the week on a
happenings which many may not be aware of.
positive note and went on to touch new historic highs during the
day. However, lack of follow-up buying support and sustained bouts of profit-booking and selling pressure made the
markets come off these historic levels. Increased selling on Friday, 5 May 2017, led to a broad based correction, which
until now remained a rotational kind of sector-specific correction. The breadth of the market remained negative amidst
high volumes, which is a negative sign for the markets.
The FIIs remained net sellers in the cash segment but
were seen hedging their positions by remaining net
buyers in the derivatives segment. The DIIs remained
Believe it or not!
net buyers during the week and were seen  B.N. Rathi Securities recommended at Rs.27.45
supporting the markets regularly. Crude prices in TT last week, zoomed to Rs.34.40 fetching 25%
continued to remain soft on the back of high returns in just one week!
inventory, trading between $44-48. On the domestic  Fertilizers & Chemicals Travancore
front, earnings remained a mixed bag. The recommended at Rs.52.75 in TT last week,
government notified a banking regulation ordinance,
zoomed to Rs.63.65 fetching 21% returns in just
a new policy to tackle bad loans.
one week!
Technically, the prevailing negative technical
conditions weighed on the market sentiment leading
 Dena Bank recommended at Rs.39.20 as SS on
to the anticipated correction. The Stochastic, RSI and 10 April 2017, recorded a new 52-week high at
KST are all placed below their respective averages on Rs.48.90 last week fetching 25% returns in four
the daily chart. Further, the RSI is placed around the weeks!
overbought zone on the weekly chart. These negative  Lancor Holdings recommended at Rs.25.25 in
technical conditions could lead to intermediate bouts TT on 27 March 2017, zoomed to Rs.40 last week
of profit-booking and selling pressure especially at fetching 58% returns in five weeks!
the higher levels.
 GIC Housing Finance recommended at Rs.302.40
The prevailing positive technical conditions,
as BB on 13 March 2017, recorded a new 52-
however, still hold good. The MACD, Stochastic, RSI
and KST are all placed above their respective week high at Rs.593.40 last week fetching 96%
averages on the weekly chart. Further, the MACD is returns in seven weeks!
placed above its average on the daily chart. (BB – Best Bet; SS – Stock Scan; TT – Tower Talk)
Moreover, the Nifty is placed above its 50-day SMA, This happens only in Money Times!
100-day SMA and 200-day SMA. The Nifty’s 50-day
SMA is placed above its 100-day and 200-day SMA
Now in its 26th Year
while 100-day SMA is placed above its 200-day SMA
indicating a ‘golden cross’ breakout. These positive technical conditions could lead to regular buying support.
A Time Communications Publication 1

The ADX line is placed above the +DI line and the -DI line and is also placed above the 37 level on the daily chart. The +DI
line is placed above the -DI line and above 28. It has come off its recent highs, which indicates that buyers are booking
profits regularly.
The market sentiment remains cautious due to geopolitical conditions and earnings season. The correction is likely to
continue and the markets are likely to struggle at higher levels. However, index management is also likely to take place.
The Nifty has failed to sustain above the 9350 resistance level, which does not augur well for the markets.
It is important that the Nifty moves and sustains above
9350 for increased buying support to be witnessed.
Follow-up buying support is crucial at higher levels.
Intermediate bouts of profit-booking and selling
pressure are likely to continue amidst stock-specific
action. 9220 and 9060 are crucial support levels.
In the meanwhile, the markets could take cues from the
earnings season, Dollar-Rupee exchange rate, global
markets and crude prices.
Technically, the Sensex faces resistance at the 30025,
30133 and 30250 levels and seeks support at the
29825, 29650, 29350, 29075, 28700, 28350 and 28100
levels. The resistance levels for the Nifty are placed at
9350, 9400, 9475 and 9550 while its support levels are
placed at 9275, 9220, 9060, 8975 and 8890.
BAZAR.COM
Flow unabated
The equity markets are consolidating on the acts of the Central government. Since the assembly results of five states, the
government is walking its talks. The proactive stance in understanding a deadlock and decoding it without any fear is
what is happening. Demonetisation was one such very bold step and its repercussions are showing up both politically
and economically. The Q4 results and the sudden surge in an individual’s finance with banks has helped consolidate the
upside.
Sometimes, it is not the direct arithmetic of the fundamentals that impact the market. In fact, what is consolidating the
rally despite the vocal hesitation of the market pundits is the inflow of direct and indirect investments in the capital
market. The government’s approach in general and PM Modi’s thrust in particular is making all the difference to the
sentiment. A few days back, PM Modi had said that he does not lack the political will needed to carry out reforms. In fact,
he asked the country’s bureaucrats to become enablers and focus on achieving outcomes for the benefit of the citizens.
Addressing a hall packed with civil servants in New Delhi on Civil Service Day, the PM said “To reform, political will is
needed. I don’t have that problem. Perhaps, I have extra political will. But the government alone cannot carry out
reforms,” he said. “Political will can reform but bureaucracy performs and public participation transforms. We have to
bring them on one wave length”, he added.
This is well echoed in the World Economic Outlook, which revised India’s growth forecast to 6.8% from 6.6% just ahead
of China’s 6.7%. IMF sees the world economy reviving in 2017 and India picking up pace. Growth rate will accelerate in
line with the pace of structural reforms in the country. Growth in 2016 was low due to demonetisation but with the
onset of GST, growth could even touch 8% over the medium-term.
The government is well aware and also reminded of reforms that are needed in earnest. Labor reforms need to be
undertaken. Reducing labor, product market rigidities is the need of the hour. Ease of entry and exit for businesses,
expansion of manufacturing base and the near paralysis in capex need to be tackled without any further delay. The
recent steel policy and the policy on treatment of NPAs are glaring examples of the business which the government
means. Such moves not only restore the confidence of domestic investors but also enables FII inflows despite global
weaknesses.
Last week, the Bankex and Bank Nifty witnessed glorious appreciation. The cabinet decision (pending President’s nod)
on treatment of NPAs and decisive recovery of the same gave wings to almost all the PSU banks. In spite of the March
2017 quarter recording a rise in NPAs and banks making higher provisions for bad loans while taking a hit on their
treasury income, banking stocks are still getting closer to 52-week highs. ICICI Bank’s rising NPAs did not deter the scrip

from gaining 7-9% in one single session. The bonus issues declared by Wipro and ICICI Bank (although low) reflects
their confidence in the current fiscal.
The fall in crude prices and strengthening of the Rupee against the USD are two key contributors for the improving
fundamentals. The flows of positive news, positive reforms, positive fund flows have kept the consolidation process on.
Time to act contrarian and accumulate stocks of leading companies from the pharma and I.T. sectors.
TRADING ON TECHNICALS
Further rise above 30185 closing
By Hitendra Vasudeo
Sensex Daily Trend DRV Weekly Trend WRV Monthly Trend MRV
Last Close 29856 Up 29645 Up 28993 Up 27036
Last week, the Sensex opened at 30021.49, attained a high at 30176.55 and moved to a low of 29804.11 before it closed
the week at 29858.80 and thereby showed a net fall of 59 points on a week-to-week basis.
Daily
The daily chart brings fear as the Sensex failed to sustain in the higher range. Of the last 6 trading days, there were 5
days when the Sensex’s opening was higher than its closing, indicating a weaker closing.
The candle on Friday was a large bearish candle which tried to halt the progress of the Sensex on the daily chart. We still
have to witness a higher top and higher bottom formation for broad psychological comfort.
Further, the daily, weekly and monthly trends have been up as shown in the table.
The higher bottoms are at 29137 and 29241. The support gap is at 29780-29681 to protect the slide. The 21 day EMA is
at 29738. The 34 day EMA is at 29562. The 55 day EMA is at 29247 and 89 day EMA is at 28825. If we define the bull
market as 21 day EMA > 34 day EMA > 55 day EMA > 89 day EMA, then the Sensex fulfills this condition since 3 February
2017. The 21 day EMA and 34 day EMA tend to provide support. In case of a deeper correction, 55 day EMA and 89 day
EMA provide support on the deeper correction. The average indicates a bull market as long as the composition is bullish.
Correction to 21 day EMA and 34 day EMA can be witnessed, which are at 29738 and 29562 respectively along with the
gap of 29780-29681.
The daily chart concern crops up due to the
negative divergence exhibited on RSI and MACD.
The 3 Buddha candlestick pattern along with the
negative divergence is the concern. We saw the
Sensex making a new high with force and
momentum leading to exhaustion and failure to
sustain at higher levels.
The daily chart shows near-term correction,
which could be intra-day, intra-week or intra-
month. But as we shift focus on the weekly or the
monthly chart, the bearish fear of chart
complexity is not witnessed.
Weekly
A follow up rise to the weekly chart breakout
was not witnessed last week. The movement was
narrow with volatility. A stalled pattern appears to be in place and a further immediate rise will continue on a breakout
and close above 30185.
Monthly
From the monthly chart angle, April 2017 closed with a spinning top suggesting that the high and low of April will be
critical for May. High and low of April were 30184 and 29241. A fall and close below 29241 with a bearish candle at the
end of the week and the month will signal a reversal for a deeper correction of the last rise from 25753 to 30185.
The peak of the year 2015 is being attempted to be crossed, which was at 30024 but needs a follow-up rise in May above
30185 and not fall below 29241.

Trend based on Rate of Change (RoC)
Daily chart:
1-Day trend - Down Evergreen
3-Day trend - Down
8-Day trend - Up
WINNERS 2017
Weekly chart: Features 31 stocks identified as performers
1-Week trend - Down
At launch on 1st January 2017, all 31 stocks were selected as Winners
3-Week trend - Up but they must go up and down their journey providing you an
8-Week trend - Up opportunity to buy / sell or accumulate during the year.
Monthly chart:
Of the 31 stocks identified, 22 are gainers already.
1-Month trend - Down
The Yearly Levels and Quarterly Levels provide for Profit Booking.
3-Month trend - Up
8-Month trend - Up On Correction, the Lower Levels are for Accumulation at Yearly and
Quarterly chart: Quarterly Levels.
1-Quarter trend - Up Stocks where Profit booking is witnessed and are correcting offer an
3-Quarter trend - Up opportunity for accumulation. Currently, 9 stocks have corrected and
thus provide an opportunity for accumulation.
8-Quarter trend - Up
Yearly chart: Most Important Reason to Subscribe Now
1-Year trend - Up
New Quarterly Levels will be issued at March 2017 end.
3-Year trend - Up
8-Year trend - Up Stocks that move up will offer a new range to capitalize on.
BSE Mid-Cap Index Stocks that correct provide an opportunity at New Quarterly Levels.
Weekly chart: For more details, contact Money Times on
1-Week trend - Down
022-22616970/4805 or [email protected].
3-Week trend - Up
8-Week trend - Up Subscribe today: Rs.6000 per annum
Uptrend is still in progress with a
higher high and higher low on a week to week basis for the past 6 weeks and the closing has moved from 13849 to
14718 with the high at 14948. The expected level of 15100 is very near for the BSE Mid-Cap index. Profit-booking
pressure can be dominant in the near-term till 15100 is not crossed on closing along with a bullish candle.
BSE Small-Cap Index
1-Week trend - Down
3-Week trend - Up
8-Week trend - Up
Overall, the BSE Small-Cap index appears to be bullish with a momentary pause to the rise for minor profit-booking.
A further immediate rise will continue above 15527. On a sustained rise and close above 15527, expect the rally to
continue towards 17000.
A correction may happen and indicate the same but it will create a higher bottom in the overall broad picture to move
higher.
Support is at 15177-15166. A fall below 15100 will mean a swing top for correction.
Strategy for the week
Traders already long can revise upwards their stop loss to 28700. Outperformance in mid-caps and small-caps will
continue with volatility. Only an upside breakout and close above 30184 can restore the strength of the index and index-
related stocks. Expect the index and index-related stocks to witness profit-booking pressure.

WEEKLY UP TREND STOCKS
Let the price move below Center Point or Level 2 and when it move back above Center Point or Level 2 then buy with
whatever low registered below Center Point or Level 2 as the stop loss. After buying if the price moves to Level 3 or above
then look to book profits as the opportunity arises. If the close is below Weekly Reversal Value then the trend will change
from Up Trend to Down Trend. Check on Friday after 3.pm to confirm weekly reversal of the Up Trend.
Note: SA-Strong Above, DP-Demand Point, SP- Supply Point, SA- Strong Above
Weekly Up
Scrip Last Level Level Center Level Level Relative
Reversal Trend
Close 1 2 Point 3 4 Strength
Value Date
Weak Demand Demand Supply Supply
below point point point point
ESCORTS 592.35 553.4 565.1 580.6 607.8 650.4 76.1 560.1 13-04-17
RURAL ELECTRIFICATIO 212.55 203.1 204.3 211.3 219.5 234.7 74.7 206.7 23-02-17
CANFIN HOMES 2831.00 2607.0 2659.7 2778.3 2949.7 3239.7 73.0 2644.5 17-03-17
FEDERAL BANK 116.40 110.0 110.9 115.5 120.9 130.9 69.2 102.2 13-04-17
CEAT 1664.00 1511.0 1556.3 1618.7 1726.3 1896.3 69.1 1519.5 03-03-17
*Note: Up and Down Trend are based of set of moving averages as reference point to define a trend.
Close below averages is defined as down trend. Close above averages is defined as up trend. Volatility
(Up/Down) within Down Trend can happen/ Volatility (Up/Down) within Up Trend can happen. Relative
Strength (RS) is statistical indicator. Weekly Reversal is the value of the average.
WEEKLY DOWN TREND STOCKS

Let the price move above Center Point or Level 3 and when it move back below Center Point or Level 3 then sell with whatever
high registered above Center Point or Level 3 as the stop loss. After selling if the prices moves to Level 2 or below then look to
cover short positions as the opportunity arises. If the close is above Weekly Reversal Value then the trend will change from Down
Trend to Up Trend. Check on Friday after 3.pm to confirm weekly reversal of the Down Trend.
Weekly Down
Scrip Last Level Level Center Level Level Relative
Reversal Trend
Close 1 2 Point 3 4 Strength
Value Date
Demand Demand Supply Supply Strong
point point point point above
GLAXO SMITHKLINE PHA 2445.00 2235.0 2381.0 2463.0 2527.0 2545.0 23.93 2555.50 07-04-17
LUPIN 1251.00 1100.7 1212.7 1286.3 1324.7 1360.0 24.58 1357.75 31-03-17
AUROBINDO PHARMA 589.70 541.3 575.6 595.7 609.9 615.9 31.16 621.69 07-04-17
DIVI'S LABORATORIES 626.30 608.3 621.0 628.3 633.7 635.7 32.42 633.60 28-04-17
TECH MAHINDRA 413.05 392.5 407.2 416.1 422.0 425.0 34.32 421.74 10-03-17
*Note: Up and Down Trend are based of set of moving averages as reference point to define a trend.
Close below averages is defined as down trend. Close above averages is defined as up trend. Volatility
(Up/Down) within Down Trend can happen/ Volatility (Up/Down) within Up Trend can happen.
! Note: Momentum breakout trend of stocks value(volume*close) between 10-80 lakhs.
EXIT LIST
Scrip Last Close Supply Point Supply Point SupplyPoint Strong Above Demand Point Monthly RS
TATA COMMUNICATIONS 641.00 664.96 677.00 689.04 728.00 563.0 45.40
MARICO 305.20 313.86 316.90 319.94 329.80 288.1 47.19
JSW STEEL 189.80 192.76 194.45 196.14 201.60 178.5 49.57
BUY LIST
Scrip Last Close Demand point Demand point Demand Point Weak below Supply Point Monthly RS
COROMANDEL INTERNATI 394.35 382.52 374.40 366.28 340.00 451.3 65.06
CEAT 1664.00 1616.06 1596.00 1575.94 1511.00 1786.1 60.23

IBUL HSG FIN 1103.45 1087.15 1074.35 1061.55 1020.10 1195.7 59.20
AHLUWALIA CONTRACTS 374.85 364.74 360.95 357.16 344.90 396.8 57.20
PUNTER PICKS
Note: Positional trade and exit at stop loss or target whichever is earlier. Not an intra-day trade. A delivery based trade for a
possible time frame of 1-7 trading days. Exit at first target or above.
Note: SA-Strong Above, DP-Demand Point, SP- Supply Point, SA- Strong Above, RS- Strength
Last Weak Supply RS-

Scrip BSE Code Demand Point Trigger Supply point Strength
Close below point
INNO INVESTMENT 533315 15.75 15.10 16.00 15.00 16.6 17.6 55.32
INV.& PRECI.CASTING 504786 241.25 231.10 245.00 216.50 262.6 291.1 56.69
TOWER TALK
 Money Times’ evergreen recommendation, Rural Electrification Corporation, is likely to be included in the MSCI
emerging market index, which will attract heavy investments by FIIs. A good buy even at the current high level.
 Maruti Suzuki India is in top gear posting 16% higher PAT with the highest dividend payout. A bonus issue is not
far away. The stock deserves a better valuation.
 Kotak Mahindra Bank beat market expectations by posting 40% higher PAT in Q4FY17. The stock is likely to
continue its rally.
 HDFC Bank is planning its highest ever perpetual debt of Rs.5000 crore. The expected coupon rate is 8.75%, which
is the lowest in the industry. A big positive for the bank.
 The government’s thrust on infrastructure will boost cement consumption by about 10% and cement stocks.
Ambuja Cements and Ultratech Cement look attractive.
 TVS Motor Company is keen to improve its net profit margins to double digits. A strict control on spending and
aggressive marketing strategies will boost its profitability.
 Q4 PAT of Motilal Oswal Financial Services has more than doubled. A worthy buy as the bull run in the stock is
here to stay for long.
 Uttam Sugar Mills posted excellent results for FY17 with PAT zooming 607% on 34% higher sales. Since there is
shortage of sugar in the market, its profits will keep rising. An attractive buy.
 IDBI Bank is set to raise ~Rs.2500 crore via rights issue. A good buy at the current level.
 Dabur India is facing problems in raising volumes. It would be prudent to sell this underperformer and wait for an
appropriate time to re-enter.
 Infosys plans to hire around 10,000 workers in USA over the next two years. This evergreen stock is still a good buy.
 In a bid to boost its market share, Dutch beer major, Heineken, plans to acquire Vijay Mallya’s pledged shares of
United Breweries from the bankers. Retail investors will benefit as an open offer will boost its share price further.
 The government plans to redevelop railway stations. State-owned NBCC (India) will be one of the biggest
beneficiaries. Buy.
 JM Financial reported 33% rise in Q4 PAT. With the good times likely to continue, it may be prudent to accumulate
this stock.
 In spite of rising bad loan provisions, RBL Bank posted a healthy rise in profits. This upcoming bank must find a
place in every portfolio.
 Indian FMGC major, Marico, posted 26% higher PAT in Q4FY17. The Company keeps launching new products
regularly. A good long-term buy.
 With demand for affordable housing set to rise exponentially, Dewan Housing Finance Corporation stands to gain
substantially as it expects 20% growth (~Rs.28000 crore incremental lending). An excellent buy.
 Iron ore prices are rising globally. NMDC, which is one of the lowest cost producers in the world, is set to gain. It also
has a hefty payout ratio.
 Bharat Immunologicals & Biologicals Corporation is a hidden gem in the pharma space and a potential
multibagger.

 The IPO of Godrej Agrovet is on the cards. According to sources, the Company would later be reverse merged
into Astec Lifesciences. A must buy at every level.
 Intellect Design Arena posted a remarkable turnaround with its much awaited profitable numbers. The stock is
50% down from its 52-week high and should return on the investors’ radar. Buy on every decline.
 Yash Papers, which supplies to the likes of McDonalds,
Pizza Hut, KFC and CCD, has witnessed a turnaround. The
stock is on the radar of some big investors. Keep an eye! Relative Strength (RS)
 Talks of Etihad Airways hiking its stake in Jet Airways are signals a stock’s ability to perform in a
ripe again. Buy Jet Airways for quick 50% gains. dynamic market.
 Listing of Reliance Home Finance will boost the share price Knowledge of it can lead you to profits.
of Reliance Capital. Some analysts expect Reliance Capital
to double from the current level. POWER OF RS - at Rs.3100 for 1 year
 Reputed big HNIs like Mukul Agrawal, Ashish Kacholia,
Chandrasekhar Moturu, Ravi Kamepalli hold 11% stake in What you get
Zen Technologies. The stock has the potential to be a
multibagger in 2017-18. Most Important - Association for 1 year at
 Balkrishna Industries’ Rs.2 paid-up share is now at Rs.3100
Rs.1518. An expert expects sister company, Balkrishna
Paper Mills Rs.10 paid-up share (CMP: Rs.83.40) to be a  1-2 buy / sell per day on a daily basis
multibagger of 2018-19.  1 buy per week
 An Ahmedabad-based analyst recommends Balkrishna  1 buy per month
Paper Mills, Black Rose Industries and Dynamic  1 buy per quarter
Industries. From his last week’s recommendations,  1 buy per year
National Plastic Industries zoomed from Rs.80.45 to
Rs.91.80 while Vippy Spinpro zoomed from Rs.42.45 to For more details, contact Money Times on
Rs.53.50 both fetching excellent returns in just 1 week! 022-22616970/4805 or
 Grey market premium for the IPO of HUDCO is Rs.29-31 [email protected].
and cost of its minimum application form is Rs.1250-1300.
 Grey market premium for the IPO of S Chand & Company is Rs.130-135.
BEST BET
JSW Energy Ltd
(BSE Code: 533148) (CMP: Rs.64.30) (FV: Rs.10)
By Amit Kumar Gupta
JSW Energy Ltd is a holding company and an integrated power company primarily engaged in the generation and sale of
power. Its business segments include Power Generation, Power Transmission, Mining, Power Trading and Equipment
Manufacturing. Its plants are located at Vijayanagar, Ratnagiri, Barmer and Himachal Pradesh. Its projects include
Kutehr Hydro Project located at Kutehr, Himachal Pradesh; Kapurdi Mine and Jalipa Mine. It operates ~4,530 MW of
power generation capacity. Its Karcham project is a ~1,000 MW (4X250 MW) run of the river hydro power plant in
Kinnaur district of Himachal Pradesh. The Karcham Project has in-built capacity of over 1,091 MW. Its ~300 MW (3X100
MW) Baspa project is located on the river Baspa in Kinnaur district of Himachal Pradesh. The design energy of the Baspa
project is over 1,050 million units (MUs).
Blending domestic coal up to 50% at its Ratnagiri and Vijaynagar plants will help if international coal prices surge
upwards of $70-75/tonne (subject to e-auction coal prices). It would act as a hedge against rising coal prices. Of the
contracted capacity of 704 MW, PPA for 200 MW was pending approval of capital cost by CERC on 30 March 2017. The
PPA is now expected soon (likely with Punjab).
According to the management, the 650 MW PPA with Karnataka could be extended (expires by May 2017) as power
availability from state gencos has reduced due to water shortage and maintenance. We estimate the Vijaynagar plant to
run at 50% PLF and realization of Rs.3/kWh for FY18, as we believe that the extension, if any, will be for a very short
period due to addition of new generation/transmission capacities.

We expect EBITDA to grow by ~5% to ~Rs.35 bn and PAT by ~2x to Rs.2.9 bn Valuations: (Rs. in bn)
in FY19E on marginally higher merchant realization and lower interest cost. Particulars FY17 FY18E FY19E
Bina and JPL acquisitions are included in our forecast. At the CMP, JSW
Net Sales 826.3 909.9 1084.2
Energy’s merchant capacities are valued at ~Rs.40 mn/MW, at a discount to
replacement cost of Rs.60 mn/MW. The Company’s balance sheet is strong at EBITDA 33.2 32 34.9
1.4x D:E with annual FCF (post interest) generation of Rs.11-14 bn on EPS (in Rs.) 3.9 2.1 1.8
support from contracted capacities. RoE (%) 6.7 3.3 2.8
Technical Outlook: The JSW Energy Ltd stock looks very good on the daily P/E (x) 17.4 31.7 38.1
chart for medium-term investment. The stock is moving in a strong uptrend P/BV (x) 1.1 1.1 1.1
and any correction should be used for accumulation. The stock trades above its 200 DMA level.
Start accumulating at this level of Rs.64.30 and on dips to Rs.56 for medium-to-long-term investment and a possible
price target of Rs.80+ in the next 12 months.
GURU SPEAK
Buy stocks in a panic
Money Times readers must thank the ‘Guru Speak’ column, which had last week warned readers with a broad headline ‘S
peculation game is on’. The column had clearly explained in the last paragraph as under “If the bearish trend continues
this week because of selling of long positions in the F&O segment and triggering stop loss levels,
it will create panic among investors for a short while, similar to the first two weeks of April
2017 when the markets turned bearish. Anyway, these are market gimmicks that no one can
stop”.
It was indeed to fool common investors and market participants who are guided by the rise and
fall in the popular indices on a day-to-day basis and who care to guess whether the market is
headed north or south without understanding the operators’ game plan, which needs to be
By G. S. Roongta thoroughly studied.
It was indeed a great irony that the market after hitting an all-time high could be thrown back
and close below that level. This confused market intermediaries who had entered at higher levels in a clear signal of a
bullish trend. But the speculators dashed their hopes forcing them to indulge in day trading to square up their long
positions on fears of a correction. This is exactly what happened in the first two weeks of April 2017 when the CNX Nifty
had crossed its then all-time high by keeping the market lifeless over the next 2 to 3 weeks and create a scare.
Last week too, when the BSE Sensex hit an all-time high at 30184.22 as against its previous high of 30024, but the
market turned bearish right from April 2017 F&O expiry i.e. 28 April 2017, onward and continued till Wednesday, 3 May
2017.
Earlier till 20005, it was the belief that whenever the market achieves a breakout level, it will surely head further North
because the bears would rush to cover their short positions and the bulls would make further bullish spreads hoping to
achieve dizzy new highs! But now, this old belief has proved wrong as speculators try and confuse market participants
for a short while. Bulls, too, take advantage of this changed market strategy by booking as much profit as possible after
achieving new breakout levels.
This is exactly what all technical experts play safe. While giving bullish calls, yet they mention Stop Loss levels to
safeguard their risk. But this is not the right spirit, according to me, for a fool proof study as it indicates lack of
conviction. A few days of corrections make the technical experts change their mind and direction altogether. This is a
huge loss to those who follow their calls or advice and shift their position from bulls to bears and from bearish to bullish
off and on, which carries a high trading cost over and above the losses.
The week before last that ended on Friday, 28 April 2017, the BSE Sensex despite making net gains of 553 points on a
weekly basis was yet below its all-time highs both old and new i.e. 30024 and 30184.22, only because of a speculators’
game plan as I pointed out in the previous edition in advance.
The stock market was closed on Monday, 1 May 2017, on account of Maharashtra Day because of which trading was
truncated to only four days of trading last week.
Although the market on Tuesday, 2 May 2017, opened steady at 30021.49 and hit a high of 30069.24, it made a low of
29804.12 thereby recording a downward swing of 265 points. This made investors jittery and forced them to square up

their bull-spread at a loss. However, at the fag end, half an hour before close, the market tried to recover its lost ground
and finally closed with a minor gain of 3 points at 29921.18.
I have repeatedly emphasized that this time the bullish trend will be stock-specific whereby several stocks make new
highs each passing day as outlined by me despite the indices remaining deceptive. Andhra Bank made a new high at
Rs.70 on 2 May 2017 and Rs.72 on 4 May 2017. The stock was recommended by one of the Money Times columnist at
Rs.56 a few weeks back.
APL Apollo Tubes made a fresh new high at Rs.1500; Canara Bank at Rs.371; DCB Bank at Rs.201; Dena Bank at Rs.46;
Federal Bank at Rs.115; Karnataka Bank at Rs.172; Oriental Bank of Commerce at Rs.179; South Indian Bank at Rs.26.7.
Last week was thus a ‘Banks special’ which
gives the impression that banking stocks Letter to the Editor
have bottomed out despite the NPA fears.
Most banking stocks have crossed their Dear Editor,
52-week highs gaining between 50-100% Please be informed that I am a regular follower of Money Times
over the last 3-4 months. These stocks had weekly since its launch i.e. about 25 years back. I started investing as
hit lows during the 3rd quarterly results a passion, which is now next to my heartbeat.
where-after they recovered rapidly to I want to thank you for introducing me to an ardent die-hard writer
scale new highs. The sector which was like Mr. G.S. Roongta and now, Ms. Archana Jain, both of whom have
considered to be risky due to mounting given not only a platform to invest in equities to salaried individuals
NPAs is now considered to have hotly
like me but have also led us to the financial growth through their
turned around!
valuable articles.
The cement sector, which was bullish till a
I am highly impressed by Mr. Roongta who has always written about
couple of weeks back, witnessed profit-
growth-oriented stocks like Bajaj Finance, MRPL, etc. (the list is
booking with few large players like
Ultratech Cement, Gujarat Ambuja Exports endless). In addition, he always warns investors against trading in
and ACC having failed to come out with a F&O segment and rightly mentions the F&O segment as a ‘weapon of
robust performance due to the lower off mass financial destruction’ due to the big-ticket operators who strip-
take falling cement prices especially in the off gullible investors of their hard-earned money. A few weeks back in
North East. However, I feel this is a your esteemed weekly, Roongtaji beautifully explained this through
temporary phenomenon and cement an example of SAIL Futures, which should be an eye-opener for the
stocks will revive in 2017-18 more whole investor fraternity.
strongly. Cement stocks recommended in Further, I thoroughly enjoyed reading Ms. Jain's articles on Lovable
‘Mid-Cap Twins’ like ACC, India Cements, Lingerie, Gennex Labs, Texmo Pipes etc. which have yet to give us
OCL India, Prism Cement have scaled
multiple financial growth, which I hope to happen soon. She has a
much higher levels against the
‘Midas-touch’ to the scrips she writes about as on the following
recommended price levels. FY18 will be
the best year for Cement, Fertilizers, Monday these scrips are on an upper circuit and hence beyond my
Sugar, Steel, Engineering, Power, Metal reach.
and Capital Goods stocks. Investors must I want to end my article here as I hope you will publish it in ‘our’
accumulate stocks of their choice from Money Times for the benefit of all the investors.
these sectors even though these stocks
have already appreciated over 100-200% Thank you very much.
by now as I am still hopeful of their future
valuation. The rapid rise in these stocks Yours forever Money Times follower,
was mainly because of their lower base in
Mahendra Bhambhani
earlier years.
The BSE Sensex on Wednesday, 3 May 2017, opened higher again at 29984.95, rallied close to its previous all-time high
at 30020.59 but soon made a low of 29846.57 thus disturbing market participants about its future course. It was nothing
new as I said. It is a pure speculators’ gimmick to confuse them about the overall market sentiment by opening high and
then release supply or distribute at higher levels and buy stock again at lows. This is the part about profit-booking or
when speculators turn traders to book partial profits out of their outstanding positions and reduce the cost of their
holdings. But investors unaware of such gimmicks sometimes lose patience and sell their holding cheap. The BSE Sensex
closed with a loss of 26 points at 29894.80 followed by the CNX Nifty to close lower barely by 1.85 points at 9311.95.
Mid-cap and small-cap stocks continued to register hefty gains.
1) Transwarranty Finance rose from Rs.11 to Rs.18 in 20 days gaining 75%.

2) Petron Engineering Construction rose from Rs.150 to Rs.214 in 20 days thus gaining 64 points.
3) Transpek Industry recommended in ‘Mid-Cap Twins’ flared up further from Rs.628 to Rs.821 in the last 20 days.
4) Mastek, too, flared up from Rs.228 to Rs.298.
The list is quite long but lack of space does not permit me to list them all. I really do not understand why investors
should break their heads in the F&O segment when the opportunity in small-caps and mid-caps is far-far better without
much risk to hold them along.
This is why Money Times launched two popular
newsletters for these two categories namely Mid-caps or Mad-caps?
‘Panchratna’ and ‘Mid-Cap Twins’ to help and 2017 will be a watershed year in the history of stock
guide small investors and they are gaining market as it takes off from a weak closure of 2016.
popularity on a monthly and quarterly basis. Leading the charge will be the Mid-caps that are
Like last week the market flared up on Thursday, likely to outperform the large-caps or index stocks.
4 May 2017, to recoup the losses of 4 days right Another forecast made by Mr. G.S. Roongta.
from 28 April 2017 in one shot. As I have stated
time and again, investors must take advantage of To encash this opportunity, Money Times has
the correction in a bullish market to buy more launched ‘Roongta’s Mid-cap Twins’ comprising two
what they had sold-off high to continue their mid-cap recommendations every month beginning
holding position.
1st August 2016.
Bank Nifty was the star performer on 4 May 2017 Attractively priced at Rs.2000 per month, Rs.11000
so also banking stocks. ICICI Bank which came out
half yearly and Rs.20,000 annually, ‘Roongta’s Mid-
with flying Q4 results too was a star performer.
MRF disappointed investors losing a hefty 2000 cap Twins’ will be available both as print edition or
points in a single day. Its Rs.100 paid-up share online delivery.
lost the value by nearly Rs.2,00,000 on a single Latest edition of ‘Mid-Cap Twins’ was released on
day! That is why I always discourage investor 1st May 2017
from investing in high value stocks as no one Please book your subscription
knows about the gimmicks being played by
promoters and speculators.
Another example is Century Textiles Industries and Hindalco Industries, which were heavily traded as they sometimes
rose and sometimes went down. But on what basis only God knows! Hindalco Industries with daily volumes by over
crore of shares fluctuates both ways heavily. It crossed its all-time high of Rs.204 in the decade. The stock is speculated
to have better days ahead but no one has patience to hold in two ways fluctuations. Tata Steel, too, has lost over 100
points in May from its 52-week high of Rs.508 a couple of weeks back. Why is it bearish? I really smell some foul game
plan. The Steel sector is doing exceedingly well and Tata Steel being the leader in India with capex plans of over
Rs.25000 crore to establish a new 6 mn capacity in Kalinganagar is really a surprise or an opportunity to buy may be a
big question mark for several of investors.
The BSE Sensex gained 231.41 points on 4 May 2017, coming close to its new all-time high at 30126.21 followed by the
CNX Nifty gaining 47.95 points at 9359.90.
On Friday, 5 May 2017, the market closed lower with the BSE Sensex shedding 267 points at 29858.8 followed by the
CNX Nifty losing 75 points at 9285. Thus, the market once again fell below its all-time high and the sensation level of
30K.
I do not read too much into daily numbers that rally one day and react the next day! Speculators with their muscle
power might stage this play as it suits them.
According to me, these are routine or passing events which will get over in time. On Thursday, banking stocks were star
performers but what happened on Friday, nobody has an answer. Earlier steel, sugar, fertilizes and cement stocks were
busy making new highs but what went wrong on Friday, 5 April 2017, no one knows. Hindalco Industries, Tata Steel,
Vedanta, Hindustan Zinc were beaten down. Tomorrow, they could bounce back again! And then we will hear an entirely
different story. According to me, these are just market gimmicks and nothing else.
Investors must buy stocks in panic and stay invested as the bull market is not yet over. Besides, the earnings season is
still going on. So, the good and bad performances of companies will have an impact on the market temporarily for the
next couple of weeks.

STOCK SCAN
Richa Industries Ltd: A potential multibagger
By Archana Jain
Incorporated in September 1993 as Richa Knits Pvt Ltd, Richa Industries Ltd (Richa) today is a leading manufacturing
company that operates in three segments - Pre-Engineered Building (PEB), Engineering, Procurement & Construction
(EPC) and Textiles. The Company was established under the dynamic leadership of Mr. Sushil Gupta (Chairman) and Dr.
Sandeep Gupta (Managing Director). It is one of the fastest growing companies in North India with a reputed clientele
comprising government as well as private clients.
Business Verticals: Richa is a recognized textile player but relatively new in the PEB space. It is engaged in Knitting,
Processing, Dyeing and Special Finishing of Fabrics. Its textile manufacturing units are located at Gurgaon and Faridabad
in Haryana. Its corporate office is situated at Faridabad. Its new PEB project is located at Kashipur in Uttarakhand.
Clients: Richa's textile clients include multi-national brands such as Adidas, American Eagle, Calvin Klein, BIBA, Classic
Polo, Coldwater Creek, GAP, H&M, Kenneth Cole, Marks & Spencer, Macy's Inc, Matalan, Next, Puma, Reebok, United
Colors of Benetton, Super Dry, etc.
Its PEB division serves various industries Financial Highlights: (Rs. in crore)
like Warehousing, Industrial Particulars 9MFY17 FY16 FY15 FY14 FY13 FY12
Manufacturing, FMCG, Automobile, Cold Total Income 363.96 480.96 302.88 277.54 271.43 302.17
Storage, Agriculture, Factories & Total Expenditure 328.59 431.1 256.74 230.32 217.63 263.65
Showrooms, Dairy & Pharma, Power PBIDT 35.37 49.86 46.13 47.22 53.8 38.53
Plants, Multi-storey Buildings, Heavy - Interest 22 27.67 27.34 22.56 23.36 19.7
Engineering and Paper. Its clients in this
- Depreciation 6.35 9.17 8.78 6.09 7.5 6.9
segment include L&T, Asahi Glass, various
food processing companies and PBT 7.02 13.02 10.01 18.57 22.94 11.93
warehouses, Usher Agro, NRB Bearings, - Tax 1.5 3.03 1.33 -0.29 1.47 5.21
Wipro, Bedmutha Industries, Crompton PAT 5.52 10.59 7.22 9.41 13.36 6.09
Greaves, Indiabulls and BHEL. EPS (in Rs.) 2.35 4.52 3.24 4.22 7.89 3.6
Financial Performance: For FY16, the Company posted 59% higher sales of Rs.480.96 crore v/s Rs.302.88 crore in
FY15. Total expenditure during the year rose to Rs.431.1 crore from Rs.256.74 crore in FY15 on account of higher
finance cost, employee benefit expenses and other administrative expenses. It posted 47% higher net profit of Rs.10.59
crore v/s Rs.7.22 crore in FY15. The quarterly performance of the Company was also quite positive and stable.
Share Capital: During FY16, its equity capital rose to Rs.23.43 crore from Rs.22.32 crore in FY15. During the year, it
allotted 11,15,000 equity shares of Rs.10 each at a premium of Rs.20.74 each to the Promoter and Promoter Group on a
preferential basis.
Risk & Concerns: The Indian textile industry faces various risks like moderate inflation growth, high interest rates,
depreciating rupee and delays in policy initiatives to boost investments and capital flows.
Book Value: Its share book value is much higher at Rs.54.19 compared to its market price of Rs.33.55.
52-week high/low: The stock’s 52-week high/low is Rs.36.80/22.05.
Media Buzz: Even though the
Capital Structure (Rs. in crore)
Company’s textile business is
performing well, there are market Particulars 9MFY17 FY16 FY15 FY14 FY13 FY12
rumours that it might sell off its textile Equity Share Capital 23.43 23.43 22.32 22.32 16.93 16.93
unit in order to focus on the high Reserve & Surplus 109.06 103.54 90.64 83.41 68.88 56.5
margin PEB business. The probable sale Book Value (Rs.) 54.19 54.23 50.66 47.42 50.75 43.43
of its textile unit to a Kolkata-based Long-Term Borrowings - 35.46 48.49 76.62 91.8 92.36
company for about ~Rs.200 crore was recently in the news. If this happens, the Company will become debt-free.
Diversification: Richa recently diversified into turnkey solutions for PEBs. With its brand value, the Company can now
attract more orders in this space. The government’s ambitious ‘Make in India’ campaign in all probability will be
successful, which in turn will boost the demand for warehousing, plants and manufacturing facilities thus leading to a
boom in the PEB space where Richa is the only company with OHSAH 18001:2007 certifications by IRQS.

India ranked 66 among 105 countries in the Global Hunger Index 2012. Given the shortage of warehouses and cold
storage, the hungry remain hungry as grains and food continue to rot. If the government is to fulfil its promises, the
hungry must get food and the wastage must stop. FM Arun Jaitley has admitted that the current warehousing capacity is
insufficient and the government plans to strengthen warehousing significantly in the upcoming budget with innovative
ideas and plans. Richa perfectly fits the bill since it works with several private food processing companies for cold-
storage and warehousing. Since the Company has won PSU orders in the industrial space recently, government orders
for warehousing of food grains is very likely.
Recently, when the sale of its textile unit was in the news, the stock rallied indicating how positive this news is. However,
even if the sale does not materialise for the time being, the Company’s debt is not so huge.
Orders: Some of the key orders it obtained recently include - Rs.20 crore order from Punj Lloyd; Rs.24 crore order from
Bharat Electronics Ltd; Rs.36 crore order from Delhi Metro Rail Corporation; Rs.23 crore order from IRCON
International Ltd.
Awards: It was awarded ‘Outstanding Company in Pre-Engineered Building’ in the 6th EPC World Awards for its
exceptional contribution in the infrastructure and construction sector with its exemplary work and projects delivered.
Projects: Richa’s top 10 key projects include:
Shareholding:
1. BHEL: Colossal building (tonnage: 5,000 MT) of BHEL in Agra. Particulars % stake
2. Madhu Silica Pvt Ltd: An iconic project located at Bhavnagar in Gujarat. This PEB covers a Promoters 59.41
floor area of ~7,000 sq.mt. Public 40.59
3. Crompton Greaves Consumer Electricals: One of the most prestigious industrial projects Total 100
executed in 2013 at Mandideep in Bhopal.
4. Lucknow Metro Rail Corporation (LMRC): The PEB covers a floor area of over 30,000 sq.mt. with tonnage of over
1,500 MT including all eight metro stations.
5. Wipro Enterprises: One of the tallest steel building projects in North India for Wipro Enterprises (Fatty Acids
manufacturing unit).
6. Sai Kripa Cold Chain: A remarkable, controlled atmosphere cold storage project at Sonepat, Haryana.
7. Man Diesel & Turbo India Ltd: A complex and aesthetically challenged project at Aurangabad in Maharashtra.
8. Bedmutha Industries Ltd: An innovative cladding pattern project covering an area of over 30,000 sq.mtrs.
9. IOCL: Richa’s first turnkey warehouse project for one of the most renowned PSUs located at Panipat in Haryana.
10. NRB Bearings: Amongst the most reputed projects located at Aurangabad in Maharashtra having a 54 metre clear
span.
Conclusion: With debt in check, good growth, strong order book, strong promoter holding and bright business
prospects, Richa Industries Ltd stock is a hidden gem available at throwaway prices. The stock is not only a value pick
but also a potential multibagger. Hence, I recommend this stock for a price target of Rs.38 in the short-term, Rs.70-90 in
the medium-term and Rs.150+ in the long-term.
As at 31 December 2017, HUDCO’s total outstanding loan portfolio was Rs.36385.8 crore of which Housing Finance loans
constituted 30.86% while Urban Infrastructure Finance loans constituted the balance 69.14%.
SECTORIAL WATCH: TEXTILES

By Laxmikant Bhole
As stated in the last article the Indian economy today is at an interesting juncture and presents immense opportunity to
investors. Globally, investors have faith in India’s growth story and are attracted to our markets. I reiterate that
investors should learn how to pick fundamentally strong stocks and analyze fringe parameters to succeed in their
investment strategies. As they say, there are three essentials for human beings i.e. ‘Roti, Kapda aur Makan’, this time, I
am happy to present a sectoral view on Kapda i.e. Textile.Global Outlook: 2016 was not a very good year for the textile
sector globally. However, 2017 looks to be more promising. The world is at the threshold of a new industrial revolution.
Analysts anticipate more expansion with the latest technologies in textile machineries. Textile machinery manufacturing
hubs like China, Germany, Italy, Switzerland and India are already competing to craft and bid for the best technologies in
textile machineries. China ranks no.1 in machinery technology along with its low pricing model and poses a greater
challenge to other countries like India, Philippines and Vietnam.

Global prices are on the rise on account of firm demand prospects. However, the increasing protectionist outlook of
various countries may impact the sector. But there are immense growth opportunities for the overall textile market
especially due to the resilient long-term demand from the rising middle-class society in emerging markets. As per Euler
Hermes economic research, the three key players in the textile sector are China, Italy and India with India being the
second largest producer and fourth largest exporter in the world. Cotton prices rose 5.7% on an average in 2016 while
producer prices have at best stagnated (China) or reduced as was the case in India (-1.8%).
Domestic Outlook: The Indian textile industry is the second largest employment creator in the Indian economy after
Agriculture. It creates ~80–100 million jobs every year, direct or indirect. The ~$108 bn textile industry has the
potential to double over the next 3-4 years. The industry contributes ~5% to India’s GDP, 14% to IIP and 15% to exports
earnings. Textile exports in FY16 were recorded at $40 bn. India's fiber production in FY16 was 9 million tonnes (MT)
and is expected to reach 10 MT in FY18. The total fabric production in India is expected to grow to 69 bn sq.mts. by FY18
from 66 bn sq.mts in FY16. According to a report by Wazir Advisors published in July 2016, India is one of the most cost
efficient textile manufacturing countries in the world and the third most competitive country in terms of ring yarn
manufacturing and second in terms of knitted and woven ring yarn fabric manufacturing. With the rising cost in China,
Korea and Egypt, the long-term outlook for the Indian textile sector remains positive.
As per the ‘Make in India’ campaign, India is the second largest textile fibre producer, the largest cotton and jute
producer and the second largest textile manufacturing capacity in the world. It accounts for 18% of the world's spindles
and 9% of world's rotor capacity. It has 5% share in the global textiles and apparel trade.
India is also a leader in various segments:
 Fibre
 World’s largest producer of Cotton with 5,984 mn
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kg production in FY16.
 World’s largest producer of Jute with 1,710 mn kg Fresh One Up Trend Daily
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 World’s second largest producer of Silk with 29 keen to focus and gain from a single stock every
mn kg production in FY15. trading day.
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(over 8 mn rotors in FY15).
 Weaving - World's highest installed weaving capacity (over 4.9 mn looms including 2.4 mn handlooms in FY15.
 Apparel contributed the highest i.e. 42% to the textile and apparel export basket of India during FY16.
This shows the size of the Indian textile industry and how rapidly it is growing. The textile industry is closely linked to
the agriculture sector due to its dependence on raw materials such as Cotton, Jute, Silk, Wool etc. and hence, the pricing
in the industry also depends upon the agricultural production.
Political Scenario: The Government of India has allowed 100% FDI in this sector under the automatic route. 100% FDI
is also allowed in single brand retail while 51% FDI is allowed in multi-brand retail. Knowing the potential of the
manufacturing sector with textile being a major component of manufacturing that creates more employment, the NDA
government has taken multiple steps to boost the Indian Textile industry.
1. FM Arun Jaitley in the Union Budget 2017-2018 announced higher allocation of funds to Mudra Bank this year from
Rs.136000 crore to Rs.244000 crore to encourage new entrepreneurs to invest in sectors such as Knitwear.
2. To strengthen the powerloom sector, the government recently launched PowerTex India, a comprehensive scheme
for the sector’s development, simultaneously across 45+ locations in the country which will benefit small
powerloom weavers specifically.

3. The government launched Technology Upgradation Fund Scheme (TUFS) which enables firms to access low interest
loans for technology upgradation in the Textile sector.
4. The Ministry of Textiles has signed MoUs with 20 e-commerce companies to provide a platform to artisans and
weavers in different handloom and handicraft clusters across the country for selling their products directly to the
consumer.
5. MoUs worth Rs.8835 crore were signed in areas such as textile parks, textile processing, machinery, carpet
development and others during the Vibrant Gujarat 2017 Summit.
6. The Union Minister of Textiles inaugurated Meghalaya’s first-ever apparel and garment making centre to create
employment opportunities in the region. Meghalaya has been sanctioned Rs.32 crore for promotion of handlooms.
7. The government has initiated various schemes viz. Scheme for Integrated Textile Parks (SITP), Revised Restructured
Technological Upgradation Fund Scheme (RRTUFS), Integrated Skill Development Scheme (ISDS), etc. to support the
textile sector. In addition, various states such as Gujarat, Maharashtra, Rajasthan, Karnataka, etc. have developed
specific policies to promote investments in the textile sector.
8. The government has started promoting the ‘India Handloom’ campaign to promote high quality handloom products.
9. The government has announced a slew of labor-friendly reforms aimed at i) generating around 11.1 mn jobs in
apparel and made-ups sectors; ii) increasing textile exports to $32.8 bn; and iii) investment of Rs.80630 crore over
the next three years.
10. The government has implemented several export promotion measures. For example, specified technical textile
products are covered under the Focus Product Scheme, MAI and MDA schemes. On the back of such measures,
India’s textile exports are expected to grow multi-fold.
Thus, it is evident that the NDA Government has identified the potential of the textile sector and is committed to provide
all the support for its growth.
Investments: Some of the key investments made in the sector in the recent years are -
1. Punjab-based Trident group has tied up with France-based Lagardere Active group to launch an exclusive range of
home textiles under the renowned French lifestyle brand ‘Elle Décor’ in India.’
2. Last year, Peter England, the menswear brand from the house of Aditya Birla Fashion and Retail Ltd, announced a
strategic collaboration with the government’s ‘India Handloom’ brand to promote the handloom industry in the
country.
3. Last year, Raymond partnered with Khadi and Village
Industries Commission (KVIC) and launched the brand Free 2-day trial of Live Market Intra-day Calls
‘Khadi by Raymond’. It also commissioned a new plant A running commentary of intra-day trading
in Amaravati in Maharashtra with capex of Rs.1400 recommendations with buy/sell levels, targets, stop loss on
crore to manufacture linen, cotton shirting fabrics and your mobile every trading day of the moth along with pre-
denim. market notes via email for Rs.4000 per month.
4. Max Fashion, part of the Dubai-based Landmark Contact Money Times on 022-22616970 or
group, will invest ~Rs.400 crore over the next four [email protected] to register for a free trial.
years to open new stores in Tier-I and II cities.
5. A couple of years back, Dupont, Reliance and Vipul Sarees collaborated to launch an exclusive collection of ‘green’
sarees made with DuPont’s latest innovation in the textile industry - DuPont Sorona, a renewable sourced fibre.
6. A couple of years back, Welspun India Ltd unveiled its new spinning facility of 1,70,000 spindles at Anjar in Gujarat.
Several such investments have been made in this sector and suitable government policies make it one of the most
attractive sectors in India from an investment perspective.
Conclusion: The Indian Textile industry, which is one the most competitive in the world, is expected to double by 2021.
Buoyed by the strong rising domestic and international demand coupled with supportive government policies, the
sector is expected to perform well. In the recent market rally, most textile stocks have regained fancy. Among textile
stocks, investors should accumulate on dips quality textile and related stocks like-
 Jute manufacturers – Gloster, Cheviot Company
 Fabric & Apparel – Arvind, Raymond, Nahar Industrial Enterprise, Sutlej Textiles & Industries, Bombay Dyeing &
Manufacturing Company, Ruby Mills, Lakshmi Mills Company, Suryalakshmi Cotton Mills, Loyal Textile Mills, Pioneer
Embroideries.

 Yarn, Spinning & Processing – Nahar Spinning Mills, Suryalata Spinning Mills, Sangam (India), RSWM, Vardhman
Textiles, Trident, DCM, Nitin Spinners, Banswara Syntex, Amarjothi Spinning Mills, Sambandam Spinning Mills,
Super Sales India, Rajapalayam Mills, Sarla Performance Fibers, Ganesha Ecosphere.
STOCK WATCH
By Amit Kumar Gupta
IDFC Ltd
(BSE Code: 532659) (CMP: Rs.62.15) (FV: Rs.10) (TGT: Rs.75+)
IDFC Ltd is a holding company and a non-banking finance company (NBFC) engaged in the investing business. Its
segments include (i) Financing, which includes the Banking Business and (ii) Others, which includes asset management,
investment banking and institutional broking. The Company has investment in IDFC Financial Holding Company Ltd,
which in turn holds investments in IDFC Bank Ltd, IDFC Alternatives Ltd, IDFC Asset Management Company Ltd (AMC),
IDFC Securities Ltd and IDFC Infra Debt Fund Ltd. The Company, through its subsidiaries, is engaged in various
businesses like Banking, Public Markets Asset Management, Institutional Broking, Infrastructure Debt Fund (IDF) and
Alternative Asset Management. IDFC Bank's businesses are split into three parts: Commercial & Wholesale Banking,
Bharat Banking and Consumer Banking. Its Commercial Banking business comprises the Middle Market Group and the
Small & Medium Enterprises Group.
IDFC’s IDF (now rechristened as IDFC Infrastructure Finance) continues to expand its loan book, up 19% QoQ from
Rs.2260 crore to Rs.2680 crore, driven by an increase in the number of accounts from 36 to 37). While growth has been
strong, we believe that sustaining such levels would be difficult due to the operating environment especially after the
rate cut by banks. IDF can refinance only those projects that have been operational for at least a year. Given the scarcity
of such projects right now, banks are unwilling to let go of such projects. As a result, the management expects spreads to
compress from 2% now to ~1.4%. IDF is well capitalized with a CAR of 28.9%. Operating profit was Rs.19 crore v/s
Rs.22 crore in Q3FY17.
In Q4FY17, IDFC acquired the 25% stake held by Natixis Global in the AMC business for Rs.244 crore. Average AUM was
largely stable QoQ (+14% YoY) at Rs.59500 crore, with share of equity AUM stable at 22%. However, total income grew
in excess of AUM growth at 8% QoQ while expense growth was relatively modest (+2% QoQ). This led to 16% QoQ
growth in operating profits in the quarter to Rs.37 crore.
Other highlights: (a) Profits in Alternative Management segment declined QoQ from Rs.7 crore to Rs.4 crore; (b) IDFC
Securities witnessed a spike in revenue from Rs.14 crore in Q3FY17 to Rs.25 crore in Q4FY17.
Valuations: In the near-term, quarterly trends are not very relevant and most of the profitability will be derived from
banking operations. We expect the balance sheet growth of the bank to remain modest while asset quality issues are
likely to persist. While trading gains at IDFC Bank supported earnings in 9MFY17, it is unlikely to continue in this
magnitude. Increase in IDF leverage (leading to higher RoE), continued traction in asset-light businesses (Securities,
Asset Management) and build-up of banking business will lead to value creation for shareholders.
Technical Outlook: The IDFC Ltd stock looks good on the daily chart for medium-term investment. It has formed a
double bottom pattern on the daily chart and trades above all moving averages like the 200 DMA level.
Start accumulating at this level of Rs.62.15 and on dips to Rs.57 for medium-to-long-term investment and a possible
price target of Rs.75+ in the next 6 months.
*******
Mold-Tek Packaging Ltd

(BSE Code: 533080) (CMP: Rs.282.75) (FV: Rs.5) (TGT: Rs.350+)
Packaging company Mold-Tek Packaging Ltd (MTPL) is a holding company engaged in the manufacture of plastic
packaging containers. It manufactures rigid plastic packaging containers through the injection molding technology for
paints, lubes, oils, food, fast-moving consumer goods (FMCG) and other sectors. It designs and manufactures airtight and
pilfer-proof pails as well as customized containers to meet the packaging requirements of customers. It also provides
bulk containers for bulk drugs, chemicals and food. It offers a range of decorating processes and product sizes for its
clients. It decorates products using technologies including in-mold labeling (IML), heat transfer labeling and screen
printing.

MTPL has 7 processing plants with over 70 injection molding machines and 3 stock points spread across India. It has an
injection molding capacity of ~20,000 TPA. Currently, its total capacity stands at ~27,000 TPA. In FY16, MTPL started
setting up a 3,000 TPA plant at Ras Al Khaimah (RAK) in the UAE, which upon completion is expected to make a
meaningful contribution from Q1FY18.
MTPL commenced supplying IML containers to Mondelez (earlier Cadbury) for its ‘Lickables’ product in Q4FY17. It also
received a Letter of Intent from Asian Paints for setting up 2 new dedicated pail manufacturing plants with total capacity
of 6,000 TPA at Vizag in Andhra Pradesh and Mysuru in Karnataka. With the incremental capacity addition of 9,000 TPA
over the next two years, we believe that MTPL is well placed to deliver strong volume growth of 16% over FY17-FY19E.
Until 2010, MTPL was purely a pail manufacturer for paint and lube industries. It introduced the IML technology by
importing two robots and labels. Since then, IML’s sales contribution has risen to ~47% as at 9MFY17. Since FY14, the
Company has also started getting meaningful contracts for IML containers from the F&F (Food & FMCG) sector. Sales to
the F&F sector rose from 1.3% in FY14 to 5.5% in 9MFY17. With the rising contribution from IML and F&F segments,
MTPL’s margins improved from 12.4% in FY11 to 16.5% in 9MFY17. We expect IML sales volume contribution to rise
from 40% in FY16 to 52.4% in FY19E and sales in value terms to rise from 44.2% of total sales in FY16 to 56.4% in
FY19E. With higher contribution from IML, operating margin is expected to rise from 16.6% in FY16 to 17.6% in FY19.
Technical Outlook: The Mold-Tek Packaging Ltd stock looks very good on the daily chart for medium-term investment.
The stock is moving in a strong uptrend and any correction should be used for accumulation. It has broken out of the
trading range and trades above its 200 DMA level.
Start accumulating at this level of Rs.282.75 and on dips to Rs.252.75 for medium-to-long-term investment and a
possible price target of Rs.350+ in the next 12 months.
STOCK BUZZ
By Subramanian Mahadevan
DLF Ltd: Expensive property!

Promoted by Chaudhary Raghvendra Singh in 1946, DLF Ltd is the largest commercial real estate developer in India that
builds residential, office and retail properties. It has over 25 mn sq.ft. of leased offices across Gurgaon, Hyderabad,
Kolkata, Chandigarh and Chennai, which generate a rental income of over Rs.1950 crore every year and supports
Rs.22210 crore of its debt. Its $2 bn IPO in July 2007 was one of the biggest IPOs in India.
Contrary to India’s talk of reducing interest rates, the US Fed is expected to hike interest rates up to 100 bps in two
tranches through 2017. The real estate and construction industry, which in general is considered as a rate sensitive
sector, should see some green shoots despite global macro headwinds. Further, recent news flows like divesting 40%
stake in its rental arm - DLF Cyber City Developers will lower its burgeoning debt coupled with business restructuring
initiatives to create two ‘pure plays’ — i) a residential business with zero debt; and ii) an independent commercial
business in partnership with long-term institutional investors, which are both positive.
DLF, being a dividend paying and profit making company with 74.99% promoter stake and huge land banks across India,
may still provide some news based trading returns with very limited upside. The stock has doubled since our
recommendation in January 2016. It is advisable to book profits and take money off the table as we feel the valuations
look a bit stretched now.
******
GIC Housing Finance Ltd: Financing home!

GIC Housing Finance Ltd (GICHF) is a housing finance company (HFC), promoted by General Insurance Corporation of
India, an active financial investor/promoter which along with its subsidiaries holds 41.31% stake in the company.
GICHF’s primary business is to grant housing loans to individuals and entities engaged in the construction of residential
properties. It has over 59 branches across the country and plans to add 8-9 branches every year. Its major business is
concentrated in Western and Southern India with customer focus on middle and lower middle-income borrowers (95%
borrowers are salaried class).
GICHF has the highest dividend payout ratio and dividend yield among its peers and enjoys healthy return ratios with nil
net NPAs. Last year, Reliance Capital Trustee Company had acquired 10 lakh shares and hiked their stake in GICHF to

7.87%. In 2015, GICHF had acquired 16% stake in LIC Nomura Mutual Fund Asset Management Company for Rs.22.68
crore, which was a huge trigger for re-rating the stock from sub Rs.250 level to the current level. The stock has delivered
phenomenal returns of over 150% since our recommendation in January 2016. Hence, it is prudent to book profits now
and re-enter after some meaningful correction for solid returns in the years to come.
SMART PICKS
Nifty in crucial range 9269-9369
By Rohan Nalavade
The markets witnessed consolidation last week as the Nifty moved into a tight range of 9269-9369. Bank Nifty, however,
outperformed and made a new lifetime high. Now, 22527 is a good support level for the Bank Nifty and the trend could
reverse only if it breaks this level.
The market is a ‘buy on dips’. Profit-booking will be seen at higher levels until a breakout above 9369 is seen on closing.
If the Nifty breaks the 9240 level, selling positions could get built up for 9200-9120 levels. Weekly close of the Nifty the
week before last was 9304 as against last week’s close of 9285. So, the market has to cross the 9310 level to gain
momentum for an upside rally.
French elections are scheduled on 7 May 2017 and the election outcome will direct the market on Monday. According to
exit polls, Macron is expected to win the election. GST is likely to get implemented in July this year. So, a lot of news has
to come.
Among stocks,
 Buy Adani Ports & Special Economic Zone above Rs.337-342 for a price target of Rs.355-360.
 Buy Punjab National Bank above Rs.170 for a price target of Rs.180-192.
 Buy L&T Finance Holdings above Rs.128-131 for a price target of Rs.140-155-180 in the long-term.
 Buy ICICI Bank at Rs.290-295 for a price target of Rs.310-320.
MARKET REVIEW
Sensex closes below 30K
By Devendra A Singh
The BSE Sensex fell 59.6 points to settle at 29858.8 while the CNX Nifty closed at 9285.3 rising 18.75 points for the week
ending Friday, 5 May 2017.
Indian manufacturing activity expanded for the fourth consecutive month in April 2017 helped by stronger growth in
new orders although a rise in output and employment slowed down. The Markit Manufacturing PMI compiled by IHS
Markit held steady at 52.5 last month.
Pollyanna De Lima, economist at IHS Markit said, “Consumers are the key drivers of growth. Buoyant domestic demand
coupled with sustained growth of new orders from abroad boosted the upturn in total new business received by Indian
manufacturers in April 2017”.
Fitch Ratings kept India’s sovereign rating unchanged at BBB- the lowest investment grade with a stable outlook, citing a
weak fiscal position and difficult business environment. The government and some commentators in India have been
pitching hard for a rating upgrade by Fitch and other agencies saying that the country’s strong economic fundamentals,
political stability and a slew of reforms need to be better reflected in the rating assigned to it. Fitch, however, said that
the business environment in India is likely to gradually improve with the implementation and continued broadening of
the structural reform agenda.
The agency forecasts real GDP growth to accelerate to 7.7% in fiscals 2017 and 2018, from 7.1% in fiscal 2016. It expects
structural reforms to boost growth along with higher real disposable income supported by implementation of the
Seventh Pay Commission recommendations on the back of an average monsoon.
“India is likely to witness a sustained improvement in the debt-to-GDP ratio over the medium-term, driven by high
economic growth rate and modest fiscal consolidation”, said a Deutsche Bank report.
If latest report titled ‘Analysing India’s Debt Sustainability’ noted that the nominal GDP growth will surprise on the
upside and will in turn help the country bring down the debt level.

India has seen its public debt:GDP ratio decline significantly in the recent decades to about 70% in FY17 from 84% in
FY06. Despite the significant reduction in debt level, it is still high compared to other emerging market peers. Only in
Brazil and Malaysia, the government’s gross debt level is as high as in India. China’s gross debt level for 2016 stood at
40% of GDP.
“An analysis of the liability position of the Centre and States
showed that a majority of the debt reduction has come at the Profitrak Weekly
central government level. While the central government debt A complete guide for Trading and Investments based
as a percentage of GDP fell to around 50.3% in FY16 from on Technicals
61.5% in FY05, the state metric fell to 21.4% from 26.3%”,
the report said. What you Get?
“Meanwhile, the Fiscal Responsibility and Budget 1) Weekly Market Outlook of -
Management (FRBM) Committee has recommended the  Sensex
Central government to continue on the path of fiscal  Nifty
consolidation with the medium-term goal of bringing the  Bank Nifty
Centre’s fiscal deficit down to 2.5% of GDP by FY23. The 2) Sectoral View of Strong/Weak/Market Perfomer
committee also recommended a desirable fiscal path for state indices
3) Weekly Trading Signals
governments so that cumulatively debt-GDP of states can
4) Stock Views and Updates every week
remain constant at around the current level of 21%
5) Winners for trading and investing for medium-
throughout the forecast period. This would require state
to-long term till March 2018
fiscal deficit to come down by about 1% of GDP to 2% by 6) Winners of 2017 with fresh Weekly Signals on
FY23. If this is achieved, India’s overall public debt:GDP ratio the same
would moderate to about 60% of GDP by FY22-23, a 10%
drop from the current levels”, the report stated. Application of this product can be explained on the
On the Asian front, China’s service sector expanded at the Telephone or via Skype or Team Viewer.
slowest pace in nearly a year, pointing to possible softness in
the sector. The Caixin China Services PMI fell to 51.5 in April For 1 full year with interaction,
2017, the lowest since May 2016. China’s nationwide factory rush and subscribe to Profitrak Weekly
activity expanded at a slower pace in April 2017 with a
private gauge falling to a seven-month low. The Caixin China Subscription Rate: 1 month: Rs.2500; 1 year: Rs.12000
Manufacturing PMI dropped to 50.3 in April 2017 from 51.2
in March 2017 indicating a slower expansion of activity. For more details, contact Money Times on
022-22616970/4805 or
The Indian stock markets remained closed on Monday, 1 May [email protected].
2017, on account of Maharashtra Day.
Key index closed flat on Tuesday, 2 May 2017. The Sensex climbed 2.78 points (+0.01%) to settle at 29921.18.
Key index fell on Wednesday, 3 May 2017, on local cues. The Sensex edged lower by 26.38 points (-0.09%) to close at
29894.8.
Key index gained on Thursday, 4 May 2017, on fresh buying. The Sensex climbed 231.41 points (+0.77%) to close at
30126.21.
Key index fell on Friday, 5 May 2017, on global worries. The Sensex was down 267.41 points (-0.89%) to close at
29858.8.
National and global macro-economic figures will surely dictate the global markets movements and influence investor
sentiment in the near future.
The government will announce industrial production data for the month of March 2017 after market hours on Friday, 12
May 2017. The data on inflation based on consumer price index (CPI) or retail inflation for April 2017 will also be
announced after market hours on that day.
On India’s macro-economic data, the HSBC Manufacturing PMI and HSBC Services PMI for April 2017 is scheduled to be
released in the first week of May 2017. On the inflation data, the government is scheduled to release data based on
wholesale price index (WPI) and the combined consumer price indices (CPI) for urban and rural India for April 2017 by
mid-May 2017.

EXPERT EYE
By Vihari
Minda Corporation Ltd: Quality stock

(BSE code: 538962) (CMP: Rs.110.90) (FV: Rs.2)
Minda Corporation Ltd (MCL) is one of the largest suppliers of Electronic & Mechanical Security System for 2-wheelers
(2W), 3-wheelers (3W) and Off Road vehicles. It is a diversified company with a product portfolio encompassing
Mechanical & Electronic Security System, Door System, Electronic Controllers (for Electric Vehicles) and Plastic Interiors
for Auto OEMs across the globe. It also manufactures Die Casting parts and high class Surface Finishing parts for auto
and consumer durable industries.
MCL has 27 plants in India, 3 in Europe, 2 in South East Asia and 1 in North America and employs 16,000 persons. It
exports ~20% of its products to USA, UK, Europe, South East Asia and ASEAN countries. Its plants are ISO/TS 16949 and
ISO 14000 certified. Its Nagar plant is also OHSAS certified.
The Minda group is headed by Ashok Minda group and operates 36 plants in India, Germany, Poland, Czech Republic,
Indonesia, Vietnam, Uzbekistan, Japan, China and Mexico. The group also has several joint ventures with leading
companies in USA, Japan, Italy and Uzbekistan.
MCL has a 51% subsidiary - Minda
Furukawa Electric Pvt Ltd, which is engaged
in Wiring Harness, Terminals, Relay Boxes,
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and Steering Roll Connectors. Furukawa
Electric Company Ltd holds the balance 49% Techno Funda Plus is a superior version of the Techno Funda column
stake. that has recorded near 90% success since launch.
MCL holds 51% stake in Minda Stoneridge Every week, Techno Funda Plus identifies three fundamentally sound
Instruments, which is engaged in and technically strong stocks that can yield handsome returns against
Instrument Clusters, Dashboard Clocks, Fuel their peers in the short-to-medium-term.
Level Sensors, Dashboard Assemblies, Speed
Sensors and Temperature Sensors. Most of our recommendations have fetched excellent returns to our
Stoneridge Inc. holds the balance 49% stake. subscribers. Of the 156 stocks recommended between 11 January 2016
MCL has a 50:50 JV of with Vehicle Access and 2 January 2017 (52 weeks), we booked profit in 124 stocks, 27
Systems Technology (VAST) LLC, which triggered the stop loss while 5 are still open and are in nominal red.
operates under the name - Minda Vast
Of the 45 stocks recommended between 9 January 2017 and 17 April
Access Systems Pvt Ltd. It manufactures
Locks & Keys, Steering Column Locks, 2017 (15 weeks), we booked 6-32% profit in 35 stocks, 1 triggered the
Immobilizers, Latches, External and Internal stop loss while 9 are still open. Of these 9, 8 are in green while 1 is in
Door Handles and Back Door Openers, nominal red.
Remote Controls, PEPS, Hood, Tail & Seat
If you want to earn like this, subscribe to TECHNO FUNDA PLUS
Latches, ESCL, Power Closure, etc. for 4-
wheelers. today.
VAST (a global alliance of STRATTEC, ADAC For more details, contact Money Times on
Automotive, USA and WITTE Automotive, 022-22616970/4805 or [email protected].
Germany) is a global supplier of
security/access control products for the Subscription Rate: 1 month: Rs.2500; 3 months: Rs.6000;
motor vehicle industry. 6 months: Rs.11000; 1 year: Rs.18000.
Minda SAI Ltd, a wholly owned subsidiary of
MCL, had acquired 51% stake in Minda Stoneridge Instruments Ltd (MSIL) w.e.f. 1 October 2015.
MCL acquired 100% stake in Panalfa Autoelektrik Ltd (PAL) w.e.f. 4 April 2016. PAL caters to Agriculture Machinery,
Stationary Engine, Construction Equipment and Automotive markets globally. Reduction Gear Starter Motors are fast
replacing the conventional direct-drive starter motors. PAL’s manufacturing facility is located at Bawal in Haryana and
its products are supplied to OEMs in India and exported to European markets. Its key customers include Eicher Motors,
Escorts, Greaves, HMT, Magneton, New Holland, Polaris, Sonalika and TAFE.

MCL recently inaugurated a Rs.100 crore plant at Mexico for Minda KTSN (plastic interiors), which commenced
operations on 4 April 2017. The plant is spread across 17,320 sq.mtrs. and mainly caters to Volkswagen. The plant is
expected to generate revenue of ~Rs.175 crore by FY19-20E.
MCL has obtained orders for interiors which include Glove box, Columns, End cap, Hang on parts and others. Further, its
new plant in China for the manufacture of plastic oil pans and cylinder heads, is expected to be operational by end FY18.
Its target customers include OEMs like Daimler, Beiqi Foton Motor Company Ltd, etc.
Also, a 4600 TPA new die casting plant is being set up in Pune at an initial outlay of Rs.75 crore and its capacity will be
ramped up to 9,600 TPA by FY20 from the current level. This plant is exclusively for Aluminum Gravity and Low-
Pressure die casting and there will be a separate machine shop for precision parts such as Compressor Housing. The
plant is expected to be complete by Q2FY18E.
Improved technology has to be adapted for engine fuel/management systems, anti-lock braking systems, sensors,
connected cars, integrated starter-generator systems and Advanced Driver Assistance Systems (ADAS). In addition to
this, products such as clusters, locks, door handles, immobilizer will be upgraded to electronic clusters & locks and
bracket less door handles also enabling PEPS (passive entry/ passive start) technology. The management expects the
sensor business to add substantial value once BS-VI norms come into force by FY20E. Currently, MCL supplies to OEMs
like Mahindra & Mahindra for exhaust gas/soot sensors.
MCL is working diligently to capitalize on new opportunities such as incremental demand for high value added products
such as ABS wiring harness, SRC for airbags and immobiliser systems with increased focus on road safety. It is focused
on increasing content of electronics and sensors in the vehicles. Establishment of 'Spark Minda Technical Centre' in Pune
is expected to be operational in FY17. MCL is working on greenfield manufacturing plants in Mexico and Czech Republic
to leverage additional growth opportunities in Latin America and Europe. It is also exploring growth opportunities in
China.
In FY16, net profit rose 11% to Rs.99 crore on 24% higher sales of Rs.2445 crore. Exceptional rise in other expenses by
20% is on account of strategic investments in expansion projects such as the Mexico plant and Spark Minda Technical
Centre (Pune). FY16 EPS was Rs.4.8. Q3FY17 NP of Rs.20.1 crore down 36% on 10% higher sales of Rs.713 crore.
Q3FY17 EPS is Re.1. During 9MFY17, net profit fell 5% to Rs.77 crore on 22% higher sales of Rs.1782 crore. 9MFY17 EPS
is Rs.3.7.
With equity capital of Rs.41.6 crore and reserves of Rs.506.6 crore, the book value of the share is Rs.26.4. Total debts
stand at Rs.543 crore. Cash of Rs.88 crore and loans/advances given of Rs.162 crore give a net debt of Rs.293 crore. The
net DER therefore is 0.5:1. The value of its gross block is Rs.1365 crore. The promoters hold 70.2% in the equity capital.
Foreign holding is 0.3%, Dis hold 8.3% and with PCBs holding 8.6% leaves 12.6% with investing public.
During Q3FY17, MCL filed three patents and during 9MFY17, 18 patents were filed. Total patents filed in FY16 were 11.
Out of the 3 patents, 2 Patents filed by MCL for Security Division in 2 wheeler Security Systems and 1 patent filed by
Minda Stoneridge-Sensors division.
According to the Automotive Component Manufacturers Association of India (ACMA), the Indian auto-components
industry is expected to register a turnover of US$ 100 billion by 2020 backed by strong exports ranging between US$ 80-
US$ 100 billion by 2026, from the current US$ 11.2 billion.
The Indian auto-components industry is set to become the third largest in the world by 2025. Indian auto-component
manufacturers are well positioned to benefit by the globalisation of the sector as its exports potential could quadruple to
US$ 40 billion by 2020.
Apart from adding new high value added products to its product portfolio, MCL has also ventured into Mexico with a
greenfield manufacturing plant. MCL’s Spark Minda Technical Centre' in Pune is operational since last fiscal.
MCL aims to be a automotive component player in the world and is focused on the next leg of its strategy, which includes
to target export markets and become a global supplier of choice for all major OEMs; to pursue inorganic opportunities
which can add value and profitability; to enhance the share of business from existing OEM customers; to increase focus
on existing geographies like India, Europe and ASEAN Countries and to identify new opportunities for products related
to emission regulations - BS VI in 2020.
Based on the current going, MCL is all set to post an EPS of Rs.5.8 in FY17 and Rs.8 in FY18. At the current market price
of Rs.110.90, the share trades at a P/E of 19.12 on FY17 earnings and 13.86 on FY18 projected earnings. A reasonable
P/E of 20 on FY18 EPS of Rs.7.5 will take its share price to Rs.160 in the medium-term. The 52-week high/low of the
share has been Rs.143.60/85.50.

TECHNO FUNDA
By Nayan Patel
LKP Finance Ltd

Incorporated in 1948, Mumbai-based LKP Finance Ltd (LKPF) through its subsidiaries, operates as a non-banking
finance company (NBFC). It provides equity broking in cash and derivatives, Internet based trading, Demat services,
debt instruments, IPO, Commodity trading and research services to retail, HNIs, mutual funds, financial institutions,
foreign and domestic institutional investors, insurance companies, banks and corporates. It also offers loan against
shares and margin funding services; merger and acquisition services; and depository services such as dematerialization
and rematerialization of shares, pledging of shares, maintenance of beneficial holdings, electronic credit against
corporate actions and SMS alerts on all transactions. It offers its services through a network of ~2,500 outlets in India.
With an equity capital of Rs.12.2 crore and reserves of Rs.110.16 crore, its share book value works out to Rs.130.49. Its
P/BV ratio stands at just 0.66x, which is quite attractive and cheap compared to its peers. The promoters hold 64.44% of
the equity capital, which leaves 35.56% stake with the investing public.
During Q4FY17, LKPF posted PAT of Rs.3.46 crore as against a loss Financial Performance: (Rs. in crore)
of Rs.1 crore in Q4FY16 fetching an EPS of Rs.2.84. During FY17, Particulars Q4FY17 Q4FY16 FY17 FY16
PAT climbed 20% to Rs.8.85 crore from Rs.7.39 crore in FY16 on Sales 12.03 11.29 59.71 102.21
sales of Rs.59.71 crore fetching an EPS of Rs.7.25. PBT 4.2 -0.6 11.35 10.67
Note: LKP Securities Ltd ceased to be a subsidiary of LKPF w.e.f. 8 Tax 0.74 0.4 2.5 3.28
July 2016 and was demerged. Hence, the consolidated results for PAT 3.46 -1 8.85 7.39
Q4FY17 do not include the financials of LKP Securities Ltd for the EPS (in Rs.) 2.84 -0.82 7.25 6.05
quarter. Consequently, the results of FY17 are not strictly
comparable to the consolidated results of FY16.
LKPF declared 20% dividend for FY17 and its book closure date is 22 May 2017. Currently, the stock trades at a P/E of
10.91x, which is among the lowest in the segment. Technically, the stock has given a strong upward break out on the
long-term chart. Investors can buy this cum dividend stock with a stop loss of Rs.75. On the upper side, it could zoom to
Rs.115-135 levels in the medium-to-long-term. The stock’s all-time high is Rs.187.
********
Vippy Spinpro Ltd

Incorporated in 1992, Indore-based Vippy Spinpro Ltd (VSL) manufactures and sells cotton yarns. It offers special
purpose, slub, fancy, multi-count, multi-twist, waxed, plied and florescent free yarns. Its yarns are used in various
applications such as denim, terry towels, bottom weights, home furnishings, bed linens, knitting, surgical clothes, artistic
canvas products, industrial fabrics, sheeting, home textiles, etc. Its yarn products are also used as a weft in flannel cloth
for made ups. It also exports its products.
With an equity capital of Rs.5.87 crore and reserves of Rs.23.08 crore, its share book value works out to Rs.49.32. Its
P/BV ratio stands at just 0.95x. The promoters hold 54.76% of the equity capital, which leaves 45.24% stake with the
investing public. The Company reduced its debt from
Rs.24.49 crore in FY12 to Rs.3.06 crore in FY16. Financial Performance: (Rs. in crore)
During Q3FY17, VSL posted a lower PAT of Rs.0.72 Particulars Q3FY17 Q3FY16 9MFY17 9MFY16 FY16
crore as against Rs.0.79 crore in Q3FY16 on higher Sales 24.48 20.18 72.94 66.06 87.76
sales of Rs.24.48 crore fetching an EPS of Rs.1.24. PBT 1.06 1.16 2.97 2.85 4.57
During 9MFY17, PAT climbed to Rs.2.05 crore from Tax 0.33 0.37 0.92 0.87 1.46
Rs.1.97 crore in 9MFY16 on higher sales of Rs.72.94 PAT 0.72 0.79 2.05 1.97 3.09
crore fetching an EPS of Rs.3.49. EPS (in Rs.) 1.24 1.34 3.49 3.37 5.27
Currently, the stock trades at a P/E of 8.68x and looks
quite attractive for investment. Investors can buy this stock with a stop loss of Rs.37. On the upper side, it could zoom to
Rs.65-70 levels in the medium-to-long-term.

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⁭ 1 qtr = Rs.2000, ⁭ 2 qtrs = Rs.3500, PROFITRAK TRENDS
⁭ 3 qtrs = Rs.5000, ⁭ 1 yr = Rs.6500 Profitrak Daily
SHORT-TERM (1 wk – 3 mnths): ⁭ 1 mnth = Rs.2500, ⁭ 3 mnths = Rs.7000
Techno Funda Plus (Courier/Online) ⁭ 6 mnths = Rs.13000, ⁭ 1 yr = Rs.20000
⁭ 1 mnth = Rs.2500, ⁭ 3 mnths = Rs.6000, Profitrak Weekly 1 mnth = Rs.1500, 1 yr = Rs.12000
⁭ 6 mnths = Rs.11000, 1 yr = Rs.18000 Profitrak Short-Term Gains 1 yr = Rs.8000
INVESTMENT RELATED: Profitrak Medium-Term Gains⁭ 1 yr = Rs.8000
Portfolio Advisory (One-to-One/Email) Profitrak Winners Long-Term Gains ⁭ 1 yr = Rs.6000
⁭ Up to 15 stocks = Rs.1500 POWER OF RS 1 yr = Rs.3100
(Above 15 stocks, Rs.100 per additional stock)
(For courier delivery, add Rs.40 per issue or Rs.2080 p.a. to the subscription amount as courier charges)
a) ⁭ I am enclosing Demand Draft/Cheque No. ________________ payable at par in Mumbai favouring

‘Time Communications (India) Ltd.’ dated _____________ on _____________________________ at Branch
______________________________________ for Rs. _____________.
b) I have deposited Cash or electronically transferred Rs._____________ via RTGS/NEFT to:
⁭ Time Communications (India) Ltd. State Bank of India C/A 10043795661, Fort Market Branch, Fort, Mumbai -
400 001 (IFSC: SBIN0005347) or
⁭ Time Communications India Limited ICICI Bank C/A 623505381145, Fort Branch, Mumbai - 400 001
(IFSC: ICIC0006235) and have advised you about Transfer No. _______________________ by e-mail / phone.
c) ⁭ I am aware that investment in equities is risky and stock performance is unpredictable and can result in losses
in spite of all analysis and projections.
Name:
Address:
City: Pin:
Tel No Mob
Email:
Are you a ⁭ Investor, ⁭ Trader, ⁭ Broker/Sub-Broker, ⁭ Investment Advisor, ⁭ Banker
Date & Place: ___________________________________ Signature: ______________________

T I M E S: Markets To Struggle at Higher Levels

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a) ⁭ I am enclosing Demand Draft/Cheque No. ________________ payable at par in Mumbai favouring

Date & Place: ___________________________________ Signature: ______________________

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