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Market View:

Mixed trend is Going on in the market - Be Selective

The devaluation of Chinese currency- Yuan has generated waves in the world market and the implications will be cascading. Many Asian and Emerging Market currencies have reacted sharply to this devaluation. Indian Rupee has also devaluated almost 2.5% and is hovering around 65.25. Monsoon progress across India is also satisfactory and will drive the market in near term. On macro front, IIP and Inflation data are extremely encouraging and WPI is in negative territory for the record period. So we can expect rate cut sooner than later. Government has taken some serious steps to revive the PSU banking sector. This will help the PSU Banking Sector stocks to move forward. The Rupee devaluation will be beneficial Tech sector and Pharma sector. The companies which have highest Dollar revenue in their total income will be beneficial the most.

Technically, any fall below 8450-8350-8320 may drag the market down and any rise above 8650 may take the market to the previous highs.

Kamal Jhaveri MD- Jhaveri Securities

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Vol.: 25617th August,2015

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Company Basics

BSE Code 524715

NSE Symbol SUNPHARMA

EQUITY (` in Cr.) 240.64

MKT.CAP (` in Cr.) 227840.16

Financial Basics FV (`) 1.00 EPS (`) 19.72 P/E (x) 48.02 P/BV (x) 8.60 BETA 0.7213 RONW (%) 34.12

Share Holding Pattern Holder's Name % Holding Foreign 31.34 Institutions 5.09 Promoters 54.72 Non Prom. 2.68 Public & Others 6.10 Government 0.08

Company overview

Sun Pharma, established in 1983 is the largest Indian pharmaceutical company both in terms of market capitaliza-tion and turnover. The company manufactures and markets pharmaceutical formulations as branded generics, as well as generics in India, the United States and several other markets across the world. The company is a market leader in specialty therapy areas in India. In India, the company has emerged as a leading Pharma company where it is the third largest player. Also, in the US, a key geography, the company has expanded significantly through both in-organic and organic routes.

Investment rationale Strongest Abbreviated New Drug Applications (ANDA) pipeline Sun Pharma , with the recent acquisitions of DUSA, URL Pharma and Ranbaxy Laboratories has now become strong in the US region, with the geography accounting for 50% of its sales in FY2015. With the merger of Ran-baxy Laboratories, the company is now the fifth-largest specialty generics company in the world (behind Teva, Sandoz, Activas and Mylan). As of March 2015, 159 products now await USFDA approval, including 12 tentative approvals.

Growth in the specialty revenues and URL portfolio Sun Pharma continues to build its specialty revenues in the US, supported by a ramp-up in sales of generic Doxil and Dusa revenues-being the only company in the US market, with a USFDA approved version of generic Doxil. FY14 was the first full year of consolidation of the US-based URL acquisition. Favourable product pricing enabled significant ramp-up in URL’s revenues with re-launch of some of the discontinued products from URL’s portfolio.

Market leader in chronic segments Chronic therapies have grown at a faster pace than that of acute therapies over the past four years. their contribution in the Indian pharmaceutical market has grown from 27% in 2010 to 30% in 2013.lifestyle changes, rapid urbanisation and increasing affluence are the factors which are expected to drive it further.

Valuation : SUNP is making investment in the right areas and is likely to benefit from these investments from FY17 onwards

(Synergy from Ranbaxy ).Maintained “Accumulate” on the stock with target price of `1041 (30xon FY17EPSof `34.7).

Company Update : Sun Pharmaceuticals Industries Ltd.

Vol.: 25617th August,2015

 

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Weekly Market Recap : • On macro front, the government on Friday, 14 August 2015 said inflation based on the wholesale price index (WPI) for July 2015

slipped further in negative and stood at -4.05% (provisional) as compared to -2.4% (provisional) for June 2015 and 5.41% during the corresponding month of the previous year.

• For the month of May, 2015, the final Wholesale Price Index stood at -2.2% as compared to -2.36% (provisional) respectively as reported on 15 June 2015. Due to a large base effect, inflation based on the consumer price index (CPI) eased sharply last month.

• CPI inflation eased to 3.78% in July 2015 from 5.4% in June 2015, according to the data released by the Ministry of Statistics & Programme Implementation earlier during the week on Wednesday, 12 August 2015.

• The IIP growth for May 2015 was scaled down to 2.5% in the first revision compared with 2.7% reported provisionally. Meanwhile, the growth in March 2015 that was scaled up at first revision to 2.5% from 2.1% reported provisionally has been retained nearly unchanged at 2.5% in final revision.

Market Eye Week ahead : • Among global events, Japan releases second-quarter gross domestic product data on Monday, 17 August 2015. • On Wednesday, 19 August 2015, the US Federal Reserve releases minutes from its July 28-29 meeting that may shed light on the

debate policy makers are having over the timing of the first increase in the nation's benchmark interest rate since 2006. • All eyes will be on Greece ahead of debt repayment deadline of 20 August 2015. The country must make a 3.2 billion-euro

($3.6 billion) payment to the European Central Bank by 20 August 2015. Greece's creditors are seeking to reach an agreement on an aid program in time for the country to make the payment.

KEY EVENTS/FACTORS TO WATCH 1. Mon: Valecha engineering earnings 2. Tue : Concrete Credit earnings 3. Wed: FOMC minutes 4. Thu: Caplin Point Laboratories, HCL Infosystems earnings 5. Sat: Supreme Infrastructure earnings

Reverse Takeover - RTO • A type of merger used by private companies to become publicly traded without resorting to an initial public offering. Initially, the private

company buys enough shares to control a publicly traded company. The private company's shareholder then uses their shares in theprivate company to exchange for shares in the public company. At this point, the private company has effectively become a publicly traded one. It is Also known as a "reverse merger" or "reverse IPO"

• RTOs are undertaken by private companies in order to become publicly traded without having to go through an initial public offering

(IPO). While this move heavily reduces the costs of migrating from a private to a public listing, a reverse takeover does not generate the capital inflow characteristic of an IPO.

Around The World

Vol.: 25617th August,2015

Knowledge Corner :

Mutual Fund Corner

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Source : - www.valueresearchonline.com

—– Fund —– CNX Nifty (Rebased to 10,000)

Fund Name Scheme Name Religare Invesco Mid N Small Cap Fund

AMC Religare Invesco Asset Management Company Pvt.

Type Mid & Small Cap

Category Open-ended and Equity

Launch Date February 2008

Fund Manager Vinay Paharia

Net Assets (` In crore ) Rs. 469.9 crore as on Jul 31, 2015

Fund Performance v/s S&P CNX Nifty

Top 10 Sector Break-Ups Fund (%)

Financial 22.14 Services 20.73 Healthcare 11.01 Chemicals 9.14 Diversified 5.38 Construction 5.24 Automobile 4.49 Technology 4.34 Energy 3.48 Engineering 2.5

Fund Style

Investment Style Growth Blend Value

Large

Medium

Small

Capitalization

Composition (%) Equity 95.97

Debt 5.70

Cash -1.67

Risk Analysis Volatility Measures Standard Deviation 17.06

Sharpe Ratio 1.55 Beta 1.04 R-Squared 0.69 Alpha 15.48

Vol.: 20418th August, 2014

Vol.: 25617th August,2015

History 2012 2013 2014 2015 NAV (Rs) 17.64 19.61 33.75 37.44

Total Return (%) 43.88 11.17 72.11 10.93

+/-CNX Nifty - 16.18 4.41 40.72 7.53

+/- CNX Midcap - 4.72 16.27 16.20 -1.24

Rank (Fund/Category) 26/58 6/59 57/100 74/112

52 Week High (Rs) 17.64 19.61 33.97 37.53

52 Week Low (Rs) 12.24 14.68 18.33 33.24

Net Assets (Rs.Cr) 23.69 44.93 308.93 -

Expense Ratio (%) 2.50 3.07 2.90 -

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Commodity Corner

USD/INR

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Forex Corner

EUR/INR

GBP/INR

JPY/INR

Market Eye Week ahead :

• For this week, above 65.14 keep view for exit long positions in USDINR pair. On upside above 64.03 near term rise till 64.85-65.77-66.40 can be possible targets for traders holding long position.

• If close below 65.14 and sustain then support can be seen at 63.31-64.23. From medium to long term view, this week US-DINR pair likely to remain range bond “bound” medium term investors can take long position for 64.85-65.77-66.40 tar-gets. If breaks 65.14 then expect 63.31-64.23 as stabilization zone for dollar from long term.

Level S2 S1 CP R1 R2 WRV High Low Close

USD/INR 63.31 64.23 64.85 65.77 66.4 64.03 65.48 63.94 65.14

Level S2 S1

JPY/INR 50.82 51.67

CP

52.16

R1

53.00

R2

53.49

WRV

51.76

High

52.64

Low

51.31

Close

52.51

Level S2 S1

GBP/INR 97.66 99.73

CP

100.97

R1

103.03

R2

104.27

WRV

99.81

High

102.2

Low

98.9

Close

101.79

Level S2 S1 EUR/INR 68.97 70.89

CP 71.94

R1 73.86

R2 74.91

WRV 70.76

High 72.99

Low 70.02

Close 72.81

Market Recap :

Vol.: 25617th August,2015

• The Indian rupee extended its fall against the dollar on the first trading day of the week on Monday, 17 August 2015 owing to continued appreciation in the dollar overseas.

• Rupee slipped by 15 paise to 65.15 against the US dollar in early trade today. Increased demand for the US currency from importers and a weak trend in the domestic equity market weighed on the local currency

• The dollar index, which measures the US currency’s strength against major currencies, was trading at 96.679, up 0.17% from its previous close of 96.52.

• The dollar pushed higher on Friday after the release of upbeat U.S. data on producer prices and industrial output, but still ended the week broadly lower against a basket of major currencies as uncertainty over China weighed.

• Traders long and holding the same can keep the stop loss at 8320-8260. Weakness and correction may be set in for near term to short term on fall below 8320-8260. On fall and close below 8320-8260 further correction till the levels 7970-7930 of can be seen. Subsequently, deeper correction will be seen. Traders may look for rise to 8730-8800-8835 to exit long.

• Trend in global markets, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), the movement of rupee against the dollar, crude oil price movement and the progress of monsoon rains will also dictate trend on the bourses in the near term.

• The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the coun-try's farmland is dependent on the rains for irrigation.

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J Street Recommendations Report Card

Top Fundamental Stocks

Stocks Rec. Date CMP on Rec. CMP Target Absolute Return @

CMP Status

Infinite Computer Sol. 20/07/2015 190 203 255 7% Buy

Nitin Spinners Ltd. 06/07/2015 79 74 94 -6% Buy

Bank of Baroda 01/06/2015 163 212 217 30% Hold

Ambika Cotton Mills 18/05/2015 880 879 1149 0% Buy

Sadbhav Engineering Ltd. 04/05/2015 298 319 430 7% Buy

CARE Ltd. 20/04/2015 1666 1336 2250 -20% Buy

Setco Automotive Ltd. 30/03/2015 242 226 304 -7% Buy

Omkar speciality Chemicals 16/03/2015 152 204 251 34% Buy

DHFL 16/02/2015 504 506 736 0% Buy

TV Today Network 27/01/2015 222 229 337 3% Buy M&M 12/01/2015 1238 1352 1452 9% Accumulate Havells India 27/10/2014 274 267 346 -3% Buy All Cargo Logistics 05/08/2014 260 320 342 23% Buy PTC India Fin. Ser. 07/07/2014 39 48 45 23% Profit Book Adani Port 05/07/2014 280 358 347 28% Hold

L & T 05/07/2014 1750 1778 1866 2% Accumulate

Sun Pharmaceutical Industries 03/08/2015 831 906 1041 9% Buy

   It's not important whether you are right or wrong, It’s about how much money you make when you're right and how        much you lose when you're wrong.” 

Vol.: 25617th August,2015

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J Street Short Term Call Status

Sr. No. DATE  STOCK 

BUY/SELL 

RANGE TRIGGER PRICE 

TGT  SL  STATUS  CMP %          

RETURN 

1 06/07/15 HEROMO‐TOCO 

BUY  2555‐2578  2560.00 2706‐2849 

2465  PB  2678.00  4.61 

2 07/07/15  BANKINDIA  BUY  183‐185  183.00  197‐208  173.75  SL  173.75  ‐5.05 

3 08/07/15  CESC  BUY  571‐577  571.00  605‐637  550.45  TA  605.00  5.95 

4 09/07/15  JISJALEQS  BUY  72‐74  72.00 81.40‐85.85 

67.15  PB  77.00  6.94 

5 10/07/15  LICHSGFIN  BUY  448‐453  450.00  478‐516  427.85  TA  478.00  6.22 

6 13/07/15  IDFC  BUY  154‐155.50  154.00  164‐175  148  PB  163.60  6.23 

7 14/07/15  CANBK  BUY 295.50‐298.50 

295.50  316‐334  282  SL  282.00  ‐4.57 

8 15/07/15  HINDUNILVR  BUY  920‐929  920.00 975‐1012 

887  SL  887.00  ‐3.59 

9 16/07/15  KSCL  BUY  752‐760  752.00  809‐874  714  PB  782.00  3.99 

10 17/07/15  HEXAWARE  BUY  274‐277  274.00  293‐315  263  PB  287.85  5.05 

11 20/07/15  M&M  BUY  1285‐1298  1285.00 1369‐1434 

1240  TA  1369.00  6.54 

12 21/07/15  MINDTREE  BUY  1280‐1293  1280.00 1377‐1467 

1222  PB  1323.80  3.42 

13 22/07/15  CAIRN  SELL 161.50‐163.50 

162.80 150.55‐138 

171  SL  171.00  ‐4.80 

14 23/07/15  HCLTECH  BUY  974‐987  974.00 1038‐1087 

939  SL  939.00  ‐3.59 

15 24/07/15  TATAMOTORS  BUY  398‐402  398.00  425‐451  380  SL  380.00  ‐4.52 

16 27/07/15  IBREALEST   BUY  55‐58  56.50  63.50‐69  50.05  TA  69.00  22.12 

17 28/07/15  ASIANPAINT   BUY  846‐855  850.00  902‐941  816  TA  902.00  6.12 

18 29/07/15  KOTAKBANK   BUY  722‐730  722.00  770‐803  696  SL  696.00  ‐3.60 

19 30/07/15  BHEL   BUY  281‐284  281.00  300‐318  270  PB  289.65  3.08 

20 03/08/15  SIEMENS  BUY  1443‐1458  1454.00 1552‐1632 

1378  TA  1552.00  6.74 

21 04/08/15 BHARAT‐FORGE 

BUY  1155‐1168  1160.00 1248‐1337 

1103  TA  1248.00  7.59 

22 05/08/15  YESBANK  BUY  835‐843  835.00  889‐939  805  SL  805.00  ‐3.59 

23 06/08/15  INFY  BUY  1078‐1089  1078.00 1148‐1203 

1040  TA  1148.00  6.49 

24 07/08/15  GLENMARK  BUY  1037‐1048  1048.00 1105‐1158 

1001  SL  1001.00  ‐4.48 

Vol.: 25617th August,2015

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J Street Short Term Call Status

Sr. No. DATE  STOCK 

BUY/SELL 

RANGE TRIGGER PRICE 

TGT  SL  STATUS  CMP %         

RETURN 

25 10/08/15  BPCL  BUY  948‐958  948.00 1011‐1057 

914  SL  914.00  ‐3.59 

26 11/08/15  JINDALSTEL  BUY  81‐82.30  81.65  91‐101  74  PB  87.45  7.10 

27 12/08/15  M&MFIN  BUY  261‐264  261.00  279‐295  251  SL  251.00  ‐3.83 

28 13/08/15  SUNPHARMA  BUY  859‐868  863.50  916‐946  828  TA  916.00  6.08 

29 14/08/15  CIPLA  BUY  719‐727  723.00  769‐803  690  PB  748.00  3.46 

Vol.: 25617th August,2015

• One call on daily basis is given keeping view of short term trading on closing basis. • Time frame and expected % of return is also mentioned with the suggested call. • This call are purely given on technical trading system generated by the Technical Research Desk. • Generally Expected Return on investment is 5-6 % with time horizon of 6-7 days. • Profit Booking update is considered if on an average expected return exceed 3.50-4.00 % against the

Expected return of 5-6% • Risk- Reward ratio percentage wise depends on the volatility of stock Normally it stands ( 3 : 9)

STAUTS  CALLS  RATIO 

TA+PB  18  62.07 

SL+EXIT  11  37.93 

TOTAL  29  100.00 

Vol.: 25617th August,2015