Religare Morning Digest - Morning Digest November 7, 2016 ... the next major support is at 8300 in...

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Religare Morning Digest

November 7, 2016

Nifty Outlook

VWAP (Expiry till date) Max OI (Call) Max OI (Put)

NIFTY 8605 9000 8200

Markets remained under pressure on Friday as well, tracking feeble global cues and lost over half a percent. In today's trade, anxiety ahead of the US Presidential election overshadowed the positivity of recent breakthrough on GST front. Also, slide in pharma majors further dented the sentiments. Above all, sharp decline in Midcap and Smallcap pack completely unsettled the participants and pushed them on the back foot.

Our markets are mirroring the global sentiments and it'll only subside post the US Presidential Election outcome. Till then, traders are advised to restrict their positions and sit on cash. At the same time, investors should use this fall to gradually accumulate quality counters, which are available at good bargain.

On index front, the next major support is at 8300 in Nifty while in case of rebound 8500 would now act as hurdle.

Sectors to watch

Sector Name Outlook

FINANCIAL STABLE

INFRA STABLE

PHARMA STABLE

News Religare Super Ideas**

FII & DII Cash Segment (Rs. in Cr.) Trade Stats

Category Amt. MTD YTD

FII -707 -1498 39738

DII 535 1134 3219

NO OF CON-

TRACTS

TURNOVER IN CR

IDXFUTS 251470 16992

IDXOPT 2959366 202061

STKFUTS 645310 42487

Derivative Ideas **

Shares of NMDC ended lower by nearly 5% after the company announced that it has kept prices of iron ores unchanged with effect from 3 Nov 2016 compared with prices in October.

Shares of Magma Fincorp fell 12.4% on subdued Q2FY17 numbers. Its consolidated PAT rose 3.7% to Rs 50.4cr, while its total income declined by 1.7% YoY to Rs 600.2cr.

Titan missed analysts' expectations on topline (down 0.2% YoY Rs 2,676cr in Q2FY17) and bottomline front (up 23.5% YoY to Rs 181cr) but operating profit was ahead of estimates, up 36.8% to Rs 276cr and margin expanded by 280 bps to 10.3% YoY.

*FII & DII data as on 3rd November 2016

Scrip Buy/Sell CMP Initiation

Range SL* Target

BEL BUY 1299.85 1270-

1280 1240 1380

ALBK SELL NOV

FUT 71.20 72-73 77 65

**Please note that the given technical and derivative recommendations are

"valid for taking position" only on recommended date and in the given range.

*Please note - Stoploss is on closing basis for delivery recommendation and intraday basis for futures recommendation.

Instrument B/S Lot INITIATION

RANGE SL

TAR-GET

NIFTY

BUY

8500 CE 75

100-105

190 350 BUY

8500 PE 140-145



November 7, 2016

Religare Super Ideas

Investment Pick - Arman Financial Services Ltd.

Incorporated in 1992, Ahmedabad based Arman Financial Services (ARFL) lends primarily in the micro-finance and two wheeler space. ARFL operates in

micro-finance through its subsidiary Namra Finance (Rs 117cr, 68% of AUM) while Vehicle financing amounts to Rs 55cr (32% of AUM).

Key rationales: i) Multi-year growth in micro-finance business ii) Value creating opportunities in newer geographies in micro-finance and foray into SME lending iii)

Steady AUM growth of 35% CAGR over FY12-FY16 iv) Stable asset quality, High NIMs and Strong ROAAs. We feel the gradual and focused growth in micro-finance, conservative lending and focus on newer geographies will drive ARFL’s AUMs while sustained NIMs and controlled costs will improve profitability.

Scrip CMP Target Duration Recommendation Price

ARMANFIN 256 338 9-12 Months 260

Index options buying by FIIs indicating rise in

volatility ahead of US presidential election which is

scheduled next week. Keeping in mind the

increased volatility and major event, we recommend

doing long straddle in Nifty.

Strategy: BUY NIFTY 8500 CE @ 100-105 & BUY

8500 PE @ 140-145, NET PREMIUM PAID @ 240-

250, SL 190, TARGET 350.

Derivative Ideas

Bharat Electronics Limited (BEL) Allahabad Bank (ALBK)

BEL is comfortably sustaining at higher levels

despite weak markets post breakout where it

surpassed five month trading range. Volume is also

supporting price movement, all this indicates

bullish bias to continue ahead as well.

Post recent rise where ALBK rallied from 50 till 88

levels, distribution is witnessed on daily chart and

on Friday, i.e. 04th November, it closed below its

200 EMA support as well, indicating weak trend.

Therefore, we believe, it will head south wards in

coming sessions.



November 7, 2016

Religare Investment Calls

Name of the Company Reco Date Reco Price Target Price Upside % Previous day Closing Price

Tech Mahindra 7-Aug-15 534 600 12.4% 430.05

Kotak Mahindra Bank 19-Aug-15 688 900 30.8% 799.65

Glenmark Pharma 10-Sep-15 1,017 1,370 34.7% 869.15

Dabur India 10-Sep-15 275 325 18.1% 298.50

HUL 10-Sep-15 803 1,050 30.8% 848.00

Bajaj Corp 3-Nov-15 416 500 20.3% 396.40

Britannia Inds 23-Dec-15 2,896 3,600 24.3% 3,302.00

Nandan Denim 5-Jan-16 150 183 22.0% 133.25

Atul Auto 22-Mar-16 506 580 14.6% 478.65

Century Plyboards 5-Jul-16 207 271 30.9% 229.70

Greenply Industries 5-Jul-16 248 322 29.8% 289.75

Talwalkars Better Valkue Fitness 22-Aug-16 252 328 30.2% 253.40

Tv Today Network 29-Aug-16 300 388 29.3% 340.10

Jamna Auto 2-Sep-16 217 272 25.3% 210.55

SML Isuzu 26-Sep-16 1,300 1,560 20.0% 1,266.20

Swaraj Engines Ltd. 3-Oct-16 1,184 1,535 29.6% 1,336.00

Cigniti Technologies Ltd. 5-Oct-16 419 538 28.3% 407.45

Arman Financial Services 14-Oct-16 260 338 30.0% 256.00



November 7, 2016

Corporate Action Calendar — November 2016 (Cash Dividend)

Sun Mon Tue Wed Thu Fri Sat

06 07

Supreme Industries Ltd

Vedanta Ltd

08

Colgate-Palmolive India Ltd

PI Industries Ltd

09

Astral Polytechnik Ltd

Sonata Software Ltd

10

Sundaram-Clayton Ltd

Transport Corp of India Ltd

11

12

Corporate Action Calendar — November 2016 (Stock Buyback)


06 07

R Systems International Ltd

08 09 10 11 12

Corporate Action Calendar — November 2016 (Stock Split)


06 07

08 09 10 11

Indo Count Industries Ltd

12



November 7, 2016

Economic Calendar — November 2016


06 07 08 09

Local Car Sales

10

Trade Balance

Imports YoY

Exports YoY

11

Industrial Production YoY

12

Corporate Action Calendar — November 2016 (Acquisition)

Date Target Company Acquirer Company

10/30/2016 Yatra Online Inc Terrapin 3 Acquisition Corp

10/31/2016 One97 Communications Ltd Multiple acquirers

10/31/2016 Spirotech Heat Exchangers Pvt Ltd LU-VE SpA

10/31/2016 IIInspection & Export Pvt Ltd Iii Co Ltd

10/31/2016 Discountseniorsupply.com domain Health Advance Inc

11/2/2016 Anka India Ltd Private Investor

11/10/2016 BCC Fuba India Ltd Private Investor

11/10/2016 Kwality Credit & Leasing Ltd Private Investor



November 7, 2016

Current Portfolio and Performance Summary as on 4th November’16

Stock Sector Entry Date Weight Reco price (`) CMP (`)

Bajaj Corp Consumer Goods May 13, 2016 9.2% 393 396

Magma Fincorp Financial Services June 30, 2016 8.7% 109 101

Apollo Hospitals

Enterprises Healthcare Services July 29, 2016 9.5% 1,362 1,286

Emami Consumer Goods August 3, 2016 10.4% 1,151 1,200

Castrol India Energy August 5, 2016 10.1% 425 430

Indiabulls Housing

Finance Financial Services August 8, 2016 9.8% 808 788

Punjab National Bank Financial Services October 3, 2016 9.4% 143 132

Minda Corporation Auto Ancillaries October 10, 2016 10.4% 109 107

Cash 22.5%

Total Total 100%



November 7, 2016

Historical Performance as on 4th November’16

Performance Matrix 1-Month 3-Month 6-Month 1-Year Since Inception

Religare Alpha -4.8% 0.3% 13.0% 10.3% 27.6%

Nifty -3.8% -1.4% 9.1% 6.0% 7.0%

Outperformance -1.0% 1.6% 4.0% 4.3% 20.7%



November 7, 2016

Research Product Basket

For cash market trading

Call / Product Call Frequency No. of calls Avg open call duration % funds allocated

Intraday Calls Intraday 2 - 3 < 1 day 25%

Live / RMD Calls Daily 3 - 4 3 - 4 days 30%

Master Pick Weekly 1 1 month 15%

Religare Alpha Opportunity NA 2 - 3 months 20%

Cash NA 10%

For 1L margin*

Total Per Call

25,000 8,000

30,000 4,000

15,000 5,000

20,000 As per weightage

10,000

Intraday Calls These calls are flashed live on Ms Lync and ODIN with the purpose of squaring off positions on the same day. As a policy, we restrict our

intraday cash market calls to less than 4 calls a day. Hence, funds should be allocated accordingly to have provision to trade in all calls.

Live / RMD Calls 2 super ideas are flashed in RMD daily with a view of 3-4 days. Additionally as per market opportunity, we flash live calls during the day

(including BTST calls). 3-4 such calls are made on a daily basis which might be open for 3-4 days. Funds should be allocated keeping in mind that

there will be 7-8 such open calls daily.

Master Pick This is our weekly recommendation shortlisted on the basis of techno-funda analysis. 15% of funds is recommended to be allocated for Master

Pick considering that there will be 3 open calls. The average open duration for this call will be 1 month.

Religare Alpha This is a portfolio of 8-10 stocks which are held with a view of 2-3 months. It is recommended to allocate 20% of funds for building this portfolio

which will provide stability to the overall trading portfolio.

Cash 10% surplus cash in the portfolio should be kept for the purposes of allocating it to opportunities as and when they arrive.

For derivative market trading

Call / Product Call Frequency No. of calls Avg open call duration % funds allocated

Derivative Ideas Daily 1 - 2 1 - 3 days 40%

Live calls Intraday / Daily 1 - 2 3 - 4 days 50%

Cash NA 10%

For 1L margin*

Total Per Call

40,000 40,000

50,000 50,000

10,000

Derivative Ideas 1 derivative idea is shared in RMD daily. It can be a plain vanilla F&O buy/sell call or an option strategy. Funds should be allocated assuming 2

such calls will be open at any time. These calls are open for 3-4 days on an average.

Live Calls These calls are flashed on MS Lync and ODIN during live market hours. These calls can be intraday or with a view of 2-3 days. Funds should be

allocated considering 2 such calls will be open at any time. 3/4 times, these calls will be on Nifty / Bank Nifty only.

Cash It is recommended to hold 10% cash to capitalize on any opportunity that may arise in markets.

For every client, the advisor must allocate a specific proportion of funds for trading and investing depending on the risk taking ability and willingness of the client

and their investment goals.

The below mentioned product basket tries to address the way to deal with the trading portfolio (cash/derivative) for optimum effectiveness of research calls.

It is recommended to divide your trading funds for various types of calls and not invest the entire amount for 1 or 2 calls only.



November 7, 2016

Hitesh Agrawal [email protected]

Ajay Pasari, CFA [email protected]

Ajit Mishra [email protected]

Archana Gude [email protected]

Gaurav Sharma [email protected]

Swati Saxena [email protected]

Manoj M Vayalar [email protected]

Mehernosh Khurshed Panthaki [email protected]

Vipin Kumar [email protected]

Team Members



November 7, 2016

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