Vol.

: 313
26th Sep,2016

Index
Market View

1 Market View

Company Update

C H AN G E D

Around the
Economy

Knowledge Corner

Mutual Fund
Commodity Corner
Forex Corner

T W O M AJ O R C E N T R AL B AN K S H A V E K E P T T H E R A T E S U N -

The Bank of Japan has kept the rate unchanged and promised

to do whatever necessary depending on the flow of data. W hile the

4 US Fed has also kept the rates unchanged, the commentary by The
5 Chairperson was little hawkish. They have said that the chances of
rate hike in December meeting has strengthened. So the world mar6
ket is relieved temporarily. At local level many positive events have

Report Card

7 happened. The first meeting of newly constituted GST council was a

Short Term Call Status

Editor & Contributor

Darshana Mishra

grand success as they have decided the threshold of Rs. 20/ - lakhs
turnover above which the GST will be applicable. In next meetings,
on September 30th and October 17th the draft rules and all important
GST rates will be decided. Secondly SEBI has relaxed certain
norms for REITs and infrastructure investment trust to facilitate the

Special Contributors
Ashesh Trivedi
Dhaval Ghodasara

growth and allowed foreign portfolio investors to directly trade in

debt market. Mega IPO of recent times ICICI Prudential is also
oversubscribed reflecting the confidence of investors in the market.
The only concern at present is absence of any big trigger except
the GST development in the market. Technically the market is stuck
in the tight range and is unable to go beyond all important level of
8950. A healthy correction is good for the market to conquer new

For suggestions, feedback

and queries
jstreet@jhaveritrade.com

highs. There is a strong resistance at 8950 and strong support at

8860-8800-8760.

Kamal Jhaveri
MD- Jhaveri Securities

-1-

Vol.: 313
26th Sep,2016

Company Update : Alembic Pharmaceuticals Limited.

Company Basics
BSE Code
NSE Symbol

533573
APLLTD

EQUITY (` in Cr.)
MKT.CAP (` in Cr.)

37.7
11818

Financial Basics
FV (`)
EPS (`) (TTM)
P/E (x) (TTM)

2.00
38.02
16.4

P/BV (x) (TTM)

BETA
RONW (%)

7.3
0.7
57.9

Share Holding Pattern

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

% Holding
11.10
3.5
74.10
0.00
11.30

Outlook

and valuation : We expect revenues to post 4% CAGR growth over FY16-18E on a high base of FY16 with EBITDA
margins set to decline post robust planned R&D investments and elevated capex plan from a high of 32% in FY16 to 21% in
FY18E. At CMP of INR 627, the stock is trading at 21.5x FY18E EPS. We maintain our earnings estimates and rate the stock BUY valuing it (at a higher multiple given the enhanced potential of its pipeline) at 22x of FY18E EPS of INR 29.1 (earlier FY18E EPS of INR
28.3), to arrive at a revised Target Price of 732 .
Company Overview :
Alembic Pharmaceuticals is a leading pharmaceutical company in India. The company is vertically integrated to develop pharmaceutical substances and intermediates. The company is a market leader in the
Macrolides segment of anti-infective drugs in India. Its manufacturing facilities are located in Vadodara and in
Baddi (Himachal Pradesh; for the domestic and non-regulated export market). The Panelav facility houses the
API and formulation manufacturing (both USFDA approved) plants.
Investment rational :
Focus on chronic segment to drive domestic formulation growth :
Alembic Pharma has been restructuring its business portfolio, which would aid in improving its growth and operating performance. The companys domestic formulation business contributed 44% to its total sales in FY2016. The company has a
strong field force of ~3,600 medical representatives. Going forward, the company expects its domestic formulation business to at least grow in line with the industry growth rate, before it sees an improvement in the share of the high growth
chronic segment. For FY2016-18E, we expect the domestic formulation business to grow at a CAGR of 15.0%.
Exports- US the key growth driver:
On the exports front, the formulation business contributed by 30% to the total turnover, with majority of the contribution coming from Europe and the US. In the US, the company has filed for ~76 ANDAs till date and received
47 approvals. The company, going forward, expects to keep its momentum high in terms of number of filings,
by filing around 10-12 ANDAs per annum. For FY2016-18E, we expect exports to register a CAGR of 13.6%, mainly
on back of base effect impact of FY2016 (sales grew by 46% due to launch of Abilify).
Outlook and valuation :
Over FY2016-18E, we expect the company to post a CAGR of 13.9% in sales, while profitability will be under pressure
on back of higher R&D spend, which is likely to reach 13-14% of sales in FY2017-FY2018E. We recommend a Neutral rating
on the stock.
- 2-

Vol.: 313
26th Sep,2016

Around The World

Weekly Market Recap :

On the macro front, the Union Cabinet on Wednesday, 21 September 2016, approved the proposals of Ministry of Finance on certain landmark budgetary reforms including the merger of Railway budget with the Union Budget, the advancement of the date of Budget presentation from the last day of February to the 1st of February every year and the
merger of the Plan and the Non-Plan classification in the Budget and Accounts. The presentation of a unified budget will
bring the affairs of the Railways to centre stage and present a holistic picture of the financial position of the Government,
according to a government statement. Consequent to the merger, the appropriations for Railways will form part of the
main Appropriation Bill.

Data released by the Reserve Bank of India (RBI) after trading hours on Wednesday, 21 September 2016, showed that
India's current account deficit (CAD) narrowed to $0.3 billion or 0.1% of GDP in Q1 June 2016, which was significantly

Market Eye Week ahead :

The market may remain volatile as traders roll over positions in the futures & options (F&O) segment from the near month
September 2016 series to October 2016 series. The near month September 2016 derivatives contracts expire on Thursday, 29 September 2016.

Shares of interest rate sensitive sectors may see some action ahead of the monetary policy. The Reserve Bank of India
(RBI) will unveil fourth bi-monthly monetary policy statement for the year ending March 2017 on 4 October 2016

Key Events / Factors to Watch

1. Mon : AGM : CCL products (India ltd), Godfrey Philips India, Greaves Cotton, Hindustan copper.
2. Tue : AGM : Mphasis ltd(bd meet) AGM Care ltd, Fortis healthcare, HCL Technologies,
3. Wed : AGM : Cipla ltd, Force Motors, IFCI ltd, Sadbhav Engineering ltd
4. Thu: The near month September 2016 derivatives contracts expiry.
5. Fri : AGM :

Jain irrigation, Amtek auto, Kwality ltd, Suzlon energy.

Knowledge Corner :
Qualified institutional placement (QIP)

These Qualified institutional placement (QIP) is a capital-raising tool, primarily used in India and other parts of southern
Asia, whereby a listed company can issue equity shares, fully and partly convertible debentures, or any securities other
than warrants which are convertible to equity shares to a qualified institutional buyer (QIB).

How much can companies raise via QIP : In a single financial year a company can raise not more than 5 times its net
worth based on the audited financial statements of the previous financial year.
- 3-

Vol.: 313
26th Sep,2016

Mutual Fund Corner

Top 10 Sector Break-Ups

Fund Name
HDFC Equity Fund

AMC

HDFC Asset Management Company Ltd

Type

Equity-oriented

Category
Launch Date
Fund Manager
Net Assets
In crore )

History

Financial
Automobile

32.02
13.09

Energy

9.79

Healthcare

4.29

Open-ended

Engineering

5.47

Jan 01, 1995

Technology

8.92

Services

4.83

FMCG

1.00

Diversified

9.06

Chemicals

1.95

Prashant Jain since June 19, 03

(`

Rs. 16047 crore as on Aug 31, 2016

2013

2014

2015

304.63

468.44

444.61

511.73

Total Return (%)

3.82

53.77

-5.09

15.10

+/- VR Balanced

-2.94

22.38

-1.03

3.52

Rank (Fund/Category)

48/73

35/145

179/187

53/155

52 Week High (Rs)

304.98

487.14

499.69

516.37

52 Week Low (Rs)

236.65

285.48

421.48

358.25

Net Assets (Rs.Cr)

10249.49

17295.02

17204.54

14794.27

NAV (Rs)

Expense Ratio (%)

Fund (%)

Sector Weights

Scheme Name

2016

Risk Analysis
Volatility Measures
Standard Deviation

19.92

Sharpe Ratio

1.07

Beta

1.25

R-Squared
Alpha

0.90
6.24

Composition (%)
99.62

Equity
2.18

2.18

2.19

Debt

0.27

Cash

Fund Performance v/s S&P CNX Nifty

Fund Style
Investment Style
Growth

Blend

Value

Medium
Small

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

Capitalization

Large

Source : - www.valueresearchonline.com

Vol.: 313
26th Sep,2016

Commodity Corner
BULLION
FUNDAMENTAL: Bullion prices last week ended with gains where gold prices gained by 1.52% and silver gained

by 3.41% after the Federal Reserve sounded a cautious note on the pace of interest rate hikes. The Fed
signalled an increasingly careful approach to future rate hikes after a policy meeting, reassuring investors who had
feared the U.S. central bank could move more quickly to tighten monetary policy. However, the U.S. central
bank signaled that it could tighten monetary policy before the end of the year if the job market continued to improve. Boston Fed President Eric Rosengren said on Friday that he believed interest rates should be raised gradually now and warned that a fall in the unemployment rate below its sustainable level could derail economic recovery in the United States. "By 2019, I expect the unemployment rate to have declined below 4.5 percent. While I
have a long track record of advocating for policy that supports robust labor market conditions, that is below the
rate that I believe is sustainable in the long run," Rosengren said in a statement. Rosengren dissented at in the
week week's Federal Reserve rate setting meeting that left interest rates unchanged.
RECOMMENDATION : SELL GOLD @ 31500 SL 31850 TGT 30850. SELL SILVER @ 4800 SL 47500 TGT 45800

BASE METALS
FUNDAMENTAL: Base metals prices ended with gains on weekly basis where nickel prices rallied by more than 8%

followed by over 3 percent gains in copper and zinc prices ended with over 2 percent gains followed by copper gains
while lead is the only counter that ended with 1.85% losses. Nickel gained as markets braced for news of more
Philippine mine suspensions amid a crackdown on environmental lapses in the world's biggest nickel ore
supplier. Aluminium prices gained by over 3 percent as sentiments improved and traders are buying metals
on optimistic outlook for demand in China after recent data pointed to a pickup in the construction market. Other
base metals prices also seen supported as support continues after Chinese economic data indicated a firmer tone
to the housing market and a revival in factory activity. . For nickel, A dozen more Philippine mines, mostly nickel
projects, are in danger of being suspended when the government announces the results of its audit on Tuesday. The Philippines has already halted the operations of 10 mines, eight of them nickel producers, since it
launched an audit in July.
RECOMMENDATION : BUY ALUMINIUM @ 107 SL 104 TGT 112. SELL COPPER @ 329 SL 336 TGT 318 SELL ZINC @ 152 SL 156 TGT
144 BUY NICKEL @ 670 SL 640 TGT 630.

ENERGY
FUNDAMENTAL : Crude oil prices ended with over one percent gains as support seen as the dollar

weakened and
after the government said U.S. oil inventories plunged last week. The US EIA reported a 6.2mbl decline in
weekly crude inventories, confirming a similar reading from the American Petroleum Institute. Crude oil has
rallied several times this year on hints of output curbs by OPEC and other oil exporters, only to fall later as production rose. Saudi and Russian production are at record highs while Libya and Nigeria are restarting key crude
exports that were stalled. This week, oil rose after report by the US Energy Information Administration that crude
stockpiles fell 6.2 million barrels last week, bringing the draw to more than 21 million barrels for this month. Crude
gave back some gains after report that a two- day expert-level meeting of the Organization of the Petroleum Exporting Countries on production cooperation had yielded no major breakthrough. . For nickel, A dozen more Philippine mines, mostly nickel projects, are in danger of being suspended when the government announces the
results of its audit on Tuesday. The Philippines has already halted the operations of 10 mines, eight of them
nickel producers, since it launched an audit in July. Things were further worsened by predictions of tepid demand with sudden change in forecasts that showed cooler weather ahead. The U.S. Energy Department's
weekly inventory release showed a slightly larger-than-expected increase in natural gas supplies.
RECOMMENDATION : SELL CRUDE @ 3050 SL 3200 TGT 2800. BUY NAT.GAS @ 194 SL 188 TGT 208.

- 5-

Vol.: 313
26th Sep,2016

Commodity Corner

Forex Corner

Market Recap :

The Indian rupee on Monday weakened against

the US dollar, after local equity markets fell 350
points.

Most Asian currencies declined owing as Fridays

oil price plunge and increasing focus on the US
presidential election raise risk-averse sentiments.
.

Market Eye Week ahead :

The USDINR On daily chart pair has formed DOJI candlestick pattern. Which represent uncertainty, and other
hand pair has been trading below all short term, medium term, and long term moving average which is 20, 100
and 200.Whereas on weekly chart pair has continually taking support at 50WMA. Which suggest short term trend
is bullish. So for trading perspective, one could buy up to the level 66.50-66.80 with SL of 66.30 for target of
67.23-67.64.

USD/INR
Level

S2

S1

CP

R1

R2

High

Low

Close

USD/INR

66.26

66.47

66.95

67.06

67.44

67.23

66.64

66.68

Level

S2

S1

CP

R1

R2

High

Low

Close

EUR/INR

74.57

74.34

74.749

75.11

75.42

75.20

74.66

74.88

Level

S2

S1

CP

R1

R2

High

Low

Close

GBP/INR

85.68

86.11

86.54

87.33

88.12

87.69

86.47

86.54

Level

S2

S1

CP

R1

R2

High

Low

Close

JPY/INR

64.77

65.77

66.08

66.77

67.39

66.70

65.39

66.15

EUR/INR

GBP/INR

JPY/INR

-- 46--

Vol.: 313
26th Sep,2016

J Street Recommendations Report Card

Nifty last week opened at 8788.45, attained a low of 8757.88 and moved up to 8893.34. Nifty finally closed the
week at 8831.54 thereby showed a net rise of 51 points on week to week basis. Traders by chance long and
still holding the same can maintain the stop loss at 8688. Resistance will be at 8897-9033. Sell is below 8688
and till then traders may look for rise to 8897 to 8968 to take profits in index and index related stocks.
Top Fundamental Stocks
Rec. Date

CMP on Rec.

CMP

Target

Absolute
Return @
CMP

Status

30/08/2016

630

679

732

8%

Buy

25/07/2016

235

249

308

6%

Buy

Capital First

06/06/2016

552

700

660

27%

Profit book

Wonderla Holidays

25/04/2016

387

398

498

3%

Accumulate

Mold-Tek Packaging

04/04/2016

138

47

179

-66%

Buy

Jamna Auto

22/02/2016

133

224

181

68%

Buy

MT Educare

01/02/2016

164

134

230

-18%

Buy

Garware-Wall Ropes

28/12/2015

425

522

550

23%

Buy

AYM Syntax

23/11/2015

121

83

223

-31%

Buy

Natco Pharma

02/11/2015

509

629

636

24%

Buy

SRF

21/09/2015

1140

1790

1374

57%

Buy

Ahluwalia contracts

24/08/2015

235

296

368

26%

Buy

20/07/2015

190

231

255

22%

Buy

04/05/2015

298

286

430

-4%

Buy

16/03/2015

152

175

251

15%

Buy

DHFL

16/02/2015

252

293

368

16%

Accumulate

TV Today Network

27/01/2015

222

307

337

38%

Buy

M&M

12/01/2015

1238

1391

1452

12%

Buy

Havells India

27/10/2014

274

410

346

50%

Buy

PTC India Fin. Ser.

07/07/2014

39

38

45

-3%

Profit book

Adani Port

05/07/2014

280

271

347

-3%

Accumulate

Stocks
Alembic Pharmaceuticals
Coromandel
International

Infinite Computer
Sol.
Sadbhav
Engineering Ltd.
Omkar speciality
Chemicals

It's not important whether you are right or wrong, Its about how much money you make when you're right and how
much you lose when you're wrong.
- 7-

Vol.: 313
26th Sep,2016

J Street Short Term Call Status

SL

STATUS

%
RETURN

352.00 368.00

340

SL

-4.30

570

575.00 545.00

600

TA

5.50

926

944

935.00 980.00

900

SL

-3.80

BUY

176

180

178.00 185.00

170

TA

3.90

HINDZINC

BUY

226

230

228.00 238.00

220

EXPIRE

18-Aug-16

BHARATFIN

SELL

740

750

745.00 730.00

775

TA

5.80

19-Aug-16

RELINFRA

BUY

585

595

590.00 620.00

565

OPEN

22-Aug-16

ENGINERSIN

BUY

233

238

235.50 250.00

225

TA

6.20

23-Aug-16

HINDUNILVR

BUY

925

935

930.00 975.00

900

EXPIRE

10

24-Aug-16

ASIANPAINT

BUY

1120

1135

1127.50 1180.00

1090

TA

3.90

11

25-Aug-16

TORNTPHARMA

BUY

1675

1710

1692.50 1860.00

1570

EXPIRE

12

26-Aug-16

PTC

BUY

77.5

79

73.5

TA

5.90

13

29-Aug-16

ASIANPAINT

BUY

1110

1130

1120.00 1174.00

1080

TA

4.80

14

30-Aug-16

IBULHSGFIN

BUY

824

832

828.00 867.00

800

EXPIRE

15

31-Aug-16

EXIDEIND

BUY

181

184

182.50 194.00

176

TA

6.00

16

1-Sep-16

CESC

BUY

660

670

665.00 695.00

640

EXPIRE

17

2-Sep-16

AMBUJACEM BUY

275

278

276.50 290.00

265

EXPIRE

18

6-Sep-16

UPL

BUY

630

642

636.00 667.00

610

TA

4.60

19

7-Sep-16

M&M

BUY

1480

1500

1490.00 1560.00

1440

SL

-3.30

20

8-Sep-16

DRREDDY

BUY

3100

3150

3125.00 3270.00

3020

OPEN

21

9-Sep-16

SUNPHARMA BUY

800

816

808.00 851.00

780

SL

-3.50

22

12-Sep-16

JUBLFOOD

BUY

1070

1080

1075.00 1020.00

1110

TA

4.60

23

14-Sep-16

STAR

BUY

990

1010

1000.00 1060.00

960

TA

5.80

Sr.
No.

DATE

10-Aug-16

11-Aug-16

MINDTREE

12-Aug-16

BUY/
SELL

RANGE

RANGE

350

354

SELL

580

HINDUNILVR

BUY

16-Aug-16

POWERGRID

17-Aug-16

- 7-

STOCK

MOTHERSUMI BUY

TRIGGER
PRICE

78.25

TGT

84.00

Vol.: 313
26th Sep 2016

J Street Short Term Call Status

Sr. No.

DATE

STOCK

BUY/
SELL

RANGE

RANGE

TRIGGER
PRICE

TGT

SL

STATUS

%
RETURN

24

15-Sep-16

UPL

BUY

695

700

697.50

730.00

675

OPEN

25

16-Sep-16

BRITTANIA

BUY

3510

3540

3525.00

3690.00

3390

OPEN

26

19-Sep-16

ITC

BUY

260

264

262.00

275.00

252

OPEN

27

20-Sep-16

BIOCON

BUY

925

935

930.00

972.00

900

TA

4.50

28

21-Sep-16

HDFC

BUY

1385

1395

1390.00

1450.00

1355

OPEN

29

22-Sep-16

INFRATEL

BUY

370

375

372.50

391.00

358

OPEN

30

23-Sep-16

TVSMOTOR

BUY

347

353

350.00

367.00

337

OPEN

STATUS

CALLS

RATIO

TA+PB

12

66.66

SL+EXIT

06

33.33

TOTAL

18

100.00

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.: 313
26th Sep,2016