Vol.

: 293
9th May,2016

Index
Market View

1 Market View:

Company Update

2 As we have discussed, market is in consolidation mode. Some results of midcap stocks are really

If there is more pain, invest More

encouraging. There are certain interesting data which suggest that an investor should invest more with
meaningful decline in the market. Have you ever seen the Sensex fall for two consecutive years? Going
back to history of last 20 years, it only happened once in 2000 and 2001. The Sensex fell by 20.6% and
18% respectively. Isnt it surprising that the index was down two years together only once in last 20
years? The question arises that 20 years is not a significantly long period but it is really interesting to
see the yearly movement of stock markets world over in last many decades. Mr. Meb Faber, a
statistician has compiled the data. Two consecutive down years is very difficult to pin point. While the
three years are the rarest of the rare. As per Mr. Faber it has happened just 6 times in last 378 years
which is just 2% of the time. Four consecutive down years happened only 1% while five down years in a
row has never happened. Our interest is to see what happened after the fall for two, three or four consecutive years.

Around the
Economy

Knowledge Corner

Mutual Fund

Commodity Corner

Forex Corner

6 The reversion to the mean is a well known rule of statistics which plays a significant role here also. As-

Report Card

Short Term Call Status

Editor & Contributor

Margi Shah

Special Contributors
Ashesh Trivedi
Aditya Nahar

set classes have this peculiar tendency to hover around their equilibrium level after some time. More
they move away from their equilibrium level, faster they come back to that level. Mr. Faber has developed this theory to predict the return of asset classes after they have fallen in a row. If the asset class is
down two, three, four and five years in a row, one can expect future two year total returns of 40%, 60%
80% and 100%. In other words if there is a meaningful downside for consecutive years, one should
invest more.
Mr. Meb Faber is particularly bullish on emerging markets. He is not talking only about India. But it is
interesting to know that India is having another kind of reversion to the mean and that is as strong as
any asset class. The reversion to the mean of profit margins. If profit margins revert to their mean there
could be a 70% upside from here on. If earnings were to grow at the historical rate of 15% and if profit
margins were to rise to their 10 year average of 13.5% from the current 12.2% an EPS of Rs. 100 can
become Rs. 168 by f.y.18. Which is nearly a 70% jump. Here there is a prediction that the Sensex P.E.
multiple remains at the current level of around 19x.
Mr. Faber has supported our claim of the idea of mean reversion and reversion in profit margin can be
possible as good as in any asset class. Considering this, it will be convincing to invest more with every
bout of pain. Technically, our market has a strong support in the range of 7550-7600 and strong
resistance at 7850-7900.

Kamal Jhaveri
MD- Jhaveri Securities

For suggestions, feedback

and queries
jstreet@jhaveritrade.com

-1-

Vol.: 293
9th May,2016

Company Update : Wonderla Holidays Ltd.

Financial Basics

Company Basics
BSE Code
NSE Symbol
EQUITY (` in Cr.)
MKT.CAP (` in Cr.)

538268
WONDERLA
56.50
2182.90

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

10.00
10.41
37.11

P/BV (x) (TTM)

BETA
RONW (%)

5.51
0.6705
20.00

Share Holding Pattern

Holder's Name
Foreign
Institutions
Promoters
Non. Promoters
Public & Others
Govt Holding

% Holding
12.38
4.38
70.99
0.00
9.01
3.25

Valuation : WONDERLA is trading at ` 381. We recommend Accumulate with target price of ` 498 , valuing
stock 30xFY18E EPS of `16.62.The stock currently trades at 32.47x of FY16E, 27.93xof FY17E and 22.98x of FY18E.
Company Overview
Wonderla Holidays is one of the largest operators of amusement parks in India, which owns and operates two parks under
the brand name Wonderla, situated at Kochi , Bangalore, Hyderabad. In FY16, it had a cumulative annual footfall of .
Company has also developed the Wonderla Resort in Bangalore, a Three Star leisure resort, next to its amusement park,
comprising of 84 luxury rooms.
Investment rational
Wonderla Hyderabad- next feather in Wonderla s kitty
'Wonderla', the third theme park from Wonderla Holidays in the country and the first in the State, is built in 50 acres of land
with an investment of Rs. 250 crore. It has 43 attractions, which include 25 land based and 18 water based rides. A reverse
looping roller coaster imported from Netherlands, and space themed flying theatre that is yet to be opened, would be the
major attractions. Management plans to launch a fourth park in Chennai at a cost of Rs. 300 Cr. , that would be their biggest
theme based amusement park.
Strong operating experience - a key requirement as Operator
WHL s management has rich operating experience in operating the park, which is the key requirement for success in this
industry. The first park was opened in Kochi in 2000 and the next one in Bangalore in 2005. Thus, promoters have over 14
years of rich and successful experience in park operations. Amusement parks operate for 365 days from 11am-7pm and
alcohol-based beverages are not allowed inside.
Strong competitive advantage- High entry barrier
Development of large amusement parks typically require huge investment involving land acquisition, establishing of
infrastructure and rides, and regular investment in creation of new rides. Due to its highly capital intensive nature,
achieving the required footfall becomes highly critical, especially in newly developed parks, in order to break-even. ~250 Cr.
capex is required to established an amusement park .Companies existing parks of Wonderla at Bangalore and Kochi are generating sufficient revenue and have witnessed steady growth in footfalls over the years.
- 2-

Vol.: 293
9th May,2016

Around The World

Weekly Market Recap :
On the economic front, the outcome of a monthly survey showed that growth in India's manufacturing sector eased last
month amid broadly stagnant inflows of new work. The seasonally adjusted Nikkei India Manufacturing Purchasing
Managers' Index (PMI) fell to 50.5 in April 2016 from 52.4 in March 2016.
Data released by the government on Monday, 2 May 2016, showed that the core sector registered a strong growth of 6.4%
in March 2016 over March 2015.
The outcome of a monthly survey showed that growth in India's services sector eased last month due to a slower
expansion in new business inflows. The seasonally adjusted Nikkei Services Business Activity Index dropped to 53.7
in April 2016 from 54.3 in March 2016.

Market Eye Week ahead :

The government is scheduled to unveil industrial production data for March 2016 on Thursday, 12 May 2016. India's industrial production (IIP) rebounded 2% in February 2016 over February 2015.
The government is scheduled to unveil the consumer price index (CPI) data (rural, urban and combined) for the month of
April 2016 on Thursday, 12 April 2016. The all-India general CPI inflation dipped to six months low of 4.83% in March
2016.
On Thursday, 12 May 2016, the Bank of England (BOE) monetary policy committee members will vote on where to set the
rate.

Key Events / Factors to Watch

1. Mon: HUL, Deepak Nitrite earnings
2. Tue: Century Plyboard, HFCL, Repco home, SRF, Radico Khaitan earnings
3. Wed: Apollo Tyres, Asian Paints, Havells India, Kotak Mahindra, Oriental Bank, TD Power System, Mold-Tek Packaging earnings
4. Thu: CPI data for the month of April 2016, IIP data for the month of March 2016, Arvind, Dr Reddys Labs, Glenmark, ITD
Cementation, Nestle, Graphite India earnings
5. Fri: Bank of Baroda, Cadila Healthcare, Central Bank, UCO Bank, United Breweries, United Breweries earnings
6. Sat: Relaxo Footwear, Uttam Sugar, Vinati Organics earnings

Knowledge Corner :
Pledged Asset
A pledged asset is collateral pledged by a borrower to a lender (usually in return for a loan). The lender has the right to seize the collateral
if the borrower defaults on the obligation. In some cases, the lender may require the borrower to place pledged assets such as cash or
securities in a separate account that the lender controls.
Pledged assets give lenders a sense of security, which is why pledged-asset loans often receive better interest rates than unsecured
loans.

- 3-

Vol.: 293
9th May,2016

Mutual Fund Corner

Top 10 Sector Break-Ups

Fund Name

Fund (%)

Sector Weights

Scheme Name

Kotak Emerging Equity Scheme Regular Plan

AMC

Kotak Mahindra Asset Management Company Ltd

Type

Small Cap

Category

Financial
Engineering

17.51
13.77

Cons Durable

10.64

Chemicals

9.63

Open-ended and Equity

Services

9.52

Launch Date

March 2007

Construction

6.91

Healthcare

6.67

Fund Manager

Pankaj Tibrewal

Textiles

4.28

Net Assets
(` In crore )

Rs. 817.5 crore as on Mar 31, 2016

Technology

4.21

Metals

3.62

History

2013

2014

2015

2016

NAV (Rs)

13.14

24.61

26.68

26.41

Total Return (%)

-5.07

87.32

8.42

-1.02

-11.83

55.93

12.48

0.20

+/- S&P BSE Mid Small

-0.42

32.95

0.38

3.12

Rank (Fund/Category)

29/32

17/50

25/41

8/36

52 Week High (Rs)

14.22

24.61

27.86

52 Week Low (Rs)

9.78

12.31

24.35

Net Assets (Rs.Cr)

69.33

274.15

792.54

Expense Ratio (%)

2.79

2.89

2.71

+/- Nifty 50

776.16
-

Risk Analysis
Volatility Measures
Standard Deviation

19.64

Sharpe Ratio

1.02

Beta

1.06
0.69

R-Squared
Alpha

15.04

Composition (%)
Equity

95.13

Debt

4.72

Cash

0.16

Fund Performance v/s S&P CNX Nifty

Fund Style
Investment Style
Growth

Blend

Value

Medium
Small

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

Capitalization

Large

Source : - www.valueresearchonline.com

Vol.: 293
9th May,2016

Commodity Corner
BULLION
FUNDAMENTAL: Bullion ended with gains last week after U.S. non-farm payrolls data for April came in weaker than expected, boosting
expectations the Federal Reserve will delay further interest rate increases. Bullion prices pared gains later in the session as the U.S. dollar turned
higher and New York Fed President William Dudley told that two rate hikes in 2016 remain a "reasonable expectation." The Labor Department report
showed the U.S. economy added 160,000 jobs in April, the fewest in seven months, and Americans dropped out of the labor force in droves, signs of
weakness that cast doubts on whether the Fed will lift rates before the end of the year. Spot prices are up 21 percent this year on expectations the
Fed will delay further rate hikes. Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding bullion. U.S. short-term
interest rate futures contracts rose after the payrolls data, suggesting traders see a better chance the Fed will wait longer to act. Four regional Fed
presidents said that they were open to considering a rate increase in June if its justified by economic data. The smaller payrolls gain may show
employers are adjusting in the wake of economic growth that has slowed for three straight quarters. The U.S. Department of Labor's Bureau of Labor
Statistics (BLS) said domestic nonfarm payrolls In April increased by 160,000, considerably below a downwardly revised gain of 209,000 in March
and the lowest monthly total since last September. The Labor Force Participation Rate fell by 0.2% to 62.8%, while the average workweek stayed
unchanged at 34.5 hours per week. While the Fed has voiced concern with the sluggish pace of inflation over the last several months, it had
expressed optimism with the broad improvement in the labor market prior to Friday's report. In April, the FOMC said in its monetary policy
statement that it will take a data-driven approach with the timing of its next interest rate hike. China's gold reserves stood at 58.14 million fine troy
ounces at the end of April, up from 57.79 million fine troy ounces at the end of March, the central bank said. Indian gold imports slumped for the
third straight month in April as a rally in prices sapped demand, according to a person familiar with provisional Finance Ministry data. Overseas
purchases fell 74 percent to about 22.3 metric tons valued at 60 billion rupees ($901 million), compared with 84.3 tons or 193 billion rupees a year
earlier, the person said, asking not to be identified as the data isnt public.

RECOMMENDATION : BUY GOLD JUNE @ 29800 SL 29350 TGT 30600-31000,BUY SILVER JULY @ 40600 SL 39500 TGT 41500-42500

BASE METALS
FUNDAMENTAL: Base metals prices ended with losses where aluminum and copper prices ended with more than four percent losses followed by
weakness in others as market braced for sell-off by funds reversing bets on higher prices, while expectations of an oversupplied market added to the
pressure. The economic recovery in the Euro area is expected to continue, supported by household consumption and rebounding investments, but risks
remain on the downside, the European Central Bank said in a regular economic bulletin. Chinese data released last week showed fa ctory activity in the
world's top metals consumer shrank for a 14th consecutive month in April has blunted optimism over demand for metals. Monthly trade data showed
that both exports and imports fell more than expected in April, added to concerns over the health of the worlds second largest economy. Exports
slumped 1.8% from a year earlier, worse than forecasts for a decline of 0.1%, while imports dropped 10.9%, compared to expectations for a fall of 5.0%.
That left China with a surplus of $45.6 billion last month, the General Administration of Customs said. The Labor Department rep orted that the U.S.
economy added 160,000 jobs last month, the smallest increase since September and well below the 202,000 jobs forecast by economists. The unemployment rate remained steady at 5%.The one bright sport of the report showed that average hourly earnings rose by eight cents or 0.3%, bringing the
year-on-year increase to 2.5% from 2.3% in March. The report saw investors all but abandon expectations for a June rate hike, with most investors now
seeing the next U.S. rate hike coming in September. Remarks by a senior Federal Reserve official indicated that U.S. interest rates could still rise
sooner than expected. New York Fed President William Dudley said that it was reasonable to expect two rate hikes this year despi te weaker-thanexpected April data on hiring. The U.S. services sector expanded in April as new orders and employment accelerated, bolstering v iews that economic
growth would rebound. In the week ahead, investors will continue to focus on U.S. economic reports to gauge if the world's large st economy is strong
enough to withstand further rate hikes in 2016, with Fridays retail sales data in the spotlight. In addition, there are more than a half-dozen Fed speakers
on tap as traders search for more clues on the timing of the next U.S. rate hike.
RECOMMENDATION : BUY COPPER JUNE @ 312 SL 306 TGT 324-330 , BUY ZINC MAY @ 122 SL 119 TGT 126-130,BUY NICKEL MAY @ 570
SL 550 TGT 602-630, BUY ALUMINIUM MAY @ 108.00 SL 110.50 TGT 105.50-103.00 , BUY LEAD MAY @ 114.00 SL 110.00 TGT 118.50-122.00

ENERGY
FUNDAMENTAL: Crude oil prices last week ended with around two percent losses as pressure seen after the latest EIA weekly inventory report
showed US crude oil inventories growing by 2.8mbls. However downside was limited as a huge wildfire in Canada disrupted its oil sands production.
Nearly one million barrels per day of Canada's crude production capacity had been taken offline as of Friday as the wildfires ravaged the oil town of
Fort McMurray in Alberta and forced evacuation of workers and precautionary production cuts or shutdowns at about a dozen major facilities. Saudi
Arabia's new energy minister said on Sunday the world's largest crude exporter was committed to meeting demand for hydrocarbons from its
customers and would maintain its petroleum policies. "Saudi Arabia will maintain its stable petroleum policies. We remain committed to maintaining
our role in international energy markets and strengthening our position as the world's most reliable supplier of energy," Khalid al-Falih said in an
e-mailed statement. Oilfield services provider Baker Hughes said Friday the number of rigs drilling for oil in the U.S. fell by four last week to 328, a
fresh six-year low. At this time last year, drillers were operating 668 oil rigs. U.S. crude oil stockpiles rose by 2.8 million barrels last week to a
record-high of 543.4 million barrels, according to the U.S. Energy Information Administration. Market participants will also keep an eye out for
monthly reports from the International Energy Agency and the Organization of Petroleum Exporting Counties to gauge global supply and demand
levels. In the week ahead, oil traders will be focusing on U.S. stockpile data on Tuesday and Wednesday for fresh supply-and-demand signals.
Natural gas prices last week ended with more than two and half percent losses after data showed that natural gas supplies in storage in the US rose
more than feared last week. Natural gas prices remain weighed down due to current inventory levels. Despite visible demand drivers like LNG,
Mexico export, and industrial demand, prices have remained range bound. The US EIA said in its weekly report that natural gas storage in the U.S. in
the week ended April 29 rose by 68bcf, compared to expectations for a gain of 64 billion. That compares with a gain of 73bcf in the prior week, an
increase of 77bcf in the same week a year earlier and a five-year average rise of around 64bcf.

RECOMMENDATION : BUY CRUDE OIL MAY @ 2960 SL 2800 TGT 3120-3240 ,SELL NAT GAS MAY @ 144 SL 152 TGT 136-130

- 5-

Vol.: 293
9th May,2016

Commodity Corner

Forex Corner

Market Recap :

The Indian rupee dipped lower at commencement

but bounced back in early trades on Monday, 09
May 2016 on increased selling of the American
currency by banks and exporters. Besides, higher
opening of the domestic equity market backed up
the rupee.

The domestic currency opened at Rs 66.50 against

the dollar and recovered to a high of 66.40 so far
during the day.

In the spot market, the Indian unit was last seen

trading at 66.43.

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

the greenback's strength against a trade-weighted
basket of six major currencies, rose 0.14% to 93.96.

Market Eye Week ahead :

On the daily chart prices are trading in the rising wedge like pattern which is a short term bearish pattern. Support line of
the same is pegged at 66.68 and breach of the same will confirm the pattern and can trigger panic selling which in turn
can drag the prices to lower levels of 65.50.

The Average Directional moving index (ADX) is below 20 on both daily and weekly charts indicating range bound
movement of pair the whole week on broader basis.

USD/INR
Level

S2

S1

CP

R1

R2

High

Low

Close

USD/INR

66.33

66.57

66.77

67.01

67.21

66.97

66.53

66.81

Level

S2

S1

CP

R1

R2

High

Low

Close

EUR/INR

75.46

75.91

76.63

77.08

77.8

77.35

76.18

76.36

Level

S2

S1

CP

R1

R2

High

Low

Close

GBP/INR

95.42

96.15

97.24

97.97

99.06

98.32

96.5

96.89

Level

S2

S1

CP

R1

R2

High

Low

Close

JPY/INR

61.58

62.01

62.55

62.98

63.52

63.09

62.12

62.44

EUR/INR

GBP/INR

JPY/INR

-- 46--

Vol.: 293
9th May,2016

J Street Recommendations Report Card

Nifty last week opened at 7822.70, attained a high at 7890.25 and fell to a low 7678.35. Nifty finally closed the week at 7733.45
thereby showed a net fall of 116 points on week to week basis.

We had said last week that if a minor correction or retracement of the rise from 7516 to 7978 is witnessed then traders look for
retracement levels of the rise for accumulation. Nifty made low of 7701 and bounced back. Continue to hold long with profit book ing
levels placed at 7767-7856-7891. In the event of a breakout and close above 7992 expect the rally to be witnessed towards the next
supply zone of 8217-8235.

Top Fundamental Stocks

Rec. Date

CMP on Rec.

CMP

Target

Absolute
Return @
CMP

Status

Wonderla Holidays

25/04/2016

387

383

498

-1%

Accumulate

Mold-Tek Packaging

04/04/2016

138

149

179

8%

Buy

Jamna Auto

22/02/2016

133

140

181

5%

Buy

MT Educare

1/2/2016

164

169

230

3%

Buy

Garware-Wall Ropes

28/12/2015

425

334

550

-21%

Buy

Welspun syntax

23/11/2015

121

106

223

-12%

Buy

Natco Pharma

2/11/2015

509

456

636

-10%

Buy

SRF

21/09/2015

1140

1363

1374

20%

Buy

Ahluwalia contracts

24/08/2015

235

272

368

16%

Buy

Infinite Computer Sol.

20/07/2015

190

216

255

14%

Buy

Ambika Cotton Mills

18/05/2015

880

822

1149

-7%

Buy

4/5/2015

298

254

430

-15%

Buy

16/03/2015

152

177

251

16%

Buy

DHFL

16/02/2015

252

196

368

-22%

Accumulate

TV Today Network

27/01/2015

222

319

337

44%

Buy

M&M

12/1/2015

1238

1327

1452

7%

Buy

Havells India

27/10/2014

274

341

346

24%

Buy

PTC India Fin. Ser.

7/7/2014

39

38

45

-3%

Buy

Adani Port

5/7/2014

280

194

347

-31%

Accumulate

Stocks

Sadbhav Engineering
Ltd.
Omkar speciality
Chemicals

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.: 293
9th May,2016

J Street Short Term Call Status

Sr.
No.

DATE

STOCK

BUY/
SELL

RANGE

RANGE

16-Mar-16

HDFC

SELL

1106

1128

17-Mar-16

ICICIBANK

BUY

223

18-Mar-16

INDUSINDBK SELL

21-Mar-16

VOLTAS

22-Mar-16

SL

STATUS

%
RETURN

1117.00 1080.00

1150

SL

-3.8

233

228.00

240.00

210

TA

5.3

900

920

910.00

880.00

942

SL

-3.5

BUY

265

270

267.50

276.00

256

TA

3.2

INDIACEM

BUY

83

86

84.50

88.00

80

TA

4.1

23-Mar-16

BHEL

BUY

115

118

116.50

120.00

112

SL

-3.8

28-Mar-16

TATASTEEL

BUY

314

320

317.00

328.00

304

TA

3.5

29-Mar-16

AXISBANK

SELL

421

428

424.50

411.00

440

SL

-3.0

30-Mar-16

CIPLA

SELL

500

510

505.00

490.00

520

SL

-2.9

10

31-Mar-16

BAJAJFINANCE BUY

6750

6860

6805.00 7120.00

6600

TA

4.6

11

4-Apr-16

HEROMO-

BUY

2930

2990

2960.00 3140.00

2850

TA

5.8

12

5-Apr-16

ORIENTAL-

SELL

94

97

95.50

90.00

100

TA

6.1

13

6-Apr-16

SBIN

SELL

182

186

184.00

174.00

191

SL

-3.8

14

7-Apr-16

UNIONBANK

SELL

126

129

127.50

120.00

133

SL

-3.4

15

8-Apr-16

LT

SELL

1176

1198

1187.00 1132.00

1230

SL

-3.6

16

11-Apr-16

TCS

SELL

2415

2463

2439.00 2375.00

2520

SL

-3.2

17

12-Apr-16

MOTHERSUMI BUY

250

255

252.50

260.00

244

TA

6.8

18

13-Apr-16

ASHOKLEY

BUY

110

113

111.50

115.00

107

SL

-4.0

19

18-Apr-16

DHFL

BUY

200

205

202.50

210.00

194

TA

3.9

20

20-Apr-16

SRTTRANSFIN BUY

990

1010

1035.00 1055.00

960

SL

-4.0

21

21-Apr-16

HINDUNILVR

BUY

894

914

904.00

935.00

860

SL

-4.2

22

22-Apr-16

ICICIBANK

BUY

251

255

253.00

261.00

243

SL

-3.8

23

25-Apr-16

ASHOKLEY

BUY

103

106

104.50

111.00

100

SL

-4.2

- 7-

TRIGGER
PRICE

TGT

Vol.: 293
9th May,2016

J Street Short Term Call Status

Sr.
No.

DATE

STOCK

BUY/
SELL

RANGE

TRIGGER
PRICE

STATUS

CMP

%
RETURN

24

26-Apr-16

CEATLTD

BUY

1130

1150

1035.00 1195.00

1100

SL

-3.6

25

27-Apr-16

YESBANK

BUY

902

922

912.00

960.00

875

TA

5.2

26

28-Apr-16

RCOM

BUY

59

61

60.00

66.00

56

SL

-4.8

27

2-May-16

AXISBANK

BUY

471

479

475.00

495.00

455

OPEN

28

3-May-16

COLPAL

BUY

843

859

851.00

878.00

825

OPEN

29

4-May-16

BANKINDIA

SELL

86

89

87.50

84.00

92

OPEN

30

5-May-16

PETRONET

BUY

275

281

278.00

288.00

266

OPEN

31

6-May-16

UPL

BUY

590

600

595.00

615.00

573

OPEN

STAUTS

CALLS

RATIO

TA+PB

22.00

48.89

SL+EXIT

23.00

51.11

TOTAL

45.00

100.00

TGT

SL

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.: 293
9th May,2016