Monthly Issue IDirect

58
The calendar year 2014 has been

very interesting for Indian equity
markets. Having appreciated 35%
this year, markets have been
running ahead of an economic
recovery, which is expected to
follow with a lag. The government
has already initiated several
confidence building measures and
taken key decisions like allowing
foreign direct investment (FDI) in
several sectors, railway fare hike,
online environment and forest
clearance, etc. However, an
economic recovery is expected only
at a gradual pace. After trading
around 14x one-year forward
earnings per share (EPS) for most of
the last five years, the Sensex is now
trading at 16.5x one year forward
EPS.
Anup Bagchi
MD & CEO
ICICI Securities Ltd.
At the heart of the change in sentiment is the expectation of an

improving business environment amid quick policy actions. Reversing
the near term trend, equity mutual funds have witnessed inflows of `
37,800 crore after a cumulative outflow of ` 32,900 crore in the
preceding five years, signifying increasing participation of retail
investors. The foreign institutional inflows (FIIs) have also poured in
$15.8 billion in Indian equities, higher than any other emerging market.
Progressive policy initiatives, coupled with improving
macroeconomic factors on both the domestic and global front would
help keep markets buoyant. On the domestic front, H1FY15 gross
domestic product (GDP) growth has revived to 5.5% from 4.7% in
FY14 while inflation continues to slide down. Also, the Reserve Bank of
India (RBI) has indicated at a possible reversal in the interest rate cycle
in the early part of next year. This could further push the capital
investment cycle, which had come to a virtual standstill in the past few
years.
Secondly, with the slowdown in China, commodity prices have been

softening. The London Metal Exchange (LME) index is down 9% over
the last six months. Though this may impact earnings of metal
companies, the overall economy would benefit from lower input
prices, which would give an impetus to infrastructure growth as well.
Moreover, crude is down 37% year-on-year (YoY) at $70 per barrel.
This will benefit India's current account deficit (CAD) situation. India
imports about 80% of its crude requirements. Besides helping lower
imported inflation, lower crude prices would also lead to a lower fiscal
deficit since oil under-recoveries are expected to decline to ~` 80,000
crore in the current year from ~` 1,40,000 crore in Fy14.
Thirdly, India is relatively lesser impacted by a global slowdown by
virtue of high domestic demand. Among major economies, India's
export as a percentage of GDP is among the lowest at 24%, which
insulates it from a slowdown in other economies in comparison to
other countries.
Lastly, the slowdown in world economies has prompted central
bankers across the globe to come up with expansive monetary
policies to inflate their way out of recession. The enhanced liquidity
will, in turn, lead to greater inflows in attractive asset classes. India
with relatively higher economic growth, an extremely stable political
environment, large domestic consumption led market and favourable
demographics, stands out as the most eye-catching investment
destination.
Improving sentiments, a stable political environment and a pick-up in
economic activity would continue to attract investor towards equities,
resulting in a shift in preference towards financial savings from
physical savings. Other asset classes including gold and real estate
have also shown signs of tiring. Even though the markets have run up
in the recent past, equity as an asset class remains attractive for long
term goals. There is no better way to benefit from the current and
potential up swing of the Indian economy.
I take this opportunity to wish you and your loved ones a very Happy
New Year 2015. Do keep investing and stay invested for your life goals.
Through this magazine and our website www.icicidirect.com we want
to make an earnest attempt to partner with you in setting and
achieving your financial goals. Do walk into any of your
Neighbourhood Financial Superstore and talk to us.
ICICIdirect Money Manager
November 2014
With the rising cost of almost everything, today's young

generation faces unprecedented challenges to achieve financial
independence.Helping our youth to learn effective management
of personal finances is more important than ever.
Parents can play an important role in this area helping children
with their first steps, getting the options of investments clear
even underwriting the risk to an extent. The first step can be as
simple as opening their savings, investment and demat account.
It may sound strange with so much talk on investments around
that youngsters do no really know how an investment can be
made. We can use our personal experiences to guide them with
their first investment.
However do remember that our knowledge is mostly be guided
by our own experiences. This can sometimes blind us. Get them
to invest into what is right for them and not where you had a great
experience investing it yourself.
In this edition we cover some important aspects of teaching
finance to your children and youngsters. The edition also offers
comprehensive information and analysis on equity diversified
funds, the ever-green option for young investors to get started
with investing.
Further, if you wish to get clarity on different aspects of personal
finance or any other money matter through Ask our Planner, you
may write to us at moneymanager@icicisecurities.com. So read
on, stay updated and involved. Do write in with your feedback
and share your thoughts.
Your magazine is now also available on www.magzter.com, a
digital newsstand.
Editor & Publisher
Abhishake Mathur, CFA
Coordinating Editor
Yogita Khatri
Editorial Board
Sameer Chavan, CWM, Pankaj Pandey
Editorial Team
Azeem Ahmad, Nithyakumar VP CFPCM, Nitin Kunte, Sachin Jain,

Sheetal Ashar
November 2014
MD Desk....................................................................................................1
Editorial......................................................................................................2
Contents.....................................................................................................3
News.........................................................................................................4
Markets Round-up & Outlook........................................................................5
Getting Technical with Dharmesh Shah.........................................................8
Derivatives Strategy by Amit Gupta.............................................................10
Stock Ideas: TV Today and UltraTech Cement............................................ . 15
Flavour of the Month: A parents' guide to help children about money
management
Helping our youth to learn effective management of personal
finances is today more important than ever. Here we
discuss how you as a parent can mentor your children to become
financially secure...................................................................................21
Tte--tte: 'Asset allocation offers the best opportunity to balance risk &
reward'
An interview with Tushar Pradhan, CIO, HSBC Mutual Fund..............27
Ask Our Planner: Claiming RGESS tax benefits
Your personal finance queries answered..........................................31
Mutual Fund Analysis: Category - Diversified Equity Funds
The best investment option for beginners as well as seasoned
investors to invest in equities for long-term financial
goals...................................................................................................... 35
Equity Model Portfolio............................................................................... 41
Mutual Fund Top Picks
Here we present our research team's top mutual fund
recommendations, across equity and debt categories....................46
Quiz Time..................................................................................................48
Monthly Trends.........................................................................................49
Premium Education Programmes Schedule..................................................53
November 2014
Government decides to pay 8.75% interest on PF for 2014-15

Over five crore provident fund subscribers governed by the Employees'
Provident Fund Organisation (EPFO) will get 8.75 per cent interest on their
deposits for the current fiscal. The Finance Ministry has ratified the rate for
2014-15, after a decision was taken to retain the interest payout at this level by
the EPFO Central Board of Trustees of the sources said. As per the practice,
EPFO trustees' decision gets implemented after the concurrence of the Finance
Ministry.
Courtesy: The Economic Times
Mid-Year Economic Review projects 5.5 per cent growth

Despite the sprouting of green shoots, a robust recovery is still to fully take hold,
says the Mid-Year Economic Analysis for the current year, tabled in Parliament
by Union Finance Minister Arun Jaitley. The Review projects 2014-15 growth
will be 5.5 per cent. India faces challenges that are mostly domestic, says the
Review. India grew at sub-5 per cent for the last two years. Growth bounced to
5.7 per cent in the April-June quarter before slipping again to 5.3 per cent in the
July-September quarter.
Courtesy: The Hindu
Govt scraps proposed Suuti ETF

The government is no longer looking to sell Specified Undertaking of UTI's
(Suuti's) stake in private-sector companies through the exchange-traded fund
(ETF) route, Business Standard has learnt. The Centre had budgeted raising Rs
6,500 crore through part-sale of the Suuti stake in Axis Bank, ITC, and Larsen &
Toubro. The capital markets division in the finance ministry was exploring the
option of bunching the stakes to be offloaded in these three companies and at
least seven public-sector undertakings as one ETF, and listing it on exchanges.
In October, the government had floated a request for proposal (RFP) for a Suuti
ETF.
Courtesy: Business Standard
Government moves bill to roll out GST; sets in motion plans to

launch tax reform from April 2016
government moved a Constitutional Amendment Bill in the Lok Sabha to roll out
goods and services tax (GST), setting in motion plans to launch this ambitious
tax reform from April 1, 2016. The Bill incorporates a number of provisions to
get the support of states whose opposition had held back what finance minister
Arun Jaitley called 'biggest tax reform since 1947' for almost five years. The
previous UPA government had planned to roll out GST which will replace the
plethora of indirect taxes levied by states, Centre and local bodies on April 1,
2010. The government hopes to get the Bill passed in the Budget session and
does not see it being referred to the standing committee on finance.
Courtesy: The Economic Times

November 2014
MARKETS ROUND-UP
Sentiments likely to remain upbeat as

RBI hints at reversal of rate cycle
Domestic equity benchmarks
scaled new highs in November,
ending the month 3.2% higher
as the market took positive cues
from a sharp fall in global
commodity
prices
and
positive macroeconomic data.
The gross domestic product
(GDP) growth came in at 5.3%
better than estimates of 5.1%
while the fiscal deficit continued
to
decline.
A
sequential
improvement in Purchasing
Managers'
Index (PMI)
manufacturing data and 2.5%
year-on-year (YoY) index of
industrial production (IIP)
growth along with all-time low
consumer price index (CPI) of
5.52%
further
improved
sentiments.
Several
government reforms such as
deregulation of diesel prices,
labour reforms, ordinance on
coal block auctioning, easing of
foreign direct investment (FDI)
norms in the real estate sector
and cut in
the
non-plan
government expenditure also
helped maintain the upward
momentum of the month.
Sentiments also remained
upbeat as OPEC (Organization
of the Petroleum Exporting
Countries) members voted to
keep their production ceiling
unchanged leading to decline in

crude
oil
prices
to
~$68.9/barrel. Positive global
sentiments arising out of
higher-than-expected GDP
growth of 3.9% in the US and
quantitative easing signals from
the eurozone helped sustain the
sentiments.
The markets also followed Q2
earnings, which concluded in
mid-November. The consumer
discretionary space witnessed a
robust performance with both
auto and consumer durables
sectors
showcasing
good
numbers. The auto ancillary
space witnessed the benefits
of operating leverage and
reported a robust performance.
The information technology (IT)
and pharmaceutical sectors
reported normalcy of earnings
on account of normalisation of
the base effect. On the
infrastructure front, the order
book of capital goods major L&T
and BHEL witnessed strong
inflows as power BTG/EPC
(Boiler, Turbine and Generator /
Engineering, Procurement and
Construction) orders picked up
pace. However, the same was
not reflected in their topline and
bottomline due to lower
5
November 2014
MARKETS ROUND-UP
execution on account of lower
order intake in FY12-14. The
quality of earnings saw an
improvement
with
SBI
reporting
asset
quality
improvement and robust 30%
growth in the bottomline. In the
fast-moving consumer goods
(FMCG) space, the growth was
primarily led by price hikes with
overall volumes remaining
subdued for most companies.
The markets ended mostly in

the green across US, eurozone
and Asia.
With softening inflation, the
benchmark 10-year bond yield
has fallen to 8.08%, the lowest
since September 2013. During
the
month,
crude (Brent)
continued the decline and
ended at ~$68.9/barrel, aided
by the stance of OPEC to stick to
their production ceiling. Gold
prices remained flat, ending the
month at $1167.4/ounce.
Global markets have been

driven by contrasting news
flows across the globe. The
markets opened on a positive
note as the Bank of Japan's
Monetary
Policy
Board
unexpectedly decided to raise
the monetary base at an annual
pace of about 80 trillion yen.
However, in the mid-month, the
hawkish tone of the Federal
Open Market Committee
(FOMC) minutes, higher-thanexpected US trade deficit and a
series of manufacturing activity
data from China and eurozone
kept sentiments in check.
However, the positive trigger
emanating from falling crude
prices aided by the OPEC
stance
to
maintain the
production levels, better-than
expected GDP growth in the US
and signals towards further
stimuli
from
eurozone
outweighed the negative cues.
Global markets
The US markets ended on a
positive note as the market took
positive cues from falling crude
prices and strong GDP data,
which stood at 3.9% vs.
expectations of 3.3%. Major
indices, Dow Jones, S&P 500
and the Nasdaq gained about
2.5%, 2.5% and 3.5%,
respectively. European markets
also gained in the month with
the rising investor confidence
data and a hint by the European
Central Bank (ECB) to offer
further stimulus. The UK FTSE
and French CAC gained 2.7%
and 3.7%, respectively, while
the German Dax extended gains
of 7%. Asian markets also
gained in the last two sessions
to end on a positive note with
the Nikkei and Shanghai SSEC
6
November 2014
MARKETS ROUND-UP
gaining 6.4% and 10.9%,
respectively, while the Hang
Seng remained flat.
Despite the expected status

quo stance from the Reserve
Bank of India (RBI), the policy
signals RBI's resolve to firmly
contain
inflation
and
inflationary expectations while
responding
to
positive
developments in inflation and
fiscal
consolidation.
By
advancing the inflation target of
6% to March 2015, RBI has in
fact set out a clear message of a
reversal of the rate cycle,
sooner than later. With oil prices
at historic lows, a stable
exchange rate (in the backdrop
of global currency downfall vis-vis the US$) and strong
capital inflows, the feel good
factor is likely to stay. Globally,
the story remains more or less
similar with ECB giving mixed
signals for some more stimuli in
the backdrop of recessionary
trends while the other side of
the Atlantic i.e. US has been
registering
a
marked
improvement in most gauges.
OPEC's decision to stay away
from production cuts despite a
request from some member
countries was, however, a
major
positive
global
development. In this backdrop,
the market undertone is likely to
be upbeat for December on the
back of positive domestic and
global signals.
Domestic markets
The foreign institutional
investors (FIIs) bought heavily
to the tune of ~ ` 14,302.2 crore
on the back of strengthening
confidence on the Indian
economy vis--vis the rest of
the emerging markets. Though
the domestic institutional
investors (DII) investment
remained relatively subdued,
they continued to be net buyers
with a net inflow of ~` 1,676.9
crore.
The Nifty and Sensex ended in
the positive territory for the
month with most sectoral
indices also ending the month
in the green. Except the BSE
Metal Index (-4.6%) and BSE Oil
Index (-2.2%) all other indices
ended November on a strong
note. BSE Realty, BSE Bankex,
BSE Auto, BSE FMCG, BSE
Te c h , B S E I T a n d B S E
Healthcare saw sharp gains of
8.3%, 8.8%, 3.5%, 3.2%, 3.7%,
4.7% and 4.2%, respectively,
while the BSE PSE (0.8%) and
BSE Power (0.0%) ended the
month flat.
Outlook: Markets to take solace
from dovish RBI comments and
positive global cues
November 2014
TECHNICAL OUTLOOK
Buying opportunity amid consolidation
structure remains positive.
Hence, any cool off towards
27350/8200 (Sensex/Nifty)
should be used as opportunity
to go long to ride the ongoing
uptrend.
Equity benchmarks continued

their record setting spree and
extended the rally for a record
ninth consecutive month. The
benchmarks logged over 2%
gains, with the Sensex and the
Nifty scaling th psychologically
significant levels of 28000 and
8600, respectively, for the first
time ever.
The broader markets achieved

important milestones during
November 2014. The BSE
Midcap and Small Cap indices
vaulted past their respective
2008 and 2010 highs.
Strengthening of the broader
markets past multi-year highs
augurs well for the longevity of
the overall uptrend
We expect the benchmarks to

enter
a
short-term
consolidation phase in
December, which will provide a
fresh entry opportunity for
participants who have missed
the rally. Stock specific price
action is expected to continue
while the benchmarks digest
the strong gains of over 10%
amassed in the last two
months. The overall price
Limited price correction and

extended time corrections
have been the hallmark of the
current uptrend. We expect
benchmarks to hold fort above
the 27350/8200 levels in case
of any corrective price action
from here on.
November 2014
TECHNICAL OUTLOOK
BSE Sensex Weekly Candlestick Chart

The index is seen approaching our
short-term target of 28800 levels
being the value of the rising trend
line connecting the monthly highs
since May 2014. Since August 2013,
the index has rallied for a maximum
five weeks in a row before
undergoing a three to five week
consolidation
With five weeks of gains already in
place, we expect the index to pause
after apprehending the overhead
trend line (28800) and enter a
consolidation mode during
December 2014
5 weeks
5 weeks
Breakout area of September

2014 high and 38.2%
retracement of current rally
project support at 27350 levels
5 weeks
5 weeks
4 weeks
21 week EMA
4 weeks
Weekly stochastic is poised at its highest level since 2012 with a reading of 96 indicating highly
overstretched conditions and warrants a temporary breather before continuation of the upmove
Source: Bloomberg, ICICIdirect.com Research
Source: Bloomberg, ICICIdirect.com Research
The views expressed in the article are personal views of the author and do not necessarily
represent the views of ICICI Securities.
November 2014
DERIVATIVES STRATEGY
Key support for Nifty placed at 8100

of declines.
Ongoing premium in Nifty is
high at 51 points which may
not bode well for incremental
upsides. We expect short
positions may be accumulated
due to prevailing high
premium in the index.
Amit Gupta
Head - Derivatives Research,
ICICI Securities
The Nifty options data of the

December series should be
closely analysed in light of the
already existing long dated
options. The open interest (OI)
in the Call strikes of 8000 and
8500 (shown in blue columns)
is mainly the long dated option
OI addition, which was already
existing since many expiries
before. On the Put side, the
highest Put base at the 8000
strike (shown in orange
column) is again attributable to
long dated contracts.
The Nifty Bollinger band below

shows it bounced from the
mean-2 sigma band in mid
October. Since then, the Nifty
has not dipped below volume
weighted average price
(VWAP) of 8350. Hence move
below 8300 may trigger
downsides towards 8100 due
to liquidation of positions.
Nifty Options build up in December
series
Call OI
8800
8700
8600
8500
8400
8300
8200
8100
8000
7800
7900
9
8
7
6
5
4
3
2
1
0
OI in Million Shares
Key additions relevant for the

December series started from
November 15 onwards. Major
additions were seen at 8600
and 8700 Call strikes, which
have added 1.1 and 1.5 million
shares, respectively. Nifty was
also not able to close above
8600 levels and succumbed to
profit booking. On the Put side,
key additions are seen at the
8300 and 8100 Put strikes
which are likely targets in case
Put OI
Nifty Bollinger Band likely to test

mean+2 sigma levels
8400
7900
7400
6900
Close
10
UBB(2)
BollMA (20) on Close
LBB(2)
November 2014
Nov-14
Oct-14
Sep-14
Jul-14
Jun-14
May-14
Apr-14
Mar-14
Feb-14
5900
Aug-14
6400
Expiry gains in 2014: including
November series, nine out of 11
expiries closed with gains during the
year
Nifty MoM Expiry gains in 2014

8.0%
6.0%
4.0%
6%
In the November series, the

Nifty continued with its trend of
closing with strong gains. The
November month closed with
gains of over 3%, which is the
highest monthly gain since
June 2014.
4%
3%
3%
3%
3%
3%
3%
2.0%
0.0%
-1%
-3%
-2.0%
-4.0%
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Bank Nifty upside target now

placed at 19000, key support
placed at 17500
I n N o v e m b e r, t h e N i f t y
respected its VWAP level of
8350 throughout the month.
The dip towards this level in
the third week was greeted as a
buying opportunity as the Nifty
moved up close to 200 points
in the next three trading
sessions.
The Bank Nifty had a strong run

in the last series. It started the
November series from near
16800 and moved up to 18900
during December before
seeing some profit booking
due to global markets.
During the month, the strong
move came from private
banking heavyweights along
with public sector undertaking
(PSU) banking heavyweights
like SBI and PNB. However, the
rest of the PSU banking space
remained muted.
Going ahead, the November

VWAP of 8390 will be the
immediate support for the
Niftys current momentum.
Looking at the seasonality
trend, December has been a
month of consistent gains
historically. In the trailing
decade, the Nifty has closed
negative only once in 2011 in
December. In all other years,
the Nifty closed positive.
December series options

build-up is suggesting the Bank
Nifty may march towards
19000 as this Call has the
highest OI. On the lower side,
Put options build-up is seen at
the 17500 strike, which is the
key support on the lower side.
December has also been

strong for equity markets
including S&P, Dax & Nikkei in
previous years.
6%
11
November 2014
Falling yields on the
benchmark 10-year
government securities (G-sec)
and cooling inflation on the
back of falling crude prices is
likely to improve macros
further. This will also help in
fresh upsides in banking
stocks. Most PSU banking
stocks in such a scenario are
throwing up good risk reward
opportunities.
midcap was up 4% while the

Nifty was up over 3%. The
Bank Nifty and CNX IT moved
up over 7% each.
The NSE advance decline ratio
was subdued in the second half
of the month. This was mainly
attributable to profit booking in
small cap stocks as the Nifty
remained above 8400. This
healthy profit booking
suggests a decline in the CNX
Small Cap index towards 5000
(key support) can be used as a
buying opportunity in this
space.
Bank Nifty could continue

upsides towards 19000
0.4
0.35
0.3
0.25
Sectoral return in November Series
0.2
0.15
0.1
Metal
0.05
Call OI
Consumer Durable
19000
18800
18600
18400
18200
18000
17800
17600
17400
17200
17000
Nifty
Put OI
CXN Mid Cap

CNX IT
Cyclicals, defensives participating

well in current market move
CNX Bank
10
The November up move of the

Nifty saw good participation
not only on part of cyclicals like
banking but also by defensives
like IT. However, the major
move was seen in
index/sectoral heavyweights
while midcap and small cap
stocks lost some ground in the
second half.
-5
Dollar index strength continues

amid consolidation. Stimulus in
Japan, expectations of same in
Europe lead to weakness in JPY,
euro
I m p o r t a n t l y, w i t h i n t h e
currency market, a major move
was seen in the Dollar Index,
which has moved up over
1.75% to 88.4 during the month
and JPY, which has weakened
For the month, the CNX
5
0
% monthly return
12
November 2014
India VIX : Likely to rise in the near
term
over 5.5% to 118.5 on the back

of Bank Of Japan (BOJ)
increased monetary stimulus.
This move has weakened most
emerging market currencies.
However, the INR was able to
limit the weakness as FII flows
in the equity segment
continued.
Also, falling crude prices could
give support to the rupee from a
major depreciation and the
rupee could consolidate in the
range of 61-63.
Brent crude has fallen close to
five-year lows below 65 after the
comments from Saudi Arabia.
We believe Brent crude may
continue its fall due to
continuous selling pressure.
We have seen a surge in

volatility in the last couple of
trading sessions. India
volatility index (VIX) started
reverting from its second
lowest weekly closing of 11.9.
Nifty options implied volatility,
which was quite subdued in
the last couple of months, may
witness a rise in the near term.
Nifty Put IVs (implied volatility)
are generally higher than Call
IVs. However, currently due to
higher optimism in the market,
Nifty Call IVs are higher than
Put IVs. ATM 8300 Put IV is at
10.5% while 8300 Call IV is at
14.5%. Similarly, the 8400 Put
IV is at 8.90% while the 8300
Call IV is at 13.45%.
Dollar strength caused weakness in

developed market
110
108
106
104
102
100
The crucial 8400-8440 level has

been broken. VWAP of trailing
30 days is at 8440 while the
Nifty has moved below 8400
that is the highest Put base.
There may be some panic
closure of short positions in Put
strikes.
98
Dollar Index
Euro
Australian Dollar
23-Nov
21-Nov
19-Nov
17-Nov
15-Nov
13-Nov
9-Nov
11-Nov
7-Nov
5-Nov
3-Nov
1-Nov
30-Oct
96
Japanese Yen
Rupee outperforming other Ems

currencies
116
114
112
110
108
106
104
102
100
Thai Bhat
Russian Ruble
Malaysian Ringitt
Indonesian Rupiah
Zimbabwian Rand
Brasilian Real
21-Nov
19-Nov
17-Nov
15-Nov
13-Nov
11-Nov
9-Nov
7-Nov
5-Nov
3-Nov
1-Nov
30-Oct
98
Indian Rupee
Turkish Lira
Philippines Peso
13
November 2014
India VIX : May move towards 15
levels
fresh longs totalling over

US$320 million.
During the month, as the 10 year
G-Sec yield fell from 8.32 to 8.14
some inflows were seen.
However, in the second half of
the month, as yields stabilised
near 8.15 outflows were seen in
the debt segment. For the
month, there was a net outflow
of US 15 million.
FII inflows in equity segment keep

Nifty rally alive
As the Nifty bottomed out at
8000 near October expiry,
foreign institutional investors
(FIIs) started to buy
aggressively in the cash
segment. For the month, they
bought over US$1.5 billion, the
largest inflow since July 2014.
Post the increased stimulus
from BOJ at the start of the
month, most Asian EMs have
seen inflows. Strongest inflows
were seen in Taiwan of US$2.75
billion with Indonesia at US$365
million.
In the derivatives segment, FIIs
bought Nifty Put options worth
over US $1.6 billion to hedge
their cash positions. In the index
futures segment, the flows
remained soft. They created
FIIs cash activity in (In Rs. crore)

30000
25000
INR is Cr
20000
15000
10000
5000
0
Oct-14
Nov-14
Sep-14
Jul-14
Aug-14
Jun-14
Apr-14
May-14
Feb-14
Mar-14
Jan-14
Dec-13
Oct-13
Nov-13
-5000
Debt markets flows 10 year G-Sec

yield dips to 8.15
20000
15000
INR in Cr
10000
5000
0
-5000
-10000
Oct-14
Nov-14
Sep-14
Aug-14
Jul-14
Jun-14
Apr-14
May-14
Mar-14
Feb-14
Jan-14
Dec-13
Oct-13
Nov-13
-15000
The views expressed in the article are personal views of the author and do not necessarily
represent the views of ICICI Securities.
14
November 2014
STOCK IDEAS
TV Today: No. 1 player in Hindi news genre; strong ad growth

Company Background
presence of TV Today to the

radio segment under the brand
Oye 104.8 FM. The company
has also made a strategic
investment worth ` 45 crore in
FY10 in Mail Today Newspaper
Pvt. Ltd., which publishes a
news paper called Mail Today in
a bid to enter the print segment
for business scalability.
TV Today Network (TV Today)

incorporated in December,
1999, is a part of the India Today
Group and a leading news
broadcaster in India. It operates
as a subsidiary of Living Media,
the holding company of the
I n d i a To d a y g r o u p o f
publications. The Aditya Birla
group also has a 27.5% stake in
L i v i n g M e d i a c u r r e n t l y.
Chairman of Living Media,
Aroon Purie, has a rich lineage
in the news disbursement
business. He has been
associated with the news
business for the past three
decades and consistently
maintained the company as a
leader owing to his vast
experience. TV Today is one of
the leading news broadcasters
in India with four channels viz.
Aaj Tak, Headlines Today, Delhi
Aaj Tak and Tez distributed by
MSM Discovery Pvt. Ltd. TV
Today is the first Indian
broadcaster to uplink a 24-hour
Hindi news channel from India.
The company has an
undisputed leadership position
in the Hindi news segment
through Aaj Tak. In addition,
Radio Today Broadcasting Ltd, a
fellow subsidiary, merged with
the company extending the
Investment Rationale
TV industry to grow at 16.2% CAGR
(FY13-18E); sees 12% CAGR in FY0813
The television industry
witnessed 12% compounded
annual growth rate (CAGR) in
CY08-13 despite the economic
slowdown. According to the
Federation of Indian Chambers
of Commerce and Industry
(FICCI)-KPMG report 2014, the
industry is expected to grow at
16.2% CAGR in FY13-18E rising
from Rs. 417 crore at the end of
2013 to ` 885 crore by the end of
2018E. The number of TV
households in India is also
expected to increase to 191
million from 161 million
c u r r e n t l y. T h e t e l e v i s i o n
industry dominates the
domestic media &
entertainment industry forming
45% of the total industry. The
increase in the channel carrying
15
November 2014
STOCK IDEAS
capacity to over 1000 owing to
digitisation and revision of
minimum channels to be
broadcasted to ~500 is
expected to bring in additional
subscription revenues to
broadcasters.
increase in the channel carrying

capacity of distributors with the
total number of channels
increasing from about 80 in
analogue cable to over 1000
channels in digital. The increase
in carrying capacity has brought
about a reduction in carriage
costs for all broadcasters. This
reduction in carriage fees is
critical for news broadcasters
and would result in EBITDA
margin gains going ahead.
News broadcasters shell out
about 25-30% of their total
revenue in the form of carriage
and placement fees. English
news channels spend
approximately 70% of their
distribution costs as carriage in
the metros and are yet to
receive an equivalent benefit in
terms of subscription from the
metros.
TV Today - No. 1 player in Hindi news

genre; strong ad growth
News segment forming just 7%
of TV viewership, garners 21%
of total TV advertisement. TV
Today, with a leadership
position in the Hindi news
segment, commands 10.9% of
total TV news advertisement.
With a viewership share of
~18.5% in the Hindi news
segment and ~8.7% of the
overall news segment, Aaj Tak
commands an impressive 23%
(as per FY13) of Hindi news and
9.2%
of
overall
news
advertisement revenues. This
signifies advertiser's preference
for Aaj Tak in a fiercely
competitive
segment
populated with 392 news and
current affair channels. With a
gradual recovery in economic
activity, we expect the company
to post 16.3% CAGR (FY14-16E)
in revenues to ` 526.6 crore.
Re-rating on the cards; recommend

BUY with target price of ` 276
With most other costs largely
fixed in nature, high degree of
operating leverage would
accrue to TV Today, resulting in
30.7% EBITDA CAGR (FY1416E) to ` 186.6 crore. With a
revival in EBITDA margins,
valuation multiples are
expected to inch up to historical
levels. We value the company at
15x FY16E EPS of Rs. 18.4 to
arrive at a target price of ` 276.
We recommend BUY rating.
Operating leverage to kick in,

carriage costs reduction - major
EBITDA driver
With digitisation, there has
been an unprecedented
16
November 2014
STOCK IDEAS
Key Financials
FY13
FY14E
FY15E
FY16E
312.7
389.4
480.3
526.6
EBITDA (` crore)
34.6
109.3
143.1
186.6
Net profit (` crore)
12.2
61.3
80.3
109.6
2.1
10.3
13.5
18.4
Net sales (` crore)
EPS (`)
Valuations Summary
FY13
FY14E
FY15E
FY16E
P/E (x)
108.1
21.5
16.5
12.1
Target P/E (x)
134.6
26.8
20.5
15
37.8
11.6
8.9
6.3
Dividend yield (%)

Price/Sales (x)
4.1
3.5
2.5
RoNW (%)
3.8
16.2
18.3
20.9
22.4
25.2
28.8
RoCE (%)
Stock Data
Market capitalization (` crore)
1,320.6
Total debt (FY14) (`)
Cash and investments (FY14) (` crore)
57
Enterprise value (` crore)
1,263.6
52-week High /Low (`)
254 / 98
Equity capital (` crore)
29.7
Face value (`)
DII holding (%)
3.4
FII holding (%)
Key risks include: The implementation of the Telecom Regulatory

Authority of India (TRAI) twelve minute ad cap can be a negative for the
revenue estimates. Moreover, the news channels also have a threat of
reputational risk.
(EBITDA: Earnings before interest, taxes, depreciation, and amortization; EPS:
Earnings per share; P/E: Price-to-earnings; RoNW: Return on net worth; RoCE:
Return on Capital Employed; DII: Domestic institutional investors; FII: Foreign
Institutional Investors)
17
November 2014
STOCK IDEAS
Ultratech Cement: Largest and efficient player

Company Background
733MW, which is around 80% of

the
company's
power
requirement. The company has
a dealer network of over 15,000
dealers, which are well spread
across the country. In terms of
sales mix across the country, it
is well distributed, indicating
lower volatility in blended
realisations. The company
currently generates ~30% of
sales from non-trade (sales to
institutions) and remaining
~70% of sales from trade
(retailers) segment, which
keeps its average realisations
healthy vs. its peers.
UltraTech Cement is the largest

player in terms of capacity
(60.2MT (million tons) including
Jaypee plant) with market share
of ~17% in India. The company
has consistently remained
ahead of its peers in terms of
capacity expansion with a
CAGR (compounded annual
growth rate) of 23% vs. peers'
CAGR of 13% over the past five
years. During FY14, UltraTech
increased its capacity by 6%
year-on-year (YoY) to 53.9MT
by commissioning the 3.3MT
clinker plant in Karnataka. The
4.8MT capacity of the recently
acquired Gujarat unit of Jaypee
Cement has resulted in total
current capacity of 60.2MT. The
company is aiming to reach its
total capacity of 70MT by
FY16E. We believe this would
help UltraTech to maintain its
leadership, going forward.
Other than this, the company
has commissioned a 25MW
(MegaWatt) thermal power
plant at Andhra Pradesh and
6.5MW waste heat recovery
system (WHRS) at Awarpur,
Maharashtra. With this, the total
power capacity of the company
(including WHRS) stands at
Investment Rationale
To benefit from strong recovery in
demand due to pan-India exposure
The cement industry's capacity
utilisation bottomed at ~69% in
FY14. We believe low capacity
addition and demand recovery
should lift utilisation levels from
hereon, given the cyclical
upturn in the economy coupled
with an expected policy push to
drive investments in the
infrastructure sector. By driving
increased cement usage in
sectors like road, power and
irrigation, the industry can
achieve the full potential of
18
November 2014
STOCK IDEAS
cement demand growth over
the next three years. Further,
supply-side bottlenecks, in
terms of quality logistics, skilled
labour and delays in land and
environment clearances, along
with high cost of fuel and
financing have put pressure on
the
cost
of
cement
manufacturing. These, in turn,
we believe, would lead to lower
capacity additions going
forward.
low debt/equity to fuel expansions

The company is expected to
generate over ~` 3,200 crore of
operating cash flows annually
during FY15-17E. Further,
considering the strong balance
sheet of the company with
minimal debt (D/E (debt-toequity) of 0.3:1), we believe, the
expansion plans will not add
any stress on the balance sheet.
This, in turn, will further
strengthen the company's
position in the industry.
Operates at healthy EBITDA/tonne

vis--vis industry
Warrants premium valuations to

capture long-term potential
With lower lead distances due

to a pan-India presence, captive
power plants and higher sales
realisations due to a higher
trade mix coupled with higher
white cement sales realisation,
the company generates highest
EBITDA/tonne in the industry. It
has also been able to reduce its
power consumption per tonne
gradually through various
initiatives. Power requirement
of ~80% is met through captive
power plants, which helps the
company in reducing per tonne
cost. Other than this, the
company also has coal linkages
with Coal India, which helps in
lowering dependence on
imports.
The stock is currently trading at

12.5x and 9.5x EV/EBITDA for
FY16E and FY17E, respectively,
against last four years' average
valuations of 13.0x. As
mentioned above, we believe
low capacity addition and
demand recovery should lift
utilisation levels from hereon.
We f o r e c a s t a p a n - I n d i a
utilisation at 78% by FY16E that
could offer pricing power. Given
this scenario, we expect
UltraTech, being the industry
leader with strong balance
sheet, to trade at premium
valuations. Hence, we maintain
BUY rating with a target price of
` 3180/share (i.e. at 12.0x FY17E
EV/EBITDA and EV/tonne of
$190/tonne.
Healthy operating cash flow and
19
November 2014
STOCK IDEAS
Key Financials
FY14
FY15
FY16E
FY17E
20,077.9
24,704.4
28,791.5
34,007.5
3,616
4,246
5,563.3
7,283
2,144.5
2,538.6
3,310.4
4,354.9
78.2
92.6
120.7
158.8
FY14
FY15
FY16E
FY17E
32
27
20.7
15.7
Target P/E (x)
40.7
34.3
26.3
20
EV/EBITDA (x)
19.1
16.5
12.5
9.5
Net sales (` crore)

EBITDA (` crore)
Net profit (` crore)
EPS (`)
Valuations Summary
P/E (x)
203.2
184.8
164.1
148.8
RoNW (%)
EV/Tonne ($)
12.5
12.9
14.9
16.6
RoCE (%)
11.9
12.3
14.9
18.1
Stock Data
Market capitalization (` crore)
68,577
Total debt (FY14) (` crore)
4,496
Cash and investments (FY14) (` crore)
4,007
Enterprise value (` crore)
69,066
52-week High/ Low (`)
2,872/1,635
Equity capital (` crore)
274.2
Face value (`)
10
DII Holding (%)
20.6
FII Holding (%)
5.2
Key risks include: Lower than expected recovery in demand and any
future acquisitions at expensive valuations posses a key risk to our
valuations.
(EBITDA: Earnings before interest, taxes, depreciation, and amortization; EPS:
Earnings per share; P/E: Price-to-earnings; EV: Enterprise value; RoNW: Return
on net worth; RoCE: Return on Capital Employed; DII: Domestic institutional
investors; FII: Foreign Institutional Investors)
20
November 2014
FLAVOUR OF THE MONTH

Parents, encourage your children to start investing
One of the most precious gifts you as a parent can give to your children is teaching
them about investing at a young age. This almost becomes a responsibility as your
child enters into the real world and starts dealing with money himself or herself.
Your responsibility actually multiplies as he or she enters into a college or gets his
or her first job. Investing or personal finance as a subject is not yet being taught in
schools or colleges in India. Hence, the responsibility to guide our children falls
primarily on us, the parents. Remember, children learn from watching us. They
observe us, listen to us and follow our habits, including money habits. In fact, a
recent study reveals that children tend to pick parents' spending habits marginally
more than their saving habits. It is therefore important to be aware of the
messages that we as parents send and the examples we set. We should try to
incorporate good financial habits and teach the same to our next generation. Here
we discuss how you as a parent can mentor your children to become financially
secure, whether they are still in college or have just got a job.
your child can start investing

online, just as shopping online,
at the click of a mouse. In
earlier days, you may have
seen markets that were not so
efficient and accessible, but
today, things have changed for
good. Investing is really easy
today and just a click away.
Getting started
Youngsters generally don't
know where to start and what
to do. So the first step is to get
them opened a savings and an
investment account.
Assuming that your child
already has a savings bank
account, he needs to open a
demat account.
Most youngsters feel it is not

worth investing till they have a
large amount available. The
fact is, even ` 500 a month is a
great amount to start with.
They key is to start investing
early and make it a habit.
The demat account can be

opened for free with some
brokers such as ICICIdirect by
doing the necessary
paperwork. We offer a threein-one account that integrates
banking, trading and demat
account, making it easier for
one to trade and invest.
As parents, we need to teach

our children about the
importance of saving and
investing early and drop by
Once the account is opened,

21
November 2014

drop, in order to help secure
their financial future. The
earlier they start, the more they
can benefit from compound
growth.
(RD) is also a great start. At the

same time, investments into
equity are most suitable as
they have long investment
horizon. Encourage them to fix
a certain sum that they should
save every month before they
start to spend.
Say for example, if your child

starts investing ` 3,000 a
month from the age of 25 in an
investment that provides 10%
return, he would accumulate `
1,02,77,680 when he turns 60.
However, if he delays his
investment plans and even if
he starts investing a greater
amount of ` 5,000 per month at
10% when he is 35, it will
accumulate only ` 62,15,798
when he is 60. A difference of
over ` 40,00,000!
The potential of equity

Yo u n g i n d i v i d u a l s a r e
generally hesitant to start their
investment journey, especially
when it comes to investing into
equity. The reasons are many.
Whether it is not having
enough time and money,
thinking stock market is too
complex and technical, young
individuals are quick to give up
before they even start.
Your children have time on

their side, so encourage them
to start investing as soon as
possible and benefit from the
eighth wonder called 'power of
compounding'.
There is no denying that equity

as an asset class is risky, and so
is to avoiding it. This is because
if a portfolio lacks investments
that carry higher potential
return, such as equity, it may
not achieve sufficient growth
to fund crucial long term
financial goals such as
retirement. This, you as a
parent, may have already
realized that skipping growth
assets such as equity can hurt
one's long-term financial goals.
A mutual fund SIP (systematic

investment plan) is the best
way to begin. The trick is to
automate SIP investments.
With this, on a designated day
of the month, the money gets
invested automatically.
A public provident fund (PPF)
or a bank recurring deposit
22
November 2014

It is a well established fact that
equity offers the best returns in
the long run as compared to
other asset classes. S&P BSE
Sensex, for instance, has
delivered 17% compounded
annual growth rate (CAGR) in
the last 35 years. Whereas
fixed deposits and gold have
returned only 8.7% and 9.1%,
respectively, during the same
period.
inflation, taxes also reduce the

net rate of return. As long-term
capital gains (> 1 year) from
equity are tax-free, they
provide better taxadjustedreturns. Dividends are
also tax-free in the hands of
investors.
Yo u s h o u l d t h e r e f o r e
encourage your children to
take some risk and start
investing in equity, to create
wealth in the long run. Risk is
an integral part, and the longer
the time frame is, more risk
they can take. Don't always let
your personal experiences
completely mask what is
optimum risk they can take
with their investments.
Apart from strong long-term

returns, equity also provides
better inflation-adjusted
returns (also known as real
returns) as compared to fixed
income instruments. Gone are
the days when one could get
12-15% interest on traditional
instruments. Today, in order to
meet goals and create wealth
in the long run, investments
must deliver higher returns
than the rate of inflation. Else,
inflation will eat into returns
and may not help build
sufficient corpus for meeting
financial goals. And equity is
perhaps the only such option
that delivers better return over
inflation.
G i v e n t h e l e s s e r
responsibilities and greater
capacity to take risks at young
age is the perfect time for your
children to take the plunge in
equity.
In the teaching process, it is
also important to make our
children understand that
equity may turn volatile in the
short term, but it provides the
best returns in the long run
(see the chart below).
Further, equity is also a tax

efficient investment. Like
23
November 2014
How SIP of Rs. 5,000 p.m. has grown since April 1, 1979
9,00,00,000
8,28,07,659
8,00,00,000
7,00,00,000
6,00,00,000
5,00,00,000
4,00,00,000
3,00,00,000
2,00,00,000
1,38,98,506
61,61,327
1,00,00,000
0
Equity
Gold
This is the whole reason to take

the effort of investing in equity.
Great investing requires time,
discipline, and patience.
current era of flourishing e

commerce, it is very easy and
tempting for youngsters to use
credit cards and loans for
everything that they need and
want. However, it is important
to make them understand the
difference between
discretionary and nondiscretionary expenses. For
example, entertainment
expenses are discretionary,
while paying the rent or utility
bill is non-discretionary.
As parents, you may have had

good or bad experiences from
investing in the equity.
However, it is important to
make our children learn not
only through our experiences,
but also what is right for them.
Equity remains the best option
for youngsters to achieve their
long-term goals.
This is not to say children

shouldn't spend any money on
discretionary expenses.
However, there should be a
balance between saving and
spending. As parents, we
should make our children learn
the fine art of delayed
Apart from investing, there are also

other areas of personal finance,
which should be taught to children,
such as managing debt carefully,
getting an insurance, etc. Let's take
a look:
Managing debt carefully: In the
RD
24
November 2014

gratification, an ability to resist
the
temptation
for
discretionary spending in
order to receive a much larger
reward later.
a self-occupied property and

second, under section 24, up to
` 2 lakh for interest paid. And in
case of a let-out property (not a
self-occupied one), one gets a
tax deduction for the entire
interest paid.
In order to help our children

spend carefully and manage
debt diligently, we need to also
make them understand the
difference between good debt
and bad debt.
With these tax benefits, the

cost of home loan actually
comes down. Let's understand
this with an example: Suppose
your child takes a home loan of
50 lakh at 10% per annum. If he
falls under the highest tax
bracket of 30%, the effective
loan rate would only be 7.90%
(for a self-occupied property),
and 7% (for a let out property),
instead of 10%.
Rationally, a good debt can be

referred to a loan, where the
expected return from the
asset/purpose is more than the
interest cost of the loan. The
most common example of a
good debt is home loan. Bad
debt, on the other hand, can be
referred to as borrowing for an
asset which depreciates or fall
in value over a period of time
or may not have an underlying
value.
This makes the case of buying

a home early on in their career.
However, it is important to
keep equated monthly
installment (EMI) outgo not
more than 40% of monthly net
income.
As home loan is a part of good

debt, we may get our children
take this loan, as this will not
only help them build an asset
early on, but will also help
them increase their savings in
the process. This is because
there are tax benefits available
for home loan. First, there is a
tax deduction available of up to
Rs. 1.50 lakh under Section
80C for principal repayment of
In case of credit card debt, it is

important to get our children
clear all the outstanding dues
on or before the due date. If
one fails to do so, a very high
rate of interest is charged,
which is anywhere between
30% to 45% p.a. Plus, the
penalty is charged for late
payment.
25
November 2014

We should help our children
develop a proper plan to pay
off debt in a systematic way,
from highest interest rate loans
(e.g. personal loan) to the
lowest (e.g. home loan).
insurance plan youngsters

must opt for. A personal
accident cover takes care of the
expenses if one gets
permanently or temporarily
disabled following an accident.
Getting a health insurance:

Though your child may already
be provided with a health
cover by his employer, it is
important to make him
understand the essentials of
getting a separate cover what
if one loses a job or switch to
another company or the cover
itself is insufficient?
Did you know? One can get a

cover of ` 25 lakh for an annual
premium of just about `
3,000*.
*premium mentioned is
indicative in nature
Summing up
Teaching sound financial
habits to children at an early
age gives them the opportunity
to be financially healthy in the
long run. Remember, even for
Warren Buffett, one of the most
famous billionaires in the
world, the greatest inspiration
was his father. He was my
hero when I was 6 and he is still
my hero now. He is an
inspiration to me in every way.
What I learned at an early age
from him was to have the right
habits early. Savings was an
important lesson he taught,
says Buffett as quoted in the
media. So parents, be a good
financial role model for your
children! The earlier your
children start investing, the
more secure their financial
future would be.
A basic plan, which reimburses

hospitalisation expenses,
should be your child's first
health insurance policy. The
cover can be enhanced by
taking riders such as critical
illness cover, etc.
There are also tax-benefits
available for premium paid
towards health insurance,
under section 80D.
Did you know? Your 25-year
old child can buy ` 5 lakh worth
of coverage for an annual
premium of just about `
4,000*.
*premium mentioned is
indicative in nature
Getting a personal accident cover:
This is another type of
Please send your feedback to moneymanager@icicisecurities.com
26
November 2014
Tte--tte
Asset allocation offers the best opportunity to balance risk & reward
Market is trading at 12-month forward PE (price-to-earnings) of 16x versus
historical average of 15.6x. On this multiple, markets may seem expensive, says
Tushar Pradhan, Chief Investment Officer (CIO), HSBC Mutual Fund. However, this
multiple is placed favourably with its history of positioning at the beginning of the
growth up-cycle, he adds. He suggests investors to continue to follow a
disciplined approach to investing and believes that asset allocation offers the best
opportunity to balance risk and reward. Excerpts:
subsidies, and boost to

infrastructure spending.
Q: How is the current economic

situation, on both global and
domestic fronts, looking like?
The Prime Minister's office

seems to be the single decision
making
body
and
consequently, decision making
is faster. Administrative
reforms like consolidation of
ministers, empowering of
bureaucracy, and transparency
in governance (e.g. putting up
c l e a r a n c e s l i k e Fo r e s t ,
Environment, and Mining on a
digital platform) fiscal
consolidation, realignment of
subsidies and streamlining of
social spending will release
capital, which could be used
for lifting infrastructure
spends.
A: On the domestic front,

reform momentum is quite
strong even though there may
not have been big-bang
announcements. Key contours
of the reforms are change in
governance
structure,
administrative reforms, tax
reforms,
realignment
of
On the economic front, the

macro indicators are more
heartening. Twin deficits
(Current Account and Fiscal
Deficit) are no longer an
overhang, currency is stable,
inflation seems to have
peaked, and there is a
reasonable expectation of a
Tushar Pradhan,
Chief Investment Officer (CIO),
HSBC Mutual Fund
27
November 2014
Tte--tte
possible lower trajectory in
interest
rates.
Fi s c a l
consolidation is happening.
Tr a j e c t o r y
of
fiscal
consolidation is steep but can
be achieved as growth
accelerates and tax reforms
get implemented. All the major
drivers of inflation - food, fuel,
fiscal,
c u r r e n c y,
and
commodity - are pointing
downwards. Crude prices have
fallen over 35% from their
near-term peak. Commodity
prices have declined rapidly
over the last 3 months. Net
commodity trade deficit
peaked at about 7% of gross
domestic product (GDP) in
2012. It had fallen to 5.5% of
GDP in the 12 months ending
August 2014. At the current
commodity price levels, net
deficit from commodity could
fall by another 1%.
markets going ahead? Do

valuations look expensive?
A: Market is trading at 12
month forward PE (price-to
earnings) of 16x versus
historical average of 15.6x. On
this multiple, markets may
seem expensive. However, this
multiple is placed favourably
with its history of positioning at
the beginning of the growth
up-cycle. We should also note
that this headline multiple is on
back of three years of
decelerating economy and
falling margins. As growth
comes back and margins
increase,
2-year forward
multiples could shrink to 13x.
Forthcoming rate cuts, too,
should feed into equity
valuations. As of now, markets
may perceptibly seem slightly
expensive
but
can
be
supported due to earnings
acceleration and rate cuts. We
expect market returns to follow
trajectory of earnings growth.
On the global front, the

economic situation is mixed.
US is growing and accelerating
but there has been a slowdown
in the European Union (EU)
and Japan. Over 2015, it is
expected that EU and Japan
will have a loose monetary
policy but the US and the UK
are likely to tighten their
monetary policies.
Q: What are the immediate risks to

the markets?
A: Geo-politics continues to be
the biggest risk not only for
India but for markets globally.
On the domestic front, a delay
in rate cutting cycle and delay
in implementation of key
reforms could also act as a
Q: What is your outlook for the
28
November 2014
Tte--tte
dampener.
have erased three years of

underperformance vis--vis
large caps. At the current
valuation levels, small and
mid-caps are aligned with
average historical discount to
large-caps on a 2-year forward
earnings basis.
Q: How do you see the markets and

currency reacting to the expected
Fed action (hike in interest rates) in
2015?
A: It is widely expected that the
US Fed will hike interest rates
sometime in 2015. When the
event actually happens, it is
bound to have some impact on
the currency markets, fixed
income markets and equity
markets across the world.
However, in anticipation of that
eventuality and having learnt
from past experiences, India
has been fortifying itself. Over
the last 15 months, India's
foreign exchange (forex)
reserves have gone up from
$275 billion to $315 billion, the
forward premium has come
down, and the currency has
stabilized. So, we expect
adverse reaction to currency
and markets but the impact
would be minimised due to
mitigating efforts undertaken
by the Reserve Bank of India
(RBI).
Q: In terms of sectors, where do

you see the opportunities for
investors in the current scenario?
A: We remain constructive on
Financials, Consumer
Discretionary, Technology and
Materials.
Q: What is your stock-picking
strategy?
A: We have a snapshot of
Indian sectors and stocks
viewed through valuation and
profitability metrics is
generated and checked against
in-house estimates. Further,
fundamental bottom-up
analysis is carried out on the
stocks that seem attractive.
The goal of stock analysis is to
establish a company's current
level of profitability and to
understand whether it is
sustainable over the medium
term. The analysis will result in
a decision to include or
exclude each of the high
ranking stocks, and will
continue until the portfolio
managers have sufficient
Q: The small and mid-cap space has

seen sharp gains in the recent past.
Is the space still attractive?
A: Over the last year, the small
and mid-companies have
increased more than their
large cap peers and therefore
29
November 2014
Tte--tte
individual stock ideas to be
able to construct a suitably
diversified portfolio.
Q: What strategy would you
suggest for investors to adopt at
this point of time in the market?
What according to you is the key to
successful investing?
A: We would suggest investors
to continue to follow a
disciplined approach to
investing. We have been and
continue to be of the view that
investors should make
allocations in keeping with
their risk appetite and
investment horizon. We also
believe that asset allocation
offers the best opportunity to
balance risk and reward.
The views expressed in the interview are personal views of the authors and do not
necessarily represent the views of ICICI Securities.
Mutual fund investments are subject to market risks, read all scheme
related documents carefully.
The article is for general information only and does not have regard to
specific investment objectives, financial situation and the particular
needs of any specific person who may receive this information.
Investors should understand that statements made herein regarding
future prospects may not be realised. The views expressed in the article
are personal views of the author and do not necessarily reflect the
views of HSBC Asset Management (India) Private Limited or any of its
associates. Neither this document nor the units of HSBC Mutual Fund
have been registered in any jurisdiction. The distribution of this
document in certain jurisdictions may be restricted or totally
prohibited and accordingly, persons who come into possession of this
document are required to inform themselves about, and to observe,
any such restrictions.
No part of this publication may be reproduced, stored in a retrieval
system, or transmitted, on any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior
written permission of HSBC Asset Management (India) Private Limited.
HSBC Asset Management (India) Private Limited; 16, V. N. Road, Fort,
Mumbai 400 001. Tel: 6614 5000.
Email: hsbcmf@hsbc.co.in.
30
November 2014
ASK OUR PLANNER
Claiming RGESS tax benefits

Q: I had invested Rs.50,000 under
section 80 CCG (RGESS) for
financial year 2013-14. Am I eligible
to invest ` 50,000 each for two
more years and claim deduction?
period, you need to submit the

general
application
as
specified by depositories,
before April 15th of the next
financial year.
- Satish G
Also, you have the freedom to

select the stocks to be kept
under lock-in up to ` 50,000 for
claiming benefits under
RGESS. Since the depository
would be automatically
locking-in all the eligible
securities, you have to intimate
the depository participant
through Form B within one
month from the date of
transaction, about those
investments which you do not
want to keep as part of RGESS
investment in that year, such
that you have the right to sell /
pledge those securities at any
time.
A: The Rajiv Gandhi Equity

Savings Scheme (RGESS) tax
benefits can be availed for
three consecutive financial
years, beginning with the
financial year in which the
investment under the scheme
was made for the first time.
Hence, you are eligible to
invest and claim benefits
during FYs 2014-15 and 201516.
The depository would be
automatically locking-in all the
eligible
securities
which
comes
into
an
RGESS
designated demat account
during the relevant financial
year up to a value of Rs. 50,000.
Once an application is made

through Form B, that particular
security cannot be brought
back under RGESS while
claiming for tax benefit.
However, if you wish not to

claim
tax
benefit
for
investments made in any
particular financial year within
the allowable 3-year time
Q: I am a defence pensioner (your

account holder). ` 15 lakh will be
maturing in two months from one of
31
November 2014
ASK OUR PLANNER

my existing investments. I want to
invest the amount in a reliable
scheme/mutual fund (MF) which
gives monthly/quarterly return like
debt / monthly income plan (MIP).
Kindly advise.
SCSS and the balance amount

into MIPs with a growth option.
In such a scenario, you will be
generating regular income
immediately only from FDs &
SCSS. For investment into
MIPs, you can wait for 3 years
and then you may start
withdrawing a fixed amount
every
month
through
Systematic Withdrawal Plan
(SWP).
- Col. Kaushal Chaturvedi

A: If you are looking at regular
income immediately from the
entire amount, then you can
consider investing into a
combination of Fixed Deposits
(FDs), Senior Citizen Savings
Scheme (SCSS) and Monthly
Income Plans (MIPs) with
dividend payout option.
However, there's no assurance
on the frequency and the
amount of payout in MIPs.
This arrangement will be more

tax efficient, as you will be
paying tax only on capital
gains, which is currently 20%
after indexation. Indexation
will bring down the taxable
capital gains to a much lower
level and the effective tax
outgo can be less than 10%.
The interest earned from Fds

and SCSS will be added to your
income and taxed as per the
income slab. However, in an
MIP, the dividend paid to you
will be after deducting a
Dividend Distribution Tax
(which is paid by the scheme),
which currently stands at a flat
28.325% (25% + 10%
Surcharge + 3% cess).
However, your corpus will keep

coming down in an SWP and
beyond a point of time it will
exhaust.
Fo r
knowing
our
recommended mutual funds,
please refer our MF Top Picks
in this edition or visit our
website www.icicidirect.com
.
Alternatively, you can invest

part of the amount into FDs and
32
November 2014
ASK OUR PLANNER

Q: I am 30 years old. Could you please assess and tell me about investment
in mutual funds (MFs) vs. public provident fund (PPF) over 15 years period?
- Pavithra Gayathri
A: The table below outlines the basic difference between PPF &
equity MFs:
Feature s
Tenure
PPF
Equity MFs
Fixed Term-15 years; Lock-in

for 5 years
No fixed term or lock-in

(except Equity Linked
Savings Schemes
(ELLS), where there is 3year lock-in
Asset Class
Debt
Fixed return as decided by the
Government of India every year
Return
As per current tax laws, Rs.1.50

lakh p.a. exempt under section
80C
Tax benefit on principal
Tax on return
Exempt from tax
Capital protection
Guaranteed by the Government

of India
Comparing PPF with Equity

MFs may not be correct, as
both these instruments fall
under different asset classes,
debt and equity, respectively.
Both have their own pros &
cons.
at
the
No guarantee
Q: I have three mutual fund

schemes through SIP (systematic
investment plan) by monthly
installment of ` 1,000 each for the
period of 60 months. These are:
1. Reliance small cap fund (G)
2. F r a n k l i n I n d i a s m a l l e r
past
No fixed return
No exemption (except
ELSS funds, where
investment up to
Rs.1.50 lakh p.a. is
exempt under section
80C, currently)
Exempt from tax, if held
for 12 months or more
performance of PPF & Sensex

for 23 years (from April 1980 to
March 2013), PPF has given an
annualized return of 9.68%,
while Sensex has given an
annualized return of 15.27%.
If you had invested Rs. 10,000

into PPF & Sensex in April 1988,
PPF would have fetched you
Rs. 1,08,911 at the end of 15
years, whereas Sensex would
have fetched you ` 4,73,241.
Looking
Equity
33
November 2014
ASK OUR PLANNER

companies fund (G)
3. Birla sun life top 100 fund (G)
the SIP has completed 6

months.
All schemes taken through
Yo u h a v e t h e c o m p l e t e
www.icicidirect.com, online mode.
freedom of withdrawing the
I have some doubts about mutual
scheme at any time. However,
funds (MFs) as I am a new investor.
SIPs in mutual funds are
1. Can I increase my monthly
beneficial if held and run for
installment in the existence
longer period.
scheme?
You can have the single folio
2. If no, then, if again I am
for all schemes of on Fund
investing the same scheme by
house. You cannot hold funds
new folio then what will
from different fund houses in
happen? Is it the right decision?
one folio. However, since you
3. Can I increase my installment
hold the investments through
months i.e 60 months to 120
ICICIdirect.com, it gives you all
months or more later?
the
4. Can I withdraw with my
benefits
of
holding
investments in one account.
scheme any time?
The
5. Can I get only one Folio for all
benefits
consolidated
being
account
schemes? If yes then w h a t i s
statement,
the benefit of this?
portfolio, consolidate capital
- Aqeeq Akhter
consolidated
gain statement, etc.
A: The installment amount as
Do you also have similar queries to
well as the investment period
ask our experts? Write to us at:
can be changed by modifying
moneymanager@icicisecurities.com.
the SIP from the 'Modify SIP'

link in the SIP book, provided
34
November 2014
MUTUAL FUND ANALYSIS

Category: Diversified Equity Funds
Kotak Select Focus
Fund Objective:
To generate long-term capital
appreciation from a portfolio of
equity and equity related
securities, generally focused on a
few selected sectors.
Key Information:
NAV as on November 28, 2014 (`)
22.2
Inception Date
September 11, 2009
Fund Manager
Harsha Upadhyaya
Minimum Investment (`)

Lumpsum
5000
SIP
1000
Expense Ratio (%)

Exit Load
2.23
1% on or before 1Y,
Nil after 1Y
Benchmark
CNX 200
Last declared Quarterly AAUM(| cr)
1220
Product Label:
This product is suitable for investors
seeking*:
long term capital growth
Investment in portfolio of
predominantly equity & equity
related securities generally
focussed on a few selected sectors
High risk
Fund Manager : Harsha Upadhyaya

Harsha Upadhyaya heads the
equity management team at
Kotak Asset Management
Company (AMC). He has 18

years of rich experience spread
over equity research and fund
management. His prior stints
have been with companies
such as DSP BlackRock, UTI
Asset Management, Reliance
Group and SG Asia Securities.
Harsha is a Bachelor of
Engineering (Mechanical) from
National Institute of
Technology, Suratkal, a Post
Graduate in Management
(Finance) from Indian Institute
of Management (IIM), Lucknow
and a Chartered Financial
Analyst from the CFA Institute.
Performance:
The fund performance has
picked up after Mr Upadhyaya
joined Kotak AMC and started
managing the fund. In the last
six months, the fund has
delivered 31% return almost
double (1.7x) that of its
benchmark CNX 200 return of
17.8%. In the last year, the fund
has outperformed its
benchmark by a whopping 20
percentage points.
35
September 2014

the banking sector, Infosys in
the information technology (IT)
space and Tata Motors & Maruti
Suzuki in the auto sector. The
fund manager has been bullish
on private banks, which
constitute about 19% of the
total assets under
management (AUM). Among
export driven companies,
exposure to pharmaceutical
companies has gradually been
reduced while exposure to
technology companies has
been maintained at 13% of the
portfolio.
6 Month
1 Year
Fund
3 Year
11
16.3
21.5
29.1
44.6
63.3
31
70
60
50
40
30
20
10
0
17.8
Return%
Performance vs. Benchmark
5 Year
Benchmark
Calendar Year-wise Performance

2013 2012 2011 2010
NAV as on Dec 31 (`) 14.1
13.3
9.9
2009
12.8 10.6
Return (%)
6.1
33.5
-22.3
20.1
Benchmark (%)
4.4
31.6
-27.0
14.2 86.6
Net Assets (` Cr)
325
368
359
Fund Name
Last Three Years Performance

30-Sep-13
30-Sep-12
30-Sep-14
30-Sep-13
6.4
122
30-Sep-11
30-Sep-12
Fund
58.04
1.66
16.40
CNX200
42.81
-1.26
14.04
CNX Nifty Index
38.87
0.56
15.38
Current Value of Standard Investment of ` 10000 in the

Date
`
Fund
19809
Benchmark
16219
CNX Nifty
16489
The top 3 sectors (banks,

automotive and technology)
cumulatively account for 60%
of the portfolio, which is in line
with its objective of being
focused on a few selected
sectors. Overall, the fund is
suitable for long term
holding/SIP (systematic
investment plan).
* As on Sep 30, 2014
Note: Investors should note that past performance may or

may not be repeated in future
Portfolio:
The fund has 90% large-cap
stocks in the portfolio with all
heavyweights like ICICI Bank
and State Bank of India (SBI) in
Top 10 Holdings
Asset Type
ICICI Bank Ltd.
Domestic Equities
6.3
Infosys Ltd.
Domestic Equities
5.3
Tech Mahindra Ltd.
Domestic Equities
5.2
State Bank Of India
Domestic Equities
4.4
Tata Motors Ltd.
Domestic Equities
3.5
HDFC Bank Ltd.
Domestic Equities
3.4
Axis Bank Ltd.
Domestic Equities
3.2
Reverse Repo
Cash & Cash Equivalents
3.2
Ultratech Cement Ltd.
Domestic Equities
3.1
Maruti Suzuki India Ltd.
Domestic Equities
3.0
36
September 2014

Top 10 Sector
Asset Type
Bank - Private
IT - Software
Domestic Equities
19.0
Domestic Equities
13.5
Cement & Construction Materials
Domestic Equities
7.6
Refineries
Domestic Equities
7.4
Bank - Public
Domestic Equities
5.7
Auto Ancillary
Domestic Equities
4.8
Industrial Gases & Fuels
Domestic Equities
3.9
Automobiles-Trucks/Lcv
Domestic Equities
3.5
Pharmaceuticals & Drugs
Domestic Equities
3.4
Automobiles - Passenger Cars
Domestic Equities
3.0
Market Capitalisation (%)
Asset Allocation
Large
90
Equity
98.6
Mid
8.5
Debt
0.0
Small
--
Cash
1.4
Dividend History
Portfolio Attributes
Total Stocks
Top 10 Holdings (%)
Fund P/E Ratio
Benchmark P/E Ratio
Fund P/BV Ratio
Dividend (%)
Date
52.0
40.6
23.7
4.6
Sep-29-2014
10
Oct-18-2010
12.5
Performance of all the schemes managed by the fund manager

30-Sep-13
30-Sep-14
Fund Name
30-Sep-12
30-Sep-13
31-Sep-11
31-Sep-12
Kotak Select Focus Fund(G)
58.04
1.66
16.40
CNX 200
42.81
-1.26
14.04
Kotak Opportunities Fund(G)
49.86
0.05
15.25
CNX 500 Index
46.08
-2.49
13.22
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
(Blue) Investors understand that
(Yellow) Investors understand that
their principal will be at low risk
their principal will be at meduim risk
(Brown) Investors understand

that their principal will be at high
risk
Data and Portfolio Details as on November 28, 2014

Source: ICICIdirect.com Research, Accord Fintech
37
September 2014

and stock broking operations.
He is the Chief Investment
Officer (CIO) Equity at ICICI
Prudential Asset Management
Company (AMC).
ICICI Prudential Dynamic Plan
Fund Objective:
To
generate
capital
appreciation
by
actively
investing in equity and equity
related securities and for
defensive consideration in
debt/money
market
instruments and derivatives
Performance:
The fund performance can be
attributed to its agility in
limiting the downside via cash
calls/hedging stock positions,
etc. In 2011, when the CNX
Nifty dipped 25%, the fund
managed to limit the downside
for its investors to 20% despite
having higher equity allocation
(~90%). The fund has not just
emerged as a steady
performer in market
downturns but also managed
to deliver above average
returns during rallies. The
fund, as on November 30, 2014
has delivered 16%
compounded annualised
return for a period of five years
as against 12% compounded
annualised return delivered by
the benchmark CNX Nifty
Index for the same period. The
fund has been a steady
performer and has weathered
many market cycles.
Key Information:
NAV as on November 28, 2014 (`)
188.4
Inception Date
October 31, 2002
Fund Manager
Sankaran Naren
Minimum Investment (`)

Lumpsum
5000
SIP
1000
Expense Ratio (%)

Exit Load
Benchmark
2.13
1% on or before 12M,
Nil after 12M
CNX Nifty Index
Last declared Quarterly

AAUM (` cr)
5446
Product Label:
This product is suitable for investors
seeking*:
Long term wealth creation solution
A diversified equity fund that aims for
growth by investing in equity and debt ( for
defensive considerations)
High risk
Fund Manager: Sankaran Naren

S. Naren has rich experience of
around 23 years in almost all
spectrums of the financial
services industry ranging from
investment banking, fund
management, equity research
38
September 2014

depending on the broader
market scenario. Currently,
allocation is closer to 75%
indicating the fund manager
has a neutral view on equities
and mildly positive on debt
market to give better riskadjusted returns.
16.7
20
11.7
19.5
30
17.2
Return%
40
21
26.2
41
45
Performance vs. Benchmark

50
10
0
6 Month
1 Year
Fund
3 Year
5 Year
Benchmark
Calendar Year-wise Performance

2013 2012 2011
NAV as on Dec 31 (`) 135.1
Return (%)
Fund Name
2010
2009
88.9 111.6 92.0
16.3
30.6 -20.3
21.3 79.9
6.8
27.7 -24.6
18.0 75.8
Benchmark (%)
Net Assets (` Cr)
116.1
3666
3953
This fund adopts a "bottom-up"

fundamental analysis strategy
across market capitalisations
for picking its investments. The
fund manager, especially for
his mid-cap holdings in the
fund, follows a buy and hold
strategy without much churn.
For stocks available in the
future & options (F&O)
category, the fund manger
does not shy away from
hedging the exposure, thereby
limiting the interim downside.
3962 2785 1822
Last Three Years Performance

30-Sep-13
30-Sep-12
30-Sep-14
30-Sep-13
30-Sep-11
30-Sep-12
Fund
50.04
5.53
16.33
CNX Nifty Index
38.87
0.56
15.38
Current Value of Standard Investment of ` 10000 in the

Date
`
Fund
176426
Benchmark
83716
* As on Sep 30, 2014
Portfolio:
Asset allocation of the fund is
determined based on market
valuations. The fund manager
has the discretion to take
aggressive or defensive asset
calls, based on market
conditions. Therefore, the
equity allocation fluctuates
between 70% and 90%
Overall, this fund is best suited

in a volatile environment
where profits in equities are
booked at rich valuation and
the downside is limited via
hedging and cash calls.
Top 10 Holdings
Asset Type
Short Term MMI
Cash & Cash Equivalents
%
11.3
Power Grid Corporation Of India Ltd.
Domestic Equities
9.8
HDFC Bank Ltd.
Domestic Equities
7.4
Domestic Equities
6.3
1.44% GOI IIB 2023
Wipro Ltd.
Government Securities
5.1
08.30% GOI - 31-Dec-2042
Government Securities
4.5
Domestic Equities
4.3
Reliance Industries Ltd.

ICICI Bank Ltd.
Domestic Equities
3.4
Infosys Ltd.
Domestic Equities
3.4
Mahindra & Mahindra Ltd.
Domestic Equities
2.7
39
September 2014

Asset Type
Top 10 Sectors
IT - Software
Domestic Equities
13.5
Bank - Private
Domestic Equities
11.9
Power Generation/Distribution
Domestic Equities
11.0
Refineries
Domestic Equities
4.3
Oil Exploration
Domestic Equities
3.3
Bank - Public
Domestic Equities
2.9
Automobiles-Tractors
Domestic Equities
2.7
Shipping
Domestic Equities
2.2
Pharmaceuticals & Drugs
Domestic Equities
2.1
Finance - Investment
Domestic Equities
2.0
Whats In
CESC Ltd.
Whats Out
Crompton Greaves Ltd.
Reliance Capital Ltd.
Tata Steel Ltd.
0.7
0.2
Motherson Sumi Systems Ltd.
Gujarat State Petronet Ltd.
Market Capitalisation (%)
Asset Allocation
Equity
75.2
Large
Debt
Cash
13.2
11.6
Mid
66.1
9.8
Small
Portfolio Attributes
1.7
Risk Parameters
Total Stocks
60
Standard Deviation (%)
Top 10 Holdings (%)
58
Beta
0.69
Sharpe ratio
0.21
R Squared
0.79
Alpha (%)
3.02
Fund P/E Ratio
19.5
Benchmark P/E Ratio
Fund P/BV Ratio
3.2
10.68
Dividend History
Dividend (%)
Date
Oct-13-2014
Oct-28-2013
Nov-05-2012
Sep-02-2011
Feb-28-2011
Aug-23-2010
20
15
22.83
5
10
10
Performance of all the schemes managed by the fund manager

Fund Name
30-Jun-13
30-Jun-14
30-Jun-12
30-Jun-13
50.04
38.87
48.25
38.87
5.53
0.56
5.05
0.56
ICICI Pru Dynamic Plan-Reg(G)

CNX Nifty Index
ICICI Pru Top 100 Fund-Reg(G)
CNX Nifty Index
31-Jun-11
31-Jun-12
16.33
15.38
21.51
15.38
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
(Blue) Investors understand that
their principal will be at low risk
(Yellow) Investors understand that

their principal will be at meduim risk
(Brown) Investors understand

that their principal will be at high
risk
Data and Portfolio Details as on November 28, 2014

Source: ICICIdirect.com Research, Accord Fintech
40
September 2014
EQUITY MODEL PORTFOLIO

Our indicative large-cap equity model portfolio has continued to
deliver an impressive return of 82.4% (inclusive of dividends) till
date (as on December 8, 2014) since its inception (June 21, 2011)
vis--vis the benchmark index (S&P BSE Sensex) return of 60.1%
during the same period, out-performance of over 22%. Our
portfolio approach towards high-quality stocks aided us in
outperforming the Sensex with continued success. We continue
to trust our philosophy of choosing stocks where the risk reward
is favourable and not just the reward aspect. We feel Quality-21
large-cap portfolio will continue to be aligned to the same
philosophy.
Our Consistent-15 mid-cap portfolio also continues to
outperform, delivering 93.1% (inclusive of dividends) till date (as
on December 8, 2014) vis--vis the benchmark index (CNX
Midcap) return of 62.8%, as we continued to identify
fundamentally strong stocks. Some key performers of our
portfolio are Sun Pharmaceuticals, Lupin, Tata Consultancy
Services (TCS), Tata Motors, Info Edge and Dabur India delivering
97%-190% returns since inception.
We have always suggested the systematic investment plan (SIP)
mode of investment and still find a lot of merit in it as the
preferred mode of deployment given the market conditions and
volatility associated since the inception of the portfolio. It has
outperformed other portfolios, thus, reinforcing our belief in a
plan of investment. However, now we are also advising clients to
look at lump-sum investments at any possible dips.
In the last few years, anxiety stemming from weak economic
health and unstable policy environment has resulted in defensive
sectors commanding high scarcity premium while debt-ridden
cyclicals witnessed a de-rating. However, the recent decisive
election verdict has given investors optimism over the overall
growth prospects of the economy. Thus, the current rally has
totally reversed the penchant for defensives (like information
technology (IT), pharmaceuticals and fast-moving consumer
goods (FMCG)), which have underperformed in 2014 year-todate (YTD). On the other hand, old economy sectors, including
capital goods, realty, metals, power and oil & gas have been
41
November 2014

topping the charts this year, signifying changing investor
preference.
Thus, from a portfolio perspective, we have now leaned forward
towards inclusion of stocks with more real economy, domestic
discretionary exposure viz. GAIL, JK Cement, Arvind, etc. We
have, thus, taken a strategic call of including stocks that possibly
have a larger opportunity size either via reforms push or via
revival in the discretionary demand from domestic consumers.
Thus, we exit Page Industries and Nestl with minimal returns.
Hence, we have made a significant shift in our portfolio stance to
play the recovery cycle. In terms of relative weightage of the
sector vis--vis the Sensex, we have changed our stance and
gone overweight on financials (raising weights of public sector
banks), oil & gas, the infrastructure space (cement, infrastructure
and power). This has been primarily triggered by the possibility
of decisive action in the infrastructure and real economy space
by the new government. We have maintained our overweight
stance on telecom considering the reducing regulatory hurdles
and relatively better earnings growth profile. We are also
overweight on sunrise sectors like media via Zee Entertainment.
We have, thus, positioned away from pure play defensives like
the pure play mature exporter- IT and the expensive FMCG
space. We feel both these sectors may have normalised earnings
growth but the sectoral churning would cause them to de-rate on
valuation terms.
For other equal weight sectors we are playing consumer
discretionary sectors like autos (pent up demand, strong
franchises) and the metals and mining space (high infrastructure
demand expected), pharmaceuticals (large global generic
opportunity yet to be tapped).
On individual names, we are strongly overweight on companies
like L&T and UltraTech Cement in the infrastructure space while in
public sector banks we like State Bank of India (SBI).
We believe we now have a better balance to our portfolio going
into a recovery cycle and possibly a longer-term Bull Run.
42
November 2014

Name of the company
Largecap
(%)
Largecap Stocks
Consumer Discretionary
United Spirits
Tata Motors DVR
Bajaj Auto
Titan
BFSI
HDFC
HDFC Bank
SBI
Axis Bank
Power, Infrastructure & Cement
L&T
Ultratech Cement
FMCG
ITC
Metals & Mining
NMDC
Oil and Gas
Reliance
Gail
Pharma
Lupin
Sun Pharma
IT
Infosys
TCS
Wipro
Telecom
Bharti Airtel
Media
Zee Entertainment
Largecap share in diversified
10
2
4
2
2
27
6
6
8
7
13
8
5
10
10
4
4
14
11
3
5
2
3
12
3
6
3
3
3
2
2
43
Model Portfolio
Midcap
(%)
Diversified
(%)
7
1.4
2.8
1.4
1.4
18.9
4.2
4.2
5.6
4.9
9.1
5.6
3.5
7
7
2.8
2.8
9.8
7.7
2.1
3.5
1.4
2.1
8.4
2.1
4.2
2.1
2.1
2.1
1.4
1.4
70
November 2014

Name of the company
Largecap
(%)
Midcap Stocks
Consumer Discretionary
Bosch
Cox & Kings
Arvind
IT
Info Edge
BFSI
DCB
IndusInd Bank
FMCG
Kansai Nerolac
Tata Global Beverages
Pharma
Natco Pharma
Media
PVR
Capital Goods
Cummins
Realty/Infrasturcture/Cement
JK Cement
Container Corporation of India
Oberoi Realty
Shree Cement
Midcap share in diversified
Total of all three portfolios
Model Portfolio
Midcap
(%)
20
6
6
8
6
6
16
8
8
14
8
6
6
6
8
8
6
6
24
6
6
6
6
100
100
Diversified
(%)
6
1.8
1.8
2.4
1.8
1.8
4.8
2.4
2.4
4.2
2.4
1.8
1.8
1.8
2.4
2.4
1.8
1.8
7.2
1.8
1.8
1.8
1.8
30
100
Content source: ICICIdirect.com Research

ICICI Securities Ltd. has been assigned an advisory mandate by Ranbaxy
Laboratories Limited with regard to Sun Pharmaceutical Industries Limited's
acquisition of Ranbaxy Laboratories Limited. This report is prepared on the
basis of publicly available information.
ICICI Securities Limited has received an advisory mandate from Natco Pharma.
This report is prepared based on publicly available information.
44
November 2014

Performance* so far Since inception
93.1
100
82.9
82.4
80
62.8
60.1
58.3
60
40
20
0
Large Cap
Midcap
Portfolio
Diversified
Benchmark
*Returns (in %) as on December 08, 2014

Large-cap Portfolio Benchmark: BSE Sensex; Mid-cap Portfolio
Benchmark: CNX Midcap; Diversified Portfolio Benchmark: Combination
of BSE Sensex and CNX Midcap
Value of ` 1,00,000 invested via SIP at the end of every month
7,000,000
5,107,023
6,364,952
4,300,000
4,300,000
3,000,000
4,300,000
4,000,000
5,890,296
6,093,580
5,000,000
6,632,112
7,156,325
6,000,000
2,000,000
Largecap
Investment
Midcap
Value of Investment in Portfolio
Divesified
Value if invested in Benchmark
Start date of SIP: June 30, 2011; *Value as on December 08, 2014
45
November 2014
MUTUAL FUND TOP PICKS

Mutual Fund Top Picks
Wth over thousand of mutual fund schemes available in the market,
selecting the right ones may become too complex. To make it easy
for you, we present our research teams top recommendations,
across equity and debt categories
Equity
Category
Top Picks
Largecaps
Axis Equity Fund

Birla Sunlife Frontline equity Fund
ICICI Pru Focussed Bluechip Equity Fund
UTI Opportunities Fund
Midcaps
HDFC Midcap Opportunities Fund

ICICI Prudential Value Discovery Fund
Franklin India Smaller Companies Fund
SBI Magnum Global Fund
Diversified
Franklin India Prima Plus

ICICI Prudential Dynamic Plan
Reliance Equity Opportunities
ELSS
Axis Long Term Equity

ICICI Prudential Tax Plan
Franklin India Tax shield
Sector - Banking
ICICI Prudential Banking

Reliance Banking
UTI Banking
46
November 2014
MUTUAL FUND TOP PICKS

Debt
Category
Top Picks
Liquid Funds
HDFC Cash Mgmnt Saving Plan

ICIC Pru Liquid Plan
Reliance Liquid Treasury Plan
Ultra Short Term
Birla Sunlife Savings Fund

Franklin India Ultra Short Term Bond
Fund
ICICI Pru Flexible Income Plan
Short Term
Birla Sunlife Short Term Fund

HDFC Short Term Opportunities Fund
ICICI Pru Short Term Plan
Credit Opportunities
Fund
Birla Sunlife Medium Term Plan

Franklin India Short term Plan
ICICI Prudential Regular Savings
Income Funds
ICICI Prudential Dynamic Bond Fund

Birla Sun Life Income Plus - Regular Plan
IDFC Dynamic Bond Fund
Gilts Funds
ICICI Pru Gilt Inv. PF Plan

Birla Sunlife Gilt Plus
MIP
(Aggressive)
Birla Sunlife Savings 5

ICICI Prudential MIP 25
DSP Blackrock MIP
47
November 2014
QUIZ TIME
1. In case of a monthly income plan (MIP), the fund house currently

pays dividend distribution tax (DDT) of ______%.
2. The Rajiv Gandhi Equity Savings Scheme (RGESS) tax benefits can
be availed for ______ consecutive financial years.
3. If you do not want to keep some eligible securities as a part of
RGESS investment, you need to submit Form ______ to the
depository within one month from the date of transaction.
4. The interest earned from Senior Citizen Savings Scheme (SCSS)
is added to your income and is taxed as per the income slab.
True / False
5. Expand SWP.
Note: All the answers are in the stories that have appeared in this edition
of ICICIdirect Money Manager. You may send in your answers at:
moneymanager@icicisecurities.com
The answers will be published in our next edition. The names of the
earliest all correct entries will be published too. So jog your grey cells
and be quick to send in your entries.
Correct answers for the November 2014 quiz are:
1. When a domestic company pays dividend, it pays dividend
distribution tax (DDT) at ______ per cent currently.
A: 17.65%
2. If an assessee invests in Equity Linked Savings Scheme (ELSS)
mutual funds, the investment is eligible for deduction from his
taxable income to the extent of Rs. ______ under section 80C.
A: 1,50,000
3. There are no tax-incentives for investment in bank and
corporate fixed deposits (FDs). True/ False
A: True; except 5-year FD with a scheduled bank
4. The interest earned on savings bank account in excess of Rs.
______ p.a. is taxable in the hands of the individual.
A: 10,000
5. Expand EET (it's a taxation regime).
A: Exempt-Exempt-Tax
Congratulations to the following winners for providing correct answers!
Satish Chirmure; Mahesh S Newalkar; Neelakandan Eswaran
48
November 2014
MONTHLY TRENDS
WPI INFLATION (FOOD)
3.0
2.70
2.5
(%)
2.0
1.5
1.0
0.63
0.5
0.0
Oct-14
Nov-14
(The figures are in %)
CRUDE OIL
90.0
80.54
80.0
$ per barrel
70.0
66.15
60.0
50.0
40.0
30.0
20.0
10.0
0.0
31-Oct
4-Nov
8-Nov
12-Nov
16-Nov
20-Nov
24-Nov
28-Nov
NYMEX crude oil prices ($/barrel)
FII & DII INVESTMENTS

3500
3000
2500
2000
2455.67
1458.78
1500
1000
500
235.00
0
-500
-268.50
-1000
3-Nov
8-Nov
13-Nov
18-Nov
FII
23-Nov
28-Nov
DII
(Foreign institutional investors (FIIs) and domestic institutional

investors (DII) net equity investment ( ` in crore)
49
November 2014
MONTHLY TRENDS
VOLATILITY INDEX (VIX)

16.0
15.0
14.0
13.74
13.0
12.90
12.0
11.0
10.0
3-Nov
8-Nov
13-Nov
18-Nov
23-Nov
28-Nov
VIX
DOMESTIC INDICES
BSE Sensex
28800
28693.99
28600
28400
28200
2.97%
28000
27800
27865.83
27600
27400
31-Oct
4-Nov
8-Nov
12-Nov
16-Nov
20-Nov
24-Nov
28-Nov
NSE Nifty
8650
8600
8588.25
8550
8500
8450
8400
3.20%
8350
8300
8250
8322.20
8200
8150
31-Oct
4-Nov
8-Nov
12-Nov
50
16-Nov
20-Nov
24-Nov
28-Nov
November 2014
MONTHLY TRENDS
GLOBAL INDICES
Dow Jones
18000
17828.24
17700
2.52%
17400
17390.52
17100
31-Oct
4-Nov
8-Nov
12-Nov
16-Nov
20-Nov
24-Nov
28-Nov
NASDAQ
4900
4800
4791.63
4700
4,630.74
3.47%
4600
4500
31-Oct
4-Nov
8-Nov
12-Nov
16-Nov
20-Nov
24-Nov
28-Nov
EXCHANGE RATES
USD-INR
62.4
62.2
62.20
USD / INR
62.0
61.8
61.6
1.31%
61.4
61.2
61.39
61.0
60.8
31-Oct
4-Nov
8-Nov
12-Nov
16-Nov
51
20-Nov
24-Nov
28-Nov
November 2014
MONTHLY TRENDS
POUND-INR
98.5
98.0
98.19
/ INR
97.5
97.31
97.0
0.90%
96.5
96.0
95.5
31-Oct
4-Nov
8-Nov
12-Nov
16-Nov
20-Nov
24-Nov
28-Nov
EURO-INR
78.0
77.43
/ INR
0.71%
76.89
76.0
31-Oct
4-Nov
8-Nov
12-Nov
16-Nov
20-Nov
24-Nov
28-Nov
BULLION
GOLD
$ per Ounce
1250
1175
1167.04
1173.92
1100
31-Oct
4-Nov
8-Nov
12-Nov
16-Nov
20-Nov
24-Nov
28-Nov
(The prices are in $ per ounce).
SILVER
17.0
$ per Ounce
16.14
15.41
15.0
31-Oct
4-Nov
8-Nov
12-Nov
16-Nov
20-Nov
24-Nov
28-Nov
(The prices are in $ per ounce).

(Source for all indicators: Bloomberg, Reuters)
52
November 2014
Premium Education Programmes Schedule

ICICIdirect Centre for Financial Learning (ICFL) imparts quality education on
financial markets to beginners and amateurs, student, housewives, working
professionals and self employed. ICFL's broad objective is to make participant
feel confident to start investing in stock market.
Here is the list of our programmes scheduled for the month of December, 2014.
Schedule for Beginners' programme on Futures and Options (F&O) Trading
Sr.
No
City
Hyderabad
Dec 06 and 07, 2014
Ruchi on 8297362323
Faridabad
07 Dec, 2014
Vishal on 07838290143, Harneet on 09582158693
Pune
Dec 13 and 14, 2014
Kusmakar on 7875442311
Nagpur
Dec 13 and 14, 2014
KUsmakar on 7875442311
New Delhi
Dec 20 and 21, 2014
Kolkata
Dec 27 and 28, 2014
Sumit on 08017516187
Bangalore
Dec 27 and 28, 2014
Subrata on 9620001478
Sr.
No
City
New Delhi
Sr.
No
For More Information & Registration call:
Dates
Schedule for Chartered Financial Analyst (CFA) Level 1

Dates
Dec 07 and 14, 2014
Schedule for Fast-Track Programme on Futures & Options (F&O)

City
Dates
Jamnagar
07 Dec, 2014
Yogesh on 8238053563
10
Ahmedabad
14 Dec, 2014
11
Vapi
21 Dec, 2014
Sr.
No
Schedule for Fast-Track Programme on Stock Investing

Dates
City
12
Bikaner
07 Dec, 2014
Harneet on 09582158693
13
Ajmer
07 Dec, 2014
Harneet on 09582158693
14
Surat
14 Dec, 2014
15
Ahmedabad
28 Dec, 2014
16
Jamshedpur
30 Dec, 2014
Sumit Sarkar on 8017516187
Sr.
No
City
Schedule for Fast-Track Programme on Technical Analysis

Dates
17
Ranchi
07 Dec, 2014
18
Patna
14 Dec, 2014
53
November 2014
Sr.
No
Schedule for MarketMaster Programme

Dates
City
19
Chandigarh
Dec 06 and 07, 2014
20
Mumbai-Andheri
Dec 13 and 14, 2014

Vidhu on 9619716146
Schedule for Technical Analysis
Sr.
No
City
21
Hyderabad
Dec 06 and 07, 2014
Ruchi on 8297362323
22
Hyderabad
Dec 06 and 07, 2014
Ruchi on 8297362323
23
New Delhi
Dec 13 and 14, 2014
24
Bangalore
Dec 20 and 21, 2014
25
Hyderabad
Dec 20 and 21, 2014
Ruchi on 8297362323
Sr.
No
City
Dates
Schedule for Foundation Programme on Stock Investing

Dates
26
Mumbai-Andheri
Dec 06 and 07, 2014
Vidhu on 9619716146
27
New Delhi
Dec 06 and 07, 2014
28
Pune
Dec 06 and 07, 2014
29
Thane
Dec 13 and 14, 2014
Vidhu on 9619716146
30
Kolkata
Dec 13 and 14, 2014
Sumit on 08017516187
31
Bangalore
Dec 13 and 14, 2014
32
Mumbai-Andheri
Dec 20 and 21, 2014
Vidhu on 9619716146
33
Thane
Dec 20 and 21, 2014
Vidhu on 9619716146
34
New Delhi
Dec 20 and 21, 2014
35
Hyderabad
Dec 20 and 21, 2014
Ruchi on 8297362323
36
New Delhi
Dec 27 and 28, 2014
37
Pune
Dec 27 and 28, 2014
Sr.
No
City
Schedule for Advanced Derivatives Trading Strategies

Dates
38
Bangalore
Dec 06 and 07, 2014
39
Hyderabad
Dec 13 and 14, 2014
Ruchi on 8297362323
40
Pune
Dec 20 and 21, 2014
54
November 2014

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58

The calendar year 2014 has been

At the heart of the change in sentiment is the expectation of an

Secondly, with the slowdown in China, commodity prices have been

With the rising cost of almost everything, today's young

Abhishake Mathur, CFA

Sameer Chavan, CWM, Pankaj Pandey

Azeem Ahmad, Nithyakumar VP CFPCM, Nitin Kunte, Sachin Jain,

ICICIdirect Money Manager

ICICIdirect Money Manager

Government decides to pay 8.75% interest on PF for 2014-15

Courtesy: The Economic Times

Mid-Year Economic Review projects 5.5 per cent growth

Courtesy: The Hindu

Govt scraps proposed Suuti ETF

Courtesy: Business Standard

Government moves bill to roll out GST; sets in motion plans to

Courtesy: The Economic Times

Sentiments likely to remain upbeat as

unchanged leading to decline in

The markets ended mostly in

Global markets have been

Despite the expected status

Equity benchmarks continued

The broader markets achieved

We expect the benchmarks to

Limited price correction and

BSE Sensex Weekly Candlestick Chart

Breakout area of September

Source: Bloomberg, ICICIdirect.com Research

Source: Bloomberg, ICICIdirect.com Research

ICICIdirect Money Manager

Key support for Nifty placed at 8100

The Nifty options data of the

The Nifty Bollinger band below

ICICIdirect Money Manager

Key additions relevant for the

Nifty Bollinger Band likely to test

BollMA (20) on Close

Nifty MoM Expiry gains in 2014

In the November series, the

Bank Nifty upside target now

The Bank Nifty had a strong run

Going ahead, the November

December series options

December has also been

midcap was up 4% while the

Bank Nifty could continue

Sectoral return in November Series

CXN Mid Cap

Cyclicals, defensives participating

The November up move of the

Dollar index strength continues

For the month, the CNX

ICICIdirect Money Manager

over 5.5% to 118.5 on the back

We have seen a surge in

Dollar strength caused weakness in

The crucial 8400-8440 level has

Rupee outperforming other Ems

ICICIdirect Money Manager

fresh longs totalling over

FII inflows in equity segment keep

FIIs cash activity in (In Rs. crore)