Vol.

: 272
7th December,2015

Index

MarketView
1 Market View:

CompanyUpdate
2
Aggressive government reforms are required to withstand the global headwinds

Aroundthe
All said and done the FIIs are selling in Indian market since last four months. The global
Economy

3 headwinds in form of rate hike in US, some hawkish commentary by ECB President Draghi

and the growing tension in Gulf region with uncertainty in China are the reasons of continuous
KnowledgeCorner 3 negative stance of FII in emerging markets as well as in India. Compared to the data of FII
selling, our market has not fallen much and that is because of continued support from local

MutualFund
4 institutes and investors. Local investors and domestic institutes are keeping faith in the Indian
economy and the reforms the government is planning to rollout. Banking and power sector

reforms with some remarkable changes in FDI norms in many sectors have proved well for the
CommodityCorner5 economy. The rollout of GST will be a reform which can help the GDP and economy in this

troubled times. After allowing 49% FDI in defense the government and private sector are
ForexCorner
6 focusing very hard to bring in the FDIs in manufacturing and defense technology from the best
in the world. In next week the defense minister is going to USA with high profile delegation

ReportCard
7 from the private sector companies like Tatas, LT, Bharat Forge, Reliance, Mahindra and so
on. In the history of India this is the largest delegation ever going to USA only and only for

defense tie up. The stage is ready for the best defense companies of the world like Lokhead

Martin to start manufacturing in India. These types of reforms will help Indian market to
Editor&Contributor
withstand the selling pressure of FIIs. The event of rate hike by US is eagerly awaited and after
MargiShah
completion of event the readjustment and rebalancing of portfolios by big players in the world
will start. Let us hope that India will get its due share going forward.

SpecialContributors
Technically any fall below 7690 will take the market to its recent low of 7550 and any decisive
AsheshTrivedi
rise above 7950 will be positive for the market.
AdityaNahar

Kamal Jhaveri

MD- Jhaveri Securities

Forsuggestions,feedback
andqueries
jstreet@jhaveritrade.com

-1-

Vol.: 272
7th December,2015

Company Update : Welspun Syntex Ltd.

Financial Basics

Company Basics
BSE Code
NSE Symbol

508933

FV (`)
EPS (`)

10.00
11.37

WELSYNTEX

P/E (x)

9.74

EQUITY (` in Cr.)

39.24

MKT.CAP (` in Cr.)

434.39

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 `138. We recommend Buy with target price of `223,
valuing stock 13xFY18E 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.:
272
7th December,2015

Around The World

Weekly Market Recap :

The Reserve Bank of India (RBI) kept its benchmark interest rate viz. the repo rate unchanged at 6.75% after a monetary
policy review on Tuesday, 1 December 2015.

Federal Reserve Chairwoman Janet Yellen on Wednesday, 2 December 2015 reinforced the case for an interest rate
hike during the middle of this month.

On macro front, the seasonally adjusted Nikkei Services Business Activity Index fell to 50.1 in November from October's
eight-month high reading of 53.2, pointing to slowdown in growth in India's services sector

India's gross domestic product (GDP) rose 7.4% in Q2 September 2015 over Q2 September 2014, with growth mainly
driven by pick-up in the manufacturing sector, which has grown by 9.3% in Q2. The GDP growth has shown a pick up
from 7% growth recorded in Q1 June 2015. The GDP growth remained below 8.4% rise recorded in the corresponding
quarter of the last year. The Q2 GDP data was announced after market hours on Monday, 30 November 2015

Market Eye Week ahead :

In macroeconomic data, the government will unveil index of industrial production (IIP) data for October 2015 on Friday, 11
December 2015. India's IIP growth moderated to 3.6% in September 2015 over a year ago compared with the revised
growth of 6.3% in August 2015.

Investors' focus is on whether the GST constitutional amendment bill will be passed in the Rajya Sabha. The constitutional
amendment bill for the implementation of GST, which subsumes all indirect taxes to create a unified market across the
country, has been cleared by the Lok Sabha and is awaiting legislative passage in the Rajya Sabha.

Among global cues, the Japanese government will revise its July-September GDP figures based on the capex and
inventory investment data in the MOF Corporate Statistics, and is due to publish its second preliminary GDP estimates on
Tuesday.

On Thursday, 10 December 2015, the Bank of England (BoE) announces its policy decision.

KEY EVENTS/FACTORS TO WATCH

1. Fri : IIP data for the month of December 2015

Knowledge Corner :
Free Float

A company's free float refers to the number of outstanding shares that are available to the public for trade.

Free float is sometimes referred to as float or public float.

Free Float = Outstanding Shares Restricted Shares

Free float is generally described as all shares held by investors, other than restricted shares held by company insiders. It does not
include restricted shares, which are owned by company management, officers and other various insiders because it's assumed that
those shares are being held on a very long-term basis.

- 3-

Vol.: 272
7th December,2015

Mutual Fund Corner

Top 10 Sector Break-Ups

Fund Name
Scheme Name

Reliance Regular Savings Fund - Balanced Option

AMC

Reliance Capital Asset Management Ltd

Type

Equity-oriented

Category
Launch Date

Financial

16.52

Automobile

11.56

Technology

8.75

Healthcare

6.67

Open-ended and Hybrid

Energy

6.38

May 2005

Services

5.01

Communication

4.95

Engineering

3.47

Diversified

3.21

Metals

0.78

Fund Manager

Amit Tripathi & Sanjay Parekh

Net Assets
(` In crore )

Rs. 1562.5 crore as on Oct 31, 2015

History

2012

2013

2014

2015

NAV(Rs)

25.54

26.44

37.87

40.34

TotalReturn(%)

33.86

3.52

43.20

6.54

11.32

-2.86

17.25

10.36

4/30

24/32

31/57

9/72

52WeekHigh(Rs)

25.54

26.44

38.57

41.58

52WeekLow(Rs)

19.10

21.92

25.36

37.53

NetAssets(Rs.Cr)

556.47

549.90

820.82

1382.11

ExpenseRatio(%)

2.22

2.86

2.85

2.64

+/VRBalanced
Rank(Fund/Category)

Fund (%)

Risk Analysis
Volatility Measures
Standard Deviation

12.78

Sharpe Ratio

0.79

Beta

1.07

R-Squared
Alpha

0.82
6.72

Composition (%)
Equity

68.54

Debt

31.76

Cash

-0.30

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.: 272
7th December,2015

Commodity Corner
BULLION
FUNDAMENTAL: Bullion prices rallied after a U.S. non-farm payrolls report, seen as likely to pave the way for the U.S. Federal Reserve to raise interest rates this month, failed to aid the dollar's ascent. Bullion prices extended bounce, buoyed then by monetary easing measures from the European
Central Bank that fell short of expectations. Although Yellen indicated in a speech on Wednesday before the Economic Club of Washington that U.S.
inflation remains well-below the Fed's targeted goal, she emphasized that the Fed has seen considerable improvement in the economy and labor market. While Yellen sent strong signals that the Fed could be on the verge of approving its first rate hike in nearly a decade, she noted that unforeseen
economic and financial developments over the next few days could sway its decision. The U.S. Department of Labor reported that non-farm payrolls in
November increased by 211,000 on a monthly basis, above consensus estimates for gains of 190,000. It followed a robust report a month earlier when
nonfarm payrolls surged by 271,000, placing a December rate hike by the Fed squarely on the table. There were further indications of strength in the
labor market on Friday when the Bureau of Labor Statistics upwardly revised the October reading by 27,000 to 298,000. Even before Friday's release,
data indicated that the U.S. labor market added more than 200,000 monthly jobs on average this year. The unemployment rate in November held
steady at 5.0%, while average hourly earnings ticked up by 0.2%. Hourly wages, which have been persistently sluggish throughout the year, were expected to increase between 0.1 and 0.3% on the month. The average workweek per all U.S. employees remained unchanged at 34.5 hours. Gold imports by India, the worlds second-biggest consumer, more than doubled in November as a slump in global prices to a five-year low stoked demand
amid the peak festival and wedding seasons. Overseas purchases last month climbed to 101 metric tons from 45 tons in October, two finance ministry
officials said, asking not to be identified citing government rules. The first back-to-back shortfall in India's monsoon rain in three decades is hurting gold
demand with sales of pendants to bracelets and necklaces dwindling during the busiest quarter of the year.
RECOMMENDATION : SELL GOLD @ 26100 SL 26600 TGT 25600-25200. SELL SILVER @ 35900 SL 36450 TGT 34800-33600

BASE METALS
FUNDAMENTAL: Base metals prices last week recovered and ended with good gains as investors bought back short positions after a strong U.S. jobs
report that helped to allay fears the world's largest economy has hit a soft patch. A surprise move by OPEC oil producers to maintain production also
supported metals because a lower crude price could help the global economy and boost demand for metals. Data showed U.S. job growth increased
solidly in November, which most likely will pave the way for the Federal Reserve to raise interest rates this month for the first time in nearly a decade.
The stronger than expected jobs data failed to boost the dollar much, perhaps because many investors had already bought the U.S. currency in anticipation. The current uptick in metals was likely only a temporary correction before a downtrend resumes, largely due to worries about demand in China
and oversupply. An avalanche of data from China in the coming weeks is likely to show that the world's second-largest economy remains sluggish, reinforcing expectations Beijing will release more stimulus measures in the months ahead. Fed chair Janet Yellen sent further hints that the U.S. central
bank will raise rates in less than two weeks with hawkish comments at two closely-watched public appearances earlier this week. Combined zinc inventories in Shanghai, Tianjin and Guangdong added 10,300 to 323,800 tonnes this past week. Tianjins zinc inventories fell only slightly. Shanghai saw
zinc inventories grow on large inflows of imported zinc and normal supplies from zinc smelters. Besides, outward shipments to Tianjin declined now that
the price spread between the two regions contracted. Total inventories in the three regions should increase further next week with continuous inflows of
imported zinc and zinc smelters liquidating stockpiles before years end. Chinese nickel production, including the refined metal and nickel pig iron, a
cheaper alternative, was expected to fall 21 percent to 585,000 tons this year from 741,000 tons in 2014. Nickel smelters in China, the largest producer,
plan to cut output next year by at least 20 percent in a bid to shore up prices after the metal plunged to its lowest in 12 years. In the week ahead, investors will be looking ahead to Fridays U.S. data on retail sales and inflation for fresh indications on the strength of the economy.
RECOMMENDATION : BUY ALUMINIUM @ 100 SL 97 TGT 104.50-107.50. BUY LEAD @ 110 SL 106 TGT 114.50-118. BUY COPPER @ 306 SL
298 TGT 312.50-316. BUY ZINC @ 102 SL 99 TGT 105.50-108.50. BUY NICKEL @ 592 SL 570 TGT 610-625.

ENERGY
FUNDAMENTAL:Crudeoil ended with losses as pressure seen on prices after news that the Organization of the Petroleum Exporting Countries was
planning to maintain its production near record highs despite depressed prices, as OPEC continued to guard its share of an oversupplied market. The
producer group failed to agree on a new production quota, allowing member countries to continue pumping more than 31 million barrels per day of oil,
further swelling a global glut that has depressed oil prices for over a year. OPEC's announcement sent ripples through wider markets and dented
shares of U.S. energy drillers already suffering from low prices, but losses in oil futures were limited as prices hit support around $40 a barrel. Saudi
Arabia has been under pressure from OPEC's poorer members to cut output to bolster prices, which have dropped from over $100 a barrel since June
2014. But Saudi Arabia has been content to keep production up, which has squeezed profits for producers in non-OPEC countries, including the United
States. Bullish wagers on U.S. crude oil from hedge funds and other big speculators fell to the lowest level in more than five years, data from the U.S.
Commodity Futures Trading Commission (CFTC) showed. Natural gas prices last week ended with losses as weather forecasts for early December
pointed to mild temperatures, dampening near-term heating demand expectations. Natural gas futures have closely tracked weather forecasts in recent
weeks, as traders try to gauge the impact of shifting outlooks on winter heating demand. The U.S. Energy Information Administration said in its weekly
report that natural gas storage in the U.S. in the week ended November 27 fell by 53 billion cubic feet, compared to expectations for a decline of 51
billion. That compared with a build of 9 billion cubic feet in the prior week, a withdrawal of 22 billion cubic feet in the same week last year, while the
five-year average change for the week is a drawdown of 50 billion cubic feet. Total U.S. natural gas storage stood at 3.956 trillion cubic feet, 13.7%
higher than levels at this time a year ago and 6.2% above the five-year average for this time of year. Natural gas have closely tracked weather forecasts
in recent weeks, as traders try to gauge the impact of shifting outlooks on winter heating demand.
RECOMMENDATION : SELL CRUDE OIL @ 2760 SL 2850 TGT 2650-2600. SELL NAT.GAS @ 152 SL 160 TGT 142-135

- 5-

Vol.: 272
7th December,2015

Commodity Corner

Forex Corner

Market Recap :

The Indian rupee commenced almost flat but edged

higher against the dollar in early trades on Monday,
07 December 2015, on fresh selling of the American
currency by exporters and banks.

The domestic currency opened at Rs 66.68 against

the dollar and climbed to a high of 66.57 so far
during the day. In the spot market, rupee was
trading at 66.58.

Meanwhile, the U.S. dollar index, which measures

the greenback's strength against a trade-weighted
basket of six major currencies, was up 0.03% to
98.30.

The Labor Department reported that the U.S.

economy added 211,000 jobs last month, after
increasing an upwardly revised 298,000 in October.
The report hardened expectations that the Fed will
hike interest rates for the first time since 2006 at its
upcoming meeting on December 15-16.

Market Eye Week ahead :

Although The Indian rupee made new high of 67.28 last week but was almost flat last week closing at 66.98 levels. The
US dollar gained against the euro after stronger-than-expected US monthly jobs data but the demand at lower end of the
range should emerge from oil importers. The rupee is likely to fell against the US dollar in coming week as the greenback
held high ahead of key central banks' policy decisions in the coming weeks.

USD/INR
Level

S2

S1

CP

R1

R2

High

Low

Close

USD/INR

66.43

66.71

66.98

67.26

67.53

67.26

66.71

66.98

Level

S2

S1

CP

R1

R2

High

Low

Close

EUR/INR

69.47

71.15

72.32

74.00

75.17

73.50

70.65

72.82

Level

S2

S1

CP

R1

R2

High

Low

Close

GBP/INR

98.97

100.11

100.92

102.06

102.87

101.74

99.79

101.24

Level

S2

S1

CP

R1

R2

High

Low

Close

JPY/INR

53.80

54.16

54.54

54.90

55.28

54.91

54.17

54.53

EUR/INR

GBP/INR

JPY/INR

-- 46--

Vol.: 272
7th December,2015

J Street Recommendations Report Card

Nifty finally closed the week at 7781.90 thereby showed a net fall of 160 points on week to week basis. Bearish candle has been witnessed last
week. An Out Bar pattern on weekly bar chart suggest that support and the last swing bottom will be under pressure. Traders short need to
maintain the stop loss at 7990 and look for lower levels of 7714-7691-7626-7539 to cover short position. Resistance during the week will
be at 7845-7915-7980. Traders can exit long and sell on rise to 7845-7915 if the opportunity arises with a stop loss of 7990. Breaking 7539 with
weekly closing and bearish candle can lead to a correction of the rally from 5118 to 9119. Short to medium term investors can take
chance to accumulate at 7691-7626-7539 with a stop loss of 7500.

Macro economic data, trend in global markets, flows from foreign portfolio investors (FPIs), the movement of rupee against the dollar, Winter session
of Parliament and crude oil price movement will dictate trend on the bourses.

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Rec. Date

CMP on Rec.

CMP

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NatcoPharma

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BankofBaroda

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SadbhavEngineering
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TVTodayNetwork

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M&M

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1238

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HavellsIndia

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274

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AllCargoLogistics

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Exit

PTCIndiaFin.Ser.

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AdaniPort

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L&T

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Stocks

It'snotimportantwhetheryouarerightorwrong,Itsabouthowmuchmoneyyoumakewhenyou'rerightandhow
muchyoulosewhenyou'rewrong.
- 7-

Vol.: 272
7th December,2015