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T I M E S
A TIME COMMUNICATIONS PUBLICATION
VOL XXVII No.32 Monday, 11 - 17 June 2018 Pgs.19 Rs.20

Follow-up buying support needed Now follow us on Instagram, Facebook &

at higher levels Twitter at moneytimes_1991 on a daily basis
to get a view of the stock market and the
By Sanjay R. Bhatia happenings which many may not be aware of.
The markets started on a weak note last week as broad-based
selling pressure especially in mid-cap and small-cap stocks continued. Imposition of additional margins as surveillance
measures did not help the matter either. However, the markets managed to bounce back after the RBI policy meet, which
was in line with expectations. The RBI announced a 25 bps hike in Repo rate and Reverse Repo rate along with Bank
rate.
The breadth of the market remained positive amidst low
volumes. The FIIs after a long time turned buyers in the Believe it or not!
cash and derivatives segment. Moreover, the DIIs also
remained net buyers during the week, albeit they too were  Tanfac Industries recommended at
occasional sellers. On the global front, crude oil prices Rs.113.55 in TT last week, zoomed to Rs.121
remained volatile, helped by production cuts by OPEC and appreciating 7% in just 1 week!
high crude output in USA. The global markets expect a rate
 Rain Industries recommended at Rs.223 in
hike announcement by the Federal Reserve in its meeting
scheduled on Wednesday. EE last week, zoomed to Rs.232.95
appreciating 4% in just 1 week!
Technically, the prevailing positive technical conditions
helped the markets move higher. The MACD, Stochastic,  Pix Transmissions recommended at
KST and RSI are all placed above their respective averages Rs.119.40 in TF on 21 May 2018, zoomed to
on the daily and weekly charts. Moreover, the Nifty is Rs.158.95 appreciating 33% in just 3 weeks!
placed above its 50-day SMA, 100-day SMA and 200-day  GRM Overseas recommended at Rs.235 in
SMA, which is its long-term average. The Nifty’s 50-day EE on 14 May 2018, zoomed to Rs.300
SMA is placed above its 100-day SMA and 200-day SMA appreciating 28% within a month!
and its 100-day SMA is placed above its 200-day SMA,
 Edelweiss Financial Services
which indicates a ‘Golden Cross’ breakout. These positive
technical conditions could lead to regular buying support. recommended at Rs.287.80 in SW on 14 May
The +DI is placed above the –DI line and is placed above 2018, zoomed to Rs.334 appreciating 16%
30. But it has come off its recent highs, which indicates that within a month!
the buyers are booking profits regularly. The ADX line, (EE – Expert Eye; SW – Stock Watch;
however, is placed around 13, which indicates that the TF – Techno Funda; TT – Tower Talk)
current trend lacks strength. The markets remain hesitant
at the higher levels as follow-up buying support is not This happens only in Money Times!
emerging at the higher levels. Lack of positive triggers is Now in its 27th Year
not helping the matter either.

A Time Communications Publication 1

Though the Nifty has sustained above 10631, it is
struggling above 10785. It is important for the Nifty to
continue to sustain above 10631 for regular buying
support to emerge and to once again test and close
above 10785. If the Nifty slips below the 10631, then
selling pressure is likely and it could test the 10396
level. The markets need regular and steady follow-up
buying support above 10785 for further gains to be
recorded.
Meanwhile, the markets will take cues from the
Federal Reserve meet, global markets, Dollar-Rupee
exchange rate, crude oil prices and the monsoon.
Technically, the Sensex faces resistance at the 35966,
36284 and 36444 levels and seeks support at the
35221, 35066, 34700, 34342, 34000, 33700 and 33055 levels. The resistance levels for the Nifty are placed at 10737,
10785, 10930, 11070 and 11131 while its support levels are placed at 10631, 10583, 10475, 10436 and 10396.

BAZAR.COM

Bulls grip the market

The way the market moved in the middle of the week, it was evident that the bulls are getting a hold on the market. Both
the Sensex and the Nifty are finding support at their respective lows and more importantly, the mid -caps and small-caps
which were butchered over the fortnight are gaining crucial support. Some of them have gained as high as 40 -50% from
their recent lows.
The market gave a thumbs-up to the corrective call taken by the RBI last week. The unanimity with which they decided
to hike rates was visible and so was the urgency, which was shown. The unanimous decision, a rarity among the
Monetary Policy Committee (MPC) members, to hike the rates comes after four years from the last hike. It stems from
the expectation of rising inflation in the coming months. The RBI has revised its CPI inflation forecast upwards to 4.8 -
4.9% YoY in H1FY19 from 4.7-5.1%. However, the GDP growth projection has been retained at 7.4% for the current
fiscal. The central bank’s neutral policy stance indicates that it may not be embarking on a tightening cycle. Though the
RBI’s next move will depend on fresh data, there is a possibility that it may hike rate by another 25 bps in the August
policy review. Many analysts and economists are of the opinion that growth as well as inflation are still heading higher
and may force further front-loading of the policy tightening. This may be required when crude oil prices move above
$80/barrel.
The market came in the bulls’ grip with the RBI’s optimism stemming from an improved investme nt outlook, robust
global demand and a pick-up in consumption. It also highlights risks from higher oil prices, geo political and trade
projectionist tensions and the volatility in the international markets. Surely with all this, the government will need t o
keep the fiscal deficit in check.
RBI led MPC’s pre-emptive move of hiking interest rates pushed the Indian Rupee (INR) to a one -month high against the
US dollar (USD). The INR on the day of the RBI meet closed at Rs.66.92 against the USD as against the previous day’s
close of Rs.67.14. No wonder the market took note of this positive fact, which was visible on the changing mood at Dalal
Street. On the day of the RBI meet, all the sectoral indices closed in the green - telecom (+3.02%); consumer durables
(+2.32%); metals (+1.72%); auto (+1.57%); realty (+1.47%); power (+1.45%); Capital Goods (+1.41%); PSU (+1.26%);
Health Care (+1.25%); Tech (+1.25%); FMCG (+1.12%); I.T. (+0.97%); and Banking (+0.57%). What bigger proof does
anyone need of the market reins shifting from the bears’ hands to the bulls’ hands!
Foreign funds have turned aggressive sellers in the Indian markets having pulled out over Rs.32078 crore in the first five
months of this calendar year. This makes it the highest outflow witnessed in the calendar year since 2008 when FPIs
pulled out Rs.41216 crore from the Indian markets. The reasons are not far -fetched. The depreciating value of the INR,
rising crude oil prices, higher bond yields in USA, sticky corporate earnings growth and fluid politic al scenario which
may lead to a ‘khichdi’ coalition are responsible for the net outflows of $2.1 bn in the last sixty days. The outflow is
coming from India dedicated off–shore funds, which are facing large redemptions. It is also observed that most of the ir
selling is in mid-cap stocks. If the Sensex and the Nifty are finding support at the current levels and the mid -caps and the

A Time Communications Publication 2

small-caps are reversing from their 52-week lows despite such a large pull back, it just proves that the reins of the
market are in the hands of the domestic players.

TRADING ON TECHNICALS

Resistance still hangs overhead

Sensex Daily Trend DRV Weekly Trend WRV Monthly Trend MRV
Last Close 35443 Up 34972 Up 34179 Up 31889
Last week, the Sensex opened at 35503.23, attained a low at 34784.68 and recovered to a high of 35628.48 before it
finally closed the week at 35443.67 thereby showing a net rise of 216.4 points. As expected, volatility was seen with an
indecisive candle at the end of the week. Last week was the 3 rd indecisive candle on back to back basis with a rise on
closing basis.
Daily Chart
Support gap is at 35278-35178.
Resistance is at 35628-35642.
The rise will continue if the Sensex sustains
above the open of the week and above the open
of the day to move higher towards 35993.
The higher zone of 35823-36443 will be of a
higher risk as profit-booking pressure or
selling pressure will emerge any time
surprisingly.
A fall and close below 34735 will resume the
downside momentum for a major lower top
formation and its confirmation.
Weekly Chart
The band of the movement is from 36000 to 34300.
On the weekly chart, the next major directional movement is outside the band of 36500 -34000.
Currently, the movement is likely to be sideways in the band and volatility with in the same is likely to be witnessed.
BSE Mid-Cap Index
Weekly chart:
A recovery candle at the end of the week will help to create a base for a near -term rise, which will be confirmed if the
index sustains above 16176.
Support will be at 15829-15621-15428.
Downside movement and momentum could continue on a fall and close below 15400.
For the time being, an attempt of reversal could be seen and the same will get confirmed if the index sustains above
16175.
BSE Small-Cap Index
Weekly chart:
A ‘Hammer’ has been formed, which suggests that further weakness is below 16092.
A swing bottom attempt is likely on confirmation of higher low and higher high with a bullish candle in the upcoming
week.
Strategy for the week
Traders who are long can maintain the stop loss at 34300. Selling could be seen at resistance levels. The downside
momentum is below 34300 and volatility between 34300 and 36000 is likely to be witnessed. Expect the rise to test
36000 and 36400. Resistance still hangs overhead. The overall objective r emains to book profits and exit long position at
the higher range of 36000-36500. Eventually, a breakout and close above 36500 is essential in order to extend the rally.

A Time Communications Publication 3

 WEEKLY UP TREND STOCKS
Let the price move below Center Point or Level 2 and when it move back above Center Point or Level 2 then buy with whatever low registered
below Center Point or Level 2 as the stop loss. After buying if the price moves to Level 3 or above then look to book profits as the opportunity
arises. If the close is below Weekly Reversal Value then the trend will change from Up Trend to Down Trend. Check on Friday after 3.pm to
confirm weekly reversal of the Up Trend.
Note: R1-(Resistance), R2- (Resistance), R3- Resistance, S1- Support & S2- Support

Weekly Up
Scrip Last Relative
S1 S2 - R1- R2- Reversal Trend
Close Strength
Value Date
Demand Demand
Weak below Supply point Supply point
point point
HINDUSTAN UNILEVER 1595 1547 1559.3 1582.7 1618.3 1677.3 73.6 1591.3 28-03-18
BRITANNIA INDUSTRIES 5918 5719 5758 5879 6039 6320 73.1 5781.8 28-03-18
FIRSTSOURCE
SOLUTIONS 79.10 71.3 73.7 76.7 82.2 90.7 69.5 74.2 28-03-18
MINDTREE 1027.95 967.6 984.7 1010.8 1054.1 1123.6 67.7 1016.3 08-06-18
INFOSYS 1260 1213 1228 1245 1277 1326 67.3 1223.3 18-05-18

*Note: Up and Down Trend are based of set of moving averages as reference point to define a trend. Close below
averages is defined as down trend. Close above averages is defined as up trend. Volatility (Up/Down) within Down
Trend can happen/ Volatility (Up/Down) within Up Trend can happen. Relative Strength (RS) is statistical
indicator. Weekly Reversal is the value of the average.
WEEKLY DOWN TREND STOCKS
Let the price move above Center Point or Level 3 and when it move back below Center Point or Level 3 then sell with whatever high registered
above Center Point or Level 3 as the stop loss. After selling if the prices moves to Level 2 or below then look to cover shor t positions as the
opportunity arises. If the close is above Weekly Reversal Value then the trend will change from Down Trend to Up Trend. Check on Friday after
3.pm to confirm weekly reversal of the Down Trend.
Note: R1-(Resistance), R2- (Resistance), R3- Resistance, S1- Support & S2- Support

Weekly Dow n
Scrip Last Relativ e
S1 S2 - R1- R2- Rev ersal Trend
Close Strength
Value Date
Demand Demand Supply Supply Strong
point point point point above
ADITYA BIRLA FASHION
AND RETAIL 139.45 123.6 134.4 140.2 145.3 146 36.52 143.41 18-05-18
J.K. LAKSHMI CEMENT 332.05 289 319.4 337.2 349.9 355 27.17 360.09 13-04-18
JET AIRWAYS (INDIA) 399.90 359 387.7 404.2 416.4 420.7 28.68 405.26 04-05-18
REDINGTON (INDIA) 117.60 106.5 113.9 117.7 121.4 121.5 30.35 121.96 20-04-18
IGARSHI MOTRS INDIA 725 615 694 742 773 790 30.74 771 18-05-18

*Note: Up and Down Trend are based of set of moving averages as reference point to define a trend. Close below
averages is defined as down trend. Close above averages is defined as up trend. Volatility (Up/Down) within Down
Trend can happen/ Volatility (Up/Down) within Up Trend can happen.
EXIT LIST
Note: R1- (Resistance), R2- (Resistance), R3- Resistance, S1- Support & SA- Strong Abov e
Scrip Last Close R1 R2 R3 SA S1 Monthly RS

THE PHOENIX MILLS 640 658.14 669 679.86 715 566.1 49.50
CITY UNION BANK 186.95 191.53 193.70 195.87 202.90 173.1 47.24
BIOCON 608.60 621.46 635.50 649.54 695 502.5 45.70
JMC PROJECTS (INDIA) 584 600.35 612.50 624.65 664 497.4 45.29

TOWER TALK
 Royal Enfield plans to launch an electric version of its motorcycle. A positive for Eicher Motors.
 After the acquisition of Italy's Aferpi and the winning bid for Monnet Ispat in the domestic market, JSW Steel looks
for more stressed assets to meet its 50 MTPA target. A good long-term buy.

A Time Communications Publication 4

 M. M. Forgings, which is
MID-CAP TWINS
due for allotting bonus
shares soon, is reportedly A Performance Review
faring well. Buy at the st
current level to take Have a look at the grand success story of ‘Mid-Cap Twins’ launched on 1 August 2016
advantage of a rebound in Sr. Scrip Name Recomm. Recomm. Highest % Gain
the market. No. Date Price (Rs.) since (Rs.)
 FMGC major Britannia 1 Mafatlal Industries 01-08-16 332.85 374.40 12
Industries is on a run. The 2 Great Eastern Shipping Co. 01-08-16 335.35 482.40 44
fact that the bear market 3 India Cements 01-09-16 149.85 226 51
could not dent its share 4 Tata Global Beverages 01-09-16 140.10 328.80 135
price indicates that there is 5 Ajmera Realty & Infra India 01-10-16 137.00 365.65 167
a lot of steam left in this 6 Transpek Industry 01-10-16 447.00 1687 277
counter. Buy. 7 Greaves Cotton 01-11-16 138.55 178 28
 Despite the temporary NIM 8 APM Industries 01-11-16 67.10 84.40 26
pressure, Rural 9 OCL India 01-12-16 809.45 1620 100
Electrification 10 Prism Cement 01-12-16 93.25 158.95 70
Corporation is poised to 11 Mahindra CIE Automotive 01-01-17 182.50 270.05 48
delivery excellent results 12 Swan Energy 01-01-17 154.10 235 52
going forward. Its current 13 Hindalco Industries 01-02-17 191.55 283.95 48
share price is inclusive of a
14 Century Textiles & Industries 01-02-17 856.50 1471.85 72
final dividend of Rs.1.75.
15 McLeod Russel India 01-03-17 171.75 248.30 44
The stock deserves a place
in every portfolio. 16 Sonata Software 01-03-17 191.00 386.40 102
17 ACC 01-04-17 1446.15 1869 29
 Punjab National Bank has
recovered about Rs.5600 18 Walchandnagar Industries 01-04-17 142.25 272.90 92
crore of bad loans in the 19 Oriental Veneer Products 01-05-17 222.30 728 227
first two months of this 20 Tata Steel 01-05-17 448.85 792.55 76
fiscal and targets a total of 21 Sun Pharmaceuticals Industries 01-06-17 501.40 608.55 21
Rs.20000 crore in H1. 22 Ujjivan Financial Services 01-06-17 307.45 432.05 40
These ambitious figures 23 Ashok Leyland 01-07-17 93.85 167.50 78
augur well for the bank. A 24 KSB Pumps 01-07-17 759.55 936 23
good buy. 25 IRB Infrastructure Developers 01-08-17 224.95 286 27
 With 23% revenue, 36% 26 JTL Infra 01-08-17 70 208 197
EBITDA and 61% PAT 27 Stock ‘A’ 01-09-17 187.40 308.90 65
growth, Alankit seems to 28 Stock ‘B’ 01-09-17 271.20 326.10 20
be a lucrative investment 29 Stock ‘C’ 01-10-17 73.65 97.50 32
bet for two years. 30 Stock ‘D’ 01-10-17 74.10 91.35 23
 Balrampur Chini Mills can 31 Stock ‘E’ 01-11-17 206 223.15 8
be bought on the back of 32 Stock ‘F’ 01-11-17 38 57.90 52
the huge Rs.7000 crore 33 Stock ‘G’ 01-12-17 194.65 196.80 1
package for the sugar 34 Stock ‘H’ 01-12-17 71.80 82.50 15
industry.
35 Stock ‘I’ 01-01-18 59.25 71.90 21
 Dilip Buildcon, which had 36 Stock ‘J’ 01-01-18 72.85 82.20 13
a dream run on the bourses 37 Stock ‘K’ 01-02-18 234.90 302.90 29
recently, suffered badly at
38 Stock ‘L’ 01-02-18 164.25 240.80 47
the hands of the bear
operators. But the worst 39 Stock ‘M’ 01-03-18 575.15 635.25 10
seems to be over for the 40 Stock ‘N’ 01-03-18 211.80 216.80 2
markets. Buy immediately Thus ‘Mid-Cap Twins’ has delivered excellent results since its launch.
for handsome gains. Latest edition of ‘Mid-Cap Twins’ was released on 1 June 2018.
 Arvind, which owns the
‘Arrow’ brand, plans to Attractively priced at Rs.2000 per month, Rs.11000 half yearly and Rs.20,000 annually,
invest Rs.1500 crore in an ‘Mid-cap Twins’ will be available both as print edition or online delivery.

A Time Communications Publication 5

 attempt to raise its garment output. An attractive buy.
 Alembic Pharmaceuticals has planned a Rs.720 crore capex for this year to complete its ongoing expansions. With
total expected filings to reach 26 from its formulations and API facilities, the company is in for better times ahead.
Buy.
 Time Technoplast has announced the launch of new generation multilayer pipes for power and communication
cable ducts. It has a small equity capital of less than Rs.23 crore and seems like a good long -term bet.
 FMGC major ITC, which notched revenues of over Rs.13000 crore in the last fiscal, reportedly has many new brands
in the pipeline. A good time to accumulate.
 The monsoon is set to start with a full throttle. Deepak Fertilisers Petrochemicals Corporation and Gujarat State
Fertilizers Corporation are excellent picks.
 Mayur Uniquoters reported strong numbers for Q4FY18. With new lines of productions starting soon, it could
notch an EPS of over Rs.24 in FY19 v/s Rs.21 in FY18.
 Dewan Housing Finance Corporation has seen a sizeable correction in this bear phase. All its divisions are
performing well and this stock can be bought for decent gains. Buy with a timeframe of 1 year.
 Hindustan Unilever is about to launch traditional breakfast and food in the local markets in an attempt to replace
the western cereals to Indian or healthier alternatives. A good buy.
 Omax Autos plans to expand its existing capacities. This auto ancillary company is due for a re-rating. Buy.
 Amara Raja Batteries and Exide Industries stand to gain immensely from the proposed big push for electric
vehicles. Excellent long-terms bet for patient investors.
 Thirumalai Chemicals, which hit a high of Rs.2437 a few months back, is available at a throwaway price of around
Rs.1550. Even a small rebound can push the company into a new orbit. Buy immediately.
 Housing finance major Housing Development Finance Corporation intends to raise $750 mn through ECBs
(external commercial borrowings) to finance onward lending to the housing sector. Accumulate this evergreen share
in small quantities.
 A sharp fall in Housing Development & Infrastructure depressed many retail investors. But the fall in share price
seems much higher than the actual issues in the company. The promoter recently infused money through a
preferential allotment at Rs.70/share and the company done a one- time settlement with Union Bank, Andhra Bank,
J&K Bank in the recent times. Its debt is also reducing. Moderate risk takers can buy this stock now.
 Hinduja Global Solutions is expected to notch an EPS of Rs.115+ in FY19 and Rs.128 in FY20. Some analysts have a
buy rating on the scrip with a target price of Rs.1200+.
 Indo-National (Nippo Batteries) reported an EPS of Rs.18/ Rs.60 in Q4FY18/ FY18. Its share book value is Rs.560
and the stock is poised to touch Rs.1000 in the medium-term.
 Some analysts are very bullish on Nestle India, which posted 38% higher PAT in Q1CY18. The stock is poised to
touch Rs.12000.
 Honeywell Automation is expected to notch an EPS of Rs.260 in FY18 and Rs.300+ in FY19 post expansion. The
stock is expected to touch Rs.25000.
 An Ahmedabad-based analyst recommends Acknit Industries, Ausom Enterprise, Dynamic Industries, Hisar
Metal Industries, H.P. Cotton Textile Mills, IOL Chemicals & Pharmaceuticals, Makers Laboratories, Pressman
Advertising, T I Global, Umang Dairies and Vijay Textiles.

BEST BET

Gujarat State Fertilisers & Chemicals Ltd

(BSE Code: 500690) (CMP: Rs.115.50) (FV: Rs.2)
By Bikshapathi Thota
Gujarat State Fertilisers & Chemicals Ltd (GSFC) was set up to manufacture agricultural nutrients to enable farmers to
shift to high yield products. Over the years, it has widened its product range, enhanced its manufacturing, marketing,
research and development processes to emerge as a leader in the fertilisers and industrial chemicals space. It is the
largest manufacturer of caprolactam, a chemical input used for the manufacture of nylon fibre. Benzene is a key raw

A Time Communications Publication 6

material used for the manufacture of caprolactam and any change in its price impacts the overall profitability of the
company. The spreads between benzene and caprolactam have doubled over the last few quarters on account of lower
production in China and also due to the closure of Fertilizers and Chemicals Travancore Ltd (FACT) plant in India.
Caprolactam prices are expected to remain firm for the next few years as no new capacities are likely to be added. Also,
several European companies including BASF have shut down their caprolactam facilities.
With a market presence exceeding 45 years, GSFC has carved out an
Projects under consideration:
irreplaceable image for itself on the Indian marketing scene through
the integration of its technologies and innovative research. Its Project Location Expected Capacity
incessant strive for product diversification and value addition has Phosphoric Acid Sikka 1.65 lakh MTPA
created a product mix ranging from more than 24 brands of Sulphuric Acid Sikka 6 lakh MTPA
fertilizers to petrochemicals, chemicals, industrial gases, plastics, Amonia Dahej 7.26 lakh MTPA
fibers and other products. Conforming to strict international Urea Dahej 10 lakh MTPA
standards, it maintains best quality, superior packaging, prompt Caprolactam Dahej 1 lakh MTPA
deliveries and services of highest standards for every product. Melamine Dahej 40,000 MTPA
Investments: GSFC has solid hidden wealth in its investment MMA Dahej 50,000 MTPA
portfolio. The total value of its quoted investments is Rs.2500 crore. PMMA Dahej 25,000 MTPA
It holds stake in GNFC, Gujarat Alkalies and Chemicals, Gujarat Gas Nylon 6 Dahej 30,000 MTPA
and Gujarat Industries Power Company. It also holds investments in
other unlisted companies with a carrying cost of around Rs.500 crore.
GSFC’s fertiliser division has shown excellent volume growth and
improved margins and should get a fresh impetus with the onset of a Performance Review: (Rs. in crore)
normal monsoon. On the other hand, its ammonia plant is expected to Particulars FY17 FY18 FY19E
operate at full capacity, up from 80% capacity utilisation a few quarters Revenue 5533 6403 7568
back, adding sufficiently to its bottom-line. This will also help reduce the Expense 5055 5794 6586
power cost due to additional steam generation.
PBDT 478 610 735
Conclusion: Given the inherent strength of its hidden investment
Net Profit 419 475 554
portfolio, expected higher profitability and higher payout ratios in the
near future, the GSFC share definitely needs a fresh re-rating and EPS (Rs.) 10.5 12 14
valuation on the bourses. We recommend this stock for a price target of
Rs.170 (10x FY19E earnings + 50% of NAV in its quoted holdings) within a year.

STOCK WATCH
By Amit Kumar Gupta

Power Grid Corporation of India Ltd

(BSE Code: 532898) (CMP: Rs.198.50) (FV: Rs.10) (TGT: Rs.230+)
Founded in 1989, Gurgaon-based Power Grid Corporation of India Ltd (PGCIL) (formerly National Power Transmission
Corporation Ltd) is a central transmission utility engaged in the transmission of power. It is involved in planning,
implementation, operation and maintenance of inter-state transmission system, telecom and consultancy services. As at
31 July 2016, it owned and operated 1,39,077 circuit (ckms) of transmission lines and 219 substations with
transformation capacity of 2,89,543 mega volt ampere (MVA). It also provides consultancy services in the areas of power
transmission, sub-transmission, distribution management, load dispatch and commu nication markets. Its consultancy
services include system engineering and feasibility studies, environmental and social impact assessment, design and
engineering, contract services, project management, construction supervision, owner's and lender's enginee r and other
services. It offers consultancy services to state-owned utilities, private utilities, central public sector undertakings and
government departments in Afghanistan, Bangladesh, Bhutan, Congo, Ethiopia, Nigeria, Nepal, Kazakhstan, Kenya, the
Kyrgyz Republic, Myanmar, Pakistan, Senegal, Sri Lanka, Tajikistan, Tanzania, UAE and Uzbekistan.
PGCIL continued to deliver a good performance in Q4FY18 with 4.6% YoY higher PAT of Rs.2000 crore v/s our estimate
of Rs.2200 crore on account of higher CSR expenses of Rs.83 crore and provisioning worth Rs.66 crore pursuant to the
final tariff orders. Its revenue grew 16.5% YoY to Rs.7800 crore led by ~16% YoY growth in the transmission segment
(which now contributes 92% to total revenue) to Rs.7460 crore owing t o strong capitalisation growth.

A Time Communications Publication 7

While the telecom businesses grew 20% to Rs.150 crore in Q4FY18, consultancy income grew to Rs.190 crore from
Rs.140 crore in Q4FY17. In the consultancy business, it received 25 new orders in FY18 while 8 new assignments were
secured in the international business. Notably, its telecom business network expanded to 23 new cities as at FY18 end.
Reported PAT rose by just 4.6% YoY to Rs.2000 crore v/s our estimate of Rs.2 200 crore on account of a substantial rise
in depreciation cost (+16.6% YoY) and interest cost (+28.9% YoY) due to project commissioning. EBITDA margin
contracted by 24 bps YoY to 83.5% owing to a substantial 47.7% YoY rise in other expenses led by higher forex charges
and CSR expenses (Rs.83 crore).
PGCIL’s capitalisation remained lower at Rs.8360 crore in Q4FY18 owing to delay in receipt of certain approvals. Hence,
falling short of its FY18 capitalisation guidance of Rs.30000 crore, it eventually ended F Y18 with capitalisation of
Rs.27900 crore. Total work in hand is pegged at Rs.11000 crore, which includes ongoing projects (Rs.75000 crore), new
projects (Rs.2500 crore), GoI consultancy works (Rs.16000 crore) and TBCB projects (Rs.16500 crore).
Technical Outlook: The stock looks good on the daily chart for medium-term investment. It has formed a saucer pattern
on the daily chart and a close above Rs.215 will lead the rally to higher prices. The stock trades above all important
moving averages like the 200 DMA level on the weekly chart.
Start accumulating at this level of Rs.198.50 and on dips to Rs.184 for medium -to-long-term investment and a possible
price target of Rs.230+ in the next 12 months.
*******

Torrent Pharmaceuticals Ltd

(BSE Code: 500420) (CMP: Rs.1411.10) (FV: Rs.5) (TGT: Rs.1600+)
Founded in 1959, Ahmedabad-based Torrent Pharmaceuticals Ltd (TPL) is a subsidiary of Torrent Pvt Ltd engaged in
the research, development, manufacturing and marketing of generic pharmaceutical formulations. It offe rs products in
various therapeutic areas including cardiovascular, central nervous system, gastrointestinal, diabetology, anti -infective,
pain management, nephrology, oncology, gynaecology, pediatric, wound care and nutraceuticals. It also provides
contract manufacturing services.
TPL has delivered a healthy set of numbers for Q4FY18 led by a strong growth in the domestic business. While its
revenue grew 20.1% YoY to Rs.1720 crore, PAT grew 10.7% YoY, which adjusted for the one -off surge by 26.7% YoY to
Rs.260 crore. EBITDA grew 23.4% YoY to Rs.360 crore and adjusted for one -time expenses of Rs.50 crore – relating to
the M&A activity, which was included in other expenses – EBITDA margin expanded by 340 bps YoY to 24%. Gross
margin rose by 728 bps to 73.1% led by higher contribution of the branded business and lower base in Q4FY17. Led by
revenue contribution from Unichem, its domestic business grew 48% YoY, which adjusting for GST -led accounting
change surged by 54% YoY. Its domestic business ex-Unichem grew 11% YoY, which adjusted for GST grew 17% YoY.
The management stated that Unichem’s key brands i.e. Unienzyme and Losar are showing sales improvement.
Highlighting that sales growth of Unichem’s business is still slow, the management expects full integrati on by FY19 end.
Despite re-stocking post the GST roll-out, inventory is yet to match the pre-GST level (18 days v/s 21 days.)
While its Brazil business remained flat, the US and RoW (rest of the world) businesses grew 9% and 13% respectively.
The US business grew on the back of improved volumes of existing products and contribution of Bio-Pharm. TPL has
filed 13 ANDAs in FY18. Expecting healthy growth in the US business, the management looks forward to $200 -300 mn in
sales, driven by new product launches.
Looking ahead, we expect TPL’s domestic formulations business to clock 27.1% CAGR over FY18 -20E led by Unichem
acquisition while Brazilian and RoW businesses are expected to record 10% and 15% CAGR respectively. We expect its
sales, EBITDA and PAT to clock 20%, 28% and 43% CAGR respectively and EBITDA margin to expand by 297 bps to
25.4% through FY18-20E.
Technical Outlook: The stock looks very good on the daily chart for medium-term investment. It has formed an
ascending triangle pattern on the daily chart and a close above Rs.1425 will lead the rally to higher prices. The stock
trades above all important moving averages like the 200 DMA level on the weekly chart.
Start accumulating at this level of Rs.1411.10 and on dips to Rs.1356 for medium -to-long-term investment and a
possible price target of Rs.1600+ in the next 12 months.

A Time Communications Publication 8

 STOCK ANALYSIS

Tata Motors Ltd

(BSE Code: 500570) (CMP: Rs.310.05) (FV: Rs.2)
By Rahul Sharma
Company Background:
The $42 bn Tata Motors ‘BEAT THE STREET 6’
group is a leading
automobile An eye-catching performance in any kind of market
manufacturer that
includes a wide range of 20th edition of ‘Beat the Street 6’ published on 12/03/18
cars, sports vehicles, Scrip Name Recomm. Rate (Rs.) Highest since (Rs.) % Gain
trucks, buses and Larsen & Toubro 1309.85 1424.50 9
defence vehicles. Its Mahindra & Mahindra 737.20 932.45 26
marquee is found in on
Bharat Forge 735.05 783.90 7
and off-road across
Kalpataru Power Transmission 463.75 507 9
175+ countries around
InterGlobe Aviation 1277.20 1520 19
the globe. It is a part of
PSP Projects 463.85 596 28
the $100 bn Tata group
founded by Jamshedji 19th edition of ‘Beat the Street 6’ published on 11/12/17
Tata in 1868. It is India's
largest automobile Scrip Name Recomm. Rate (Rs.) Highest since (Rs.) % Gain
manufacturer and it Larsen & Toubro 1219.30 1469.60 20
continues to take the Mahindra & Mahindra 1388.95 1571.15 13
lead in shaping the Torrent Power 272.45 306.95 13
Indian commercial Jamna Auto Industries 66.80 103.20 54
vehicle (CV) landscape, Godawari Power & Ispat 187.60 623 232
with the introduction of Mastek 392.45 619.30 58
leading-edge power
trains and electric 18th edition of ‘Beat the Street 6’ published on 11/09/17
solutions packaged for
Scrip Name Recomm. Rate (Rs.) Highest since (Rs.) % Gain
power performances
Dilip Buildcon 593.90 1248.35 110
and user comfort at the
lowest life-cycle costs. DCM Shriram 431.05 628.05 46
Its new passenger cars Ashok Leyland 115.05 167.50 45
and utility vehicles are Bharat Forge 1161.60 1290 11
based on impact design Tata Sponge Iron (ABP) 893.80 1248 40
and offer a superior H T Media 102.30 118.50 16
blend of performance,
The Indian stock market offers an excellent opportunity to grow your wealth. The market
drive ability and
connectivity. has corrected from its all-time high level due to the macros. We are in the middle of a long-
term bull run and this correction provides a great opportunity to reshuffle your portfolio. As
Tata Motors is a classic
the macros are against the bulls, 2018 will be extremely difficult to make money.
example of a value pick
As many companies have posted fantastic numbers in FY18, many have improved their
as its share price has
operating performance due to GST and demonetisation.
fallen steeply. We are
This is thus the right time to pick good quality stocks before the next leg of the rally!
closely watching its
margin recovery The next issue of ‘Beat the Street 6’ will be published on 11 June 2018.
especially post the weak
result in UK/Europe We have selected 6 strong stocks that could yield handsome returns in coming days.
markets from JLR. JLR So don’t wait, subscribe to ‘Beat the Street 6’ today.
retail volumes declined Subscription Rate: 1 Qtr: Rs.2000, 2 Qtrs: Rs.3500, 3 Qtrs: Rs.5000, 4 Qtrs: Rs.6500.
8% YoY in March 2018 For payment details, refer to the subscription form.
led by 16-26% volume
decline in UK/Europe.

A Time Communications Publication 9

While new models like E-pace and Velar have done well, this was more than offset by a steep decline in volumes of
existing models. China volumes grew 11% YoY, driven by the continued ramp-up of local production in Chery JV
(volumes up 24% YoY) while volumes of imported models declined 3% YoY. China might offset volume weakness in
UK/Europe.
We expect consolidated revenues to grow at 13% CAGR over FY18-20E to Rs.375343 crore, driven by JLR’s revenue
growth of 12% at £32.2 bn over the same period. On the domestic front, we expect revenues to rise at 17% CAGR to
Rs.80528 crore by FY20E.
JLR’s product story is likely to continue. The management has given a capex guidance of ~£4.5 bn towards new products,
technology and expansion. It expects capex to remain in the range of 15 -17% of sales in the medium term on significant
investments in platform development.
Tata Motors remains a unique case with a combination of high leverage CV business along with a financial dragger on
the PV side. On the other hand, on the global front with JLR, it is one of the most profitable luxury carmakers in the
world. The variation is excellent with the number of levers towards EBITDA ranging from financial leverage to operating
leverage to product mix as well as market mix. We expect JLR’s EBITDA margins to improve to 13.1% by FY20E. In the
domestic business, we expect PAT to be positive by FY19E.
Return ratios have declined since FY12, primarily due to the significant investments in both the JLR and domestic
business, with the latter failing in generating strong returns. Going ahead, we expect high JLR margins to positively
impact the return ratios. At the consolidated level, we expect PAT of Rs.14800 crore in FY20E.
Conclusion: Tata Motors’ business is skewed towards the global business of JLR. We believe that with JLR’s product
line-up and planned product refreshes, the market share march is likely to continue. We remain positive on the
sustained earnings growth for the JLR business on the back of its product pipeline and rising market share across
geographies. We value the stock on a SOTP (sum-of-the-parts) basis, with JLR on 2.8x EV/EBIDTA basis contributing
Rs.278/share (excluding JV) and the domestic business contributing Rs.86/share. Inclusive of other subsidiaries, we
arrive at a price target of Rs.450.

STOCK BUZZ
By Subramanian Mahadevan

Karur Vysya Bank: Focused lending

(BSE Code: 590003) (CMP: Rs.104.60) (FV: Rs.2)
KarurVysya Bank (KVB) is a mid-sized bank in the private sector space that operates through a network of 790+
branches with 2,300+ ATMs and cash recyclers. 82% of its business is concentrated in South India wi th ~73% of its
branch footprint in Tamil Nadu and Andhra Pradesh. As at Q4FY18, its total business was Rs.1029 bn. The bank is
capitalized with a total CAR of 14.4% (Basel-III). Gross NPAs were reported at 6.56% with provision coverage ratio
(PCR) of 56.5%.
The bank has a diversified loan book and is working towards increasing the share of its granular exposure through
adoption of technology. It is consciously reducing the average ticket size of its corporate as well as commercial banking
exposure. Internal risk management is being strengthened to improve the quality of its portfolio. It is focused on risk
adjusted growth and it expects a near-term growth in the mid-teens.
The new CEO (ex- Citi banker) is focused on new hires, technology implementation and risk management to give the
institution a more agile and modern look. Asset quality issues might linger for a couple of quarters but these issues are
nearing an end. Given that the bank is well capitalized, it can strengthen its presence in the segments w here PSU banks
are giving up market share. The stock trades at attractive valuations of 1.1x FY19 book and 1.4x FY19 adjusted book. The
stock can be accumulated for at least 50% returns in the next two years.
*******

Idea Cellular Ltd: Signal strong!

(BSE Code: 532822) (CMP: Rs.63.95) (FV: Rs.10)
Idea Cellular Ltd (Idea), an Aditya Birla group company, is India’s third largest wireless operator with a revenue market
share of more than 20%. It is a leading GSM mobile services operator with over 72 million su bscribers under the brand
‘Idea’. It operates in all the 22 telecom circles of which 15 are classified as established service areas and 7 as new servic e
areas. It is a pan India integrated GSM operator covering the entire telephony landscape of the country with NLD

A Time Communications Publication 10

(National Long Distance) and ILD (International Long Distance) operations. It offers affordable and world -class mobile
services besides basic voice and SMS services to high-end value added and general packet radio service (GPRS) services
such as Blackberry, Datacard, Mobile TV and Games.
In 2015, Microsoft had tied up with Idea to launch operator billing on the Windows Store for the latter’s subscribers.
Idea has successfully retained the crucial 900 MHz spectrum and won 54 MHz of the 900 MHz spe ctrum. Videocon
Telecommunications had sold its spectrum in Gujarat and Uttar Pradesh (West) circles to Idea at a valuation of Rs.3310
crore during the same year.
Idea had launched high-speed 4G and 4G LTE services in all the four telecom service areas of South India. The big-bang
entry of Reliance Jio and unceremonious death of regional operator – Aircel and national player – Reliance
Communications forced the telecom industry for consolidation enabling Vodafone and Idea to join hands for merger.
Pricing power will emerge soon where existing players with good network will continue to make money. Buy now and
hold for two years to make up to 100% returns.

MARKET REVIEW

RBI hikes rate

By Devendra Singh
The Sensex advanced 216.41 points to settle at 35443.67 while the Nifty closed at 10767.70 rising 71.50 points for the
week ending Friday, 8 June 2018.
The Reserve Bank of India (RBI) on Wednesday, 6 June 2018, hiked the key lending or repo rate by 25 bps to 6.25% in its
second bi-monthly monetary policy review for FY18-19. The RBI said in its policy statement said that the reverse repo
rate under which the RBI borrows from banks was to 6%. The decision of the Monetary Policy Committee (MPC) is
consistent with the neutral stance of the monetary policy in consonance with the objective of achieving the medium-
term target for consumer price index (CPI) inflation of 4% within a band of +/ - 2% while supporting growth. It,
however, maintained a neutral stance in the policy statement and retained the GDP growth for FY18-19 at 7.4%.
The RBI stated that the sharp rise in petroleum product prices is likely to impact disposable incomes. It also said that
domestic economic activity has exhibited sustained revival in the recent quarters and the output gap has almost closed .
Investment activity in particular is recovering well and could receive a further boost from swift resolution of distressed
sectors of the economy under the Insolvency and Bankruptcy Code.
“With improving capacity utilization and credit off-take, investment activity is expected to remain robust even as there
has been some tightening of financing conditions in the recent months. Global demand has also been buoyant, which
should encourage exports and provide a further thrust to investment. Besides, consumpti on both rural and urban
remains healthy and is expected to strengthen further”, the RBI added.
It also said that geo-political risks, global financial market volatility and the threat of trade protectionism pose
headwinds to the domestic recovery.
On the macro-front, the Indian economy grew 7.7% in January-March 2018, the fastest in nearly two years signaling a
quick turnaround aided by rapid construction activity, consumer spending and corporate investment. The new estimates
firmly cements India’s place as the fastest growing major economy ahead of China’s 6.8% growth in Q4FY18. For FY18,
India grew at 6.7%, the slowest in the last four years.
The central statistics office (CSO) estimates showed that Gross Value Added (GVA) grew 6.5% in 2017 -18, slower than
the previous year’s 7.1%. In Q4FY18, GVA grew at 7.6%, up from 6% percent a year ago.
The manufacturing sector grew 9.1% during Q4FY18 from 6.1% growth in the previous corresponding period and 8.5%
in October-December. Similarly, construction witnessed a massive jump of 11.5% from a de-growth of 3.9% a year ago.
Aditi Nayar, Principal Economist at ICRA, said that the sharp uptick in the construction GVA growth in Q4FY18 benefited
from the trend in its inputs such as cement and steel consumption a nd activity in the infrastructure sector (including
affordable housing) even as real estate and industrial capex is yet to pick up and consumer sentiment is yet to recover
appreciably.
The national income data showed that Gross Fixed Capital Formation (GFC F), a useful metric to measure corporate
investment activity, grew 14.4% at current prices during the January-March quarter, due to 9% growth in capital goods.
Private final consumption expenditure (PFCE) grew at 6.6% in FY17 -18, the lowest in last three years. Government final
consumption expenditure (GFCE) or government expenditure grew 10.9% in FY18 and 16.8% in Q4FY18.

A Time Communications Publication 11

Farm sector output grew 4.5% in Q4FY18 v/s 7.1% in Q4FY17 and 3.1% in Q3FY18. However, mining and quarrying
output fell to 2.7% in January-March from a robust 18.8% percent a year ago.
On the EXIM front, India’s exports are expected to record a growth of about 15 -20% and touch $350 billion in the
current fiscal on account of a host of factors including rise in commodity prices. In FY17 -18, exports were $303 billion.
Moody’s Investors Service report has cut India’s GDP growth forecast to 7.3% from the previous forecast of 7.5% due to
higher oil prices and tighter financial conditions. The Indian economy is in cyclical recovery led by both in vestment and
consumption. However, higher oil prices and tighter financial conditions will weigh on the pace of acceleration.
“We expect GDP growth of about 7.3% in
2018, down from our previous forecast
of 7.5%. The growth expectation for
2019 remains unchanged at 7.5%” the
report said.
The ongoing transition to the new GST
regime could also weigh on growth
somewhat over the next few quarters,
which poses some downside risk to its
forecast. However, we expect these
issues to moderate over the course of the
year, the agency added.
On the monsoon front, India's weather
office defines average or normal rainfall
as between 96% and 104% of a 50-year
average of 89 cm for the entire four-
month season beginning June. Monsoon
rains are likely to be unaffected by the El
Nino weather pattern, which is expected
to set in only after the four-month rainy
season ends in September. In 2017,
monsoon rains were 95% of the long-
term average compared to forecasts of
98%.
Key index fell on Monday, 4 June 2018,
on selling by foreign funds. The Sensex
was down 215.37 points to close at
35011.89.
Key index fell on Tuesday, 5 June 2018,
on negative cues. The Sensex was down
108.68 points to close at 34903.21.
Key index advanced on Wednesday, 6
June 2018, on fresh buying of equities.
The Sensex was up 275.67 points to close
at 35178.88.
Key index surged on Thursday, 7 June
2018, on fresh buying of equities by the
FIIs. The Sensex was up 284.20 points to
close at 35463.08.
Key index gained on Friday, 8 June 2018,
on extended buying. The Sensex was up
19.41 points to close at 35443.67.
National and global macro-economic
figures and events will dictate the
movement of the markets and influence

A Time Communications Publication 12

investor sentiment in the near future. The movement of rupee (INR) against the US dollar (USD) and crude oil prices will
be closely watched by market participants.
On the inflation data, the government is scheduled to release data based on wholesale price index (WPI) and the
combined consumer price indices (CPI) for urban and rural India for May 2018 by mid-June 2018.

EXPERT EYE
By Vihari

Yes Bank: Banking on growth

(BSE Code: 532648) (CMP Rs.337.60) (FV Rs.2)
Yes Bank has reported a better than expected performance for Q4FY18 with an EPS of Rs.5 despite the difficult
period witnessed by the banking sector.
Yes Bank Ltd, India's fourth largest private sector bank with Total Assets of over Rs.3000 bn, is an outc ome of the
professional entrepreneurship of Rana Kapoor (Founder) and his top management team to establish a high quality,
customer centric, service driven, private sector Indian bank catering to the ‘Future Businesses of India’. Its core Retail
Advances have grown at 122% CAGR over FY15-18 to constitute 12.2% of the Total Advances while CASA has grown at
51% CAGR to constitute 36.5% of the Total Deposits.
The Bank has 1,110 Branches across key liability corridors with an ATM network of 1,800 as at 31 March 2018. It has
presence across all 53 Metros, 29 States and 7 Union Territories, 13 Metro/Urban and 3 dedicated RIBB regions. It has a
headcount of 18,132 with an average age of 32 years.
The Bank reported a very strong set of numbers for Q4FY18.
Net interest income (NII) grew 31.4% YoY to
Rs.2154.2 crore while the non-interest income
grew 13% YoY to Rs.1421 crore. Net interest One more successful year for
margin (NIM) stood at 3.4%. Gross NPA (non- TF+ subscribers…
performing asset) ratio dropped to 1.28% v/s
1.52% in Q4FY17. Similarly, net NPAs “Think Investment… Think TECHNO FUNDA PLUS”
dropped to 0.64% from 0.81% in Q4FY17. Of
the earlier reported NPA divergence of Techno Funda Plus is a superior version of the Techno Funda column that
Rs.6355.2 crore, Rs.2434 crore has already has recorded near 90% success since launch!
been paid (fully or partially) and Rs.2632
crore is upgraded to the standard account due Every week, Techno Funda Plus identifies three fundamentally sound and
to a satisfactory performance. technically strong stocks that can yield handsome returns against their
peers in the short-to-medium-term.
Advances of the bank grew 53.9% YoY to
Rs.2.03 lakh crore on the back of robust Most of our recommendations have fetched excellent returns to our
growth across corporate, MSME (micro, small subscribers. Of the 156 stocks recommended between 11 January 2016
& medium enterprises) and retail businesses. and 2 January 2017 (52 weeks), we booked profit in 125 stocks, 27
Retail banking advances grew 99.1% YoY. Its triggered the stop loss.
proportion to total advances rose to 12.2% at
the end of March 2018 from 9.4% in March Of the 156 stocks recommended between 9 January 2017 and 1 January
2017. Deposits grew 40.5% YoY to over Rs.2 2018 (52 weeks), we booked 7-41% profit in 119 stocks, 24 triggered the
lakh crore, with CASA ratio at 36.5%. stop loss of 2-18% while 13 are still open. Out of 13, 11 stocks are in
green & 2 stocks are in nominal red.
During the quarter, PAT jumped 29% to
Rs.1179.4 crore on 27% higher total income of If you want to earn like this,
Rs.7164 crore. EPS was Rs.5.1. For FY18, PAT
climbed 27% to Rs.4233 crore on 24% higher
subscribe to TECHNO FUNDA PLUS today!
income of Rs.25562 crore. EPS was Rs.18.4 For more details, contact Money Times on
and a dividend of 135% was declared. 022-22616970/22654805 or moneytimes.support@gmail.com.
With an equity capital of Rs.460.6 crore and
reserves of Rs.25297 crore, Yes Bank’s share Subscription Rate: 1 month: Rs.2500; 3 months: Rs.6000;
6 months: Rs.11000; 1 year: Rs.18000.
book value works out to Rs.95. The promoters
hold 20% of the equity capital, FIIs hold

A Time Communications Publication 13

42.6%; DIs hold 24.8% and PCBs hold 2.2%, which leaves 10.4% stake with the investing public.
The Bank has intensified its focus and is investing significantly on new -age media and digital technologies to achieve a
better customer engagement and experience. It has launched key digital initiatives in partnership with e -commerce
companies revolutionizing the payments ecosphere through various initiatives. It has demonstrated the ability to raise
capital across cycles, reflecting excellent market appetite for Yes Bank capital qualifying bonds. It recently raised
Rs.7000 crore in FY18 through private placement of Basel-III Tier-II Bonds in two tranches and also raised Rs.5415
crore in FY18 through the issue of Basel-III complaint additional Tier-I. It raised $600 mn for 5-year Tenor under its
$1000 mn MTN Program, which was the largest international bond issuance by an Indian bank.
Yes Bank’s business continues to be on track with healthy accretion to loans and deposits, sustain ed asset quality and
healthy operating efficiencies from older branches. The current legal tangle involving the promoter entities has not
affected its business. The Bank continues to grow its assets and add low -cost deposits at a fast clip, focus on expanding
coverage of retail products across branches and increased efforts to maintain its superior credit quality.
Yes Bank is a leveraged play on the economic growth revival and lower interest rates and its outlook continues to
improve, albeit gradually. Post de-regulation of savings bank rates, the Bank’s major focus is on improving the CASA
ratio through its celebrated offering of 6% interest on savings balances.
NIMs will continue to improve in the medium-term and with healthy fee incomes, it could lead to ROEs of 20-22% by
FY20E. The Bank targets to achieve NIM of 4% by 2020 v/s 3.6% currently. The improving CASA ratio and enhanced
organic priority sector loan generation is expected to support improvement in margins.
The Bank is confident of improving CASA ratio to 40% by September 2018, well ahead of the earlier targeted timing of
FY20 while it expects CASA ratio to touch 43-45% by FY20. It will continue to focus on diversification in liabilities and
on building a more granular asset base.
Asset growth, primarily driven by credit substitutes in FY09-17, is driven by loans as lower interest rates make it
attractive to sell-down corporate bonds. The Bank has been incrementally lending to low ticket size SMEs and MSMEs as
demand in the large corporate segment shifts to corporate bonds.
Yes Bank’s key competitive strength lies in its book, which remains predominantly wholesale and it continues to
leverage that. Despite being a relatively new bank, its domestic corporate book is now nearly as large as many of the
older banks. This will probably be the fastest growing segment over the next 2 -3 years (over retail) and the Bank’s
positioning in this segment is better.
Given its robust profitability profile, strong outlook on balance sheet growth and proven record of accomplishment, the
Yes Bank stock is expected to continue to command premium valuations versus its peers.
Yes Bank is set to post an EPS of Rs.23.7 in FY19 and Rs.27.5 in FY20. At the CMP of Rs.337.60, the stock trades at a P/E
of 14.24x and P/BV of 2.6x on FY19E earnings and a P/E of 12.27x and P/BV of 2.2x on FY20E earnings. A reasonable
P/E of 18.67x (industry P/E is 33.03x) will take its share price to Rs.474 in the medium -term and Rs.550 thereafter.

MARKET OUTLOOK

Buy on dips; 10660 now a major support

By Rohan Nalavade
In the previous edition, we had stated that if the Nifty crosses the major support of 10500, it will head towards 10660
(an important Gann level) and we did see the Nifty move up 200 points in the last 3 trading days. Technically, the Nifty is
moving in a ‘higher high and higher close’ pattern on the weekly chart as it closed at 10767 last week, higher than the
previous weekly close of 10696.
Many stocks rallied last week. Prominent among them were Reliance Industries, Petronet LN G, Tata Motors, State Bank
of India, Punjab National Bank. The monsoon has arrived and forecast of a good monsoon is a positive for the market.
The Nifty may test 10900-10950 levels soon. The trend could reverse only below 10610. So above 10610, accumulate on
dips. Crude oil prices seem to have bottomed out. The Metals sector looks strong.
Among stocks,
 Mahanagar Gas looks strong above Rs.840 for a target of Rs.880-900 (SL: Rs.810)
 State Bank of India looks good above Rs.270 for a target of Rs.285-290 (SL: Rs.263)
 UPL looks good above Rs.710 for a target of Rs.730-740-750 (SL: Rs.694)

A Time Communications Publication 14

Learn ‘square of 9 intraday trading strategies’ in our upcoming W.D. Gann session on Saturday, 16 June 2018. To
know more, please contact us on 9769212176 and book your seats.

TECHNO FUNDA
By Nayan Patel

Nahar Capital & Financial Services Ltd

(BSE Code: 532952) (CMP: Rs.124.90) (FV: Rs.5)
Incorporated in 2006, Ludhiana-based Nahar Capital & Financial Services Ltd (NCFS) is a non -deposit taking non-
banking financial company (NBFC) engaged in investment/financial activities. It invests in various financial securities
including equity, bonds, debentures, commodity, term deposits and securities of various kinds issued by companies,
banks, mutual funds and other authorities as well as central, state, municipal and local bodies. It provides lending
services against liquid securities such as shares, government bonds, gold, property and other assets. It is involved in the
real estate business.
With an equity capital of Rs.8.37 crore and reserves of Rs.671.9 crore (almost 80x its equity), its share book value works
out to Rs.408.4 and its P/BV ratio stands at just 0.3x. The promoters hold 70.42% of the equity capital, which leaves
29.58% stake with the investing public. Ace small-cap investor Subramanian P holds 1.49% stake in the company.
For Q4FY18, NCFS reported 55% higher PAT of Rs.6.2 crore on Financial Performance: (Rs. in crore)
higher income of Rs.9.23 crore with an EPS of Rs.3.7. During Particulars Q4FY18 Q4FY17 FY18 FY17
FY18, PAT rose 13% to Rs.28.55 crore on higher income of
Total Revenue 9.23 5.49 40.93 33.42
Rs.40.93 crore with an EPS of Rs.17.05. It paid 30% dividend for
PBT 7.19 4.45 34.05 30.02
FY17.
Tax 0.99 0.46 5.5 4.72
As at FY17, NCFS had a portfolio of Rs.481 crore comprising
PAT 6.20 3.99 28.55 25.30
blue-chip companies like L&T Finance Holdings, IDFC, etc. Apart
from equity, it has substantial investments in debt and equit y EPS (in Rs.) 3.70 2.38 17.05 15.11
mutual funds.
Currently, the stock trades at a P/E of just 7.33x and is available at around 45% discount to its 52-week high of Rs.227
recorded in December 2017. Based on all these parameters, the stock looks quite attractive for investment at the curre nt
level. Investors can buy this stock with a stop loss of Rs.100. On the upper side, it could zoom to Rs.155 -170 levels in the
medium-to-long-term.
*******

PBM Polytex Ltd

(BSE Code: 514087) (CMP: Rs.81.10) (FV: Rs.10)
Incorporated in 1919, Vadodara-based PBM Polytex Ltd (PBM) manufactures, processes, exports and sells cotton yarns.
It offers single and TFO doubled yarns. It also generates electricity through windmills. It has installed indigenous as well
as imported machinery sourced from world-class manufactures like Lakshmi Machine Works (Coimbatore), Luwa
(Switzerland), Vouk (Italy), Schlafhorst (Germany), Zellweger Uster (Switzerland) and Murata (Japan).
PBM has an equity capital of Rs.8.13 crore supported by reserves of Rs.102.85 crore. The promoters hold 74.16% of the
equity capital, which leaves 25.84% stake with the investing public. Ace small -cap investor Subramanian P holds 1.24%
stake in the company. Its share book value is Rs.147 and P/BV ratio is just 0.58x, which is attractive and the lowest
amongst its peers.
For Q4FY18, PBM reported PAT of Rs.4.46 crore on sales of Financial Performance: (Rs. in crore)
Rs.49.52 crore with an EPS of Rs.5.5. During FY18, it reported Particulars Q4FY18 Q4FY17 FY18 FY17
PAT of Rs.7.14 crore on sales of Rs.196.98 crore with an EPS of Sales 49.52 61.46 196.98 179
Rs.8.8. It declared 35% dividend for FY18 as against 30% for PBT 2.36 5.63 6.32 12.80
FY17. This clearly indicates that the management is optimistic Tax -2.1 1.46 -0.82 2.97
about the company’s future. At the current share price, this PAT 4.46 4.17 7.14 9.84
results in a dividend yield of 4.3%. EPS (in Rs.) 5.49 5.13 8.78 12.11

A Time Communications Publication 15

Currently, the stock trades at a P/E of 9.24x and is available at around 34% discount to its 52-week high of Rs.123.80
recorded in December 2017. Based on all these parameters, the stock looks quite attractive for investment at the current
level. Investors can buy this stock with a stop loss of Rs.70. On the upper side, it could zoom to Rs.115 -125 levels in the
medium-to-long-term.

BULL’S EYE

National Plastic Industries Ltd

(BSE Code: 526616) (CMP: Rs.53.90) (FV: Rs.10)
By Pratit Patel
Company Background: Incorporated in 1952, National Plastic Industries Ltd (NPIL) manufactures and markets
injection moulded plastic products, mainly furniture and household items, under the brand ‘National’. It is not only a
leading manufacturer of house ware products but also the largest exporter of plastic furniture in India. It offers a varied
range of products that suit all applications and different budgets. The brand is well known for its quality, color and
finishing. It is also engaged in the PVC flooring mats business at Nellore in Andhra Pradesh under the brand ‘INSTA’. It
also manufactures air coolers for various brands.
Financials: NPIL has an equity capital of Rs.9.13 crore backed by huge reserves of Rs.17.98 crore. The promoters hold
56.66% of the equity capital, which leaves 43.34% stake with the investing public. Ace small -cap investor Subramanian
P holds 1.36% stake in this company.
Performance Review: (Rs. in crore)
Performance Review: During FY18, NPIL reported
Particulars Q4FY18 Q3FY18 Q4FY17 FY18 FY17
PAT of Rs.3.25 crore against a loss of Rs.0.15 crore in
FY17 on 13% higher sales of Rs.122.5 crore with an Total Income 32.39 26.26 36.15 122.5 108.84
EPS of Rs.3.56. It pays dividends regularly and declared PBT 1.45 1.13 0.90 4.23 3.01
10% dividend for FY18. During Q4FY18, it reported Tax 0.98 - 3.03 0.98 3.03
PAT of Rs.0.47 crore against a loss of Rs.2.13 crore in
PAT 0.47 1.13 -2.13 3.25 0.15
Q4FY17 on sales of Rs.32.39 crore with an EPS of
Re.0.51. EPS (Rs.) 0.51 1.23 -2.33 3.56 0.02
Industry Overview: The Indian furniture market is estimated to be over Rs.60000 crore. The industry is primarily
dominated by the unorganized sector, which constitutes 85% of the market. The moulded plastics industry is one of the
fastest growing industries substituting materials like wood, ferrous and non -ferrous metals and penetrating major
sectors like agriculture, building and construction, transportation, communication, power, etc. Since plastic products are
economical, durable and versatile, which enables them to suit user requirement, the future of the plastic industry looks
bright.
Currently, the per capita consumption of plastic in India
is just around 4 kgs p.a. as against the world average of Do you know the 15 x 15 x 15 rule of
around 25 kgs p.a. The middle and low-income
segments are the major consumers of moulded plastic mutual funds?
furniture and consumption of moulded plastics is highly
sensitive to price. There exists stiff competition from Well, it simply says that if one does a Rs.15,000 SIP per month
smaller players in the unorganised sector that target for 15 years which earns average 15% compounded annual
low-end customers with their low-priced products. returns, you are able to accumulate Rs.1 crore against your
Higher freight cost for transporting moulded finished total investment of just Rs.27 lakh.
products makes cross-border movement of the goods Now, read about the 15 x 15 x 30 rule of mutual funds. If you
difficult and therefore, revenues from exports are do a Rs.15,000 SIP per month for 30 years (instead of 15 years
insignificant in total revenues. as stated earlier) at a 15% compounded annual return, you are
able to accumulate Rs.10 crore against Rs.1 crore if you invest
Conclusion: NPIL has introduced various high-end
for 15 years.
products both in the furniture and household segments
This shows that time and not the timing is important for
in order to gain market share, which ultimately boosts
Wealth Creation.
margins. We are quite positive on the company due to
So stay invested and happy investing!
its management pedigree and increasing market size of
the industry.

A Time Communications Publication 16

Currently, the stock trades at a P/E of just 15.10x and is available at a d iscount of around 30% from its 52-week high of
Rs.77 recorded on 27 July 2017. Investors can accumulate the stock with a stop loss of Rs.45 for a price target of Rs.75 -
80 in the next 9-12 months. Its 52-week high/low is Rs.77/47.05. Its market cap stands at Rs.49.21 crore.

Early Bird Gains – A Performance Review

Early Bird Gains (EBG), our newsletter specializing in multi-baggers, has performed well for the
last 15 years. Here’s the performance review of the 52 stocks featured between
28th September 2016 and 27th September 2017.
Issue Date of Recomm. Highest Gain
Scrip Name
No. Recomm. Price (Rs.) since (Rs.) %
1 Tera Software 28-09-16 80.55 132.60 65
2 Rico Auto Industries 05-10-16 64.55 110.90 72
3 Steel Strips Wheels 12-10-16 752.20 1473.70 96
4 Goldiam International 19-10-16 78.60 99.30 26
5 Tanla Solutions 26-10-16 43.10 66.45 54
6 Suryaamba Spinning Mills 02-11-16 80.65 91.30 13
7 Infinite Computer Solutions 09-11-16 240.65 519.55 116
8 Kovai Medical Center & Hospital 16-11-16 838.45 1480 77
9 Pix Transmission 23-11-16 66.95 199 197
10 Aarvee Denim and Exports 30-11-16 86.85 94.80 9
11 BCL Industries & Infrastructures 07-12-16 37.70 195.70 419
12 HIL 14-12-16 266.60 2374.85 791
13 Leel Electricals 21-12-16 259.60 340.40 31
14 Nitin Spinners 28-12-16 67.50 145 115
15 Uflex 04-01-17 277 506.75 83
16 Indiabulls Housing Finance 11-01-17 687.70 1439.40 109
17 Global Vectra Helicorp 18-01-17 116.95 203.45 74
18 L&T Technology Services 25-01-17 831.70 1479.70 78
19 Gujarat Heavy Chemicals 01-02-17 276.95 348.95 26
20 SP Apparels 08-02-17 407 482 18
21 KEI Industries 15-02-17 176.05 494.80 181
22 Bang Overseas 22-02-17 48.90 52.40 7
23 Polyspin Exports 01-03-17 84.85 147.15 73
24 AYM Syntex 08-03-17 81.05 87.15 8
25 Hinduja Global Solutions 15-03-17 601.25 1042 73
26 Cambridge Technology Enterprises 22-03-17 85.70 102.90 20
27 Kilburn Engineering 29-03-17 57.55 116.40 102
28 Winsome Textile Industries 05-04-17 77.35 128 65
29 Sakuma Exports 12-04-17 69.45 282 306
30 GNA Axles 19-04-17 217.85 577.50 165
31 Nandan Denim 26-04-17 119.15 186.65 57
32 Ugar Sugar Works 03-05-17 32.85 34.60 5
33 SMS Pharmaceuticals 10-05-17 89.80 114.30 27
34 Refnol Resins & Chemicals 17-05-17 44.80 59 32
35 Cosmo Films 24-05-17 396.35 448.55 13
36 Morganite Crucible (India) 31-05-17 824.50 1550 88
37 ISGEC Heavy Engineering 07-06-17 6251.15 8400 34
38 Divi's Laboratories 14-06-17 644.10 1220 89
39 Welspun India 21-06-17 80.70 197 144
40 Gujarat Industries Power Company 28-06-17 109.95 150.55 37
41 Pincon Spirit 05-07-17 66.15 75.20 14
42 Vakrangee 12-07-17 449.25 776.70 73
43 Bhagyanagar India 19-07-17 25.15 60.25 140

A Time Communications Publication 17

 44 Vippy Spinpro 26-07-17 44.70 61.60 38
45 Eros International Media 02-08-17 219.90 238.80 9
46 Mangalam Drugs & Organics 09-08-17 155.10 225.90 46
47 Sintex Plastics Technology 16-08-17 108.10 111.50 3
48 Deep Industries 23-08-17 210.35 250 19
49 Som Distilleries & Breweries 30-08-17 144.30 322.65 124
50 GeeCee Ventures 06-09-17 160.25 193.80 21
51 Sphere Global Services 13-09-17 49.20 53.80 9
52 High Ground Enterprises 20-09-17 10.58 19.95 89

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A Time Communications Publication 19