Vol.

: 275
28th December,2015

Index

MarketView
1 Market View:

A historic year 2015 was!!

CompanyUpdate
2
Year 2015 was a historic year so far as the global capital market and the Indian market is

concerned. In the year 2015, the world has seen never before events. The world has seen
Aroundthe
crude prices which is lower than the bottled water! The world has witnessed unprecedented fall
Economy

3 in commodity prices. We have also seen seesaw movement in Greece crisis in the year 2015.

And we have witnessed first rate rise by Federal Reserve after almost a decade in 2015. In
KnowledgeCorner 3 India, we have seen the high of the market on back of Modi wave. The Modi wave seems to
have faded and we have seen huge sell off by FIIs in the year 2015. Lack of political

MutualFund
4 consensus, poor corporate earnings and foreign exchange volatility has led FIIs to sell in the
market from august onwards. But the year 2015 was remarkable in the sense that local funds

and retail investors have kept faith in Indian economy and invested heavily in the market.
CommodityCorner5
These unprecedented actions by local institutes made it sure that the Indian market

outperforms in every respect in the world arena. Year 2015 has also seen revival of primary
ForexCorner
6 market with almost RS 13000 crores raised this year against RS 9500 crores raised in last

three years. Let us hope that in the coming year, the hope meets with the reality and the corReportCard
7 porate earnings fulfill the expectations of the investors as the investors look forward with hope
and aspirations in the year 2016.

Technically, the rise above 7850 is good for the market which provides strength to conquer
Editor&Contributor
8000 on back of metal and commodity stocks. The defense stocks have surged off late on
MargiShah
back of some important agreements signed by India and Russia and hope for many more with

USA. Some new sectors like Dairy have emerged on the horizon.

LET us hope Prime Minister MODI mimics all time great Hollywood movie from Russia with
SpecialContributors
love.
AsheshTrivedi
AdityaNahar
Kamal Jhaveri

MD- Jhaveri Securities

Forsuggestions,feedback
andqueries
jstreet@jhaveritrade.com

-1-

Vol.: 275
28th December,2015

Company Update : Garware-Wall Ropes Ltd.

Financial Basics

Company Basics
509557

FV (`)
EPS (`)

10.00
19.17

GARWALLROP

P/E (x)

20.66

P/BV (x)
BETA
RONW (%)

2.80
1.0730
14.72

BSE Code
NSE Symbol
EQUITY (` in Cr.)

21.88

MKT.CAP (` in Cr.)

866.53

Share Holding Pattern

Holder's Name
Foreign
Institutions
Promoters
Non Prom.
Public & Others
Government

% Holding
1.91
2.26
50.59
0.00
39.11
6.14

Valuation : GARWALLROP is trading at `425. We recommend Buy with target price of `550, valuing stock
20xFY18E EPS of `27.47.The stock currently trades at 22.27x of FY16E, 18.56x of FY17E and 15.47x of
FY18E.
Company Overview
Garware-Wall Ropes Ltd. (GWRL), is one of India's leading players in Technical Textiles with customers and end-users
across the world. The company provides application-focused solutions for various sectors including Deep Sea Fishing,
Aquaculture, Shipping, Agriculture, Sports, Infrastructure, Defence and Transportation.

Investment rational
Strong products portfolio and has wide range of end users
GWPL is the largest domestic player in Technical Textile industry that provides application focus solutions to
various traditional sectors like Fisheries, Aquaculture and also cater to new and rising sectors like Sports,
Defence and Transportation with its wide range of product portfolios. End-users of Company's products include
Fishermen, Shipping Companies, Oil Drillers, Agriculturists, Packers, Transporters, Construction companies,
Municipalities, Government Organizations, Clubs, Universities and Manufacturing Plants. The company also
provide various product and solution for Water management, Waste management, erosion control applications.
Apart from being a leading player in the domestic market, GWPL has a dominant share of markets in North
America, and parts of Europe and Australia for several products.
Falling crude oil prices and currency devaluation work well for GWRL
Most of the Raw Material (like High Density Polyethylene ,Polypropylene, Nylon Polyester Yarn) consumed by
the GWRL is crude based derivatives which constitutes ~50% of total expenditure. RM cost as % of sales remains
in the range of 45%-47% in last five years. Falling in crude oil price (Brent crude touched lowest level since 2004)
leads to added advantage for GWRL in the form of margin expansion. RM cost as % of Sales fell from 47% in
6MFY15 to 43% in 6M FY16 leads to EBITDA margin expansion of 137bps to 11.80% in H2FY16 (v/s 10.43% in
H2FY15). Rupee depreciation help s to maintain top line better due to exports revenue contributes ~49% of top
line as company has increased its focus on USA, Canada and Europe.

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Vol.:
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28th December,2015

Around The World

Weekly Market Recap :

The Reserve Bank of India (RBI) in its latest Financial Stability Report (FSR) said that public sector banks (PSBs) pay
out significant amounts as dividend to the government and other shareholders which have no relevance to their balance
sheet strengths and capital planning.

IT major Wipro said it has signed a definitive agreement to acquire Viteos Group for a purchase consideration of $130
million. The announcement was made on Wednesday, 23 December 2015.

Larsen & Toubro (L&T) said that its construction division, L&T Construction, won orders worth Rs 1178 crore across
various businesses in December 2015.

SBI on Thursday, 24 December 2015, announced that the bank has raised Rs 4000 crore on private placement of Basel
III compliant, Tier-II bonds with 10 year tenure, bearing 8.33% per annum coupon and with call option after 5 years.

Market Eye Week ahead :

The market may remain volatile as traders roll over positions in the futures & options (F&O) segment from the near month December
2015 series to January 2016 series. The near month December 2015 derivatives contracts expire on Thursday, 31 December 2015.

Shares of automobile companies will be in focus as companies start announcing monthly sales volume data for December 2015 from
Friday, 1 January 2016.

On the global macro front, Conference Board (CB) Consumer Confidence data in the US, which measures the level of consumer
confidence in economic activity, will be unveiled on Tuesday, 29 December 2015.

The National Association of Realtors (NAR) will unveil the Pending Home Sales data in the US on Wednesday, 30 December 2015.

China Manufacturing Purchasing Managers Index (PMI) report will be unveiled on Thursday, 31 December 2015.

KEY EVENTS/FACTORS TO WATCH

1. Fri: auto sales data for the month of December

Knowledge Corner :
Growth Fund

A mutual fund whose aim is to achieve capital appreciation by investing in growth stocks. They focus on companies that are
experiencing significant earnings or revenue growth, rather than companies that pay out dividends.

In general, growth funds are more volatile than other types of funds, rising more than other funds in bull markets and falling more in
bear markets.

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Vol.: 275
28th December,2015

Mutual Fund Corner

Top 10 Sector Break-Ups

Fund Name

Fund (%)

Scheme Name

Reliance Regular Savings Fund - Balanced Option

AMC

Reliance Capital Asset Management Ltd

Type

Equity-oriented

Category

Open-ended and Hybrid

Launch Date

May 2005

Fund Manager

Amit Tripathi & Sanjay Parekh

Net Assets
(` In crore )

Rs. 1639.7 crore as on Nov 30, 2015

History

2012

2013

2014

2015

NAV (Rs)

25.54

26.44

37.87

40.94

Total Return (%)

33.86

3.52

43.20

8.11

11.32

-2.86

17.25

11.07

4/30

24/32

31/57

7/74

52 Week High (Rs)

25.54

26.44

38.57

41.58

52 Week Low (Rs)

19.10

21.92

25.36

37.53

Net Assets (Rs.Cr)

556.47

549.90

820.82

1382.11

2.22

2.86

2.85

2.64

+/- VR Balanced
Rank (Fund/Category)

ExpenseRatio(%)

Financial

18.56

Automobile

12.56

Technology

7.98

Energy

6.86

Healthcare

6.54

Services

5.04

Diversified

3.85

Engineering

3.58

Communication

3.06

Metals

0.69

Risk Analysis
Volatility Measures
Standard Deviation

12.78

Sharpe Ratio

0.79

Beta

1.07

R-Squared
Alpha

0.82
6.72

Composition (%)
Equity

69.90

Debt

29.88

Cash

0.22

Fund Performance v/s S&P CNX Nifty

Fund Style
Investment Style
Blend

Value

Large
Medium
Small

Fund
CNX Nify
(Rebased to 10,000)
- 4-

Capitalization

Growth

Source : - www.valueresearchonline.com

Vol.: 275
28th December,2015

Commodity Corner
BULLION
FUNDAMENTAL: Bullion last week recovered with Gold rose nearly 1.20% and Silver manage to hold gain with 0.52% snapping losses as the dollar
softenedahead of the Christmas holiday break and a recovery in oil prices helped sentiment. Traders were hesitant to make significant moves ahead of
the year-end. Global financial markets closed early on Thursday, Christmas Eve, and remained shut for Christmas Day on Friday. The dollar slid despite with the first U.S. rate hike since 2006 out of the way, the focus is now on the pace of future rate increases. The Fed, from its forecasts, is anticipating four rate hikes next year. However, the Fed funds futures currently suggests there will be just two rate increases, one in June and one in December. Mixed U.S. economic reports released throughout the week failed to offer clues as to how fast the U.S. central bank will raise interest rates next
year. Set for the third straight year of downtrend, gold has lost further sheen in 2015 as investors looked for other asset classes and the government
sought to monetize the holdings lying idle with the households and institutions. The silver has been no better with a dip of about 8 per cent in its prices.
The gold prices have dipped by about 5 per cent this year. Subdued domestic demand along with fears over slowdown in global consumption further
dampened the sentiments, while improving outlook for equity markets led to the investors looking for asset classes with better return prospects. Now
heading into the final week of the year, trading volumes are expected to remain light as many traders already closed books due to the holiday period,
reducing liquidity in the market and increasing volatility. The U.S. is to release key reports on consumer confidence, pending home sales and jobless
claims, as market players look for further indications on the strength of the economy and the future path of U.S. rate hikes. Festival and wedding purchases were brought forward to take advantage of the price dip, therefore demand towards the end of the year is likely to be correspondingly affected.
RECOMMENDATION : SELL GOLD @ 25500 SL 25850 TGT 25150-24900.SELL SILVER @ 34600 SL 35200 TGT 34200-33800

BASE METALS
FUNDAMENTAL: Base metals Complex rallied last week lead gained nearly 3% rebounding from lows as hopes for stimulus from China buoyed the
metal. Some investors seemed to be starting to square their books, a process which could pick up before the year end. Nickel dropped most by -2.36%
despite on update that a build-up of refined nickel units in Shanghai went largely unnoticed by international sources in 2015, as market participants focused on the comparatively small London Metal Exchange drawdown's. As total LME inventories dropped, total inventories in the major Shanghai warehouses which, combined, are considered by local sources to be the best indicators of domestic Chinese stock levels surged to around 159,550 in
December 2015, up from 55,000 at the start of the year, according to market data. Much of the focus has been on China's Central Economic Work Conference, which made a decision to maintain a proactive fiscal policy in 2016, Xiao Fu, head of commodity market strategy at Bank of China International
in London, said. Some big Chinese commodity funds are positioning for a short-term uptick in metals prices despite a poor longer-term outlook, expecting supplies to tighten over the next three to six months as Beijing acts to strengthen its economy. Chinese commodity funds have been blamed for
pulling down copper prices in particular the last two years, but at least two large funds have started backing away from bearish bets on metals. Sources
at three large funds said some fund managers had covered part of their short positions on iron ore and nonferrous metals futures over the past week,
hedging for the possibility that prices might rise in the short-term. The market could tighten noticeably, the sources said, as demand picks up due to
government infrastructure projects and stockpiling - just as nonferrous supplies start to fall due to cuts by Chinese smelters. Copper, aluminum, nickel
and zinc producers have announced planned cuts. For the week, Comex copper prices inched up 0.9 cents, or 0.38%. The red metal is on track to post
an annual decline of 27% in 2015 as fears of a China-led global economic slowdown spooked traders and rattled sentiment. Heading into the final week
of the year, trading volumes are expected to remain light as many traders already closed books due to the holiday period, reducing liquidity in the
market and increasing volatility.
RECOMMENDATION : BUY ALUMINIUM @ 99 SL 96 TGT 101.50-103.50. BUY LEAD @ 112 SL 109 TGT 116-121. BUY COPPER @ 306 SL 298
TGT 314-320. BUY ZINC @ 100 SL 97 TGT 103.50-105. BUY NICKEL @ 560 SL 540 TGT 590-610.

ENERGY
FUNDAMENTAL: Energy complex seen in green closing last week where by Crude Oil bounced almost 10% helping global markets to rebound after
US inventory levels fell much lower than expected although most traders think this is just a knee jerk reaction. Same with Natural Gas prices which rebounded sharply as traders bought up the bargain basement commodity in the hopes of cold weather finally closing at 133.40 seeking a gain of 13.60%
for the week, while Nymex prices bouncing off almost 20 year lows. Crude oil prices soared last week after weekly supply data showed that U.S. oil
stockpiles fell 5.9mbls last week. Market analysts' expected a crude-stock gain of 1.1mbls. Also Wednesday, industry research group Baker Hughes
said that the number of rigs drilling for oil in the U.S. decreased by three to 538 last week, the fifth decline over the past six weeks. For the week, Crude
surged nearly 10% the biggest weekly rise since early October. The steep gains were likely related to thin year-end trade, which increased volatility and
heightened the severity of market moves. Despite last week's strong gains, US Crude oil are still down nearly 26% in 2015 amid worries over ample
domestic supplies. Meanwhile OPEC released its World Oil Outlook report and highlighted that demand for OPEC crude oil could fall to 30.7 MMbpd in
2020, as compared to the expected demand of 30.9 MMbpd in 2016. OPECs current production is 1 MMbpd more than the 2020 demand. The drop in
demand suggests a decrease in OPECs market share or long-term weak demand for crude oil. The consensus of weak demand will continue to put
pressure on crude oil prices. The recent rally is a relief rally due to short covering and bargain buying. On the other hand Natural gas prices jumped to a
two-week high after data showed U.S. natural gas supplies in storage fell more than expected last week. While the US EIA said natural gas storage in
the U.S. fell by 32bcf last week, more than expectations for a decline of 25 billion. That compared with a drawdown of 34bcf in the prior week, 49bcf in
the same week last year, while the five-year average change for the week is a decline of 140bcf. Total U.S. natural gas storage stood at 3.814tcf, 14.7%
higher than levels at this time a year ago and 10.8% above the five-year average for this time of year. The heating season from November through
March is the peak demand period for U.S. gas consumption.
RECOMMENDATION : SELL CRUDE OIL @ 2600 SL 2750 TGT 2480-2350. BUY NAT.GAS @ 126 SL 122 TGT 136-145

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Vol.: 275
28th December,2015

Commodity Corner

Forex Corner

Market Recap :

The Indian rupee appreciated further against the

dollar on Monday, 28 December 2015 for the eighth
straight session on increased selling of the US
currency by exporters and banks.

The domestic currency opened at Rs 66.10 against

the dollar but dipped to a low of 66.15 so far during
the day. In the spot currency market, the Indian unit
was last seen trading at 66.15.

The local currency had appreciated by 12 paise to

settle at 66.21 against the greenback on
Wednesday.

The dollar has lost some steam, with investors

locking in profits after the Federal Reserve this
month hiked interest rates for the first time in nine
years.

Market Eye Week ahead :

Pair ended the past week with a loss of around 0.37% but managed to hold above the crucial support level of 66.02. In
the past week weekly MACD slipped below the signal line that is likely to increase the selling pressure in the counter.
Negative diversion in the weekly MACD and declining volume during the formation of the second top is also supporting
the bearish outlook. then sell Below 66 with stop loss of 66.56 and target of 64.81.

USD/INR
Level

S2

S1

CP

R1

R2

High

Low

Close

USD/INR

66.05

66.14

66.19

66.28

66.33

66.25

66.11

66.22

Level

S2

S1

CP

R1

R2

High

Low

Close

EUR/INR

71.74

72.07

72.33

72.66

72.92

72.59

72.00

72.40

Level

S2

S1

CP

R1

R2

High

Low

Close

GBP/INR

97.58

98.08

98.63

99.13

99.68

99.18

98.13

98.58

Level

S2

S1

CP

R1

R2

High

Low

Close

JPY/INR

54.47

54.62

54.75

54.90

55.03

54.88

54.60

54.77

EUR/INR

GBP/INR

JPY/INR

-- 46--

Vol.: 275
28th December,2015

J Street Recommendations Report Card

This week it is advised that one can do fresh buy at this support level of 7920 with low of the last week as 7770 stop loss. support during the week will be at 7875-7800. Better opening and initial low during the week to can be used to exit short and buy
with a stop loss of 7770. Traders long can maintain the same level of 7770 as the stop loss. The same is likely to be tested in
coming weeks 8025-8100-8175. Trend will become bearish if nifty manages to crosses and closes below 7770.

Trend in global markets, investment by foreign portfolio investors (FPIs), the movement of rupee against the dollar and crude oil price
movement will dictate trend on the markets in the week ahead.

Top Fundamental Stocks

Rec. Date

CMP on Rec.

CMP

Target

Absolute
Return @
CMP

Status

GarwareWallRopes

28/12/2015

425

425

550

0%

Buy

WelspunsyntaxLtd.

23/11/2015

121

155

223

28%

Buy

NatcoPharma

02/11/2015

509

567

636

11%

Buy

SRFLtd.

21/09/2015

1140

1274

1374

12%

Accumulate

Ahluwaliacontracts

24/08/2015

235

275

368

17%

Buy

SunPharma

03/07/2015

831

812

1041

-2%

Buy

InfiniteComputerSol.

20/07/2015

190

218

255

15%

Buy

NitinSpinnersLtd.

06/07/2015

79

78

94

-1%

Buy

BankofBaroda

01/06/2015

163

159

217

-3%

Buy

AmbikaCottonMills

18/05/2015

880

935

1149

6%

Buy

SadbhavEngineering
Ltd.

04/05/2015

298

341

430

14%

Buy

Omkarspeciality
Chemicals

16/03/2015

152

229

251

50%

Buy

DHFL

16/02/2015

252

230

368

-9%

Buy

TVTodayNetwork

27/01/2015

222

322

337

45%

Buy

M&M

12/1/2015

1238

1247

1452

1%

Buy

HavellsIndia

27/10/2014

274

301

346

10%

Buy

AllCargoLogistics

05/08/2014

260

416

342

60%

Exit

PTCIndiaFin.Ser.

07/07/2014

39

40

45

3%

Buy

AdaniPort

05/07/2014

280

262

347

-7%

Buy

Stocks

It'snotimportantwhetheryouarerightorwrong,Itsabouthowmuchmoneyyoumakewhenyou'rerightandhow
muchyoulosewhenyou'rewrong.
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Vol.: 275
28th December,2015