Index MarketView 1CompanyUpdate 2AroundtheEconomy 3KnowledgeCorner 3MutualFund 4CommodityCorner5ForexCorner 6ReportCard 7 Editor&ContributorMargiShahSpecialContributorsAsheshTrivediAdityaNaharForsuggestions,feedbackandqueriesjstreet@jhaveritrade.com

Market View:

Global melt down Last Saturday the title of our write up was GLOBAL UNCERTAINITIES ARE GROWING. The oversupply position in almost all sectors in China is the root cause of this deflationary trend in the world market. The world market and China in particular has created unprecedented production capacity ignoring the demand situation. Their export led economy has suddenly faced the problem of lack of demand resulting into closure of many big plants, medium and small scale units. To curb this trend, China is trying to overcome this problem by devaluing its currency and thereby exporting deflation in the world market. If we look at this problem purely from the theory of economics, it can be resolved only by increase in demand or drastic reduction in supply. Demand shoot up is not possible in the world market in near term. Supply has to come down in the world market which results in de growth making many commercial activities unviable and putting pressure on the corporate profitability world over. Crude and base commodities are classic example of the above discussion.

Locally, India is facing the heat of global melt down with some burning local issues. The NPAs of PSU banks have risen to such an extent which no one has expected. Recently RBI has instructed the banks with the list of 150 big accounts which is 20% of the total NPA to provide for the same. The steps being taken by The Government to fight the global recession do not yield the fruits in view of the currency de-valuation. The government is trying to run on slippery ground which has lot of uncertainties. The falling Rupee and rise in US Fed rate is pressurizing the FIIs to pump out their Dollar investment in equity and debt market from India. The important question is weather the process of outflow has bottomed out? It is very difficult to answer this question as many sovereign funds are facing crisis type situation and pull-ing out of India. Some of the investment bankers and brokers say that the inflow in India dedicated fund has dried out. Indian investors have played a great role in protecting the market from going down but it seems that it is not sufficient. It is true that this down fall has created lot of opportunities for long term investment but it is also true that the pain will continue for some time. Technically there is a big support at 7150-7200 which is 61.8% retracement of previous rally from 5933 to 9116.

It is interesting to note that the Walmart, the retail giant of the world has decided to close 269 Walmart stores world over.

Kamal Jhaveri

MD- Jhaveri Securities

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Vol.: 278 18th January,2016

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Company Basics

BSE Code 509557

NSE Symbol GARWALLROP

EQUITY (` in Cr.) 21.88

MKT.CAP (` in Cr.) 866.53

Financial Basics FV (`) 10.00 EPS (`) 19.17 P/E (x) 20.66 P/BV (x) 2.80 BETA 1.0730 RONW (%) 14.72

Share Holding Pattern Holder's Name % Holding Foreign 1.91 Institutions 2.26 Promoters 50.59 Non Prom. 0.00 Public & Others 39.11 Government 6.14

Company Overview

Garware-Wall Ropes Ltd. (GWRL), is one of India's leading players in Technical Textiles with customers and end-users across the world. The company provides application-focused solutions for various sectors including Deep Sea Fishing, Aquaculture, Shipping, Agriculture, Sports, Infrastructure, Defence and Transportation.

Investment rational

Strong products portfolio and has wide range of end users

GWPL is the largest domestic player in Technical Textile industry that provides application focus solutions to various traditional sectors like Fisheries, Aquaculture and also cater to new and rising sectors like Sports, Defence and Transportation with its wide range of product portfolios. End-users of Company's products include Fishermen, Shipping Companies, Oil Drillers, Agriculturists, Packers, Transporters, Construction companies, Municipalities, Government Organizations, Clubs, Universities and Manufacturing Plants. The company also provide various product and solution for Water management, Waste management, erosion control applications. Apart from being a leading player in the domestic market, GWPL has a dominant share of markets in North America, and parts of Europe and Australia for several products.

Falling crude oil prices and currency devaluation work well for GWRL

Most of the Raw Material (like High Density Polyethylene ,Polypropylene, Nylon Polyester Yarn) consumed by the GWRL is crude based derivatives which constitutes ~50% of total expenditure. RM cost as % of sales remains in the range of 45%-47% in last five years. Falling in crude oil price (Brent crude touched lowest level since 2004) leads to added advantage for GWRL in the form of margin expansion. RM cost as % of Sales fell from 47% in 6MFY15 to 43% in 6M FY16 leads to EBITDA margin expansion of 137bps to 11.80% in H2FY16 (v/s 10.43% in H2FY15). Rupee depreciation help s to maintain top line better due to exports revenue contributes ~49% of top line as company has increased its focus on USA, Canada and Europe.

Valuation : GARWALLROP is trading at `341. We recommend Buy with target price of `550, valuing stock

20xFY18E EPS of `27.47.The stock currently trades at 22.27x of FY16E, 18.56x of FY17E and 15.47x of

FY18E.

Company Update : Garware-Wall Ropes Ltd.

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Weekly Market Recap : On the macro front, the data released by the government on Tuesday, 12 January 2016 showed that inflation based on the consumer

price index (CPI) accelerated last month. The all-India general consumer price index (CPI) inflation inched up to 5.61% in December 2015 from 5.41% in November 2015.

Another data released by the government on Tuesday, 12 January 2016 showed that India's industrial production witnessed a contraction during the festive Diwali month in November 2015 due to high base effect. Industrial Production declined 3.2% in November 2015 over a year ago period.

Data released by the government on Thursday, 14 January 2016 showed that inflation based on the wholesale price index (WPI) remained in negative zone last month. WPI inflation stood at minus 0.73% in December 2015, compared with a reading of negative 1.99% in November 2015.

In China, the data released on Friday, 15 January 2016 showed new yuan loans in December 2015 were well below the previous month's lending and broad M2 money supply growth also slowed.

Market Eye Week ahead :

On the global front, China is set to announce its Q4 December 2015 and full-year 2015 GDP data on Tuesday, 19 January 2016. On the same day, China's industrial production data for the month of December 2015 is due.

European Central Bank's (ECB) monetary policy statement is slated on Thursday, 21 January 2016. Euro zone Market PMI Composite data for December 2015 is scheduled on Friday, 22 January 2016. On the same day,

US existing home sales data for the month of December 2015 is due. KEY EVENTS/FACTORS TO WATCH

1. Mon: Asian paints, Wipro, Delta corp., Kotak Mahindra bank, TTK prestige, Mindtree earnings

2. Tue: BASF, Reliance power, Reliance industries, HCL technology earnings

3. Wed: Axis bank, Gati, Ultratech cement SW energy, reliance infra, Tata Elexi, Tata sponge, KPIT tech earnings 4. Thu: Biocon, alembic Pharma, GSFC, Exide Industries, Reliance capital, idea cellular, Raymond , Inter globe aviation, M&M

financial services earnings

5. Fri: Atul, Cairn India, Supreme Petro, L&T finance, ITC, Reliance communications, Ashoka Buildcon earnings

6. Sat: Persistent Systems, RS software, Unichem labs earnings

Relative Strength Index - RSI'

A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought

and oversold conditions of an asset. It is calculated using the following formula: RSI = 100 - 100/(1 + RS*) When RSI goes above 70 or below 30, it indicates that a stock is overbought or oversold and vulnerable to a trend reversal.

Around The World

Vol.: 278 18th January,2016

Knowledge Corner :

Mutual Fund Corner

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Source : - www.valueresearchonline.com

Fund Name Scheme Name ICICI Prudential Balanced Advantage Fund

AMC ICICI Prudential Asset Management Company

Type Equity-oriented

Category Open-ended and Hybrid

Launch Date December 2006

Fund Manager Manish Banthia

Net Assets (` In crore ) Rs. 10579.9 crore as on Dec 31, 2015

Top 10 Sector Break-Ups Fund (%)

Financial 15.74 Technology 11.11 Energy 9.62 Automobile 5.77 FMCG 5.13 Healthcare 5.08 Engineering 2.73 Construction 2.64 Diversified 2.08 Services 1.76

Composition (%) Equity 75.92

Debt 32.96

Cash -8.88

Risk Analysis Volatility Measures Standard Deviation 8.39 Sharpe Ratio 0.93 Beta 0.71 R-Squared 0.85 Alpha 5.63

History 2013 2014 2015 2016 NAV (Rs) 19.08 24.62 26.27 25.06

Total Return (%) 10.93 29.04 6.70 -4.61

+/- VR Balanced 4.55 2.27 8.88 0.47

Rank (Fund/Category) 5/32 49/57 14/65 53/89

52 Week High (Rs) 19.09 24.65 26.63 -

52 Week Low (Rs) 16.00 18.47 24.34 -

Net Assets (Rs.Cr) 691.73 4462.86 9842.88 -

Expense Ratio (%) 2.82 2.41 2.35 -

Fund Style

Investment Style Growth Blend Value Large

Medium

Small

Capitalization

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Fund Performance v/s S&P CNX Nifty

Fund CNX Nify (Rebased to 10,000)

Commodity Corner

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FUNDAMENTAL: Bullion prices on weekly basis ended with gains as weakness in rupee and falling equity markets underpinned demand for assets perceived as safer. Bullion hit a two-month high of $1,112 last week as volatility in Chinese stocks raised concerns about the state of the global econ-omy, leaving investors looking for a refuge in gold and other safe havens. U.S. retail sales and industrial production fell in December, the latest indication that economic growth braked sharply in the fourth quarter. In addition, the drop in oil prices and a strong dollar have also raised the risk of U.S. inflation expectations heading lower, New York Fed President William Dudley said. In three of the five sessions, prices fluctuated considerably as investors kept a close eye on developments in China, where economic growth last year is projected to slow at the slowest rate in a quarter century. The University of Michigan's Consumer Survey Center said in its mid-monthly flash report that U.S. consumer sentiment increased 0.7 points from the De-cember final reading to 93.3, slightly above expectations of 93.0. Shortly after, the U.S. Census Bureau said retail sales fell 0.1% last month, below forecasts for a flat reading. It came one month after retail sales nationwide surged by 0.4% in November. Also on Friday, the Federal Reserve Bank of New York said its Empire State Manufacturing Index plummeted to negative 19.37, extending losses from December's revised reading of minus 6.21. The downbeat data could persuade the Federal Reserve to delay its next interest rate beyond the first quarter. San Francisco Fed president John Wil-liams said in a speech at the Economic Forecast Conference that further rate hikes by the U.S. central bank should be gradual. Premiums on Shanghai Gold Exchange, the platform for all physical gold trade in China and a good indicator of demand in the country, held at $2-$3 this week as compared with $4-$5 a week ago. Demand from rural areas remained sluggish as earnings of Indian farmers have drained out by the first back-to-back drought conditions in nearly three decades. Rural demand accounts for about two-thirds of India's total gold consumption. RECOMMENDATION : SELL GOLD @ 26450 SL 26900 TGT 25950-25350.SELL SILVER @ 34600 SL 35400 TGT 33900-33250 FUNDAMENTAL: Base metals prices last week ended with mixed node as prices seen under pressure where nickel and lead ended with small gains while others ended with losses pressured by a slide in oil prices plus further losses in shares and the offshore currency in China, where weak loan data undermined sentiment. Chinese shares fell below last month's low while the yuan weakened sharply offshore, knocking confidence about demand for metals in the world's top consumer of raw materials. Prices dropped over 6 percent this month, hitting a succession of multi-year lows in the New Year as investor sentiment soured. Physical demand for copper remained steady in China with local buyers willing to pay higher premiums as the futures have dropped. Copper prices in the local physical market traded at a 160 yuan premium against the front month ShFE contract this week, the highest since early December. Those upbeat physical signals, however, have been overwhelmed by negative data about the health of the Chinese economy, such as loan data. Chinese banks extended 597.8 billion yuan in net-new yuan loans in December, well below the previous month's lending. Combined zinc inventories in Shanghai, Tianjin and Guangdong fell 9,900 to 325,200 tonnes this past week, due mainly to growing outward shipments. Down-stream buyers built stocks at lows Shanghai reported higher inflows of imported zinc, but arriving shipments of domestic zinc fell. When combined with stronger downstream purchasing, outward shipments from Shanghai increased. Guangdong saw stocks fall with lower arriving shipments of Feilong and Chihong zinc and improved downstream demand. Stocks in Shanghai warehouses surged 16 percent on weekly basis. Nickel inventories also ticked higher on the LME, where they equalled around 25 weeks of consumption, about twice as high as aluminium and compared with only two to six weeks for the other metals. Consumers are holding off for cheaper metal while recent rallies have been used as a selling opportunity by both funds and physi-cal traders. Slumping demand in stainless steel is the main source of nickels surplus. U.S. retail sales unexpectedly fell in December as unseasonably warm weather undercut sales of winter apparel and cheaper gasoline weighed on receipts at service stations, adding to signs that economic growth braked sharply in the fourth quarter. RECOMMENDATION : BUY COPPER @ 292 SL 284 TGT 301-312. BUY ZINC @ 99 SL 97 TGT 103-107. BUY NICKEL @ 562 SL 540 TGT 595. BUY ALUMINIUM @ 99 SL 97 TGT 102-104.BUY LEAD @ 107 SL 104 TGT 112-116. FUNDAMENTAL: Crudeoil prices ended with heavy losses of over 11% on weekly basis as the market braced for increased Iranian oil exports, with the lifting of international sanctions possible within days. The International Atomic Energy Agency (IAEA) could issue its report on Iran's compliance with an agreement to curb its nuclear program during a Friday meeting in Vienna, potentially triggering the lifting of Western sanctions. Still, influential U.S. bank Goldman Sachs maintained its $40 price forecast for U.S. crude for the first half of 2016. "The key theme for 2016 will be real fundamental adjustments that can rebalance markets to create the birth of a new bull market, which we still see happening in late 2016," Goldman said in a report. Others were more concerned about the impact of new exports from Iran. While experts warned that not all sanctions may be lifted immediately once the agreement on its nuclear program came into effect, any additional oil would add to a glut that has pushed prices into a deep slump since mid-2014. Commerzbank cut its 2016 forecast for oil prices, changing its year-end expectation for Brent to $50 per barrel, down from a previous forecast of $63. Natural prices too ended with more than 12 percent losses as warmer weather forecasts renewed concern about weak demand and bulging stockpiles. Natural-gas storage levels fell by 168 billion cubic feet in the week ended Jan. 8, but they still sit at nearly 3.5 trillion cubic feet, the U.S. Energy Information Administration said. That keeps storage levels 20% above a year ago and 16% above the five-year average for the same week, EIA said. Because of limited heating demand from the warmer forecast, storage levels could still be at 2.3 tcf at the end of winter. Prices have been falling so low this winter in part because of the glut expected to linger after the end of winters peak demand. Friday weather reports showed below-normal temperatures in the Midwest now out of the forecasts for next week and, instead, above-normal temperatures getting warmer and spreading across more of the country. About half of U.S. households use natural gas as their primary heating fuel, making winter weather the markets primary driver for prices. Stockpiles are on pace to challenge a record for their end-of-winter highs and more warm weather updates on Friday simply made that outlook worse. RECOMMENDATION : SELL CRUDE OIL @ 2100 SL 2300 TGT 1650. SELL NAT GAS @ 152 SL 165 TGT 140-128

BULLION

BASE METALS

ENERGY

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Commodity Corner

USD/INR

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Forex Corner

EUR/INR

GBP/INR

JPY/INR

Market Eye Week ahead :

USD-INR pair finally closed the week at 67.72 levels showing great strength as we had clearly suggested last week to buy the pair on decline. The rupee weakened further to a fresh over two-year low against the US dollar, as mounting concerns on a global downturn led to sell-off in local and regional shares, raising worries of additional foreign fund outflows. We ex-pect the US dollar to find buying support on declines against the rupee. Utilise declines in the US$/INR January contract to buy the pair.

Level S2 S1 CP R1 R2 High Low Close

USD/INR 67.45 67.18 67.63 67.90 68.08 67.81 67.36 67.72

Level S2 S1 CP R1 R2 High Low Close

JPY/INR 57.26 56.84 57.50 57.92 58.16 57.75 57.67 57.67

Level S2 S1 CP R1 R2 High Low Close

GBP/INR 96.99 96.81 97.25 97.43 97.69 97.51 97.07 97.17

Level S2 S1 CP R1 R2 High Low Close EUR/INR 73.44 73.00 73.73 74.17 74.46 74.02 73.29 73.88

Market Recap :

The Indian rupee commenced almost flat but recovered later on Monday, 18 January 2016 on fresh selling of the US currency by banks and exporters.

The domestic currency opened at Rs 67.60 against the dollar but bounced back to a high of 67.49 so far during the day. In the spot market, the Indian unit was last seen at 67.59.

The local currency had dipped by 30 paise to close at fresh 28-month low of 67.59 against the American currency on Friday on demand for the greenback from importers in view of persistent foreign capital outflows amid sharp fall in equities.

Meanwhile, the U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was down 0.01% at 98.98.

Vol.: 278 18th January,2016

Nifty finally closed the week at closed the week at 7437.80 thereby showed a net fall of 159 points on week to week basis. The last

medium term bottom support cluster was at 7539 and 7422. Nifty broke that level and traders short and holding the same can maintain the revised stop loss of 7610. Exit long and sell on rise from 7489-7553 with a stop loss of 7610. Expect lower range of 7374-7194 to be tested which is the lower range for the week. One can start buying in range of 7200-7250 with low of the week as stop loss. Q3 results of India Inc., trend in global markets, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), the movement of rupee against the dollar and crude oil price movement will dictate trend on the markets in the near term.

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J Street Recommendations Report Card

Top Fundamental Stocks

Stocks Rec. Date CMP on Rec. CMP Target Absolute Return @

CMP Status

GarwareWallRopes 28/12/2015 425 341 550 -20% Buy

WelspunsyntaxLtd. 23/11/2015 121 107 223 -11% Buy

NatcoPharma 02/11/2015 509 501 636 -2% Buy

SRFLtd. 21/09/2015 1140 1142 1374 0% Buy

Ahluwaliacontracts 24/08/2015 235 243 368 3% Buy

SunPharma 03/07/2015 831 785 1041 -6% Buy

InfiniteComputerSol. 20/07/2015 190 211 255 11% Buy

NitinSpinnersLtd. 06/07/2015 79 63 94 -20% Buy

BankofBaroda 01/06/2015 163 126 217 -23% Buy

AmbikaCottonMills 18/05/2015 880 800 1149 -9% Buy

SadbhavEngineeringLtd.

04/05/2015 298 281 430 -6% Buy

OmkarspecialityChemicals

16/03/2015 152 196 251 29% Buy

DHFL 16/02/2015 252 191 368 -24% Buy

TVTodayNetwork 27/01/2015 222 279 337 26% Buy

M&M 12/1/2015 1238 1166 1452 -6% Buy

HavellsIndia 27/10/2014 274 276 346 1% Buy

PTCIndiaFin.Ser. 07/07/2014 39 33 45 -14% Buy

AdaniPort 05/07/2014 280 219 347 -22% Buy

It'snotimportantwhetheryouarerightorwrong,Itsabouthowmuchmoneyyoumakewhenyou'rerightandhowmuchyoulosewhenyou'rewrong.

Vol.: 278 18th January,2016

Vol.: 278 18th January,2016