STOCKS THAT

NIFTY OVERVIEW
M ADE NOISE

Ber ger Pain t s: The company

on Monday reported a 31.76
per cent increase in
consolidated net profit to Rs
176.41 crore for the first
quarter ended June 2019. It
had posted a net profit of Rs
133.88 crore in the April-June
quarter a year ago.

With predictions of a global slowdown, macros

data going down and skewed corporate earnings
markets have witnessed bears taking full control.
Benchmark Nifty has already tanked about 1000
Private sector lender YES Bank points from the previous month till now and
Ltd's shares rose as much as
7.8 per cent , their highest analysts says that more downside can be
since July 31.
expected. One relief after bad macros was the
good rainfall after a bad June. Some experts are
even predicting that these might be early signs of
a global recession. FPI's has already offloaded 1.63
billion since the Budget was presented on 5th of
July. One needs to be very careful in picking up
stocks at this stage. Recent monetary policies,
corporate results and macros data will guide the
market in recent time.
 STOCKS THAT
COM M ODITY ANALYSIS
M ADE NOISE

Pharma giant Cipla posted a

6% rise in Q1 profits and
consolidated a 478 crore GOLD
profit for this quarter. Gold at present is
outperforming most of the
investments with an increase
of around 4% from the
previous months. As gold is
traded in futures with high
leverage an increase of 4%
if we assume a leverage of 20x (offered by zerodha) it
Zee Entertainment Enterprises
translates to a profit of 80% on investment. Equity
topped the Nifty losers list,
falling 5.1% and dragging the markets going down, auspicious festivals and constant
Nifty media index by 2.9%.The buying by the government surged the demand for the
stock of the company was commodity. At this time when markets are nose-driven
trading at its lowest level since to its monthly lows, gold seems a sensible and safer
January 25, 2019 and was 5 investment.
per cent away from its
52-week low of Rs 289 touched
on the same day. OIL
There are many factors
affecting this one of the most
famous commodities. Apart
from the factors we have
discussed in the previous
Tata Steel Ltd dropped 3.7% as
the company terminated stake editions, factors like global
sale of its South East Asia economy and interest
business to China?s HBIS. The
rates also affect it. A better economy is expected to create
company will also be
announcing its June quarter more demand for oil and hence surging its prices as per
earnings later in the day. Tata general supply demand curve. Also increasing interest rates
Steel was to sell a 70% stake to
decreases the price of oil as people have access to less
HBIS for $327 million in cash
money which in turn decrease the demand for oil. While
recent good numbers from chinese economy and rate cut
expectations from US has surged the prices, US stance on
Iran's oil, middle east tensions and outlook of global
economy are the major events to look for.
SLOW DOW N IN
SECTOR ANALYSIS-AUTO
AUTO SECTOR,
REASON FOR
RBI TO CUT
REPO RATE.

The slowdown in the auto sector is

one of the 15 domestic and global
considerations underlying the RBI
Monetary Policy Committee?s
(MPC) decision to reduce the policy
repo rate under the liquidity
adjustment facility (LAF) by 35
basis points (bps) from 5.75% to
5.4%.
Tractor and motorcycle sales ?
indicators of rural demand ?
Auto sector is facing one of the worst phases in
continued to contract. Amongst
indicators of urban demand, the past 2 decades. Sales of both 4 wheelers and
passenger vehicle sales contracted
2 wheelers are declining for multiple months in a
for the eighth consecutive month
in June row. Companies are cutting down inventories and
this will result in numerous job losses if the
demand problem is not resolved. The sector was
AI EXPRESS doing great till September 2018 until it was hit by
REPORTS 4TH norms to upgrade vehicles to BS VI, increasing
STRAIGHT fuel prices and NBFC crisis. Convertion to BS VI
PROFITABLE norms is costing companies huge expenses in
infrastructure and then they were hit again by
YEAR
compulsory electric 3-wheelers by 2023 and
2-wheelers by 2025 by government think tank.
Air India Express has reported its
fourth profitable fiscal in a row Even after huge discounts offered by the
with a profit of Rs 169 crore in FY companies the sales could not be increased.
2018-19, down 35.5% from profit
of Rs 262 crore in the previous Companies are now hoping the government to
financial year. The low cost and reduce the GST on vehicles to 18% from present
primarily international arm of AI
saw its revenues grow to Rs 4,202
28% to boost demand.
crore in the last fiscal, up 16.1
from Rs 3,620 crore in FY
2017-18.
 AIRTEL TO SHUT SECTOR ANALYSIS-IT
DOW N ITS 3G
NETW ORK
Telecom major Bharti Airtel
on Friday said that it
expects to shut down its
entire 3G network across
the country by March 2020,
the process for which has
already started with Kolkata
service area. The company
said it is keeping razor
sharp focus on driving
greater realisation and
Average Revenue Per User Starting from Economic Survey 2019 that outlined the way
(ARPU) but emphasised that forward for IT exports to Budget 2019 that addressed the
tariffs need to move up in much-needed gap in technology skilling, July 2019 has been
long term for viability. quite a month for the IT sector.
The Indian IT industry has been reeling under pressure from the
TECH US and the UK markets, which account for the majority of
M AHINDRA'S exports. Visa issues apart, spending in select sectors such as
banking and insurance have dropped, which is a major revenue
SOLUTION TO generator for IT firms.
SPAM CALLS
In the light of these challenges in the US and the UK markets,
Tech Mahindra Ltd the Economic Survey 2019 said the IT sector should focus on
announced that its geographies such as South East Asia, Japan, Africa and Eastern
Blockchain solution is Europe that were offering newer opportunities for growth.
safeguarding over 300 Investors should therefore look out for companies which have
million mobile been shifting their focus to such regions. To give a few cues,
subscribers spam calls. Infosys and TCS have been strengthening their ties with their
It had designed the existing Japanese clients. TCS recently increased its stake by 15
Blockchain solution in percent to 66 percent in TCS Japan, a joint venture between TCS

compliance with the and Mitsubishi Corporation

regulations and The Budget 2019 provided relief against another key concern
guidelines of the TRAI for IT majors which was skilling. Finance Minister Nirmala
to enable telecom Sitharaman announced that close to 10 million youth would be
trained in the latest technologies to ensure employability in the
providers prevent
emerging areas such as AI.
unauthorised access of
subscribers' data.
 BANK CREDIT UP
12%, DEPOSITS SECTOR ANALYSIS - BANKING
10.6%

Bank credit and deposits rose by

12.01 percent and 10.59 percent
to Rs 96.57 lakh crore and Rs
126.491 lakh crore respectively
for the fortnight to July 19, show
the RBI data.
In the year-ago fortnight, bank
credit stood at Rs 86.09 lakh
The banking sector has trembled the most from this bear
crore while deposits were at Rs
114.371 lakh crore. ride hovering the market. The benchmark, Nifty Bank is
down more than 10% from the previous month. Even when
In the previous fortnight ending
July 5, bank loans had grown by quarterly results of the banking stocks was quite
12.02 percent to Rs 96.97 lakh impressive with even Nirav Modi hit public lender bank
PNB reporting a profit, market is weighing in
macroeconomic factors to value stocks. Recent RBI
monetary policy meet is a major event to watch for. It is
INDIA RECEIVES
expected that another rate cut will be announced to boost
HIGHEST
the slow growth in the economy and in-control medium
EVER FDI IN FY19 term inflation targets amplifies the possibility. Although
repeated rate cuts are being announced, the actual benefit
Highlighting the importance of on growth can only be seen if banks pass transmit the
FDI, it said the foreign inflows lower rates to borrowers, which they are scared to do so
bring in resources, the latest
owing to bad debt in the past.
technology and best practices to
push economic growth on to a
higher trajectory.
India received the highest-ever
FDI inflow of USD 64.37 billion
during the fiscal ended March
2019, said a government report.
According to the Annual Report
2018-19 of the Department for
Promotion of Industry and
Internal Trade (DPIIT), foreign
direct investments (FDI) worth
USD 286 billion were received in
the country in past five years.
 SUN PHARM A
SHUTS 2 GUJURAT SECTOR ANALYSIS - PHARM A
R&D CENTRES The revenue stream for Pharma companies can be divided
In a bid to rationalise costs, drug into domestic revenue and overseas revenue. Traditionally
major Sun Pharma is shutting two profits for Pharma companies from the Indian markets
units at its Vadodara-based R&D
were low but stable and cushioned them against the huge
centre, terminating employment of
around 85 scientists. The scientists but highly unstable profits made by these companies
were engaged in the clinical overseas, majorly in US. The high profits in US came from
pharmacology unit, which is part of
R&D operations. The company?s R&D generic drugs which the Indian pharma companies found
centre at Gurgaon (started by cheaper to manufacture than their US counterparts.
erstwhile Ranbaxy) will now undertake
However these profits were highly unstable due to
the clinical research handled by the
Vadodara facility, while the rest of the uncertain regulations in US which required these drugs to
research operations will continue at be sold at low prices and imposed heavy fines on
the Vadodara unit. Many others
reduced or shut their innovative and companies which did not follow stringent manufacturing
specialised research operations to practises. In the month gone by , reports showed that
protect margins in an industry that is
domestic pharma growth slowed down led by a fall in
showing signs of a slowdown
volumes probably due to delay in onset of monsoon and

M ICROSOFT low incidence of infections.

PARTNERS W ITH On the overseas front, warning letters by the US Food and
APOLLO Drug Association for not following current good
manufacturing practices increased with Strides Pharma
As part of Microsoft's AI Network for
Healthcare initiative, Microsoft India
being in the headlines. Moreover competition for generic
and Apollo Hospitals. They have joined drug markets in the US has been rising. In order to combat
hands to set up a National Clinical this competition reports suggest that major pharmaceutical
Coordination Committee for
AI-powered Cardiovascular Disease companies in India are taking the following two steps:-
Risk Score API.
1. Looking at China as a big opportunity, making the

The coordination committee will be

market one of the focus areas for future growth
assisting the core team at Apollo 2. Increasing investment in research and development
Hospitals and Microsoft by providing for complex products
guidance on all cardiology and
cardiovascular-related artificial
intelligence projects; insights on
developing clinical algorithm and
treatment guidelines based on the
inferences of national, multi-centre
prospective study, a release said here.
 TERM OF THE W EEK
EQUITY WARRANT
REV I SI TED
Warrants are a derivative that
give the right, but not the
obligation, to buy or sell a
security? most commonly an
equity? at a certain price before
expiration. The price at which
the underlying security can be
bought or sold is referred to as
the exercise price or strike
price. That is, an equity warrant
is a certificate issued with a
SENSITIVITY ANALYSIS
security giving the holder the
option of buying a stock at a
certain strike price for a certain A sensitivity analysis determines how different values of
period of time. Warrants that an independent variable affect a particular dependent
give the right to buy a security variable under a given set of assumptions. This technique
are known as call warrants; is used within specific boundaries that depend on one or
those that give the right to sell a more input variables, such as the effect that changes in
security are known as put interest rates (independent variable) has on bond prices
warrants. (dependent variable).
Unlike options, warrants are Sensitivity analysis is also referred to as "what-if " or
issued by companies during a simulation analysis and is is concerned with the
round of financing as an added uncertainty inherent in mathematical models where the
incentive to buy a security; they values for the inputs used in the model can vary. By
are not issued by individual creating a given set of variables, an analyst can determine
investors or brokerages.Unlike how changes in one variable affect the outcome.
options, warrants are dilutive.
The conclusions drawn from studies or mathematical
When an investor exercises
calculations can be significantly altered depending on
their warrant, they receive
such things as how a certain variable is defined or the
newly issued stock, rather than
parameters chosen for a study. When results of a study
already-outstanding stock.
or computation do not significantly change due to
Warrants also usually have a
variations in underlying assumptions, they are considered
longer maturity.
to be robust.
You can su bm i t y ou r con tr i bu ti on s f or Fi n Str eak at :-
m an ager .f i n an ce.i i t b@gm ai l .com
Con tact :- Sh r ey a A gar w al ( 96430 37893)
D h eer aj A gar w al (6350 541522)

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