Vol.

: 318
02 NOV,2016

Index

M AR K E T VI E W

Market View

Company Update

Around the
Economy

Knowledge Corner

3 0 . 1 % whi l e e m e r gi n g m ar ke t s r al l i e d 1 % i n t he m o nt h o f Se pt e m be r .

Mutual Fund

4 Lo c al m ar ke t de c l i ne d f o r t he f i rs t t i m e o n m o nt h t o m o nt h b as i s i n

Commodity Corner

Forex Corner

Report Card

7 w hi c h de ri ve r e ve nue s fr o m a br o ad . M e t al s a n d a ut o s e c t o r s ar e

Short Term Call Status

M AR K E T, TH E W O R LD O VE R AR E TAK I NG A B R E AK
Fr o m t he Se pt e m be r o n war ds , t he wo r l d m ar ke t i s t a ki ng a t i m e
o ut a n d go i ng no whe r e . M ar ke t s o f de ve l o pe d e c o no m i e s r al l i e d

Se pt e m be r af t e r s i x c o ns e c ut i ve m o nt hl y r i s e s .

U nde r t he c i r c um -

s t anc e s , i t i s i m po r t ant t o r e l o o k t he po r t f o l i o and c h ur n i t ac c o r di ngl y. Fo r e . g . do m e s t i c pur e pl ays o ut pe r fo r m t he c o m p ani e s

c l e ar e xam pl e o f t hi s s wi t c h f r o m e xpo r t l e ad c o m p a ni e s t o do m e s t ic
l e ad s t o r i e s . J SW St e e l , Hi n dal c o , Tat a St e e l , M ar ut i a nd Ei c he r ar e

Editor & Contributor

Darshana Mishra

go o d e xa m pl e s o f do m e s t i c pl ay. At t hi s po i nt o f t i m e it i s i m po r t ant
t o f i nd o ut c o m pani e s wi t h m o at . As B uf f e t t de s c r i be d, i n 1 7 t h and

Special Contributors
Kunal Shah
Dhaval Ghodasara

1 8 t h c e nt ur i e s a c as t l e ( ki l lo ) was b ui l t s ur r o un de d by de e p wat e r
an d f i l l e d wi t h l i ve ani m al s an d d an ge r o us i t e m s . Di ppe r an d wi de r
t he m o at i s , t he ki ng l i vi n g i ns i de t he c as t l e l i ve s s af e l y an d l o nge r
pe r i o d o f t i m e . Sam e wa y t he c o m p a ni e s ha vi ng c l e ar c o m pe t i t i ve
ad va nt a ge c a n s us t ai n t he pr o f i t abi l i t y f o r l o n ge r pe r i o d o f t i m e
Te c hni c al l y, t he m ar ke t i s r an ge d bo un d wi t h u p war d bi as a n d

For suggestions, feedback

and queries
jstreet@jhaveritrade.com

t he r e i s s t ro ng s up po r t i n t he r an ge o f 8 5 00 - 8 55 0 and s t r o ng r e s i s t anc e be t we e n 8 7 0 0 - 8 8 00 .

K a m a l J h a v e ri
M D- Jha ve ri S e curi ti e s

-1-

Vol.: 318
02 NOV,2016

Company Update : Alembic Pharmaceuticals Limited.

Company Basics
BSE Code
NSE Symbol

APLLTD

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

2.00
38.02
16.4

37.7

P/BV (x) (TTM)

7.3

533573

EQUITY (` in Cr.)
MKT.CAP (` in Cr.)

Financial Basics

11818

BETA
RONW (%)

0.7
57.9

Share Holding Pattern

Holder's Name
% Holding
Foreign
11.10
Institutions
3.5
Promoters
74.10
Non. Promoters
0.00
Public & Others
11.30

Outlook

and valuation : We expect revenues to post 4% CAGR growth over FY16-18E on a high base of FY16 with EBITDA
margins set to decline post robust planned R&D investments and elevated capex plan from a high of 32% in FY16 to 21% in
FY18E. At CMP of INR 627, the stock is trading at 21.5x FY18E EPS. We maintain our earnings estimates and rate the stock BUY valuing it (at a higher multiple given the enhanced potential of its pipeline) at 22x of FY18E EPS of INR 29.1 (earlier FY18E EPS of I NR
28.3), to arrive at a revised Target Price of 732 .
Company Overview :
Alembic Pharmaceuticals is a leading pharmaceutical company in India. The company is vertically integrated to develop pharmaceutical substances and intermediates. The company is a market leader in the
Macrolides segment of anti-infective drugs in India. Its manufacturing facilities are located in Vadodara and in
Baddi (Himachal Pradesh; for the domestic and non-regulated export market). The Panelav facility houses the
API and formulation manufacturing (both USFDA approved) plants.
Investment rational :
Focus on chronic segment to drive domestic formulation growth :
Alembic P harma has been restructuring its business portfolio, which would aid in improving its growth and operating performance. The companys domestic formulation business contributed 44% to its total sales in FY2016. The company has a
strong field force of ~3,600 medical representatives. Going forward, the company expects its domestic formulation business to at least grow in line with the industry growth rate, before it sees an improvement in the share of the high growth
chronic segment. For FY2016-18E, we expect the domestic formulation business to grow at a CAGR of 15.0%.
Exports- US the key growth driver:
On the exports front, the formulation business contributed by 30% to the total turnover, with majority of the contribution coming from Europe and the US. In the US, the company has filed for ~76 ANDAs till date and received
47 approvals. The company, going forward, expects to keep its momentum high in terms of number of filings,
by filing around 10-12 ANDAs per annum. For FY2016-18E, we expect exports to register a CAGR of 13.6%, mainly
on back of base effect impact of FY2016 (sales grew by 46% due to launch of Abilify).
Outlook and valuation :
Over FY2016-18E, we expect the company to post a CAGR of 13.9% in sales, while profitability will be under pressure
on back of higher R&D spend, which is likely to reach 13-14% of sales in FY2017-FY2018E. We recommend a Neutral rating
on the stock.
- 2-

Vol.: 318
02 NOV,2016

Around The World

Weekly Market Recap :
Trading for the week started on a positive note on Monday, 24 October 2016, as key benc hmark indices settled wit h small gains as firmness in global stocks boosted sentiment. Banking, metal and pharma sector stocks led modest losses for key benchmark indices on
Wednesday, 26 October 2016. DRL announced that it has entered into a strategic collaboration with Gland Pharma, to market and distribute a diverse portfolio of eight injectable Abbreviated New Drug Applications (ANDAs).
On the global front, data showed that the Markit flash US manufacturing purchasing managers' index rose to 53.2 in October fr om 51.5 in
September. Data showed that profit growth in China's industrial firms slowed in September from the previous month's rapid pace as several sectors showed weak activity, suggesting economy remains underpowered des pite emerging signs of stability.

Market Eye Week ahead :

Among macro economic data, Markit Economics will announce t he India Manufacturing Purchasing Managers' Index (PMI) data for O ctober 2016 on Tuesday, 1 November 2016. The seasonally adjusted Nikkei India Manufacturing PMI fell to 52.1 in September from 5 2.6 in
August. Markit Economics will announce the India Services PMI data for October 2016 on Thursday, 3 November 2016.

On the global front, US Federal Reserve's monetary policy statement is due on Wednesday, 2 November 2016. On Friday, 4 Novemb er
2016, the crucial US nonfarm payrolls data for the month of October is due. The Bank of Japan's monetary policy statement is due on
Tuesday, 1 November 2016. The Eurozone Q3 gross domestic product (GDP) will be released on Monday, 31 October 2016.

Key Events / Factors to Watch

1. Mon : Re sults: 2.

Tue : - Results: IDFC Ltd, Hindustan Media Ventures

3.

Wed : Results : HT Media, Sonata Software, Sundaram Fasteners

4.

Thu: Re sults: Ambuja Cements, Berger Paints, Shoppers stop, Whirlpool India.

5.

Fri : Results: Allahabad Bank, CBI Bank, CARE Ltd, Gati Ltd, Pfizer ltd.

Knowledge Corner :
Qualified institutional placement (QIP)

These Qualified institutional placement (QIP) is a capital-raising tool, primarily used in India and other parts of southern
Asia, whereby a listed company can issue equity shares, fully and partly convertible debentures, or any securities other
than warrants which are convertible to equity shares to a qualified institutional buyer (QIB).

How much can companies raise via QIP : In a single financial year a company can raise not more than 5 times its net
worth based on the audited financial statements of the previous financial year.
- 3-

Vol.: 318
02 NOV,2016

Mutual Fund Corner

Top 10 Sector Break-Ups

Fund Name
Scheme Name

Sector Weights

ICICI PRUDENTIAL VALUE DISCOVERY FUND

Fund (% )

Financial
Automobile

23.62
7.23

Equity-oriented

Energy
Healthcare

7.96
9.22

Category

Open-ended

Engineering

5.32

Launch Date

Feburary 2011

Technology
Services

13.01
5.61

Fund Manager

Mrinal Singh since Feb 2011

Construction

6.88

Diversified

5.55

Chemicals

2.36

AMC

ICICI Prudential Asset Management Company

Type

Net Assets
In crore )

History
NAV (Rs)
Total Return (%)
Rank (Fund/Category)

(`

Rs. 14460.6 crore as on Sep 30,2016

2013

2014

2015

62.15

107.99

113.86

126.86

8.31

73.76

5.44

11.42

9/47

25/78

37/187

119/155

52 W eek Hi gh (Rs)

62.15

108.70

120.07

128.60

52 Week Low (Rs)

47.85

58.56

106.67

97.50

Net Assets (Rs.Cr)

2830.81

7367.40

Expens e Ratio (%)

2.33

2.26

10664.05
2.24

Risk Analysis

2016

14044. 28
-

Volatility Measures
Standard Deviation

17.13

Sharpe Ratio

1.49

Beta

1.02

R-Squared
Alpha

0.78
15.62

Composition (% )
Equity

91.36

Debt

8.07

Cash

0.57

Fund Performance v/s S&P BSE 100

Fund Style
Investment Style
Growth

Blend

Value

Medium
Small

Fund
S&P BSE 100
(Rebased to 10,000)
- 4-

Capit alization

Large

Source : - www.valueresearchonline.com

Vol.: 318
02 NOV,2016

Commodity Corne r
BULLION
FUNDAMENTAL: Bullion

prices ended with gains on weekly basis where gold gained by 0.45% and silver by over one percent
gains as prices recovered on Friday in the evening session after the FBI said it will further investigate Democratic presidential candidate Hillary Clinton's use of a private email system. Gold demand in India spiked as festive buying lifted the premium over official domestic prices to its highest in 10 months, although buying else where in Asia remained tepid. Gold
prices in India, the world's second largest consumer, were at a premium of up to $3 an ounce over official domestic prices
this week, the highest in 2016 and against $2 the previous week, buoyed by purchases for the Dhanteras and Diwali festivals. India's overseas purchases of gold likely hit a nine-month high in October, as a flip in domestic prices to a premium
prompted banks and refiners to resume imports ahead of the festival season. Meanwhile, the world's largest consumer
China witnessed a slowdown in purchases, with buyers waiting for a further fall in gold prices as premiums slipped to $2
from $4- $5 against the international benchmark last week. The U.S. economy grew by 2.9 percent in the third quarter, outpacing consensus forecast of 2.5percent.
.
RECOMMENDATION : BUY GOLD @ 29950 SL 29700 TGT 30150-350 BUY SILVER @42250 SL 41750 TGT 42850-43350.

BASE METALS
Last week, base metals prices rallied buoyed by brightening prospects for the U.S. economy and by a rally
across China's steel sector that fuelled speculative buying in metals. New U.S. single-family home sales unexpectedly rose
in September, pointing to sustained demand for housing even as data for the prior three months was revised lower. Gains in
the week had been partly due to Chinese speculative activity, which had receded after China's Zhengzhou Commodity Exchange doubled the charges for intraday trading in thermal coal. Demand for base metals from China is likely to grow in
2017, according to Goldman Sachs, which revised up by 3 percent its copper price forecast for 2016. The bank now sees
copper averaging $4,693 per tonne in 2016 versus $4,565 expected previously. Also supporting copper prices are stocks in
LME-approved warehouses, which at 331,450 tonnes have fallen more than 12 percent since late September. Volatility is
picking up as traders square books ahead of an industry event in London. China accounts for nearly half of global copper
demand estimated at around 22 million tonnes this year. Chinese consumers are expected to import more over coming
months due to stronger local demand.
FUNDAMENTAL:

RECOMMENDATION : BUY ALUMINIUM @ 113 SL 110 TGT 115.8-117 BUY COPPER @ 324 SL 318 TGT 332-338 BUY ZINC @ 160 SL
154 TGT 168-174 BUY NICKEL @ 695 SL 680 TGT 710-725.

ENERGY
FUNDAMENTAL : Last

week, crude oil prices dropped on concerns OPEC will not fully carry out a planned output cut, even as
data showed U.S. oil drillers removed rigs from production for the first time since June. OPEC officials meeting in Vienna to
work out the details of their plan to reduce oil production failed to reach agreement after hours of talks on Friday, amid objections by Iran which has been reluctant to even freeze its output, OPEC sources said. The High Level Committee of experts will meet again in Vienna on Nov. 25 ahead of the next meeting of OPEC ministers on Nov. 30, to "finalise individual
quotas", source said. Oil prices have been under pressure in recent days amid market skepticism over the implementation
of a planned deal by OPEC to limit production. The 14-member oil group reached an agreement to cap output to a range of
32.5 million to 33.0 million barrels per day in talks held on the sidelines of an energy conference in Algeria late last month.
However, OPEC said it wont finalize details on individual output quotas until its next official meeting in Vienna on November
30.
RECOMMENDATION : SELL CRUDE @ 3220 SL 3350 TGT 3000. BUY NAT.GAS @ 206 SL 215 TGT 195.

- 5-

Vol.: 318
02 NOV ,2016

Commodity
Corne r
Forex Corner

Market Recap :

The Indian rupee weakened marginally against

the US dollar tracking the losses in the local equity markets.

Traders are cautious ahead of the Federal Reserves statement at the completion of its two-day
meeting on Wednesday and any new indication
that an interest rate hike is likely at the central
banks December meeting as the US holds its
presidential election on 8 November.

Market Eye Week ahead :

The USDINR On daily chart pair has formed DOJI candlestick pattern. Which represent uncertainty, and other
hand pair has been trading below all short term, medium term, and long term moving average which is 20, 100
and 200.Whereas on weekly chart pair has continually taking support at 50WMA. Which suggest short term trend
is bullish. So for trading perspective, one could buy up to the level 66.88-66.98 with SL of 66.70 for target of
67.03-67.50.

USD/INR
Level

S2

S1

CP

R1

R2

High

Low

Close

USD/INR

66.93

66.88

66.98

67.03

67.08

67.03

66.93

66.98

Level

S2

S1

CP

R1

R2

High

Low

Close

EUR/INR

73.52

73.30

73.65

73.87

74.00

73.77

73.42

73.75

Level

S2

S1

CP

R1

R2

High

Low

Close

GBP/INR

81.90

81.70

82.11

82.31

82.52

82.31

81.90

82.11

Level

S2

S1

CP

R1

R2

High

Low

Close

JPY/INR

63.74

63.62

63.86

63.98

63.62

63.98

63.74

63.86

EUR/INR

GBP/INR

JPY/INR

-- 46--

Vol.: 318
02 NOV,2016

J Street Recommendations Report Card

Nifty last week opened at 8709.85 and attained a high at 8736.95. A fall during the week to 8550.25 was witnessed and
the week closed at 8638 thereby showed a net fall of 0.63% on week to week basis. Traders short and still holding the
short position can maintain the stop loss at 8750. Traders long and holding the same can maintain the stop loss at
8500.Sideways movement for 3 week between 8750-8500 is being witnessed. Therefore, next direction movement is outside
the band of 8750-8500. Sell is below 8500 with high of the week as the stop loss or 8638 whichever is lower. Alternatively, buy
above 8750 with low of the week as the stop loss of 8638 whichever is lower.

Top Fundamental Stocks

Rec. Date

CMP on Rec.

CMP

Target

Absolute
Return @
CMP

30/08/2016

630

675

732

0%

Buy

25/07/2016

235

277

308

1%

Buy

Capital First

06/06/2016

552

766

660

8%

Profit book

Wonderla Holidays

25/04/2016

387

407

498

6%

Accumulate

Mold-Tek Packaging

04/04/2016

138

51

179

4%

Buy

Jamna Auto

22/02/2016

133

223

181

-2%

Buy

MT Educare

01/02/2016

164

136

230

2%

Buy

Garware-Wall Ropes

28/12/2015

425

528

550

-4%

Buy

AYM Syntax

23/11/2015

121

87

223

4%

Buy

Natco Parma

02/11/2015

509

596

636

1%

Buy

SRF

21/09/2015

1140

1908

1374

8%

Buy

Ahluwalia contracts

24/08/2015

235

292

368

2%

Buy

20/07/2015

190

235

255

-3%

Buy

04/05/2015

298

278

430

3%

Buy

16/03/2015

152

173

251

4%

Buy

DHFL

16/02/2015

252

331

368

4%

Accumulate

TV Today Network

27/01/2015

222

330

337

-4%

Buy

M&M

12/01/2015

1238

1327

1452

-2%

Buy

Havells India

27/10/2014

274

412

346

1%

Buy

PTC India Fin. Ser.

07/07/2014

39

39

45

-5%

Profit book

Adani Port

05/07/2014

280

285

347

-6%

Accumulate

Stocks
Alembic Pharmaceuticals
Coromandel
International

Infinite Computer
Sol.
Sadbhav
Engineering Ltd.
Omkar speciality
Chemicals

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.: 318
02 NOV,2016

J Street Short Term Call Status

RANGE

RANGE

TRIGGER
PRICE

TGT

SL

STATUS

%
RETURN

800

816

808.00

851.00

780

SL

-3.50

BUY

1070

1080

1075.00 1020.00

1110

TA

4.60

STAR

BUY

990

1010

1000.00 1060.00

960

TA

5.80

15-Sep-16

UPL

BUY

695

700

697.50

730.00

675

EXPIRE

16-Sep-16

BRITTANIA

BUY

3510

3540

3525.00 3690.00

3390

EXPIRE

19-Sep-16

ITC

BUY

260

264

262.00

275.00

252

SL

-3.60

20-Sep-16

BIOCON

BUY

925

935

930.00

972.00

900

TA

4.50

21-Sep-16

HDFC

BUY

1385

1395

1390.00 1450.00

1355

EXPIRE

22-Sep-16

INFRATEL

BUY

370

375

372.50

391.00

358

OPEN

10

23-Sep-16

TVSMOTOR

BUY

347

353

350.00

367.00

337

TA

4.80

11

26-Sep-16

HDFC

BUY

1405

1435

1420.00 1492.00

1365

SL

-3.80

12

27-Sep-16

JUBLFOOD

SELL

960

950

955.00

912.00

985

TA

4.50

13

28-Sep-16

ITC

SELL

248

245

246.50

235.00

254

TA

4.40

14

29-Sep-16

TATAGLOBAL BUY

143

147

145.00

153.00

139

TA

5.50

15

3-Oct-16

BUY

1395

1415

1405.00 1476.00

1355

EXPIRE

16

4-Oct-16

MOTHERSUMI BUY

325

330

327.50

342.00

315

SL

-3.50

17

5-Oct-16

LICHSGFIN

BUY

596

606

601.00

624.00

576

TA

4.40

18

6-Oct-16

ASIANPAINT

BUY

1190

1210

1200.00 1258.00

1156

OPEN

19

7-Oct-16

TATASTEEL

BUY

402

410

406.00

429.00

386

TA

4.90

20

13-Oct-16

NTPC

SELL

148

146

147.00

140.00

152

SL

-3.80

21

14-Oct-16

BATAINDIA

SELL

498

492

495.00

480.00

509

TA

3.20

22

17-Oct-16

NBCC

SELL

257

255

256.00

245.00

265

TA

4.00

23

18-Oct-16

ZEEL

SELL

508

498

503.00

478.00

520

OPEN

Sr.
No.

DATE

9-Sep-16

12-Sep-16

JUBLFOOD

14-Sep-16

- 7-

STOCK

BUY/
SELL

SUNPHARMA BUY

M&M

Vol.: 318
02 NOV, 2016

J Street Short Term Call Status

Sr. No.

DATE

STOCK

BUY/
SELL

RANGE

RANGE

TRIGGER
PRICE

TGT

SL

STATUS

24

19-Oct-16

YESBANK

BUY

1285

1296

1290.50

1348.00

1249

OPEN

25

20-Oct-16

WIPRO

BUY

490

498

494.00

518.00

475

OPEN

26

21-Oct-16

HINDALCO

BUY

154

156

155.00

163.00

150

OPEN

27

24-Oct-16

IGL

BUY

856

870

863.00

904.00

834

OPEN

28

25-Oct-16

LUPIN

BUY

1515

1535

1525.00

1595.00

1468

OPEN

29

26-Oct-16

DRREDDY

BUY

3180

3220

3200.00

3348.00

3090

OPEN

30

27-Oct-16

BIOCON

SELL

915

900

907.50

864.00

940

OPEN

STATUS

CALLS

RATIO

TA+PB

11

68.75

SL+EXIT

05

31.25

TOTAL

16

100.00

%
RETURN

One call on daily basis is given keeping view of short term trading on closing basis.
Time frame and expected % of return is also mentioned with the suggested call.
This call are purely given on technical trading system generated by the Technical Research Desk.
Generally Expected Return on investment is 5-6 % with time horizon of 6-7 days.
Profit Booking update is considered if on an average expected return exceed 3.50-4.00 % against the
Expected return of 5-6%
Risk- Reward ratio percentage wise depends on the volatility of stock Normally it stands ( 3 : 9)

- 7-

Vol.: 318
02 NOV,2016