Vol.

: 271
30th November,2015

Index
Market View

1 Market View:

Company Update

2 The king of the financial world, US Dollar is gaining strength day by day in expectation of the
first rate hike after almost a decade which can change a lot of equations. Even the possibility
of passing the GST Bill by The Government has not deterred FIIs from selling yesterday.
Regarding the GST Bill, the opinion of some of the FIIs is that GST is not a game changer but
good for the economy and capital market. Considering the above development, one should
evaluate the medium term outlook of the market. It was hoped in the month of April 2015 that
the earning cycle will revive after a quarter or two. The two quarters have already been passed
but the earning revival seems to be in back seat. The silver lining is pickup in auto demand,
demand in white goods and FMCG. The real test for the economy at present is credit growth.
Bankers are having their fingers crossed for the credit growth and are hopeful for the revival.
The cumulative effect of power reforms and introduction of Bankruptcy Act will definitely
change the color of banking stocks going forward. The Auto sector is enjoying good days with
auto ancillary stocks experiencing good demand revival. But the real question and test will be
at the time of rate hike by US Fed and its after effects.

Around the
Economy

Knowledge Corner

Mutual Fund

Commodity Corner

Forex Corner

Report Card

7 In short, the market will remain ranged bound in short to medium term between 7700 to 8150

Editor & Contributor

Margi Shah

and one should remain stock specific and remain invested with cash on hand to invest more in
case of remarkable fall. Technically any rise above 7950 will take the market to 8050 and
8150. Any fall below 7850 may take it to 7690.
Kamal Jhaveri
MD- Jhaveri Securities

Special Contributors
Ashesh Trivedi
Aditya Nahar

For suggestions, feedback

and queries
jstreet@jhaveritrade.com

-1-

Vol.: 271
30th November,2015

Company Update : Welspun Syntex Ltd.

Financial Basics

Company Basics
BSE Code
NSE Symbol

508933
WELSYNTEX

EQUITY (` in Cr.)

39.24

MKT.CAP (` in Cr.)

434.39

FV (`)
EPS (`)
P/E (x)

10.00
11.37
9.74

P/BV (x)
BETA
RONW (%)

2.97
1.3904
30.61

Share Holding Pattern

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

% Holding
0.66
1.10
70.10
0.00
23.16
5.00

Valuation : Currently, WELSYNTEX is trading at `135. We recommend Buy with target price of `171,
valuing stock 10xFY18E EPS of `17.18.The stock currently trades at 10.06x of FY16E and 8.38xof FY17E
and 6.99x of FY18E.
Company Overview
Welspun Syntex is a flagship company of the Welspun Group. Welspun group is one of the leading and largest growing
business conglomerates in India. Welspun Syntex Limited was established in 1983 and is the flagship company

under the Welspun umbrella. Since its inception WSL has grown manifold and is amongst the largest
manufacturers and exporters of Polyester Texturised Filament Yarn, Nylon Filament Yarn from India. With plants
located at Silvassa and Palghar (Thane), India WSL is well equipped to meet the domestic as well as international
demand. It has marketing offices located at Surat and Mumbai in India that facilitate big business ventures.
Investment rational
Polycycle- a unique kind of Yarn with unique advantages
WSL has unique positioning in the BCF segment with POLYCYCLE. Polycycle is a 100% recycled Polyester yarn
extruded (derived) from used PET bottles (plastic bottles) using patented process called ReNew. This polyester
has same feature and better quality like normal Vargin polyester. Vargin polyester is derived crude feed stock like
PTA and MEG. So fluctuation in crude oil prices are less concern.
Stable crude oil prices helps to maintain operating margin
Man made yarn mainly consumes crude oil based derivatives as Raw material (chips constitutes ~50-60% where
as other textures consumes ~40% -45% of total RM cost ). RM cost as % of sales fell from 68.41 to 60.95 YoY, one of
the lowest in last five year, largely because of fall in key components like purified terephthalic acid (PTA) and
mono-ethylene glycol (MEG) which have touched multi-year lows on account of lower crude prices.
Strategically located plant in Union Territory and Maharashtra
The company has two state of the art manufacturing plants in Silvasa (UT) and Palghar. Silvassa plant is perfectly
located between the two most important Textiles States of India, Gujarat and Maharashtra. This location is
situated near sea ports of JNPT and Mumbai and it becomes possible to deliver the finished products and receive
the imported raw materials to and from the ports. This location helps Welsun to deliver finished products to its
customers in India and overseas.
- 2-

Vol.: 271
30th November,2015

Around The World

Weekly Market Recap :

The month long winter session of the parliament began on Thursday, 26 November 2015. Expectations that the
constitutional amendment bill on goods and services tax (GST) will be passed during the winter session of parliament
aided fresh upmove on the domestic bourses. The winter session of the parliament began on Thursday, 26 November
2015, and will continue till 23 December 2015.

Market rose last week on expectations that the constitutional amendment bill on goods and services tax (GST) will be
passed during the winter session of parliament.

Trading was volatile during the week as the November 2015 contracts expired in the futures & options (F&O) segment on
Thursday, 26 November 2015. The Sensex settled above the psychological 26,000 mark. The Sensex and the Nifty,
both, settled at their highest level in three weeks.

Market Eye Week ahead :

The Indian stock market investors will closely watch parliamentary proceedings this week as the government seeks to
pass the crucial Goods and Services tax while the central bank's monetary policy review and data on economic growth will
be the other major triggers.

Data showing gross domestic product growth likely accelerated in the July-September quarter may keep hopes buoyed for
a revival of the economy. The Reserve Bank of India' comments at its monetary policy review, where it is widely expected
to stand pat on interest rates, will also be closely followed. Data on purchasing managers' index surveys on manufacturing
and services will also be released this week.

Besides the GST bill, another closely watched event by the markets will be the report by a panel headed by chief
economic advisor Arvind Subramanian on GST that will be made public this week.

KEY EVENTS/FACTORS TO WATCH

1. Mon : Q2 FY16 GDP, Fiscal Deficit, Sale of Bonds with various maturity ; Tue : RBI Monetary Policy ,
2. Thu : Nikkei India PMI Composite
3. Fri : Sales of Various treasury bills

Knowledge Corner :

Put-Call Ratio
The Put/Call Ratio is an indicator that shows put volume relative to call volume. Put options are used to hedge against market
weakness or bet on a decline. Call options are used to hedge against market strength or bet on advance.

The Put/Call Ratio is above 1 when put volume exceeds call volume and below 1 when call volume exceeds put volume.

Typically, this indicator is used to gauge market sentiment. Sentiment is deemed excessively bearish when the Put/Call Ratio is trading at relatively high levels, and excessively bullish when at relatively low levels.

- 3-

Vol.: 271
30th November,2015

Mutual Fund Corner

Top 10 Sector Break-Ups

Fund Name
Scheme Name
AMC

Fund (%)

Open-ended and Hybrid: Equity-oriented

L&T Investment Management Ltd

Financials

17.01

Technology

8.64

Construction

6.59

Type

Open-ended

Services

5.20

Category

Hybrid: Equity-oriented

Automobile

5.01

Launch Date

January 2011

FMCG

4.62

Engineering

4.29

Fund Manager

Vikram Chopra, Soumendra Nath, Lahiri

Healthcare

4.27

Net Assets
(` In crore )

Rs. 901.9 Cr. as on Oct 31, 2015

Chemicals

2.93

Textiles

2.40

History

2012

2013

2014

2015

NAV (Rs)

11.47

12.51

18.08

19.72

Total Return (%)

31.36

9.10

44.48

9.05

+/- VR Balanced

8.82

2.72

18.53

Rank (Fund/Category)

6/30

7/32

26/57

4/72

52 Week High (Rs)

11.47

12.51

18.19

20.36

52 Week Low (Rs)

8.76

10.58

12.11

17.95

Net Assets (Rs.Cr)

Expense Ratio (%)

2.50

2.91

127.46
3.02

2.93

Risk Analysis
Volatility Measures
Standard Deviation

11.02

Sharpe Ratio

1.28

Beta

0.91
0.82

R-Squared
Alpha

9.65

Composition (%)
Equity

66.25

Debt

28.20

Cash

5.55

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.: 271
30th November,2015

Commodity Corner
BULLION
FUNDAMENTAL: Gold prices on weekly basis ended with more than half percent losses due to firm dollar and prospects of a U.S. interest rate hike
next month whereas silver prices ended with small gains as prices were seen supported tracking firmness in base metals counters. The Federal
Reserve is widely expected to raise U.S. rates for the first time in nearly a decade when it meets next on Dec. 15-16. Investors continued to price in
a series of key monetary policy decisions by Central Banks over the next month, starting with the European Central Bank's Governing Council's
meeting in Frankfurt on Thursday. In recent weeks, ECB president Mario Draghi has sent strong indications that the central bank could increase the
scope of its comprehensive 60 billion a month quantitative easing program at the meeting. The ECB could also impose a two-tiered penalty next
week for banks that leave deposits at its facility. The ECB's benchmark refinancing rate is at a record low of 0.05%, while rates at the deposit facility
are already in negative territory at minus-0.20%. The U.S. Commerce Department reported that new home sales rose by 10.7% to 495,000 units
last month. The report came shortly after the U.S. Department of Labor said initial jobless claims declined by 12,000 last week to 260,000. A
separate report showed that durable goods orders jumped 3.0% in October, easily surpassing forecasts for 1.5%. Core durable goods orders,
excluding volatile transportation items, rose 0.5%, beating expectations for an increase of 0.3%. India's gold imports may hit an all-time high of
over 1,000 tonnes in 2015 buoyed by sharp fall in global prices, according to the All India Gems and Jewellery Trade Federation. The world's
second- biggest gold consumer had imported around 900 tonnes in 2014, it said. According to the federation, India has imported 850 tonnes of gold
during January-September period of 2015 as against 650 tonnes in the year-ago period. In a latest report, the World Gold Council has said India's
gold demand in fourth (October - December) quarter would be more muted. India's gold buying in the key December quarter is likely to fall to the
lowest level in eight years, hurt by poor investment demand and back-toback droughts that have slashed earnings for the country's millions of
farmers. The sluggish demand could halve imports by the world's secondbiggest gold consumer in U.S. dollar terms in the final quarter, putting
further pressure on global prices that hit a five-year low earlier this month.

RECOMMENDATION : SELL GOLD FEB @ 25500 SL 25950 24900-24650,SELL SILVER MAR @ 35000 SL 36200 TGT 33800-32800

BASE METALS
FUNDAMENTAL: Base metals prices recovered last week while in last 2 days prices swung between gains and losses as investors weighed the
impact of potential output cuts and volatility in Chinas stock market. Lastweek Lead outperformed metal complex with the gain's nearly 2.95%,
while Nickel and Aluminium rallied more than 1.50% least in the complex Copper and Zinc gain near to 1%. Investors arent giving too much weight
to any major impact from possible production cuts by smelters next year, focusing instead on slowing demand in China, where President Xi Jinping is
steering the countrys economy away from a reliance on investment and infrastructure. Volatility in Chinas equities market is again feeding into
metals prices by underscoring uncertainty over the course of financial and economic reforms. Also Chinas zinc and nickel smelters have already
pledged to reduce output next year, although the amounts havent been enough to dramatically arrest the drop in prices. This week outlook remain
weak as Chinas manufacturing PMI slated for release this week should remain low, with eurozone manufacturing PMI up slightly. The indicator from
the US is expected to fall marginally. Sluggish raw material prices and weak demand compound to weigh on ex-works prices of industrial products.
Industrial output in China and eurozone is also impacted, and market expectations of an interest rate hike in the US constrained consumption loan.
The US dollar index has been pushed up to 100 as US non-farm employment numbers in November are expected to improve further. The U.S. dollar
has gained amid widening divergence between the monetary policies of the Federal Reserve and European Central Bank. The WSJ Dollar Index,
which tracks the dollars value against 16 currencies, hit a 13-year high on Friday in the US. Also European Central Bank will announce its interest
rate decision for December this Thursday, and is expected to expand quantitative easing, pushing up the US dollar. News that Chinese nonferrous
metals sector will cut some output will be absorbed early this week. Nine largest copper smelters in China decided November 28 to cut output by
200,000 mt next year, but any positive effects from this will be short-lived. Also Friday, the key U.S. payrolls report will be even more closely
watched than usual It could cement expectations that the Fed will deliver its first hike in almost a decade, or lead investors to pare back dollar bets.
The diverging monetary policy pathways between the ECB and the Fed have led to an increase in bullish bets on the U.S. currency.

RECOMMENDATION : SELL COPPER FEB @ 310 SL 318 TGT 302-296 ,SELL ZINC DEC @ 106.50 SL 109.50 TGT 103.20-100 , SELL NICKEL
DEC @ 605 SL 620 TGT 590-570 , SELL ALUMINIUM DEC @ 99 SL 101 TGT 97.50-95 ,SELL LEAD DEC @ 111 SL 114 .50 TGT 107.50-104.

ENERGY
FUNDAMENTAL: Crude oil prices last week ended with around half percent losses as disappointing Chinese data and worries over a supply glut
overshadowed geopolitical concerns. However, the trading volume was muted also on Friday, following Thanksgiving Day in the US. The biggest
downside risk for the oil market is the ongoing global supply glut and weak demand. Crude stocks in the US climbed by 961,000 barrels in the week
to November 20, coming in at slightly less than the 1 million barrel gain expected. Total reserves reached 488.2 million barrels, the highest since late
April when stockpiles reached record highs. The International Energy Agency estimated earlier this month that global reserves have swollen to an
unprecedented 3 billion barrels. For now, oil traders are shifting their focus to the upcoming OPEC meeting, scheduled for December 4, with a majority of analysts expecting no changes to the group's oil production target, currently set for 30 million barrels per day. However, some investors say
we may see some action from the oil cartel to help prices to recover. The EIA said gasoline stockpiles rose 2.5 million barrels, versus the 938,000barrel build forecasted. Inventories of distillates, which include diesel and heating oil, rose by 1.0 million barrels, versus expectations for a 417,000
barrels drop. Naturalgas prices extended losses as market players continued to focus on healthy stockpiles of the fuel. Data showed that natural gas
supplies in storage increased by 9 billion cubic feet last week, above expectations for a build of 5 billion. That compared with a build of 15 billion
cubic feet in the prior week, a withdrawal of 141 billion cubic feet in the same week last year, while the five-year average change for the week is a
drawdown of 36 billion cubic feet. Total U.S. natural gas storage stood at an all-time high of 4.009 trillion cubic feet, 13.8% higher than levels at
this time a year ago and 6.3% above the five-year average for this time of year. Last spring, supplies were 55% below the five-year average, indicating producers have more than made up for all of last winters unusually strong demand. Inventories of the gas are typically built up during the
warm summer months and then drawn down in the winter as cold temperatures increase demand for the fuel. But market experts warned that stockpile buildups will probably continue for at least another week, two weeks beyond what is normal, due to tepid winter heating demand so far.

RECOMMENDATION :

- 5-

BUY CRUDE OIL DEC ABV 2900 SL 2780 TGT 3040-3150 , SELL NAT.GAS DEC @ 155 SL 165 TGT 148-136.

Vol.: 271
30th November,2015

Commodity Corner

Forex Corner

Market Recap :

The Indian rupee on Thursday closed at over

11-week low against the US dollar, after foreign institutional investors (FIIs) continued to liquidate their
investment in the local equity and debt market.

Traders were also cautious ahead of gross domestic

product data, to be released on 30 November, and
the Reserve Bank of India and European Central
Bank (ECB) monetary policy decisions on 1st and
3rd December, respectively.

The rupee fell against the US dollar last week,

marking its seventh straight weekly loss, as the
greenback held high ahead of key central banks'
policy decisions in the coming weeks.

Last week ECB chief Mario Draghi who expressed

willingness to add more stimulus to the euro zone
economy to raise inflation thus giving some upside
room to dollar index. The USD/INR gained and
ended higher at 67.08 in comparison to last week.

Market Eye Week ahead :

The USD/INR gained and ended higher at 67.08 in comparison to last week. We had clearly said last week the daily chart seems
to very bullish. The rupee fell against the US dollar last week, marking its seventh straight weekly loss, as the greenback held
high ahead of key central banks' policy decisions in the coming weeks.

Clustered dollar outflows amid month-end importer demand also weighed on the local currency. With the US Fed signaling
higher interest rates, and whenever the certainty arises, there could be capital outflows from the emerging market economies &
USD/INR is expected to see some depreciation pressure in line with other Asian currencies.

USD/INR
Level

S2

S1

CP

R1

R2

High

Low

Close

USD/INR

66.47

65.85

66.83

67.45

67.81

67.2

66.22

67.08

Level

S2

S1

CP

R1

R2

High

Low

Close

EUR/INR

70.48

69.87

70.95

71.56

72.03

71.43

70.35

71.08

Level

S2

S1

CP

R1

R2

High

Low

Close

GBP/INR

100.27

99.74

100.83

101.36

101.92

101.39

100.3

100.8

Level

S2

S1

CP

R1

R2

High

Low

Close

JPY/INR

54.05

53.36

54.46

55.15

55.56

54.88

53.78

54.73

EUR/INR

GBP/INR

JPY/INR

-- 46--

Vol.: 271
30th November,2015

J Street Recommendations Report Card

Nifty finally closed the week at 7942.72 thereby showed a net rise of 86 points on week to week basis. We are currently in
a pullback of the fall from 8336 to 7714. The retracement levels for pullback are 8025 and 8099. Strong Momentum in
buying will only come if Nifty manages to crosses and close above 8100 on daily basis. Any rise at current situation is
expect to form a lower top in relation to the earlier lower top of 8336. Support cluster points are in the range of 7850-77107620.

The macroeconomic data, trend in global markets, investment by foreign portfolio investors (FPIs), the movement of rupee against the dollar and winter session of parliament will dictate trend on the bourses in the truncated week ahead .

Top Fundamental Stocks

Rec. Date

CMP on Rec.

CMP

Target

Absolute
Return @
CMP

Welspun syntax Ltd.

23/11/2015

121

135

171

12%

Buy

Natco Pharma

02/11/2015

509

544

636

7%

Buy

SRF Ltd.

21/09/2015

1140

1249

1374

10%

Accumulate

Ahluwalia contracts

24/08/2015

235

265

368

13%

Buy

Sun Pharma

03/07/2015

831

739

1041

-11%

Buy

Infinite Computer Sol.

20/07/2015

190

215

255

13%

Buy

Nitin Spinners Ltd.

06/07/2015

79

68

94

-14%

Buy

Bank of Baroda

01/06/2015

163

179

217

10%

Buy

Ambika Cotton Mills

18/05/2015

880

861

1149

-2%

Buy

Sadbhav Engineering
Ltd.

04/05/2015

298

345

430

16%

Buy

Omkar speciality
Chemicals

16/03/2015

152

197

251

30%

Buy

DHFL

16/02/2015

252

222

368

-12%

Buy

TV Today Network

27/01/2015

222

259

337

17%

Buy

M&M

12/1/2015

1238

1348

1452

9%

Buy

Havells India

27/10/2014

274

287

346

5%

Buy

All Cargo Logistics

05/08/2014

260

380

342

46%

Exit

PTC India Fin. Ser.

07/07/2014

39

41

45

5%

Buy

Adani Port

05/07/2014

280

268

347

-4%

Buy

L&T

05/07/2014

1750

1363

1866

-22%

Buy

Stocks

Status

It's not important whether you are right or wrong, Its about how much money you make when you're right and how
much you lose when you're wrong.
- 7-

Vol.: 271
30th November,2015