Moneylife

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Antelope
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Monday, 21 December 2015

Volume 8, Issue 36

MARKET WATCH

Nifty, Sensex may head higher

W
e had mentioned in last weeks parliamentary logjam that has hindered Feds Federal
Indices Change
closing report that Nifty, Sensex the passage of key economic legislations. Open Market
may bounce back a bit and that On Tuesday, investors were optimistic Committee BSE Sensex 2%
if Nifty stays above 7,500, it may head despite the overall wait and watch trend. (FOMC) raised
for 7,850. The weekly trend of the market The major indices closed a little higher on key interest Nifty 2%
has been positive. The high of the week Tuesday, closing at the high of the day. rates by only
was 7853. Weekly gains of the major On Wednesday, the Indian stock markets 25 basis points. On Friday, benchmark
indices were of the order of 1.5%-2.0%. saw a minor rally in continuation of the indices went down as selling in
From here as long as the Nifty stays above two previous days of positive trading. On information technology shares weighed on
7,650, the uptrend may continue. Thursday, there was a sharp rally in all the sentiment.
On Monday, both the benchmark the major indices in the stock market and
indices opened on a negative note in-sync gains were more than 1.2%. Investors Stock: Sandeep Kishore who is currently
with their Asian peers and concerns on the breathed a sigh of relief as the US with HCL Technologies as corporate
vice-president and global head of life
Money Flows sciences, health care and public services
is appointed as managing director
FII Net Inflow DII Net Inflow and chief executive officer of Zensar
Technologies effective 12 January 2016.
735 (Rs crore) 1,565 (Rs crore) Zensar Technologies rose 8%. HDFC Bank
235 1,145 raised Rs2,975 crore through issue on a
private placement basis senior, unsecured,
-265 725
redeemable, long term, non-convertible
305
bonds in the nature of debentures. The
-765
stock rose 3%. Argentinas peso fell
-1,265
-115 after the as the new administration lifted
deeply unpopular limits on buying foreign
-1,765 -535 currencies. Bajaj Auto FY14-15 annual
21 Oct-15 19 Nov-15 18 Dec-15 21 Oct-15 19 Nov-15 18 Dec-15 report show 19% export happening to
Latin America. However the stock rose
The Nifty rose 2% this week. FIIs were net buyers bringing in Rs19.40 crore, while DIIs were net 3%. TCS has been recognized as a
buyers bringing in Rs913.22 crore. Leader in Life Sciences - Clinical and
R&D IT Services Providers by advisory
Market Valuation and research firm, Everest Group, in its
report. Everest Group evaluated 16 ITO
Nifty service providers specific to the global
PE life sciences sector and mapped them
8,950
Grossly Overvalued - abvove 22x; Overvalued - 20x to 22x on their performance, experience, ability,
7,660
Fairly valued - 17x to 20x; Undervalued - 15x to 17x 22x knowledge. TCS third quarter performance
Grossly Undervalued - below 15x 20x
is likely to have a material impact with
6,370 17x the floods in Chennai. Chennai is the
15x
5,080
companys largest delivery location with
over 65,000 employees. US Congress
3,790 doubled a special fee on the popular H-1B
2,500
and L-1 visas raising it up to $4,500. This
will hit Indian IT companies. The stock
Jan-08 Dec-11 Dec-15
rose 1%.

The current four-quarter trailing Nifty EPS as per NSE is Rs370. On this basis, the current Nifty Changes: There are no changes this
PE works out to 20.99. Unless earnings improve, the market is overvalued. week.

Disclaimer: Although information has been obtained from and is based upon sources we believe to be reliable, we do not guarantee its accuracy and the information may be
incomplete or condensed. All opinions and estimates constitute our judgment as of the date of the report and are subject to change without notice. This report is for informational
purposes only and none of the stock information, data and company information presented herein constitutes a legally binding recommendation or a solicitation of any offer to buy
or sell any securities. Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present
a personalised recommendation to you. Individual stocks presented may not be suitable for you. Moneylife is a Media and information company and not investment advisor. Please
consult an advisor about the appropriateness of your investment decisions.
 Moneylife
STOCK LETTER

Antelope
More mid-caps

Monday, 21 December 2015

Volume 8, Issue 36

Company Business Comments

The most profitable private sector bank taking advantage of strong demand for banking
HDFC Bank Banks
services

Bajaj Finance Financial Services Apart from banks, one of the best placed to fund the aspirations of the a rising middle class

Best auto battery manufacturer. Has done very well even during slowdown. Poised for huge
Amara Raja Batteries Auto Components
growth

Supreme Industries Plastics Plastic processing company with a strong brand equity. Highly efficient with capital use

One of the top manufacturers of sanitaryware. High return on equity. Government focus on
Cera Sanitaryware Building Material
toilets helps

Subsidiary of HDFC, focus on lower semi-urban and rural areas where demand will remain
Gruh Finance Financial Services
high

City Union Bank Banks Small bank down South. Managed very well. Low bad loans and high return on capital

Motherson Sumi Systems Auto Components A globally competitive auto components manufacturer with great long term strategic thinking

Lupin Pharma Among the top Indian pharma companies. Strong global growth. High ROCE

Indag Rubber Auto Components A small company in the rubber retread business. High RoCE. Planning expansions

Professionally managed housing finance having loans schemes ranging from home loans,
Repco Home Finance Financial Services home makeover loans, mortgage loans, plot loans, commercial construction loans, NRI loans
and loans for fifty-plus individuals.

Atul Auto Auto Strong player in the three wheeler market. Recording fast growth and high RoCE

Another among the strong smaller pharma companies in India. Low profile. High return on
Alembic Pharmaceuticals Pharma
equity. Strong financial management

Zensar Technologies Software & IT Services A small but global IT player with extremely high RoNW of 25% and low valuation

A mid-cap hardware and software company with a niche market, high RONW (42%) and low
Tata Elxsi Software & IT Services
relative valuation.

Bajaj Auto Auto One of the best combination of mega-cap, low valuation and high RoCE

VST Tillers Tractors Farm & Farm Inputs One of the few farm-focused listed companies. Has a 23% RoNW and reasonable valuation

Global leader in the automotive cables. High RoCE. Not dependent on domestic customers
Suprajit Engineering Auto Components
alone

Indias largest software company with one of the best ROCE. Preferred option for all
Tata Consultancy Services Software & IT Services
institutional investors

TVS Srichakra Auto Components Leading two & three-wheeler tyre manufacturer. Low valuation and high RONW of 49%

German multinational in refractories. Has done very well during the slowdown. Poised for
Orient Refractories Industrial Intermediates
strong growth

Infrastructure growth is one of the topmost priorities and Dredging Corp will be a big
Dredging Corp of India Infrastructure
beneficiary

Specialty chemical company concentrating on industrial monomers and polymers.

Vinati Organics Chemicals
Reasonable valuation and high RoNW of 28%
Moneylife
STOCK LETTER

Antelope
More mid-caps
Monday, 21 December 2015
Volume 8, Issue 36

Financial* Valuation** Return# Entered

RoE Current Annualised return
Av. Sales Av. OP MC/Sales MC/OP Date Price
Price since entry@
Earlier Recommendations That Can Still be Bought
1. HDFC Bank 15,644.57 4,690.70 3.91 13.42 18% 18-Feb-11 435 1,073 21%
2. Bajaj Finance 1,492.87 374.86 4.64 18.56 22% 27-Jan-12 731 5,814 70%
3. Amara Raja Batteries 1,099.96 189.44 3.15 18.35 26% 13-Apr-12 146 854 61%
4. Supreme Industries 1,005.60 146.39 2.68 24.85 27% 27-Apr-12 208 652 37%
5. Cera Sanitaryware 215.78 30.16 2.81 21.74 20% 04-May-12 265 1,950 73%
6. Gruh Finance 288.01 79.69 7.61 29.30 32% 04-May-12 68 261 45%
7. City Union Bank 800.04 186.64 1.64 6.64 16% 18-May-12 48 91 20%
8. Motherson Sumi Systems 9,044.54 803.95 1.03 10.62 49% 01-Jun-12 47 287 66%
9. Lupin 3,180.14 798.72 6.05 29.91 24% 15-Mar-13 610 1,786 48%
10. Indag Rubber 63.81 11.07 1.92 11.10 26% 19-Jul-13 40 208 98%
11. Atul Auto 128.54 16.39 1.99 12.96 34% 06-Sep-13 85 518 121%
12. Alembic Pharmaceuticals 630.79 157.01 3.15 8.46 56% 25-Oct-13 181 675 85%
13. Zensar Technologies 701.69 106.54 1.59 10.09 27% 23-Oct-14 596 1,081 68%
14. Tata Elxsi 233.17 50.29 6.49 27.90 47% 23-Oct-14 611 2,197 203%
15. Repco Home Finance 190.37 51.52 4.63 16.64 17% 29-May-15 620 638 3%
16. Bajaj Auto 5,614.17 1,060.49 2.94 13.63 32% 10-May-13 1,859 2,482 12%
17. VST Tillers Tractors 142.60 25.81 1.89 11.45 22% 23-Oct-14 1,468 1,324 -9%
18. Suprajit Engineering 135.29 22.35 2.90 15.15 21% 13-Jul-12 25 143 67%
19. Tata Consultancy Services 25,074.19 6,623.31 4.38 15.28 41% 03-May-13 1,419 2,417 22%
20. TVS Srichakra 494.18 66.15 1.04 6.62 57% 28-Aug-15 2,619 2,838 8%
Older stocks to avoid now ( does not mean exit; Hold not Sell)
1. Orient Refractories 112.82 19.26 2.21 12.83 30% 28-Feb-14 49 82 33%
2. Dredging Corp of India 174.67 44.82 1.60 5.68 6% 23-May-14 524 365 -20%
3. Vinati Organics 177.50 48.45 3.35 10.43 29% 28-Aug-15 478 423 -11%
*5 quarter average(Rs crore) ** Based on latest quarter (annualised), MC- Market Cap # Return on Equity (based on net profit of previous 4 quarters), @ - stocks less than one year
have absolute return

Operating Profit - profit generated in the normal course of business; arrived at after deducting operating expenses (excluding depreciation and interest) from sales.
Valuation - ratio of market capitalisation to sales or operating profit. Low ratio is better. Market capitalisation - recently traded price multiplied by number of shares outstanding.
RoE is return on equity which is net profit divided by networth. Entered at price is the price at which we had added the stock to our stockletter.
Current price is the price as on the last trading date of the week. Performance is the return between the entered at price and current price.

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