J Street Volume 268

7/24/2019 J Street Volume 268

1/8

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rket

View

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mpany

Update

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wledge

Corner

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tual

Fund

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mmodity

Corner

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Card

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Contributor

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cial

Contributors

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suggestions,feedback

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Market View:

The stage is set for high vo latility

Hectic result season is almost over and the big battle of Bihar is in the EVM waitingreleased tomorrow. The nonfarm payrolls has surprised the analysts and pushed thenear to all time high. Both the events are having great impact on the market at least fotime. The market seems to have discounted both the events largely. Any kneejerk reshould not be taken as the trend setter. The real issue is the results and earnings declafar. The overall top line growth is of concern. The silver lining is bottoming out of bad NPA of the banks as reflected in the result of SBI, BOB and PNB. The SBI chairpersbeen confident about the loan growth and recovery cycle going ahead. Other positivfrom government in the form of aggressive power reforms, aviation reforms and the propbankruptcy law. Some important reforms are in pipeline which may be announced afBihar outcome. As per the statements made by Finance Minister in an interview recehas categorically said that some important reforms will be introduced in winter sessisome executive actions will be taken after Diwali. Only those investors who can sustavolatility should trade in this market otherwise one should take the opportunity of any sdecline with medium to long term view. Stock like NTPC has given robust performance back of power sector reforms looks attractive. Some stocks from auto ancillary sectogiven robust Q2 results and are worth watching.

Technically any fall below 7950 will make the market nervous and can open the ga

recent lows. Be ready for high voltage drama next week.

Kamal JhaveriMD- Jhaveri Securities

1 -

268ovember,2015


2/8

2-

Company Basics

E Code 524816

E Symbol NATCOPHARM

UITY ( in Cr.) 34.83

T.CAP ( in Cr.) 8921.90

Financial Basics

FV () 10.00

EPS () 40.25

P/E (x) 63.63

P/BV (x) 7.52

BETA 1.1454

RONW (%) 18.98

Share Holding Pattern

Holder's Name % Holdin

Foreign 21.26

Institutions 5.90

Promoters 51.29

Non Prom. 0.00

Public & Others 18.94

Government 2.61

mpany Overview

was established in 1981 in Hyderabad with a single unit and 20 employees. At present Natco Pharma h

nufacturing facilities spread across India with dedicated modern research laboratories and more tha

ployees. NATCO Pharma exports both APIs and Finished Dosage Forms that comply with Interna

ndards to various markets across the globe. Exports contribute about 50% of the companys total revenue

estment Rational

ding Oncology player in Indian Pharmaceutical space

co has strong presence in Indian Oncology space with focusing launching of the generic versions of ecancer medications at a low cost of existing therapies. Natco pioneered the launch of several generic verugs in the domestic oncology segment and holds a leading market share in their operated portfolios.

co has strong international presence

: For US market Natco has created niche in therapeutic areas and focusing on generic space. The Compang Para IV products pipeline for US market which is expected to commercialize over the next few yearsMarket and most of them strong market and revenue visibility such as Copaxone 20 / 40 mg has a marktunity of $ 2410 Mn and $342 Mn. respectively.

PCINAT : A game changer for Natco

co mainly associated with oncology and its related business. In FY15, company has launched HEPC

fosbuvir) in India which makes Natco one of the few companies globally to launch Hepatitis C

dicines. With the launching of this medicine, Natco has started to focus on non-oncology therapy se

ch spur the growth in India and Rest of World. According to WHO, HEPCINAT has robust opportun

ume growth as India has ~15-20 Mn. people who have infested HCV infected people and more than 1

ple in developing countries. According to management, this product will contribute significantly in FY1

Natco.

uation : Currently, NATCO is trading at 2469. We recommend Accumulate with target price of

ing stock 48xFY17E EPS of 66.32.The stock current ly trades at 53.71 x of FY16E and 38.37x of F

mpany Update : Natco Pharma Ltd.

268ovember,2015


3/8

3-

eekly Market Recap :

On the macro front, a monthly survey showed a further loss of growth momentum across the Indian manufacturingast month. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) hit 22-month50.7 in October 2015 from a reading of 51.2 in September 2015, data released on Monday, 2 November 2015 show

The outcome of a monthly survey showed that growth in India's services sector accelerated last month on the bacpickup in new business.

On the global front, activity in China's manufacturing sector unexpectedly contracted in October for a third straight an official survey showed on Sunday, 1 November 2015. The official Purchasing Managers' Index (PMI) was at 4October, the same pace as in previous month. A reading below 50 points suggests contraction.

rket Eye Week ahead :

Among the key macro economic data, the government is scheduled to release the consumer price index (CPI) data for the mOctober 2015 on Thursday, 12 November 2015. The all-India general CPI inflation increased to 4.4% in September 2015 cowith 3.7% reading in August 2015.

The government will also release the industrial production data for September 2015 on Thursday, 12 November 2015. India's ndustrial Production (IIP) accelerated to 34-months high of 6.4% in August 2015 over a year ago compared with the revised g.1% in July 2015.

Shares of public sector oil marketing companies (PSU OMCs) will be in focus as a regular fuel price review is due during the m

he month.

EVENTS/FACTORS TO WATCH

Mon: AB Nuvo, BPCL, HPCL, REC, Canara Bank, NHPC ,Havells India, Tata Power, NHPC, Central Bank earningsTue: Hindalco, Prabhat Dairy, J kumar Infra, Kothari products, NCC, Suven life sciences earningsWed: Muthoot Cap, Savera Indust ries, KCP sugar earningsTurs: IIP data for the month of September 2015, CPI data for the month of October 2015Fri: CESC, GMR infra, Coal India, Nectar life sciences, Eveready Industr ies, Kaveri seeds, Wockhardt earningsSat: Jindal steel, Rajesh exports earnings

Market Capitalization

Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of oneThe investment community uses this figure to determine a company's size, as opposed to sales or total asset figures.

Frequently referred to as "market cap."

Stocks of companies are of three types. The stocks with a market cap of Rs 10,000 crore or more are large cap stocks. Ctocks with a market cap between Rs 2 crore and 10 crore are mid cap stocks and those less than Rs 2 crore market cap aap stocks.

round The World

268ovember,2015

owledge Corner :


4/8

utual Fund Corner

4-

Source : - www.valueresearchon

nd Name

heme Name Birla Sun Life MNC Fund

C Birla Sun Life Asset Management Company

pe Others

egory Open-ended and Equity

nch Date April 1994

nd Manager Ajay Garg

Assetsn crore )

Rs. 2569.2 crore as on Sep 30, 2015

Top 10 Sector Break-Ups

Fund

Automobile 21

Financial 16

FMCG 14

Healthcare 12

Engineering 10

Chemicals 9.

Cons Durable 4.Services 3.

Construction 1.

Technology 0.

Composition (%)

Equity 97

Debt 3

Cash -1

Risk Analysis

Volatility Measures

Standard Deviation 16

Sharpe Ratio 1

Beta 0

R-Squared 0

Alpha 18

story 2012 2013 2014 2015

V(Rs) 267.14 294.26 502.89 585.51

alReturn(%) 42.37 10.15 70.90 16.43

CNX Nifty 14.67 3.39 39.51 19.05

CNXMNC 14.08 2.41 28.43 8.60

k(Fund/Category) 7/33 6/32 6/55 -

Week

High

(Rs) 267.14 294.26 502.89 630.80

WeekLow(Rs) 187.34 235.76 270.73 503.55

Assets(Rs.Cr) - - 852.49 -

enseRatio(%) 2.35 2.92 2.72 2.65

Fund StyleInvestment StyleGrowth Blend Value

Large

Medi

Sma

268ovember,2015

nd Performance v/s S&P CNX Nifty

FundCNX Nify

based to 10,000)


5/8

mmodity Corner

5-

DAMENTAL: Bullion prices last week ended with losses where silver prices dropped by more than four percent and gold prices dropped after U.S. data showed job growth surged in October, making it likely the Federal Reserve will hike interest rates in December. U.S.jo

ed in October and the unemployment rate hit a 7-1/2-year low of 5.0 percent in a show of economic strength, sending the dollar up 1.4 pighest since April. Fed Chair Janet Yellen said on Wednesday that a rise in rates in December was a "live possibility" if justified by upcomc data. With gold falling to a seven-week low it may seem an odd moment to outline the case why the gloom over the yellow metal may fng to lift.China's sluggish second-quarter demand this year ended with a sharp rebound in the third quarter, with 196 tonnes representingyear-on-year increase, according to data. China's gold consumption rose 7.83 percent in the first nine months of the year compared to th

od in 2014, the China Gold Association said. India's jewellery consumption also roared back in the third quarter, rising 5 percent year-ontonnes, the highest quarterly total in seven years, according to GFMS data. Central bank buying is also holding up strongly, with net purchtonnes in the third quarter of this year, a gain of 13.1 percent over the same period in 2014. Indian dealers expect demand to continue strok and for discounts to move into a premium. However, most are still struggling with the poor start to the season, with one source predictind 25-30% lower than last year for the entire season. The Indian wedding and festival season -- which typically runs October to December

sees the highest level of demand, with gold contributing around 50% of total wedding costs, according to the World Gold Council. Gold impin October fell 16.8% month on month to 68.7 mt, customs data showed. A string of major economic indicators from US, including Univigans November CCI, October retail sales and PPI, slated for release this week, are promising, bolstering the US dollar.

COMMENDATION : SELL GOLD @ 26100 SL 26600 TGT 25450-24900. SELL SILVER @ 35600 SL 36400 TGT 34900-34200.

DAMENTAL : Base metals prices last week ended with mixed node where aluminium prices was the major gainer gaining by around 7peort seen after US producing giant Alcoa Inc cut output to attack a supply glut. Prices also seen supported after LME data showed 99,500 t

metal was booked to leave warehouses in Vlissingen. LME warehouses is now equivalent to 45.5 percent of the 3.01-milliontonne headlie. Zinc and lead prices too ended with more than gains as support seen as investors grew more positive about demand in top consumer CUnited States. Whereas copper and nickel prices ended with losses as the dollar rallied on buoyant U.S. jobs data that boosted the chaninterest rates would rise for the first time in almost a decade. Pressure also seen on prices after declining factory orders in Germany and autlook for Europes economy added to demand concerns. Data showed U.S. job growth surged in October and the unemployment rate hit low, making it more likely the Federal Reserve will hike interest rates in December. Factory orders in Germany, the third-biggest copper uctedly dropped for a third month in September, government data showed. The European Commission cut its euro-area growth and inflation

ext year, citing more challenging global conditions. The October jobs report left little doubt the U.S. labor market is back with a vengeancemonth lull. The 271,000 gain in payrolls was the biggest this year and exceeded all estimates in a survey, a Labor Department report shoThe jobless rate fell to a seven-year low of 5 percent and average hourly earnings over the past 12 months climbed by the most since 20ber of Americans working part-time because of a weak economy fell to 5.7 million in October, the lowest since June 2008. Combined zinc n Shanghai, Tianjin and Guangdong declined 5,500 to 318,600 tonnes this past week. Inventories fell across the three regions now that zin

were unwilling to sell goods due to continuously falling zinc prices. Shanghai also saw a drop in zinc stocks with less inflows of imported ze zinc smelters holding back goods. Meanwhile, some imported zinc in Shanghai was shipped to Tianjin, and downstream buying interest ed in the latter half of the week, driving down local zinc inventories.OMMENDATION : BUY ALUMINIUM @ 98 SL 94 TGT 102-104. BUY LEAD @ 109 SL 106.50 TGT 112-116. BUY COPPER @ 322 SL 3338.BUY ZINC @ 108 SL 105 TGT 112-115. BUY NICKEL @ 636 SL 620 TGT 654-675.

DAMENTAL : Crudeoil last week dropped by around 4% amid a soaring dollar, as the weekly U.S. oil rig count moved lower for a 10th conod last week exacerbating concerns of oversupply on domestic energy markets. For the week, crude futures were down by around 4 percen

e Wednesday after a sixth weekly build in crude stockpiles. U.S. energy firms cut oil rigs for a tenth week in a row this week, decreasing thenes from recent weeks, data showed, a sign low prices continued to keep drillers away from the well pad. Drillers removed six oil rigs in th

ed Nov. 6, bringing the total rig count down to 572, the least since June 2010, oil services company Baker Hughes Inc said in its closely rt. A senior OPEC delegate told the group is unlikely to cut output when it meets in December if rival producers are unwilling to help redu. On a weekly basis, U.S. oil output edged up to 9.2 million bpd last week after holding at 9.1 million bpd since the start of September, accs weekly field production report. That is still well below the 9.6 million bpd peak seen in April. Natural gas settled up by more than 3.5 pecasts showing a return to cool weather after a warm spell in the eastern U.S. supported prices. Gas inventories climbed by less than averastraight week, the Energy Information Administration said. Gas stockpiles rose by 52 billion cubic feet in the week ended Oct. 30, falling veyear average gain of 58 billion for the period, the Energy Information Administration said. Supplies totaled 3.929 trillion, matching theSpeculators have raised bearish bets six out of the last seven weeks as gas supplies keep flowing out of U.S. shale formations. Stockpiles

929 trillion cubic feet last week, matching an all-time high. U.S. natural gas production may climb 5.6 percent this year to a record 79.06 beet a day, forecasts from the U.S. Energy Information Administration show. Output has surged amid rising supplies from shale reservoirs, Marcellus in Pennsylvania. Hedge funds boosted their net-short position in gas contracts by 6.8 percent to a record 166,165 in the week enden as prices jumped 7.7 percent, according to U.S. Commodity Futures Trading Commission data. Long wagers rose for the first time in sixOMMENDATION : BUY CRUDE OIL @ 2880 SL 2780 TGT 3040-3120. SELL NAT.GAS @ 164 SL 172 TGT 156-148.

BULLION

BASE METALS

ENERGY

268ovember,2015


6/8

4 -

mmodity Corner

USD/INR

6-

rex Corner

EUR/INR

GBP/INR

JPY/INR

rket Eye Week ahead :

As said last week, the USD-INR traded positive for whole week. and ended at 66.01. The dollar rose against moscurrencies on Thursday, hitting a more than two-month high, as comments from Federal Reserve officials reinfgrowing view that the U.S. central bank would hike interest rates next month. The chances for a December rate hnow perceived as higher than 50 percent after Yellen laid out what appeared to be the base case that the econeady for higher rates. USDINR is likely to trade positive further.

Level S2 S1 CP R1 R2 High Low Cl

SD/INR 71.27 70.73 72.00 72.54 73.27 72.72 71.45 71


PY/INR 53.95 53.73 54.31 54.53 54.89 54.68 54.10 54


BP/INR 99.12 98.34 100.59 101.37 102.84 102.06 99.81 99


UR/INR 71.27 70.73 72.00 72.54 73.27 72.72 71.45 71

rket Recap :

The Indian rupee dropped sharply early on Monday,09 November 2015, once again breaching the Rs 66per dollar mark after the BJP led NDA governmentost the Bihar elections.

The domestic currency opened at Rs 66.36 and fellurther to a low of 66.50 so far during the day.

n the spot currency market, the Indian unit was lasteen trading at 66.38, recovering from initial decline.

Meanwhile, the U.S. dollar index, which measureshe greenback's strength against a trade-weighted

basket of six major currencies, was quoted down0.06% at 99.23.

268ovember,2015


7/8

Nifty closed the week at 7954.29 thereby showed a net fall of 111 points on week to week basis. We had said clear said lahat Engulfing bear candlestick pattern was formed taking care of 2 weeks of range. The 2 weeks range violated and nowower range of 7881-7691 to be tested. Exit long and sell on rise to 7998-8071 with a stop loss of 8130. A close above 8rigger pullback towards 8336. Overall a breakout and weekly close above 8336 is required.

Outcome of Bihar assembly elections, macroeconomic data, final batch of Q2 results of India Inc., trend in global markets, flooreign portfolio investors (FPIs), the movement of rupee against the dollar and crude oil price movement will dictate tren

ourses.

7-

treet Recommendations Report Card

Top Fundamental Stocks

Stocks Rec. Date CMP on Rec. CMP TargetAbsoluteReturn @

CMPStatu

Pharma 03/07/2015 831 804 1041 -3% Buy

niteComputerSol. 20/07/2015 190 188 255 -1% Buy

nSpinnersLtd. 06/07/2015 79 56 94 -29% Buy

kofBaroda 01/06/2015 163 167 217 3% Buy

bika

Cotton

Mills

18/05/2015

880 852 1149 -3% BuybhavEngineering

04/05/2015 298 311 430 4% Buy

ELtd. 20/04/2015 1666 1292 2250 -22% Buy

oAutomotiveLtd. 30/03/2015 242 211 304 -13% Buy

karspeciality

micals16/03/2015 152 201 251 32% Buy

L 16/02/2015 252 213 368 -15% Buy

TodayNetwork 27/01/2015 222 240 337 8% Buy

M

12/1/2015 1238 1248 1452 1% Buy

ellsIndia 27/10/2014 274 242 346 -12% Buy

CargoLogistics 05/08/2014 260 330 342 27% Buy

IndiaFin.Ser. 07/07/2014 39 46 45 19% Buy

niPort 05/07/2014 280 285 347 2% Hol

uwaliacontracts 24/08/2015 235 238 368 1% Buy

T 05/07/2014 1750 1377 1866 -21% Buy

Ltd. 21/09/2015 1140 1296 1374 14% Accumu

co

Pharma

02/11/2015

2546 2469 3183 -3% Buy

s

not

important

whether

you

are

right

or

wrong,

Its

about

how

much

money

you

make

when

you're

right

and

h

ch

you

lose

when

you're

wrong.

268ovember,2015


8/8

268ovember,2015

J Street Volume 268

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