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T I M E S
A TIME COMMUNICATIONS PUBLICATION
VOL XXVIII No.28 Monday, 13 May – 19 May 2019 Pgs.18 Rs.20

Markets turn nervous Now follow us on Instagram, Facebook &

By Sanjay R. Bhatia Twitter at moneytimes_1991 on a daily basis to
The fresh round of conflict between USA and China resulted in a sell- get a view of the stock market and the
off in global stock markets. The Indian stock markets also happenings which many may not be aware of.
succumbed to this negative news because of which the expected
rangebound behaviour did not materialize. In fact, the Indian VIX index hit a new high in this month, which led to higher
volatility during the week. The Satta bazaar continued to give mixed results with respect to the Lok Sabha eelctions. The
breadth of the market remained weak amidst high volumes, which is a negative sign.
The FIIs turned net sellers in the cash and derivatives segment.
The DIIs, however, turned net buyers after a long time and
were seen supporting the markets at the lower levels. Crude oil Believe it or not!
prices continued to fall on concerns that a protracted tariff war Despite the extremely negative sentiment in
between USA and China will harm global economic growth. On
the markets last week, our following
the earnings front, the results remained a mixed bag.
recommendations have given excellent
Technically, the prevailing negative technical conditions returns in just 1 week!
continued to weigh on the market sentiment. The MACD, RSI
and KST are all placed below their respective averages on the  Mold-Tek Technologies recommended at
daily chart. Moreover, the Stochastic, RSI and KST are placed Rs.51.75 in TF last week, jumped 22% to Rs.62.90!
below their respective averages on the weekly chart as well.  Paisalo Digital recommended at Rs.330 in EE
The Nifty is placed below its 50-day SMA. These negative
last week, jumped 13% to Rs.374.50!
technical conditions could lead to intermediate bouts of selling
pressure, especially at the higher levels.  Deepak Nitrite recommended at Rs.273.50 in SP
last week, jumped 11% to Rs.304.15!
The positive technical conditions, however, still hold good. The
Stochastic is placed above its average on the daily chart and is  Hariyana Ship Breakers recommended at
placed in the oversold zone. The MACD is placed above its Rs.67.30 in TF last week, jumped 8% to Rs.72.85!
average on the weekly chart. Moreover, the Nifty is placed  Sterlite Technologies recommended at
above its key averages i.e. 100-day SMA and 200-day SMA. The Rs.191.85 in SA last week, jumped 6% to
Nifty’s 50-day SMA is placed above its 100-day SMA and 200- Rs.204.25!
day SMA, signaling a ‘Golden Cross’ breakout. These positive
technical conditions could lead to buying support at the lower (EE – Expert Eye; SA – Stock Analysis;
levels. SP – Stock Pick; TF – Techno Funda)
The -DI line has moved above the ADX line and the +DI line and This happens only in Money Times!
is placed above 30. But it has come off its recent highs, which
indicates that the sellers are covering their short positions Now in its 28th Year
regularly at the lower levels. The ADX line is placed above 29.
The market sentiment has turned nervous and hesitant.

A Time Communications Publication 1

The Nifty has failed to sustain above 11300, which does
not augur well for the markets. It is important for the Nifty
to move and above this level for selling pressure to ease
and to move higher to test the resistance zone of 11343-
11416. If the Nifty fails to do so, then further selling
pressure is likely to test the 10942 mark, which is a crucial
support level for the markets.
Intermediate bouts of short-covering and selective
support are likely to be witnessed due to the earnings
season. Meanwhile, the markets will take cues from the US-
China trade talks, earnings season, news flow on the Lok
Sabha elections, Dollar-Rupee exchange rate, global
markets and crude oil prices.
Technically, the Sensex faces resistance at the 37490,
38125, 38421, 38646, 38896, 39000, 39330, 39488,
39500, 39700 and 40100 levels and seeks support at the
37172, 36678, 35973 and 35287 levels. The resistance levels for the Nifty are placed at 11311, 11354, 11525, 11572,
11603, 11680 and 11739 while its support levels are placed at 11227, 11180, 11146, 11070 and 10942.

BAZAR.COM

Markets turn jittery

The markets have turned jittery ahead of the Lok Sabha poll results and US President Donald Trump’s ultimatum to China
and the world. The Indian stock market declined for seven consecutive days with the Sensex losing nearly 1,500 points
making investors poorer by nearly Rs.6 lakh crore. Moreover, the results of India Inc. weakened the market sentiment
further. Corporate results, especially of the automobile sector, created tremors of a slowdown, which kept hardcore
investors at bay.
The Sensex and the Nifty have breached their first
support levels and are cruising towards their second Are you passionate about stocks?
support line. Both the indices had created new highs
during the pre-poll fever but failed to maintain the Can you spot a winner?
optimism as the poll results near. Are you keen to write?
The markets have turned nervous on fears of a
coalition government by the opposition or a NDA
If your answer is YES to all the three questions, MONEY TIMES,
government sans Narendra Modi. The petty fights launched by the pioneers of investment journalism, invites
between the big-wigs and the abuses thrown at each you to join its team of contributors.
other have taken national politics to a new low. The Each and every analyst on our panel is passionate about stock
lack of focus on national issues is another reason for investments and is an expert in his field. What is, however,
the fatigue syndrome that the market has more significant is that most of them were our subscribers
experienced over the last eight sessions. first and have been writing for over 20 years now.
Globally, traders are concerned that USA’s decision So if you want to join this eminent group, write to
to hike tariffs on Chinese goods worth $200 billion
moneytimes.support@gmail.com and send us a sample of
from 10% to 25% will hurt the world's second
largest economy. The list of goods on which tariffs your article written or published.
will be raised has been identified.
Investors world over were in jitters after the latest trade data from China showed an overall trade surplus of $13.3 billion,
which is substantially lower than $33-35 billion estimated earlier. Consequently, the Shanghai Composite lost 1.1% while
the Hang Seng closed 1.2% lower.
At home, it's a culmination of the weakening sentiment and fundamentals being unable to beat the estimates. It is
worthwhile to note the erosion in benchmarks since 1 April 2019: Sensex - 2.3%; BSE Large-Cap - 2.6%; BSE 100 - 2.9%;
BSE 500 - 3.4%; BSE Mid-Cap - 7.1%. This shows where the biggest erosion lies! Index heavyweights like Reliance
Industries, Bajaj Finance and Tata Motors may have led the fall. Of late, FIIs have turned net sellers in the Indian stock
market. Consequently, the Rupee has weakened marginally by about 0.3% to 69.71 against the US Dollar.

A Time Communications Publication 2

On the political front, the petty verbal fights are giving an advantage to the underdog UPA. A little bit of last minute
rebalancing may upset NaMo’s chances of a safe and smooth return to power. So long as the verbal duets continue, the
Sensex and the Nifty may gather pace in their downward journey. For sure, the interim top is here for long and it may take
some months to regain the lost glory and push ahead. Till then, the meltdown will persist.

TRADING ON TECHNICALS

Further correction/consolidation likely

Sensex Daily Trend DRV Weekly Trend WRV Monthly Trend MRV
Last Close 37462 Down 38167 Down 37843 Up 33775
Start Date - 07-05-19 - 10-05-19 - 31-05-16 -
Start Level - 38276 - 37462 - 26667 -
Gain/Loss (-) - 814 - 0 - 10795 -
% Gain/Loss (-) - 2.13 - 0.00 - 40.48 -
While the market ended March 2019 on a positive note, it turned indecisive in the month of April. The markets reversed
this month as the stop loss of 38400 was violated. The slide was sharp as it cut down the stop loss of 38400 to reach a low
of 37370 last week.
The Sensex witnessed a gap-down opening last week at 38719 as against its previous week’s closing of 38963. It registered
a weekly low at 37370 before it finally closed the week at 37462 and thereby showed a net fall of 1,500 points on a week-
to-week basis.
Daily Chart
Last week, a breakdown was seen on the daily and weekly charts for
retracement. The last rise was from 35287 to 39487. The support
level of 38460 was violated for retracement. The retracement levels
of this rise are placed at 37378 and 36885.
The 50% and 61.8% retracement levels are placed at 37378 and
36885.
The Standard Error Channel of the rally from 33291 in October 2018
to 39420 in April 2019 is applied on the daily chart. The lower
channel line was tested along with the 50% retracement level of
37378.
If the retracement of the full rally from 33291 to 39420 is marked,
the 38.2% retracement level is at 37116.
The last lower top is at 37172.
The support gap is placed at 37230-37054. A breakdown of the support gap with a bearish candle could lead to a further
correction to 36403-35665.
The election results are 13 days away and currently, the market is trying to discount and adjust to the surprises or trying
to be conservative on the outcome. An unfavorable election outcome could lead to a landslide.
Weekly Chart
In 1992 when the first major peak was seen, the market had witnessed a series of hung parliament and its effect was
torturous extending till 2003. The markets underperformed for almost 10 years.
The market needs a stable government for a 5-year term.
Most of the times, the markets have rallied post the election outcome. Therefore, the current panic and correction could
be an opportunity for long-term investors to accumulate quality stocks. The yearly center point is at 35847 and the yearly
level 2 is at 32704. The last major higher bottom for the market is 33291 and 32483. These lower levels are panic points
for the market where the worst possible negative effect of the news, if any, is discounted.
The weekly candle is bearish and therefore, the higher range of 37889-38408-38835 will offer resistance. In order to
negate the bearish candle and the negative sentiment, the Sensex must quickly cross 38835 to establish another swing
trading higher bottom.
In September 2018, the market had fallen 6.25% from the peak of 38989. In this month, the Sensex has already fallen
about 4.01% in just 10 days. In October 2018, the fall was of 4.92%. With a favorable election result from the market point
of view, the current monthly slide may be of around 6.25%. But in the event of an unfavorable result, the slide could extend

A Time Communications Publication 3

towards the panic points mentioned above. For the near-to-short term, the objective remains to exit long and sell on rise
until there is clarity on the election outcome.
BSE Mid-Cap Index
Weekly Chart
The support levels of 14183-13784-13538 will be tested in the near term. The support range of 13538-13100 needs to be
held for a recovery and reversal. The index is likely to test the support levels in the near-to-short term.
The volatility band is 13100-15661 with a momentary bias to test the lower side of the band.
BSE Small-Cap Index
Weekly Chart
Expect 13562-13099 to be tested. The overall objective is to remain out till 15230 is not crossed. If the support level is
broken, then the bearish sentiment will extend further.
Strategy for the week
There is no upside target for the time being as the stop loss of 38400 has been violated indicating a near-to-short term
downtrend, which could extend into the medium term.
The objective remains to exit long till the peak of 39487 is not crossed. Use the rise to 37889-38408 for selling. The
markets may test the lower support cluster of 36943-35478 this week. An intra-week recovery may happen from the
support levels. But the market will have to undergo another phase of correction or consolidation before moving higher.

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: R1-(Resistance), R2- (Resistance), R3- Resistance, S1- Support & S2- Support

Weekly Up
Scrip Last Relative
S1 S2 - R1- R2- Reversal Trend
Close Strength
Value Date
Weak Demand Demand Supply Supply
below point point point point
IPCA LABORATORIES 972.00 905.3 947.3 964.7 989.3 1031.3 66.9 969.5 26-04-19
HONEYWELL AUTOMATION 24016.00 22617.3 23462.3 23753.7 24307.3 25152.3 61.7 23881.0 10-05-19
ATUL 3584.00 3317.0 3480.0 3539.0 3643.0 3806.0 56.2 3507.0 10-05-19
WELSPUN CORPORATION 143.55 112.5 131.4 138.2 150.3 169.2 50.9 135.7 10-05-19

*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.
Note: R1-(Resistance), R2- (Resistance), R3- Resistance, S1- Support & S2- Support

Weekly Down
Scrip Last Relative
S1 S2 - R1- R2- Reversal Trend
Close Strength
Value Date
Demand Demand Supply Supply Strong
point point point point above
IDEA CELLULER 14.00 9.2 12.7 14.9 16.2 17.1 28.08 15.93 03-05-19
BIOCON 540.60 485.4 522.4 541.2 559.4 560.0 30.37 581.80 03-05-19
WOCKHARDT 380.50 323.7 365.7 392.8 407.7 420.0 30.58 413.37 18-04-19
RELIANCE CAPITAL 117.90 85.2 108.3 121.9 131.5 135.4 31.31 137.83 12-04-19
CHAMBAL FERTILISERS 141.60 115.5 134.7 147.1 154.0 159.4 32.49 155.39 26-04-19
AMARA RAJA BATTERIES 634.00 588.3 620.3 638.7 652.3 657.0 33.35 663.50 22-03-19

A Time Communications Publication 4

*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.
EXIT LIST
Note: R1- (Resistance), R2- (Resistance), R3- Resistance, S1- Support & SA- Strong Above
Scrip Last Close R1 R2 R3 SA S1 Monthly RS

RELIANCE INDUSTRIES 1251.00 1310.70 1331.00 1351.30 1417.00 1138.7 43.41

GILLETE INDIA 6928.00 7128.70 7218.50 7308.30 7599.00 6367.7 43.43
BAJAJ FINANCE 2921.00 2990.81 3023.50 3056.19 3162.00 2713.8 43.86
FUTURE LIFE FASHION 462.00 471.04 475.58 480.11 494.80 432.6 44.79
HAVELL'S INDIA 738.00 746.01 752.50 758.99 780.00 691.0 48.20
TATA CONSULTANCY SER 2135.55 2163.93 2182.27 2200.62 2260.00 2008.5 49.93
AXIS BANK 734.00 743.90 748.50 753.10 768.00 704.9 53.72
KENNMETAL INDIA 1116.00 1143.20 1155.00 1166.80 1205.00 1043.2 54.35

TOWER TALK
 Kewal Kiran Clothing, owner of apparel brands like Killer, LawMan Pg3, Easies, has once again posted good results
with its turnover crossing Rs.500 crore in FY19 with an EPS of Rs.65. A potential bonus candidate. Accumulate.
 Ashok Leyland reported a 10% jump in sales (13,141 units) in April 2019 at a time when other manufacturers are
struggling to lift their sales. A big positive for the company. Accumulate.
 The Biocon share is falling in spite of a significant rise in Q4 PAT. A good opportunity to buy.
 Godrej Properties has acquired RK Studio’s land for about Rs.190 crore to build a residential property. Buy for the
long term.
 Century Textiles & Industries posted 109% higher PAT for Q4, primarily on account of royalty income from Grasim
Industries. Its fortune is about to change. Buy.
 Titan expects 20% growth in profitability this year with plans to add about 14 Taneira outlets. Accumulate.
 With the launch of TUV300 (an updated version) at ~Rs.8.38 lakh, Mahindra & Mahindra expects higher sales from
this segment. A safe investment bet.
 Godrej Consumer Products reported higher profitability on the back of new launches. Buy for the long term.
 Indiabulls Housing Finance and its credit arm will be merged into Lakshmi Vilas Bank. A positive for the bank. Buy
for quick gains.
 Ircon International has obtained a huge order worth ~Rs.635 crore from Sri Lankan Railways. Buy for the long
term.
 Sugar manufacturer EID Parry reported a four-fold rise in Q4 profitability and its performance is likely to be equally
good going forward. Accumulate.
 Aditya Birla Capital shows signs of recovery. It witnessed a turnaround on a quarterly basis. Buy for the long term.
 LIC Housing Finance posted excellent results for FY19 with 22% higher PAT. A big buy!
 Morepen Laboratories posted 124% higher PAT for Q4. Its future looks bright. Buy selectively.
 Indian Overseas Bank plans to raise ~Rs.850 crore through the sale of non-core assets. This will infuse liquidity
into the system. Buy.
 HDFC Bank plans to split the face value of its share from Rs.2 to Re.1. This may boost its share price. Accumulate.
 Dr. Reddy’s Laboratories has launched its generic version of AndroGel testosterone gel. Buy selectively.
 While most FMCG companies posted muted earnings, Marico posted more than double the profits for Q4 primarily
on account of a write-back in tax provisioning. Buy for the long term.
 HEG exports over 70% of its products to 30+ countries. The product clamp down in China is beneficial for the
company. An exciting buy.
 Granules India posted a consolidated EPS of Rs.9 for FY19. The stock is poised to rise by 30% on a FY20E EPS of
Rs.12+ post expansion.

A Time Communications Publication 5

 Excluding a one-time exceptional loss, Gujarat Mineral Development Corporation has posted an EPS of Rs.14 for
FY19. With improving fundamentals, its future looks good. Buy for about 25% returns.
 Meghmani Organics is likely to notch an EPS of Rs.10+ for FY19. Marketmen expect the stock to touch Rs.90-100 in
the medium term.
 An Ahmedabad-based analyst recommends Ruchira Papers.

BEST BET

KCP Ltd
(BSE Code: 590066) (CMP: Rs.84.95) (FV: Re.1)
By Bikshapathi Thota
Company Background: KCP Ltd is a 75-year old diversified business group with business interests in cement, heavy
engineering, power, sugar and hospitality. It has manufacturing units at 9 locations in India and Vietnam. It has 2 cement
manufacturing plants in Andhra Pradesh with captive supply of high grade limestone and a combined capacity of 2.6
MMTPA. After its brownfield expansion of 1.7 MMTPA, its total capacity will stand at 4.3 MMTPA. This ~Rs.500 crore
project is expected to be commissioned by Q3FY20. It has captive limestone reserves as well. Cement constitutes ~60%
of the top-line.
KCP enhanced its sugar capacity from 7,000 TCD to 9,000 TCD in March 2018 with plans to enhance it further to 11,000
TCD by FY19 end. It also commissioned a 30 MW co-gen plant, which will contribute to FY19 revenues. Sugar currently
constitutes ~30% to the total revenue.
KCP has 2 engineering units in Chennai. It also built a 4-star hotel in Hyderabad for ~Rs.100 crore, which is managed by
Mercure hotels. Both these divisions reported losses for FY18.
Outlook: KCP’s cement division reported healthy volume growth in FY18 and is expected to do well going forward based
on the projects. Realizations will improve in line with capacity utilization. Its Sugar division, too, is likely to report good
revenue growth for the next two years on the back of expansions. The management has guided that its engineering division
will break even this year on the back of orders from the defense and railways. Its hotel division is also expected to report
operating profits with higher occupancy levels.
At $70/tonne, KCP’s cement division alone could be worth Rs.1900 crore even after considering replacement cost of
$100/tonne. Its huge land bank in Chennai is valued around a little less than its market cap. Only a small portion of it is
used for the hotel while the rest, we believe, could be used for container freight in the future.
KCP’s debt:equity ratio (DER) is healthy even though most expansions are underway. Most importantly, its cement
business is not valued like other cement companies. In fact, it’s not even half of what other companies quote. Hence, sooner
or later, it might get de-merged for value unlocking or the shareholders will have to be rewarded by other means. Its
Vietnam plant is an icing on the cake.
Since most real estate companies are not doing well, we are not sure
about the prospects of KCP’s real estate business. Though the Financials: (Rs. in crore)
government has initiated favourable housing policies, private players Particulars FY16 FY17 FY18 FY19E
must be in good shape to help achieve the vision. However, KCP looks
Sales 1296 1282 1520 1684
safe as 60% of its revenue is derived from the cement division.
Government initiatives like Smart City development, allocations for Expenditure 1107 1174 1378 1472
Urban Rejuvenation Mission, etc. will ensure the cement off-take. The Net Profit 117 94 112 162
rural push given in the Union Budget and the adoption of cement in
EPS (Rs.) 7.3 5.6 6.9 7.5
place of bitumen in new road projects will also boost the demand for
cement.
Conclusion: With the proposed infrastructure projects in Andhra Pradesh and Telangana like the new capital city project
of Amaravati, East Coast Economic Corridor, Dedicated Freight Corridor, Diamond Quadrilateral High Speed Rail and
National Waterways, KCP will benefit significantly.
In order to capitalize on these opportunities, KCP is enhancing the capacity of its Muktyala plant in Andhra Pradesh from
1.8 MMTPA to 3.5 MMTPA. The project is likely to go on stream next year. Given its business potential and fair management
ethics, we recommend this stock for a price target of Rs.135 (18x FY19E earnings) within a year.

A Time Communications Publication 6

 MARKET REVIEW

Markets fall on US-China tariff war

By Devendra Singh
The Sensex declined 1,500.27
points to settle at 37462.99 The new ratnas at Panchratna!
while the Nifty closed at After the sad demise of Mr. G. S. Roongta on 2nd July 2017, we were at a loss to
11278.90 losing 433.35 points replace our crown jewel. But so good is our team of analysts that their first five
for the week that ended on issues of Panchratna have already clocked in results.
Friday, 10 May 2019.
India’s industrial output Given below is their maiden score
contracted 0.1% in March 2019 and we are sure this team will improve as we go along.
due to a slowdown in the
manufacturing sector. Factory Sr. Date Scrip Name Recom. Highest % Gain
No. Rate (Rs.) since (Rs.)
output, as measured in terms of
1 October 2017 Stock A 74.50 147.80 98
the Index of Industrial
Stock B 37.05 44.10 19
Production (IIP), had expanded
Stock C 90.95 100 10
5.3% in March 2018.
Stock D 77.70 94.40 21
During FY2018-19, industrial Stock E 41.70 83.85 101
output grew 3.6% as against 2 January 2018 Stock F 74.80 86 15
4.4% in FY2017-18. India’s Stock G 42 44.80 7
infrastructure output grew Stock H 60.85 63.90 5
4.7% in March 2019 from a year Stock I 90.45 713.70 689
earlier. Infrastructure output, Stock J 57.30 59.70 4
which comprises eight sectors 3 April 2018 Stock K 54.55 63.10 16
such as coal, crude oil and Stock L 29.95 37.75 26
electricity, accounts for ~40% of Stock M 65.65 81.85 25
India’s industrial output. Stock N 99.70 125 25
On the monsoon front, the India Stock O 143.05 186 30
Meteorological Department 4 July 2018 Stock P 76.60 86 12
(IMD) said that India is likely to Stock Q 59.05 66.40 12
receive average monsoon rains Stock R 46.20 52.20 13
this year. The forecast raised Stock S 48.45 54.50 12
expectations of higher farm and Stock T 82.10 99.05 21
economic growth in Asia’s third- 5 October 2018 Stock U 33.25 45 35
biggest economy where half of Stock V 69.70 79.30 14
the farmland lacks irrigation. Stock W 70.70 96.30 36
Stock X 97.20 114.80 18
On the US-China tariff-war, US Stock Y 55.45 68.15 23
President Donald Trump
announced his intention to raise The latest edition of ‘Panchratna’ was released on 1 April 2019.
tariffs with his negotiators
saying that China was So hurry up and book your copy now!
backtracking on earlier Subscription Rate: Rs.2500 per quarter, Rs.4000 for two quarters & Rs.7000 per annum.
commitments. China has You can contact us on 022-22616970, 22654805 or moneytimes.support@gmail.com.
appealed to the US to meet it
halfway to salvage a deal that
could end their trade war with its chief negotiator in Washington for two days of talks hoping to stave off US tariff hikes
set to be triggered on Friday, 10 May 2019.
The US will raise tariffs on $200 billion worth of Chinese imports to 25% from 10% effective on Friday, according to a
notice posted to the Federal Register.
President Trump has repeatedly slammed China for indulging in what he claims are ‘unfair’ trade practices, particularly
with regards to access to its giant market, intellectual property and technology transfers.

A Time Communications Publication 7

China's central bank adviser stated that US tariff hikes on
Chinese goods could cut Chinese growth by 0.3 percentage
points but the strengthening economy has become more Relative Strength (RS)
resilient to external shocks.
“The Chinese stock market was unlikely to see the same signals a stock’s ability to perform in a
heavy sell-off it experienced last year after the trade war dynamic market. Knowledge of it can lead
began,” he said, adding that investors had previously been you to profits.
prone to overreacting due to an inability to judge the real
impact of trade frictions and jitters over slowing economic POWER OF RS - Rs.3100 for 1 year
growth.
What you get -
“China’s real economy performance has improved
significantly in recent months. The country’s current Association for 1 year at just Rs.3100!
macroeconomic and policy environment should help the
market improve its resilience to new external shocks,” the 1-2 buy / sell per day on a daily basis
adviser said. 1 buy per week
He also said that the Chinese central bank had sufficient 1 buy per month
monetary policy tools to cope with the current internal and 1 buy per quarter
external uncertainties and will look to fine-tune policy 1 buy per year
according to changes in the country’s economic situation.
The global markets declined over the escalating trade fight One of our recent recommendations, Titan
fearing that it could hamper the world economy. Industries, delivered 15% returns within a
Key indices tumbled on Monday, 6 May 2019, on weak global month and 9% returns within a week!
cues. The Sensex tanked 362.92 points to close at 38600.34 To earn like this, subscribe now!
while the Nifty was down 114 points to close at 11598.25.
Key indices declined further on Tuesday, 7 May 2019. The For more details, contact Money Times on
Sensex plunged 323.71 points to close at 38276.63 while the 022-22616970/4805 or
moneytimes.support@gmail.com.
Nifty lost 100.35 points to close at 11497.9.
Key indices fell further on Wednesday, 8 May 2019, as US-
China trade uncertainty hit the financial markets. The Sensex nosedived 487.5 points to close at 37789.13 while the Nifty
closed 138.45 points lower at 11359.45.
Key indices tanked again on Thursday, 9 May 2019, on profit-booking. The Sensex fell 230.22 points to close at 37558.91
while the Nifty closed 57.65 points lower at 11301.8.
Key indices settled lower on Friday, 10 May 2019. The Sensex closed 95.92 points lower at 37462.99 while the Nifty closed
22.9 points lower at 11278.9.
National and global macro-economic data and events as well as fluctuations in crude oil prices and currencies will dictate
the movement of the markets and influence investor sentiment in the near future.
The ongoing Lok Sabha Elections, which started on 11th April, is scheduled in seven phases till 19th May. The counting of
votes and results will be declared on Thursday, 23rd May.
On India’s macro-economic data, the HSBC Manufacturing Purchasing Managers’ Index (PMI) and the HSBC Services PMI
for April 2019 both will be released this week. The government is scheduled to release data based on WPI and CPI for
urban and rural India for April 2019 by mid-May 2019. On the global front, USA, China and some Euro-nations will release
their macro-economic figures for April 2019 in the next few weeks.

STOCK WATCH
By Amit Kumar Gupta
Ambuja Cements Ltd
(BSE Code: 500425) (CMP: Rs.215) (FV: Rs.2)
Incorporated in 1981, Mumbai-based Ambuja Cements Ltd (ACL) is a subsidiary of Holderind Investments Ltd engaged in
the manufacture and sale of cement and cement related products. It primarily offers Portland Pozollana Cement (PPC) and
Ordinary Portland Cement (OPC). It is also engaged in exports.

A Time Communications Publication 8

ACL posted disappointing numbers for Q1CY19 on all major fronts except volumes and production efficiency. Volume
growth remained in line with I-direct estimates at 6.37 MMT but realisations remained flat YoY at Rs.4600/tonne v/s our
estimate of Rs.4717/tonne. Revenues remained moderately below I-direct estimates at Rs.2928 crore. Premium products
i.e. Roof special, Cool walls and Pura Sand gained traction recording 14% YoY growth. On the profitability front, EBITDA
margins dipped 189 bps to 15.8%, below our estimates of 17.2%. The drag was mainly led by lower realisations as
production cost per tonne of Rs.3869/tonne was below our estimate of Rs.3905/tonne. EBITDA contracted 8.8% to Rs.463
crore.
Various measures taken by the management including rationalising the distribution network, changing the production
mix by increasing the flyash content, increasing the usage of slag, changing the fuel mix by increasing the use of alternative
fuels have helped the company partly mitigate exogenous cost pressures. Eventually, on a YoY basis, production costs rose
~2.2% to Rs.3869/tonne.
ACL ended CY18 at a standalone capacity utilisation of 81% producing ~24.2 MMT cement during the year. Capacity
utilization as at Q1CY19 was higher at ~87%. The greenfield expansion at Marwar is expected to get commissioned in
H2CY20E. Thus, in the near term, we believe capacity constraints will hinder volume growth, leading us to model a 5.2%
volume CAGR over CY18-20E.
FY19 witnessed strong tailwinds for the cement industry with production growth at 13.3% despite a slight slowdown in
volumes in Q4FY19. The demand for cement in FY20 is expected to be driven by sustained demand from the housing and
infrastructure segments despite the initial hiccups in Q1 on account of Lok Sabha elections. We maintain a positive outlook
on the industry.
Technical Outlook: The ACL share has formed a double bottom pattern on the daily chart and looks good for medium-
term investment. It trades above all important moving averages like the 200 DMA level on the daily chart.
Start accumulating at this level of Rs.215 and on dips to Rs.190 for medium-to-long term investment and a possible price
target of Rs.260+ in the next 12 months.
*****
Future Lifestyle Fashions Ltd
(BSE Code: 536507) (CMP: Rs.462) (FV: Rs.2)
Incorporated in 2012, Mumbai-based Future Lifestyle Fashions Ltd (FLFL), formerly Future Value Fashion Retail Ltd, is
an integrated fashion company that primarily operates a chain of department retail format stores under the ‘Central’
name; fashion discount stores under the ‘Brand Factory’ name; multi-brand sports and lifestyle speciality retail chain
under the ‘Planet Sports’ name; and fashionable, stylish, social media savvy and selfie-lovers fashion stores under the ‘I
Am In’ name. It operates 35 Central stores, 53 Brand Factory outlets and 284 sports stores and exclusive brand outlets. It
offers formal menswear, women's wear, footwear and accessories under a portfolio of fashion brands. It offers its products
under the following brands: COVER STORY, ALL, UMM, Lee Cooper, Bare, Scullers, RIG, Converse, Spalding, Daniel Hechter,
Lombard, Urban Yoga, Mohr, Jealous 21, John Miller, Famozi, Desi Belle, Urbana, Mother Earth, Trèsmode, GIOVANI, Mor
Pankh, Peperone, MINERAL, Celio, CERIZ and Hey! It distributes products through its exclusive brand outlets (EBOs),
department stores, multi-brand outlets, retail chains as well as through e-commerce sites.
FLFL’s Q4FY19 YoY revenue growth of 28.9% was in line with our estimates while EBITDA growth of 29.5% surpassed
our estimates. ‘Central’ posted SSSG (same store sales growth) of 6.5% on a base of 1%, ahead of Shoppers Stops’ 3.7%.
Brand Factory reported strong SSSG of 13.1% in spite of a high base of 13.7%. Retail sales for power brands remained
healthy—up 21.3% YoY. While gross margin dipped 59 bps YoY, EBITDA margin was flat on account of operational
efficiencies. Comfortable net debt/EBITDA at 1.4x (1.8x in FY17) coupled with strong operating parameters lends comfort.
FLFL’s strong growth was led by robust SSSG as well as revenue from new stores. For FY19, it reported SSSG of 8.7% YoY
underpinned by Brand Factory’s 13.9% YoY and Central’s 5.7% YoY growth. Brand Factory continues to remain a strong
growth driver (added 30 stores in FY19 with a target to add 30 in FY20) with share of revenue expanding 630 bps YoY.
FLFL plans to open another 5 Central stores with a focus on profitability and steady SSSG.
In spite of an unfavorable base of 54.7% growth, power brands clocked 21.3% YoY growth. This was led by healthy spurt
in Lee Cooper’s (up 25% YoY), Bare Casuals (up 40.6% YoY), Indigo Nation (up 20.5% YoY), Scullers (up 32% YoY) and
John Millers (up 23.5% YoY). Overall revenue growth of Scullers and Jealous 21 was relatively softer owing to closure of
40 EBOs and EOSS (end of season sale) at Central being lower by two weeks, which is their prime sale outlet. There was a
tax reversal of ~Rs.300-350 million, which led to an effective tax rate of 19.6% for FY19.
We estimate ~6% SSSG for Central and 11.5/11% SSSG for Brand Factory in FY20/FY21 aided by strong format pull and
better execution. We expect overall revenue and margin expansion to sustain on account of sharpened focus on power
brands.

A Time Communications Publication 9

Technical Outlook: The FLFL share has formed a saucer pattern on the daily chart and looks good for medium-term
investment. Every correction in this counter offers a good investment opportunity. The stock trades above all important
moving averages like the 200 DMA level on the daily chart.
Start accumulating at this level of Rs.462 and on dips to Rs.440 for medium-to-long term investment and a possible price
target of Rs.540+ in the next 12 months.

DO NOT FORGET THE ‘POWER OF FORGETTING’

By Laxmikant Bhole
The markets have been extremely volatile Winners of 2019 begin to perform…
over a year and a half especially in the last six % Gain Highest in % Gain
months. While most mid-caps Sr. Dec. 2018 Mar. 2019
Scrip Name (on March 2019 so (on high
No. Close Close
closing) far achieved)
and small-caps fell sharply, the large-cap
1 Stock A 1134 1403 24% 1427 26%
stocks were steadier. Despite the carnage in
2 Stock B 802 978 22% 1046 30%
mid-caps and small-caps, the Nifty has risen
3 Stock C 516 614 19% 625 21%
by over 1,000 points within a year and a half
4 Stock D 1483 1709 15% 1775 20%
from the 10200 level to around 11300 today.
5 Stock E 692 773 12% 780 13%
Amid such volatility, investors who applied
6 Stock F 3176 3535 11% 3649 15%
the ‘Power of Forgetting’ as emphasized in
7 Stock G 360 399 11% 402 12%
my article in October 2017 may not be
8 Stock H 2122 2316 9% 2328 10%
worried as the Nifty has gained 5-7% in the
9 Stock I 723 777 7% 840 16%
last seven months. This is why the ‘Power of
10 Stock J 1893 2000 6% 2098 11%
Forgetting’ in quality stocks is important.
11 Stock K 195 205 5% 206 6%
We often get carried away by the daily 12 Stock L 3437 3545 3% 3659 6%
market movements and take impulsive 13 Stock M 1605 1647 3% 1709 6%
decisions based on what we see on news 14 Stock N 1377 1396 1% 1491 8%
channels and what we hear from others 15 Stock O 1077 1090 1% 1177 9%
instead of relying on our own analysis. First, 16 Stock P 919 924 1% 957 4%
let’s understand how the stock market 17 Stock Q 1968 1963 0% 2016 2%
works. Traders swear by the age-old adage 18 Stock R 712 688 -3% 757 6%
‘Buy on rumor, sell on news’. The market is 19 Stock S 1438 1382 -4% 1445 1%
forward-biased and values a stock based on 20 Stock T 431 409 -5% 464 8%
its forward estimates. Taking advantage of 21 Stock U 298 280 -6% 312 5%
this phenomenon, traders often speculate 22 Stock V 1210 1136 -6% 1210 0%
and buy stocks based on rumors and sell 23 Stock W 1344 1259 -6% 1350 0%
them when the news is made public. This is 24 Stock X 316 276 -13% 327 3%
the time when small retail investors enter 25 Stock Y 268 218 -18% 271 1%
such stocks, which slide down further on the
massive sell-off by traders who are exiting Of the 25 stocks recommended under ‘Winners of 2019’ released on 1st January 2019,
their positions. Thus, entering a stock after 16 stocks have already started to perform. The remaining 9 are bouncing back from
their support levels. Buy them before it’s too late!
the release of the positive news is potentially
the worst possible time. That is the time Book your copy of ‘Winners of 2019’ – a compendium of stocks set to perform in
2019 with their ‘Buy’, ‘Sell’ and ‘Stop Loss’ levels along with 3 quarterly reviews
when traders who bought the stock at lower on 1st April, 1st July and 1st October 2019 to help you invest and repeatedly trade in
levels are exiting and booking profits. these stocks throughout the year.
Company headlines and corporate results do Subscribe to ‘Winners of 2019’ now for just Rs.6000 p.a. and get the 1 st Quarterly
not move markets in the short term but Review, which was released on 1st April 2019.
traders and their speculation do. When a For subscription details, contact us on 022-22616970
share movement seems unusual, it is time to or email us at moneytimes.support@gmail.com
be suspicious. There may be a rumor that is
driving the price of the stock. There is no shortcut to success in this world, which is true of stock markets as well. When
the rumor turns into facts, the stock reverts to its real valuation. Hence, investors must look at the long-term prospects of
a company instead of taking impulsive decisions to make a quick buck.

A Time Communications Publication 10

The more patience you have with quality stocks, the more returns you are bound to get. Wipro has delivered returns of
43% CAGR since 1980. Many such quality stocks like Havells India, Hindustan Unilever, Infosys, Tata Consultancy Services,
Eicher Motors, MRF and Page Industries have delivered bumper returns.
Stocks are bound to seek their right valuations in the long term. Investors must, therefore, prioritize their own stock
research instead of running behind daily stock movements.
Stocks bought at the right time at reasonable valuations have a high probability of yielding positive returns. It requires
immense endurance to keep aside our emotional quotient to deal with the daily price movements of stocks. ‘Power of
Forgetting’ is the key principle to fetch gigantic returns. But choosing the right stock is a must before applying this
principle. The essence lies in how much perseverance investors can show with conviction. While all this is true, it is equally
important to understand whether the selected investment can sustain for a long period as many stocks have eroded
investor wealth, which is why it is equally important to review your investments from time to time in order to avoid losses.
Investors nowadays do not believe in stock research and rely on the ‘tips’ that they receive either from friends, family or
other sources, which is very injurious to financial health. Stock analysis is crucial for spotting the right stocks that can
create wealth. One must understand that stock price movements are influenced by market sentiment in the short-term
but in the long run, the market price of a stock will move towards its intrinsic value. Hence, analyzing the fundamentals of
a company is very important for reaping good returns. Therefore, stock valuation should be the rationale behind your
investment decision and not the daily price movements.
Remember:
1. Come what may, valuations will always prevail;
2. Buy growth-oriented businesses at sensible prices;
3. Think sensibly, not emotionally;
4. Do your own study;
5. And finally, apply the ‘Power of Forgetting’ in the right spirit.
Invest wisely, not emotionally!

STOCK ANALYSIS

Firstsource Solutions Ltd

(BSE Code: 532809) (CMP: Rs.50.75) (FV: Rs.10)
By Rahul Sharma
Mumbai-based Firstsource Solutions Ltd (FSL) is a leading Business Process Management (BPM) company that provides
customer-centric business process services. It offers customized business process management to customers in various
sectors such as banking and financial services, customer services, telecom and media, healthcare, etc. Besides India, it has
operations in USA, Ireland, UK and Philippines.
In Q3FY19, FSL reported 8% lower revenue of Rs.968 crore with 6% higher PAT of Rs.98 crore. Margins came in higher at
14.3% v/s our estimate of 13.6%. There are certain headwinds from the revenue perspective. However, with an optimistic
outlook on digital revenues and the BFSI and healthcare sectors, we expect accelerated growth of 8.2% CAGR in revenue
to Rs.4477 crore in the next two years with an EBITDA margin of 14.5% by FY21.
The EBITDA margin in 9MFY19 was below our expectations though the performance in 9MFY19 (average of 13.9%) was
encouraging compared to 9MFY18 (average of 12.4%). Taking into account the nine month’s trajectory, we expect FY19
to clock an EBITDA margin of 13.7%. Going ahead, the management expects the margin expansion trajectory to continue
led by the high margin digital business.
Conclusion: The recent correction in FSL’s share price has made the valuations attractive. At the CMP, the stock trades at
8x FY21E EPS. Hence, we have a ‘Buy’ on the stock with a price target of Rs.60 in the next few months.

EXPERT EYE
By Vihari

Yes Bank: Banking on growth

A Time Communications Publication 11

(BSE Code: 532648) (CMP Rs.164) (FV Rs.2)
The stock has fallen sharply by about 30% due to poor Q4FY19 results on account of higher provisioning, lower other income
and worsening of overall asset quality. The stock recently hit a high of Rs.285 and it has the potential to rise again by over
30% in the short-to-medium term.
Yes Bank, India's fourth largest private sector bank, is an outcome of the professional entrepreneurship of Rana Kapoor
(Founder) and his top management team to establish a high quality, customer centric, service driven, private sector Indian
bank catering to the ‘Future Businesses of India’. As at 31 March 2019, it had a network of 1,120 branches and 1,456 ATMs
at 53 Metro locations across 29 States and 7 Union Territories.
Ravneet Gill, who has over 30 years of experience in the banking industry and has led Deutsche Bank (India) for over six
years now, has been appointed as the Managing Director and CEO of Yes Bank w.e.f. 1 March 2019.
In Q4FY19, advances grew 18.7% YoY to Rs.241499 crore. The retail segment grew sharply by 62.3% YoY with the
proportion of retail advances rising to 16.7%. The management aims 20-25% YoY growth in the credit book in the medium
term. Other income declined 62% YoY to Rs.531 crore due to a reversal in corporate fees and slowdown in treasury. Retail
fees, however, continued to grow at a healthy pace of 17% YoY.
Deposits grew 13.4% YoY to Rs.227610 crore, led by slower accretion in CASA and term deposits. CASA ratio declined 20
bps to 33.1%. Retail term deposits (TD) grew 40.2% YoY and 8.3% QoQ. CASA and retail TD constitute 58.8% of the overall
deposits. Provisions rose sharply (8x YoY and 6x QoQ) to Rs.3661.7 crore in Q4FY19 and Rs.5800 crore in FY19. The Bank
has identified a stressed pool of Rs.10000 crore against which an additional contingent provision of Rs.2100 crore has
been taken. As a result, the bank reported a net loss of Rs.1507 crore in Q4FY19. FY19 PAT came in at Rs.1710 crore with
an EPS of Rs.7.4.
Slippages increased to Rs.3481 crore in Q4FY19 from Rs.2297 crore in Q3FY19 mainly due to the Bank’s exposure to Jet
Airways and IL&FS slipping into the NPA category. The Bank has an exposure of Rs.2528 crore to a beleaguered IL&FS
conglomerate of which it has classified Rs.2442 crore as NPA. Gross NPA ratio rose 112 bps sequentially to 3.22% while
the net NPA ratio rose 68 bps to 1.86%.
Net interest income (NII) grew 16.3% YoY to Rs.2506 crore in Q4FY19 and 26.8% YoY to Rs.9809 crore in FY19. Net
interest margin (NIM) stood at 3.1% and 3.2% for Q4FY19 and FY19 respectively. Non-interest income stood at Rs.532
crore in Q4FY19 and at Rs.4590 crore in FY19.
With an equity capital of Rs.463 crore and reserves of Rs.26424 crore, the Bank’s share book value works out to Rs.116.
The promoters hold 19.8% of the equity capital, FIIs hold 40.3%, Mutual Funds hold 9.5%, DIs hold 11.1% and PCBs hold
2.5%, which leaves 16.8% stake with the investing public.
Yes Bank is a leveraged play on the economic growth revival and lower interest rates and its outlook continues to improve,
albeit gradually. Post de-regulation of savings bank rates, the Bank’s major focus is on improving the CASA ratio through
its celebrated offering of 6% interest on savings balances.
NIMs will continue to improve in the medium-term and with healthy fee incomes, it could lead to ROEs of 20-22% by
FY20E. The Bank targets to achieve NIM of 4% by 2020 v/s 3.2% currently. The improving CASA ratio and enhanced
organic priority sector loan generation is expected to support improvement in margins. The management expects CASA
ratio to touch 40% by FY20-21 with a continued focus on diversification in liabilities and on building a more granular
asset base. The Bank has been incrementally lending to low ticket size SMEs and MSMEs as demand in the large corporate
segment shifts to corporate bonds.
According to a report by Mint, the new CEO Ravneet
Gill plans to replace 14 top executives of the Bank in
WANTED!
order to improve corporate governance, risk Trainee Journalist
management and credit disbursal policies at the
Bank. Money Times has a vacancy for a Journalist
“RBI advised the board and Gill to review the Trainee fluent in written and spoken English
decisions taken by Rana Kapoor both in terms of and conversant with computers. Commerce
business and key management-level hires," a source graduates living in South Mumbai will be
told the paper.
Yes Bank’s key competitive strength lies in its book,
preferred. Freshers are also welcome.
which remains predominantly wholesale and it Interested candidates kindly send your resume to
continues to leverage that. Despite being a relatively moneytimes@gmail.com.
new bank, its domestic corporate book is now nearly

A Time Communications Publication 12

as large as many of the older banks. This will probably be the fastest growing segment over the next 2-3 years (over retail)
and the Bank’s positioning in this segment is better.
Given its robust profitability profile, strong outlook on balance sheet growth and proven record of accomplishment, the
stock is likely to get re-rated going forward. At the CMP of Rs.164, the stock trades at an attractive P/BV ratio of 1.5x.
Considering the strong action in provisioning and cleaning of balance sheet, a reputed brokerage house has recommended
this stock for a price target of Rs.275. The stock’s 52-week high/ low is Rs.404/147.

TECHNO FUNDA
By Nayan Patel

Virinchi Ltd
(BSE Code: 532372) (CMP: Rs.75.45) (FV: Rs.10)
Incorporated in 1990, Hyderabad-based Virinchi Ltd provides consultancy services in the field of information technology
(IT) and infrastructure. It operates through four segments: Computer Software and Services; Healthcare Services; IT
Enabled Services (ITES); and Infrastructure and Real Estate Services. Its products include QFund, an end-to-end loan
management software; vCard, an instant settlement credit card for digital payments, credit services and advertising
services; PayEz, a point of sale credit service IT platform that offers lead sourcing, loan generation, machine learning
underwriting, lender aggregation and integrated loan servicing for consumer loans; and V23, a healthcare mobile
application that provides access to specialist doctors, pharmacies and diagnostic tests at home. In addition, it owns and
operates a 350-bed Hospital and offers health management services through aggregated analytics on biomarkers and
clinical outcomes and provides healthcare skill development services.
Virinchi has an equity capital of Rs.31.17 crore supported by reserves of Rs.215.48 crore. The promoters hold 43.58% of
the equity capital, which leaves 56.34% stake with the investing public. With a share book value of Rs.78.5, the stock trades
at an attractive P/BV ratio of less than 1x.
For Q3F19, Virinchi posted 71% higher PAT of Rs.15.22 crore Financial Performance: (Rs. in crore)
on 24% higher income of Rs.106.06 crore and an EPS of
Particulars Q3FY19 Q3FY18 9MFY19 9MFY18
Rs.4.88. For 9MFY19, it posted 75% higher PAT of Rs.42.03
crore on 21% higher income of Rs.306.26 crore and an EPS of Revenue 106.06 85.61 306.26 254.06
Rs.13.49. Its 9MFY19 PAT is 27% higher than the PAT PBT 17.22 12.26 50.67 33.18
recorded for full FY18. Tax 2.01 3.38 8.64 9.2
Currently, the stock trades cheap at a P/E of 4.7x and at 40% PAT 15.22 8.89 42.03 23.99
discount to its 52-week high of Rs.127. Investors can buy this EPS (Rs.) 4.88 3.32 13.49 8.95
stock with a stop loss of Rs.65. On the upper side, it could
zoom to Rs.100-110 levels in the medium-to-long term.
*****

Jagsonpal Pharmaceuticals Ltd

(BSE Code: 507789) (CMP: Rs.26.60) (FV: Rs.5)
Incorporated in 1964, Delhi-based Jagsonpal Pharmaceuticals Ltd (JPL) develops active pharmaceutical ingredients (APIs)
and formulations. It offers formulations for various therapeutic categories such as anabolic steroids, analgesics,
anaesthetics, anti-diabetics, anti-emetics, etc. Its sells its products through agents under various brands such as Lycored,
Maintane, Metadec, Metabol, Doxypal DR, Parvon, Indocap SR, etc.
JPL has an equity capital of Rs.13.1 crore supported by
reserves of Rs.77.11 crore. The promoters hold 70.26% of the Financial Performance: (Rs. in crore)
equity capital, which leaves 29.74% stake with the investing Particulars Q3FY19 Q3FY18 9MFY19 9MFY18
public. The promoters have increased their stake by 1.09% in Revenue 41.9 38.06 128.42 93.93
the last nine months. With a share book value of Rs.34, its PBT 2.14 -2.29 5.27 -10.42
P/BV ratio works out to just 0.77x.
Tax 0.4 -0.04 1.02 -0.14
JPL witnessed a turnaround in Q3FY19 with a PAT of Rs.1.74
PAT 1.74 -2.25 4.24 -10.28
crore against a loss of Rs.2.25 in Q3FY18 on 11% higher sales
of Rs.41.9 crore and an EPS of Re.0.67. In 9MFY19, it posted a EPS (Rs.) 0.67 -0.86 1.62 -3.92

A Time Communications Publication 13

PAT of Rs.4.24 crore against a loss of Rs.10.28 crore in 9MFY18 on 37% higher sales of Rs.128.42 crore and an EPS of
Rs.1.62.
Currently, the stock trades at 24% discount to its 52-week high of Rs.34.95 and looks quite attractive at this level based
on its performance parameters. Investors can buy this stock with a stop loss of Rs.20.25. On the upper side, it could zoom
to Rs.37-40 in the medium-to-long term.

BULL’S EYE
Review: Goldiam International recommended at Rs.76.75 on 22 April 2019, zoomed to Rs.118.90 appreciating 55% in just
three weeks!

Reliance Chemotex Industries Ltd

(BSE Code: 503162) (CMP: Rs.80.20) (FV: Rs.10)
By Pratit Nayan Patel
Company Background:
Incorporated in 1977, Reliance Chemotex Industries Ltd (RCIL) manufactures synthetic and blended yarn. It is also
engaged in exports. It operates 53,280 spindles and a high temperature/ high pressure fibre-dyeing plant. It manufactures
100% Polyester, 100% Viscose, 100% Acrylic, 100% Bamboo Viscose as well as Polyester/ Viscose, Polyester/ Acrylic,
Polyester/ Viscose/ Acrylic blended yarns used for knitting, weaving, upholstery, carpet, medical and other industrial
purposes.
Financials: With an equity capital of Rs.3.98 crore and reserves Rs.62.89 crore, RCIL’s share book value works out to
Rs.167.99. Its P/BV ratio stands at just 0.5x. The promoters hold 50.43% of the equity capital, which leaves 49.57% stake
with the investing public.
Performance Review: For FY19, RCIL posted 57% Performance Review: (Rs. in crore)
higher PAT of Rs.4.09 crore on 13% higher sales of
Rs.323.19 crore and an EPS of Rs.10.28. For Q4FY19, Particulars Q4FY19 Q3FY19 Q4FY18 FY19 FY18
it posted 58% higher PAT of Rs.2.48 crore on 15% Total Income 81.02 77.96 70.46 323.19 285.46
higher sales of Rs.81.02 crore and an EPS of Rs.6.23. PBT 3.21 2.13 -1.31 8.04 0.81
It declared a 10% dividend for FY19 along with a Tax 0.73 1.52 -2.88 3.95 1.79
special dividend of 5%.
PAT 2.48 0.61 1.57 4.09 2.6
Industry Outlook: India is the second largest textile
exporter in the world. The textile industry accounts EPS (Rs.) 6.23 1.52 3.94 10.28 6.53
for 10% of the country’s industrial production and contributes 2% to the GDP. According to IBEF, the $120 billion Indian
textile industry is projected to grow to $230 billion by 2020. The $18 billion technical textile industry is projected to grow
at 13% CAGR in the next 5 years.
Investment Rationale: RCIL reduced its debt significantly by Rs.10.75 crore in FY19. Consequently, its net long-term
debt:equity ratio (DER) improved from 0.24x in FY18 to 0.13x in FY19. The Board recently approved raising of funds via
a rights issue. The management plans to modernize two units in order to enhance the annual production capacity by 12-
13%. During the year, Rajasthan State Industrial Development & Investment Corporation (RIICO) approved a term loan of
~Rs.35 crore to fund this modernization programme. This loan qualifies under the Rajasthan Investment Promotion
Scheme 2014 (RIPS-2014) for interest subsidy of 7% for five years from the start of commercial production. Post
completion, the management expects significant savings in power consumption and repairs and maintenance cost which
in turn will result in higher operating profits.
Conclusion: Currently, the RCIL share trades at a P/E of 7.8x and is available at 25% discount to its 52-week high of
Rs.106.5. The stock looks quite attractive at this level based on its financial parameters. Investors can accumulate the stock
with a stop loss of Rs.60 for a price target of Rs.115-125 in the next 12-15 months. The stock’s 52-week high/ low is
Rs.106.5/ Rs.57 and its market cap stands at Rs.32 crore.

A Time Communications Publication 14

A Time Communications Publication 15
 Early Bird Gains – A Performance Review
Early Bird Gains (EBG), our newsletter specializing in multi-baggers, has performed well for the
last 15 years. Here’s the performance review of the 52 stocks featured between 27th September
2017 and 26th September 2018.
Issue Date of Recomm. Highest Gain
Scrip Name
No. Recomm. Price (Rs.) since (Rs.) %
1 GHCL 27-09-17 210.55 357.50 70
2 Gitanjali Gems 04-10-17 67.20 104.80 56
3 Vivimed Labs 11-10-17 132.85 137.25 3
4 Mangalam Organics 18-10-17 86 510 493
5 Kriti Nutrients 25-10-17 23 56.95 148
6 Premier Explosives 01-11-17 427.70 536.25 25
7 N.R. Agarwal Industries 08-11-17 297.80 615.85 107
8 Sintex Industries 15-11-17 25.20 28 11
9 Larsen & Toubro Infotech 22-11-17 975.85 1469.60 51
10 KPIT Technologies 29-11-17 177.70 314.80 77
11 Talwalkar Better Value Fitness 06-12-17 302.15 358.05 18
12 Security and Intelligence Services (India) 13-12-17 1261.25 1404.80 11
13 Elnet Technologies 20-12-17 190.40 204 7
14 Kellton Tech Solutions 27-12-17 103.10 137 33
15 Lupin 03-01-18 875.70 986 13
16 International Paper APPM 10-01-18 383.35 591.15 54
17 Star Paper Mills 17-01-18 293.10 318.20 8
18 Steel Strips Wheels 24-01-18 1124.30 1473.70 31
19 Yes Bank 31-01-18 353.45 404 14
20 Lincoln Pharmaceuticals 07-02-18 215.10 314 46
21 Dewan Housing Finance Corporation 14-02-18 524.55 690 31
22 Just Dial 21-02-18 439.30 637.80 45
23 Jindal Poly Films 28-02-18 351.60 362.55 3
24 KSE 07-03-18 2497.55 4000 60
25 Rico Auto Industries 14-03-18 71.60 87.25 22
26 Virinchi 21-03-18 105.60 137 30
27 Honeywell Automation India 28-03-18 16466 24178 47
28 Jay Bharat Maruti 04-04-18 482.85 528.90 9
29 Bodal Chemicals 11-04-18 137.10 156.25 14
30 Simmonds Marshall 18-04-18 125.80 154.90 23
31 Mahanagar Gas 25-04-18 908.35 984.40 8
32 Hinduja Global Solutions 02-05-18 957.05 974.75 2
33 Mishra Dhatu Nigam 09-05-18 135.55 160.40 18
34 Pondy Oxides & Chemicals 16-05-18 414.10 452.70 9
35 Manaksia 23-05-18 54.90 60 9
36 RACL Geartech 30-05-18 65.40 75.50 15
37 Sintex Industries 06-06-18 15.05 17.85 19
38 Natco Pharma 13-06-18 791.95 849 7
39 UFO Moviez India 20-06-18 366.60 396 8
40 Sharda Cropchem 27-06-18 365.45 424 16
41 Vindhya Telelinks 04-07-18 1008.55 1698.80 68
42 Pix Transmissions 11-07-18 174.40 284.40 63
43 Meghmani Organics 18-07-18 86.80 99.05 14
44 Federal Bank 25-07-18 87.70 92.75 6
45 Everest Industries 01-08-18 486.15 597.50 23
46 Rites 08-08-18 275.25 326.55 19
47 International Paper APPM 15-08-18 459.45 591.15 29
48 Patel Engineering 22-08-18 52.30 53 1
49 Jindal Poly Films 29-08-18 280.15 324.95 16

A Time Communications Publication 16

 50 Shreyans Industries 05-09-18 179.30 202.35 13
51 Eimco Elecon (India) 12-09-18 368.65 390 6
52 Jasch Industries 19-09-18 62.30 67 7

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A Time Communications Publication 18