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Sensex, Nifty end lower: Reliance, Infosys, Ongc drag

8. March 2017 Rohit Stock Market Research (0)

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Indian Indices: Indian equity benchmarks traded on a weak note for most part of the day and ended the session in red. Investors maintained a cautious approach ahead of state elections results, including that of Uttar Pradesh. Uttar Pradesh election is the world’s largest this year and will have a key influence on Prime Minister NarendraModi’s chances of clinching a second term in 2019. Concerns have also grown over a hike in interest rates by the US Federal Reserve next week.

The market made a soft start in early deals as traders took cautious approach with the Organization for Economic Cooperation and Development (OECD) in its Interim Economic Outlook report highlighted that India, where the government implemented a drastic measure of currency demonetization in November, was the only one to see its growth forecast for the year reduced. India’s growth projection for the financial year ending on March 31 was lowered to 7.3 percent. The outlook for the fiscal year 2018 was retained at 7.7 percent.

The BSE Sensex ended at 28904.41, down by 95.15 points or 0.33% after trading in a range of 28815.48 and 29022.32. There were 10 stocks advancing against 20 stocks declining on the index. The broader indices ended in red; the BSE Mid cap index was down by 0.60%, while Small cap index was down by 0.34%.

The CNX Nifty ended at 8926.30, down by 20.60 points or 0.23% after trading in a range of 8891.95 and 8957.05. There were 19 stocks advancing against 32 stocks declining on the index.

*MARKET INDICATORS*			·
*Top Movers (Group A)*
*Company*	Cmp	% chg
*Gainers*
*Hathway*	38.20	5.82
*Jubilant*	735.05	4.33
*Bhartifin*	851.75	4.32
*Marksans*	49.75	3.75
*Losers*
*Nationalum*	74.10	-4.76
*RCOM*	34.55	-4.43
*NMDC*	141.00	-4.28
*Adanipowe*	38.50	-4.70

INDEX PERFORMANCE
*Index*	*Close*	*% Chg*
*Sensex*	*28901.94*	*-0.34*
*Nifty*	*8,924.30*	*-0.25*

Crporate Front:

Consumer price inflation is likely to rise in February for the first time since demonetisation and this could prompt the RBI to hike rates much sooner than most expect, says a report. According to a report by Capital Economics, consumer price inflation dropped in January to 3.2 per cent from 3.4 per cent in December, but is likely to rise in February.

Macroeconomic front: Empowering women to achieve economic equality would "exponentially" increase global gross domestic product (GDP) by at least $12 trillion by 2025, according to Assistant Secretary General Lakshmi Puri.With women's equal participation in the economy, world GDP has the potential to even go up to $28 trillion, she said Tuesday citing a study done by the consulting company, McKinsey, in association with UN Women, the international organisation's outfit for women's empowerment and equality.

On the global front:

On the global front, Asian markets closed mixed, as strong China trade data bolstered bets of a recovering global economy, though gains were capped by caution ahead of a widely expected US interest rate hike next week. Japan’s economy grew more than earlier estimated in the fourth quarter as capital expenditure grew at its fastest in almost three years, welcome news for policymakers as they begin to discuss how to wind down years of massive stimulus. European stocks were trading in green as investors eyed the UK annual budget release due later in the day, as well as a batch of fresh earnings reports.

Commodity Updates:

*Commodity Prices (MCX):*
*Commodity*	Rs	*% Chang*
*Gold*	*28696.00*	*-0.19*
*Silver*	*41776.00*	*-0.4*
*Crude oil*	*3529.00*	*-0.82*
*Natural Gas*	*194.50*	*2.75*
*Alluminium*	*125.50*	*0.2*
*Copper*	*388.20*	*0.36*

Top Sectoral& Stock Screening:he few gaining sectoral indices on the BSE were Bankex up by 0.28%, Healthcare up by 0.10% and Consumer Durables up by 0.02%, while Metal down by 2.03%, Realty down by 1.58%, Energy down by 1.44%, Oil & Gas down by 1.35% and Basic Materials down by 0.96% were the losing indices on BSE. (Provisional)

Top Nifty Movers:The top gainers on Nifty were Bosch up by 2.81%, Yes Bank up by 1.99%, Zee Entertainment up by 1.65%, Eicher Motors up by 1.42% and Kotak Mahindra Bank up by 0.92%. On the flip side, Tata Steel down by 2.07%, Idea Cellular down by 2.07%, ONGC down by 1.96%, Tech Mahindra down by 1.71% and BHEL down by 1.34% were the top losers.

Global Signals:

Asian markets were trading mixed; KOSPI Index increased 1.36 points or 0.06% to 2,095.41, Taiwan Weighted increased 15.38 points or 0.16% to 9,753.45 and Hang Seng increased 101.2 points or 0.43% to 23,782.27. On the flip side, Nikkei 225 decreased 90.12 points or 0.47% to 19,254.03, Jakarta Composite decreased 6.24 points or 0.12% to 5,396.37, FTSE Bursa Malaysia KLCI decreased 1.8 points or 0.1% to 1,726.86 and Shanghai Composite decreased 1.74 points or 0.05% to 3,240.67.

All European markets were trading in red; France’s CAC decreased 8.82 points or 0.18% to 4,946.18, UK’s FTSE 100 decreased 1.7 points or 0.02% to 7,337.29 and Germany’s DAX decreased 0.2 points or 0% to 11,965.94.

Research Report-Voltas-Sharetipsinfo

8. March 2017 Rohit Stock Market Research (0)

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Text Box: Company Overview:

Voltas is India's largest air conditioning company, and one of the world's premier engineering solutions providers and project specialists.

Founded in India in 1954, Voltas Limited offers engineering solutions for a wide spectrum of industries in areas such as heating, ventilation and air conditioning, refrigeration, electro-mechanical projects, textile machinery, mining and construction equipment, water management & treatment, cold chain solutions, building management systems, and indoor air quality.

Green Mission:

It's in the very nature of Voltas' core businesses to be actively engaged in today's Green movement. Every day, the need to conserve energy, preserve the ecology and minimise man's carbon footprint become more and more imperative. That's a call which Voltas answers through its products, its services, and its operating principles.

Devlopment Growth: VOLT’s Q3 revenues (-7% YoY to Rs 11.8bn) were hit by demonetisation and slower execution in the projects business, even as EBITDA margins expanded 309bps YoY (9M: +241bps) off a low base. Management remains cautious on the pace of execution in the Middle East but expects closure of legacy projects by FY17-end. While VOLT maintains leadership in the room AC business, we think competition can depress the business metrics. BUY &HOLD with (Sep’17 TP: Rs 450) set at 20x FY19E PE.

Performance highlights:.

Execution disappoints in Middle East:

VOLT attributed the 3% YoY decline in the electromechanical projects & services (EMPS) business to slower-than-expected progress on some new orders in the Middle East. However, positive closure of some old projects and better margins in new orders led to segment EBIT margins of 3.88%. VOLT expects to close legacy projects in the Middle East by FY17-end, which should normalise segment EBIT margins to ~4-5%. Overall, VOLT booked Rs 4.5bn of new orders in Q3 and its order book stood at Rs 42bn (incl. Rs 18bn of overseas orders). PAT came in at Rs 803mn (+42% YoY).

Currency ban hits AC business: The unitary cooling products (UCP) segment declined 5% YoY to Rs 4.1bn as demonetisation negated the strong YoY growth in Oct’16. VOLT stated secondary sales of ACs across the industry dropped 11% YoY by volume, and that it maintained leadership in room ACs with YTD market share of 21.7%. Segment EBIT margins slid 116bps YoY to 10.8% but increased 150bps YoY to 13.4% in 9MFY17. Management had earlier guided to ~13% margins for FY17. VOLT thinks it can get scale benefits even if it sources ACs via imports as it will have a higher import share when rivals opt for installing manufacturing capacity locally.

Financials (Quarterly) :

Particulars	Dec 16	Sep 16	June 16
Revenue	1037.16	850.33	1654.88
Other Income	57.93	118.07	35.74
Total Income	1095.09	968.40	1690.62
Expenditure	-943.37	-787.72	-1537.77
Interest	-1.29	-1.31	-2.40
PBDT	150.43	179.37	150.45
Depreciation	-4.54	-4.49	-4.68
PBT	145.89	174.88	145.77
Tax	-42.48	-48.97	-40.81
Net Profit	103.41	125.91	104.96

Highlights the fact:

1)Voltas has a history of strong price swings, which started with a steep fall in 2008, followed by equally sharp reversal in 2009. In short, it rewards handsomely to the swing trades and investors, provided they follow its trend.

2)The unitary cooling products (UCP) segment declined 5% YoY to Rs 4.1bn as demonetisation negated the strong YoY growth in Oct’16.

3)The company is selective in booking fresh orders. VOLT booked Rs 4.5bn of new orders in Q3 and its order book stood at Rs 42bn (incl. Rs 18bn of overseas orders).

4)It has been consolidating in a broader range 320-350 for last couple of months and currently trading closer to the upper band of the same.

5) It recovered almost vertically from that mark and formed a new record high 406 in at its recent moves.

Technically View:

VOLTAS	Synopsis	Technicals View
50 Day EMA	Close is Above EMA 50 (Short Term)	Bullish
100 Day EMA	Close is Above EMA 100 (Mid Term)	Bullish
200 Day EMA	Close is Above EMA 200 (Long Term)	Bullish
MACD (12 26 9)	MACD Line is GreaterThen SIGNAL Line	Bullish
RSI (14)	RSI is 54.56	Sideways
MFI (14)	MFI is 72.08	Sideways
CCI (20)	CCI is above 100	Over Bought
10 Day Avg Volume	Traded -42.89 % Less then 10 Day Average Volume

VALUATION & OUTLOOK:

The stock trades at a PE of 25x/22x FY18E/FY19E; we think valuations are full given “slow recovery” in the Middle East and the near-term impact of demonetisation. Maintain BUY &HOLD with a Mar’18 TP of 550 (Sep’17 TP: Rs 450).

Text Box: CONCLUSION:

Given sustained Short-term earnings growth potential,–

We retain our Buy recommend in this script with the target of Rs 450-550 in the short term outlook. So Entry would be around 365-375and stoploss maintain 330 asrecomanded in this counter.

US indices consolidate as rate hike certainty sees caution on stocks with bond yields rising as US Dollar gains.

8. March 2017 Rohit Stock Market Research (0)

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Indian Indices: Asian markets are also seeing consolidation as US indices close with minor losses with caution being the buzzword. With almost 85% probability of a rate hike by the US Federal Reserve on the March 15 markets have turned cautious and will see some more profit booking before the event to price in the same.

Nifty closed with minor losses as 8950 and above saw profit booking before the election results due this weekend. With next week being holiday, expect more volatility in the coming few days as investors book profit before the event with markets being closed on Monday. Metals, Banks and Pharma stocks could be under pressure with Energy, IT seeing buying for today.

The BSE Sensex is currently trading at 28920.60, down by 78.96 points or 0.27% after trading in a range of 28908.89 and 29022.32. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.31%, while Small cap index was down by 0.06%.

The CNX Nifty is currently trading at 8942.00, down by 4.90 points or 0.05% after trading in a range of 8939.85 and 8957.05. There were 22 stocks advancing against 29 stocks declining on the index.

MARKET INDICATORS			·
*Group ATopGainers*
*Company*	Price (Rs)	% chg
*Hathway*	37.95	5.12
*APLLTD*	617.00	4.84
*GET&D*	287.70	3.16
*Divislab*	773.90	2.50
*Group ATopLosers*
*NMDC*	140.75	-4.45
*Adanipower*	38.75	-4.08
*Jindalstel*	120.25	-3.72
*Adanient*	94.55	-3.42

INDEX PERFORMANCE
*Indices*	*Support*	*Resistanes*
*Sensex*	*28938*	*29079*
*Nifty*	*8929*	*8975*

Technical view: Nifty finds strong support @ 8880-8900 while resistance comes around 9000. Bank Nifty sees support around 20400, which was the swing low last week while 20800 will act as resistance on the upside.

Trading ideas :IndusInd Bank (Buy above 1332 for Target of 1370 and SL 1315): After consolidating for the past five trading sessions, our analysis of the hourly time frame indicates that the stock has broken out from an inverse head and shoulder pattern, which is bullish in nature. The neckline breach has also been accompanied with credible volumes. IndusInd Bank has also closed above its short term 10-EMA, further accentuating our bullish stance on the stock.

Derivative Snippets: Markets ended yesterday’s trading session on a lackluster note. Nifty call and put options witnessed some buying interest, as the implied volatility of ATM/OTM options started to move up ahead of state election results.

FIIs were net buyers in cash market segment to the tune of Rs 920 crore.

FII’s index future long/short ratio stands at 3.5x vs4.1x. Significant long and short positions to the tune of ~14k and ~13k contracts were added in index future.

Nifty Movers: The top gainers on Nifty were Kotak Mahindra Bank up by 1.71%, Yes Bank up by 1.70%, Power Grid up by 1.49%, ACC up by 1.34% and AurobindoPharma up by 0.87%.

On the flip side, BPCL down by 1.57%, Idea Cellular down by 1.52%, Hindalco down by 1.22%, HCL Technologies down by 1.05% and Infosys down by 0.89% were the top losers.

Top Sectoral& Stock Screening: The only gainers on the BSE were Healthcare up by 0.15% and Bankex up by 0.09%, while Metal down by 1.27%, Oil & Gas down by 1.08%, Energy down by 0.88%, IT down by 0.71% and Realty down by 0.71% were the losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 1.16%, HDFC up by 0.69%, NTPC up by 0.41%, Larsen & Toubro up by 0.36% and Cipla up by 0.28%.

On the global front: On the global front, Asian shares were trading mostly in green, as strong China trade data bolstered bets of a recovering global economy, though gains were capped by caution ahead of a widely expected US interest rate hike next week. Japan’s economy grew more than earlier estimated in the fourth quarter as capital expenditure grew at its fastest in almost three years, welcome news for policymakers as they begin to discuss how to wind down years of massive stimulus.

Global Signals:The Asian markets were trading mostly in green; KOSPI Index increased 0.86 points or 0.04% to 2,094.91, Shanghai Composite increased 1.05 points or 0.03% to 3,243.45, Taiwan Weighted increased 23.15 points or 0.24% to 9,761.22 and Hang Seng increased 95.21 points or 0.4% to 23,776.28.

On the other hand, Nikkei 225 decreased 111.9 points or 0.58% to 19,232.25, Jakarta Composite decreased 2.38 points or 0.04% to 5,400.23 and FTSE Bursa Malaysia KLCI decreased 1.96 points or 0.11% to 1,726.70.

Mon	Tue	Wed	Thu	Fri	Sat	Sun
27	28	1	2	3	4	5
6	7	8	9	10	11	12
13	14	15	16	17	18	19
20	21	22	23	24	25	26
27	28	29	30	31	1	2
3	4	5	6	7	8	9