Vol.

: 263
5th October,2015

Index

MarketView
1 Market View:

Corporate India is cautiously optimistic

CompanyUpdate
2
The much awaited rate cut decision by RBI is materialized on 29th September, 2015 and RBI has moved

aggressively with 0.50% repo rate cut to kick start the stagnating economy. The expectation of RBI on
Aroundthe
inflation front is also moderated going forward. The reactions to this much awaited move, was mixed to
Economy

3 positive from corporate India.

KnowledgeCorner 3 Today the elite group of corporate giants like Dilip Sanghvi, Shikha Sharma, Uday Kotak, and others

have expressed their opinion on the current state of economy and the road ahead. All most all are
MutualFund
4 cautiously optimistic and agreed on following points:

CommodityCorner5
The Government is taking the steps in right direction.

The various schemes formulated by the government and the initiative taken to project a highly
positive picture of India to the world is commendable and can change the view of the world
ForexCorner
6
about India with regard to taxation issues, ease of doing business and opportunities of doing

business in India.
ReportCard
7
This is rightly reflected in the quantum of FDI received by India in 2nd quarter. India is No. 1 in

the world in getting the FDI in July Sept quarter.

They expressed that there is need for greater co-ordination to address the regulatory issues
Editor&Contributor
amongst ministries, regulatory and the business community to get desired result in expected
MargiShah
time.

All of them firmly believe that the Government needs to be given time to prove its policies and

commitments.
SpecialContributors
The connect and togetherness they are feeling with the Government is unprecedented and
that is the great thing ever happened in India.
AsheshTrivedi
AdityaNahar

The conclusion of the discussion is that the launching pad is ready; the real jump can happen
within 18 to 24 months.

Kamal Jhaveri

MD- Jhaveri Securities

Forsuggestions,feedback
andqueries
jstreet@jhaveritrade.com

-1-

Vol.: 263
5th October,2015

Company Update : SRF Ltd.

Financial Basics

Company Basics
503806

FV (`)
EPS (`)

10.00
52.74

NSE Symbol

SRF

P/E (x)

21.74

EQUITY (` in Cr.)

57.42

P/BV (x)
BETA
RONW (%)

2.90
1.3170
10.52

BSE Code

MKT.CAP (` in Cr.)

6582.92

Share Holding Pattern

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

% Holding
16.04
12.59
52.38
0.00
15.17
3.82

Valuation : SRF Ltd. is currently trading at 15.74x FY16E EPS of Rs.72.80 and 12.51x FY17E EPS of
Rs. 91.60, valued the stock at 15xFY17E (three year average) with the target price of Rs. 1374.

Company overview
SRF Limited is multi-product, multi-business organization and industrial intermediate segment. The company
was incorporated in 1970. The business divisions of the company include Technical Textile Business, Chemical
Business, Packaging Films Business and Engineering Plastics Business. The company has 12 production plant
across the globe. Out of 12 nine in India and the remaining in Dubai, South Africa, Thailand. It is market leader in
majority of its product. SRF has strong presence in international market with exporting around 75 countries.
Investment Rational
SRF is one of the leading and sole domestic supplier of HFC 134 a and growth in passenger vehicles spur
sales
This elements contributed 23% of SRFs fluorochemicals revenues. The market-size of HFC-134a in India is
8.0KTPA, which is expected to rise with the rise of automobile and refrigerator sales. We estimate HFC-134as
consumption to clock 10.1% CAGR till FY20 as sales of passenger vehicles pick up from FY17 (HFC-134a gas is
used as refrigerants in cars). With a capacity of 17.5KTPA, SRF is the sole domestic producer of R-134a and its
market share increased to 41% in FY15. Imports have broadly remained flat at ~4,700 MT during the past 5 years.
Specialty Chemical is on strong footing
SRF is on a strong footing in Specialty Chemicals, as it is knowledge driven and has high entry barriers. We expect
the business to grow at a CAGR of 28% over FY15-17 to `1005.40 Cr. Given that it is a niche business, we believe it
will continue to enjoy PBIT margin of 35%.

Packaging Business has a good strength

The total demand for films in India is 360,000 MT/year and is growing at 10%. Capacity utilization swings
between 73% and 86%. Currently, the industry is operating at peak utilization of ~86%. With higher capacity
utilization, film manufacturers have begun enjoying higher margins.
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Vol.: 263
5th October,2015

Around The World

Weekly Market Recap :

The market edged higher last week after the Reserve Bank of India (RBI) surprised financial markets by announcing a
steeper-than-expected 50 basis points reduction in its benchmark lending rate viz. the repo rate after a regular monetary
policy review on Tuesday, 29 September 2015.

The RBI marked down slightly the FY16 gross domestic product (GDP) growth target to 7.4% from 7.6% earlier as global
growth and trade were slower than initial expectations, a continuing lack of appetite for new investment in the private
sector, the constraint imposed by stressed assets on bank lending and waning business confidence.

Market Eye Week ahead :

The Institute of Supply Management in the US will unveil its non-manufacturing purchasing managers index figures for
September 2015 on Monday, 5 October 2015. The index is calculated as an indicator of the overall economic condition for
the non-manufacturing sector.

The Reserve Bank of Australia (RBA) will hold its interest rate meeting on Monday, 5 October 2015.

Nikkei India Services PMI for September 2015 is due on Tuesday, 6 October 2015. The seasonally adjusted Nikkei
Services Business Activity index rose to 51.8 in August 2015, from 50.8 in July 2015.

Knowledge Corner :
Securities-Based Lending

The practice of making loans using securities as collateral. Securities-based lending (SBL) provides ready access to capital that can
be used for almost any purpose such as buying real estate, purchasing personal property like jewelry or a sports car, or investing in a
business. The only restrictions are other securities-based transactions like buying shares or repaying a margin loan.

Also known as "securities-based borrowing" or "non purpose lending,"

SBL is separate and distinct from "securities lending." Securities-based lending became increasingly popular with U.S. broker-dealers
and banks from 2011 onwards as an additional revenue stream, facilitated by the steady rise in equities and record-low interest rates.

- 3-

Vol.: 204
Vol.: 263
18th August, 2014
5th October,2015

Mutual Fund Corner

Top 10 Sector Break-Ups

Fund Name
Scheme Name

Axis Focused 25 Fund

AMC

Fund (%)
Financial

28.94

Axis Asset Management Company Ltd

Services

17.09

Type

Multi Cap

Technology

11.24

Automobile

10.91

Category

Open-ended and Equity

Diversified

9.79

Launch Date

June 2012

Engineering

8.48

Fund Manager

Sudhanshu Asthana

Healthcare

5.99

Textiles

3.96

Metals

2.38

Net Assets
(` In crore )

Rs. 304.8 crore as on Aug 31, 2015

History

2012

NAV(Rs)

11.51

TotalReturn(%)

2013

2014

2015

12.18

16.90

17.39

5.82

38.75

2.90

+/CNXNifty

+/CNXMNC

-0.94

7.36

6.91

Rank(Fund/Category)

34/74

87/119

71/187

52WeekHigh(Rs)

12.24

17.15

18.82

52WeekLow(Rs)

10.27

11.49

16.56

Risk Analysis
Volatility Measures
Standard Deviation
Sharpe Ratio

13.73
0.69

Beta

R-Squared
Alpha

Composition (%)
Equity

98.78

NetAssets(Rs.Cr)

147.41

116.94

180.29

Debt

0.07

ExpenseRatio(%)

2.36

3.13

3.16

Cash

1.15

Fund Style
Investment Style
Growth

Blend

Value

Medium
Small

Capitalization

Large

Source : - www.valueresearchonline.com

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Vol.: 204
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18th August, 2014
5th October,2015

Commodity Corner
BULLION
FUNDAMENTAL: Bullion prices last week seen under pressure after data pointing to strong gains in U.S. private sector jobs growth last
month underlined expectations for higher interest rates from the Federal Reserve. The upbeat data indicated that the recovery in the labor market is continuing to gain momentum. The U.S. Department of Labor's Bureau of Labor Statistics said non-farm payrolls for the month of September
increased by 142,000, significantly below consensus estimates from analysts of a 203,000 gain. The figure also fell well below low end of estimates
of an 180,000 increase. Severe declines in manufacturing and mining employment restrained overall job gains as the sectors lost 9,000 and
13,000 positions respectively. A month earlier, the manufacturing industry lost 18,000 jobs in August, while mining positions nationwide decreased by
22,000. There were other signs of weakness within the dreary report. After surging by 0.3% on a monthly basis in August, hourly wages
remained unchanged in September. On a yearly basis, hourly wages were only up 2.2% over the last 12 months. The labor participation rate also fell by
0.2% to 62.4%, providing indications that that the labor market is shrinking. The Fed held off from raising rates at its September meeting amid
concerns over the outlook for global growth. However, Fed Chair Janet Yellen has since indicated that the bank remains on track for a rate lift-off this
year. Gold prices in India continued to trade at a discount for a fourth straight week, while premiums in China fell before it went on a week-long
national holiday, in signs of sluggish demand in top consuming region Asia. Persistent weakness in India and China, which together account for
about half of global demand, could add more pressure on gold prices, already reeling from a looming U.S. interest rate hike. In India, retail demand
dwindled due to the start of Shradh, a two-week period considered an inauspicious time to buy gold, property or any big purchases The U.S.
Mint sold 14.26 million ounces of American Eagle silver coins in the third quarter, the highest on records going back to 1986.
RECOMMENDATION : BUY GOLD @ 26100 SL 25750 TGT 26550-26800.BUY SILVER @ 34500 SL 34000 TGT 35200-36000.

BASE METALS
FUNDAMENTAL: Bullion prices last week seen under pressure after data pointing to strong gains in U.S. private sector jobs growth last month underlined expectations for higher interest rates from the Federal Reserve. The upbeat data indicated that the recovery in the labor market is continuing to
gain momentum. The U.S. Department of Labor's Bureau of Labor Statistics said non-farm payrolls for the month of September increased by 142,000,
significantly below consensus estimates from analysts of a 203,000 gain. The figure also fell well below low end of estimates of an 180,000 increase.
Severe declines in manufacturing and mining employment restrained overall job gains as the sectors lost 9,000 and 13,000 positions respectively. A
month earlier, the manufacturing industry lost 18,000 jobs in August, while mining positions nationwide decreased by 22,000. There were other signs of
weakness within the dreary report. After surging by 0.3% on a monthly basis in August, hourly wages remained unchanged in September. On a yearly
basis, hourly wages were only up 2.2% over the last 12 months. The labor participation rate also fell by 0.2% to 62.4%, providing indications that that
the labor market is shrinking. The Fed held off from raising rates at its September meeting amid concerns over the outlook for global growth. However,
Fed Chair Janet Yellen has since indicated that the bank remains on track for a rate lift-off this year. Gold prices in India continued to trade at a discount
for a fourth straight week, while premiums in China fell before it went on a week-long national holiday, in signs of sluggish demand in top consuming
region Asia. Persistent weakness in India and China, which together account for about half of global demand, could add more pressure on gold prices,
already reeling from a looming U.S. interest rate hike. In India, retail demand dwindled due to the start of Shradh, a two-week period considered an
inauspicious time to buy gold, property or any big purchases. The global silver-coin market is in the grips of an unprecedented supply squeeze, forcing
some mints to ration sales and step up overtime while sending U.S. buyers racing abroad to fulfill a sudden surge in demand. The U.S. Mint began
setting weekly sales quotas for its flagship American Eagle silver coins in July because it can't meet demand, and the Canadian mint followed suit after
record monthly sales in July.
RECOMMENDATION : SELL COPPER @ 345 SL 356 TGT 336-328.SELL ZINC @ 112 SL 115 TGT 109-105.SELL NICKEL @ 690 SL 710 TGT
650-630.SELL ALUMINIUM @ 104 SL 106.50 TGT 101-99.SELL LEAD @ 111 SL 114 TGT 108-104.

ENERGY
FUNDAMENTAL: Crude oil prices dropped as the government's storm monitor altered forecasts for the path of the latest U.S. hurricane. Pressure also
seen on prices after crude inventories rose considerably last week adding to the glut of oversupply in domestic energy markets. U.S. energy companies this week cut the number of rigs drilling for oil by 26, a weekly survey by oil services company Baker Hughes showed. In its Weekly Petroleum Status Report, the U.S. Energy Information Administration (EIA) said U.S. crude stockpiles rose by 4.0 million barrels for the week ending on Sept.
25, significantly above estimates for a 0.5 million draw. It halts a two week streak of draws of at least 1.9 million barrels. At 457.9 million barrels, U.S. crude inventories remain near its highest level at this time of the year in at least 80 years. U.S. production, meanwhile, fell sharply by 40,000
barrels per day last week, dropping below 9.1 million bpd for the first time since last November. Crashing oil prices have forced U.S. shale producers to
slow output dramatically from its levels over the summer when it surged to 40-year highs. In a reminder that a supply glut persists, U.S. crude inventories rose by 4 million barrels to 457.9 million in the week to Sept. 25, more than expected, a government report said. Naturalgas last week
dropped by more than seven percent as mild U.S. weather forecasts for the first half of October dashed hopes of early heating demand despite
data showed that U.S. natural gas supplies increased less than expected last week. In its weekly report the Energy Information Administration said
natural gas storage in the week ended September 25 rose 98 billion cubic feet, compared to expectations for an increase of 100 bcf. Total U.S. natural
gas storage stood at 3,538 bcf the EIA said. Stocks were 454 Bcf higher than last year at this time and 152 Bcf above the 5-year average of 3,386 Bcf.
EIA data shows that power plants account for approximately 32% of gas demand in the U.S. Gas production from Pennsylvania, the second-largest
producing state by volume, rose 3.4 percent in July to 12.727 billion cubic feet a day from the previous month, the EIA said Sept. 30 in its monthly
EIA-914 production report. Gross gas output in the U.S. fell 0.3 percent in July to 89.460 billion cubic feet a day, EIA data show.
RECOMMENDATION : BUY CRUDE OIL @ 2940 SL 2850 TGT 3080-3200.SELL NATURAL GAS @ 170 SL 178 TGT 164-156.

- 5-

Vol.: 263
5th October,2015

Commodity Corner

Forex Corner

Market Recap :

The Indian rupee commenced sharply higher on

Monday, 05 October 2015 on persistent selling of
the greenback by banks and exporters amid weakness in the American currency overseas and higher
domestic equity market.

The Indian unit opened at seven weeks high at

65.25 per dollar. The domestic unit registered an
intraday high and low of 65.21 and 65.34
respectively so far during the day and is currently
quoting at 65.30 as against previous closing level of
65.51.

The dollar index, which measures the US currencys

strength against major currencies, was trading at
95.693, down 0.14% from its previous close of
95.83.

Market Eye Week ahead :

The USD INR pair though inched up little higher from 66.45 to 66.80 but overall moved whole week in line with our expectations and
ended at 65.77 as lack of confidence among the bulls was seen in last week.The rupee continued to show strength and appreciated
to a six-week high against the US dollar in Thursday's session, holding on to early gains, helped by strong custodian inflows in the
holiday shortened week and improved global risk appetite.
The dollar slumped on Friday, stung by a September U.S. jobs report depicting slower hiring that added to doubts the economy was
strong enough for the Federal Reserve to raise U.S. interest rates later this year. We expect USDINR is likely to trade negative on the
back of weaker than expected US employment data.

USD/INR
Level

S2

S1

CP

R1

R2

High

Low

Close

USD/INR

65.46

65.10

66.13

66.49

67.16

66.80

65.77

65.82

EUR/INR
Level

S2

S1

CP

R1

R2

High

Low

Close

EUR/INR

72.70

72.02

73.96

74.64

75.90

75.21

73.27

73.39

GBP/INR
Level

S2

S1

CP

R1

R2

High

Low

Close

GBP/INR

98.88

98.07

100.24

101.05

102.40

101.60

99.43

99.69

Level

S2

S1

CP

R1

R2

High

Low

Close

JPY/INR

54.42

53.95

55.17

55.64

56.39

55.91

54.69

54.90

JPY/INR

-- 46--

Vol.: 263
5th October,2015

J Street Recommendations Report Card

A pullback is currently being witnessed and higher range of 8018 - 8100 - 8160 can be tested. The weekly gap is at
8091-8225.Traders long in index and index related stocks need to take profits as the Nifty hits the gap of 8091-8225
range. Further rally can happen on rise and close above 8225. On downside, immediate Support will be at 8025-79007830. Traders can form short position on fall and close below 8000 as downside momentum will be restored.
Trend in global markets, investment by foreign portfolio investors (FPIs), the movement of rupee against the dollar and
crude oil price movement will dictate trend on the bourses in the trading week ahead. Amongst lack of any triggers in the
domestic market, major focus will be on the global cues next week.

Top Fundamental Stocks

Rec. Date

CMP on Rec.

CMP

Target

Absolute
Return @
CMP

SRFLtd.

21/09/2015

1140

1187

1374

4%

Buy

Ahluwaliacontracts

24/08/2015

235

270

368

15%

Buy

SunPharma

03/07/2015

831

898

1041

8%

Buy

InfiniteComputerSol.

20/07/2015

190

186

255

-2%

Buy

NitinSpinnersLtd.

06/07/2015

79

62

94

-22%

Buy

BankofBaroda

01/06/2015

163

187

217

14%

Buy

AmbikaCottonMills

18/05/2015

880

849

1149

-3%

Buy

SadbhavEngineering
Ltd.

04/05/2015

298

299

430

0%

Buy

CARELtd.

20/04/2015

1666

1160

2250

-30%

Buy

SetcoAutomotiveLtd.

30/03/2015

242

235

304

-3%

Buy

Omkarspeciality
Chemicals

16/03/2015

152

202

251

33%

Buy

DHFL

16/02/2015

252

219

368

-13%

Buy

TVTodayNetwork

27/01/2015

222

280

337

26%

Buy

M&M

12/1/2015

1238

1270

1452

3%

Buy

HavellsIndia

27/10/2014

274

259

346

-6%

Buy

AllCargoLogistics

05/08/2014

260

300

342

15%

Buy

PTCIndiaFin.Ser.

07/07/2014

39

47

45

20%

Exit

AdaniPort

05/07/2014

280

317

347

13%

Buy

L&T

05/07/2014

1750

1551

1866

-11%

Buy

Stocks

Status

It'snotimportantwhetheryouarerightorwrong,Itsabouthowmuchmoneyyoumakewhenyou'rerightandhow
muchyoulosewhenyou'rewrong.
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Vol.: 263
5th October,2015