Zen Money Mantra Mar 14

8/12/2019 Zen Money Mantra Mar 14

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Issue No : 162 March 2014

Why do most investors buy different asset classes at peak valuations and sell in a panic or a crash? Why does history repeat itself? Whydo we have bubbles and crashes in various asset classes, again and again? Which behavioral trait causes investors to exhibit this

irrational behavior?Crowd psychology is an important behavioral trait that affects the decision making of individuals. This trait refers to the fact that thecharacteristics of an individual might disappear in a crowd and the characteristics of the crowd might overpower the individuals whoconstitute the crowd. This happens because, although individuals' intelligence levels may differ, their emotions such as feelings andinstincts are quite similar. Since the behavior of the crowd is relatively more predictable, it overpowers the individuals’ behavior.

Investors’ individual behavior changes when they join a crowd, as their individuality is weakened trying to conform to the crowd andinstead of reacting rationally, they become more impulsive, gullible and tend to react emotionally and irrationally. Crowd psychology isparticularly at play in the financial markets, where bubbles and crashes are a recurring phenomenon.

The term Market Sentiment indicates crowd psychology with regards to the activity and the price movement in financial markets. In theshort term, market sentiment dictates the market direction in the financial markets. Since market sentiment is based on crowd psychology,it is quite contagious.

There are many examples to illustrate the behavioral trait of crowd psychology. For example: The 1998-2000 Nasdaq rally in the US andIT sector rally in India, ended in a steep crash. The 2004-2007 rally of US Real Estate & Equity Markets and Real Estate & Infrastructure

rally in the Indian markets, again ended in a steep crash.Another instance of crowd psychology at play was seen in January 2008, when the markets were at all time high levels and ReliancePower, a private power producer with no immediate earnings, was able to raise funds through it’s Initial Public Offer (IPO) at Rs.420premium for retail investors and Rs.440 premium for institutional investors and the IPO was oversubscribed by nearly 73 times, i.e. it got73 times the money it had intended to raise. It was the largest IPO in the world at that time, attracting nearly 50 lakh investors to the issue.This herd behavior of the crowd at the market peak, led to steep losses for the investors of Reliance Power. By January 2014, after nearly 6years, Reliance Power investors have lost nearly 77-82% of their investment value, by blindly following the crowd.

Even as recently as April/May 2011, many investors have succumbed to the influence of crowd psychology and purchased Silver aroundRs.70,000-Rs.75,000 per kg. as everyone around them was purchasing Silver. After nearly 3 years, Silver is still hovering in the price rangeof Rs.45,000-Rs.47,000 per kg.

Investors can follow the acclaimed U.S. equity fund manager, Peter Lynch's “Cocktail theory !” to understand the current crowd psychologyat play, so as to avoid being part of the crowd and also to take advantage of the crowd psychology.

According to Peter Lynch, when at a party, if he indicates that he is a fund manager, people nod politely but do not seem to be interested

in discussing about stocks or the market, as it has been down and they dont expect it to rise, this typically is the first stage of an upmoveas most people are uninterested in the market and valuations of stocks are reasonable.

In the second stage, when the market has witnessed some rise, few people start showing some curiosity but do not discuss about themarket or stocks in detail, they tend to focus on other interesting topics of conversation.

In the third stage, market is up by a lot and most people at the party start discussing about the markets and stocks. They also tend to showinterest in knowing about what to buy. By now, they would have also bought a few stocks or applied for few public issues.

In the fourth stage, when markets are trading at peaks, new investors or even neighbors who have no prior investment experience start behaving like experts and start recommending stocks to experienced fund managers.

The lesson to be taken from Peter Lynch’s “Cocktail Theory” is that investors should buy when the interest level of people in the stockmarket is low, as the prices are more reasonable and they should sell when the interest level of people in the stock market is high, as theprices are relatively high.

While most of the investors follow the crowd, successful investors do not succumb to the crowd's influence. One of the ways to avoidgetting affected by crowd psychology, and to take advantage of the opportunities provided by the follies committed by investors being

influenced by the prevailing crowd psychology, is to stick to a set investment plan.

Inside the issue...Crowd Psychology ......................................... 1

Property Insurance ........................................ 2

Personal Accid ent Insurance Policy ............. 2

Overseas Travel Insurance ............................ 3

Tax Planning .................................................. 4

Oct-Dec 2 013 Qtr_Results Review ............ 5-6

Commodity Review / Q&A ........................... 7

Market Review & Outlook ............................... 8

Focus Stocks ............................................... 9-10

March Stock List ............................................ 11

Volatility Index Futures .................................. 11

ELSS ................................................................ 12

Zen Money Services Offered ......................... 12


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Property Insurance Property Insurance Property Insurance Property Insurance Property Insurance

Property Insurance

Property of any kind could be exposed to loss or damage due to innumerable risks such as Fire,

Burglary, Theft and Natural Catastrophes. The Property could be a Manufacturing Unit,

Warehouse, Shop, Office, Hotel, School, Hospital or can be a Residential/Commercial complex.

Various policies have been designed keeping in view the risks to which these properties are

exposed.

Following are the policies for providing insurance coverage to a property.

Standard Fire and Allied Perils Policy:This is the most common policy under property segmentand covers various perils such as Fire, Riot & Strike, Malicious Damage, Flood and Earthquake.

Long term policies can be issued for dwellings.

Motor Vehicle Policy: Motor package policy covers loss or damage to Motor vehicles.

Money Policy: This policy is issued for covering loss of money during transit, while in a safe or in counter. This policy may be

extended to cover infidelity of employees.

Burglary Policy: This policy provides cover for loss of property by burglary and theft.

Machinery Breakdown Policy: Replacement/repairs to Industrial machinery are quite expensive and such expenses incurred by the

corporates towards putting the machinery back in order are covered under the policy.

Contractor’s Plant and Machinery: This Insurance provides cover to Contractors Plant and Machinery against unforeseen and sudden

physical damage whether at work or rest, while being dismantled or in the course of such operations or while being shifted or re-

erected, while such items are at the erection site.

Contract Works Insurance: The Contractors All Risks (CAR) Policy may be obtained by the interested parties in the project butprimarily by Principal or by the Contractor engaged for the work and generally includes all sub-contractors. The cover begins from the

start and terminates when the completed project is handed over or any completed part is taken over or put into service. In respect of

Construction Plant and the likes, cover terminates when removed from the site. CAR consists of two main types of work: building

works and civil works.

Marine Transit Policy: This policy provides cover against loss or damage to cargo whilst in transit from one place to another by any

mode of transport. The coverage varies from a restricted cover to an All Risks cover.

Besides the above, there are also property specific policies such as Plate Glass Policy and Neon Sign Policy. There are also composite

policies which combine one or more of the above policies and offer an integrated tailor made coverage.

Personal Accident Insurance Policy

In today’s chaotic world, the probability of death or bodily injury due to an accident has drastically

gone up. Bodily injury resulting in death or disablement of the bread winner upsets the lifestyle of his

dependants and family members.

The Personal Accident insurance policy provides financial protection in case of any unfortunate incident

leading to crippling of Income. The policy pays compensation in case of death or bodily injury, due to

an accident, to the Insured person . It must be noted that natural death is not covered under the policy.

Personal Accident Insurance policies can be issued either to an individual or to a corporate or a group.

The cover provided by the policy may broadly be classified under the following headings:

● Death due to accident: Amount paid is 100% of sum insured.

● Permanent Total Disablement or Dismemberment of Limbs/Loss of eyes: Amount paid may be either 50% or 100% of sum insured

depending on the extent of disablement.

● Permanent Partial Disability: Loss of fingers/toes or amputation of a portion of a limb where the extent of disability has to be

certified by a Doctor. The amount payable varies with the extent of disability suffered.

● Temporary Total Disablement: When the Insured is forced to be temporarily confined at home due to an injury sustained by an

accident, weekly benefits are payable under this section for such period during which the Insured is unable to attend to his normal

duties. The weekly benefit is limited to 1% of the sum insured or Rs.3,000/-, whichever is less.

The documents generally required in case of a claim are:

● Duly filled Claim Form.

● First Information Report – For proof of accident; (In minor accidents, this may be waived).

● Post Mortem Report in case of Death claim.

● Nominee details along with proof of nominee (eg. Ration Card, Voter ID Card).

● For weekly benefits claims, leave certificate from employer and certificate from doctor advising rest are required.



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Overseas Travel Insurance Overseas Travel Insurance Overseas Travel Insurance Overseas Travel Insurance Overseas Travel Insurance

Overseas Travel Insurance

Whenever there is a plan to travel overseas, the first thing we need to take care of is the risks that we are

exposed to in a foreign land, like: sudden illness, accidents, liabilities and loss of belongings like baggage,

passport, money etc. Travel insurance can protect us from such risks when we travel overseas and can

make the journey enjoyable and stress free.

Salient Features:

● No medical examinations will be required upto certain age depending on the terms and conditions of Insurance companies.

● Most of the Insurance companies are covering pre-existing diseases in case of life threatening situations.

● Coverage is available for a maximum period of 180 days which can be extended by another 180 days.

● Travel policy with Annual Cover is available for frequent travelers.

● Special Plans are available for travelers to Asian Countries and for Senior Citizens.

Categories in Travel Insurance:

Insurance companies generally issue policies under the following two categories:

a) For all countries including USA.

b) For all countries excluding USA.

Premium varies for travel to USA and to countries other than USA.

What are covered?

The following risks are broadly covered under Travel Insurance offered by various insurance companies:Amount covered (maximum)

under a Premium Plan

For all your Insurance needs, please call us @ 040-39112244 oremail us at [email protected] or visit our web site: www.zenmoneyinsurance.com

1 Medical Expenses including MedicalEvacuation and repatriation USD 5,00,000 USD 100

2 Personal Accident USD 25,000 USD 100

3 Personal Liability USD 2,00,000 USD 100

4 Trip delay USD 500 6 hours @USD 30 per hour

5 Missed Flight connection USD 250 Nil

6 Trip cancellation USD1000 Nil

7 Loss of passport USD 300 USD 50

8 Political Risk and catastrophe evacuation USD 7500 Nil 9 Hijack Distress Allowance USD 125 per day

7 days maximum 12 hours

10 Delay of checked in baggage USD 100 6 hours

Coverages DeductibleSl.No.

Some of the additional covers available under Students Travel Plan:

Tuition Fee: Reimbursement of the tuition fee paid in advance for the current semester (subject to maximum limit mentioned by the

insurer), if the insured student discontinues school/college owing to medical conditions requiring hospitalization; or due to serious

injury/death of either parent.

Accident to Sponsor: In case the sponsor named in the schedule meets with an accident resulting in death/permanent disability

during the policy period, the Insurance Company shall reimburse the remaining school/college fee subject to the maximum limit

mentioned in the policy.

Family Visit: In case the insured is hospitalized due to accidental injury/sickness covered in the policy and the attending physician in

writing advises the attendance of a family member, the Insurance Company will reimburse the actual cost of economy class transportation by the most direct route via a common carrier subject to maximum sum insured under the policy.

What are not covered?

Some of the major exclusions for Travel Insurance are:

● Cost of treatment of pre-existing diseases/conditions and pre-planned treatment/surgeries.

● Delay of baggage when the intended destination is in India.

● Loss of valuables, money, securities, tickets etc. for baggage claims.

● Theft or loss of passport or money when left unattended or not informed to the Police.



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Tax Planning Tax Planning Tax Planning Tax Planning Tax Planning

Tax Planning for Insurance and Investments

With the fiscal year entering it's last quarter, it is time for tax assessee to plan for tax savings or put in

another way, enter into Tax-Planning Mode. To start with, individual taxpayers will be better off knowing

the various options available under insurance and investment under which tax exemptions and benefits

can be availed.

Tax Exemptions under insurance:

Life Insurance:

● Section 80C (Limit - Rs. 1,00,000): Deduction on Life Insurance policy, taken after 1 April 2012, will be allowed only if yearlypremium is less than 10% of sum assured. If it is more than 10% then not eligible for deduction u/sec. 80C.

Health Insurance:

● Section 80D: Deduction of Rs. 15,000 is allowed if the same is paid as a premium for Medical Insurance taken for self/dependents

or towards preventive health check-up (max. Rs. 5,000). In case any of self/dependents is a senior citizen, the deduction allowed is

Rs. 20,000.

● Additional Rs. 15,000 is allowed as deduction if the same is paid as premium for Medical Insurance taken for parents. In case the

parent is a senior citizen, the deduction allowed is Rs. 20,000.

● Section 80 DD: Exemption given for expenditure made for a disabled dependent towards Medical Treatment/Training/

Rehabilitation. It is also includes the LIC/Insurance premium paid towards maintenance of such dependant.

● Maximum deduction allowed is Rs. 50,000 in case of normal disability and Rs. 1 lakh in case of severe disability.

Tax benefits under Investment Plans:● Rajiv Gandhi Equity Scheme (RGESS) under Section 80CCG: This scheme is open to new retail investor. The maximum investment

permissible under the scheme is Rs.50,000 and the investor would get a 50% deduction of the amount invested from the taxable

income for that year.

● Equity Linked Savings Scheme: Equity-Linked Savings Scheme (ELSS) provided by mutual funds helps you to save taxes under

section 80C as well as provide possible opportunity for long-term returns from the equity markets. Section 80C provides for tax

exemptions on investments upto Rs.1,00,000 on ELSS schemes.

● Tax free bonds: Tax-free bonds are long-tenured (usually 10-20 years) fixed-income securities generally issued by government

backed entities and offer annual interest at rates less than the yield of government securities of similar tenure. The interest earned

on these bonds is tax-free, but capital gains from sale in the secondary market is taxable. Short-term capital gains are taxed at the

normal rate, while long-term capital gains are taxed at 10% without indexation and 20% with indexation. In addition to tax free

interest, investors can earn capital appreciation if and when the interest rates fall.

● These bonds are especially useful for investors in the 20% and higher tax bracket. Assuming a tax free coupon yield of 8.41% for10 years, the implied pre-tax rate will work out to 12.01% for the highest tax bracket (i.e. 30%) while it will be around 10.51% for

investors in the 20% tax bracket.

● Investors can take advantage of the Tax free Bonds only if they stay invested till the maturity as most of these bonds are not

traded regularly in the secondary market and they may end up in losses if they want to exit early.

Other Tax benefit instruments covering Insurance and Investment:

● Unit-Linked Insurance Plans: Unit - Linked Insurance Plans (ULIPs), which are eligible under Section 80C, are investment products

that provide dual privileges of life insurance and savings . However, if one does not need insurance, going with ULIP is not

advised, as there are many other investment options. , Insurance Regulator, IRDA has initiated a few changes by hiking the threshold

limit for ULIPS and mandated a minimum guarantee for such plans. IRDA has also introduced a cap on surrender charge.

Along with these instruments, investors also have the other options for regular annual income and tax benefits.

● Public Provident Fund (PPF): With current interest rate of 8.70%, it is a long term, statutory scheme of Central Government with

a tenure of 15 years.On maturity, one need not pay any tax under section 80 C. Partial withdrawals and loans are allowed in PPF

● Employee's Provident Fund: EPF brings with it key benefits of a fixed-income instrument providing tax benefits under section 80C

at the time of investment. Even the returns from EPF are tax free on maturity.

● National Savings Certificate: The (8.6%-8.90%) returns from National Savings Certificate (NSC) are not only assured and tax

exempt under Section 80C, but also guaranteed by government of India. interest on NSC is taxable after a period of five years. Up

to five year, it is re-invested in the scheme and so is tax exempt.

● Home Loan: A first time home buyer can avail tax benefits on interest payments, u/s. 24, up to the limit of Rs. 1,50,000 p.a. On

principal repayment he can avail tax benefits to the tune of Rs. 1,00,000 p.a. u/s. 80C. For a person with multiple properties, he

cannot avail of any tax benefits on principal re-payment but can avail tax benefit on Interest payment without any upper limit.



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Oct - Dec 2013 Qtr_Results Review

Banking: The December quarter has not thrown any new surprises for the Banking sector. The gap between the private banks andthe PSU banks continues to widen on the performance level. While most private banks continued to do well on the profitability front,asset quality concerns plagued the banks in general, with many reporting increased levels of NPAs. A combination of slowinggrowth and rising credit costs are affecting the sector performance. Revenue growth (NII+credit growth) too has witnessed somemoderation. Banks' performance on the non-interest income front, for both PSUs and private banks, remained lacklustre mainly dueto the lack of support from treasury income and lower transaction-related fee income. Net Interest Margins (NIMs), a gauge of profitability were subdued for both Private and PSU banks.

Our View: There is not going to be any respite for the Indian banks in the coming quarters as slowing economy and high interest

rates will lead to further increase in bad loans both from the retail and corporate sector. The fourth quarter will continue to be a badone for the sector as banks resort to higher provisioning to offset the bad loans. Credit costs will continue to rise as there is noturnaround in the credit cycle. The loan growth is likely to moderate considering the poor capital conditions for most PSU banks.Although the government has pledged to infuse capital, it is far less than required and will restrict the banks' balance sheet growth.

Oil & Gas: Exploration companies have shown good set of bottom line numbers during the December quarter because of operationalimprovement, decrease in volatility in crude oil prices, write back of certain provisions and growth in Offshore margins. Net realizationof crude oil per barrel in Dollar terms has decreased but increased in rupee terms due to rupee depreciation (on a Y-o-Y basis). Highersubsidies led to decrease in crude oil realization per barrel while increase in import prices of LNG has put pressure on gas transmission,petrochemical and liquid hydrocarbons sales and profit margins. The Gross Refining Margins of Oil refining companies has fallensignificantly because of weak prices of oil cracks. Rupee depreciation further put pressure on the bottom line. All the PSU OilMarketing Companies have reported bottom line losses because of non-receipt of subsidies payments from the government.

Our View: The exploration companies are likely to see a muted growth in the coming quarters because of the subsidy burden to be borne for the whole year. The continuing high gas prices are likely to put pressure on the volumes and realizations of the gas transmissionand trading companies. Oil refining companies too are likely to report weak set of numbers in the coming quarter as the governmenthas rolled over its subsidy payments to the next Financial Year.

IT: The IT sector came out with a stellar performance during the Dec quarter despite it being a seasonally lean quarter. Althoughrupee was comparatively stable during the Dec quarter, it still was over 13% down compared to a year ago period due to which mostIT companies were able to maintain their competitive advantage. Gradual pickup in the demand outlook from key markets coupledwith increased discretionary spend from clients aided this growth. Barring a few, the operating margins of most IT companies wereeither flat or marginally lower due to recent wage hikes. TCS, Wipro, HCL Technologies and Hexaware were among the companieswhich reported improvement in their operating margins during the quarter. Pricing across the companies remained stable.

Our View: The demand outlook for IT related services will improve during FY15 led by improving economic growth outlook both atthe domestic and global levels. Pick up in discretionary spends in the US and Europe coupled with demand for newer technologiessuch as the Social, Analytics, Mobile and Cloud will drive the demand further in the coming year.

FMCG: In the December quarter, most FMCG companies have reported healthy earnings driven by decent volume growth and highvalue growth on the back of product price hikes. However, concerns over volume growth continued in the reported quarter withlower than expected volumes reported by majority companies amid slow growth in the economy that lead to lower consumption.Softened raw material prices internationally supported the companies in reporting better margins. Further, improving market andincreasing demand growth in international markets supported this growth. However, higher advertising and sales promotionexpenditure has capped the upside in the margins. Most companies have taken product price hikes to offset higher input costs and toimprove operating margins. Most FMCG companies are showing stronger growth in the rural segment rather than the urban segment.

Our View: The FMCG sector is likely face some moderation in the next few quarters. Revenues are likely to be under pressure onrising concerns on moderating volume growth across the sector. Further, lowered consumption spending due to high inflation,subdued growth in the economy and higher interest rates are expected to pressurize margins in the coming months. On the positiveside, the improving rural demand on the back of increasing purchasing power would aid volume growth for the sector. Any revivalin the macro environment resulting in improvement of consumer sentiment would act as a key trigger for improvement in thevolume growth in the coming quarters.

Infrastructure: Infrastructure sector continued to face the slow-down in order-inflows even in this quarter. Companies with stronginternational presence were able to compensate for a slowdown in domestic order-inflow, by bagging orders from Middle-East,North Africa and South East Asia. Out of these international geographies, it is the Middle-East/West Asia which is helping thecompanies overcome the domestic weakness. Most of the orders for the EPC players are in the segments of Power T&D and UrbanCivic Orders (majorly water supply and sewage treatment). Orders in the international geography were in the segments of PowerT&D and Urban Transport Infrastructure. Urban Transport Infrastructure was also a relatively vibrant segment in domestic geography

(considering the projects in Delhi, Mumbai, Jaipur, Chennai, Bengaluru and Hyderabad).Our View: The increasing pace of project clearances from the MoEF (considering the recent spate of clearances after Veerappa Moily tookover as the Minister) preceded by the push given by the CCI might start showing some effect on the ground in another 2 to 3 quarters. But,policy uncertainty and weak economic and demand scenario might continue to affect the investment ability. This can be overcome onlythrough easier and cheaper credit sources or through stake sales. The latter is already happening but the former needs a stable and aprogressive government formation at the centre post the general elections in May 2014. The outlook thus continues to remain cautiouslypositive with uncertainty continuing. Certain companies with strong execution capabilities are better placed than others.

Pharma: The Pharma sector came out with healthy results both in terms of sales and realizations in the Dec quarter on the back of new formulation exports to US, UK and to Latin American countries. Few drugs which contributed to good set of revenue and profitmargins are Doxil, Prandin, Cymbalta, Azacitidine, Decitabine, Divalproex, Donepezil and Zoledronic. Performance of the newacquisitions in the US and Japan markets further boosted the growth. However, new regulations and regulatory issues in domesticmarket and in countries like Brazil has affected the growth of few companies. But strong brands and presence in niche segmentsenabled them to overcome those weaknesses. Rupee depreciation and other accounting entry reversals further boosted the bottom

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line. The recent US FDA warning letters to some companies affected the growth in API and formulation exports. All the key playerscontinued to file good set of ANDA molecules and received ANDA approvals.

Our View: Key companies in the sector are expected to show healthy growth in revenues and profit margins in the coming quarter.Strong base business in US and the new formulations in pipeline are likely to drive the growth. Growth from domestic market islikely to resume as uncertainties in trade related issues are being settled. Decrease in volatility in Rupee value is likely to decrease theforex translation losses. Few companies are likely to witness pricing pressure in API and Formulations in regulated markets.

Power: Power sector continued to witness demand slow-down. The total power demand in India is pegged at around 133,000 MW(approx.) by CEA (as of 31st December, 2013) when the total installed power generation capacity is about 233 GW. The weak demandposition also shows up in the weakening PLFs for thermal power plants. These factors indicate, increasing price elasticity of demand,as SEBs prefer to go for load shedding than incurring losses. Companies with lower Gross Station Heat rate have benefitted from

more efficient plant operations and thus were able to increase their PLF's. Transmission companies also depend upon higher demandgeneration for attaining higher capacity utilization and generating the desired growth levels ahead.

Our View: The continuous investments by SEBs on their T&D network along with improving financial health can aid the sector inthe medium to long term. The recent tariff relief to Tata Power (Mundra) and Adani Power might reduce the PLF for these plants butgoing forward, will act as a policy support for power plants set up on imported coal. Considering the upcoming capacity additionsand the need for cheaper power, the long term sustainable growth of the sector would depend upon softening of international pricesof Coal, Crude Oil and Natural Gas and improvement in growth rate of domestic economy. Policy related issues have been addressedto a significant extent in the last one year. So, it is the improvement in these macro factors which can provide the required spurt in thegrowth to the sector. For IPPs with captive coal blocks, demand safety would be higher going forward.

Capital Goods: Capital Goods sector continued to face weakness in order inflow, even in Q3 FY14, mirroring the general slowdownin the economy. This slowdown was even more pronounced in the core sectors of the economy like Capital Goods (for December2013, Capital Goods sector grew at negative 3%). Looking at the trends in a broad sense, there has been a slow-down in price erosionas the competition pressure has eased and pricing has rationalized a bit. Major Companies in the sector are working on improvingcost-efficiency, broadening the product range, increasing the manufacturing capabilities and turning India into a international

manufacturing base and thus looking at tapping the exports market and also serving the international operations from India. Theseefforts have helped them not only to stop erosions in operating margins but also reverse it to some extent. What continues to remaina concern for the companies in the sector is slow pace of execution and deferment of payments for completed works. Sector wise,capacity additions in Cement and Steel sector are going slow because of lower capacity utilizations at the existing facilities. But,sectors like Pharma, Food processing, Textiles and Chemicals continue to see traction. Power Transmission & Distribution sector iswitnessing some buoyancy as PGCIL continues with its planned capex and SEBs are working on improving the efficiency of theirT&D networks (to bring down the AT&C Losses).

Our View: The sector is expected to see subdued growth to de-growth continuing for another 2 to 3 quarters before the on-groundexecution of projects start. This view is also based on the caution needed to factor in the slow pace of economic growth. Only acombination of factors like softening of international commodity prices (and thus a drop in input inflationary pressures), significantdrop in interest rates, emergence of new sources of cheap long term debt funds, appreciation & stability in Indian Rupee and strongpolicy framework can create a strong and sustainable growth in the sector. Power generation sector might start seeing a strongerorder inflow in 2 to 3 quarters.

Telecom: Telecom sector continued to perform well on a Y-o-Y basis because of higher Revenue per Minute and sustained voice

minutes. This apart, the contribution of Data Services to the total service revenue is now closing in on 10% (for the major telcos). Whatthough is visible is the increasing price elasticity of demand and the total voice minutes increase remaining muted on a Q-o-Q basis.The major growth on a Q-o-Q basis though is getting driven by increasing data download (MBs) and a marginal increase in per MBrealization. Companies with high debt burden continue to see high interest outgo. On a whole, there has been an increase in profitabilitymargins on a year-on-year basis.

Our View: The increasing price elasticity of Voice services and increasing scope for providing Data services brings to the fore, thenecessity of increasing the MBs of Data usage on the network. Indian market for Mobile Services, is a highly price elastic market.Thus, it would entail upon the operators to cut down the costs and increase their operational efficiency to maintain the profitabilitymargins along with volume driven top-line growth. This apart, the balance sheet of the players might see an increasing stretch because of the cash out go for spectrum auction payments and network expansion. Hence, it also brings to the fore the need for theoperators to design products that can increase the data usage by customers. The sector thus is in exciting times, wherein there could be a valuation upside for players who increase their data and voice top-lines without compromising their operating margins. All of this also has to be done in the backdrop of an imminent game changing entry strategies expected to be employed by a new player.

Metal & Mining: The Metal and Mining sector reported a mixed performance during the December quarter. Higher volumes and

price rise in India along with better performance in International operations, because of asset base restoration & upgradation, drovethe growth of Steel companies. Plant shutdowns for maintenance constrained this growth. Companies into non ferrous metals -Aluminium and Copper, have reported a growth in top line but profit margins were under pressure because of fall in LME prices,plant shutdowns and underutilized capacities. The average Aluminium LME and Copper LME prices decreased by 12% and 10%respectively during the quarter on a Y-o-Y basis while both the metals were down by 1% on a sequential basis. Fall in realizations because of weak LME prices was partly offset by Rupee depreciation. Coal mining companies reported a muted growth and the Ironore mining companies reported good growth because of price hikes. Increased burden of interest & depreciation of the recentlycommissioned and underutilized capacities has affected the growth of companies across the sector.

Our View: The weakness in LME prices and delays in Coal block & mineral ore allocations will continue to hurt the sector. There areno major changes from Government which can help increase the production and induce an increase in demand from Infra & realtysectors. Recent mining permissions and the new capacities coming on stream are likely to show positive growth in the volumes butweak LME prices, high interest costs and depreciation charges on under utilized capacities along with lack of required minerallinkages are expected to put pressure on the net profit margins.

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CommodityCommodityCommodityCommodityCommodity R R R R R eview eview eview eview eview / / / / / Q& AQ& AQ& AQ& AQ& A

Commodity Review - Outlook

During the month of February, Industrial metals traded on a muted note on the back of mixed

global economic data, especially from China. The month started out on a muted note as Chinese

markets remained closed during the first week of February on account of New Year holidays. A

drop in China’s PMI index for January, which indicated that it's factory activity dropped to a six

month low, added pressure on these metals. However, positive China Trade figures showing awidening trade surplus along with Chinese loan growth supported them at lower levels. Among

precious metals, Gold closed with smart gains for the month at $1330 (from $1245, up by 7%), the

rub off effect of Gold was seen in silver as well, as it posted impressive gains to close at $21.3

(from $19, up by 12%). The rally in precious metals was supported by weak economic data coming

out of China and U.S., this coupled with political and economic turmoil in Ukraine pushed investors to flock to safe haven assets.

Brent crude also closed higher at $109 gaining close to 4% for the month on the back of rising winter demand for heating fuel

coupled with escalating tensions in Libya, South Sudan, Venezuela and most recently Ukraine. Natural Gas spiked up sharplyduring the month on the back of continuing severe cold conditions across U.S. sharply increasing demand for heating, however it

has come off it's highs towards the end of the month with weather reports predicting a move towards more calmer spring weather

conditions in March.

The outlook for Industrial metals for the month of March looks subdued on the back of weak Chinese data coupled with mixed data

coming in from developed markets. Data flow from China and U.S. would be watched closely along with FOMC meet scheduled inthe middle of March which could provide further direction to industrial metals. The next U.S. Fed meet would be key as the current

weak economic data from the U.S. is being attributed to inclement weather and further data flow before the meet would be watched

closely to get clarity as to whether this weakness is down to the economy or just weather related. Weakness in China data and

emerging markets seems to be bringing back the safe haven value associated with precious metals like gold and silver. In Dollar

terms, immediate support for gold could come in at $1290-$1300 levels and in rupee terms this could correspond to the level at Rs.29,700. Silver could move along with Gold and in dollar terms, the support for Silver could come in at $21-$20.5 and in rupee term

this could correspond to the level at Rs. 45,700 levels. The recovery in Crude Oil could be supported by escalating tensions in oilproducing countries and any improvement in economic data from the developed markets (considering that weak U.S. Data is being

attributed to weather conditions which are expected to improve in the month of March with the onset of Spring season). However,

the upside could be capped on account of weak data flow from China as well as U.S. oil production rising due to a boom in shale

drilling and also expectations of rising exports from OPEC member Iran as it prepares for more oil business after the easing of

sanctions. Natural gas could find some support and move up in the early part of March as current weather reports point to another

bout of severe weather which is expected to hit the eastern and central U.S. in the first week of March. However, the forecast formilder U.S. weather in the second half of march with the onset of Spring weather could cap any sharp rise in Natural Gas prices. The

movement in Rupee denominated commodities of internationally traded commodities have to be taken in context with the movement

in rupee which seems to be stabilizing but could see some volatility on the back of lower than expected Indian GDP data and also on

account of U.S. Fed meet scheduled for 18th &19th of March 2014.

Personal Finance Queries

To clarify your Personal Finance Queries, please email your questions to [email protected].

I am 35 years old and need your advice on tax saving investments. Under Sec 80C, I have investments of Rs. 90,000,

towards Home loan (principal repayment) and Tuition fee. Please let me know other investments exempted under

Sec 80 C and any other sections to claim tax benefits. Also update on taxation on the proceeds of life insurance claims.

I will invest further if the investments are suitable for me. I request your early response as we are close to 31st March.

- Raghu, War angal

While we appreciate you for consulting us for your tax-saving investments, we need to reiterate that Investment-Planning should

start right from the beginning of the Financial Year (i.e. April) and not at the end of the Financial Year (Jan, Feb or Mar). Secondly,

the main objective for investments is to fulfill the financial needs & goals of individuals and their families and only then tax-savings

should be considered.

One can claim a maximum exemption of Rs. 1,00,000/- under IT Sec 80C that includes investments such as Home Loan (Principal

repayment), Life Insurance Premiums, Provident Fund, Public Provident Fund, National Savings Certificate, Equity Linked Savings

Scheme (ELSS), Senior Citizen Savings Scheme, 5-year Fixed Deposits (Banks/Post Office), Tuition Fee, ULIPs etc.

Under IT Sec 80D, Health Insurance Premiums are exempted to the extent of Rs. 15,000 for Self, Spouse & Children and an additional

amount of Rs.15,000 towards Health Insurance for parents (Rs.20,000 if parents are over 60 years).

Under IT Sec 24, Home Loan (Interest repayment) for self-occupied Home is exempted to the extent of Rs.1,50,000/-

Maturity benefits and the claim proceeds from traditional Life Insurance policies are exempted from Income tax under Sec 10 (10D)

subject to conditions. In case of pension plans, taxation is different.



8

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Indian markets ended the month of February with gains on the back of firm globalcues, continued FII inflows and stability witnessed in the rupee. By the end of themonth, Sensex and Nifty were up 606 and 187 points to close at 21120 and 6276respectively.

Domestic indices started the month on a negative note following weak global cues,including disappointing Chinese PMI data and weak US manufacturing data. Fiscaldeficit for nine months ending December 2013 touching 95.2% of the budgeted targetand lower revised GDP growth of 4.5% (from earlier figure of 5%) for FY13 dampenedthe market sentiment further. Also, concerns over rising NPAs of banks, weak servicesector output and continued FII outflows kept the bourses under check. However, better than expected advance growth numbers, India’s narrowed trade deficit data for January and improving global cues supported the market at lower levels. Marketstook note of mixed set of macro data including weak IIP growth, better than expected

data for CPI and WPI inflation. Stock specific activity was witnessed in the market onthe back of ongoing quarterly earnings season.

Markets found some support with Interim-Budget 2014-15, wherein, FM announcedrevised fiscal deficit target for the current fiscal year to 4.6% from 4.8% proposed earlier,along with other announcements including, lowering gross borrowing target for thecoming financial year and excise duty cuts for Capital Goods, Auto and White Goodssectors. Further, renewed FII inflows, stability witnessed in rupee against dollar, IMFrevising upwards GDP growth, RBI governor's focus on stabilising the currency coupledwith supportive global cues including improved US manufacturing index, ChineseTrade surplus data and drop in Euro Zone inflation supported the upside of the marketand Indices ended the month with gains.

During the month, FIIs’ net bought equities worth Rs 1,985 Cr. Mutual funds on theother hand continued to withdraw from equities, and for the month they net soldequities worth Rs 1,207 Cr.

On a sectoral front, Capital Goods and Auto were the top gainers of the month. CD,HC, Banking and IT were among other sectors that outperformed the indices whileMetal sector was the top loser of the month.

Market Review & Outlook Market Review & Outlook Market Review & Outlook Market Review & Outlook Market Review & Outlook

MARKET WATCH

Major IndicesMajor IndicesMajor IndicesMajor IndicesMajor Indices 28/02/1428/02/1428/02/1428/02/1428/02/14 31/01/1431/01/1431/01/1431/01/1431/01/14 % VAR% VAR% VAR% VAR% VAR

S& P CNX Nifty 6,276.95 6,089.50 3.08

S& P CNX 500 4,849.50 4,709.15 2.98

BSE Sensex 21120.12 20513.85 2.96

BSE 200 2494.74 2425.46 2.86

NASDAQ 4308.12 4103.88 4.98

DOW 16321.71 15698.85 3.97

FTSE 6809.70 6510.44 4.60

NIKKEI 14841.07 14914.53 -0.49

Other IndicatorsOther IndicatorsOther IndicatorsOther IndicatorsOther Indicators 28/02/1428/02/1428/02/1428/02/1428/02/14 31/01/1431/01/1431/01/1431/01/1431/01/14 % VAR% VAR% VAR% VAR% VAR

FOREX (Rs/$) 61.76 62.66 1.44

BRENT CRUDE ( $/ Bl ) 1 09 .0 7 1 06 .4 0 2 .5 1

GOL D ( Rs/1 0Gm s) 3 04 87 .0 0 2 97 36 .0 0 2 .5 3

Top GAINERS - BSE 500Top GAINERS - BSE 500Top GAINERS - BSE 500Top GAINERS - BSE 500Top GAINERS - BSE 500 CM PCM PCM PCM PCM P % VAR% VAR% VAR% VAR% VAR

M ahindra C I E Autom otive 81.15 60.53

Monsanto India 1466.60 55.57

Amtek Auto 99.90 53.46

P C Jeweller 104.10 41.63

Tata Elxsi 586.05 41.22

Top LOSERS - BSE 500Top LOSERS - BSE 500Top LOSERS - BSE 500Top LOSERS - BSE 500Top LOSERS - BSE 500 CM PCM PCM PCM PCM P % VAR% VAR% VAR% VAR% VAR

N C L Research & Financial Services 452.00 -45.93

S R K Industr ies 55.60 -44.18

Gl ob al In fr at ec h & Fi nan ce 5 5.4 0 - 34 .5 9

Anukaran Commercial Enterpr ises 10.03 -31.30

Ind ian Info tech & Softw ar e 8 .42 - 31 .27

BSE Sectoral IndicesBSE Sectoral IndicesBSE Sectoral IndicesBSE Sectoral IndicesBSE Sectoral Indices 28/02/1428/02/1428/02/1428/02/1428/02/14 31/01/1431/01/1431/01/1431/01/1431/01/14 % VAR% VAR% VAR% VAR% VAR

CG 10375.60 9486.63 9.37

AUTO 12598.73 11568.87 8 .90

CD 5951.36 5548.18 7.27

HC 10839.95 10109.76 7.22

BANKEX 12284.27 11712.31 4.88

IT 9792.25 9476.62 3.33

POWER 1528.54 1525.34 0 .21

OIL & GAS 8425.99 8453.06 -0.32

FMCG 6483.96 6517.93 -0.52

REALTY 1203.50 1211.6 -0.67

PSU 5514.88 5554.94 -0.72

M ETAL 8660.83 9151.57 -5.36

Institutional Activity - February 2014 (Rs. Cr.)Institutional Activity - February 2014 (Rs. Cr.)Institutional Activity - February 2014 (Rs. Cr.)Institutional Activity - February 2014 (Rs. Cr.)Institutional Activity - February 2014 (Rs. Cr.)

Inst i tut ionInst i tut ionInst i tut ionInst i tut ionInst i tut ion Bu yBu yBu yBu yBu y SellSellSellSellSell Ne tNe tNe tNe tNe t

FII 45582.7 43596.9 1985.80

M F 6896.8 8104.2 -1207.40

Market Review for February - 2014

The Indian markets are likely to remain fairly range

bound in March tracking global and domestic cues.

After the recent rallies, the US markets are likely to

witness some consolidation in the near term as the

sustainability of it's economy remains a concern after

recent weak economic data releases. China too

remains a concern in the near term after new economicdata releases raised fresh fears of a slowdown in the world’s second largest economy.

Global markets will be eyeing key economic data releases from these countries formore cues. The market will also await the FOMC meet scheduled during the mid of the

month which can provide clues to the Fed’s moves on the tapering.

Market Outlook - March 2014

Back home, in the absence of any major cues, politics will take center stage for the markets in the next couple of months. Markets are likely

to move sideways with a possible upside till the general election in Apr-May.

The IIP and the Inflation numbers in the middle of the month would be tracked by the markets for cues. While inflation numbers are

easing, IIP numbers continue to remain weak and any positive news on that front could improve market sentiments.

Markets will be awaiting the advance tax figures which will be out from the mid of the month for additional cues.

Market will also be eyeing the crude and rupee movement for cues. Any sharp move either ways in them can affect market sentiments.

Improving FII inflows in the second half of February boosted the market sentiments. But going forward, FIIs are likely to remain on the

sidelines and will focus on the outcome of the general elections before planning their further moves.

Sensex - February, 2014

1st Week 2nd Week 3rd Week 4th Week

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Focus Stocks Focus Stocks Focus Stocks Focus Stocks Focus Stocks

C o n s e r v a t i v e I n v e s t o r

C o n s e r v a t i v e I n v e s t o r

Concerns:

● Rising input costs of major raw materials (metals)

and volatility in currency fluctuations are adding

pressure on the margins of the company.

● Huge Competition and lack of pricing power are

affecting the margins of the company.

Company Profile: Whirlpool of India is a 75% subsidiary of US based Whirlpool Corporation. The company's portfolio includesrefrigerators, washing machines, air-conditioners, microwave ovens and water purifiers. The company has ventured into the built-in appliances segment wherein the company markets completely imported kitchen units through specialized kitchen manufacturerand builder channels. Currently, Refrigerators contribute for around 60% of its revenues while Washing machines account foraround 20% of its revenues. Exports constitute 10% of the total sales of the company and it exports it's products to Russia, MiddleEast, Africa and South America. In the domestic markets, the company currently commands a 15% market share in washing machinesand a 20% share in refrigerators.

Key Financials (Rs. Cr.) FY 09 FY 10 FY 11 FY 12 FY 13

Total Income 1919.22 2694.97 3285.87 2849.45 3191.26

OPM (%) 7.43 9.47 8.81 8.26 7.60PAT 70.52 145.02 166.03 123.73 127.75

Equity 126.87 126.87 126.87 126.87 126.87Reserves 24.87 87.49 241.65 363.32 490.67

Debt 0.00 0.00 0.00 0.00 0.00EPS (Rs.) 5.56 11.43 13.09 9.75 10.07

Book Value(Rs.) 11.96 16.90 29.05 38.64 48.68Dividend (%) 0.00 0.00 0.00 0.00 0.00Promoter H(%) Last 5 Qtrs. 75.00 75.00 75.00 75.00 75.00

CMP: Rs. 195.30 Whirlpool of India Ltd. EPS(TTM): 8.83

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●

The company is backed by a strong parent group, i.e. Whirlpool Inc., which isamongst the largest consumer durable company in the world.

● Company was among the first in home appliances to enter home shoppingchannel and a significant part of it's Microwave volume comes from this channel.

● Company has made an aggressive foray into South America and is also strivingto tap unexplored potential in many Middle East and African markets which arerelatively under penetrated.

Outlook: Whirlpool has made huge investmentsover the last few years and has revamped it's

product range, strengthened it's supply chain andis focusing on premium/international image togrow in the under penetrated Indian ConsumerDurable market. Although, the volume growth forthe company is expected to be under pressure in

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Concerns:

● Delay in Vodafone stake sale due to any reason

can delay improvement in profitability.

Company Profile: Piramal Enterprises Limited (PEL) is a diversified enterprise, with presence in Pharmaceuticals, Life sciences,Financial Services and Information Management. Presence in these segments is through group companies - Piramal Healthcare;Piramal Lifesciences; Piramal Capital and Decision Resources Group (DRG) respectively. In Pharmaceuticals space, PEL is one of the leading global players in custom manufacturing and critical care segment (inhalation and injectible anesthetics - Halothane,Isoflurane, Enflurane, Sevoflurane and Propofol) and also has 13 OTC products. In Lifesciences segment PEL is engaged in drugdiscovery & research with 11 products in Oncology and Diabetics therapeutic segments in various stages of clinical trials. In financialservices, its presence is through PE fund - Indiareit Fund Advisors (AUMs of above Rs. 5,000 Crore and a Loan Book of Rs. 1,665Crore, post restructuring) - and Piramal Capital (lending to real estate, education & infrastructure sector through structured debtfinancing/Investments). In information management business, DRG, is a leading provider of information based services to thehealthcare industry. PEL has equity investments in Vodafone India (10.97%) and Shriram Transport Finance (9.9%) and has 5subsidiaries and One Joint Venture (Allergan India Ltd. a 51:49 JV).


Total Income 3490.88 3802.39 18546.71 2667.75 3800.78

OPM (%) 18.87 21.73 90.30 17.45 15.57PAT 316.25 481.90 12883.36 111.50 -227.29

Equity 41.80 41.80 33.58 34.51 34.51Reserves 1275.27 1643.09 11802.84 11207.52 10689.05

Debt 1339.08 1294.96 756.86 2046.68 7688.13EPS (Rs.) 15.13 23.06 767.32 6.46 -13.17

Book Value (Rs.) 63.02 80.62 704.97 651.52 621.48Dividend (%) 210.00 270.00 600.00 875.00 875.00Promoters H (%) Last 5 Qtrs. 52.99 52.98 53.00 52.97 52.95

PEL Sensex

CMP: Rs. 552.45 Piramal Enterprises Ltd. EPS(TTM): NA

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Strengths:

● PEL has market leading position in many of it's business segments like ContractManufacturing, OTC Products, Anesthetics and Real Estate PE Fund.

● PEL's strong balance sheet position allows it to tap distressed or undervaluedassets and create an avenue for future profits.

Outlook: PEL is going to concentrate in the businessareas of realty funding & lending; structured equityinvestments in infrastructure and education sector;drug discovery & research; hospital based products,consumer healthcare products and informationmanagement on the pharma side; to reach thetargeted turnover of Rs. 20,000 Crore by 2020. Themain near term trigger for the company is stake salein Vodafone India (10.97%) for Rs. 8,900 Crore. In

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the short to medium term, as consumer demand is expected to remain sluggish on account of rising interest rates and elevated inflationarypressures. Whirlpool’s vast product portfolio, regular new launches and strong parentage along with the company’s decent financialsand strong balance sheet makes it a good long term bet.

Whirlpool Sensex

the medium term, valuation increase could come through successful Launch of BST Cargel whereas in the long term a significantvaluation upside could be attained if any of the molecules in various stages of clinical trials are successfully commercialized. Post thesale of Vodafone stake, PEL would become debt free, leading to increase in accounting profits because of drop in interest expensesand/or increase in other income. This would also aid the company in terms of carrying out strong organic and inorganic growth.



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A g g r e s s i v e I n v e s t o r

M o d e r a t e I n v e s t o r

Focus Stocks Focus Stocks Focus Stocks Focus Stocks Focus Stocks

CMP: Rs. 1085.05 Aditya Birla Nuvo Ltd. EPS (TTM): Rs. 89.59

Company Profile: Aditya Birla Nuvo, a $4.75 billion conglomerate under the ambit of Aditya Birla group, operates in FinancialServices, Manufacturing, Telecom, Fashion & Lifestyle and IT. In the BFSI segment, the company operates through Birla Sun LifeInsurance (BSLI) and Birla Sun Life Asset Management (BSAMC), both JVs with Sun Life Financial Inc. of Canada (Revenue: 27%). It'score manufacturing business (Revenue: 18%), produces viscose filament yarn, insulators, textiles and agri-business products like Ureaand DAP. Company has presence in the telecom sector through 25% stake in Idea Cellular (Revenue: 24%). In the textiles segment, itoperates through Madura Fashion & Lifestyle (brands includes Van Heusen, Louis Philipp and Peter England) (Revenue:21%), also,the company has acquired controlling stake in Pantaloon Retail (67.95%).


Total Income 13956.87 15749.61 18566.57 22255.09 25892.34OPM (%) 6.21 10.71 14.02 14.32 16.02

PAT -435.73 154.56 822.10 890.13 1058.89Equity 95.01 103.01 113.51 113.52 120.21

Reserves 5373.27 5189.44 6539.25 7402.98 9039.87Debt 8886.77 7432.40 9300.88 12300.73 18680.21

EPS (Rs.) -36.25 12.86 68.39 74.05 88.09

Book Value (Rs.) 575.55 513.78 586.09 662.13 762.01Dividend (%) 40.00 50.00 55.00 60.00 65.00Promoter H (%) in last 5 Qtrs. 53.76 53.76 53.75 57.23 57.23

Strengths:

● The company has leadership position in Insulators, VSF & VFY, BrandedApparels, Telecom, Life Insurance and Asset Management businesses.

● The financial services business with funds under management of around USD

20 billion (Rs. 1,17,278 Cr. on Dec’13) has been witnessing strong performance

as the life insurance business has turned around to profits.

Outlook: Aditya Birla Nuvo by virtue of it'sdiversified business presence can be considered agood proxy for long-term India growth story.Company has applied for a banking licence and isone of the major contender considering its strongpresence across the BFSI sector. It has plans to investaround Rs. 8,000 crore in it's financial services,

Concerns:

● Company has huge debt on books (Rs. 8,394 Cr.on Dec’13), which could limit it's profit margins.

● Any adverse regulatory requirements, such as ahigher capital adequacy ratio, could impact thetop and bottom lines of BSLI and BSAMC.

CMP: Rs. 233.05 Alkyl Amines Chemicals Ltd. EPS(TTM): 34.14

Company Profile: Alkyl Amines Chemicals Limited is engaged in the manufacture of amines and amine-based chemicals to thepharmaceutical, agro-chemical, rubber chemical & water treatment industries and others. Company caters to both domestic andinternational market with core competence in chemicals handling and manufacturing. The company products are Aliphatic amines(Methylamine, Ethylamine, Isopropylamine, Propylamine, Butylamine, Ethylhexylamine, Cyclohexylamine), Amine Derivatives(Amides, Hydrochlorides and Mixed Amines), Fine chemicals and Other gases. The company also takes up contract services forproviding technology and product development and custom manufacturing support to clients. Its manufacturing plants are situatedat Patalganga and Kurkumbh in Maharashtra. Its R&D Centre is located at Pune. The company is top supplier in some of the productsin the domestic market. It's 100% subsidiaries are Alkyl Amines(Europe) SPRL and Alkyl Speciality Chemicals. It owns 30.44% stakein a listed associate company-Diamines Chemicals.

Concerns:

● Volatility in Rupee and domestic Alcohol pricescould affect the operating profit margins of the

company.● Cheap imports from China is affecting companies

across the sector.

Outlook: The company has been able to come outwith consistent performance over the last four yearson the back of continued new investments,upgradation and expansions of it's manufacturingcapacities. Further, the debottleneck measures taken


Total Income 207.49 213.67 245.24 288.00 372.24OPM (%) 12.97 17.39 14.26 15.60 16.46

PAT 5.63 12.78 13.96 17.59 24.21Equity 10.21 10.21 10.21 10.21 10.21

Reserves 55.70 63.87 75.04 87.84 106.03Debt 133.28 113.58 120.08 123.41 146.02EPS (Rs.) 5.17 12.01 13.17 16.58 22.86Book Value (Rs.) 64.55 72.56 82.53 95.09 112.94Dividend (%) 20.00 30.00 30.00 40.00 50.00Promoter H (%) Last 5 Qtrs 74.19 74.19 74.19 74.19 74.19

in the past and commissioning of Acetonitrile new plant in FY13 are enabling it to generate good revenues and improve it's net profitmargins. Company further upgraded this plant to supply high quality products to specific customers and planned to increase thecapacity in FY14. It has commenced the work for setting up of a new manufacturing plant at Dahej, Gujarat. The company's strongmarket share in domestic Amines market and the current expansion & upgradation plans along with new products will lend supportto the growth prospects of the company in the medium to long term.

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● A vast product portfolio consisting of specialty chemicals for variousapplications in Pharma, Agri and Rubber Industry. Company is top supplier insome of the products in the domestic market

● Strong R&D with core competence in manufacturing Amine and it's Derivatives.

Alkyl Amines Chemicals Ltd. Sensex

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fashion retailing and urea business segments in next 3-5 years. Recently, company has exited it’s IT & ITeS business by selling Minacsfor about Rs.1,600 Cr, proceeds of which are expected to support its growth plans and ensure greater focus in the other businesses. Inshort to medium term, earning could come under pressure due to the ongoing restructuring plans of some of it’s business segments,general slowdown in economy and aggressive bidding of spectrum by Idea. However, a strong diversified business presence andcompany’s strategy to exit or sell a business in which they cannot attain leadership position makes it a good long term bet.

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February Stock List February Stock List February Stock List February Stock List February Stock List

We have provided below a short list of companies which we feel are currently available at attractive valuations, particularly when viewed with a

medium\long term perspective. The CMP and the Market Cap. are based on 28/02/2014.

* Trailing 12 Months; M = Medium Term (3-12 Months); L = Long Term (12 Months and above)

DISCLAIMER

This document was prepared by Zen Securities Ltd (ZSL), on the basis of publicly available information, internally developed data and other sources believed to be reliable.The material contained herein is for information only and under no circumstances should be deemed as an offer to sell or a solicitation to buy any security. ZSL or itsemployees, may, from time to time have positions in the stocks mentioned in this document. While all care has been taken to ensure that the facts are accurate and theopinions are reasonable, ZSL shall not be liable for any loss or damage howsoever arising as a result of any person acting or refraining from acting in reliance on anyinformation contained therein.

Volatility Index Futures

The Volatility Index ("VIX") is an index which measures expectations of volatility, orfluctuations in price, of the S&P 500 index. The index, commonly known by its ticker VIX, isalso known as the "Fear Index" because a high VIX represents uncertainty about future prices.The index is calculated using the price of near-term options on S&P 500 index.

To help investors hedge near-term volatility risks in their equity portfolio, the National StockExchange launched futures contracts on India VIX called ’NVIX’ from 26th February, 2014.India VIX is India’s Volatility Index which is a key measure of market expectations of near-term volatility conveyed by NIFTY stock index option prices. The index depicts expectedmarket volatility over the next 30 calendar days. This volatility index is computed by NSE

based on the order book of NIFTY Options. The minimum contract value of NVIX is set at Rs.10 lakh for now, which along with thecomplex nature of the product could act as a dampener for retail investors. For Investors, the addition of a volatility index to aportfolio enhances the possibility of better returns in a volatile market as volatility index tends to be negatively correlated withmarket returns. This would also help in hedging the risk of Vega (the change in price of an options contract due to a 1 per cent changein the volatility of the underlying asset) in an options portfolio. Traders can also construct hedges using these futures based on anextreme loss (black swan) scenario as well as use them to protect existing portfolio volatility based on a volatility estimate over aspecified period of time, going forward. Further, investors will be able to take directional views on volatility.

CONSERVATIVE INVESTOR (Low Risk Profile)

Sl .Sl .Sl .Sl .Sl . Company NameCompany NameCompany NameCompany NameCompany Name IndustryIndustryIndustryIndustryIndustry CMP(Rs.)CMP(Rs.)CMP(Rs.)CMP(Rs.)CMP(Rs.) EPS*EPS*EPS*EPS*EPS* BVBVBVBVBV FVFVFVFVFV Di vDi vDi vDi vDi v Equi tyEqui tyEqui tyEqui tyEqui ty Market CapMarket CapMarket CapMarket CapMarket Cap T imeTimeTimeTimeTime

No .No .No .No .No. (28 /02/14)(28/02/14)(28/02/14)(28/02/14)(28/02/14) (Rs.)(Rs.)(Rs.)(Rs.)(Rs.) (Rs.)(Rs.)(Rs.)(Rs.)(Rs.) (Rs.)(Rs.)(Rs.)(Rs.)(Rs.) ( % )( % )( % )( % )( % ) (Rs.Cr)(Rs.Cr)(Rs.Cr)(Rs.Cr)(Rs.Cr) (Rs.Cr)(Rs.Cr)(Rs.Cr)(Rs.Cr)(Rs.Cr) FrameFrameFrameFrameFrame

1 Container Corpn. Rail Logistics 761.85 49.34 360.05 10.00 175.00 194.97 14853.79 M,L

2 Piramal Enterprises Diversified 552.45 NA 610.38 2.00 875.00 34.51 9532.52 L

3 Gujarat Gas Gas Distr ibution 227.85 28.81 104.02 2.00 350.00 25.65 2922.18 L

4 Whir lpool Consumer Durables 195.30 8.83 55.54 10.00 0.00 126.87 2477.77 M,L

5 Clariant Chemicals Chemicals 606.70 26.92 215.44 10.00 275.00 26.66 1617.46 L

MODERATE INVESTOR (Medium Risk Profile)


No .No .No .No .No . (28 /02/14)(28/02/14)(28/02/14)(28/02/14)(28/02/14) (Rs.)(Rs.)(Rs.)(Rs.)(Rs.) (Rs.)(Rs.)(Rs.)(Rs.)(Rs.) (Rs.)(Rs.)(Rs.)(Rs.)(Rs.) ( % )( % )( % )( % )( % ) (Rs.Cr)(Rs.Cr)(Rs.Cr)(Rs.Cr)(Rs.Cr) (Rs.Cr)(Rs.Cr)(Rs.Cr)(Rs.Cr)(Rs.Cr) FrameFrameFrameFrameFrame

1 Aditya Bir. Nuv. Diversified 1085.05 8 9.59 811.33 10.00 65.00 130.08 14114.33 M,L

2 M ax India Diversified 192.85 7.24 121.03 2.00 200.00 53.25 5134.63 L

3 EIH Hotels & Restaurants 64.80 1.49 46.93 2.00 45.00 114.31 3703.64 M,L

4 BASF India Chemicals 688.80 31.09 291.88 10.00 40.00 43.29 2981.82 L

5 DCB Bank - Private 52.20 5.85 44.31 10.00 0 .00 250.32 1306.67 M,L

AGGRESSIVE INVESTOR (High Risk Profile)


No .No .No .No .No . (28 /02/14)(28/02/14)(28/02/14)(28/02/14)(28/02/14) (Rs.)(Rs.)(Rs.)(Rs.)(Rs.) (Rs.)(Rs.)(Rs.)(Rs.)(Rs.) (Rs.)(Rs.)(Rs.)(Rs.)(Rs.) ( % )( % )( % )( % )( % ) (Rs.Cr)(Rs.Cr)(Rs.Cr)(Rs.Cr)(Rs.Cr) (Rs.Cr)(Rs.Cr)(Rs.Cr)(Rs.Cr)(Rs.Cr) FrameFrameFrameFrameFrame

1 BPCL Oil & Gas - Refinery & Exp. 377.65 66.24 229.94 10.00 110.00 723.08 27307.12 M ,L

2 Jagran Prakashan Media - Print 89.35 6.48 33.45 2.00 100.00 66.38 2965.53 M

3 Texm aco Rail & Eng. Capital Goods-Rail Equipm ent 39.05 1.61 33.02 1.00 100.00 18.20 710.71 L

4 Aptech Computer Education 70.80 8.64 7 1.98 10.00 40.00 39.89 282.42 L

5 Alkyl Amines Chem icals 233.05 34.14 131.37 10.00 50.00 10.20 237.71 M,L

NA: Not Applicable



12

Tax saving investment avenues Tax saving investment avenues Tax saving investment avenues Tax saving investment avenues Tax saving investment avenues

H U R R

Y

H U R R

Y

H U R R

Y H U R R Y

H U R R Y H U R R Y

Tax saving investment avenues - withspecial reference to ELSS

An investor can invest upto Rs.1,00,000 in ELSS MF and enjoy tax benefit upto a maximum of Rs.30,900 depending upon the tax slabs. However, the

actual tax benefit depends upon the tax bracket of the investor (i.e., 10%, 20%, 30% slabs) as the investment amount will be deducted from income

and tax will be saved to that extent.

Section 80C of Income Tax Act, 1961 provides for tax exemptions on investments upto Rs.1,00,000 on certain investment avenues like, PPF , PF,

ELSS schemes, Repayment of Principal amount of Home Loan, Life Insurance premiums, Kisan Vikas Patra, Tax Saving ULIPs etc.

Equity Linked Saving Scheme (ELSS):

As the name suggests, it is a mutual fund saving scheme linked to equity markets, in which majority of the corpus are allocated towards equity or

equity related securities. ELSS offers investors the twin-advantage of capital appreciation and tax benefits.

The maximum tax benefit is Rs.30,900/- at 30% tax bracket including 3% cess on an investment of Rs.1,00,000/- in ELSS MF.

Advantages of investing in ELSS:

Good chance of higher return and appreciation in capital.

Relatively shorter Lock in Period of 3 years.

Investment amount upto Rs.1,00,000 is eligible for tax benefit u/s.80-C.

Dividend received, if any will be totally tax free.

Capital Gains will be totally tax free.

Can be redeemed at it's Net Asset Value (NAV) once the lock-in period expires.

One of the best ways to invest in ELSS is to save and invest on a regular basis. A Systematic Investment Plan (SIP) in ELSS gives the best combination

of investments available to investors. The minimum investment in an ELSS through the SIP route can be as small as Rs 500. SIP gives you a

combination of two powerful investment strategies i.e. compounding and rupee cost averaging.

Head Office : Zen Securities Ltd., GEV Tulasi, 3rd Floor, Plot No.151,152 &153, Pragathi Nagar, Opp. JNTU, Quthbullapur,

Ranga Reddy (Dist.), Hyderabad - 500 090 Ph: 040-44232222.

Regd. Office : Zen Securities Ltd., IIIrd Floor,Vamsee Estates, Ameerpet, Hyderabad - 500016. Ph : 040-23400855, 39112222.

For details : Log on to www.zenmoney.com or call 040-44232323 or email : [email protected] or

Contact your nearest branch

Stock Broking / Trading Futures and Options

Mutual Funds / KYC PAN Application Center

Depository Services Investment Advice / Newsletter

Internet Trading Commodities Trading

Portfolio Management Tax Saving Mutual Funds & Bonds

Currency Derivatives Public Issues / IPOs

Insurance Services Real Estate Services

SERVICES OFFERED

To know more on how we can help you invest in ELSS, you can visit the nearest branch or

call / reach us @ 040 - 44232205/2206, 9347372025, 9347372029 or email us at [email protected]

Zen Money Mantra Mar 14

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Transcript of Zen Money Mantra Mar 14