Vol.

: 281
8th February,2016

Index

MarketView
1 Market View:

The concern for slowing world economy

CompanyUpdate
2
After the subprime crisis in 2008-09, the world is trying to recover from the financial deadlock.

Almost all important central banks of the world have used their arms to fight the financial deadAroundthe
lock. But during this process an important element of over capacity in many sectors was not
Economy

3 addressed. Today with severe fall in oil and commodity prices coupled with over capacity, the

world is grappling with bankruptcy of big corporate and countries as well. This situation has
KnowledgeCorner 3 lead to slow demand and no growth in the world economy. Economies like Russia, Brazil, Japan and China are taking all steps whatever they can to fight the existing problems. Signals of

MutualFund
4 slow growth are also coming from US economy and The Fed is likely to have status quo for the
rates in the month of March-April. What all this signals implies for Indian market? Yes some

good analysts including Mr. Aditya Puri of HDFC Bank opined that early signals of recovery are
CommodityCorner5 visible in the economy. If the situation in the world worsens from here on, the recovery in In
dian market will also get delayed. Quarter three results are nothing less than disappointing and
ForexCorner
6 all are expecting business friendly budget with GST implementation. Today the only driver of
Indian economy is Government expenditure. How far the government will be able to balance

ReportCard
7 the fiscal side considering the expectations to raise the expenses will be an interesting point to
watch in the next budget. The Finance Minister has assured the business community that the

budget will not resort to sheer populism and will set road map for 2-3 years. Some important
ShortTermCallStatus8 issues may be addressed in the budget will be removal of MAT in certain cases, rationalization

of TDS, resolving the problem of Retrospective Taxation and so on. It will be really a challenge
for the team of Finance Ministry to come out with proposals which may satisfy the aspirations
Editor&Contributor
of large population and to fight the uncertainties and slow down in the global growth. To repair
MargiShah
the balance sheets of PSU banks will also be on the priority list. If the world economic prob
lems gets stabilized and a normal monsoon in India, the corporate will have some earning re
covery. Till then, it is advisable to invest with caution and have an eye on the world economic
SpecialContributors
events. It is interesting to note here that in a recent interview, RBI Governor Dr. Rajan has said
AsheshTrivedi
that the problems in China are much bigger than the problems the world faced during the subAdityaNahar
prime crisis.

Technically any rise above 7600/25000 will markets to higher levels and any fall below 7350
7240 may see new lower levels.

Kamal Jhaveri

MD- Jhaveri Securities

Forsuggestions,feedback
andqueries
jstreet@jhaveritrade.com

-1-

Vol.: 281
8th February,2016

Company Update : MT Educare Ltd.

Company Basics
BSE Code
NSE Symbol

Financial Basics

534312

FV (`)
EPS (`) (TTM)

10.00
7.65

P/E (x) (TTM)

21.54

P/BV (x) (TTM)

BETA
RONW (%)

5.22
1.2363
23.24

EQUITY (` in Cr.)

39.82

MKT.CAP (` in Cr.)

656.64

Share Holding Pattern

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

% Holding
24.74
1.13
42.78
26.88
26.88
0.00

Valuation : MTEDUCARE is trading at `160. We recommend Buy with target price of `230 , valuing stocks
25xFY18E EPS of `9.24.The stock currently trades at 21.48 x of FY16E, 19.53x of FY17E and 17.75x of FY18E.
Company Overview

MT Educare is engaged in the business of providing education support and coaching services under the brand
name Mahesh Tutorials. It has its presence in 128 locations across 7 states and union territories of India.
Investment rational
Indian Coaching Sector has immense growth opportunities
According to CRISIL estimates, the Indian coaching industry is expected to clock 17% CAGR (over FY2011-16E)
from ` 40,187 cr to `75,629 cr. This growth would primarily be driven by rising disposable incomes, increasing
household spend on education, infrastructural bottlenecks for formal education.
Geographical vertical and diversification through various technology initiative
Sri Gayatri Educational Society (Sri Gayatri). Sri Gayatri is one of the leading educational institution for the
intermediate section (XI-XII) in the states of Telangana and Andhra Pradesh. Sri Gayatri currently has 53 colleges
spread across the two states, with over 33,500 Engineering, Medical aspirants. Through this arrangement, MTEL
will provide to Sri Gayatri, the expertise in teacher training, study material, technology aided teaching methods
and in development of digital content on the lines of Robomate
Sale of high margin educational Digital Content : Robomate / Advance Robomate
The digital content of Robomate received good response from the students after launching of Robomate in FY15
Encouraged by this, MT Educare started content selling to students who are not enrolled with the company.
Online sales through E-Commerce portal also received good response during the year. Presently, products in the
school, science, commerce, CA and IIT segment are being sold. During the year, content digitization for ICSE /
CBSE, Std. XI, XII and JEE Advanced Robomate was completed. Robomate has highest margin of 32-35%.
The company has developed 4 pronged growth strategy -1) Focus on national level exams; 2) geographical &
vertical expansion expanding in North India, Karnataka, Andhra Pradesh and Telangana for science and
commerce; 3) Asset light college tie-up; and 4) Robomate technology driven growth.
- 2-

Vol.:
281
8th February,2016

Around The World

Weekly Market Recap :

The Reserve Bank of India kept its benchmark interest rate viz. the repo rate unchanged at 6.75% after a
scheduled monetary policy review on 2 February 2016. The RBI kept the cash reserve ratio (CRR) unchanged
at 4% of net demand and time liability (NDTL).
The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) rose to 51.1 in January
2016 from 49.1 in December 2015.
The seasonally adjusted Nikkei India services purchasing managers' index (PMI) hit a 19-month high at 54.3 in
January 2016. The Services PMI rose from December's reading of 53.6.

Market Eye Week ahead :

On macro front, the government will announce data on gross domestic product (GDP) for Q3 December 2015
on Monday, 8 February 2016. GDP rose 7.4% in Q2 September 2015. Data on industrial production for December 2015 will be announced by the government after market hours on Friday, 12 February 2016.

The government will also announce on Friday, 12 February 2016, data on inflation based on the consumer price
index (CPI) for January 2016. CPI inflation inched up to 5.61% in December 2015 from 5.41% in November 2015.

On global front, Chinese stock markets remain closed next week for the Lunar New Year holiday.

Key Events / Factors to Watch

1. Mon: Q3 GDP data, AIA engineering, Gujarat gas, Inox wind, SRF, TV today network, Repco home finance earning
2. Tue: Bharat forge, Dr Reddys labs, Central bank,Hindalco, Aurobindo Pharma, PNB, Petronet LNG, SAIL earning
3. Wed: Ambuja Cements, Bata India, Cipla, Engineers India, GMR infra, Tata chemicals, REC, Finolex cables earnings

4. Thu: AB Nuvo, BHEL, Ashok Leyland, BEML, Coal India, Hero MotoCorp, ONGC, NCC, Natco Pharma, SBI, Rajesh exports
earnings
5. Fri: CPI data for the month of January 2016, CEAT, IOC,HPCL,IDBI bank, Godrej Industries, Sun Pharma earnings
6. Sat: Bank of Baroda, Adani ports, Adani power,HDIL, Jindal steel earnings

Knowledge Corner :
Relative Strength Index - RSI'

A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought
and oversold conditions of an asset. It is calculated using the following formula:

RSI = 100 - 100/(1 + RS*). When RSI goes above 70 or below 30, it indicates that a stock is overbought or oversold and vulnerable to
a trend reversal.

- 3-

Vol.: 281
8th February,2016

Mutual Fund Corner

Top 10 Sector Break-Ups

Fund Name
Birla Sun Life Tax Relief 96

AMC

Birla Sun Life Asset Management Company Ltd

Type

Tax Planning

Category

Open-ended and Equity

Launch Date

March 1996

Fund Manager

Ajay Garg

Net Assets
(` In crore )

Rs. 2010.0 Cr. as on Dec 31, 2015

History

2014

2015

86.06

128.10

137.07

129.25

Total Return (%)

9.10

54.54

9.15

-5.71

+/-Nifty 50

2.34

23.15

13.21

-0.89

+/- S&P BSE 100

4.72

19.07

10.63

-0.19

Rank (Fund/Category)

11/37

19/73

7/73

37/81

52 Week High (Rs)

86.06

128.12

143.72

0.00

52 Week Low (Rs)

68.31

78.21

Net Assets (Rs.Cr)

1401.31

NAV (Rs)

Expense Ratio (%)

Fund (%)

Sector Weights

Scheme Name

2013

1808.99

1.97

2.42

Financial

24.71

Automobile

16.48

Services

13.01

HealthCare

8.48

Engineering

8.08

Technology

6.28

Diversified

4.97

Chemicals

4.70

FMCG

4.03

Energy

2.96

2016

Risk Analysis
Volatility Measures
Standard Deviation

14.43

Sharpe Ratio

1.02

Beta

0.95
0.79

R-Squared
Alpha

10.89

Composition (%)

126.69

0.00

Equity

97.74

1947.66

0.00

Debt

2.50

2.38

Cash

-0.24

2.32

Fund Performance v/s S&P CNX Nifty

Fund Style
Investment Style
Blend

Value

Large
Medium
Small

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

Capitalization

Growth

Source : - www.valueresearchonline.com

Vol.: 281
8th February,2016

Commodity Corner
BULLION
FUNDAMENTAL: Bullion soared this week adding more than 3%, while Gold scaled an eight month peak to settled at 27524 on Friday as buyers
rushed to buy jewelry in the marriage season besides protecting their investments in an asset, which enjoys safe haven status at times of choppy stock
markets. As a non-interest bearing asset, dollar-denominated gold becomes less attractive if US interest rates rise. Market players are firming global
trendas dollar extended losses amid fading expectations of a US rate hike this year, boosting appeal of the precious metal - mainly kept gold prices
higher. The dollar's retreat has been sparked by tepid US data, raising concerns over the strength of the economy and dampening expectations of further rate increase this year. Falling equity markets, both in developed and developing markets, credit and currency worries in China and monetary easing from major central banks other than the US Federal Reserve have made gold look more attractive. Last week dollar dropped last week as soft US
economic data, together with increasing uncertainty in global economic outlook have weighed on hopes of another Fed funds rate hike in March. The
USD index fell four out of five trading days last week, only recovered on Friday following a surprising decline the US unemployment rate. Non-farm payrolls gained +151K in January, compared with market expectations of +192K and a downwardly revised +262K addition in December. Despite the disappointing headline reading, details of the report suggest that US' job market has continued to grow. SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, also said its holdings rose 0.70 percent to 698.46 tonnes on Friday from 693.62 tonnes on Thursday. Meanwhile, Hedge funds
and money managers boosted their bullish bet in COMEX gold to a three-month high in the week to Feb. 2, U.S. Commodity Futures Trading Commission data showed on Friday. In the week ahead, investors will be looking to Wednesdays testimony by Fed Chair Janet Yellen and Fridays data on
U.S. retail sales for further indications on the strength of the worlds largest economy. Fridays preliminary report on euro zone fourth quarter growth will
also be closely watched amid heightened expectations for more easing by the European Central Bank in the coming months.
RECOMMENDATION : BUY GOLD APR @ 27450 SL 27100 TGT 27850-28100. BUY SILVER MAR @ 35400 SL 34800 TGT 36000-36600.

BASE METALS
FUNDAMENTAL: In Base metals Complex Zinc and Lead was the best performer on weekly base and so far this year, gained near to 4 percent during
last week. Copper rebounded on Friday to see a weekly gain of 1.44% as the PBOC promised additional stimulus and support for the yuan ahead of the
Lunar Holiday, while Aluminium and Nickel dropped tracking weakness from LME Aluminium which fell 2.3 percent to end at $1,500, LME lLad gave up
1.8 percent to close at $1,770, nickel tumbled 4.4 percent to $8,160. Copper set for a third consecutive week of gains as signs of stabilization in the
market and a weaker dollar convinced traders to close short positions ahead of Lunar New Year holidays next week in China. Also the dollar steadied
but remained on track for weekly losses, as investors braced for US employment figures later in the session for the latest clues on the outlook for the
Federal Reserve's monetary tightening path. The dollar index bounced back from a week of heavy losses after a mixed U.S. jobs report, which included
a all in the unemployment rate to 4.9 percent, the lowest since February 2008, A stronger dollar makes commodities priced in the U.S. currency more
expensive for buyers outside the United States. Copper and other base metals, however, are likely to bounce back when the Chinese return from holidays. This week we may see some support in Aluminum prices as Noranda Aluminum Holding Corp, a producer of primary aluminum and rolled aluminum coils, filed for Chapter 11 bankruptcy protection on Monday and said it will evaluate its various business operations.
RECOMMENDATION : SELL COPPER @ 320 SL 328 TGT 312-304. BUY ZINC @ 109 SL 106 TGT 113.50-119. SELL NICKEL @ 570 S 590 TGT
545-530. SELL ALUMINIUM @ 104 SL 106.50 TGT 100.50. BUY LEAD @ 114 SL 109 TGT 118-122.

ENERGY
FUNDAMENTAL: In the week ahead, investors will be looking to Wednesdays testimony by Fed Chair Janet Yellen and Fridays data on U.S. retail
sales for further indications on the strength of the worlds largest economy. Fridays preliminary report on euro zone fourth quarter growth will also be
closely watched amid heightened expectations for more easing by the ECB in the coming months. The dollar was boosted after the latest U.S. jobs report showed that while the economy added fewer than expected jobs in January, wage growth accelerated and the unemployment rate fell to an eightyear low. The dollar index rose to 96.98 late Friday, off 3.5 month lows hit earlier in the session. A stronger dollar weigh on oil prices while pressure also
seen amid uncertainty over a possible deal between the OPEC and other major producers to cut output in a bid to reduce one of the largest supply gluts
in decades. Meanwhile Venezuelan Oil Minister was to hold talks with his Saudi counterpart Ali al-Naimi on Sunday. Saudi Arabia cut prices for its
crude exports to Europe and Asia on Thursday, in a move designed to defend market share, lowering expectations among traders that the kingdom will
be willing to participate in a production cut. In its weekly supply report the EIA said crude inventories increased by 7.8mbls last week, maintaining a total
US commercial crude inventory of 502.7mbls.

RECOMMENDATION : SELL CRUDE OIL @ 2250 SL 2400 TGT 2060-1920.SELL NAT.GAS @ 148 SL ABV 170 TGT 132-120.

- 5-

Vol.: 281
8th February,2016

Commodity Corner

Forex Corner

Market Recap :

The domestic currency market opened at Rs 67.84

against the dollar and registered an intraday high
and low of 67.7950 and 67.86 respectively so far
during the day.

In the spot currency market, the Indian unit was last

seen at 67.82.

the U.S. dollar index, which measures the

greenback's strength against a trade-weighted
basket of six major currencies, rose 0.07% to 97.05.

In the week ahead, investors will be looking to

Wednesday's testimony by Fed Chair Janet Yellen
and Friday's data on U.S. retail sales for further indications on the strength of the world's largest economy.

Market Eye Week ahead :

Last week USD-INR pair closed the week almost flat at 67.88.We expect US dollar to meet supply pressure on rallies
against the rupee. Utilize pullbacks in the USD/INR February contract to sell February futures in the range of 68.16-68.26.
The rupee failed to extend gains and weaken marginally against the US dollar, as oil importers dollar purchases offset
gains from stronger domestic equities.

USD/INR
Level

S2

S1

CP

R1

R2

High

Low

Close

USD/INR

67.60

67.32

68.07

68.35

68.82

68.54

67.79

67.88

Level

S2

S1

CP

R1

R2

High

Low

Close

EUR/INR

74.38

72.79

75.24

76.83

77.69

76.10

73.65

75.97

Level

S2

S1

CP

R1

R2

High

Low

Close

GBP/INR

97.10

95.60

98.36

99.86

101.12

99.61

96.85

98.61

Level

S2

S1

CP

R1

R2

High

Low

Close

JPY/INR

56.63

55.19

57.40

58.84

59.61

58.16

55.95

58.08

EUR/INR

GBP/INR

JPY/INR

-- 46--

Vol.: 281
8th February,2016

J Street Recommendations Report Card

Nifty finally closed the week at 7489.10 thereby showed a net fall of 74 points on week to week basis. Hold long
position with a stop loss of 7400. Resistance is at 7610. Traders can buy above 7610 with stop loss or 7450.A rise
towards gap of 7674-7741 can happen if movement sustains above 7674. Selling will gain momentum on fall below 7400.
Target remains 7330-7250 on downside.
Macroeconomic data, Q3 results of India Inc., trend in global markets, investment by foreign portfolio investors (FPIs) and
domestic institutional investors (DIIs), the movement of rupee against the dollar and crude oil price movement will dictate
trend on the bourses in the near term.

Top Fundamental Stocks

Rec. Date

CMP on Rec.

CMP

Target

Absolute
Return @
CMP

Status

MT Educare

01/02/2016

164

160

230

-2%

Buy

Garware-Wall Ropes

28/12/2015

425

346

550

-19%

Buy

Welspun syntax

23/11/2015

121

117

223

-4%

Buy

Natco Pharma

02/11/2015

509

488

3183

-4%

Buy

SRF

21/09/2015

1140

1136

1374

0%

Buy

Ahluwalia contracts

24/08/2015

235

266

368

13%

Buy

Infinite Computer
Sol.

20/07/2015

190

216

255

14%

Buy

Nitin Spinners Ltd.

06/07/2015

79

68

94

-14%

Buy

Bank of Baroda

01/06/2015

163

131

217

-20%

Buy

Ambika Cotton Mills

18/05/2015

880

803

1149

-9%

Buy

04/05/2015

298

300

430

1%

Buy

16/03/2015

152

186

251

23%

Buy

DHFL

16/02/2015

252

174

368

-31%

Buy

TV Today Network

27/01/2015

222

290

337

31%

Buy

M&M

12/01/2015

1238

1202

1452

-3%

Buy

Havells India

27/10/2014

274

304

346

11%

Buy

PTC India Fin. Ser.

07/07/2014

39

36

45

-8%

Buy

Adani Port

05/07/2014

280

212

347

-24%

Buy

Stocks

Sadbhav
Engineering Ltd.
Omkar speciality
Chemicals

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

Vol.: 281
8th February,2016

J Street Short Term Call Status

Sr.
No.

DATE

STOCK

BUY/
SELL

RANGE

RANGE

14Dec15

YESBANK

SELL

682

694

15Dec15

JUBLFOOD

SELL

16Dec15

PNB

SL

STATUS

%
RETURN

688.00 663.00

655

TA

3.8

1425

1450 1437.50 1400.00

1365

TA

2.7

SELL

120

123

121.50 117.00

115

TA

3.8

17Dec15

KOTAKBANK BUY

686

697

691.50 709.00

712

TA

2.5

21Dec15

ADANIPORT SELL

258

262

260.00 252.00

270

SL

3.8

22Dec15

GLENMARK

SELL

920

940

930.00 895.00

970

PB

2.5

23Dec15

CANBK

SELL

236

242

239.00 231.00

248

TA

3.5

24Dec15

BUY

862

878

870.00 900.00

845

TA

3.4

28Dec15

SELL

2715

2665 2690.00 2590.00

2765

TA

3.9

10

29Dec15

BUY

342

347

344.50 361.00

332

TA

4.8

11

30Dec15

APOLLOHSPT BUY

1448

1475 1461.50 1520.00

1400

TA

4.0

12

31Dec15

ZEEL

BUY

423

431

427.00 440.00

414

SL

2.0

13

4Jan15

HAVELLS

BUY

320

325

322.50 332.00

310

SL

3.8

14

5Jan15

CADILAHC

SELL

320

325

322.50 308.00

335

TA

3.9

15

6Jan15

SBIN

SELL

216

220

218.00 210.00

226

TA

3.8

16

7Jan15

INFY

BUY

1060

1080 1070.00 1030.00

1120

TA

2.8

17

8Jan15

TECHM

SELL

506

515

510.50 490.00

532

TA

4.2

18

11Jan16

MARUTI

SELL

4200

4270 4235.00 4040.00

4300

TA

4.8

19

12Jan16

M&M

SELL

1155

1177 1166.00 1100.00

1195

TA

6.0

20

13Jan16

FEDRALBANK SELL

47.7

48.7

48.20

46.20

51

TA

4.3

21

14Jan16

BANKINDIA

SELL

93

97

95.00

90.00

100

TA

5.6

22

15Jan16

TATASTEEL

SELL

237

241

239.00 230.00

245

TA

3.9

- 7-

AURO
PHARMA
HEROMO
TOCO
ARVIND

TRIGGER
TGT
PRICE

Vol.: 281
8th February,2016

J Street Short Term Call Status

Sr.
No.

DATE

STOCK

BUY/
SELL

RANGE

23

18Jan16

ACC

SELL

1220

24

19Jan16

HINDPETRO SELL

25

20Jan16

BANKBARODA SELL

26

21Jan16

ALBK

27

22Jan16

28

STATUS

CMP

%RE
TURN

1242 1231.00 1190.00

1270

TA

3.4

820

832

826.00 788.00

858

TA

4.8

124

126

125.00 119.00

129

TA

5.0

SELL

49

51

50.00

53

SL

3.8

DRREDDY

BUY

2730

2780 2755.00 2885.00

2680

TA

4.7

25Jan16

IGL

BUY

564

578

571.00 595.00

550

TA

4.2

29

27Jan16

HAVELLS

BUY

298

304

301.00 313.00

287

TA

4.0

30

28Jan16

HINDZINC

SELL

158

162

160.00 152.00

166

TA

3.8

STAUTS

CALLS

RATIO

TA+PB

25

65.79

SL+EXIT

13

34.21

TOTAL

38

100.00

TRIGGER
TGT
PRICE

SL

47.80

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

- 7-

Vol.: 281
8th February,2016