MOSt Market Outlook

27th January 2017

Nifty Chart

Nifty Outlook

Market Drivers

3

Indian markets closed on a strong note on

Nifty Fut. R1

R2

S1

S2

Wednesday. Sectors like financials, banking,

8614

8655

8675

8625

8600

auto, cement did well. Bank Nifty gained over 2

'Nifty surged during the final lap of the F&O Expiry & closed

percent led by strong gains in Kotak. Nifty has

above 8600. Though the momentum oscillators have

now rallied by about 9 percent in a month. Glo-

entered the overbought territory there is no sign of any

bal cues have been quite strong as well. With

weakness or indication of loss in strength. The ongoing

expectations of budget getting built up and con-

momentum could extend towards 8740 while a breach

sumption scenario returning to normal, domes-

below 8500 would distort the momentum.

tic consumption stocks, housing finance, infra

stocks could continue to remain in focus. FII flows

also turned positive and this could continue to

fuel positive sentiment. Near term resistance is

expected around 8700 levels.

Trading Idea - Cash & Future

Scrip

HUL

Reco

BUY

CMP

869

SL

860

Target

885

Sectoral Outlook

Sector

ENERGY

FMCG

Outlook

POSITIVE

NEUTRAL

Highest Call OI

Instrument

Nifty 23-Feb

Bank Nifty 23-Feb

Bank Nifty 02-Feb

Strike

9000

19500

19500

OI

3060525

488120

270240

Chg in OI

883950

227720

130800

Corporate Action:

NIL

Trading Idea - Derivatives

STRATEGY UPDATED : TATAMOTORS Long Call Condor

Instrument

B/S

Lot

Reco

CMP

23 FEB 560 CE

23 FEB 580 CE

23 FEB 600 CE

23 FEB 620 CE

Buy

Sell

Sell

Buy

1

1

1

1

15

9

5

2.75

16.75

10.15

5.75

2.95

Highest Put OI

Instrument

Nifty 25-Jan (imm.)

Bank Nifty 23-Feb

Bank Nifty 02-Feb

Strike

8400

18000

19000

OI

3236475

335080

305080

Chg in OI

1643850

31920

257560

Security in Ban period:

NIL

Target Profit: Rs.8000 SL: Rs.4000

MOSt Market Outlook

27th January 2017

Trading Calls

HUL

Buy

CMP

Target

INR 869

INR 885

Derivatives Idea

TATAMOTORS

Long Call Condor

Buy 1 Lot 560 CE

Sell 1 Lot 580 CE

Sell 1 Lot 600 CE

Buy 1 Lot 620 CE

'Breakout from the continuation pattern indi-

cates likely extension towards 885

3

Momentum traders could participate the

upmove with a stop below 860 for a pattern

target upto 885

3

TATAMOTORS is in long- long unwinding cycle

Positive sector outlook along incremental

built-up in futures could boost momentum

3

Highest Call concentration for Feb series is at

540, unwinding in same could lead to option

trigger. Expecting rise in volatility in coming

sessions, low risk Long Call Condor Strategy

is recommended

3

3

FII & DII Activity (Rs. in Cr)

Cat.

FII

DII

Amt

1379

383

MTD

-1751

4462

YTD

-12333

39825

Major Price % Change

Major Combined OI % Change

FII F&O

Institution

Index Future

Index Options

Stock Futures

Net B/S

371

-350

-46

OI

Unwinding

Unwinding

Unwinding

MOSt Market Outlook

27th January 2017

Morning Meet Notes

Research Notes

Bharat Financial Inclusion: (CMP 749, TP 883, Rec. BUY)

Total Income up 33% to INR 4.2b, PAT grew 80% YoY to INR1.4b, disbursement of INR29b unchanged YoY, -26% QoQ, loan book down 6% QoQ to INR85b.

3

Expect +35% CAGR in AUM over the next 3 years. Maintain BUY

3

Bharti Airtel: (CMP 312, TP 410, Rec. BUY)

Cons. Rev. down 5.3% QoQ (-2.7% YoY) to INR233.6b. EBITDA fell 10% QoQ to INR84.8b. PAT fell 65% QoQ to INR5b on exceptional item of INR2b and higher tax

3

ARPU declined 8%/10% QoQ/YoY to INR172. RPM declined by a steep 9% QoQ to INR0.294/min

3

Wipro: (CMP 474, TP 540, Rec. Neutral)

CC rev. grew 0.6% QoQ (lower than exp), EBIT margin inline at 16.4%, PAT grew 2.0% QoQ to INR21b

3

Over FY16-19, we expect USD revenue/EPS CAGR of 5%/6%. Valuing it at 13x. Maintain Neutral

3

BIOcon: (CMP 995, TP 750, Rec. SELL)

Rev. grew 29.3% YoY to INR10.3b, EBITDA grew 45% YoY to INR2.6b (est. of INR2.25b), with margin up 370bp to 25.4%. PAT grew 66% YoY to ~INR1.7b (est. of INR1.4b).

3

We maintain Sell with a revised TP of INR800 @ 20x 1HFY19E EPS. Maintain SELL

3

Exide Ind.: (CMP 197, TP 233, Rec. BUY)

Net sales grew ~12.6% YoY to INR17.25b (est. of INR15.5) driven by replacement market. EBITDA declined ~4% YoY (-22% QoQ) to INR2.3b. EBITDA margin declines

230bp YoY to 13.3%. PAT growth to ~9% YoY (-16% QoQ) to ~INR1.5b

3

Expect EPS CAGR of 20%. Maintain BUY

3

CG CONSUMER ELECTRICALS: (CMP 184, TP 205, Rec. BUY)

A net sale was ahead of exp. INR8.9b (+9.7% YoY). EBIDTA stood at INR1b (up 20% YoY). Operating margin was 11.2%. Net profit at INR0.57b was ahead of our estimate

of INR0.33b

3

We value CGCEL at 30x its FY19E EPS of INR6.7 to arrive at our target price of INR205

3

Alembic Pharma: (CMP 586, TP 630, Rec. Neutral)

Sales declined 17% YoY. EBITDA margin contracted ~150bp QoQ to 19%. PAT was at INR860m (-27.5% QoQ).

3

Maintain Neutral with TP of INR630 @20x 1HFY19E EPS

3

MOSt Market Outlook

27th January 2017

Dharmesh Kant (Head - Retail Research)

Dharmesh.Kant@motilaloswal.com

Sacchitanand Uttekar (Technical Analyst)

Sacchitanand.Uttekar@motilaloswal.com

Tina Gadodia (Derivatives Analyst)

Tina.Gadodia@motilaloswal.com

Disclaimer: This document has been prepared by Motilal Oswal Securities Limited (hereinafter referred to as Most) to provide information about the company(ies) and/sector(s), if any, covered in the report and may be distributed by it and/or its affiliated company(ies).

This report is for personal information of the selected recipient/s and does not construe to be any investment, legal or taxation advice to you. This research report does not constitute an offer, invitation or inducement to invest in securities or other investments and

Motilal Oswal Securities Limited (hereinafter referred as MOSt) is not soliciting any action based upon it. This report is not for public distribution and has been furnished to you solely for your general information and should not be reproduced or redistributed to any

other person in any form. This report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any advice or recommendation in this material, investors

should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. The price and value of the investments referred to in this material and the income from them may go down as well as up, and investors may realize losses

on any investments. Past performance is not a guide for future performance, future returns are not guaranteed and a loss of original capital may occur.

MOSt and its affiliates are a full-service, integrated investment banking, investment management, brokerage and financing group. We and our affiliates have investment banking and other business relationships with a some companies covered by our Research Department.

Our research professionals may provide input into our investment banking and other business selection processes. Investors should assume that MOSt and/or its affiliates are seeking or will seek investment banking or other business from the company or companies

that are the subject of this material and that the research professionals who were involved in preparing this material may educate investors on investments in such business . The research professionals responsible for the preparation of this document may interact with

trading desk personnel, sales personnel and other parties for the purpose of gathering, applying and interpreting information. Our research professionals are paid on twin parameters of performance & profitability of MOSt

MOSt generally prohibits its analysts, persons reporting to analysts, and members of their households from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. Additionally, MOSt generally prohibits its analysts and

persons reporting to analysts from serving as an officer, director, or advisory board member of any companies that the analysts cover. Our salespeople, traders, and other professionals or affiliates may provide oral or written market commentary or trading strategies

to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent with the recommendations expressed herein. In reviewing these materials,

you should be aware that any or all of the foregoing among other things, may give rise to real or potential conflicts of interest. MOSt and its affiliated company(ies), their directors and employees and their relatives may; (a) from time to time, have a long or short

position in, act as principal in, and buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial

instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same

shall have no bearing whatsoever on the specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the affiliates of MOSt even though there might exist an inherent conflict of interest

in some of the stocks mentioned in the research report

Reports based on technical and derivative analysis center on studying charts company's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's

fundamental analysis. In addition MOST has different business segments / Divisions with independent research separated by Chinese walls catering to different set of customers having various objectives, risk profiles, investment horizon, etc, and therefore may at times

have different contrary views on stocks sectors and markets.

Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information specifically agrees to exempt MOSt or any of its affiliates or employees from, any and all responsibility/liability arising

from such misuse and agrees not to hold MOSt or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSt or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered

by the person accessing this information due to any errors and delays. The information contained herein is based on publicly available data or other sources believed to be reliable. Any statements contained in this report attributed to a third party represent MOSt's

interpretation of the data, information and/or opinions provided by that third party either publicly or through a subscription service, and such use and interpretation have not been reviewed by the third party. This Report is not intended to be a complete statement or

summary of the securities, markets or developments referred to in the document. While we would endeavor to update the information herein on reasonable basis, MOSt and/or its affiliates are under no obligation to update the information. Also there may be regulatory,

compliance, or other reasons that may prevent MOSt and/or its affiliates from doing so. MOSt or any of its affiliates or employees shall not be in any way responsible and liable for any loss or damage that may arise to any person from any inadvertent error in the information

contained in this report. MOSt or any of its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness

for a particular purpose, and non-infringement. The recipients of this report should rely on their own investigations.

This report is intended for distribution to institutional investors. Recipients who are not institutional investors should seek advice of their independent financial advisor prior to taking any investment decision based on this report or for any necessary explanation of its

contents.

Most and it's associates may have managed or co-managed public offering of securities, may have received compensation for investment banking or merchant banking or brokerage services, may have received any compensation for products or services other than

investment banking or merchant banking or brokerage services from the subject company in the past 12 months.

Most and it's associates have not received any compensation or other benefits from the subject company or third party in connection with the research report.

Subject Company may have been a client of Most or its associates during twelve months preceding the date of distribution of the research report

MOSt and/or its affiliates and/or employees may have interests/positions, financial or otherwise of over 1 % at the end of the month immediately preceding the date of publication of the research in the securities mentioned in this report. To enhance transparency, MOSt

has incorporated a Disclosure of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report.

Motilal Oswal Securities Limited is under the process of seeking registration under SEBI (Research Analyst) Regulations, 2014.

There are no material disciplinary action that been taken by any regulatory authority impacting equity research analysis activities

Motilal Oswal Securities Limited is registered as a Research Analyst under SEBI (Research Analyst) Regulations, 2014. SEBI Reg. No. INH000000412

A graph of daily closing g prices of securities is available at www.nseindia.com and http://economictimes.indiatimes.com/markets/stocks/stock-quotes.

Analyst Certification

The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations

and views expressed by research analyst(s) in this report. The research analysts, strategists, or research associates principally responsible for preparation of MOSt research receive compensation based upon various factors, including quality of research, investor client

feedback, stock picking, competitive factors and firm revenues

Disclosure of Interest Statement

1.Analyst ownership of the stocks mentioned above

2.Served as an officer, director or employee

No

No

Regional Disclosures (outside India)

This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject MOSt & its group

companies to registration or licensing requirements within such jurisdictions.

Motilal Oswal Securities Ltd

Motilal Oswal Tower, Level 6, Sayani Road, Prabhadevi, Mumbai 400 025

Phone: (91-22) 30894200 Fax: (91-22) 22885038. E-mail: info@motilaloswal.com