Vol.

: 259
7th September,2015

Index

MarketView
1 Market View:

The slowdown of world economy is impacting the market

CompanyUpdate
2
The slowdown in the world market lead by China is impacting the whole world. Even after

unprecedented stimulus announced by major economies of the world, the economists fear that
Aroundthe
the world economy is slowing down. India has clocked the GDP growth of 7% for the first
Economy

3 quarter compared to the expectations of 7.5%. The credit growth in last quarter was the

slowest in last 20 years, suggesting the slowdown in the economy. The government is trying to
KnowledgeCorner 3 speed up the stalled projects, expedite the processes involved in setting up the business,
trying hard to scale down the subsidy burden, making India a digitalized country and so on.

MutualFund
4 However, these efforts will take some time to materialize and impact the real economy. During
this time, Indian economy will not be excluded from the recent slow down and its impact on the

capital market. As per the theory of Buffet and Benjamin, these types of crisis provide an excelCommodityCorner5
lent opportunity for value buyers in the market. For investors, who have long term view and

patience, the falling prices provide a good entry point for staggered investment.
ForexCorner
6

Technically, any sustained fall below 7650 may take the market to 7475 and beyond that. The
ReportCard
7 market is waiting for Fed decision on 17th September, 2015. The rain deficit and consequent

rise in inflation may stop RBI for rate cut on 29th September, 2015. However, all this possibiliPositionalCallStatus8 ties are being discounted by the market at present.

Editor&Contributor
Kamal Jhaveri
MargiShah
MD- Jhaveri Securities

SpecialContributors
AsheshTrivedi
VimulSolanki

Forsuggestions,feedback
andqueries
jstreet@jhaveritrade.com

-1-

Vol.: 259
7th September,2015

Company Update : Ahluwalia Contracts (India) Ltd

Financial Basics

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

532811

FV (`)
EPS (`)

2.00
9.56

AHLUCONT

P/E (x)

24.91

P/BV (x)
BETA
RONW (%)

4.74
1.6817
3.55

13.40
1594.97

Share Holding Pattern

Holder's Name
Foreign
Institutions
Promoters
Non Prom.
Public & Others
Government

% Holding
15.49
5.92
66.87
6.44
5.29
0.00

Valuation : AHLUCONT is currently trading at 17.76X FY16E EPS of `13.20 and 14.43x FY17E of `16.00, Valued the
stock at 22x FY17E with target price of ` 368.

Company overview
ACIL is an integrated construction company, offering turnkey solutions in engineering and designing to public and
private sectors. The company is primarily in the business of construction of wide range of structural building and
manufacture of Ready Mix Concrete. They are having business interests in varied segments including IT Parks,
Retail, Multi Storied Housing Complexes, Industrial Complexes, Luxury Hotels, Hospitals and Commonwealth
Games Village & Stadium. In the past five years, ACIL has executed more than 50 projects.
Investment Rational
Strong Order book
ACIL has a robust order book built on the strengths of its strategically focused direction, expertise and strong execution capabilities. The order book comprises of 65% orders from Government sector against 32% as on 31st
March, 2014. The company is also currently L1 in projects worth Rs3.5 bn which includes projects like
Indraprastha Institute of Information Technology (IIIT), Delhi of Rs2.6 bn Hospital building (HSCC) at Kolkata of
Rs800 mn.
Tie-up with Russian company
Ahluwalia contracts ltd. has entered into technology tied up with KUB STROY Russia to build structures using a
patented high speed pre-cast construction technology. The company expects huge opportunity in the institutional
and affordable housing segment and expects this technology to play a key role the mass housing projects.
Increasing urbanisation trend
Today, about 31% of Indias population lives in the urban areas. It is much lower than its emerging market peers49% in china, 54% in Indonesia, 78% in Mexico, and 87% in Brazil. However, Indian economy is in quest of a
rapid change in the pace of urbanisation that will dominate what it has witnessed in the past decade. Indian economy is slated to grow to 43% , housing a population of about 540 million. This will help the company to receive
more order inflows and thereby improving the margins of the company.
- 2-

Vol.: 259
7th September,2015

Around The World

Weekly Market Recap :

India's gross domestic product (GDP) grew 7% in Q1 June 2015, slower than 7.5% expansion registered in Q4 March 2015, according to the data released by the government on Monday, 31 August 2015.

The government on Tuesday, 1 September 2015, announced that it has accepted the recommendation of the Justice A.P. Shah
Committee not to levy minimum alternative tax (MAT) on stock market transactions of foreign institutional investors (FIIs) for the period prior to 1 April 2015.

China's official manufacturing purchasing managers index (PMI) slipped to 49.7 in August, the weakest level since August 2012,
down from 50 in July.

Market Eye Week ahead :

The government is scheduled to unveil industrial production data for July 2015 on Friday, 11 September 2015. Index of industrial
production (IIP) rose at an accelerated pace of 3.8%, a four month high level, in June 2015 over a year ago compared with the revised
growth of 2.5% in May 2015.

China will unveil its trade balance data for August 2015 on Monday, 7 September 2015. The trade balance measures the difference in
value between imported and exported goods and services over the reported period.

UK will unveil manufacturing production data for July 2015 on Wednesday, 9 September 2015.

Bank of England (BoE) will hold monetary policy committee meeting and disclose interest rate decision on Thursday, 10 September
2015.

KEY EVENTS/FACTORS TO WATCH

1. Fri : IIP data for July 2015

Knowledge Corner :
Reverse Takeover - RTO'

A type of merger used by private companies to become publicly traded without resorting to an initial public offering. Initially, the private
company buys enough shares to control a publicly traded company. The private company's shareholder then uses their shares in the
private company to exchange for shares in the public company. At this point, the private company has effectively become a publicly traded
one. Also known as a "reverse merger" or "reverse IPO"

RTOs are undertaken by private companies in order to become publicly traded without having to go through an initial public offering (IPO).
While this move heavily reduces the costs of migrating from a private to a public listing, a reverse takeover does not generate the capital
inflow characteristic of an IPO.

- 3-

Vol.: 204
Vol.: 259
18th August, 2014
7th September,2015

Mutual Fund Corner

Top 10 Sector Break-Ups
Fund (%)

Fund Name
Scheme Name

Franklin India Balanced Fund

AMC

Franklin Templeton Asset Management India Private Ltd

Type

Equity-oriented

Category

Open-ended and Hybrid

Launch Date

December 1999

Fund Manager

Sachin Padwal-Desai & Anand Radhakrishnan

Net Assets
(` In crore )

Rs. 571.6 crore as on Jul 31, 2015

History

2012

2013

2014

2015

NAV (Rs)

54.84

58.48

86.00

87.95

Total Return (%)

24.21

6.64

47.05

2.27

+/- VR Balanced

1.67

0.26

21.10

7.64

Rank (Fund/Category)

20/29

14/32

16/59

24/71

52 Week High (Rs)

54.84

58.51

86.26

94.03

52 Week Low (Rs)

44.12

49.55

57.04

85.34

Net Assets (Rs.Cr)

209.15

202.27

307.10

2.34

2.73

2.90

Expense Ratio (%)

Fund Performance v/s S&P CNX Nifty

Financial

19.75

Automobile

9.33

Technology

7.65

Healthcare

7.31

Services

4.61

Diversified

3.93

Communication

3.02

Engineering

2.92

Energy

2.55

Chemicals

1.91

Risk Analysis
Volatility Measures
Standard Deviation

11.41

Sharpe Ratio

1.23

Beta

0.93

R-Squared
Alpha

0.87
8.10

Composition (%)
Equity

65.92

Debt

31.24

Cash

2.84

Fund Style
Investment Style
Growth

Blend

Value

Medium
Small

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

Capitalization

Large

Source : - www.valueresearchonline.com

Vol.: 204
Vol.: 259
18th August, 2014
7th September,2015

Commodity Corner
BULLION
FUNDAMENTAL: Bullion closed with the mixed note where by Gold continued its downtrend during the week dropping nearly -0.34% at 26532
after witnessing a massive sell off in the past week which is being seen as a huge negative. While Silver managed to closed with a gain of nearly 0.85%
to settled at 35388 as some support seen from the Rupee weakness, in line with equity market, the rupee continued to fall against the dollar for
the 4th consecutive week, slipping by another 32 paise to settle at 66.46 on persistent demand for the green currency from banks and importers
coupled with sustained foreign capital outflows. Many traders believe that the strength of the dollar which continues to trade near 11 year highs and
the lack of physical demand from countries like China and India are the key reasons for the precious metal to trend lower at the current
moment. Reports suggesting an apparent slowdown in China is being seen as a huge negative for Gold prices as China continues to remain one
of the biggest consumers of the precious metal. The dollar has been in a strong uptrend over the past few weeks ever since the Chinese authorities decided to devalue its currency and saw investors moving away from emerging market currencies towards safe haven currencies like the dollar
and the Japanese yen. All are now eyeing on the Federal Reserve as many players believe that the slew of positive economic reports coming out of the
Meanwhile, Richmond Fed President Jeffrey Lacker said that the U.S. economy no longer needs interest rates near zero, fueling further speculation
over a possible rate hike as soon as this month. In the week ahead, investors will be looking ahead to Fridays U.S. reports on producer prices
and consumer sentiment for further indications on the strength of the economy and the likelihood of a near-term interest rate hike.
RECOMMENDATION : SELL GOLD @ 26850 SL 27100 TGT 26400-26150. SELL SILVER @ 36000 SL 36800 TGT 35200-34400.

BASE METALS
FUNDAMENTAL: Base metals recovered last week despite unnerved by prospects of an increase in US interest rates and the re-opening of the hardhit Chinese stock market. Out of all metal Aluminum gained sharply to closed up by +4.88% proved its sturdiness as the metal traded on the positive
path for most part of the week as the inventories dropped by 38275MT giving a mixed cue to negative for the metal. While Copper and Nickel gained
more then +1.5% with Zinc by 0.97% and Lead by 0.50% despite Global shares declined after data showed US job growth slowed in August, though a
fall in the unemployment rate to a near seven-and-a-half-year low kept alive prospects of a Federal Reserve rate rise later this month. A rate rise could
boost the US dollar, eroding the purchasing power of commodities buyers paying with other currencies. Short-covering has been the main driver that
lifted copper while the Chinese stock market, which will re-opens on Monday after a two-day holiday, has taken a battering on recent economic signals.
Market is expected to be weak as turmoil in markets began when China unexpectedly devalued the yuan on August 11, sparking fears that the economy may be slowing at a faster than expected rate. China's National Bureau of Statistics on Monday said it has revised down the 2014 GDP growth rate
to 7.3% from the previously announced 7.4%. For this year, China has set a growth target of about 7%, the slowest pace in 25 years. Also the European Central Bank lowered its forecast for growth and inflation, citing oil prices and slowing growth in China, on Thursday and indicated that it could
expand its quantitative easing program amid increased downside risks to its inflation outlook. In the week ahead, investors will be looking ahead to Fridays U.S. reports on producer prices and consumer sentiment for further indications on the strength of the economy and the likely hood of a near-term
interest rate hike. Markets will also be watching a raft of Chinese economic data, including a report on the trade balance as well as data on consumer
price inflation.
RECOMMENDATION : SELL COPPER @ 355 SL 370 TGT 342-330.SELL ZINC @ 121 SL 124 TGT 118.50-116. BUY NICKEL @ 640 SL 618 TGT
670-695.SELL ALUMINIUM @ 109 SL 111.50 TGT 104.50-101.50. SELL LEAD @ 113 SL 115.50 TGT 110.50-108.50.

ENERGY
FUNDAMENTAL : Crude oil gained on Friday and posted a gain of 3.49% for the week to settle above 3100 at 3110 level pared losses after Baker
Hughes data showed a weekly decline in the number of active US rigs drilling for oil. While Natural gas fell by -1.44% to settled at 178.40 as forecasts
for cooler weather across key consumption regions of the U.S. in the week ahead dampened demand expectations for the fuel. Crude oil sentiments
still remain weak on demand concerns and amid lingering fears over volatility in Chinas markets after Asias top oil consumer cut its growth rate for last
year. Meanwhile Nymex crude has risen for two consecutive weeks and Brent crude has fallen for eight of the past 10 weeks; both oil benchmarks are
down by around 13%-14% year-to- date. Crude oil traders are now hoping some action by OPEC member Saudi Arabia to reduce production after the
Kings meeting in the US. Last week the ECB lowered its growth forecast and inflation outlook on Thursday, citing slowing growth in China and
weak oil prices. Meanwhile, data in the U.S. on Friday showed that the economy added fewer jobs that expected last month, despite a decline
in the unemployment rate. The Labor Department reported that the U.S. economy added 173,000 jobs in August, below forecasts for an increase of 220,000 and slowing from gains of 245,000 a month earlier. The turmoil in markets began when China unexpectedly devalued the
yuan on August 11, sparking fears that the economy may be slowing at a faster than expected rate. Natural gas outlook for this week also remain
weak as market players weighed shifting weather forecasts to assess the outlook for U.S. demand and supply levels. On Thursday, prices rallied
after data showed that U.S. natural gas supplies rose less than expected last week. According to the U.S. EIA, natural gas storage rose by 94bcf.
The data included a reclassification from working gas to base gas of 8bcf, which brought the number to 86bcf. Now in the week ahead, investors will
be looking ahead to Fridays U.S. reports on producer prices and consumer sentiment for further indications on the strength of the economy and
the likelihood of a near-term interest rate hike.
RECOMMENDATION : BUY CRUDE OIL @ 3000 SL 2850 TGT 3220-3450.SELL NAT.GAS @ 182 SL 188 TGT 174-165.

- 5-

Vol.: 259
7th September,2015

Commodity Corner

Forex Corner

Market Recap :

The Indian rupee dipped slightly at commencement

on Monday, 07 September 2015 as the US currency
strengthened in overseas markets.

The domestic currency opened lower at Rs 66.57

against the US dollar and dropped to a low of 66.80
so far during the day.

In the spot currency market, the Indian unit was last

seen trading at 66.73, as compared to Friday;s close
at 66.46.

The dollar index, which measures the US currencys

strength against major currencies, was trading at
96.234, up 0.01% from its previous close of 96.229.

Market Eye Week ahead :

For this week, keep view for invested long positions in USDINR pair. On upside above near term rise till 67.12 can be
possible targets for traders holding long position. If breaks 66.50 then expect 66.38-66.15 as near term support.

USD/INR
Level

S2

S1

CP

R1

R2

High

Low

Close

USD/INR

66.15

66.38

66.50

67.05

67.50

66.86

66.43

66.77

Level

S2

S1

CP

R1

R2

High

Low

Close

EUR/INR

72.93

73.64

74.58

75.29

76.23

75.51

73.86

74.36

Level

S2

S1

CP

R1

R2

High

Low

Close

GBP/INR

99.50

100.50

101.60

102.15

102.60

103.08

101.23

101.62

Level

S2

S1

CP

R1

R2

High

Low

Close

JPY/INR

54.46

55.25

55.69

56.48

56.92

56.13

54.9

56.04

EUR/INR

GBP/INR

JPY/INR

-- 46--

Vol.: 259
7th September,2015

J Street Recommendations Report Card

Weakness and correction may be set in for near term to short term on fall below 7586. On fall and close below 7550
further correction till the levels7520-7506 of can be seen. Subsequently, deeper correction will be seen. Traders may look
for rise after 7940.

Macroeconomic data, the performance of the monsoon rains, trend in global markets, flows from foreign portfolio
investors (FPIs), the movement of rupee against the dollar and crude oil price movement will dictate trend on the markets.

The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the
country's farmland is dependent on the rains for irrigation.

Top Fundamental Stocks

Stocks

Rec. Date

CMP on Rec.

CMP

Target

Absolute
Return @
CMP

Ahluwalia contracts

24/08/2015

235

219

368

-7%

Buy

Sun Pharma

03/07/2015

831

836

1041

1%

Buy

Infinite Computer

20/07/2015

190

149

255

-22%

Buy

Nitin Spinners Ltd.

06/07/2015

79

58

94

-26%

Buy

Bank of Baroda

01/06/2015

163

170

217

4%

Buy

Ambika Cotton Mills

18/05/2015

880

721

1149

-18%

Buy

Sadbhav Engineering Ltd.

04/05/2015

298

283

430

-5%

Buy

CARE Ltd.

20/04/2015

1666

1196

2250

-28%

Buy

30/03/2015

242

220

304

-9%

Buy

16/03/2015

152

164

251

8%

Buy

DHFL

16/02/2015

504

426

736

-15%

Buy

TV Today Network

27/01/2015

222

212

337

-4%

Buy

M&M

12/01/2015

1238

1111

1452

-10%

Buy

Havells India

27/10/2014

274

260

346

-5%

Buy

All Cargo Logistics

05/08/2014

260

286

342

10%

Buy

PTC India Fin. Ser.

07/07/2014

39

38

45

-2%

Buy

Adani Port

05/07/2014

280

323

347

15%

Accumulate

L&T

05/07/2014

1750

1511

1866

-14%

Buy

Setco Automotive
Ltd.
Omkar speciality
Chemicals

Status

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

Vol.: 259
7th September,2015

J Street Short Term Call Status

BUY/
SELL
HEXAWARE BUY

Sr.
No.

DATE

17/07/15

20/07/15

M&M

BUY 12851298

21/07/15

MINDTREE

BUY 12801293

22/07/15

CAIRN

SELL

161.50
163.50

23/07/15

HCLTECH

BUY

974987

24/07/15

TATAMOTORS BUY

398402

27/07/15

28/07/15

ASIANPAINT BUY

29/07/15

KOTAKBANK BUY

10

30/07/15

BHEL

11

03/08/15

SIEMENS

12

04/08/15

13

05/08/15

BHARAT
FORGE
YESBANK

14

06/08/15

INFY

BUY 10781089

15

07/08/15

GLENMARK

BUY 10371048

16

10/08/15

BPCL

BUY

948958

17

11/08/15

JINDALSTEL

BUY

18

12/08/15

M&MFIN

19

13/08/15

20

14/08/15

CIPLA

21
22

17/08/15
18/08/15

ARVIND
ICICIBANK

23

19/08/15

24

20/08/15

- 8-

STOCK

TRIGGER
TGT
SL
PRICE
274.00 293315 263
1369
1285.00
1240
1434
1377
1280.00
1222
1467
150.55
162.80
171
138
1038
974.00
939
1087

%
RETURN
5.05

STATUS

CMP

PB

287.85

TA

1369.00

6.54

PB

1323.80

3.42

SL

171.00

4.80

SL

939.00

3.59

SL

380.00

4.52

56.50 63.5069 50.05

TA

69.00

22.12

846855

850.00 902941

816

TA

902.00

6.12

722730

722.00 770803

696

SL

696.00

3.60

281284

270

PB

289.65

3.08

1378

TA

1552.00

6.74

1103

TA

1248.00

7.59

805

SL

805.00

3.59

1040

TA

1148.00

6.49

1001

SL

1001.00

4.48

914

SL

914.00

3.59

8182.30

281.00 300318
1552
1454.00
1632
1248
1160.00
1337
835.00 889939
1148
1078.00
1203
1105
1048.00
1158
1011
948.00
1057
81.65 91101

74

PB

87.45

7.10

BUY

261264

261.00 279295

251

SL

251.00

3.83

SUNPHARMA BUY

859868

863.50 916946

828

TA

946.00

9.55

BUY

719727

723.00 769803

690

PB

748.00

3.46

BUY
BUY

291294
299303

291.00 314339 275

299.00 319334 288
3302
ULTRACEMCO BUY 31003130 3100.00
2991
3458
1915
LT
BUY 17981816 1798.00
1735
2006

SL
SL

275.00
288.00

5.50
3.68

SL

2991.00

3.52

SL

1735.00

3.50

IBREALEST

BUY

BUY

RANGE
274277

5558

BUY 14431458
BUY 11551168
BUY

835843

398.00 425451

380

Vol.: 259
7th September,2015

J Street Short Term Call Status

BUY/
SELL

TRIGGER
PRICE

TGT

SL

STATUS

CMP

%
RETURN

BUY 42604300 4260.00

4536
4751

4110

SL

4110.00

3.52

685.00 637599

727

TA

637.00

7.54

9294

93.00

99104

87

TA

104.00

11.83

8684

84.00

7972

91

SL

91.00

7.69

1775
1740

1835

SL

1835.00

1.47

Sr.
No.

DATE

STOCK

25

21/08/15

DRREDDY

26

24/08/15

27

25/08/15

NMDC

BUY

28

26/08/15

VEDL

SELL

29

27/08/15

LUPIN

SELL 18001815 1808.00

KOTAKBANK SELL

STAUTS

CALLS

RATIO

TA+PB

14

48.28

SL+EXIT

15

51.72

TOTAL

29

100.00

RANGE

685695

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

- 9-

Vol.: 259
7th September,2015