MOSt Market Outlook

8th, March 2016

Nifty Outlook

Nifty Fut

7460

Reco

BUY

MBP

7480

Stop Loss

7420

Target

7600

Outlook

Global markets have held out well post the rally.

Indian markets have also seen a swift move back

to 7500 levels. Budget not having any of the

feared negatives, positive global cues, FII flows,

recovery in commodity prices all have played a

part. Dow has moved above 17000 level and S&P

over 2000 level. Expectations are of rate cut ac-

tion by RBI post the budget. Banks, real estate,

commodities have been the biggest gainers.

Technically Nifty could see consolidation.

3

Brent crude has moved above $40 level. US pro-

ducers cut rig count. Rupee is back to 67 levels.

Commodities have continued to see recovery.

Iron Ore prices saw sharp jump. China reiter-

ated that the GDP growth targeted is in the re-

gion of 6.5 percent. Commodities will continue

to see interest.

3

Gyansangam meet did not bring out anything

specific. The discussions as reported revolved

around NPA issue, consolidation in the psu bank-

ing space. The govt intends to consolidate the

27 PSU banks into six large banks.

3

'A breach above 7250 with a 'Breakaway Gap' resulted

into a 'Double Bottom' formation . The reversal wave is

in line with the 'Impulse Wave' characteristics & indicates

a change in trend after the prolonged weakness. Declines

from hereon would serve as an additional opportunity

to create longs as the impending move could stretch up

to the upper end of the weekly channel placed near 7900.

Sectoral Outlook

Sector

Name

ENERGY

BANKS

Sector OUTLOOK

FOR THE WEEK

Positive

Positive

Trading Idea - Cash & Future

Scrip

AXISBANK

HEROMOTO

Trading Idea - Derivatives

Target

465

3320

Investment Idea

Scrip

CMP

20.0

8.15

Reco

Buy

Buy

MBP

416

2835

SL

393

2640

STRATEGY - Hindpetro Call Ratio Spread

Instrument

B/S

Lot

Reco

Mar 760 CE

Mar 800 CE

Target Profit

: 8500

Buy

Sell

1

2

20.0

8.15

Reco

Buy

Buy

CMP

748

1015

Target

1299

1300

HINDPETRO

CANFINHOME

Stop Loss : 2000

3

MOSt Market Outlook

8th, March 2016

Trading Calls

AXISBANK

Buy

MBP

Target

INR 416

INR 465

Derivatives Idea

HEROMOTO

Buy

CMP

Target

INR 2835

INR 3320

Hindpetro

Call Ratio Spread

BUY

Buy 1 Lot 760 CE

Sell 2 Lots 800 CE

Multiple reversal patterns confirm the support

at 380. Axis Bank rebounded from the said sup-

port & has been attracting momentum.

3

A breach above 425 could further accelerate the

momentum & hence further longs could be

added with a medium term perspective & a stop

at 393 for an overall target upto 465

3

Breakout from a triangular pattern indicates

directional move in the offing. We expect the

stock to resume its secular uptrend & revisit its

life high level.

3

Hero Moto Corp could be participated with a

stop at 2640 & a target upto 3320.

3

Target Profit : 8500

3

Stop Loss : 2000

FII & DII Activity (Rs. in Cr)

Cat.

FII

DII

Amt

672

-533

MTD

3345

-681

YTD

-61203

96538

FII F&O

Institution

Index Future

Index Options

Stock Futures

Net B/S

147.42

-246.02

300.19

OI

Long

Option Writing

Short Covering

Stock have seen traces of short covering in

early March expiry

3

Put built-up at 700-720 could act as important

support

3

Unwinding in 760 CE could trigger fresh mo-

mentum

3

Implied volatility is expected to cool-off, thus

Ratio call spread is recommended

Outlook

Coal India announced dividend of Rs 27.40 per share. At current price this translates to a dividend yield of 7-8 percent. While Govt companies are announcing

dividend at the behest of govt, private companies are also preponing dividend payouts to avoid the tax on dividend next year.

3

HPCL in its analyst meet indicated that the Bhatinda Refinery has turned profitable. The company continues to benefit from the structural changes and stable

refining margins. It plans to increase refinery capacity by 65 percent through brownfield expansion. We have a investment target of 1299, implying a 73 percent

upside.

3

Strides acquires three OTC brands from Swedish firm Moberg. Apollo Tyres enters two wheeler segment. Tata Motors, Bharat Forge tie up for FICV project. ED files

money laundering case against Mallya. ITC is expected to take price increase on cigarettes post increase in excise duty as per channel checks.

3

MOSt Market Outlook

8th, March 2016

Investment Ideas

Hindustan Petroleum Corporation Ltd.

BUY

CMP

Target

3

Can Fin Homes Ltd.

BUY

CMP

Target

3

INR 748

INR 1299

INR 1015

INR 1300

Post de-regulation and sharp drop in crude prices, we expect market-

ing division profitability to grow rapidly and hence a higher valuation

3

Of the 3 OMCs, HPCL's earnings are more sensitive to a change in mar-

keting margin-given its higher ratio of marketing-to-refining volume.

3

An INR0.5/ltr increase in diesel mktg margin increases FY16E EPS by

32%. Making it the largest beneficiary of higher auto fuel margins.

3

We value HPCL at 5.5x for refining and 8x for marketing to arrive at a

fair value of INR1,299.

Can Fin Homes Ltd. is a South India-based home financier focused on

Tier 1 and Tier 2 cities. Can Fin Homes is India's sixth largest housing

finance company with AUM of 8,251 crore as on 31 March 2015.

3

CANFIN has set a target of achieving a loan book of INR 35,000cr by the

year 2020 which translates to a 33% CAGR in loan book which is much

higher than the 20-22% growth expected for its peers.

3

We estimate CANFIN's loan book to grow at 30% CAGR over FY15-18E

Siemens - NEUTRAL TP970

3

Clump sale of the Healthcare division for INR30.5b

3

Post capital gains tax, receipts estimated at INR24.4b; half would be paid as special dividend

3

Cutting our estimates by 3% and 5% for FY16/FY17

HPCL - BUY 1299

3

Plans to spend INR450b over five years - INR212b for refineries, INR100b for marketing

3

Marketing margins 10-15% above regulated regime;

Gyan Sangam

3

Statement of intent towards consolidation of PSBs

3

Bankruptcy and Insolvency Law likely in 2nd half of budget session

EVEREADY (TP: 287)

3

ENTRY INTO APPLIANCES MARKET: Ceiling Fans, Dry/Steam Irons, Food Processors, Induction

Cookers, Mixer Grinders, Multi Grills, Oven Toasters Grillers, Pop-Up Toasters, Rice Cookers, Roti

Makers, Sandwich Makers and Water Heaters.

NEWS

3

Crude@40+, Iron ore +~20%

3

ITC expected to raise prices by 3-4% in next few

days

3

State elections announced - April/May'16

3

COLGATE: P&G to withdraw ORal B from market

shortly. less than 1% MS, loss making.

3

COAL INDIA: Declared dividend of INR 27.4/share

on Saturday. 130% Payout.

3

RJIO's To offer Free Wi-fi during the upcoming

T20 World Cup across 6 stadiums@15 Mbps

3

MM in talks with a Chinese firm to make

Ssangyong in China.

3

Monsanto India signals India seed venture at risk

if royalties are cut

MOSt Market Outlook

8th, March 2016

Sacchitanand Uttekar (Technical Analyst)

Sacchitanand.Uttekar@motilaloswal.com

Bhavin Desai (Derivatives Analyst)

Bhavin.Desai@motilaloswal.com

Ravi Shenoy (Midcap Analyst)

Ravi.Shenoy@motilaloswal.com

Sambhu Sa (Research Analyst)

sambhunath@motilaloswal.com

Tina Gadodia (Derivatives Analyst)

Tina.Gadodia@motilaloswal.com

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