Weekly Market Sentiment_21.10.2017

Markets closed the pre diwali session near all time high. Although the “Muhurat” trading did not bode well with the bulls. Global weakness pulled the markets and sentiment lower. Nifty has slipped below its newly conquered high of 10200. Diwali sentiment ruled the streets throughout the week. Results will continue going forward and stock specific theme is likely to play out. New listings – MAS Financial and Godrej Agrovet made stellar debuts on the market. Both the stocks got a 35% premium from the street on listing day.

Technically speaking the Friday pull back should give fresh legs and a much-needed breather. 10080 will hold a key support for the very short-term. 9970 being the 50 D EMA will provide intermediate support to Nifty. On the positive side if Nifty is to hold 10180 on a weekly closing basis, one may have a massive rally squeezing shorts and surprising a lot of scared bulls. Flip side of range breaks, if there is correction in the intermediate time, Nifty can easily test the lower end of the weekly range at 9700. A double bottom is in the making still, 10180 is the key level to watch on a closing basis.

Fundamentally, nothing has changed. If anything markets just got more expensive. Historically elevated valuations will continue to keep bulls on their toes. Complacency cannot be tolerated at this levels. Time is ripe for a black swan event. Liquidity fueled rallies do not bode well for investors and this seems to be the most hated bull market. P/E is still astonishingly high and continues to stay there around the 25x multiple. Result season is underway and it seems that Nifty will decide a trend based on these results.

Globally, minor unrest continues as North Korea keeps the world and its neighbors on their toes. Kim is giving sleepless nights but none of that has boiled down to the prices. DOW continues to scale all time new highs. 23k has come – something that nobody had foreseen. Liquidity is abundant and interest rates are low giving this rally fresh room to scale new highs.

Sector watch – Infra looks promising. Keep an eye on the Nifty Infra index and its components. Some of them are near crucial resistance. A break out is on the cards. Nifty metals seem the strongest but slightly over heated index. Metals must pause. Bank is the ugly kid on the block. Nifty Bank does not look in a hurry to scale new highs while Nifty has. Unless this divergence closes, rally will not be clean.

Weekly Markets Sentiment_14.10.2017

Markets ended on a strong footing for the week. It was early diwali on the streets as Nifty broke its previous high and was 9 points shy to hit 10200. The close is an all time high close for Nifty. Sentiment has been strong ever since the IIP and CPI numbers came out. Nifty sits strong at 10167 with its eyes firmly set on a final break out attempt. This will be markets 3rd attempt at 10170+ levels.

Technically speaking Nifty is looking good with a gap up opening on daily charts. Undercurrent seems strong enough to warrant a fresh rally. A close above 10200 will confirm 9700 zone to be an intermediate bottom, may be a pattern of double bottom will be in place. Still early days but technically Nifty does look good for fresh intraday spikes above 10200. Sustaining a close above this will be a thing to watch. Divergence continues as Nifty Bank is yet to take out its highs and Sensex is still a few points shy for an all time high.

Fundamentally, nothing has changed. Markets are still over valued. Multiples continue to be at all time highs across the board. Also FII continue to dump in cash markets, and DII continues to mop up supply with the dry powder it is sitting on. IPO market frenzy continues as people flock towards high valued IPOs. RIL came in with decent but doubtful results. The stock will react on Monday. It will be a wait and watch game as results season kicks in the coming days and weeks. This is will be the litmus test for all major companies and the market as a whole.

Globally DOW continues to be strong and over bought. Charts indicate a reluctant history where the market has risen almost all year around. Other parts of the world have a similar phenomenon. Barring a few local issues such as Brexit for UK and Catalan crisis for Spain, world seems a quieter place for now. But who knows when Kim strikes.

Banks are finally looking to lead this break out. Far from its new highs, one can bet on banks in the coming weeks. Nifty bank does seem it will test last highs if not break it. This year and season’s favorite metal stocks should see some traction continuing. Nifty metal looks to continue to scale new highs. Nifty energy will be one index to watch. Reliance should lead followed by HPCL. One can look at momentum bets in this index.

Morning Business News Round Up_Oct 13,2017

Morning Business News :

  • RBI’s strict KYC norms to keep e-wallets safe
  • Idea, Voda may offer 4G smartphones after Jio, Airtel
  • Banks to set aside Rs 3.3L cr as NPA provisioning
  • Tata Teleservices to sell wireless mobile biz to Bharti
  • 4 metros to gain $7.2 bn/yr on digital payment boost
  • SC asks banks not to sell pledged Fortis shares
  • IndusInd Bank posts 25% YoY surge in Q2 profit
  • RBI proposes currency trading platform for retail customers
  • IIP recovers to 4.3% in Aug, retail inflation steady at 3.28% in Sept
  • Sebi may reduce time to file consent pleas
  • Bitcoin trades above $5,000 for first time ever, up 7%

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  • Real estate might soon be under GST: Arun Jaitley
  • US jobless claims fall to more than one-month low
  • ‘India’s per capita energy consumption to double in next 6-7 years’
  • World Bank President lauds Modi’s reform agenda
  • India, Mauritius back to negotiating free trade pact
  • TCS net profit slips 2% to Rs. 6,446 cr in Q2
  • Mutual funds log Rs. 2 lakh cr inflows in April-Sept FY’18
  • Prakash Industries bags additional coal linkage for 5 years
  • LIC makes Rs8,000 crore bid in GIC Re IPO
  • Reliance Industries’s Q2 results to get a boost from refining business
  • Kumar Mangalam Birla may tap markets amid telecom shakeout
  • Govt relaxes guidelines for atomic mineral mining in coastal regions
  • JNPT container traffic rises 6% in April-September period
  • SoftBank hits 17-year high amid Japan rally, Sprint talks
  • Paytm eyes 5-fold growth in gold sales in Dhanteras, Diwali
  • Allianz, Shapoorji Pallonji partner to invest in office market
  • FM Arun Jaitley says Indian economy undergoing challenges, not crisis
  • China says EU, US trade moves lack awareness of WTO rules
  • RBI sets rupee reference rate at 65.1003 against US dollar
  • Government tempers daily price revision of petroleum products
  • Slowdown is real but not sure of causes: PM’s panel
  • Indian carriers eye flying slots of Qatar Airways at Dubai
  • Corporates may report dip in profits for second quarter

Weekly Markets Sentiment_07.10.2017

Markets closed firm for the week. Nifty was up almost 2% and is in striking distance of reclaiming 10k for the third time. Global markets stability and liquidity ensured markets remained stable throughout. Result season is about to kick in. RBI held rates unchanged and sighted a stricter environment. The policy was a non event altogether. Growth concerns were flagged however undertone was mildly positive. Sentiment has stabilized around our own markets. The scare of breaching 9700-9600 zone has temporarily subsided.

Technically speaking, Nifty is far from its resistance zone. Cannot be considered safe yet as still good 200 points need to be scaled. On the positive note Nifty is 200 points away from its recent lows of 9680. It has successfully tested and bounced back.  Momentum is still to reverse technically speaking but looks like markets could be headed higher to test 10100 on the Nifty. Immediate resistance stands at 10040 levels where Nifty should take a pause.

Fundamentally, nothing has changed. Multiples and valuations continue to remain stretched. Liquidity is abundant and hence market corrections are being bought. Small and mid-caps continue their dream run. When will the tap run dry? This is anybody’s call. India has recently under-performed its global peers. FII’s continue their cash selling spree. However, they have bought a lot of stock and index futures going into the new October expiry. Cash selling continues and is equally countered by local DIIs and MFs who seem to be having access to unlimited capital.

Globally DOW had a decent week. Bulls rampaged as it kept scaling new all time highs. DOW sits pretty at 22600+. US presidents tax reform proposals have sent a fresh wave of buying across US markets. Bulls have got yet another reason to party and justify valuations. North Korea for now seems to have calmed down, but one reckons only for now.

Sector wise, as pointed out Metals are strongest in the lot and they proved to be. Nifty metals have hit 3700+ and is likely to scale new peaks as globally commodities have a good time. One can trade momentum in Nifty Metal constituents. Nifty Energy seems to be on a roll. Keep an eye out for energy plays and the index will look to test its early peak of 13650+. OMC’s will be in the news and should be looked at for buying the dips. Pharma looks on track to hit  new highs as Nifty Pharma on back of support given by Sun should test 9800. Nifty Bank will continue to be the make-break index. It is clearly struggling to gain momentum. 24300, if taken out can give it fresh legs. Unless that happens it will drag the sentiment down.

Weekly Markets Sentiment_30.09.2017

Markets ended 2% down from previous weekly close. The 2 weeks leading to September ending have not thrown up good signals. Sentiment has gone for a toss. Weakness continues across the markets. No one has to guts to buy the dips. Nifty is down 3-4% from it’s all time highs. Sensex perhaps never made a significant top. Divergence has been magnified all across the places. Expiry week lived up to its expectations.

Technically speaking. Nifty is in a bad shape. 9900 is the crucial first level it needs to cross to stem the sell on rallies strategy. 9883 being the daily chart 50 day EMA should be reclaimed. On the positive note, 9685 was the key level from where the Nifty bounced to reclaim the top. This was August 2017. In the recent downturn the markets reversed from 9687. However Nifty is not decisively safe as it’s just 1% away from its low. This can be categorized as a dead cat bounce and not a buying spree.

Fundamentally speaking, multiples are still stretched. Nothing has changed substantially. FII selling is relentless. DII buying is relentless. Time will tell who has the last laugh. History tells us its going to be FIIs. Economy is struggling – mixed data points, noise of a political instability, doubts being cast on the ability of the incumbent government are weighing down. With the Q2 FY17 closed, all eyes will be on the results season which will kick-start soon. This seems to be the deal breaker quarter.

Globally, Korea v/s the world noise seems to have lowered as bit. As of now. Dow is stable and so are global markets supported by lack of negative triggers and bundle of liquidity. Commodity space is seeing some traction as Crude is having one of the best runs in recent times.

Sector watch – keep and eye on Metals. As a space they seem to look strong. If the recent lows hold, Nifty Metal should be on its way to make a new high. Watch out for Auto Index and stocks. Given a robust performance they would show good positive traction. Nifty Bank is looking tricky. A breach of previous lows will accelerate momentum on the down side.

Upcoming SME IPO_Jash Engineering Limited

SME IPO_JASH ENGINEERING LIMITED

Issue Details

Issue opens 28th September 2017
Issue Closes 3rd October 2017
Issue Price 115-120
Lot Size 1200
Issue Size 48 Crore
Lead Manager Systematix Corporate Services Limited
Registrar Linkintime India Private Limited
Platform NSE

Promoters Group

The promoters of our company are Mr. Laxminandan Amin, Mr. Pratik Patel, Mrs Bharafi Patel and Mr. Harsh Patel which holds aggregate of 30.09% of pre offer issued, Subscribed and paid up equity capital of the Company.

Overview of Business

The Company is engaged in manufacturing of water control gates, flap valves, knife gates valves, energy dissipating valves and coarse screens,  screening conveying equipment, hydro power screw generator, screw pump and process equipment. The company offers a single stop solution undeer one roof including Design, casting, Fabrication, Assembly & testing and provides the most varied range of these products in largest possible sizes.

Object of the ISSUE

(Rs. in Lakhs)
Sr. No. Particulars Amount
1 Working Capital Requirements 900
2 Expansion of Manufacturing Facilities 193.48
3 Acquasition of Land and Set up of New Plant 859.14
4 General Corporate Purpose 359.45
Total 2312.07

Overview of Consolidated Financials

(Rs. in Lakhs)
Particulars 2016-17 2015-16 2014-15 2013-14 2012-13
Total Revenue 1225.08 882.72 576.73 737.86 544.38
Total Asset 640.72 734.05 541.24 402.84 340.53
Groups Share of Net Profit 117.65 97.68 45.16 63.48 66.82

List of Wholly Owned Subsidiaries

  1. Shivpad Engineers Private Limited, India
  2. Jash USA Inc, USA
  3. Mahr Maschinenbau Gambh, Austria
  4. Engineering and Manufacturing Jash Limited, Hong Kong

Financial Ratios

  1. EPS : 10.98 ( Standalone Basis) , 10.72 ( Consolidated basis)
  2. PE Ratio: 11
  3. RONW: 11.77%( Standalone Basis) , 12.26%( Consolidated basis)
  4. NAV per Share: 93.30 ( Standalone Basis) , 87.44 ( Consolidated basis)

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Upcoming SME IPO_Milton Industries Limited

SME IPO_MILTON INDUSTRIES LIMITED

Issue Details

Issue opens 29th September 2017
Issue Closes 6th October 2017
Issue Price 34
Lot Size 4000
Issue Size 14.28 Crore
Lead Manager Swastika Investmart Limited
Registrar Big Share Services Private Limited
Platform NSE

Promoters Group

Mr. Vijay Pal Jain, Mr. Ajay Mahipal SinghJain, Mr. Abhaykumar Mahipalsingh Jain, Mr. Vikas Jain and Mr. Saket Jain are the Promoters of the Company. Promoter and Promoter Group will continue to hold the majority of post- Issue paid-up equity share capital of the Company

Business Overview 

The Company, Milton Industries Limited is engaged in manufacturing of Laminates, Artificial Leather cloth and Glass Fibre Reinforced Epoxy (GFRE) Sheets in the state of Gujarat. They are manufacturer and exporter of premium quality high-pressure laminates, industrial Laminates, laminated board, flooring laminates, artificial Leather cloth, GFRE Sheets and other allied products. The superior quality laminates can be used on walls, doors, windows, cupboards, tabletops, hotels, cash counters, home kitchen, etc. Initially our Company was engaged in manufacturing of laminates and further diversified in manufacturing and exports of Artificial Leather cloth, GFRE Sheets,DGFRP, CCL and NAFTC.

Company is producing Decorative & Industrial Laminates so called High Pressure Laminates from the year 1986. This Laminates are used for Flooring, for Door, Windows, Cupboards in Hotels, for Site Panels, for Table Top Counter at Banks & Other Places.  They are also producing different Textures for Vertical Decorative Thermosating Synthetic Resin Bonded Laminate Sheets which are basically supplied to Railways Departments.  Their product is also used by other Industries such as real estate and decorative Industry. Company was awarded by export award for three consecutive years 1994-1997 and also holding export status certificate

Object of the Issue

(Rs. in Lakhs)
Sr. No. Particulars Amount
1 Working Capital Requirements 1300
2 Public Issue Expenses 37.45
3 General Corporate Purpose 90.55
Total 1428.00

Overview of Financial Indicators

(Rs. in Lakhs)
Particulars 2016-17 2015-16 2014-15 2013-14 2012-13
Total Revenue 4363.17 4203.04 4228.35 4546.17 4655.06
Total Asset 5592.52 4851.89 4766.95 4127.73 3830.07
PAT 115.43 22.1 62.98 74.31 86.26

Financial Ratios

EPS: 1.03

PE Ratio : 33.14

RONW: 8.65%

NAV after Issue: 17.88

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Morning Business News Round Up_Sep 27,2017

Morning Business News :

  • GST mop up for August dips to Rs 90,669 crore
  • IDFC and Shriram to redraw new merger formula
  • Indian telecom undergoing tech disruption phase’
  • NCLT to hear Ericsson-RCom insolvency plea on Oct 6
  • Facebook to localise user data or be blocked: Russia
  • NeSL to be the first IU under the new recovery law
  • Reliance Infra to raise stake in Reliance Naval
  • Sebi stiffens rule on unauthorised trades
  • Govt considers fund to help exporters under GST regime
  • TN to procure 1500 MW of solar power at Rs 3.47 per unit
  • ICICI Lombard to make market debut today
  • Sebi to allow mutual funds, PMS to participate in commodity futures market
  • ArcelorMittal’s focus on other assets may hit $1-bn JV with SAIL
  • SEBI allows guarseed options on NCDEX

Image result for •	Sebi

  • Parliamentarians, experts for early passage of Motor Bill
  • UP sugar mills demand status quo on cane prices
  • JM Baxi Group opens India’s first ICD-based cold store in Haryana
  • Godrej Agrovet eyes raising ₹1,160 cr via IPO
  • ‘RCom has backup plans in place for the delayed Sistema merger’
  • GE warns India about risks to altering $2.5 billion diesel locomotives deal
  • Dabur ties up with Amazon to boost global sales
  • Shell companies: Disqualified directors under banks’ scrutiny
  • Lloyds Bank to transfer 1,000 staff to TCS subsidiary
  • Hong Kong, Malaysia looking better as India slows: ADB
  • Technology billionaires lose $16 billion as sector stocks sink
  • Rupee closes at 65.45; weakest in 6 months
  • India raises market access, barriers issue with Indonesia
  • Airtel deploys 5G capable tech; promises faster data speeds
  • Anil Ambani says telecom sector in ICCU, warns of monopoly
  • Letters from a whistle-blower to SEBI on NSE rot
  • Tech, infra upgradation vital for agri-business
  • Rising oil prices to further hurt bleeding economy
  • RJio foots chunk of bill for cut-price phone, bets on data
  • ADB lowers India growth outlook

Upcoming SME IPO_ Reliable Data Services Limited

SME IPO_ RELIABLE DATA SERVICES LIMITED

Issue Details

Issue opens 27th September 2017
Issue Closes 3rd October 2017
Issue Price 57
Lot Size 2000
Issue Size  14.82 Crore
Lead Manager Swastika Investmart Limited
Registrar Skyline Financial  Services Private Limited
Platform NSE

Promoters Group

Mr Sanjay Kumar Pathak, Mr. Rakesh Jha, Mr. Sandeep Kumar Jha, Mr, Sunil Kumar Rai and Mr. Anil Kumar Jha are the promoters of the Company.

Overview of the Business

The company is primarily engaged in providing customized services to various Banks, financial institution and other manufacturing industries in the field of management Services, transaction processing services, human resource services and other allied services.

The company has entered into agreement with various lending MNC and private sector banks for providing various support services.The company is engaged in collection services with mobile based application developed by banks, image based data processing on behalf of banks.

Object of the issue

(Rs. in Lakhs)
Sr. No. Particulars Amount
1 Working Capital Requirements 500
2 Repayment of Long term Borrowing 596.07
3 Capital Expenditure 248.48
4 General Corporate Purpose 97.45
5 Issue Expenses 40
Total 1482.00

Overview of Consolidated Financial Parameters(Restated)

(Rs. in Lakhs)
Particulars 2016-17 2015-16 2014-15 2013-14 2012-13
Total Revenue 3429.33 2619.09 2428.04 2013.85 1399.72
Total Asset 2756.67 2420.09 2136.94 1828.61 1245.56
PAT 162.32 129.29 172.49 148.14 102.56

Financial Ratios

  1. EPS: 2.71
  2. P/E Ratio : 21.07
  3. RONW: 15.16%
  4. Consolidated NAV after Issue : 29.68

 

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Morning Business News Round Up_Sep 25,2017

Morning Business News :

  • Donald Trump slaps travel restrictions on North Korea
  • Foreign funds head for Dalal Street exit
  • Amazon India calls up Ashok Patni group for JV
  • 200,000 more directors disqualified
  • Essar to Set Up 4 Small & Medium LNG Terminals
  • Mallya diverted most of Rs 6kcr loan to shell cos
  • UK negotiator dismisses reports of 40 bn-pound Brexit bill
  • Crackdown on shell firms: India Inc may have to go on restructuring drive
  • Insurance sector undergoing disruptions, trend to accelerate: Assocham
  • India in talks with Uzbekistan, other countries to create uranium reserve
  • Decision on PEs investing in insurance firms in a month: Irdai chief
  • Modi likely to respond to economy concerns at BJP executive meet on Monday
  • Amazon picks up 5% stake in Shoppers Stop

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  • FinMin wants RBI to lower rates, boost domestic demand
  • India, Indonesia trade ministers to meet on Monday
  • FinMin plans Mudra promotion camps from Sept 27
  • Supertech raises Rs350 crore from L&T Finance for housing project
  • Sebi to hire agency to strengthen IT infrastructure
  • Govt to set up 5 scrap-based steel plants with Rs500 crore investment
  • Insurance sector undergoing disruptions, says report
  • Aditya Birla’s acquisition bid may value Aleris Corp at $2.5 billion
  • Economic stimulus to influence equity indices’ movement, says report
  • 95 mobile companies have set up plants in India, says IT Minister Ravi Shankar Prasad
  • DGCA invites bids from consulting firms for its eGCA project
  • Mark Zuckerberg wants to sell 35-75 million Facebook shares
  • Govt favours bank recapitalisation
  • Telcos owe Rs 3.08L cr in spectrum dues
  • FC Exclusive: NCLT notice to SpiceJet in insolvency plea
  • Oil sector mergers may be advanced to boost economy