Religare Morning Digest · Religare Morning Digest June 16, 2017 Nifty Outlook ... version of...

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Religare Morning Digest

June 16, 2017

Nifty Outlook

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

NIFTY 9555 9700 9500

Markets traded under pressure and lost nearly half a percent, mainly pressurised by weak global cues. It opened lower and maintained negative tone till the end. The news of rate hike by the US Fed was already discounted and markets reacted primarily to the news of special counsel will investigate the US president for his role in obstruction of justice. Mostly sectoral indices traded in line with the benchmark and ended lower while the market breadth remained flat.

Nifty has almost tested its crucial support of 9550 today and rebounded marginally in the end. With no major event around, we feel global cues and further update on monsoon will dictate the market trend ahead. We suggest continuing with stock specific trading approach and focus mainly on index majors and select few from the midcap and smallcap pack.

Sectors to watch

Sector Name Outlook

AUTO STABLE

FMCG STABLE

IT WEAK

News

Religare Super Ideas**

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

Category Amt. MTD FYTD

FII -161 -304 -7386

DII 72 1287 14810

NO OF CON-

TRACTS

TURNOVER IN CR

IDXFUTS 148359 11998

IDXOPT 8464055 760136

STKFUTS 587687 41464

Derivative Ideas **

Aurobindo Pharma has received final approval from the United States Food & Drug Administration (USFDA) to manufacture Sevelamer Carbonate oral suspension, 0.8 gm and 2.4 gm. The Sevelamer Carbonate oral suspension is a therapeutic equivalent generic version of Genzyme’s Renvela oral suspension. The product is being launched immediately.

Aarti Industries has entered into a multi-year contract with a global agriculture company to supply high value agrochemical intermediary. Aarti will supply high value agrochemical intermediary for use in herbicides over a period of 10 years. The supplies are expected to commence from FY20 and would generate revenues of approximately Rs 4,000 crores over the contract term.

Ratnamani Metals & Tubes has bagged two new orders aggregating to Rs. 328 cr for supply of HSAW pipes of Rs. 116 cr and supply of ERW pipes of Rs. 212 cr for Oil and Gas Pipe lines to be completed by Jan 2018.

*FII & DII data as on 14th June 2017

Scrip Buy/Sell CMP Initiation

Range SL* Target

FEDERALBNK BUY 119 116-118 114 126

RELCAPITAL SELL FUTS 599.95 605-610 620 580

**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

INITIA-TION

RANGE

SL TAR-GET

NIFTY

9700CE SELL 75 38-40 52 18



June 16, 2017

Religare Super Ideas

Investment Pick - Talwalkars Better Value Fitness Ltd

Talwalkars Better Value Fitness Ltd (TBVFL) reported inline numbers for Q4FY17 with a revenue and PAT growth of 17% & 23.6% YoY. Led by cost efficiencies,

EBITDA margins expanded 274bps YoY to 70.7%, which was encouraging.

With steady gym additions, healthy same store sales growth and higher contribution from value added services, we expect revenue and profit growth to remain

healthy. We maintain a BUY with target price of Rs 328.

Scrip CMP Target Duration Recommendation Price

TALWALKARS 304.90 328 9-12 Months 277

NIFTY has been hovering in the range of

9500-9650 for almost 8-10 sessions. Huge call

writing is seen at 9600 and 9700 strike. Nifty

9700 strike CE has the highest open interest as

well. We expect Nifty to be in 9500-9650 range in

short term.

Strategy: SELLNIFTY JUNE 9700 CE@38-40 SLOSS

AT 52,TARGET 18.

Derivative Ideas

The Federal Bank Limited (FEDERALBNK) Reliance Capital Limited (RELCAPITAL)

FEDERALBNK has bounced sharply from its support

zone and currently trading on the verge of

breakout from a consolidation pattern around its

record high. We suggest traders to initiate fresh

long in the given range.

After a sharp correction from its 52-week high,

RELCAPITAL has now rebounded of late and

reached closer to resistance zone around 600.

Keeping in mind its overall trend, we advise to use

this bounce to create fresh short positions.



June 16, 2017

Religare Investment Calls

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

Nandan Denim 5-Jan-16 150 183 22.0% 127.8

Atul Auto 22-Mar-16 506 580 14.6% 418.3

Cigniti Technologies Ltd. 5-Oct-16 419 538 28.3% 262.5

Fiem Industries 26-Dec-16 1,089 1,315 20.8% 952.5

Greenply Industries 3-Feb-17 268 304 13.4% 284.1

Arman Financial Services 22-Feb-17 226 340 50.0% 180.7

Castrol India 7-Mar-17 412 483 17.1% 409.5

Berger Paints (I) Ltd 15-Mar-17 230 273 18.7% 253.2

Mayur Uniquoters Ltd 18-Apr-17 380 478 25.8% 361.8

CRISIL 26-Apr-17 1,911 2,540 32.9% 1,867.4

Zee Entertainment Enterprises 12-May-17 530 592 11.6% 508.4

Force Motors 17-May-17 4,497 5,210 15.9% 4,227.1

Indo Count Industries Ltd. 17-May-17 198 240 21.2% 180.5

Huhtamaki PPL Ltd 19-May-17 253 266 5.3% 246.2

Bajaj Finance Ltd 22-May-17 1,268 1,454 14.7% 1,405.3

SML Isuzu 25-May-17 1,247 1,525 22.3% 1,198.7

Sutlej Textiles 29-May-17 902 1,032 14.5% 894.1

Jain Irrigation Systems Ltd. 30-May-17 97 125 28.8% 107.1

Srikalahasthi Pipes Ltd 30-May-17 320 416 29.7% 352.5

Wonderla Holidays 31-May-17 378 430 13.7% 367.6

Tv Today Network 2-June-17 263 335 27.3% 259.4

The Byke Hospitality 6-June-17 190 242 27.4% 189.2

Mold-Tek Packaging Limited 7-June-17 274 340 24.1% 284.8

Magma Fincorp Ltd 9-June-17 135 163 20.5% 149.5

Talwalkars Better Value Fitness 12-June-17 277 328 18.3% 304.9



June 16, 2017

Corporate Action Calendar — June 2017 (Stock Buyback)

Sun Mon Tue Wed Thu Fri Sat

11 12

HCL Technologies Ltd

Marathon Nextgen Realty

13 14 15 16 17

Corporate Action Calendar — June 2017 (Cash Dividend)


11 12

JSW Steel Ltd

13

Tata Consultancy Services Ltd

Kansai Nerolac Paints Ltd

Chembond Chemicals Ltd

14

Mastek Ltd

Can Fin Homes Ltd

Visaka Industries Ltd

15

Deepak Nitrite Ltd

ASM Technologies Ltd

Vijaya Bank

Nitta Gelatin India Ltd

Asian Paints Ltd

Cheviot Co Ltd

16

Navin Fluorine International Ltd

Tata Communications Ltd

Union Bank of India

Dena Bank

Syndicate Bank

Allahabad Bank

17

Corporate Action Calendar — June 2017 (Stock Dividend)


11 12

Muthoot Capital Services Ltd

13

Wipro Ltd

14 15

Biocon Ltd

16

Thacker & Co Ltd

17

Economic Calendar — June 2017 )


11 12

CPI YoY

Industrial Production YoY

BoP Current Account Balance

13

Manpower Survey

14

Wholesale Prices YoY

Trade Balance

Exports YoY

Imports YoY

15 16 17



June 16, 2017

Current Portfolio and Performance Summary as on 15th June’17

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

Emami Consumer Goods August 3, 2016 9.2% 1,151 1,136

Castrol India Energy August 5, 2016 9.0% 425 410

Sml Isuzu Auto February 6, 2017 8.9% 1,265 1,199

Amara Raja Batteries Auto March 22, 2017 10.6% 868 838

Power Grid Corporation of India

Energy April 12, 2017 11.5% 200 210

Bajaj Finance Financial Services May 5, 2017 11.2% 1,292 1,405

TV Today Network Media & Ent. May 10, 2017 9.5% 279 259

Tata Motors Auto May 26, 2017 9.3% 475 448

Capital First Financial Services May 26, 2017 10.1% 705 722

Cash 10.6%

Total 100%



June 16, 2017

Historical Performance as on 15th June’17

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

Religare Alpha -2.8% 9.0% 14.7% 14.3% 36.3%

Nifty 1.4% 5.4% 17.7% 16.7% 21.5%

Outperformance -4.2% 3.6% -3.0% -2.5% 14.8%



June 16, 2017

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.



June 16, 2017

Hitesh Agrawal [email protected]

Ajay Pasari, CFA [email protected]

Ajit Mishra [email protected]

Archana Gude [email protected]

Manoj M Vayalar [email protected]

Mehernosh Khurshed Panthaki [email protected]

Siji A Philip [email protected]

Suhanee Shome [email protected]

Vipin Kumar [email protected]

Team Members



June 16, 2017

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