Ashika_Monthly_Flip_Insight_June_2016

June, 2016 

Optimism 

Building UP 

Market Overview Monthly Insight Performance 

Stock Picks Valuation at a Glance 

P-Note Norms Sector Outlook-Wood Panel 

Economy Review Mutual Fund Overview 

Technical View Market Diary 

Commodities Monthly Round up 

World Economic Calendar 

Dabur India Ltd. 

| 

Godrej Consumer Products Ltd. 

Glenmark Pharmaceuticals Ltd. | Tata Power Company Ltd.

Inside this issue 

JUNE 2016 

01 04 08 16 Market 

Stock Picks 

Valuation at a 

Overview 

Monthly 

• Dabur India Ltd. 

Glance 

Insight 

• Godrej Consumer Products Ltd. 

• Glenmark Pharmaceuticals Ltd. 

Performance 

• Tata Power Company Ltd. 

18 22 28 33 P-Note Norm Sector 

Economy 

Mutual Fund 

Outlook 

Review 

Overview 

36 41 Technical 

Market Diary 

View 

42 Commodity 

Monthly 

Round up 

44 World 

Economic 

Event Calender 

Name Designation Email ID Contact No. 

Paras Bothra VP Equity Research paras@ashikagroup.com +91 22 6611 1704 

Krishna Kumar Agarwal Equity Research Analyst krishna.a@ashikagroup.com +91 33 4036 0646 

Partha Mazumder Equity Research Analyst partha.m@ashikagroup.com +91 33 4036 0647 

Chanchal Bachhawat Equity Research Analyst chanchal.bachhawat@ashikagroup.com +91 22 6611 1712 

Tirthankar Das Technical & Derivative Analyst tirthankar.d@ashikagroup.com +91 33 4036 0645 

SEBI Registration No. INH000000206 

Disclosure 

The Research Analysts and /or Ashika Stock Broking 

Limited do hereby certify that all the views expressed in 

this research report accurately reflect their views about 

the subject issuer(s) or securities. Moreover, they also 

certify the followings:- 

• The Research Analyst or Ashika Stock Broking Limited or 

his/its Associates or his/its relative, has any financial 

interest in the subject company (ies) covered in this report. 

No 

• The Research Analyst or Ashika Stock Broking Limited or 

his/its Associates or his/its relative, have actual/beneficial 

ownership of 1% or more in the subject company, at the 

end of the month immediately preceding the date of the 

publication of the research report. No 

• The Research Analyst or Ashika Stock Broking Limited 

or his/its Associates or his/its relatives has any material 

conflict of interest at the time of publication of the 

research report. No 


or his/its Associates have received any compensation or 

compensation for investment banking or merchant 

banking or brokerage services or for product other than 

for investment banking or merchant banking or brokerage 

services from the companies covered in this report in the 

past 12 months. No 


or his/its Associates have managed or co managed in the 

previous 12 months any private or public offering of 

securities for the company (ies) covered in this report. No 


or his/its Associates have received any compensation or 

other benefits from the company (ies) covered in this 

report or any third party in connection with the Research 

Report. No 

• The Research Analyst has served as an officer, director 

or employee of the company (ies) covered in the research 

report. No 


has been engaged in Market making activity of the 

company (ies) covered in the research report. No 

Disclaimer 

This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. Ashika Stock Broking Ltd. is 

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OPTIMISM BUILDING UP 

The World is in a divergent trend now at least as far as 

the interest rates are considered. While the central banks 

of Denmark, Sweden, Switzerland, Japan, and the Eurozone 

have all indulged in the practice of negative interest rates, 

US Fed in its latest statements is contemplating for 

another rate hike in June. The practice of negative interest 

rates is just another tool to revive growth and encourage 

consumption. In this case the central bank actually taxes 

commercial banks for parking deposits with them rather 

wants to infuse in the economy at lenient terms to boost 

consumption by lending more. Measures such as negative 

interest rates are advocated out of desperation, a signal 

that traditional policy options have proved ineffective and 

new limits need to be explored. These measures have 

been advocated by policymakers after lowering the 

interest rates to historic low levels failed to spruce up 

inflation and growth in the economies. Central banks then 

resort to quantitative easing and thus inject liquidity into 

economies by buying long-term government and other 

bonds. Policy makers in both Europe and Japan are trying 

to prevent a slide back into deflation and are willing to 

introduce new monetary tools to spruce price levels and 

economic growth. Europe’s central bank chose to 

experiment with both negative rates as well as bondbuying 

program (quantitative easing) like those used in 

the U.S. and Japan. European central bank however 

resorted to quantitative easing almost six years after US 

embarked on the same mission and kept the interest rates 

at zero. However, this practice of easy money and 

unconventional monetary policies could come at a cost. 

World Bank has warned that negative rates can erode 

bank profitability by narrowing interest-rate margins. They 

can also encourage banks to take excessive risks, leading 

to asset bubbles. Lower interest rates on deposits may 

cause large sections of the economy to become cashbased, 

while pension and insurance companies may 

struggle to meet long-term liabilities at a fixed nominal 

rate. A latest survey by Swedish debt collector Intrum 

Justitia AB for its European Payment Report 2016 has 

found that low interest rates haven’t affected their 

willingness to invest and have failed to revive investment 

at Europe’s companies. A RBI working paper titled “Rules 

of the Monetary Game” by Prachi Mishra and Governor 

Raghuram Rajan have highlighted that unconventional 

policies may result in large adverse spillover effects on 

other countries, which then could resort to aggressive 

policies to gain even small positive domestic effects and 

consequently, the world may embark on a sub-optimal 

collective path. 

Although, the debates still goes on with regards to the 

success of the US quantitative easing. However, majority 

will accept that it has checked most of the boxes as far 

the targets were considered missing. The economic growth 

is reviving as well as the unemployment rate is under 

comfort level of the US Federal bank. The only other thing 

– inflation target is yet to be meaningfully achieved. 

However, the policymakers can live with that. The US 

Federal reserve raised rates after seven years in Dec 2015 

and ever since there have been speculation regarding the 

tone of the US Fed chairman – dovish, hawkish or some 

even look for hovish statement. All eyes are now on the 

June 14-15 FOMC meet and earlier expectations of a 

status quo have gradually turned into a hawkish 

expectation for a 25 bps rate hike. The hawkish 

expectation have been incorporated by the economists 

after statements from Janet Yellen, Fed Chairman that the 

economic growth is gradually picking up as signaled by 

various data monitored by US Fed. At the same time, the 

unemployment situation is in a comfortable position and 

is probably the key indicator for monetary policy together. 

Further, any positive surprises on wage growth will only 

bolster strong sentiments for June rate hike. Other Fed 

officials have also increasingly voted for a June rate hike 

and there could be two or three rate hikes this year, 

1


MARKET OVERVIEW 

according to them. Two of the key factors which have 

been a deterrent to the global growth, apart from slowing 

China - energy slump and the strong dollar seem to be 

fading to some extent. With most economists now 

expecting that worst may be over for crude oil and related 

commodities and probabilities of stable dollar, financial 

market volatility is expected to be tamed. However, one of 

the possible hurdles for a June rate hike is the U.K.’s June 

23 referendum on whether to leave the European Union. 

The RBI’s own monetary policy is also on June 7th and by 

looking at the latest prints for CPI, WPI as well as IIP, the 

RBI would be settling for a status quo. There are further 

risks to the CPI as well as WPI from the rising food prices and 

the RBI would take that into account before any further 

easing of rates as it doesn’t want to be caught off guard. 

However, the rosy expectation for monsoon is extremely 

positive for meeting FY17 CPI targets for RBI. Skymet, private 

weather forecasting agency revised upward its 2016 

southwest monsoon forecast to 109 per cent of the long 

period average (LPA) from 105 predicted in April. This sounds 

extremely positive when second estimates surpass first 

estimates. If the Skymet expectations really comes true, it 

would mean that India might have its highest southwest 

monsoon since 1994. According to Skymet’s revised estimate, 

the rains this year would provide enough moisture not only 

for the kharif crops but also for the rabi farming season. A 

good monsoon goes a long way apart from providing a boost 

to the rural consumption. India being predominantly 

dependent on agriculture, monsoon has a huge impact on the 

Indian economy. Despite agriculture sector contributes to 

~15% of GDP, nearly 70% of the population is dependent on 

agriculture directly and indirectly. The strong estimates thus 

helped create a positive mood for stock markets as well. Nifty 

and Sensex both recorded gains of 4.2% and 4.4% 

respectively on account of the optimism in the air. The 

corporate set of results for Q4FY16 has also been on a 

positive note. According to Care Ratings report, based on the 

database of 622 companies, the corporate results have shown 

signs for first green shoots. Net Sales grew by 3.51% YoY 

while net profit grew by 2.66% YoY. However, after excluding 

three outlier companies (the companies which skew the 

results), the growth in net sales improved to 5.63% YoY while 

growth in net profit declined by 8.3%. Further excluding 

banks from those, the net sales grew by 5.62% YoY and the 

net profit grew by ~12%. The essence of the Q4FY16 results 

have been the recovery in growth in revenue, thus suggesting 

a recovery in demand. Part of this recovery had to do with 

the low base of last year numbers. The numbers for next 

quarters are expected to be even better and the market 

seems to be building in the expectations. The FII’s seems to 

be making a comeback to the Indian equity markets as they 

have been net buyers to the extent of Rs 1511 crore (as of 

26th May, 2016). This could also be part of the global stance 

towards emerging markets. Bank of America Merrill Lynch 

survey of fund managers for May 2016 suggest that the 

global fund managers’ allocation to emerging market equities 

has turned positive after 17 months, with a net 2% of fund 

managers overweight. 

The interest of the FIIs in the Indian markets is despite the 

fact that India and Mauritius have signed a protocol amending 

the double tax avoidance arrangement between the two 

countries. India and Mauritius have signed a protocol 

amending the India-Mauritius tax treaty and starting 1st April 

2017, investment through Mauritius will become taxable for 

short-term capital gains. Besides, investment through 

Singapore will also become taxable for short-term capital 

gains because Singapore’s tax treaty exemptions are coterminus 

with Mauritius. Mauritius and Singapore accounted 

for 28% and 44% of outstanding FPI investment in equities 

and bonds respectively, as of March 2016. Together, they also 

account for 49% of cumulative FDI inflows into India. 

Singapore, Mauritius and Cayman Island are known as tax 

heavens as they do not impose capital gain tax. Under Article 

13 (4) of the India-Mauritius DTAA, capital gains derived by a 

Mauritius resident from alienation of shares of a company 

resident in India were taxable in Mauritius alone. However, 

the Protocol marks a shift from residence-based taxation to 

source-based taxation. Consequently, capital gains arising on 

or after April 01, 2017 from alienation of shares of a 

company resident in India shall be subject to tax in India. 

However, there will be no retrospective taxation to 

investment in shares acquired before 1 April 2017. 

Incidentally, General Anti-Avoidance Rules (GAAR) will also be 

applicable from 1 April 2017. Essentially, foreign investors 

who view India as a long term strategy are immune from the 

changes since long term capital gains tax is nil in India. Thus, 

this will encourage investors to view India from a long term 

investment perspective and lower the hiccups to some extent. 

SEBI has also cracked on the P-notes in order to tighten the 

2


due-diligence norms for issuance and transfer of ODIs after 

concerns were raised by the Supreme Court-appointed Special 

Investment Team (SIT) on Black Money about the possible 

misuse of these instruments for laundering of black money or 

round tripping of funds. Thus, slowly but surely the 

government is doing its bit by moving through the promised 

polices to curtail the advancement of illicit money into the 

country. 

Another important factor has been the elections in the states 

of West Bengal, Tamil Nadu, Assam wherein the BJP-led 

coalition has emerged victorious in the state of Assam, a 

commendable job by every standard. Besides, West Bengal 

chief minister has also showered her support for GST and the 

government expects a positive outcome on the GST in the 

coming sessions. Although, the numbers will not meaningfully 

have any impact on the numbers for BJP in the Rajya Sabha 

at least as of now. Nevertheless, it sends out a strong signal 

about the popularity of the BJP party after having lost the 

Delhi and Bihar elections. The Narendra Modi government 

turned 2 years recently and to kickstart the fortnight-long 

celebrations; the prime minister addressed a rally in Uttar 

Pradesh’s Saharanpur. He will follow this up with four more 

rallies – Balasore in Odisha; and one each in Rajasthan, 

Karnataka and Meghalaya, later on. The BJP has high stakes in 

the 2017 UP Assembly polls, where it had won 72 of 80 

seats in 2014 Lok Sabha elections. The state’s ruling 

Samajwadi Party and the BJP, in power at the Centre, appear 

eager to have the polls in December 2016 as they believe 

this gives them the best chance to win the key electoral 

contest that will have repercussions for the whole nation. 

After the mistakes in Delhi and Bihar, the BJP seems to have 

learnt quick and strategized. It needs to be seen what 

strategies BJP adopts for the upcoming UP elections, however 

after this victory in Assam, the BJP has raised the bar and 

promises for a tough fight. 

Paras Bothra 

Vice President - Equity Research 

Email - paras@ashikagroup.com 

Phone : 022 6611 1704 

3


MONTHLY INSIGHT PERFORMANCE 

Over the years, Ashika Research based on its rigorous and 

co n t i n u o u s a n a l y s i s o n f u n d a m e n t a l b a s i s , h a s 

recommended stocks and consistently achieved the target 

price recommended. Since January 2012 we have 

recommended 194 stocks out of which 149 has achieved 

target. Hit Ratio stands at 77%. Out of these 78 stocks 

have given a return of more than 100%. During this period 

the Nifty has given a return of 57% and a return of 75% 

from its peak. 

The stocks recommended by us such as Cera Sanitaryware, 

Symphony, Srikalahasti Pipes, Aurobindo Pharma, Shree 

cement, MRF, Britannia, Can Fin Homes, Pidilite Ind, Torrent 

Pharma, Wim Plast, Axiscades Engg, Lupin, Maruti Suzuki, 

Glenmark Pharma, Kaveri Seeds, Himatsingka Seide, HPCL, 

Gujarat Gas, UPL, Relaxo Footwears, Indusind Bank, Zensar 

Tech, Havels India, Berger Paints, Hexaware Ltd., PI 

Industries, Dabur, Sharda Motor, Deccan Cements, Emami, 

Bajaj Finserv, Zydus Wellness, Bharti InfraTel, Cummins 

India, Adani Ports, L&T, Godrej Consumer, Prism Cement, 

Finolex Ind., Pidilite, MRF Ltd., Dr Reddy, Pidilite Ind., Berger 

Paints India, Divis Lab, Ashok Leyland, BPCL, Tatamotor - 

DVR, Gulshan Polyols, IFB Industries, Motherson Sumi, Zee 

Entertainment, Escorts, Castrol India, Rallis India, Info Edge 

(India), LIC Housing Fin, AIA Engineering, Indian Bank, Dr. 

Reddy Lab, Axis Bank, FDC Ltd., Dabur India, Multibase 

India, Tata Motors, City Union Bank, SKS Microfinance, V- 

Guard Ind., IPCA Lab and Magma Fincorp have generated 

exceptional returns (more than 100% returns) for our 

investors. A few of them have generated returns in excess 

200% for our investors. 

We have selected stocks across large cap and mid cap 

companies and across variety of sectors. For the period 

a n a l y ze d , t h e s t o c k s re co m m e n d e d by u s h ave 

outperformed their respective sectoral indices. 

Success Rate 

Return Classification 

19% 

27% 

4% 

52 

Stocks 

78 

Stocks 

77% 

13% 

25 

Stocks 

40% 

20% 

39 

Stocks 

Target Achieved Exit/Booked Calls Open 

Total Call: 194 

More than 100% Return 

50-25% Return 

100-50% Return 

Less than 25% Return 

4


Recommended Stocks 

27/05/2016) 

May-16 Mahindra & Mahindra Auto 1330 1550 16.5% 1397.0 5.0% 1333.7 

PI Industries Paints & Chemical 635 760 19.7% 682.5 7.5% 671.8 

DCM Shriram Paints & Chemical 157 195 24.2% 197.4 25.7% 187.2 Target Achieved 

Apr-16 ACC Cement 1370 1580 15.3% 1533.3 11.9% 1523.0 

Whirlpool India Home Appl. 680 810 19.1% 788.8 16.0% 774.7 

VA Tech Wabag Water Treatment 518 690 33.2% 594.4 14.7% 556.3 

Mar-16 NTPC Power 126 148 17.5% 144.8 14.9% 140.1 Target Achieved 

Marico FMCG 236 280 18.6% 269.3 14.1% 257.3 

Feb-16 HDFC Banking & Finance 1180 1400 18.6% 1268.4 7.5% 1255.6 

HCL Tech IT 866 1020 17.8% 877.0 1.3% 757.6 

Hero MotoCorp Auto 2562 2820 10.1% 3172.0 23.8% 3002.5 Target Achieved 

Jan-16 Pidilite Ind. Paints & Chemical 551 656 19.1% 709.0 28.7% 694.7 Target Achieved 

Indraprastha Gas Oil & Gas 525 624 18.9% 608.0 15.8% 574.3 

SH Kelkar Personal Prod. 250 310 24.0% 275.8 10.3% 221.0 

Texmaco Rail Engg. & Const. 151 183 21.2% 154.9 2.5% 102.7 

Dec-15 Wabco India Auto 6280 7200 14.6% 6450.0 2.7% 5816.6 

Sanofi India Pharma 4300 5060 17.7% 4525.0 5.2% 4196.7 

Garware Wall Ropes Textiles 388 488 25.8% 436.5 12.5% 362.4 

Nov-15 Inox Wind Power 397 500 25.9% 411.4 3.6% 224.2 

Sterlite Tech Electrical Equip. 94 130 38.3% 108.6 15.5% 87.0 

GP Petroleums Oil & Gas 67 156 132.8% 90.2 34.6% 58.8 

HCC Construction 26 43 65.4% 28.3 8.8% 19.0 

Oct-15 Castrol India Oil & Gas 433 510 17.8% 474.4 9.5% 376.8 

Zee Ent. Media 390 464 19.0% 459.0 17.7% 453.4 Target Achieved 

Syngene Int Pharma 321 385 19.9% 436.0 35.8% 385.6 Target Achieved 

Sep-15 Berger India Paints & Chemical 208 247 18.8% 301.9 45.1% 289.4 Target Achieved 

Ceat Tyre 1080 1245 15.3% 1319.9 22.2% 928.2 Target Achieved 

Aug-15 Cummins India Electrical Equip. 962 1130 17.5% 1247.7 29.7% 783.9 Target Achieved 

Greenply Ind. Plywood 935 1123 20.1% 234.6 -74.9% 215.1 

TIME Technoplast Plastic Prod. 66 81 22.7% 69.9 5.9% 48.1 

SQS India BFSI IT 680 863 26.9% 1291.0 89.9% 1165.2 Target Achieved 

Jul-15 Asian Paints Paints & Chemical 760 883 16.2% 1001.8 31.8% 998.3 Target Achieved 

Idea Cellular Telecom 179 209 16.8% 186.5 4.2% 113.0 

Gruh Finance Banking & Finance 261 322 23.4% 279.0 6.9% 272.0 

Jun-15 Maruti Suzuki Auto 3774 4367 15.7% 4790.0 26.9% 4146.6 Target Achieved 

Whirlpool India Home Appl. 760 879 15.7% 847.0 11.4% 774.7 

May-15 Sun pharma Pharma 925 1220 31.9% 1010.0 9.2% 825.0 

Tata Motors Auto 515 615 19.4% 533.8 3.7% 403.9 

Ultratech Cement 2680 3300 23.1% 3454.9 28.9% 3248.3 Target Achieved 

Tata Global FMCG 141 174 23.4% 150.5 6.7% 117.3 

Apr-15 Abbott India Pharma 4020 4680 16.4% 6177.7 53.7% 4751.7 Target Achieved 

Strides Arcolab Pharma 1153 1340 16.2% 1414.0 22.6% 1120.9 Target Achieved 

Elantas Beck India Chemical 1130 1320 16.8% 1605.0 42.0% 1475.4 Target Achieved 

Mar-15 MCX Finance 1177 1552 31.9% 1289.9 9.6% 963.9 

BEML Electrical Equip. 978 1200 22.7% 1612.0 64.8% 854.3 Target Achieved 

Rolta IT 191 250 30.9% 196.8 3.0% 79.0 Exit 

Feb-15 SML Isuzu Auto 979 1222 24.8% 1671.0 70.7% 970.6 Target Achieved 

HBL Power Battery 34.9 55 57.6% 64.5 84.8% 36.0 Target Achieved 

Mangalam Cement Cement 321 432 34.6% 324.5 1.1% 247.6 Exit 

Amrutanjan Health Pharma 449 650 44.8% 564.9 25.8% 398.8 

Jan-15 Torrent Pharm Pharma 1096 1338 22.1% 1718.4 56.8% 1378.5 Target Achieved 

Emami FMCG 783 924 18.0% 1365.0 74.3% 1014.9 Target Achieved 

Dewan Housing Finance 397 480 20.9% 569.2 43.4% 197.5 Target Achieved 

KPIT Tech IT 200 263 31.5% 232.4 16.2% 172.9 Exit 

Dec-14 Bajaj Corp Personal Prod. 327 385 17.7% 522.0 59.6% 386.9 Target Achieved 

Alstom India Electrical Equip. 586 725 23.7% 877.0 49.7% 614.7 Target Achieved 

Transport Corp Transportation 284 354 24.6% 348.5 22.7% 276.7 Target Achieved 

Multibase India Rubber Prod. 164 300 82.9% 342.5 108.8% 230.3 Target Achieved 

Albert David Pharma 256 363 41.8% 404.3 57.9% 307.8 Target Achieved 

Nov-14 ONGC Oil & Gas 395 516 30.6% 412.5 4.4% 213.0 

Cadila Helthcare Pharma 1384 1600 15.6% 2160.0 56.1% 327.2 Target Achieved 

Karur Vysys Banks 541 700 29.4% 619.0 14.4% 477.9 

JK Lakshmi Cement Cement 348 396 13.8% 429.9 23.5% 345.8 Target Achieved 

5


MONTHLY INSIGHT PERFORMANCE 


Diwali Pick Ashok Leyland Auto 44 65 46.2% 112.9 154.0% 106.8 Target Achieved 

Karur Vysys Banks 540 700 29.6% 619.0 14.6% 477.9 

SKS Microfinance Finance 317 412 30.0% 642.0 102.5% 633.1 Target Achieved 

NOCIL Chemical 43 60 38.4% 64.5 48.8% 50.0 Target Achieved 

Oct-14 Kesoram Industries Diversified 117 176 50.4% 148.6 27.0% 109.0 Exit 

Akzo Nobel Paints & Chemical 1240 1460 17.7% 1551.0 25.1% 1445.9 Target Achieved 

IFB Industries Household Appl. 295 380 28.8% 700.0 137.3% 335.9 Target Achieved 

Munjal Auto Auto Parts 102 155 52.0% 134.0 31.4% 79.3 

Sep-14 Tata Motors Auto 527 598 13.5% 612.4 16.2% 403.9 Target Achieved 

Timken India Industrial Prod. 447 545 21.9% 669.0 49.7% 547.4 Target Achieved 

KEC International Electrical Equip. 102 130 27.5% 164.8 61.6% 139.9 Target Achieved 

Indoco Remedies Pharma 256 327 27.7% 412.2 61.0% 290.6 Target Achieved 

Ingersoll-Rand Industrial Prod. 649 785 21.0% 1124.4 73.3% 663.1 Target Achieved 

Aug-14 Bodal Chemicals Chemical 60 94 56.7% 94.8 57.9% 85.8 Exit 

Som Distilleries Breweries & Dist. 211 269 27.5% 246.0 16.6% 170.1 

Sharda Motor Auto Parts 391 536 37.1% 1190.0 204.3% 851.4 Target Achieved 

Axiscades Engg IT 106 138 30.2% 396.2 273.8% 261.9 Target Achieved 

Visaka Industries Cement Prod. 119 173 45.4% 188.8 58.7% 138.3 Target Achieved 

Deccan Cements Cement 270 408 51.1% 813.4 201.3% 760.6 Target Achieved 

Gulshan Polyols Chemical 177 274 54.8% 430.0 142.9% 331.0 Target Achieved 

Jul-14 Mahindra Lifespace Real Estate 560 710 26.8% 664.4 18.6% 441.1 

V-Guard Ind. Industrial Prod. 593 746 25.8% 1198.0 102.0% 1228.0 Target Achieved 

Astra Microwaves Defence 142 186 31.0% 166.4 17.2% 113.8 

Himatsingka Seide Textile 74 95 28.4% 251.0 239.2% 224.8 Target Achieved 

Mangalam Cement Cement 221 285 29.0% 351.0 58.8% 247.6 Target Achieved 

Jun-14 Coal India Coal 392 500 27.6% 447.1 14.1% 281.3 Target Achieved 

Container Corporation Logistics 1180 1500 27.1% 1947.7 65.1% 1380.3 Target Achieved 

Balmer Lawrie Logistics 473 700 48.0% 682.0 44.2% 584.7 

Can Fin Homes Housing Finance 305 450 47.5% 1324.8 334.4% 1172.4 Target Achieved 

Srikalahasti Pipes Iron & Steel Prod. 46 70 52.2% 349.0 658.7% 246.6 Target Achieved 

May-14 Bank of Baroda Banking 164.4 201.6 22.6% 228.9 39.2% 138.6 Target Achieved 

AIA Engineering Industrial Prod. 606 726 19.8% 1364.2 125.1% 937.9 Target Achieved 

MOIL Ltd. Metals & Mining 255 341 33.7% 341.7 34.0% 217.9 Target Achieved 

Wim Plast Plastic Prod. 620 800 29.0% 2499.0 303.1% 2097.8 Target Achieved 

Apr-14 Engineers India Engg. & Const. 224 270 20.5% 331.7 48.1% 180.5 Target Achieved 

Gujarat Gas Gas 263 305 16.0% 862.4 227.9% 515.2 Target Achieved 

City Union Bank Banking 52.8 69 30.7% 108.0 104.5% 106.7 Target Achieved 

Relaxo Footwears Footwear 297 390 31.3% 960.1 223.3% 447.4 Target Achieved 

Mar-14 Motherson Sumi Auto Ancillary 232 285 22.8% 540.8 133.1% 279.3 Target Achieved 

PI Industries Agrichem 252 315 25.0% 787.2 212.4% 671.8 Target Achieved 

VA Tech Wabag Water Treatment 645 765 18.6% 972.5 50.8% 556.3 Target Achieved 

Feb-14 Bharti InfraTel Telecom - Infra 171 213 24.6% 499.7 192.2% 386.9 Target Achieved 

UPL Fertilizer 187 251 34.2% 613.0 227.8% 595.4 Target Achieved 

Finolex Ind. Pipes 155 185 19.4% 422.0 172.3% 385.2 Target Achieved 

Jan-14 NIIT Tech IT 355 500 40.8% 631.0 77.7% 474.6 Target Achieved 

Zensar Tech IT 349 500 43.3% 1121.0 221.2% 962.3 Target Achieved 

Bajaj Finserv Banking 726 850 17.1% 2160.0 197.5% 1835.7 Target Achieved 

FDC Ltd. Pharma 130 170 30.8% 274.4 111.0% 188.1 Target Achieved 

Dec-13 MRF Ltd. Tyre 17350 19430 12.0% 46399.0 167.4% 33542.2 Target Achieved 

Info Edge (India) Web Services 446 550 23.3% 1015.0 127.6% 799.9 Target Achieved 

Indian Bank Banking 101 120 18.8% 224.3 122.0% 92.4 Target Achieved 

Symphony Cons. Durable 405 500 23.5% 3275.0 708.6% 2291.4 Target Achieved 

Nov-13 Pidilite Ind. Paints & Chemical 266 350 31.6% 709.0 166.5% 694.7 Target Achieved 

Aurobindo Pharma Pharma 216 297 37.5% 1535.0 610.6% 763.1 Target Achieved 

Kaveri Seeds Agri Prod. 305 580 90.4% 1075.5 253.1% 440.6 Target Achieved 

Speciality Restaurant Restaurants 124 198 59.7% 218.6 76.3% 95.3 Target Achieved 

Oct-13 Britannia FMCG 759 845 11.3% 3434.2 352.5% 2719.3 Target Achieved 

Glenmark Pharma Pharma 520 610 17.3% 1262.9 142.9% 875.5 Target Achieved 

Ultratech Cement Cement 1808 2045 13.1% 3454.9 91.1% 3248.3 Target Achieved 

Sep-13 L&T Engg. & Const. 705 810 14.9% 1893.8 168.6% 1474.9 Target Achieved 

Tech M IT 1375 1495 8.7% 948.8 -31.0% 535.9 Target Achieved 

Indusind Bank Banking & Finance 344 470 36.6% 1111.9 223.2% 1104.1 Target Achieved 

Escorts Auto 82 108 32.5% 188.2 130.9% 173.1 Target Achieved 

Aug-13 Hexaware Ltd. IT 107 130 21.5% 335.8 213.8% 215.7 Target Achieved 

Godrej Consumer FMCG 815 950 16.6% 1530.0 87.7% 1526.5 Target Achieved 

Torrent Pharma Pharma 421 475 12.8% 1718.4 308.2% 1378.5 Target Achieved 

6



Jul-13 TCS Ltd IT 1460 1640 12.3% 2839.7 94.5% 2572.7 Target Achieved 

Dabur India FMCG 150 170 13.3% 316.4 110.9% 295.8 Target Achieved 

Rallis India Chemical 130 148 13.8% 298.7 129.7% 207.8 Target Achieved 

Jun-13 Hero MotoCorp Auto 1736 2020 16.4% 3270.0 88.4% 3002.5 Target Achieved 

Divis Lab Pharma 977 1120 14.6% 2484.7 154.3% 1084.7 Target Achieved 

Corporation Bank Banking & Finance 77 92 19.8% 86.0 12.0% 35.7 Booked 

May-13 Maruti Suzuki Auto 1673 1920 14.8% 4790.0 186.3% 4146.6 Target Achieved 

Dr. Reddy Lab Pharma 1991 2280 14.5% 4386.6 120.3% 3116.1 Target Achieved 

BPCL Oil & Gas 405 460 13.6% 1024.7 153.0% 1012.0 Target Achieved 

Kotak Mahindra Bank Banking & Finance 830 1021 22.9% 1475.3 77.7% 742.6 Target Achieved 

Apr-13 L&T Engg. & Const. 683 915 34.0% 1893.8 177.3% 1474.9 Target Achieved 

Pidilite Chemical 264 300 13.6% 709.0 168.6% 694.7 Target Achieved 


Mar-13 ITC FMCG 291 352 21.0% 410.0 40.9% 359.3 Target Achieved 

Berger Paints Chemical 95 116 21.6% 301.9 217.8% 289.4 Target Achieved 

LIC Housing Fin Banking & Finance 232 284 22.4% 524.0 125.8% 462.0 Target Achieved 

Zee Entertainment Media & Ent. 215 265 23.3% 459.0 113.5% 453.4 Target Achieved 

Feb-13 Axis Bank Banking & Finance 301 397.8 32.2% 654.9 117.6% 512.4 Target Achieved 

Tata Motors Auto 298 379 27.2% 612.4 105.5% 403.9 Target Achieved 

Cairn India Oil & Gas 324 410 26.5% 386.0 19.1% 138.1 Booked 

Petronet LNG Oil & Gas 152 200 31.6% 284.8 87.4% 273.2 Target Achieved 

Jan-13 Adani Ports Others 135 180 33.3% 374.8 177.6% 191.7 Target Achieved 

J & K Bank Banking & Finance 130.3 167 28.2% 195.5 50.0% 58.7 Target Achieved 

Dec-12 Zee Entertainment Media & Ent 198 235 18.7% 459.0 131.8% 453.4 Target Achieved 

Indusind Bank Banking & Finance 416 500 20.2% 1111.9 167.3% 1104.1 Target Achieved 

Nov-12 IPCA Lab Pharma 450 545 21.1% 906.9 101.5% 437.0 Target Achieved 

L&T Finance Banking & Finance 55 85 54.5% 97.1 76.5% 73.8 Target Achieved 

Zydus Wellness FMCG 445 560 25.8% 1128.9 153.7% 791.0 Target Achieved 

Oct-12 Sun TV Media & Ent. 357 446 24.9% 494.9 38.6% 382.3 Target Achieved 

Allahabad Bank Banking & Finance 147 180 22.4% 191.1 30.0% 52.7 Target Achieved 

Shoppers stop Others 393 465 18.3% 624.4 58.9% 368.4 Target Achieved 

Sep-12 Dish TV Media & Ent. 68 92 35.3% 121.7 78.9% 86.7 Target Achieved 

Havels India Cons. Durables 111 127.6 15.0% 354.0 218.9% 374.9 Target Achieved 

Aug-12 Lupin Pharma 570 672 17.9% 2129.0 273.5% 1480.1 Target Achieved 

Bajaj Finserv Banking & Finance 730 877 20.1% 2160.0 195.9% 1835.7 Target Achieved 

Jul-12 Uflex Others 112 145 29.5% 201.7 80.1% 186.6 Target Achieved 

Cummins India Engg. & Const. 438 513 17.1% 1247.7 184.9% 783.9 Target Achieved 

Exide Inds Others 135 165 22.2% 205.2 52.0% 157.6 Target Achieved 

Engineers India Engg. & Const. 200 280 40.0% 305.0 52.5% 180.5 Target Achieved 

Jun-12 Glenmark Pharma Pharma 350 410 17.1% 1262.9 260.8% 875.5 Target Achieved 


Cera Sanitaryware Cons. Durables 248 340 37.1% 2960.9 1093.9% 2047.5 Target Achieved 

HPCL Oil & Gas 300 365 21.7% 991.0 230.3% 931.7 Target Achieved 

May-12 Emami FMCG 457 535 17.1% 1365.0 198.7% 1014.9 Target Achieved 

Berger Paints India Chemical 114 141 23.7% 301.9 164.8% 289.4 Target Achieved 

Graphite India Others 92 110 19.6% 126.4 37.4% 74.9 Target Achieved 

Rainbow papers Others 66 85 28.8% 94.4 43.0% 4.0 Target Achieved 

Apr-12 Tatamotor - DVR Auto 158 200 26.6% 391.4 147.7% 271.7 Target Achieved 

Pidilite Ind Chemical 172 210 22.1% 709.0 312.2% 694.7 Target Achieved 

Mar-12 Magma Fincorp Banking & Finance 70 ACCu 141.0 101.4% 91.9 Target Achieved 

Torrent Power Power 222 290 30.6% 252.9 13.9% 184.3 Booked 

Feb-12 Castrol India Oil & Gas 236 ACCU 544.0 130.5% 376.8 Target Achieved 

Prism Cement Cement 48.75 ACCU 133.5 173.7% 93.0 Target Achieved 

MRF Auto 9767 ACCU 46399.0 375.1% 33542.2 Target Achieved 

Shoppers Stop Others 340 ACCU 624.4 83.6% 368.4 Target Achieved 

Allahabad Bank Banking & Finance 200 ACCU 211.3 5.7% 52.7 Target Achieved 

Zydus Wellness FMCG 382 ACCU 1128.9 195.5% 791.0 Target Achieved 

MRPL Oil & Gas 71 ACCU 83.2 17.2% 67.6 Target Achieved 

Akzo Nobal Cons. Durables 857 ACCU 1551.0 81.0% 1445.9 Target Achieved 

Maruti Suzuki Auto 1320 ACCU 4790.0 262.9% 4146.6 Target Achieved 

M & M Auto 749 ACCU 1442.1 92.5% 1333.7 Target Achieved 

Feb-12 Tata Power Power 115 120 4.3% 117.6 2.2% 72.6 Target Achieved 

Dr Reddy Pharma 1642 1795 9.3% 4386.6 167.1% 3116.1 Target Achieved 

Jan-12 Shree cement Cement 2100 ACCU 13888.0 561.3% 13140.1 Target Achieved 

Dabur FMCG 102 125 22.5% 316.4 210.2% 295.8 Target Achieved 

7


STOCK PICKS 

Dabur India Ltd. 

CMP: Rs 290 

Rating: BUY Target: Rs 335 

Company Information 

BSE Code 500096 

NSE Code 

DABUR 

Bloomberg Code 

DABUR IN 

ISIN 

INE016A01026 

Market Cap (Rs. Cr) 51119 

Outstanding shares(Cr) 175.9 

52-wk Hi/Lo (Rs.) 316.4 / 231.5 

Avg. daily volume (1yr. on NSE) 1,262,889 

Face Value(Rs.) 1 

Book Value 23.6 

120 

110 

100 

90 

80 

70 

60 

50 

Jun-15 

Jul-15 

Aug-15 

Sep-15 

Oct-15 

Dabur vs. Nifty 

Nov-15 

Dec-15 

Share holding pattern as on Mar 2016 (%) 

Particulars (in Rs. Cr.) FY15 FY16 FY17E FY18E 

Net Sales 7827.2 8454.0 9536.1 10804.4 

Growth (%) 10.6 8.0 12.8 13.3 

EBITDA 1316.4 1519.8 1745.1 1988.0 

EBITDA Margin (%) 16.8 18.0 18.3 18.4 

Net profit 1065.8 1252.7 1440.0 1653.1 

Net Profit Margin (%) 13.6 14.8 15.1 15.3 

EPS (Rs) 6.1 7.1 8.2 9.4 

Jan-16 

Feb-16 

Mar-16 

Consensus Estimate: Bloomberg, Ashika Research 

Apr-16 

May-16 

Volume('000)RHS Dabur Nifty 

Others 

6.8 

Institution 

25.1 

Promoters 

68.1 

6000 

5000 

4000 

3000 

2000 

1000 

0 

Company Background 

Established in 1884, Dabur India Ltd. is the second largest 

FMCG company in India, in terms of Product portfolio. 

Dabur is a market leader in Chyawanprash category and is 

increasing its presence in other traditional categories like 

Hair Care, oral care, household care and foods. The 

company has a wide distribution network, covering over 5.8 

million retail outlets with a high penetration in both urban 

and rural markets. Its products also have a huge presence 

in the overseas markets and are currently available in over 

60 countries across the globe. Its brands are highly popular 

in the Middle East, SAARC countries, Africa, US, Europe and 

Russia. 

Investment Rationale 

Portfolio of Powerful Brands 

Dabur has strong portfolio of powerful brands like ‘Dabur, 

Vatika, Hajmola, Real and FEM ’. It spends around 14-15% 

of its sales on advertisement every year to increase its 

brand presence. The company has built a wide distribution 

network covering 5.8 million retailers across the country to 

support its growth. Dabur’s FMCG portfolio includes five 

flagship brands with distinct brand identities - Dabur as 

the premium brand for natural healthcare products, Vatika 

for premium personal care, Hajmola for digestives, Réal for 

fruit juices and beverages and Fem for fairness bleaches 

and skin care products. 

Diversified Business Model 

Dabur India's business operation is well diversified. Around 

31% of its sales come from international business and 

69% from domestic business. The products range of the 

company are also well diversified covering key consumer 

product categories like Hair Care, Oral Care, Health Care, 

Skin Care, Home Care and Foods. Domestic FMCG business 

occupy lion’s share of 66% while among International 

business, organic international business contributes 22% 

of sales followed by Namaste Labs (6%) and Hobi Group 

(3%).Again among verticals, in Domestic FMCG, healthcare 

products contributes 33% of sales. 

8


Beneficiary of a revival in consumption 

The Indian Meteorological Department (IMD) as well as the 

private forecaster, Skymet estimated for a better than 

average monsoon for 2016-17. The initial estimates of IMD 

are 105% of LPA (long period average) with an error of 

5%. A good monsoon forecast in conjunction with 

implementation of Seventh Pay commission and One Rank 

One Pension scheme (OROP) will augur well for a recovery 

in domestic demand, especially rural demand. This is in the 

backdrop of two continuous monsoon deficit prone years 

(14% in 2015-16 & 12% in 2014-15) coupled with a 

moderation in overall demand, which had an impact on 

volume growth of consumer oriented companies. Hence, 

going ahead, with a likely improvement in purchasing 

power, consumer discretionary sectors such as FMCG, 

consumer staples & durables and automobiles are likely to 

witness pent up demand, leading to improved financials for 

companies operating in that segment. 

Q4FY16 Result Analysis 

Despite of challenging macro environment and soft 

consumer demand, Dabur India Ltd reported good growth 

across its key categories like Oral Care, Home Care, Foods 

and Hair Oils during Q4FY16. Dabur reported 7% volume 

growth in the domestic FMCG business and it came as a 

positive surprise. Driven by this volume growth, net sales 

increased 10.9% YoY to Rs. 2157.3. The domestic business 

grew 9.1% YoY led by 19.3%, 18.3% & 11.7% growth in 

home care, oral care & foods segment, respectively. Odonil 

crossed the Rs. 200 crore mark while Gulabari & Lal Tail 

became Rs. 100 crore brands in FY16. The international 

business registered robust growth of 15.6% YoY. Operating 

margins expanded 155 bps to 19.1% on the back of 

benign commodity costs. Savings due to judicious A&P 

spend were nullified by higher employee cost. Other 

income increased coupled with higher EBITDA, resulted in 

16.6% YoY growth in PAT to Rs. 331.9 crore. 

Strong distribution reach and growing 

As mentioned earlier, the company is a major beneficiary 

of a pickup in rural demand owing to its dependence on 

rural sales. The company has efficiently expanded its 

distribution network in rural India through ‘Project Double’ 

since FY13. Through Project Double, Dabur has more than 

tripled its rural penetration from 14,000 villages in FY11 to 

44,000 villages in FY15. Owing to such expansion, the 

revenue contribution from the rural areas has increased 

from 30% earlier to 45%. Dabur plans to extend its rural 

reach to ~60,000 villages by FY17E. Besides, Dabur has 

been generating consistent volume growth of 8-10% over 

last few years. The company launched ‘Project 50-50’ in 

FY15 wherein it will focus on top 130 cities in India which 

contribute 50% of urban consumption to drive revenues. 

Under this initiative, Dabur will split the sales team for 

wholesale & retail channels and is expected to generate 

renewed focus on urban markets. According to the 

company, most of these cities are in South India, which 

contributes 15- 20% of total revenue for Dabur. Dabur also 

launched ‘Project LEAD’ in FY16 under which front-end 

teams will be separated for healthcare & other domestic 

FMCG business to enable better focus on these segments. 

For this purpose, The Company would hire ~275 medical 

representatives. Dabur expects annual cost of ~Rs 10-12 

crore towards Project LEAD. Further, to enhance chemist 

coverage and provide further impetus to Health Care 

portfolio, Dabur launched ‘Project CORE’. Direct Chemist 

Coverage for the company is currently at 213,000 and 

through this initiative the company aims to to increase 

coverage and range for better throughput. 

Key Risks 

• Poor rural demand 

• Increasing competition 

• Sharp rise in input costs 

Valuation 

Dabur is the second largest FMCG company in India, in 

terms of Product portfolio. The company has created 

successful brands over the years in the likes of Dabur, 

Vatika, Hajmola, Real and FEM and spends on average 14- 

15% of sales on brand generation. The sales are heavily 

dependent on the rural demand and thus two back to back 

monsoon failures have impacted the volume growth for the 

company. The company has a strong distribution reach and 

plans to increase further through ‘Project Double’, Project 

50-50, Project LEAD & Project CORE. The initial estimates 

for monsoon by both IMD as well as Skymet is extremely 

rosy for the company as it will generate pent up demand 

for the company on higher discretionary spend. Apart from 

that, OROP and 7th pay commission implementation will 

also result in higher revenues for the company. The 

company earns higher EBITDA margins of 16-18% on the 

back of strong brand power particularly in healthcare 

space. The management expects Q1 FY17 to be subdued. 

However, expects Q2FY17 to be good and Q3 to be great 

on back of low base and driven by above average 

monsoon. At current price, the stock is trading at P/E 

multiple of 30.8x of FY18E EPS. We advise our investors to 

BUY the stock with target price of Rs. 335, valuing at P/E 

multiple of 35.6x FY18E EPS. 

9


STOCK PICKS 

Godrej Consumer Products Ltd. 

CMP: Rs 1481 




NSE Code 

GODREJCP 


GCPL IN 

ISIN 

INE102D01028 



52-wk Hi/Lo (Rs.) 1536.9 / 1037 

Avg. daily volume (1yr. on NSE) 227,050 



150 

Godrej Consumer vs. Nifty 

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Jun-15 

Jul-15 

Aug-15 

Sep-15 

Oct-15 

Nov-15 

Dec-15 

Jan-16 

Feb-16 

Mar-16 

Apr-16 

May-16 

Volume('000)RHS Godrej Consumer Nifty 



Leadership in domestic business with rural focus 

Godrej Consumer Products Ltd. (GCPL) enjoys leadership 

position in the product categories of hair colours, hair 

extensions and household insecticides. Post merger of the 

insecticide business with GCPL, the company has increased 

its focus towards gaining a stronger market position in the 

domestic market and which bore fruitful results for the 

company. For FY16, India business has delivered 9% YoY 

growth. The company has been able to attain such height 

with its 1m outlets while in rural market it reaches around 

60,000 villages. The company is aggressively targeting to 

increase its contribution in rural sales of total sales to 40% 

from its current level of 28% over the next 6-7 years. 

Inelastic demand for key products 

The demand for the products is so strong that despite the 

price hikes the volumes for the FMCG products are not 

affected particularly in the insecticides and hair products 

segment. Further, with increasing purchasing power of 

consumers, the growth story for the segment remains intact 

above all management believes that intrusion of 

insecticide products to eliminate malaria and dengue is 

very less across India especially rural India hence 

management is of opinion that there is further opportunity 

of growth to widen the Inelastic segment. 

Others 

6.3 

DII 1.9 

FII 

28.6 

Promoters 

63.3 


Net Sales 8276.4 8967.8 10653.8 12528.8 

Growth (%) 8.9 8.4 18.8 17.6 

EBITDA 1351.2 1597.3 1960.3 2317.8 

EBITDA Margin (%) 16.3 17.8 18.4 18.5 

Net profit 920.6 1140.5 1491.5 1816.7 


EPS (Rs) 26.7 32.9 43.8 53.3 


International business to drive growth 

The company’s international operation extends to all 

geographies contributing around 46% of the total revenue. 

International business sales grew 11% YoY to Rs. 10.8bn, 

with a 18% organic constant currency growth. EBITDA grew 

15% to Rs. 1.6bn with 40bps YoY operating margin 

expansion to 15.0%. The company acquired companies in 

emerging economies of Asia, Africa and Latin America with 

significant presence in local market. The acquisitions were 

strategically conducted so that the product range of the 

acquired companies is also similar to that of the existing 

product range of GCPL, which augmented the company to 

cross sell its domestic products in the international 

markets. In Asia, the geographies that GCPL is looking to 

enter are Bangladesh and Myanmar, followed by Iran and 

Pakistan, all potentially through organic means, while for 

Vietnam it is likely to be through an acquisition. 

10


Q4FY16 Performance 

The company in its latest quarter achieved turnover of Rs. 

22.69bn for the 4th quarter of the financial year 2016 as 

against Rs. 20.29bn in the previous year. EBITDA reported is 

at Rs.4.6bn in Q4FY16, increase of 14.10% compared to 

the previous quarter. Net Profit reported at Rs. 3.1bn, an 

increase of 16.83% as compared to Rs.2.65bn in Q4FY15. 

The company reported EPS of Rs. 9.11 for the 4th quarter 

as against as EPS of Rs. 7.80 in the corresponding quarter 

of the previous year. Indian business grew 7% (volume 

growth 9%) Organic International business grew 18% yoy 

in constant currency. Indonesia/Africa/Latin America/Europe 

grew by 16%/20%/(-6%)/18% and 13%/26%/31%/15% 

in reported/constant currency. 

Concall highlights 

• Management expects the gross margin to continuously 

benefit from the declining crude oil prices. 

• The management expects an improvement in EBITDA 

margin, led by gross margin expansion in 1HFY17, cost 

savings and SoN (Strength of Nature, USA based 

company) integration which earns higher margins. 

• During the quarter, the benefits of low commodity 

prices were passed on to consumers resulting in 

relatively higher consumer promotions. 

• For the full year volume growth in India was 11% with 

offers and 9% without offers 

• The management expects to strengthen focus on rural 

penetration with strategies like split lines 

• International business delivered robust organic sales 

growth of 18%, in constant currency terms. 

• Consolidated organic constant currency sales growth of 

12% and EBITDA growth of 18% are well ahead of 

market growth. 

• Robust pipeline of innovative products to be launched 

over the next few quarters will aid stronger growth and 

market share gains. 

Key Risks 

• Volatility in raw material prices especially crude oil 

prices can severely affect the margins adversely 

• Large number of players in every product segment 

poses serious risk to the margins and making it 

vulnerable to price competition. 

• Sharp currency depreciation and geopolitical risk act 

negatively for the business. 

Valuation 

With monsoon expected to be better in 2016 season, 

GCPL’s Indian business is expected to achieve better 

volume growth in FY17. The segments such as hair colour 

and Household insecticides are expected to post better 

performance in the backdrop of improvement in the rural 

economy. On the international front, with the improving 

economic outlook, the company is expected to achieve 

double digit growth in the countries of African and Latin 

American. With the expected increase in top line due to 

lower penetration of Home Insecticide products, strong 

brand positioning, innovation and new product launches, 

the bottom line of the company will also improve. Besides, 

the raw material benefits are expected to sustain for next 

few quarters until the low cost inventory dries out. Further 

as the economy revives, consumer expenditure will further 

increase. Going ahead, the key drivers of margins would be 

premiumisation, better revenue mix and cost saving 

initiatives at various levels. Based on the above factors 

GCPL is looking a good investment bet. At current price, 

the stock is trading at P/E multiple of 27.8x of FY18E EPS. 

We advise our investors to BUY the stock with target price 

of Rs. 1750, valuing at P/E multiple of 32.8x FY18E EPS. 

11


STOCK PICKS 

Glenmark Pharmaceuticals Ltd. 

CMP: Rs 851 




NSE Code 

GLENMARK 


GNP IN 

ISIN 

INE935A01035 



52-wk Hi/Lo (Rs.) 1262.9 / 671.1 

Avg. daily volume (1yr. on NSE) 896,553 



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Glenmark vs. Nifty 

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Jan-16 

Feb-16 

Mar-16 

Apr-16 


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Volume('000)RHS Glenmark Nifty 

Others 

11.6 

DII 

5.6 

FII 

36.4 

Promoters 

46.5 

0 


One-offs impacted Q4FY16 profitability 

Glenmark Pharmaceuticals Ltd. (GPL) reported strong yoy 

growth across all the geographies led by India, US and 

ROW. In Q4FY16, revenues grew 28.5% YoY to Rs. 2281 cr. 

led by continued strong growth in domestic formulations 

and US generics along with strong recovery in emerging 

markets. The company witnessed 21.6% YoY growth in the 

US to Rs. 652.0 crore, 22.5% YoY growth in India to Rs. 

539.8 crore, 33.5% YoY growth in Latin America to Rs. 

241.6 crore and 35.6% growth in RoW markets to Rs. 

298.0 crore. Reported EBITDA margin declined 258bps YoY 

to 13.3% mainly due to a one-time hit of Rs. 65 cr. related 

to sitagliptin litigation cost and translation loss of Rs. 94 cr. 

Ex one-off the EBITDA was ~Rs. 460 crore i.e. 20% of 

revenues. Adjusted for these, margins improved 310bps. 

Adjusted net profit grew 33.6% YoY to Rs. 260 cr., though 

reported net profit was Rs. 171 cr. 

Strong Management outlook 

The management has given a revenue growth guidance of 

25% for FY17 (including Zetia) including core business (ex- 

Zetia) growth of 15%. The management has indicated that 

for future growth key focus areas will be dermatology, 

contraceptives and complex injectibles. The growth would 

be mainly driven by the USA, European Union (EU) and 

India, which are witnessing exponential growth on account 

of launches of new products. Management believes the 

Zetia launch would deleverage the balance sheet and 

improve the D/E ratio. The company is gearing up for the 

launch of gZetia where it has 180 days’ exclusivity in the 

USA (H2FY17 launch). R&D guidance for FY17 has been 

maintained at ~11% of sales as it sees ramp up in filing of 

ANDAs (i.e >20 vs. 12 in FY16) and capex guidance set at 

Rs 7bn. Tax guidance of 25% (Vs. earlier 27 28%) for FY17. 

It guided for positive Free cash flow and lower debt post 

success of Zetia exclusivity sales in FY18E. 


Net Sales 6644.8 7560.0 9283.7 10964.0 

Growth (%) 10.6 13.8 22.8 18.1 

EBITDA 1037.5 1433.9 2302.4 2795.8 

EBITDA Margin (%) 15.6 19.0 24.8 25.5 

Net profit 624.9 720.1 1346.1 1644.6 


EPS (Rs) 17.5 25.7 47.7 58.3 


US generics and domestic formulations - key growth 

drivers 

After toying with R&D success and subsequent setbacks, 

the company has successfully developed and nurtured the 

US generics franchise. US generics now comprise ~31% of 

total turnover and have grown at a CAGR of 23.7% in the 

last five years. Total USFDA filings as on date are 171. So 

far, the company has received approvals for 112. From the 

12


pending ANDAs, 26 are Para IV applications. It received 

eight final and two tentative ANDA approvals each from 

USFDA during the quarter. In FY16, the company received 

24 ANDA approvals (including five tentative approvals) 

from USFDA. In addition, with 180 days exclusivity sales of 

gZetia in H2FY17E, the management guided for US$200m 

sales of Zetia during its exclusivity sales in FY17E and 

FY18E. Glenmark’s key launches of Yaz and Vancomycin as 

well as benefits of price rise and volume growth in 

Mupirocin will continue to drive US sales. Key therapies in 

the US are oral contraceptives, pain management and CVS. 

The new focus areas in the US will be oncology, respiratory 

and dermatology. Management expects a 15 20% growth 

in US base business with ramp up in new launches and 

timely launch of gZetia (under exclusivity) in December 

2016 will add to the incremental growth to the US sales. 

The company plans to file more than 25 ANDAs in FY17 

and expects approvals for 10-12 ANDAs. Glenmark’s 

domestic business is on strong growth trajectory with 

higher than industry growth FY18 onwards. This would be 

on account of focus on chronic therapy segments such as 

cardiac, dermatology and respiratory, which are growing at 

faster pace than industry and the company has been 

gaining market share as well. 

Zetia a key medium term driver 

Zetia launch expected in Dec 2016 and is expected to be 

the key medium trigger on back of 180 day exclusivity. 

Zetia reported sales of ~US$2bn and being the sole 

generic, Glenmark is expected to garner a sizable share of 

the market. Given the significant cash flows generation 

which would be utilized for de-leveraging (Net debt to 

decline in FY18, after peaking in FY17). Over the next two 

years, Glenmark is likely to participate in a few large (brand 

sales >USD 1bn) launches in the first wave. This includes 

gCrestor (USD 6.5bn), gStrattera (USD 1bn), gRenvela (USD 

1.7bn), and gBenicar/Benicar HCT (USD 2bn). Margin 

traction to remain highly dependent on pace of US 

approvals/launches. 

Venezuelan currency to revive in FY17 

With strong headwinds in global commodity prices, 

Venezuelan Bolivar (VEF) remains cause of concern with 

official rate devalued by 67% to 10VEF/US$ while DICOM 

rate at global market is 272VEF/US$. The company 

continues to sell existing inventory in Venezuela, but has 

already stopped new shipments from India since Nov’15 

due to uncertainty on repatriation of funds. Glenmark 

continues to believe that pending repatriation, the cash 

lying in the Venezuelan subsidiary will be recoverable with 

new Indian govt initiatives for commodities swap 

arrangement though, the time period of recovery is not 

clear. The company has already provided for Rs1.24bn 

currency devaluation and legal settlement costs in Q4FY16. 

Venezuela business reported revenue of Rs 3.2 bn and PAT 

of Rs 750 mn and the management is expecting that the 

micro economic issue will get resolved in FY17 and 

company will continued to see ramp up in its revenue and 

profitability. 

Key Risks 

• Slowdown in ANDA approvals and USFDA related 

regulatory risks are part of the generics business 

• Unfavorable currency fluctuations 

• Developmental setbacks in the novel research pipeline. 

Valuation 

Glenmark has given better than expected Q4 performance 

with strong sales guidance of 25% growth for FY17 which 

is largely led by strong US business. The company is set to 

capitalize on a robust US pipeline that includes Zetia 

launch in December 2016 with exclusivity of 180 days and 

other key product launches in the US like generic 

Nitroglycerine, Crestor, etc. with sales value of over USD 1 

bn. It has a rich pipeline of 59 ANDAs pending approval, 

which includes 26 Para IVs and plans to file more than 25 

ANDAs in FY17 and expects approvals for 10-12 ANDAs. 

Timely approvals in the US remain critical for earnings 

recovery. With a strong presence in the fast-growing 

segments like dermatology and CVS, Glenmark is expected 

to continue to outpace domestic market growth. It is also 

investing in R&D pipeline in niche segments which will 

drive growth. The management has indicated that for future 

growth key focus areas will be dermatology, contraceptives 

and complex injectibles. Further management believes the 

Zetia launch would deleverage the balance sheet and 

improve the D/E ratio. Given that the Company's robust 

financial outlook, strong launches pipeline in US and 

Europe with strong domestic business growth trajectory 

and rich pipeline of ANDAs approval, Glenmark is looking 

as a good investment bet. At current price, the stock is 

trading at P/E multiple of 14.6x of FY18E EPS. We advise 

our investors to BUY the stock with target price of Rs. 985, 

valuing at P/E multiple of 16.9x FY18E EPS. 

13


STOCK PICKS 

Tata Power Company Ltd. 

CMP: Rs 73 




NSE Code 

TATAPOWER 


TPWR IN 

ISIN 

INE245A01021 



52-wk Hi/Lo (Rs.) 76.85 / 55 

Avg. daily volume (1yr. on NSE) 3,744,219 



110 

100 

90 

80 

70 

60 

50 

Jun-15 

Jul-15 

Aug-15 

Sep-15 

Tata Power vs. Nifty 

Oct-15 

Nov-15 

Dec-15 

Jan-16 

Feb-16 

Mar-16 

Apr-16 

May-16 

60000 

50000 

40000 

30000 

20000 

10000 

Volume('000)RHS Tata Power Nifty 

0 


Mundra tariff hike, key growth driver 

Early resolution of compensatory tariff issue of Mundra UMPP 

at the Appellate Tribunal for Electricity (APTEL) is the key for 

Tata Power Company Ltd. (TPC). In a positive development, 

APTEL has accepted the “change in law” in Indonesia as a 

“Force Majeure” event as per PPA and this would enable Tata 

Power to seek compensatory tariff. However, APTEL has also 

highlighted that significant depreciation of INR does not 

constitute a Force Majeure event and no benefit can be 

granted on such grounds. Previously Supreme Court had 

stayed APTEL’s order to allow a compensatory tariff hike for 

Mundra UMPP and APTEL had allowed 36 paisa per unit tariff 

hike for Mundra UMPP project to compensate for the losses 

incurred due to a hike in Indonesian coal prices. However, 

after that the judgment has been kept reserved and APTEL has 

asked CERC to recalculate the necessary tariff hike. CERC is 

expected to submit the fresh calculations by July16. Losses at 

Mundra have already eroded ~Rs. 3,985 crore of TPL’s networth 

in the past three years. While the company has reversed 

impairment losses for the project amounting to Rs. 2,320 crore 

in the same period. Tata Power’s management believes that the 

impact of relief under force majeure, granted recently by 

APTEL, is positive but chances of any additional positive 

surprise are bleak. 


Others 

16.3 

DII 

24.5 

Promoters 

33.0 

FII 

26.2 


Net Sales 33727.6 37480.2 37967.4 39372.2 

Growth (%) (6.0) 11.1 1.3 3.7 

EBITDA 6301.2 7710.6 9226.1 9764.3 

EBITDA Margin (%) 18.7 20.6 24.3 24.8 

Net profit 167.8 1028.0 1290.9 1574.9 


EPS (Rs) 0.2 2.7 4.8 5.8 


Stake sale to alleviate cash flow 

Tata Power had entered into contract with Bakrie brothers for 

divesting its holding in Arutmin mines and associated 

infrastructure for USD501m (~ Rs 3,200 crore). The matter is 

being pursued and finalization of the same is subject to 

conditions precedent. Tata Power has also signed an option 

agreement to sell its 5% stake in PT Kaltim Prima Coal (KPC) 

Indonesia coal mines for $250 million (~Rs 1,500 crore) to the 

same group. The transaction will attract a ~10% withholding 

tax on sale and the proceeds will be used for reducing its 

consolidated debt. If the transactions go through, it will reduce 

Tata Power’s holding in KPC mine to 25% however it is not to 

impact the coal supplies for its Mundra plant. The stake sale is 

part of the management’s ongoing restructuring effort to bring 

down TPC’s consolidated debt level by hiving off its stake 

across non core asset and improve its cash flow and D/E 

position (currently 2.4x). 

To raise renewable energy capacity 

Tata Power has created a separate entity, Tata Power 

Renewable Energy Limited (TPREL), to participate in the 

currently lively renewable power scene. The new entity with an 

operational solar and wind capacity of 294MW, and 593MW of 

14


capacity under execution, will be used as a vehicle for 

expansion of the company’s renewable portfolio. The 

management has decided to increase the share of its 

renewable energy output to 30-40% by 2025, up from its 

earlier target of 20%. The government has set an ambitious 

target of 175 gw renewable energy capacity by 2022. The 

comapny have set a target of 20,000 mw of total capacity by 

2025 and had initially set a target of 20% of it from the 

renewable sources. TPREL recently won the tender for 

development of 100MW solar capacity in Karnataka at a tariff 

of Rs4.79/kWhr under JNNSM and has also purchased 30MW 

of operational winds assets. “Though solar is a very small part 

in our total portfolio, it will increase significantly over the 

period as the government is expected to bid out large scale 

projects to meet its target. For wind, on the other hand, we will 

continue to look at opportunities as and when they come. We 

will be looking at both organic as well as inorganic growth to 

increase the capacity” Tata Power managing director and chief 

executive Anil Sardana said. 

UDAY a boost for power sector 

The UDAY (Ujwal DISCOM Assurance Yojana) scheme launched 

by the Government is a long term positive for the sector. So 

far, fifteen states have signed the MoU for UDAY and most of 

the other states (excluding Tamil Nadu) have joined the 

scheme in-principle. Given the huge focus on SEBs’ health for 

demand growth improvement, implementation of UDAY and 

liquidity infusion into SEBs is critical at this stage to boost 

power demand. Accumulated SEB losses stood at Rs. 3.8trn 

with outstanding debt of Rs. 4.3trn as of Mar15. The plan 

envisages States taking over 75% of Discom debt as on 30 

September 2015 over next 2 years - 50% in 2015-16 and 

25% in 2016-17. Implementation of UDAY will help to 

improve the offtake situation and working capital cycle of 

utilities like Tata Power. 

Q4FY16 Result Analysis 

Tata Power Q4FY16 performance was above market 

expectation. Revenues came in at Rs. 9374 crore up 13.8% 

YoY. On a segmental basis, power segment revenues were 

higher by 17% at Rs. 7025 crore while coal segment revenues 

came in higher by 8% at Rs. 2023 crore. Performance across 

subsidiaries was reasonably strong. The likes of Maithon power 

(strong generation), Mundra (lower fuel costs), Tata Solar 

(strong revenue booking and outlook) added to overall 

performance. EBITDA margins came in at 20.4% for Q4FY16 

due to miss in the power segment EBIT which came in at 

17.3% YoY as compared to 19.4% in Q4FY15. The same is 

reiterated from the fuel costs which have gone up sharply by 

73% YoY. Cost efficiencies in the coal business and at Mundra 

UMPP along with stabilization of Maithon were the key 

earnings drivers for Tata Power for Q4FY16. Consolidated net 

profit of the company increased more than doubled to Rs 

360.25 crore for the quarter on strong operational 

performance and lower fuel cost and despite of an exceptional 

loss of Rs. 93 cr. 

Recent Developments: 

• 

• 

• 

• 

Tata Power gets forest clearance for 52.50 MW wind power 

project in Karnataka 

Tata Power Solar has commissioned 4.8 MW solar unit at 

Rajaram Maize Products factory to become a 100 per cent 

renewable energy company. 

Nava Bharat Ventures Ltd has entered into an arrangement 

with Tata Power Trading Company Limited for supply of 

power to Telangana State Power Distribution Companies 

for the period from May 27, 2016 to May 25, 2017. 

Tata Power Company announced that Tata Power 

Renewable Energy, a wholly owned subsidiary of the 

Company, has signed a share purchase agreement with 

Indo Rama Renewables to acquire its wholly owned 

subsidiary, Indo Rama Renewables Jath, which owns a 30 

MW wind farm in Sangli District of Maharashtra. With this 

acquisition, Tata Power’s total generation capacity will 

increase to 9130 MW and its operational wind power 

generation capacity to 570 MW. 

Key Risks 

• 

Delayed decision on relief under the force majeure clause 

for Mundra. 

• Delayed sale of Arutmin coal mines. 

Valuation 

Given that Tata Power has infused Rs 35bn worth of sub debt 

in Mundra UMPP, the APTEL directive to CERC to compute the 

relief under change in law in Indonesia is critical for the 

company going ahead. TPC plans to sell its noncore assets of 

coal blocks in Indonesia in order to reduce its debt will be 

positive for the company as it will improve the cash flow for 

the company. TPC's focus on non-fossil fuel segment with Tata 

Power Renewable taking on a big role as the government has 

set an ambitious target of 175 gw renewable energy capacity 

by 2022 and the company has decided to increase the share 

of its renewable energy output to 30-40% by 2025 through 

both organic as well as inorganic route. UDAY scheme of the 

Government is also a long term positive for the company as it 

will help to improve its cash flows. Improving performances of 

other subsidiaries augurs well for profitability going ahead 

coupled with low probability of extraordinary write-offs. Given 

the above factors we are positive on Tata Power in the long 

term basis. At CMP, the stock trades at 1.21x its consolidated 

book value of FY18E, lower than its five-year average valuation 

of 1.7x. Currently the valuation look cheap and it seems to be 

a good entry point. We advise our investors to BUY the stock 

with target price of Rs. 85, valuing at P/BV multiple of 1.39x 

FY18E Book Value. 

15


VALUATION AT A GLANCE 

1 ACC 1523.0 28592.7 30.7 21.8 3.4 7.1 14.3 17.0 54.3 1.1 

2 Adani Ports 191.7 39700.1 14.2 13.2 3.7 23.7 17.6 1.1 9.8 0.6 

3 Ambuja Cements 230.3 35732.4 28.2 21.4 N/A N/A 13.2 2.8 53.8 N/A 

4 Apollo Hospitals 1348.2 18756.9 42.8 33.2 5.4 10.0 13.5 6.0 25.2 0.4 

5 Ashok Leyland 106.8 30394.0 N/A N/A 6.1 22.5 N/A 0.5 95.6 0.4 

6 Asian Paints 998.3 95751.9 45.6 38.9 17.1 33.4 33.6 6.1 41.9 0.6 

7 Aurobindo Pharma 763.1 44654.3 22.1 17.6 8.6 35.4 30.4 2.3 8.3 0.3 

8 Axis Bank 512.4 122193.4 12.1 8.6 2.7 17.9 21.3 4.6 17.7 0.9 

9 Bajaj Auto 2563.7 74185.0 18.1 16.1 5.7 31.3 29.1 50.0 57.3 2.0 

10 Bajaj Finserv 1835.7 29211.8 12.3 10.3 2.1 15.1 11.6 1.8 1.5 0.1 

11 Bajaj Holdings 1533.0 17060.7 N/A N/A 1.1 15.8 N/A 32.5 17.8 2.1 

12 Bank of Baroda 138.6 31935.7 N/A N/A 0.7 9.8 N/A 3.2 21.8 2.3 

13 Bank of India 87.0 8121.4 N/A N/A 0.2 -18.8 N/A 5.0 16.5 5.8 

14 Bharat Forge 744.7 17336.2 22.1 17.9 4.8 18.6 20.7 7.5 22.8 1.0 

15 Bharti Airtel 351.3 140408.7 24.7 20.3 2.1 8.6 9.2 2.2 17.1 N/A 

16 Bharti Infratel 386.9 73372.6 26.5 23.1 4.0 13.5 17.4 3.0 23.9 0.8 

17 BHEL 128.1 31353.8 35.3 17.3 0.9 -2.7 4.8 1.2 19.5 0.9 

18 Bosch 21947.0 68911.2 N/A N/A 9.4 N/A N/A N/A N/A N/A 

19 BPCL 1012.0 73176.1 10.4 9.5 2.6 31.6 21.8 22.5 33.8 2.2 

20 Britannia Industries 2719.3 32625.0 34.2 28.5 18.4 53.5 42.4 16.0 27.9 0.6 

21 Cairn India 138.1 25882.5 16.2 11.6 0.5 -17.5 4.1 9.0 37.7 6.5 

22 Canara Bank 192.7 10460.7 N/A N/A 0.3 9.1 N/A 10.5 18.9 5.5 

23 Cipla 473.5 38036.2 20.8 17.1 3.2 13.3 15.1 2.0 13.6 0.4 

24 Coal India 281.3 177679.3 12.0 11.2 4.4 33.2 39.4 20.7 95.3 7.4 

25 Colgate-Palmolive 839.3 22827.8 N/A N/A 22.4 64.4 N/A 10.0 47.2 1.2 

26 Container Corp. 1380.3 26911.3 27.3 24.0 3.4 10.1 11.9 13.4 24.8 1.0 

27 Cummins India 783.9 21729.7 N/A N/A 6.5 23.6 N/A 14.0 49.4 1.8 

28 Dabur India 295.8 52035.4 36.1 31.4 12.5 33.3 30.4 2.0 33.0 0.7 

29 Divis Lab. 1084.7 28794.0 27.1 22.6 8.2 26.4 27.9 10.0 31.2 0.9 

30 Dr Reddy’s Lab. 3116.1 53140.9 22.0 18.5 4.1 17.6 18.3 20.0 14.6 0.6 

31 Eicher Motors 18742.3 50906.3 31.0 24.3 14.7 31.3 37.0 100.0 25.1 0.5 

32 Exide Industries 157.6 13391.8 16.9 15.1 3.1 17.5 17.0 2.2 30.4 1.4 

33 Federal Bank 52.6 9028.4 N/A N/A 1.1 6.2 N/A 1.1 17.8 2.1 

34 GAIL 379.3 48113.3 14.2 11.3 1.4 6.5 10.8 6.0 24.1 1.6 

35 GlaxoSmith Consumer 5912.8 24866.6 N/A N/A 10.2 30.1 N/A 55.0 39.6 N/A 

36 Glaxosmithk Pharma. 3528.4 29886.2 50.4 43.4 17.6 21.4 38.1 N/A N/A N/A 

37 Glenmark Pharma. 875.5 24702.9 18.1 16.4 5.8 19.3 23.4 2.0 11.4 0.2 

38 Godrej Consumer 1526.5 51980.8 38.2 32.9 10.2 23.8 23.1 5.8 17.5 0.4 

39 Grasim Industries 4361.3 40710.6 13.2 10.6 1.6 9.6 12.5 18.0 9.5 0.4 

40 HCL Technologies 757.6 106864.0 13.5 11.9 3.8 28.8 25.7 22.0 42.2 N/A 

41 HDFC 1255.6 198356.8 19.5 16.2 3.9 21.2 23.3 17.0 26.4 N/A 

42 HDFC Bank 1186.8 300169.5 21.2 N/A 4.0 18.6 N/A 8.0 18.8 0.7 

43 Hero MotoCorp 3002.5 59956.2 N/A N/A 7.5 42.7 N/A 60.0 50.7 2.0 

44 Hindalco Industries 91.9 18977.2 52.9 13.3 0.5 2.2 3.9 1.0 24.2 1.1 

45 Hindustan Unilever 861.2 186358.2 39.5 34.1 46.9 102.1 128.7 15.0 74.4 1.7 

46 HPCL 931.7 31548.2 8.5 8.1 1.8 31.5 19.5 24.5 55.4 2.6 

47 ICICI Bank 243.2 141404.6 11.1 8.4 1.5 11.4 15.5 5.0 23.7 2.1 

16


48 Idea Cellular 113.0 40685.9 23.0 19.0 1.6 12.6 7.5 0.6 6.8 N/A 

49 Indiabulls Housing Fin. 743.8 31333.6 10.8 8.9 2.9 27.1 26.9 45.0 80.9 6.1 

50 Indian Oil Corporation 413.0 100262.3 8.0 7.0 1.3 15.5 15.7 6.6 34.2 1.6 

51 IndusInd Bank 1104.1 65698.7 N/A N/A 3.7 16.1 N/A 4.5 11.7 N/A 

52 Infosys 1247.5 286543.8 18.8 16.6 4.6 23.2 23.7 24.3 40.7 N/A 

53 ITC 359.3 289136.1 25.7 22.9 8.5 30.2 30.8 6.3 51.8 1.7 

54 JSW Steel 1375.7 33252.5 13.2 10.8 1.6 -3.4 12.1 11.0 15.1 0.8 

55 Kotak Mahindra Bank 742.6 136228.3 29.4 23.2 4.1 12.5 15.7 0.5 2.7 0.1 

56 Larsen & Toubro 1474.9 137436.3 25.1 20.8 3.1 12.0 13.0 16.3 31.7 1.1 

57 LIC Housing Finance 462.0 23312.9 10.0 7.8 2.5 19.5 N/A 5.0 18.1 1.1 

58 Lupin 1480.1 66707.6 22.6 19.1 6.1 22.9 23.1 7.5 14.0 0.5 

59 M & M Financial 324.9 18476.3 17.7 13.8 2.8 12.4 16.9 4.0 24.9 1.2 

60 Mahindra & Mahindra 1333.7 82835.1 23.2 18.5 3.1 12.8 13.5 12.0 23.8 0.9 

61 Marico 257.3 33196.1 38.9 33.3 15.8 37.0 36.4 1.3 28.1 0.5 

62 Maruti Suzuki 4146.6 125260.5 20.6 17.6 4.5 18.0 20.1 25.0 19.8 0.6 

63 Motherson Sumi 279.3 36937.6 21.7 17.3 8.7 33.7 34.6 2.0 30.7 0.7 

64 MRF 33542.2 14225.7 N/A N/A 2.1 22.2 N/A 50.0 2.3 0.1 

65 NMDC 92.7 36752.9 10.6 11.1 1.1 20.4 9.2 8.6 53.4 9.2 

66 NTPC 140.1 115519.0 12.6 11.6 1.4 11.8 10.9 2.5 20.6 1.8 

67 Oil India 348.7 20961.6 9.2 9.4 1.0 12.4 10.1 20.0 46.1 5.7 

68 ONGC 213.0 182231.9 10.7 8.4 1.0 7.7 10.4 9.5 44.3 4.5 

69 Oracle Financial Serv. 3486.8 29593.7 21.8 18.3 8.1 32.7 29.6 665.0 471.9 19.1 

70 Petronet LNG 273.2 20486.3 N/A N/A 3.2 15.3 N/A 2.0 17.0 0.7 

71 Power Finance Corp. 166.3 21952.3 N/A N/A 0.6 18.1 N/A 9.1 20.0 5.5 

72 Power Grid Corp. 150.9 78918.5 10.6 9.4 1.8 14.8 16.1 2.0 22.2 1.3 

73 Punjab National Bank 76.6 15041.2 N/A N/A N/A N/A N/A 3.3 18.0 N/A 

74 Reliance Capital 414.0 10459.0 9.6 8.4 0.7 8.0 7.4 9.0 22.7 2.2 

75 Reliance Comm. 49.0 12183.6 17.5 15.4 N/A N/A 2.2 0.0 0.0 N/A 

76 Reliance Industries 974.7 315928.1 11.1 9.4 1.3 12.0 11.4 10.0 12.5 1.0 

77 Reliance Infrastructure 541.7 14246.2 8.0 6.6 0.5 6.7 7.4 8.0 11.7 1.5 

78 Rural Electrification 155.4 15345.1 N/A N/A 0.6 23.3 N/A 10.7 19.8 6.9 

79 Shriram Transport Fin. 1194.1 27090.9 17.0 13.4 2.7 12.2 15.7 10.0 22.1 0.8 

80 Siemens 1202.8 42832.4 60.1 48.4 8.4 N/A 14.1 6.0 30.1 0.5 

81 State Bank of India 195.9 152072.8 9.4 7.4 0.8 7.1 10.3 2.6 16.5 N/A 

82 Steel Authority of India 42.7 17635.5 N/A N/A 0.4 4.9 -1.3 2.0 38.3 4.7 

83 Sun Pharma. 825.0 198540.2 36.4 25.3 6.7 20.6 23.3 3.0 15.9 0.4 

84 Sundaram Finance 1397.7 15529.0 24.5 20.6 4.1 16.9 16.6 10.5 20.3 0.8 

85 Tata Chemicals 432.5 11016.9 11.8 10.3 1.8 13.2 15.3 10.0 53.4 2.3 

86 TCS 2572.7 506922.1 19.1 17.1 7.8 41.9 31.0 43.5 35.3 1.7 

87 Tata Global 117.3 7403.2 17.1 15.2 1.3 5.8 7.9 2.3 57.3 1.9 

88 Tata Motors 403.9 130429.5 11.5 9.3 2.3 23.0 17.8 0.0 0.0 0.0 

89 Tata Power 72.6 19635.6 15.1 12.3 1.4 6.5 10.1 1.3 783.1 1.8 

90 Tata Steel 329.6 32011.3 23.3 12.0 1.0 -9.8 8.1 8.0 N/A N/A 

91 Tech Mahindra 535.9 51998.2 14.7 12.8 3.6 23.4 21.0 6.0 21.9 N/A 

92 Titan Company 360.5 32000.3 36.6 30.3 9.2 21.0 23.8 2.2 28.3 0.6 

93 UltraTech Cement 3248.3 89144.4 27.8 21.5 4.2 11.4 15.4 9.0 11.8 0.3 

94 United Breweries 722.3 19098.0 48.3 38.8 9.1 14.9 18.2 1.0 10.3 0.1 

95 United Spirits 2481.2 36058.0 57.0 39.1 20.2 79.1 35.7 0.0 N/A 0.0 

96 UPL 595.4 25519.1 15.9 13.6 3.8 20.5 20.6 5.0 18.7 0.8 

97 Vedanta 102.8 30477.1 10.5 6.1 0.7 -18.9 9.1 3.5 N/A 3.4 

98 Wipro 545.4 134752.7 14.1 12.8 2.9 20.3 18.8 6.0 16.7 N/A 

99 Yes Bank 1025.5 43155.4 N/A N/A 3.1 19.9 N/A 10.0 16.6 1.0 

100 Zee Entertainment 453.4 43546.7 35.0 28.3 10.3 26.5 23.1 2.3 26.0 0.5 

#N/A: Not Available 

Source: Bloomberg Consensus as on May 27, 2016 

17


P-NOTE NORMS 

P-NOTE NORMS 

Participatory notes (PNs) or offshore derivative instruments 

are instruments that are used by foreign investors for 

making investments in shares listed in the Indian stock 

market. Foreign Institutional Investors (FIIs) and their subaccounts 

mostly use these instruments for facilitating the 

participation of their overseas clients, who are not 

interested in participating directly in the Indian stock 

market. For example, Indian-based brokerages buy Indiabased 

securities and then issue participatory notes to 

foreign investors. Any dividends or capital gains collected 

from the underlying securities go back to the investors as 

shown in the diagram below. Hedge funds place their 

buy/sell orders to foreign broking houses who in turn place 

orders to Indian broking houses. Indian broking houses 

carry out the requested transactions and transfer the net 

profit/loss to Hedge funds via the foreign broking house. 

Some of the benefits to foreign investors by investing in 

PNs are as follows 

• Any entity investing in participatory notes is not 

required to register with SEBI. This is quite beneficial to 

the FIIs who can carry out their operations in discretion 

and are free from all the hassles of regulatory and legal 

compliance. If FIIs chose to trade directly and not 

through P-note, they have to compulsorily get 

registered with the SEBI. 

• There are certain tax benefits which foreign investors 

receive in certain preferred countries 

• Participatory notes are popular because they provide a 

high degree of anonymity, which enables large hedge 

funds to carry out their operations without disclosing 

their identity. 

• Participatory Notes is easy because participatory notes 

are like contract notes and are transferable by 

endorsement and delivery, thus being easy to trade. 

However, off late P-notes are not preferred by the SEBI as 

it provides anonymity about the foreign investors leading 

to potential money laundering and other tax evasion 

measures. Use of P-Notes also brought high volatility in the 

times of boom or bust thereby making the domestic 

investors vulnerable. Due to this the SEBI has been 

proposing curbs on participatory notes since 2007. In 

October 17th, 2007, Indian markets recorded one of the 

biggest declines when SEBI proposed curbs on P-Notes a 

day earlier. Sensex crashed by 1744 points or about 9% of 

its value - the biggest intra-day fall in Indian stock-markets 

in absolute terms. This event clearly shows how vulnerable 

are Indian markets to foreign fund inflows. Later the 

finance minister cleared that they want to gradually reduce 

the usage of P-Notes to encourage greater transparency 

and lower volatility in the markets. In 2007, P-Note 

comprised ~50% of total FII investment and now PNs 

comprise only ~10% of FII investment. 

SEBI proposed higher stricter norms for P-Notes this 

month in order to curb money laundering and encourage 

greater transparency: SEBI has decided to tighten the duediligence 

norms for issuance and transfer of Offshore 

18


Derivative Instruments (ODIs) after concerns were raised by 

the Supreme Court-appointed Special Investment Team 

(SIT) on Black Money about the possible misuse of these 

instruments for laundering of black money or round 

tripping of funds. The new norms also require P-notes 

issuers to file suspicious transaction reports with the Indian 

Financial Intelligence Unit on the notes issued by them. 

They would also have to carry out reconfirmation of the P- 

notes position on a semi-annual basis. In addition, SEBI has 

made it mandatory that P-notes issuers would have to 

follow the Indian know-your-client (KYC) and anti-money 

laundering norms instead of the norms present in the 

jurisdiction of P-note issuers. This will bring uniformity in 

KYC norms. SEBI has asked the P-notes issuers to carry out 

KYC review every year during the time of on boarding. Also, 

ODI Issuers will be required to identify and verify the 

beneficial owners in the subscriber entities, who hold in 

excess of the applicable threshold — 25 per cent in case of 

a company and 15 per cent in case of partnership firms, 

trusts or unincorporated bodies. In such cases, the ODI 

issuers will need to identify and verify the persons who 

control operations of these entities. The regulator also 

wants P-Note issuers to report all transactions that happen 

during a month (compared to only end of month holdings) 

in their monthly reports. 

Due to greater disclosures required by the SEBI since 2007 

crash, the percentage of P-Note trading of derivatives is 

declining gradually (as shown below in the left table). The 

% of derivatives has declined from 40% of total P-Note 

investments in 2012 to 25% now while % of debt has 

increased from 5% in 2012 to 13% now. Equity’s share 

has also increased from 55% in 2012 to 61% now. Thus, 

simpler products such as equity and debt investments are 

being preferred for P-Note investments to avoid any 

regulatory conflicts and complications. 

4500 

P-Note Breakup by total value (in Rs 1000 cr) 

4000 

3500 ODIs Debt ODI Derivatives ODI Equity 

3000 

2500 

767 

2000 

716 

1500 

726 687 

1000 

2,037 

1,653 

500 998 1128 

170 

412 

0 

2012 2013 2014 2015 2016 

Mutual Funds have been the primary user of PNs/ODI: 

According to recent NDTV data, Mutual funds have been 

using the P-Notes the most and they enjoy a share of 

>60%. Out of a total of nearly 2,500 entities that are 

subscribing to ODIs, nearly 1,500 (over 60 per cent) are 

mutual funds and about 300 others are 'companies'. Top 

10 foreign portfolio investors (FPIs) account for almost 

73% of total outstanding investments worth over Rs 2.2 

lakh cr through the ODIs. These FPIs include Singapore and 

Mauritius-based arms of global giants like Morgan Stanley, 

Goldman Sachs, Credit Suisse, HSBC, Merrill Lynch, 

Citigroup and JP Morgan. Top on the list is Cayman Islands 

(over 41 %), followed by Mauritius, the UK and the US with 

nearly 11 % share each in the total outstanding ODIs. 

Ireland, France, Luxembourg, Singapore, British Virgin 

Islands and South Korea have a share of 1% to 6 % each. 

300 

250 

200 

150 

100 

50 

0 

-50 

-100 

FPI/FII Investments(INR '000 cr) 

Debt 

35 

Equity 

42 128 113 

159 

97 

46 

18 15 

-3 

-51 

-4 

2011 

2012 

2013 

2014 

2015 

2016 

19


P-NOTE NORMS 

Removal of the route of P-Note investments shall bring 

greater transparency and reduce market volatility which is 

good for Indian markets in the long term; however, faster 

approvals through FDI/FPI routes for investments should 

be encouraged SEBI has been trying to remove the 

anonymity by discouraging the use of P-notes and 

encouraging greater disclosures. As discussed above this 

initiative will help to bring greater transparency and 

prevent money laundering. But other routes of foreign 

investments like FII/FPI should be encouraged in order to 

create healthy efficient markets. SEBI is trying to simplify 

the FII investment procedure so that FIIs can directly 

invests through this route and avoid P-notes. Direct 

investment with simplified application procedure will 

benefit both the FIIs and SEBI .However, a lot still needs to 

be done in simplifying the regulatory procedures for FII/FPI 

investments. Below is the FII/FPI investment breakup .From 

the left table below, we can make out that FIIs preferred 

debt more than equity in 2011,2014 and 2015. Quite 

rightly, 2014 and 2015 recorded a chain of interest rate 

cuts supported by low inflation on the back of falling crude 

oil and precious metal prices. 

Sebi chairman Mr UK Sinha recently said that “P-Note users 

should eventually move to direct route of investing as their 

share in foreign portfolio investments”. He wants to make the 

FPI process simpler and reduce the difference between FPIs 

and ODIs. 

There are broadly 3 categories of FPIs as mentioned below 

1> First category is of sovereign entities and central banks 

which has the least risk and is the most preferred. 

There are about 300 Category-I FPIs and they have 

invested close to Rs 3,30,000 crore. 

2> Second category constitutes of broad-based funds, 

asset management companies, pension funds, insurers, 

banks etc. Among these, some of them can issue and 

subscribe to ODIs, but majority of them can’t. They 

carry medium risk. There are over 7,000 category-II 

FPIs and they have invested over Rs 18,74,000 crore. 

3> The third category of FPIs includes hedge funds and 

they cannot subscribe or issue ODIs as they belong to 

the high risk segment. The regulations are the toughest 

for them. Category-III FPIs currently stand at only 

about Rs 77,000 crore while their count around 600 

Thus, we can see that Indian market regulator SEBI is 

clearly trying to create resilency into the Indian markets by 

reducing volatility. It is trying to give less exposure to 

category 3 as hedge funds can create extreme volatility as 

they are highly leveraged and can conduct both long/short 

positions. This would create a disturbance during volatile 

markets. Neverthless for long term benefit, the rules for 

FPIs should be made easier but with calculated disclosure 

such that the risk from money laundering or any other 

unwanted measures is contained while at the same time 

foreign investors can enjoy investing at ease. 

SEBI is trying to develop healthy and efficient markets in 

the long term. This would protect the investors interest and 

restore confidence. SEBI wants to remove extreme volatility 

caused in the markets due to market manipulation through 

any misuse. It has not only tightened the use of P-notes to 

bring transparency and prevent money laundering 

activities, but has also put in place other stringent norms. It 

is keeping a track of high frequency trades too and will be 

imposing a higher penalty for any kind of misuse. SEBI also 

announced that it will take strong action against auditors 

for lapses. It also plans to seek delisting of over 4,200 

listed companies whose shares are not being traded, apart 

from having an online platform for sale and purchase of 

mutual funds. As part of efforts to further strengthen the 

domestic markets and protect investor interests, SEBI is 

also eyeing regulations for credit rating agencies also and 

they might have to disclose reasons for their actions. SEBI 

has also recently launched 565 prosecution cases against 

those collecting public money through illegal investment 

schemes and over 1,000 other cases for violation of 

securities norms. The entities have garnered funds through 

fraudulent investment schemes with promise of huge 

returns to investors. SEBI has clamped down on a number 

of illegal collective investment schemes including on 

entities from Saradha, MPS, Sumangal, MPS Greenary 

Developers, Sai Prasad, HBN, Alchemist Infra, Maitreyi and 

Rose Valley groups. 

One might argue that SEBI’s stringent actions would hold 

back fradulent investments and reduce liquidity in the 

markets. However, it is not the case so as SEBI is also trying 

to bring in liquidity through faster approvals of IPO and 

introduction of various derivatives contracts, thereby 

creating an equilibrium. As many as 16 firms have received 

market regulator Sebi’s approval so far this year for 

launching IPOs to fund business expansion and meet 

working capital requirements. L&T Infotech, Quess Corp, 

New Delhi Centre for Sight, Nihilent Techonologies, GVR 

Infra Projects, Mahanagar Gas, GNA Axles and Maini 

Precision Products are the companies which have received 

the SEBI’s approval for IPO and are yet to hit the capital 

20


SEBI is trying to balance liquidity by removing fraudulent practices while promoting healthier activities 

• Curbing the use of P-Notes 

• Penalising market manipulators 

• Monitor high frequency trades 

• Delist non traded stocks 

• Monitor rating agencies too 

• Promoting the launch of healthy 

IPOs 

• L a u n c h i n g c o m p l e x d e r i v a t e 

products 

• Developing the currency and debt 

markets 

• Promoting the launch of more 

exchanges 

• Better FPI norms 

markets. 3 firms - Equitas Holdings, Thyrocare Technologies 

and Ujjivan Financial Services — had recently hit the 

capital markets and collectively raised Rs 3,500 crore. The 

remaining 12 companies are expected to raise at least Rs 

5,200 crore, according to sources. 2015 was one of the 

best year for IPO launch as 20 companies launched their 

IPO and they collectively raised around Rs 15,000 cr from 

the markets. 2014 and 2013 was comparatively dull as IPO 

collections were only Rs 1261cr and Rs 1,284 cr through 6 

and 3 firms respectively. 

Role of domestic investors (DIIs) is increasing in the Indian 

markets gradually thereby reducing the volatilty from 

foreign fund flows; this trend is expected to continue. 

From the table below, we can see that DII’s contribution is 

increasing during times of foreign fund outflows. In 2015, 

DIIs have pumped in more than thrice the amount of 

foreign fund outflows, thus reducing the volatility of the 

markets. With increased number of retail participants 

through mutual fund schemes and greater participation 

from pension funds, domestic flows are going to be robust 

over the coming years. The Finance Ministry had last year 

notified a new investment pattern for EPFO, allowing the 

body to invest a minimum of 5 per cent and up to 15 per 

cent of its funds in equity or equity-related schemes. In 

2015-16, EPFO invested 5% of its incremental corpus, or a 

little more than Rs.6,000 crore, in stocks. Labour ministry 

officials estimate that in 2016-17, the amount would rise 

to as much as Rs.10,000 crore. 

Sebi chairman Mr Sinha disclosed some important figures 

recently. Between March 2015 and March 2016, FPIs' share 

in the free-float shares in Indian markets declined 

marginally from 21.35 per cent to 21 per cent. During the 

same period, the mutual funds' exposure rose from 4.8 per 

cent to 5.8 per cent. Other domestic institutions also 

witnessed an increase from 6.7 per cent to 7.97 per cent. 

This clearly shows that although FPIs' contribution has 

gone down a bit, domestic investors’ contribution has 

increased considerably. 

Curbs on P-Notes will not cause turmoil in the financial 

markets like before; the recent move by SEBI is positive as 

it will prevent money laundering and other market 

manipulation measures: As discussed above, SEBI is trying 

to protect investors’ interests by removing any fraudulent 

measures . P-Notes contributes only 10% of total FII 

investments now and thus a curb will not be that impactful 

the was it was in 2007 times. Overall, SEBI’s focus to 

increase foreign investments through the FPI route is 

healthy for long term. The increasing contribution by 

domestic investors will also provide resiliency to the Indian 

markets. 

21


SECTOR OUTLOOK 

Wood Panel 

The Indian interior infrastructure industry has been rapidly 

growing over the last few years. One of the major verticals 

of the interior infrastructure industry is the wood panel 

market, which comprises of materials used in building 

furniture: plywood; decorative surface products like 

laminates and veneers, and engineered wood panels like 

PB (Particle Board) and MDF (Medium Density Fibreboard). 

Wood Panel industry in India is at the cusp of major growth 

push over the coming years due to improvement in reality 

sector and various government programs to revive the 

reality sector along with government vision of Housing For 

All by 2022 and to built 100 smart cities. Wood panel 

products involves wood based materials required in 

manufacturing furniture, like Plywood, Laminates, Medium 

Density Fibreboard (MDF) and Veneers. 

The Indian wood panel industry is worth Rs. 290bn, of 

which plywood accounts for ~Rs. 190bn, laminates for ~Rs 

55bn, particle board for ~30bn, and Medium density 

fibreboard (MDF) accounts for ~Rs. 15bn. Consumption of 

Indian panel products has grown at a CAGR of 15-20% for 

the organized segment as compared to the overall industry 

growth of 5-7% over past five years. Improvement in 

Wood and Panel products industry profile 

housing sector, swift urbanization, constructive 

demographics, increasing per capita income, nuclear 

families and rising middle class in the country have been 

vital growth drivers for the plywood and allied products. 

Indian wood panel market and its constituents 

Plywood (66%) 

Size: Rs. 190bn 

Organised: 30% 

Unorganised: 70% 

Growth CAGR: 6-8% 

Indian Wood Panel Market (100%) 

Size: Rs. 290 bn 




Surface 

products (19%): 

Laminates 




Growth CAGR: 10% 

Engineered products 

(15%): MDF & PB 





Particle 

Board (10%) 





MDF (5%) 



Unorganised: NIL 


Product Features 

Durability 

Product Plywood MDF Laminates 

Cost Scaled to 

standard ply 

The most preferred wood for making 

furniture in India 

Better durability, so widely used for any 

application 

Branded products : Lower quality : 65, 

Commercial : 100, Premium ply: 130) 

Unbranded : 45 / 65 

The new low cost engineer wood catching 

up 

Lower than Ply, so limited applications 

for heavy load bearing structure 

50 (between commercial and unbranded 

products) 

Laminates are used for providing an 

aesthetic look to furniture 

Decorative application 

Rs800/1660 sheet (8x4 sq ft size) 

Market size 

Organised / 

Unorganised (%) 

Raw Material 

Manufacturing 

process 

Key players & 

Market share 

Rs190 bn 

30/70 

Source: Industry, Ashika Research 

Face timber (22%), Core wood (64%), 

chemicals/adhesives (14%) 

A 19mm ply would have 2 outer layer of 

face timber (0.4mm thickness) and 11 

layers of core wood (0.8mm thickness) 

pressed using chemicals /adhesives 

Century ply, Greenply, Sarda plywood, 

Archid ply, Uniply 

Rs15 bn 

80 / 20 (Imports) 

Wood residuals (tree trunk, branches, 

chemicals) 

Paper like pulping process. Wood 

residuals cooked to obtain fibres which 

then are pressed with adhesives. 

Greenply, Mangalam timber, Action, VIR, 

Shirdi Industries 

Rs 55 bn 

70 / 30 

(Brown paper, Decorative printed 

paper, Clear translucent paper, 

Melamine, Phenolic resin) 

Brown paper and Decorative paper 

soaked in phenolic and melamine 

resins are hard pressed together to 

form a stiff laminate sheet 

Merino, Greenlam, Royal Touch, 

Century ply, Rushil Decor 

22


India Wood Panel Market - Snapshot 

Product Units Plywood MDF PB Laminates Veneer Total 

Size FY16 Rs. bn 170 15 30 55 20 290 

% of total industry % 59 5 10 19 7 

FY11-16 growth % 6 25 15 10 8 7 

Organized % 30 70 30 70 60 42 

Unorganized % 70 0 70 30 40 57 

Imports % 0 30 0 0 0 2 

Residential % 70 20 10 35 70 56 

Commercial % 30 80 90 45 30 40 

Export % 0 0 0 20 0 3 

New Demand % 85 99 98 80 85 86 

Replacement % 15 2 5 20 15 14 


Plywood 

Plywood is the most favored wood for making furniture in 

India. It is a manufactured wood panel made from thin 

sheets of wood veneer. To manufacture plywood, three vital 

raw materials are required: face veneers (22%) - outermost 

layer, core/panel veneers (64%) low quality timber below 

face timber and chemicals / adhesives (14%). Plywood is 

prepared of three or more thin layers of wood attached 

together with an adhesive. Face timber is superior quality 

premium timber, generally imported from Myanmar, Europe, 

Indonesia or Africa. Core timber is cultivated area timber 

and is available in plenty in India and has a life cycle of 6- 

7 years. 

Plywood Raw material (%) 

Chemicals 

14% 

Face veneer 

22% 

Indian plywood industry is currently estimated at ~Rs 190 

billion and in the last five years it has increased more than 

two times. India's plywood market is largely captured by 

unorganized players which account for ~70% market share 

while organized players account for ~30%, of which around 

50% of the organized market share is being controlled by 

two companies - Century Ply and Greenply. Industry has 

shown a growth of ~6% in past five years while the 

organized players are better place with a growth of ~22% 

during the same period. It clearly suggests that the shift is 

consistently happening to branded from unbranded 

plywood. With the unorganized industry still occupying 

majority share of the industry, there is a considerable 

opportunity for organized brands to eye a big pie of the 

unorganized market going forward over the next five years. 

Moreover with government's continuous focus to revive 

infrastructure and low cost housing programs, demand for 

plywood is expected to remain strong. Decline in home 

transformation cycle from 15 years to 5 years together with 

increase in housing demand from Tier II and Tier III cities is 

expected to maintain demand growth in the Indian 

plywood industry. 

Plywood industry statistics 

Core veneer 

64% 

Source: Industry Ashika Research 

Industry size 

Industry growth 

Demand drivers 

Rs. 190bn 

6-8% CAGR 

New construction demand, rising 

disposable incomes, faster replacement 

cycle in furniture, etc 

Organized to unorganized mix Over 75% unorganized 

Key USP 

Key risks 

Quality, branding, distribution and 

transparency in operations 

Raw material availability and pricing 

23



Laminates 

Laminates are engineered materials prepared from paper 

and chemicals. The size of the Indian laminates industry is 

~Rs 55 billion, which is rising at ~10% per annum. Total 

capacity of the industry in FY15 was anticipated ~100 mn 

sheets per annum, and is subjugated by organized players 

with market share of ~70%, have been growing faster than 

their unorganized counterparts due to their intense focus 

on 1mm thickness laminates and value-added products like 

textured, exterior grade and compact laminates. Utilization 

of laminates has started from furniture and cabinetry to 

decorative walls as they are ideal over wood and paint for 

better design, easily fitting, maintenance, stability and cost 

efficiency. Laminates are also stain-proof and resistant. 

Major growth drivers and customer base for laminate 

industry are identical as plywood since laminates are 

requires giving a visual look to plywood. Greenply is the 

largest player in this segment, followed by Merino and 

Century Plyboard. 

Laminate industry statistics 

Industry size 



Rs. 40bn 

100% CAGR 

Organized to unorganized mix 55% unorganized 

Key USP 

Key risks 

New construction demand, rising 

disposable incomes, faster replacement 

cycle in furniture, etc 

Branding, distribution and Innovation 

Obsolescence in designs. 

Break-up of the laminate industry 

Thickness-wise Dynamics Organized to 

unorganized mix 

Volume 

mix 

Value 

mix 

Average 

realization 

Price 

differential 

Segment 

CAGR 

1mm Brand driven 60:40 40% 60% 600 20-25% 10-15% 

0.7mm and 0.8mm Price driven 40:60 40% 30% 300 40-50% 5-10% 

0.5mm and 0.6mm Price driven 20:80 20% 10% 200 40-50% Flat growth 

Total 100% 100% 400 

Medium Density Fibreboard (MDF) 

MDF is engineered wood prepared from wood residuals like 

tree trunks, branches and attached together using heat and 

pressure. Being eco-friendly and cost efficient, MDF is 

better substitute for economical unorganized plywood. 

Globally, 80% of the wood panel used for furniture has 

been MDF as compared to less than 10% for India. Market 

size of Indian MDF segment is ~Rs. 15 billion and is rising 

at a CAGR of 25% over the last five years. Of the overall 

MDF market 70% is controlled by a few organized players 

like Greenply, Action Tesa and Rushil Décor and 30% is 

accounted by imports. With high entry barriers in this 

segment caused by massive capex along with it being a 

regulated market, it is easier to produce engineered MDF 

products. Demand in this sector is determined by 

convenient modular furniture, ready-to-move into space; 

require an alternative low quality plywood and 

affordability. MDF products are yet to find acceptance 

among Indian users but with cost gap between B & C 

category plywood, customers are expected to gradually 

accept MDF for furniture. Further with increasing 

urbanization, the demand for ready-made furniture, 

manufactured with engineered panels like MDF, is rapidly 

growing as consumers are increasingly finding themselves 

short on time and inconvenient to get customized furniture 

fabricated by carpenters. One of the biggest advantages of 

using MDF is that it is far more affordable than plywood 

and can be carved and moulded to one's liking. 

MDF industry statistics 

Industry size 



Rs. 15bn 

25% CAGR 

Organized to unorganized mix 100% unorganized 

Key USP 

Key risks 

New construction demand particularly in 

commercial real estate and retail, modular 

furniture, increasing applications etc. 

Distribution and availability 

Imports 

Size of MDF market in India in FY15 

Company Capacity 

(in CMB) 

Volume 

(CBM) 

Size 

(in Rm) 

Market 

Share 

Mangalam Timber 45000 17,000 400 3% 

Shirdi Industries 42000 12,000 280 2% 

Action Group 160000 115,000 2,750 21% 

Greenply Industries 180000 161,000 4,080 31% 

Rushil Décor 84000 60,000 1,050 8% 

Domestic total (A) 511000 365,000 8,560 66% 

Imports (B) 200,000 4,440 34% 

Total size (A+B) 565,000 13,000 100% 


24


Anti-Dumping Duty on MDF to be imposed soon 

On August 17, the ministry notified its final findings and 

recommended imposition of antidumping duty from the 

date of notification to be issued by the central government 

on all imports from China, Thailand, Malaysia and Sri Lanka. 

It recommended imposition of definitive anti-dumping duty 

equal to the lesser of the margin of dumping and the 

margin of injury to the domestic industry. India government 

is now planning to impose anti-dumping duty of up to USD 

64.35 per cubic metre on imports of a specific type of fibre 

board i.e. medium density fiberboard (MDF) from Indonesia 

and Vietnam, in line with the recommendation of the 

Commerce Ministry. Companies had filed an application for 

initiation of anti-dumping duty probe concerning imports of 

“plain medium density fibre board having thickness of 6 

mm and above”. The landed price differential between 

imported and domestic medium MDF stands at around 5-6 

percent. Net MDF imports account for 30-35 percent, 

majority of which come from Vietnam and Indonesia. In its 

final findings, the Directorate General of Anti-Dumping and 

Allied Duties (DGAD), under the ministry, has found that 

there are instances of dumping from these countries and 

the domestic industry has suffered material injury. “The 

authority considers it necessary and appropriate to 

recommend imposition of definitive duties on imports. 

DGAD has recommended an anti-dumping duty in the 

range of USD 14.71-64.35 per cubic meter on the imports,” 

DGAD said in a notification. It is being expected that the 

anti-dumping duty on MDF will get imposed by end of June 

2016. 

Particle board 

Particle Boards are engineered wood product that are made 

from gluing together small chips and saw-dust and firmly 

pressing them together to make boards or sheets. These 

are low cost, low density, light weight boards though has 

limited life and less durability so finds limited application 

such as making make-shift, lower load bearing furniture, 

cabins and cubical, panels etc. Ideally particle board is sold 

as pre-laminated product. 

colour palette to enhance every design. While a veneer is 

environmentally friendly as it is a renewable resource, it is 

also timeless and never quite goes out of style. The result 

is that each veneer is distinctive; there are no two veneers 

alike. Veneers make ideal fashion statements; they can be 

used in interiors by the exclusive-seeking customers. 

Compared to decorative laminates, cost of veneer is 3 to 4 

times expensive depending upon the design and finish. 

Total market size of domestic Veneer industry is Rs 8bn. 

Veneer needs finishing, polishing, lamination and also 

needs to be maintained. Hence, compared to laminates, 

veneer is 2/4 times costlier and used for high-end 

applications. Major players in the organized veneer 

segment are Greenlam, Greenply, Centuryply, Orchid 

Veneers etc. 

Growth Driver 

Strong growth in housing sector 

India is having housing shortage of about 60 mn units. The 

government’s massive programme “Housing for All by 

2022” aims at building 110mn houses across 305 cities 

and towns in nine states over next seven years. Further real 

estate players are also trapping the opportunity to build 

more houses in Tier II and Tier III cities with help of 

government’s new reforms and incentives. All this in turn 

will spur demand for modern interiors, along with 

modifications in the existing interiors. 

Urban housing shortage (mn) 

30 

25 

20 

15 

10 

5 

0 

1961 1971 1981 1991 2001 2007 2012 


Veneer 

Veneer is a thin layer of wood which is sliced from a log. 

From the clean lines and consistency of contemporary 

reconstructed veneer to the traditional individuality of 

wood grain patterns – there’s a veneer to suit every 

application from the traditional beauty of naturally grained 

veneer or the designer appeal of dyed veneers, there is a 

FDI to drive commercial real estate 

Relaxation of FDI in real estate is expected to result in 

growing demand for commercial real estate, retail, 

hospitality, healthcare sectors as foreign funds are 

expected to pour in the real estate market providing boost 

to the commercial realty market. Moreover, an increasing 

25



number of corporate offices, being set up in Tier II and Tier 

III cities will drive demand for office furniture. 

Increasing urbanization 

As per industry estimates, India's urban population has 

grown by 2.5% annually over the last decade, making it the 

fastest urbanizing country. Nearly 33% of the total Indian 

population is urban and this figure is expected to reach to 

about 40% by 2030 due to migration as well as perfection 

in the standard of living. The governmental focus on 

creating 100 smart cities will further drive demand for 

homes. 

25 

20 

15 

10 

5 

0 

Rising disposable income 

FY10 FY11 FY12 FY13 FY14 FY15 

80 

70 

Increasing urbanization Rural 

Urban 

60 

50 

40 

30 

20 

10 

0 

FY01 FY11 FY20E 


Growing middle class segment and increase in per capita 

income 

The middle class segment, which was at 58 mn household 

in 2010, is anticipated to grow to 110 mn by 2020 and is 

likely to result in upsurge in demand for plywood industry. 

Rise in per capita income is also expected to put in more 

money in the hands of people, thereby ensuing in higher 

spend on home decoration front. 

Seventh Pay Commission 

Seventh Pay Commission as and when implemented will 

substantial increase the current salary of the Government 

employees by around 30-40% which augur higher 

consumer spending and is also likely to boost demand for 

furniture. Also, post implementation of OROP (One rank 

one pension), the beneficiaries are likely to have higher 

disposable income which is expected to translate into 

higher demand for the home interior industry. 

GST to be a game changer for the organized sector 

GST is expected to be a game changer for the sector. 

Currently organized players were at a disadvantage due to 

high excise duty and interstate transfer taxation. Due to 

this there is large price variation in branded and 

unbranded product. At present, the price differential 

between organized and unorganized plywood varies 

between 15% and 20% in the premium plywood space 

and between 20% and 50% in the commercial grade 

plywood space. With GST implementation, this variation in 

Price analysis - Pre & Post GST 

Pre GST 

Company 

Organized 

Basic price 100 100 

Excise duty @12.36% 12.4 - 

Basic + Excise duty 112.4 100 

VAT @12.5% 14.1 12.5 

Total 126.4 112.5 

Dealer Basic price 112.4 100 

Dealer margin @10% 11.2 10 

Total 123.6 110 

VAT @12.5% 15.4 13.8 

Less input credit 14.1 12.5 

Total 125 111.3 

Source: Ashika Research 

Unorganized 

Post GST 

Company 

Organized 

Basic price 100 100 

GST@24% (assumed) 24 24 

Basic + Excise duty 124 124 

Dealer Basic price 100 100 

Dealer margin @10% 10 10 

Total 110 110 

GST@24% (assumed) 26.4 26.4 

Less input credit 24 24 

Total 112.4 112.4 

Source: Ashika Research 

Unorganized 

26


unorganized and organized sector will fade, thereby 

creating a level playing field for organized players. Apart 

from reduction in production cost due to availability of tax 

credit, GST implementation will also benefit organized 

players in logistics, with free flow of goods within states. 

This is also likely to give plywood manufacturers an 

opportunity to tap into the unorganized market, whose size 

is more than two times the organized market and consumer 

preference will shift towards branded products due to 

reduced price gap. 

Post the implementation of GST, assuming a tax rate of 

24%, our calculations taking 100 as the base suggests that 

the price differential between branded and unbranded 

players would narrow by 10%, which in turn would 

improve the competitiveness of organized players and help 

it gain further market share. Apart from this, small 

manufacturers, who currently escape the excise net by 

maintaining a turnover below INR15m, are expected to fall 

into the GST ambit as the threshold limit could be reduced 

to ~INR2.5m per annum. 

Raw timber ban, positive for organized sector 

Raw-material is the major cost in plywood industry, forming 

about 55-60% of revenue. In April, 2014, Myanmar banned 

the export of raw timber logs, putting Indian plywood 

players in a fix as they were deeply dependent on 

Myanmar for raw timber. However, the ban on raw timber 

imports turned out to be beneficial for Indian companies 

who had already set-up a unit in Myanmar to process raw 

timber providing security on face veneer (key component 

for plywood) just prior to Myanmar's new reformist 

government forced an export ban on raw timber logs to 

save its forests. Though, Myanmar government has given 

permission towards processing of raw timber in the country 

and exporting it. This has helped the organized players to 

achieve first mover benefit over others. Government of 

LAOS has also banned the export of raw timber logs in 

September 2015. Being the first mover, companies has 

already setting up a new unit through owned SPV with 

local partner in SEZ Area of LAOS and also by setting up 

owned new unit at Laos with a capex with moderate capex 

which will provide further security of raw material. The 

unorganized players are now mostly dependent on 

organized players for their high quality raw material needs. 

In this situation, organized players would be able to control 

the higher growth, quality-conscious segment, improving 

their brand image and margins. A positive implication of 

ban on raw timber exports is in the form of lower logistics 

costs on transporting processed timber. The cost of 

transporting raw timber from Myanmar is very high 

because of its bulky nature. Once converted to veneers, the 

bulk weight reduces substantially, as 30% of the moisture 

content in logs is removed, and post-peeling, the weight 

reduces by another 30%. In veneer form, the total bulk 

handling weight reduces by 50%, thus reducing logistics 

costs. 

Comparative Valuation 

Company 

CMP 

(Rs.) 

Market Cap 

(Rs. Cr) 

P/E 

Ratio (x) 

P/E 

FY17E (x) 

P/Bv 

ratio (x) 

Centuryply 162.0 3605.0 21.5 19.5 7.3 37.0 34.6 10.5 13.3 

Greenply 212.0 2561.0 18.3 16.5 4.2 23.9 21.5 10.3 9.3 

Greenlam 633.5 1525.0 47.7 26.3 6.7 13.0 18.6 11.4 9.0 

Source: Bloomberg, Capitaline, Ashika Research 

ROE 

(%) 

ROE 

FY17E (%) 

EV/EBITDA 

(x) 

EV/EBITDA FY17E 

(X) 

27


ECONOMIC REVIEW 

As we are nearing the end of Q4FY16 result season, 

corporate results are coming thick and fast. So far, the 

performance has been on a mildly positive note. According 

to many, this might actually be signs of first green shoots 

considering that there has been a marginal recovery in 

demand as is evident from the meaningful increase in net 

sales. While the growth in bottom-line has indeed been 

one of the best off late. One however also needs to keep in 

mind the low base effect of the previous year quarterly 

numbers which might have led the improvement. 

Nevertheless, the meaningful recovery in demand albeit 

from a low base, through reported revenues gives 

something to cheer. Among sectors, Consumer goods, 

pharmaceuticals, pesticides & agrochemicals are some 

which witnessed muted demand. One of the outliers among 

the sectors clearly has been the banking sector which 

witnessed one more quarter of dismal and scary numbers. 

The situation is particularly grave and dismal at the same 

time particularly for the public sector banks. This is in part 

is a consequence after responding to the RBI's call to front 

load the provisions and provide for even some of the 

corporate which are healthy as of now but can be potential 

NPA candidates. This broadly what the Asset Quality Review 

(AQR) conducted by the Reserve Bank of India is outlined 

to achieve. The concept was introduced by RBI governor 

while delivering a speech titled “Issues in Banking Today” 

at CII's first Banking Summit held in Feb, 2016. According 

to him the reasons for which a large number of projects in 

the economy have run into difficulty include poor project 

evaluation, extensive project delays, poor monitoring and 

cost overruns, and the effects of global overcapacity on 

prices and imports. The RBI governor has clearly opined his 

negative views on putting “band aids” or further loans to 

service already non-performing projects. According to him, 

these band aids do not actually help in the long run and 

the promoters eventually loses interest when unable to 

revive the project and pay interest. Thus according to him, 

it is better to write them off now than put band aids, that 

way banks can go ahead and provide fresh loan to a fresh 

project probably to the same promoter. The RBI has an 

agenda to have clean and fully provisioned bank balance 

sheets by March 2017 and the basic premise is that unless 

the balance sheets of PSU banks (PSB) are clean, the 

management will be held back with the NPA and stressed 

balance sheets and will lose out on providing fresh credit 

thus hurting economic growth. 

Indeed, the credit growth has fallen as the management of 

PSU banks are bothered and focused on preservation and 

in need of scare capital than to go for growth. Growth in a 

way means providing fresh capital to the corporate, 

anything gone wrong will actually lead them to the same 

position what they are today, unless a thorough due 

diligence and asset review mechanism is in place. That is in 

Regulatory Tier 1 Capital to Risk-Weighted Assets (%) 

Indonesia 

Hong Kong 

Philippines 

Singapore 

Malaysia 

Thailand 

Australia 

Korea 

China 

India 

Source: IMF, Live Mint 

10 

11 

12 

12 

14 

14 

14 

14 

15 

19 

28


170 

143 

110 

131 

Net NPA and 1/3rd of restructured assets % of Networth 

126 

111 114 

101 

93 95 

95 

87 

59 60 

77 

United Bank of 

India 

UCO Bank 

PNB 

CBI 

Bank of 

Maharashtra 

Allahabad Bank 

Bank of India 

Dena Bank 

OBC 

Vijaya Bank 

Union Bank of 

India 

Andhra Bank 

IDBi Bank 

Bank of Baroda 

Indian Bank 

Source: Capitaline, BSE, Bank presentations to investors and analysts, Live Mint 

124 124 

Net NPA as a percentage of Networth 

92 92 91 90 87 84 84 81 

66 65 61 59 58 

53 48 

40 35 

United Bank of 

India 

UCO Bank 

PNB 

CBI 

Bank of 

Maharashtra 

Allahabad Bank 

Bank of India 

Dena Bank 

Syndicate Bank 

Corporation Bank 

OBC 

Vijaya Bank 

Union Bank of 

India 

Andhra Bank 

Punjab & Sind 

Bank 

IDBi Bank 

Bank of Baroda 

Indian Bank 

SBI Associates 

Source: Capitaline, BSE, Bank presentations to investors and analysts, Live Mint 

fact the whole essence of undertaking AQR. Just to put the 

numbers in perspective as outlined by Mr. Rajan in his 

speech states the abysmal difference between the 

strategies and the performance between private banks and 

PSU banks. According to Mr. Rajan, “Non-food credit growth 

from public sector banks, the more stressed part of the 

system, grew at only 6.6% over the calendar year 2015. 

Industrial credit growth for PSBs was only 3.3% while 

growth in lending to agriculture and allied lending was only 

10.4%. The only area of strength was personal loans, 

where growth was 16.9 %. In contrast, non-food credit 

growth in private sector banks was 20.2 %, in agriculture 

25.4%, in industry 14.6%, and 23.5% in personal loans. 

Put differently, in each of these areas except personal 

loans, loan growth in private sector banks was at least 10 

percentage points higher than public sector banks, while 

loan growth in personal loans was 6.6 percentage points 

higher.”Thus, although we cite the obvious examples of 

dwindling corporate loan demand on account of lower 

capacity utilization levels thus hampering fresh capex 

committed, the same is partly true. While it is true that the 

new capex committed is low on account of already stressed 

corporate balance sheet, however the same has not 

affected the performance of private sector banks but only 

the public sector banks. Thus, in a way it can be deduced 

that the erstwhile management of PSU banks had been 

lenient of some form and the present corporate stress 

seem to affect their asset quality and business growth 

more. It’s no brainer that the PSU banks occupy the lion’s 

share of the total bad loans in the system. As per our 

analysis, the share of gross non-performing assets (GNPA) 

stands at ~89% based on FY16 numbers of 24 PSU banks. 

Thus, clearly when we talk about the stressed assets in the 

banking system, it’s more to do with PSU banks and their 

inefficiencies in management. 

According to an article by Live Mint, in the last six months, 

22 state-owned banks has reported losses to the tune of 

Rs.30,700 crore. This clearing of the balance sheet 

although necessary but actually has wiped off 16.4% of 

their net worth. Considering that the banks have to comply 

with the prestigious Basel III norms, the capital adequacy 

norms are already stringent. RBI issued Basel III guidelines 

applicable with effect from April 1, 2013 and has provided 

a transition schedule for Basel III implementation till March 

31, 2019. Upon full implementation, Basel III guidelines 

target minimum capital adequacy ratio would be 11.5% 

with minimum core capital ratio of 8%. Based on the latest 

set of figures, PSU banks in the likes of IDBI Bank, UCO 

Bank, United Bank of India, Central Bank, Bank of India and 

29



Punjab National Bank have all reported GNPA figures above 

10%. What’s more, barring IDBI bank and Bank of India, 

others are actually below the minimum norm for capital 

adequacy as far as Basel III norms are concerned. Even IDBI 

and Bank of India are either at the threshold or just above 

it. This is after the RBI changed the provisions wherein real 

estate revaluation could be used to shore up the base. 

According to the International Monetary Fund’s regional 

economic outlook report, Indian banks have the worst 

capital adequacy ratio in the region. Based on the Live Mint 

analysis, net NPAs of 10 of 22 PSU banks are greater than 

75% of net worth. What’s more, after assuming that onethird 

of restructured loans turn into bad loans, eight banks 

have stressed assets to net worth ratio of over 100%. The 

Live Mint analysis didn’t take into account asset stress from 

5/25 scheme or strategic debt restructuring (SDR) scheme. 

The gruesome part is that even after reporting such level of 

losses and making provisions, the management of majority 

of banks is not confident of the clarity with regards to 

balance sheet. The tone suggests that there might be more 

pain ahead. The government has already allocated for Rs 

25,000 crore for FY16 as well as for FY17. Going by the 

numbers, it will fall short and the government has to infuse 

more. It’s for no reason that the media are ripe with articles 

on bank consolidation. In fact, this might be the only 

solution out of the bad loan mess they have got into. It will 

be easy for the government to provide capital for 2-3 

banks rather a whole gang of rotten lot. Much as the 

management is confused and feared to lend further they 

are also in the back foot because of the scarcity of capital. 

Unless, they have enough capital it will prevent banks to 

fund the economy, something can be deduced even 

looking at the capital adequacy ratios. Clearly, 

consolidation will result in an efficient banking system at 

least as far as the management is concerned both for the 

government as well as for the banks. Sometimes, less is 

better. 

Talking of consolidation, Mr. R. Gandhi, Deputy Governor, 

RBI delivered a speech titled “Consolidation among Public 

Sector Banks” wherein he argued both for as well as 

against consolidation. The consolidation of banks is 

however not a new topic, it has been discussed even back 

in 1991. Narasimham Committee Report in 1991 (NC-I), 

recommended a three tier banking structure in India 

through establishment of three large banks with 

international presence, eight to ten national banks and a 

large number of regional and local banks. According to Mr. 

Gandhi, consolidation in India could be imposed upon or 

be voluntarily. Voluntary consolidation is almost absent for 

PSU banks mergers rather obvious for private banks. The 

recent case of voluntary merger has been that of ING Vysya 

Bank with Kotak Mahindra Bank. Some of the important 

points raised with regards for consolidation are: (a) despite 

India being the seventh largest economy in the world in 

terms of nominal GDP, there is no Indian bank in the list of 

70 large banks in terms of asset size (b) larger bank may 

be less risky than a smaller bank as the larger bank will 

have a more diversified portfolio resulting in less volatility 

in its earnings and higher credit rating (c) Large banks do 

benefit from economies of scale in terms of risk 

diversification although beyond a certain threshold size (d) 

A comparison of performance of larger PSBs with smaller 

PSBs does indicate that larger PSBs perform better. 

However, the suggestions drawn by Mr. Gandhi are not 

without caveats. They are: (a) Large is always not better in 

the context of banks since the benefit of size will only 

work up to a certain threshold beyond which there could 

be negative impact (b) Mergers between two banks should 

not be seen as a short term fix but there should be a 

strategic vision driven by synergy and creating value for 

both the banks. Thus, he summed up that although merger 

will create synergies and bring efficiency however only if 

they are well thought out and executed. 

Despite of the fact, the new provisioning norms brought 

about by RBI has received thumbs up from international 

players; the same has turned out to be a major headache 

for both RBI and government alike. Nevertheless, RBI 

remains committed to clear the banks of their bad loan 

mess before they can loan again “stress free”. It has always 

been the notion that the smaller companies are the culprits 

to have taken the loans and failed to service them. While 

in reality, the situation is a little different. According a an 

article by Indian Express, large and medium industries 

accounted for over 55% of the stressed loans in the 

banking sector as on September-end 2015, up from 42% 

at the end of March 2014. The figures were disclosed by 

RBI Deputy Governor SS Mundra in a presentation. Since 

2012-13, proportion of stressed assets for large and 

MSME Growth Story- Aggregated Data (%) 

2013-14 2014-15 

Sales 8.7 12 

Value of production 9.9 11.6 

Total Income 9.6 11.7 

Remuneration to Employees 16.2 17.6 

Operating Profit 23 16.6 

Operating Profit to Sales 8.7 9.1 

Profit After Tax to Net Worth 8.7 9.1 

Gross Saving 11.6 17.9 

Net Worth 7.7 8.1 

Total Earnings in Foreign 

currencies 3.7 25.8 

of which exports -7.7 26.7 

Source: RBI 

30


MSME Growth Story- Disaggregated Data (%) 

Industry 

2013-14 2014-15 

1. Mining & Quarrying 0.1 12.2 

2. Manufacturing 8 9.5 

2.1 Iron & Steel 1.1 9.3 

2.2 Fabricated metal products 7.6 14.7 

2.3 Electrical Machinery & 

apparatus 10 10.8 

2.4 Machinery & Equipment 5.9 10 

2.5 Motor Vehicles & 

other transport 4.8 10.4 

3. Services 9.8 15.5 

3.1 Trade wholesale & retail 8.9 18.3 

3.2 Transport Storage & 

Communications 9.4 13.3 

3.3 Hotels & Restaurants -3.8 11.7 

3.4 Computer and related 

activities 14.6 19.7 

3.5 Real estate 7.7 23.6 

All Industries 8.7 12 

Source: RBI 

medium corporate has been on a rise and they jumped 

from 36 per cent in March 2013 to 50 per cent by Marchend 

2015. On the other hand, Small and micro industries 

accounted for 29 per cent of the stressed loans by 

September-end 2015, while agriculture sector account for 

the lowest 7.9 per cent stressed loans. According to Mr. 

Mundra, “Contrary to popular perception, stress relatively 

much less in priority sector. Restructuring mostly in larger 

accounts,” The authenticity that the smaller firms are 

actually in a better state than the larger ones can be found 

out from the fact that India’s MSME (micro, small and 

medium enterprises) sector, with 48 million enterprises, 

now contributes 37.5% to gross domestic product. The RBI 

released data related to 237,398 Finances of Non- 

Government Non-Financial (NGNF) Private Limited 

Companies for 2014-15. While corporate profitability of 

the listed universe of companies buckled under pressure in 

2014-15, the data of these MSME companies presents a 

heartening picture both on the top line, bottom line as well 

as the margins earned and return on equity. Growth rates 

in sales and operating profit and profit after tax have 

grown at 12%, 16.6% and 12.3% respectively for FY15. 

While operating profit margin as well as the return on 

equity both improved from 8.7% in FY14 to 9.1% in FY15. 

This is certainly in stark contrast to the listed companies 

which have witnessed muted revenue growth on demand 

slowdown and decline in profitability was on account of 

higher interest and depreciation. India Inc’s profit-to-GDP 

ratio fell for the fifth consecutive year, slipping to 4.1 per 

cent in FY15, against the 10-year average of 5.3 per cent. 

Further contrasting ideas emanate when one looks at the 

disaggregated data. Tulsi Jayakumar, professor of 

economics at the S.P. Jain Institute of Management and 

Research found out that “core sectors—including mining 

and quarrying, manufacturing of iron and steel, fabricated 

metal products, machinery and equipment, motor vehicles 

and other transport equipment, and construction—have 

exhibited dramatic increases in growth rates”. Even within 

services, trade, transport, hotels etc have all reported good 

growth rates. In reality, the core sector growth dipped to 

3.5% in FY15 from 4.2% in the previous fiscal year. 

According to Jayakumar, “The alleged discrepancy between 

perception and reality of the India growth story clearly 

warrants the use of a larger database to draw conclusions 

regarding both growth and equity.” In that sense, 

government’s as well as RBI’s efforts towards the MSME 

sector is noteworthy and makes genuine sense. 

Indeed, there should be better focus on MSME sector 

considering its superior financials and increasing 

contribution towards GDP. However, this is a call the 

management of the banks would probably take once they 

clear their heads as well as their balance sheets of the 

mess they are presently in. Unfortunately, when you are 

cornered, you become pessimistic, that is exactly what the 

banks would be probably up for the next couple of years. 

They are conservative and at the back foot but what 

everybody wants is probably a cautiously optimistic stance 

towards credit growth. The latest set of pathetic results for 

Q4FY16 has set the management to be conservative. On 

account of high delinquencies in the iron and steel sector, 

Punjab National Bank (PNB) has decided to refrain from 

lending to the sector till it recovers from the downturn. 

S eve n h e avily s t re ss e d s e c t o rs i n c l u d i n g s t e e l , 

infrastructure, textiles and cement contributed more than 

55% of GNPAs of the bank. Out of the lot, Iron and steel 

alone contributed 25%. The management however said 

that even big names in good sectors are avoided and only 

high collateralized or good quality proposals would be 

accepted. This necessary means that the management has 

finally learnt its lesson and realized that even large 

corporate fail to service loans while a good player even 

from MSME might have no problem in servicing the loan. In 

fact, the data by RBI for the NGNF set of companies have 

shown that the interest coverage ratios of the set has been 

steady at 3x of more than 3x for the last three financial 

years (FY13 to FY15).Thus, in the future we might see 

traction towards share of loans towards MSME sector and 

more lenient terms. Although, it is hard to pin point but Mr. 

S. S. Mundra, Deputy Governor, Reserve Bank of India in his 

speech titled “Asset Quality Challenges in India: Diagnosis 

and Prognosis” undertook this difficult task. He broadly 

outlined four factors to have cause this acute crisis: (a) 

Environmental factors – the general slow state of the 

economic recovery after 2008 global financial crisis, 

31



sluggishness, policy paralysis, stalled projects primarily (b) 

Corporate Imprudence – overleverage, obsession for higher 

growth thus resulting in idle capacities, chasing profits 

ignoring risks involved (c) Corporate Misdemeanors – 

generally the willful defaulters and the mischievous ones 

(d) Banks’ failings - Governance deficit, Poor credit 

appraisal, Weak risk management, Chasing quick growth, 

Pretend and Extend. The RBI has set in several procedures 

to get a grip on the bad loan mess in the likes of Joint 

Lenders’ Forum (JLF), Corrective Action Plan (CAP), 

Refinancing of Project Loans, Sale of NPAs by Bank, 5/25 

scheme and the Strategic Debt Restructuring scheme (SDR) 

together with AQR. Having done so much and written off 

such huge pile of bad loans, did it pay off? According to Mr. 

Mundra, the strategies particularly AQR have certainly 

worked at least to change the mentality of the promoters. 

According to him “the promoters have realized that the 

banks are going to come hard after them if they don’t 

observe credit discipline.” 

The prime question remains, have the banks cleared 

themselves of the bad assets or there’s more pain in the 

offing. The answer is not a very optimistic one from the 

management of the PSBs as well as the private banks. The 

already introduced SDR scheme although has been latched 

upon by the banks, however in reality the banks are in 

trouble finding buyers for these companies. Very low 

commodity cycles and investment cycles has further 

complicated matters to find new buyers else SDR is a very 

useful tool, has been acknowledged by ICICI bank 

management. According to the views of Credit Suisse there 

are more pains ahead since full stress recognition is yet to 

happen. According to them, there are four reasons for the 

same: (i) divergences in stress corporate NPL classification 

have increased further post the audit; (ii) still only 10-20% 

of steel loans are impaired for most banks; (iii) majority of 

‘House of Debt ‘groups’ stress is still neither NPL or 

restructured; and (iv) loan growth to stress sectors (power, 

steel) continues to be high. Credit Suisse comes out with 

detailed report “House of Debt” wherein they analyze the 

degree of financial stress, how the deleveraging exercise 

has been going and finally the outlook for these leveraged 

groups in the likes of Adani Group, Essar Group, GMR 

Group, GVK Group, Jaypee Group, JSW Group, Lanco Group, 

Reliance ADAG, Vedanta Group and Videocon Group. An 

analysis done by Business Standard with regards to the 

above mentioned groups shows that these companies 

collectively announced 33 deals to sell assets since April 

last year. Based on the available information, the total 

value of these deals adds up to $12.29 billion (Rs 82,343 

crore). However, of these, only six have been completed as 

on date. Of these, the total value of the four deals on 

which information is available, adds up to a mere $379 

million (Rs 2,546 crore). According to the Business Standard 

report, fourteen deals are pending, of which nine are worth 

$7.3 billion (Rs 48,910 crore); 12 remain in the proposal 

stage, of which seven are worth $4.3 billion (Rs 28,810 

crore); while one has been withdrawn. 

However, all said and done the performance of the PSBs 

are at the throes and it is highly expected that by the end 

of FY17, the NPAs or bad assets for the banks will peak 

out. There is clear focus of the government as well as the 

RBI to find a solution for this issue. The rising stressed 

assets have seen a large number of applications for 

licences to set up asset reconstruction companies (ARCs) to 

acquire stressed assets. According to Financial Express, 

Piramal Enterprises, Encore Capital JC Flowers in 

partnership with Ambit Holdings, Fairfax-backed IIFL 

Holdings and Fortune Financial Services promoted by 

former Sun Pharma CFO Sudhir Valia have all applied for 

ARC licences. Thus clearly the issue with limited capital 

among the ARCs to buy such a huge pile of bad assets is 

slowly getting sorted. According to a recent RBI study the 

acquisition cost of NPAs for ARCs as a percentage to book 

value of assets has increased sharply from 20.8% as of 

March 2013 to 44.5% as on March 2015. In other words, 

the discount rate at which ARCs are acquiring NPAs from 

the banks/financial institutions has decreased considerably. 

With newer ARCs in the fray competition may drive up the 

prices of assets further which means better realization for 

stressed assets for ailing banks. One of the reasons for 

good valuations has been the early recognition and sale of 

bad assets which generates interest among ARCs since it 

has good chance of being recovered. In fact, the business 

of ARCs is getting attractive with a lot of players like the 

ARC business of JM Financial, Edelweiss Capital etc. have 

made strong profits for the latest quarter. The increased 

interest in the ARC segment will be supported by easier 

investment norms after the Department of Industrial Policy 

and Promotion (DIPP) allowed 100% foreign direct 

investment (FDI) in reconstruction companies under the 

automatic route. Earlier, only 49% of the investment was 

permitted under the automatic route, and anything higher 

would’ve required government permission. This has 

certainly generated interest in the ARC business of the 

companies. Apart from that, a strict AQR with bankruptcy 

law will make difficult for the willful defaulters. According 

to Moody’s Investors Service, the law will empower lenders 

to bargain strongly in matters of asset recovery, while 

borrowers can gain with lower borrowing costs after threefour 

quarters. The RBI has urged the loss making banks to 

not to go slow on recognizing NPAs. While the PSBs 

account for 89% of the total bad loans in the system, they 

also hold ~70% of the banking assets. Thus, considering 

the sheer size, it is imperative for the part of the 

government as well as RBI to help the banks to clear of this 

mess and probably we are at the one of the last legs 

before everything steers clear ahead. 

32


ICICI Prudential Balanced Advantage Fund (G) 

About the Fund: Launched on December 30, 2006, ICICI 

Prudential Balanced Advantage Fund is an open ended 

equity oriented fund. The Fund uses an in-house asset 

allocation model to maintain an effective equity 

investment level, endeavored to be above 65%. However, 

the actual equity level may go below 65% after 

considering the derivative exposure. 

Why ICICI Prudential Balanced Advantage Fund? 

• The Scheme uses an in-house model, based on a longterm 

historical mean Price to Book Value (P/BV), with a 

view to limit the downside risk during a falling market, 

while aiming to capture the upside in a rising market. 

• The Scheme is a blend of large and mid-cap stocks. 

While the large cap stocks represent established 

enterprises selected from the Top 100 stocks by market 

capitalization, the midcaps are smaller business entities 

with long-term growth potential. The allocation is 

decided on a tactical basis rather than any predefined 

ratio. 

• The Scheme uses derivative instruments for the 

purpose of hedging or portfolio rebalancing or for any 

other stock and/or index strategies as allowed under 

SEBI Regulations. 

• The Scheme seeks to provide investors a reasonable 

opportunity to benefit out of market volatility, since the 

Scheme is structured with intent to benefit from such 

volatilities. 

Current Portfolio Positioning 

We believe that due to uncertainty in global markets, 

domestic equity markets could be volatile in the medium 

term. ICICI Prudential Balanced Advantage Fund well 

positioned to benefit from volatility and generate good 

return over the long term. With a major portion of the 

portfolio comprising large cap stocks, the fund is 

positioned to benefit from discounted valuations in the 

segment. 

NAV (Rs.) 26.61 

Inception Date November 8, 2006 

Fund size(in Rs cr) # 11,360.0 

Fund Manager Manish Gunwani / Manish Banthia / 

Ashwin Jain / Rajat Chandak 

Entry load 

Exit Load 

Benchmark 

Min Investment 

N.A 

1.00% (1yr) 

CRISIL Balance Fund Aggresive 

Rs.5000 

Min SIP Investment - 

# as on April 30, 2016 

Beta 0.78 

Standard deviation (%) 10.17 

Sharpe Ratio 0.95 

Alpha 6.24 

R Squared 88.00 

Expense ratio (%) 2.35 

Portfolio Turnover ratio (%) 37.00 

Avg Market cap (Rs in cr) $ 62,893 

# as on April 30, 2016 

Important Information 

Key Ratios 

Top Ten Holdings 

Stocks 

% of Net assets 

HDFC Bank 5.57 

Infosys 2.72 

ITC 2.66 

ICICI Bank 2.32 

Coal India 2.26 

Tech Mahindra 2.23 

Cipla 2.15 

Motherson Sumi 2.08 

HCL Technologies 2.00 

Axis Bank 1.82 

Asset Allocation 

Equity Debt Cash & Equiv. 

65.18% 33.48% 1.35% 

Performance of the Fund 

1 month 3 month 6 month 1 year 3 years 5 years Since Inception 

Fund (%) 0.6 12.14 1.45 3.97 15.61 14.05 11.0 

Benchmark (%) 0.7 10.98 3.21 1.21 9.79 8.9 12.4 

33


MUTUAL FUND OVERVIEW 

Ashika Insight Mutual Fund Recommendation Alpha Generation 

Month of 

Recom Fund Name Benchmark 

NAV on 

Recom 

Date 

NAV on 

26/05/2016 

Fund 

Returns 

Since Recom 

Benchmark 

Returns since 

Recom 

May-15 SBI Blue Chip Fund S&P BSE 100 27.8273 29.3126 5.34% 4.32% 1.02% 

Jun-15 Kotak Opportunities Fund Nifty 500 82.4950 81.1420 -1.64% -3.34% 1.70% 

Jul-15 Franklin India Bluechip Fund S&P BSE Sensex 359.6038 359.0563 -0.15% -5.90% 5.75% 

Aug-15 UTI Mid Cap Fund Nifty Free Float 

Midcap 100 83.7773 79.3050 -5.34% -5.25% -0.09% 

Sep-15 Birla Sun Life Frontline Equity Fund S&P BSE 200 155.0000 162.9500 5.13% 3.13% 2.00% 

Oct-15 HDFC Equity Fund Nifty 500 444.7440 435.4970 -2.08% 1.06% -3.14% 

Nov-15 ICICI Prudential Focused 

Bluechip Equity Nifty 50 28.7900 28.8500 0.21% 0.23% -0.03% 

Dec-15 HDFC Top 200 Fund S&P BSE 200 330.8060 323.5310 -2.20% 1.61% -3.81% 

Jan-16 Mirae Asset Emerging Bluechip Fund Nifty Free Float 

Midcap 100 31.9490 31.6280 -1.00% -3.21% 2.21% 

Feb-16 Franklin India Opportunities Fund S&P BSE 200 51.5468 55.8254 8.30% 6.42% 1.88% 

Mar-16 Birla Sun Life Top 100 Fund Nifty 50 38.3379 42.7803 11.59% 11.73% -0.14% 

Apr-16 HDFC Mid-Cap Opportunities Fund Nifty Free Float 

Midcap 100 36.3740 37.8530 4.07% 2.45% 1.62% 

May-16 Birla Sun Life Pure Value Fund S&P BSE 200 39.2112 38.7397 -1.20% 2.43% -3.64% 

Alpha 

heme 

Ashika General Mutual Fund Recommendation - Equity - Categorywise 

Large Cap Funds 

Scheme 

NAV 

AUM 

(Rs. Cr) 

3M 6M 1Yr 3Yr 5Yr 

Since 

Inception 

Sharpe 

Ratio 

Benchmark 

Exp. 

Ratio 

SBI - Blue Chip Fund 

Reg (G) 29.31 4050 15.61 4.29 4.44 20.33 16.16 11.03 0.67 S&P BSE 100 2.32 

Motilal Oswal - MOSt 

Focused 25 Reg (G) 15.15 356 9.2 -2.95 -7.35 15.56 0 14.35 -1.15 Nifty 50 2.87 

Franklin - India Bluechip 

Fund (G) 359.06 6098 15.11 3.69 1.33 15.31 11.46 22.26 0.3 S&P BSE Sensex 2.2 

ICICI Pru - Focused Bluechip 

Equity Fund Reg (G) 28.85 8884 15.49 0.98 -0.79 15.86 12.65 14.13 0.37 Nifty 50 2.16 

Birla SL - Frontline 

Equity Fund Reg (G) 162.95 9434 15.49 3.43 0.72 17.75 13.91 23.27 0.5 S&P BSE 200 2.16 

DSP BlackRock - 

Focus 25 Reg Fund (G) 17.03 1123 14.51 -0.26 -2.43 18.49 10.93 9.13 0.45 S&P BSE 200 2.79 

34


Mid Cap Funds 

Scheme 

NAV 

AUM 

(Rs. Cr) 


Since 

Inception 

Sharpe 

Ratio 

Benchmark 

Exp. 

Ratio 

Franklin - India Prima 

Fund (G) 

690.47 3362 17.1 3.26 4.86 29.43 21 20.54 0.98 Nifty 500 2.31 

Motilal Oswal - MOSt 19.92 842 11.9 0.22 0.34 0 0 35.8 0.81 Nifty Free Float 

Focused Midcap 30 Reg (G) Midcap 100 2.73 

HDFC - Mid Cap Opportunities 37.85 9193 16.85 1.27 1.32 28.44 19.68 16.12 0.94 Nifty Free Float 

Fund (G) Midcap 100 2.32 

Sundaram - Select 346.32 2896 18.85 1.06 5.37 29.34 18.9 29.14 0.83 S&P BSE Mid 

Midcap Reg (G) Cap 2.37 

UTI - Mid Cap Fund (G) 79.31 2827 15.65 -0.71 0.89 32.58 21.03 18.49 1.09 Nifty Free Float 2.4 

Midcap 100 

Small Cap Funds 

Scheme 

NAV 

AUM 

(Rs. Cr) 


Since 

Inception 

Sharpe 

Ratio 

Benchmark 

Exp. 

Ratio 

DSP BlackRock - Micro Cap 

Fund Reg (G) 

44.11 2004 22.25 4.09 10.85 41.73 24.37 18.05 1.24 S&P BSE Small 2.43 

Cap 

Franklin - India Smaller 41.1 2299 18.95 4.3 7.38 35 24.1 14.59 1.16 Nifty Free Float 2.4 

Companies Fund (G) Midcap 100 

SBI - MidCap 63 1404 20.21 5.32 7.93 34.1 23.91 17.99 1.15 S&P BSE Mid 2.55 

Fund Reg (G) Cap 

Reliance - Small 25.65 1652 16.63 -5.5 7.09 39.07 21.75 17.79 1 S&P BSE Small 2.44 

Cap Fund (G) Cap 

Sundaram - SMILE 67.89 967 20.24 -6.5 -0.51 32.94 17.85 18.5 0.72 S&P BSE Small 

Fund Reg (G) Cap 2.59 

Multi Cap Funds 

Scheme 

NAV 

AUM 

(Rs. Cr) 


Since 

Inception 

Sharpe 

Ratio 

Benchmark 

Exp. 

Ratio 

Birla SL - MNC Fund Reg (G) 584.25 2766 12.95 1.33 2.13 31.81 22.98 18.11 1.16 Nifty MNC 2.43 

ICICI Pru - Value 

Discovery Reg (G) 113.03 9925 15.22 -1.24 -1.45 27.7 18.47 22.86 0.83 S&P BSE 500 2.24 

Motilal Oswal - MOSt 

Focused Multicap 35 Reg (G) 17.45 2982 13.51 1.08 1.14 0 0 30.7 -0.13 Nifty 500 2.41 

Franklin - India High Growth| 

Companies Fund (G) 28.54 3614 16.71 -3.1 -3.31 26 18.17 12.59 0.77 Nifty 500 2.26 

Birla SL - Adv Fund Reg (G) 295.21 914 16.53 2.8 -0.25 24.6 14.63 17.91 0.71 S&P BSE 200 2.81 

Scheme 

NAV 

AUM 

(Rs. Cr) 


Since 

Inception 

Sharpe 

Ratio 

Balance Fund 

Benchmark 

ICICI Pru - Balanced 

26.61 10128 12.14 1.45 3.99 15.61 14.05 10.79 0.58 Crisil Balanced 2.35 

Advantage Fund Reg (G) Fund Aggressive 

HDFC - Prudence Fund (G) 366.95 6992 15.97 -1.87 -0.83 16.39 11.94 18.89 0.36 Crisil Balanced 2.28 

Fund Aggressive 

SBI - M Balanced 96.91 3491 9.94 1.4 1.53 18.76 14.81 16.39 0.84 Crisil Balanced 2.47 

Fund Reg (G) 


HDFC - Balanced Fund (G) 109.97 4695 13.9 2.23 2.88 20.88 14.55 16.48 0.78 Crisil Balanced 2.13 


Birla SL - Balanced 95 576.12 2254 13.67 3.61 3.96 18.37 13.58 21.41 0.65 Crisil Balanced 2.5 

Fund Reg (G) 


Tata - Retirement Savings 20.42 40 12.74 1.47 -1.34 20.06 0 16.64 0.75 Crisil Balanced 3.06 

Fund Moderate (G) 


HDFC - Children Gift Invest 84.62 881 12.72 2.64 1.92 18.94 14.51 17.04 0.8 Crisil Balanced 2.48 


Exp. 

Ratio 

35


TECHNICAL VIEW 

Key takeaways from May 2016: 

• BJP won 86 of Assam's 126 assembly seats while TMC 

wins in West Bengal, AIDMK wins in Tamil Nadu and Left 

wrests power in Kerala. 

• The Insolvency and Bankruptcy Code Bill was approved 

by the Rajya Sabha by voice vote. 

• Sebi stipulated that Indian KYC norms would be 

applicable to all issuers of offshore derivative 

instruments including P-Notes 

• IIP for March, decreased sharply to 0.1% versus 2% in 

February. 

• CPI for April accelerated to 5.39% as compared to 

4.83% in March 

• India Composite PMI Output Index dropped from 54.3 in 

March to 52.8 in April. 

On the technical front Nifty during the month lack direction 

and higher high formation since March 2016 got curbed. 

Nifty formed consecutive doji like candle for the entire 

month in both weekly and daily time frame. The 

psychological level of 8000 proved crucial for the market 

and was unable to breach past the resistance zone for a 

considerable number of days but eventually was able to 

surpass it. The downward sloping channel line since the 

start of the 2015 was breached the previous month and 

traders were expecting a continuation of the existing rally 

however the pattern had been asking for further 

confirmation and awaiting patience from investors before 

confirming of a genuine breakout. Though Nifty had been 

gradually drifting lower, now trading decisively marginally 

above the downward sloping trendline recognizes that 

bullish structural buildup still remains perfectly in place 

and awaiting cues of a continuation in rally. 

An interesting aspect to note that Nifty since March 2016 

onward formed bullish broadening pattern in daily chart. 

Presently it seems that nifty might be in formation stage of 

the pattern and now trading or rather consolidating to form 

the fourth leg of the pattern. Prices sustaining above the 

7850-7900 mark would confirm the said assumption. 

Sustaining above 7900 confirms that the pattern might 

head higher towards the upper panel of the trendline to 

complete its 5th impulse wave around 8200-8300. Hence 

presently it seems that short term trend in the market has 

changed from neutral to positive after the confirmation of 

a breakout in pattern. 

Classical theory of Technical Analysis 

Indian equity market witnessed extreme rangebound 

trading action during the month of May 2016, though stock 

specific action was noticed due to the ongoing result 

season. Volume in the market subsided and breadth of the 

market remained evenly poised amongst the bulls and the 

bears. Uncertain global cues too played essential for the 

domestic market as well to remain rangebound. Renewed 

concern of rate hike by US Fed had been spooking the 

international market while on domestic front norms of 

tighter P-note also scared investors sentiment as against 

which FII remained net seller at the initial start of the 

month. Small cap index underperformed against the 

broader Index and the Midcap Index. 

However on a pessimistic note chances remain that Nifty 

might be in the formation stage of bearish Head & Shoulder 

pattern in daily chart since April 2016 onward. The neckline 

of the said pattern appears around 7700. If the elevated 

support level is breached then negative biasness in the 

market might prop up. The downside target for Nifty comes 

around 7350-7400 if the said pattern materializes which 

somewhat coincides with the 50% retracement of the entire 

rally since February 2016 onward. 

To sum up according to classical theory of Technical 

analysis the short term trend in the market now has 

changed from neutral to positive and the Index if able to 

sustain above the 7900 would maintain the positive 

biasness in the market 

36


Modern approach in Technical Analysis 

On the oscillator front Nifty presently is trading in neutral 

price region in both daily and weekly time frame Present 

formation indicates that upside potential for the market 

remains open and higher target of 8250-8300 can be seen 

due to neutral price reading. Further to top it all presence 

of positive divergence in daily chart reconfirms of an 

imminent breakout waiting. Synergy of buy in both the time 

frame is likely to propel the Index to head higher with its 

neutral price reading. MACD too in the weekly time still 

remains positive with buy crossover. The said indicator 

remaining positive has confirms that the long term trend in 

the market remain positive and the daily reading too 

turned positive after the exuberate rally, while ADX in both 

the time frame has also turned positive with +DI trading 

above the -DI. Hence to conclude market is likely to 

maintain its upward trajectory. 

Nifty during the month of May had been grinding near its 

crucial 200dma at 7790 for past couple of days but on the 

expiry week, the Index closed decisively above it and now 

has widened the gap between the average and the price. 

The corrective decline was holding marginally above its 50- 

DEMA (7726). Short term moving averages (10/20/30) also 

have converged 7700-7830 zone. The said level now is the 

trend deciding level for the market sustain above or below 

which would dictate the direction of the market. The next 

level of support for the market exist from weekly chart 

where 100WMA is seen at 7550 breach of which would 

drag the Index further lower towards it 200WMA at 7050. 

According to Bollinger band study, Nifty is now rubbing 

shoulder near the the upper end of the band in both the 

time frame. In daily time frame the exuberant rally for the 

last couple of days lead prices to witness a spurt outside 

the band. The mid band of Bollinger band from both the 

time frame indicates that immediate support for the market 

exist around 7600-7800 and the trend would remain 

positive as long as Nifty trades above it. Hence it would be 

prudent to execute buy on dip strategy at every meaning 

decline. 

Indian VIX 

Indian VIX during the month of May remained almost static 

in absence of domestic and global cues. On the technical 

parlance not much inference can be drawn from the 

present setup as the Index continues to witness lack of 

trend and sideways action can be seen since March 2016 

onward. Though one important aspect need to be noted 

that Indian VIX had been honouring the 2.5 year trendline 

support and is likely to trade above it or rather no major 

cool-off in volatility can be seen. Hence to sum up in the 

forthcoming month the volatility in the Indian equity 

market is likely to diminish further and a narrow 

rangebound action in Nifty can be seen from here onwards. 

Gann Theory of Time cycle 

The rally since December 2011 onward if considered as 

the beginning of an impulse wave then Nifty presently is 

trading at its 5th wave. Previously impulse wave 1 took 17 

months in the making. Hence forth if wave 5 unfolds into 

37



an equidistance of wave 1 then the recent rally in the 

market might extend further till the month of June 2018. 

Nifty now is trading within the 50 degree angle of 

inclination, further rally has resulted in to form bullish 

channel formation in weekly chart, target of which stands 

around 8200-8300, and according to W.D. Gann the said 

angle signifies 1 unit of price & 1 unit of time. So the said 

target of 8300 might be achieved within 4-5 months. 

However the theory of the famous 8-year bear cycle need 

to paid equal importance. This theory of 8-year bear cycle 

indicates that after every 8 year, markets witness a major 

correction which is in the range of 20-60% The theory can 

be aptly applied in Indian markets as well as we witnessed 

a hefty correction in the year 1992 followed by a major 

correction in the year 2000, then in the year 2008 and now 

the year 2016 is the next in the eight year cycle. 

Retracement principle: 

In order to identify the crucial trend deciding level for the 

market three different time frames are being identified 

which are as follows. The first being the entire correction 

since January 2008 onward till November 2008, the second 

being the gradual upscale for the Index since December 

2011 till the high registered in March 2015 and the last 

being the corrective decline since March 2015 till date. 

Retracement level from all the different time cycles 

indicates presence of crucial resistance zone 8000-8050 

Hence it can be concluded that Nifty with its significant 

closing above the resistance zone of 8000-8050 indicates 

of a change in trend in the market. 

Inter-market analysis 

U.S Market: It has been seen that uncertainty in the US 

market has lead the Index to form bearish Head & shoulder 

formation in daily chart, presently the Index is trading 

below the sloping neckline of the suggested classical 

pattern. Flirting around 18,000 despite the turbulent start 

to 2016. Moreover, trading below 20DMA and 50DMA is 

another bearish signal, but a confirm break below 17320 

would resume the downside actions. RSI moves below the 

value of 50.00, but seems to be in a neutral mode, while 

ADX shows technical hesitation. Dow Jones touched twomonth 

lows after hawkish comments from the Federal 

Reserve suggested interest rates could be hiked as early as 

June given continued improvement in the U.S. economy. 

Future Projection – June 2016 

Nifty is now in its 3rd super cycle wave after completing 7 

year triangular formation and breaking past it on March2014 

above 6350.Thereafter, it is following a 7-leg (a-b-c-d-e-f-g) 

triple diametric structure developing since Aug 2013. Nifty 

achieved 2nd X correction in Oct2014 and reached c wave 

towards 9100. Nifty was also in its upward channel in its 

triple combination which finished at 9100. Henceforth Nifty 

went into Complex Correctives involving “x-waves” which are 

mostly well channeled. The channeled fall from Mar2015 

starting as 1st Corrective of a 7-legged “Diamond-Shaped 

Diametric” and the drop in Index till 7678 market the endpoint 

of f-leg and if it is indeed a diametric then it requires 

g-leg to hit higher top above 8000. Hence until the level is 

scaled the structure looks –ve. 

38


Nymex Crude: two keys incidents which are worth stating 

first being Crude oil prices reaching 7-months high and 

prices reached near the psychological level of $50/bbl. 

Post a double bottom formation during the months of Jan 

and Feb, crude oil is making higher high formation. Crude 

oil during the month managed to close above all the 

crucial short term and medium term average of 

50/100/200 indicating that a change in direction might be 

underway and considering the short term averages cutting 

above the long term it can be rightly said that a bottom 

might be in place or the commodity. June 2015 high of 

50.9 would now act as important resistance for crude oil. 

Recent worries about Canadian and Nigerian supply 

outages offset the impact of a stronger dollar, which has 

rallied on growing expectations that the Federal Reserve 

will raise interest rates next month. 

to its crucial support level provided another round of 

gradual uptrend. The horizontal channel was broken but 

now it seems that the pattern needed time to avoid a false 

breakout. The stated level was coincided with the 23.6% 

Fibonacci retracement level of the last drop from the 

$68.76 high to $66.06 low. However on the flipside 

presence of double bottom formation in daily chart raises 

little doubt in terms of weakness and might imagine prices 

reaching high around resistance level of $67.40. 

Positives: 

10 Year Bond Yield India: Indian benchmark bond yield 

rose in the month of May after economic data showed 

consumer price inflation accelerated in April, raising 

expectations the Reserve Bank of India (RBI) would hold off 

on cutting rates at its policy review next month. On the 

technical front bond yield had been in a severe downtrend 

since March 2016 onward however the recent pullback has 

lead the yield to scale higher towards its previous swing 

high, now at the breach of which would witness a change 

in trend. 

Indian Rupee: USDINR slid to 3-months low amidst concern 

of fund outflow from Indian debt market as US Fed hinting 

of an interest rate hike in June. The sentiment also took 

the pounding after market regulator SEBI made mandatory 

for all participatory notes users to follow anti-money 

laundering law in India and to report any breach 

immediately. Indian Rupee hold prices above 66 and due 

• Breakout from downward sloping channel 

• Bullish Broadening pattern in daily chart 

• All crucial averages converging together indicating of a 

renew uptrend 

• Indian VIX continues to settle at its historical low level 

of 16. 

• According to Gann Theory impulse wave would extend 

till 2018 

• According to Elliot wave Nifty is in a 7-legged Diamond 

shaped Diametric pattern and need to sustain above 

8000 

• Change in direction can be seen in Crude oil prices with 

its higher high formation. 

Negatives: 

• Bearish Head & Shoulder pattern in daily chart. 

• Oscillator witnessing divergent viewpoints indicating 

volatile price action 

• Major resistance exist at 8000 from retracement levels 

• Presence of Bearish Head & Shoulder in DJIA 

• USDINR continues to trade amidst the upward sloping 

channel line 

39



To sum up Indian equity market since the start of the 

month were banking on good monsoon for a recovery in 

the market and with IMDs prediction on monsoon above 

the 106% of Long Period Average had been providing the 

necessary cushion for the market. Earning season had been 

in full swing with no major negative surprises while some 

companies surprised the streets on the positive side and 

investors were rewarded handsomely against the bet. On 

the global front though Fed kept rates unchanged and were 

scheduled to review the same in June but concern of rate 

hike sooner than later continued to haunt the market, Bank 

of Japan too kept rates unchanged though GDP growth 

came on with strong numbers also dampened the market 

sentiment. Expectations of a rate hike by the U.S. shot up 

from 1% a month ago to 32% and its consecutive impact 

on currencies, slowing Chinese economy, etc. had been 

adding lot of confusion in the investors mind at a time 

when the global economy had been struggling for growth. 

Slowing economy, high levels of debt and policy 

uncertainty had been weighing on the Chinese markets 

which had been falling for successive number of weeks. On 

the commodity front fluctuation has been seen in the 

prices and most of them closed up against that backdrop 

mainly Crude oil, US market too can be seen with limited 

downside except the Fed review in June. On the domestic 

front our market too were in dicey situation after SEBI 

announced of considering more stringent rules for p-notes 

and with the sighing of the protocol amending the Double 

Taxation Avoidance Agreement (DTAA) with Mauritius, in 

order to curb black money in the system, money laundering 

and tax avoidance. On the macro data front, retail inflation 

spiked in April while industrial growth stagnated. IIP rose 

0.1% in March, while retail inflation stood at 5.39% in 

April compared with 4.83% in March. At such a grim 

situation market were almost deprived of any positive 

triggers and were at the mercy of the weather God, Skymet 

suitably revised its forecast for the 2016 southwest 

monsoon to 109% of the long period average (LPA) from 

105% of LPA predicted earlier and provided the soothing 

shower. On the week of expiry of the May contract market 

celebrated two years of Modi Government in style clocking 

one of the biggest gain in recent times. The surge was in 

the stock market, has come on the back of a number of 

domestic factors such as better-than-expected earnings, 

expectations of a good monsoon and a rise in new orders, 

among others. Even though several key events are lined up 

over the next couple of weeks such as Reserve Bank of 

India' monetary policy meeting on June 7 and FOMC 

meeting on June 14 and 15, our market will be driven more 

by domestic news and data flow that are hinting towards 

an uptick in the economy rather than global factors. Hopes 

of a rate cut by the Reserve Bank of India in its 

forthcoming monetary policy meeting is something that the 

market would be looking up to but the worries over rate 

hike by the Federal Reserve in the US will have a drag on 

the market in the next couple of weeks. On the technical 

front Nifty provided the necessary breakout from the 5 

week of congestion zone and ended on a positive note. 

Strong Marubazu candle in Weekly chart too denotes the 

same. Now Nifty is above the psychological level of 8000 

and aiming higher. On the retracement principle the entire 

correction since March 2015 onward initiated resistance 

from 50% retracement level at around 7970-7990 zone, 

the Index finally cleared the hurdle and the next level of 

retracement of 61.8% would be posing resistance around 

8240. As average define the broader trend in the market, 

Nifty too during the month had been flirting around crucial 

200dma for quiet some indicating indecisiveness in the 

market but finally provided a decisive close above it and 

all the short to medium term averages further reinstating 

that the broader term trend in the market might have 

changed from neutral to positive. On the oscillator front 

Nifty turned positive in both the time frame further 

reinstating of the strength the market now holds in 

sustaining the rally. According to Elliot wave theory after 

scaling the high of 8000 confirms that Nifty is in a 

'Diamond-Shaped Diametric' pattern and the said structure 

projects an upside potential for Nifty till 9100. Other 

correlated markets like that of Crude oil prices and US 

index too are in favour of the bulls registering newer highs 

apart from Indian rupee as further depreciation might act 

negatively in days to come. Going ahead in the 

forthcoming month, markets is likely to maintain it upward 

trajectory and any dips should be used as an incremental 

buying opportunity. The derivative data at the expiry of the 

May contract indicates the same, Nifty futures witnessed 

hectic rollover to June month series, as Nifty regained the 

psychological 8,000 mark. Rollovers from both Nifty as well 

as market-wide perspective have been on the higher side. 

Most of the rollovers were on the long side. Nifty saw a 

rollover of 72% against the average of 67-68% in the last 

three months. Market-wide rollovers stood at 84%, which 

is higher than the average previous three-month figure of 

77-78%. On the option front Unwinding in 8000 CE of May 

series led to wild movement in Nifty. Aggressive selling 

was seen in 7900,7950 PE while long addition seen in 

higher strike price call option of 8300 & 8400. 

40


BEST PERFORMERS FOR THE MONTH (NIFTY 100) WORST PERFORMERS FOR THE MONTH (NIFTY 100) 

28.04.2016 26.05.2016 28.04.2016 26.05.2016 

1 SRTRANSFIN 964.25 1196.6 24.10% 1 ADANIPORTS 235.45 184.8 -21.51% 

2 LT 1259.55 1474.15 17.04% 2 RCOM 57.85 47.5 -17.89% 

3 UPL 516.95 592.95 14.70% 3 BANKBARODA 160.55 134.85 -16.01% 

4 ASIANPAINT 873.1 991.85 13.60% 4 PNB 88.2 74.55 -15.48% 

5 PIDILITIND 600 680.65 13.44% 5 RECLTD 180.05 155.05 -13.89% 

6 HDFC 1085.55 1228.25 13.15% 6 SAIL 46.95 40.7 -13.31% 

7 TECHM 480.15 542.3 12.94% 7 CIPLA 528.25 467.95 -11.42% 

8 ITC 322.9 362.45 12.25% 8 TATAMTRDVR 301.85 269.6 -10.68% 

9 GODREJCP 1332.3 1484.5 11.42% 9 IDEA 126.5 113.8 -10.04% 

10 AXISBANK 468.05 519 10.89% 10 EICHERMOT 20292.95 18394.35 -9.36% 

11 MARUTI 3747.95 4118 9.87% 11 PFC 181 167.35 -7.54% 

12 BOSCHLTD 19948.9 21817.35 9.37% 12 HCLTECH 799.9 740.9 -7.38% 

13 DABUR 269.65 294.4 9.18% 13 CUMMINSIND 868.75 807.65 -7.03% 

14 YESBANK 945.55 1021.05 7.98% 14 HINDALCO 96.9 90.3 -6.81% 

15 NHPC 21.1 22.65 7.35% 15 LUPIN 1576.3 1469.95 -6.75% 

16 BAJFINANCE 6967.1 7458.35 7.05% 16 TATASTEEL 347.6 325.2 -6.44% 

17 INDUSINDBK 1035 1103.9 6.66% 17 GLAXO 3746.7 3505.7 -6.43% 

18 TATAPOWER 69.25 73.65 6.35% 18 UBL 764.05 716.2 -6.26% 

19 HDFCBANK 1113.95 1183.25 6.22% 19 BHARTIARTL 372.7 352.85 -5.33% 

20 POWERGRID 141.85 150.6 6.17% 20 BHARATFORG 793 751.4 -5.25% 

Source: NSE 

Indices Performance 28.04.2016 –26.05.2016 

10% 

Sector Indices -Monthly Return (%) 

9.2% 

8% 

6% 

4% 

2% 

0% 

-2% 

-4% 

-6% 

0.2% 0.3% 

6.0% 

4.6% 

3.5% 

2.1% 

0.7% 

-1.5% -1.2% 

-2.4% 

-4.1% 

METAL HC OIL&GAS CD AUTO TECk IT POWER BANKEX REALTY FMCG CG 

Source: BSE 

41


COMMODITY MONTHLY ROUND UP 

“To other countries I may go as a tourist, but to India, I come as pilgrim” 

Martin Luthar King 

Soybean 

Industry body Soybean Processors Association of India 

(SOPA) has revised the soybean production estimates for 

2015-16 downwards by 6.21% in its mid-term review. The 

Indore-based SOPA revised the soybean crop numbers for 

Kharif 2015 in a meeting attended by soybean processors 

from Madhya Pradesh and Maharashtra. 

Considering the arrivals till date, crushing, exports, 

domestic consumption and available stock and arrival 

pattern, it was decided to revise the Kharif 2015 

production of soybean downwards from the earlier 

estimate of 73.88 lakh tonne to 69.29 lakh tonnes. 

The monsoon's erratic tenure and moisture levels had 

resulted in some loss to the expectation of a bumper crop. 

While farmers in Maharashtra and Karnataka have been 

facing a drought-like situation, in MP's Dewas, excessive 

rain has destroyed huge swathes of the crop. 

Technical Analysis: 

After a brief run up in March, the market has again started 

drifting lower. 3900 area is an intermediate support. Below 

3900 we have 200 weekly SMA (currently at 3640) which 

is the strongest support. Longer period chart is depicting a 

picture which is broadly sideways, from upside at 4700 

and downside at 3000. The Market needs to get out of this 

range where it will be easier for traders to determine its 

trend. 

In NCDEX if market is able to hold above 4130 then we 

can expect another brief run up towards 4750. So our 

advice is to wait for a weekly decisive close above 4130 

and then enter with long position and place the stop at 

3890. 

Indicators like weekly RSI and Stochastic are not confirming 

the trend and also indicating sideways move in coming 

days. 

Weekly Chart NCDEX : Soybean 

42


USD/JPY 

JP Morgan said in its recent research paper that BOJ's 

stance to ease monetary policy may fail to weaken YEN for 

long. As per JP Morgan, Japanese companies are still 

holding large asset bases in off shores and weakening of 

Yen will give them the opportunity to repatriate which in 

turn strengthen Yen. Despite BOJ's surprising move on 29th 

January'2016 by introducing negative interest rate, the Yen 

has strengthened against US Dollar and sell from 120 level 

to 107 within span of three months. 

This fall, for sure shocked the currency players. Traders are 

now expecting that in coming months Yen may weaken 

towards the 112-113 level as expectation of more easing 

steps from BOJ meeting in mid-June. After that 

fundamental of Japanese economy is expected to rule 

which may again put Yen within 103-105 bracket. Shinzo 

Abe's easing economy is not yielding desired result and 

negative interest rate is already proved ineffective. After 

two years of easing environment Japan failed to deliver 

anything good. After last month's G7 meeting, US and 

Japan locked horn on Currency Intervention. 

U.S. Treasury Secretary Jack Lew said that his country 

considered the recent moves in the yen to be "orderly," 

giving Japan no justification to intervene in the currency. 

Lew's counterpart in Japan, Finance Minister Taro Aso said, 

however, that the moves had been disorderly and 

speculative. 

The G-20 countries agreed at a meeting in Shanghai in 

February that they would avoid competitive currency 

devaluations, but Japanese policymakers have argued that 

the agreement should not prevent intervention to stop the 

"rapid, one-sided" moves it had observed in the yen. 

Technical Analysis: 

Market touched down the low near 105.50 which is exactly 

near the previous swing high of 105.44 in weekly chart. 

Weekly chart showing that last few candles are forming a 

setup which may be similar to Morning Star pattern which 

is essentially a bullish setup after long down trend. But 

upside is for the time being restricted within 112.30 where 

we have one downward sloping trend line as resistance 

and also 20 weekly SMA. Weekly RSI is also now at 

resistance line. 

Our advice is to go long in the pair at 113 that means if 

the pair is able to break from the Trendline resistance and 

the target will be around 116 with initial stop around 

112.10. Contrary if market falls below 108.20, it will be sell 

call for the pair with stop at 110.50 and initial target will 

be 106.30 and then towards 103. 

Weekly Chart: Spot USD/JPY 

43


WORLD ECONOMIC EVENT CALENDAR - JUNE 2016 


US: ISM Manufacturing 

US: MBA Mortgage Applications 

UK: Nationwide House PX MoM 

CH: Caixin China PMI Mfg 

JN: Nikkei Japan PMI Mfg 

1 

6 

EC: Markit Eurozone Retail PMI IN: RBI Repurchase Rate 

EC: GDP SA QoQ 

UK: Halifax House Prices MoM 

JN: Leading Index CI 

7 

JN: GDP SA QoQ 

JN: BoP Current Account Balance 


UK: Industrial Production MoM 

CH: Trade Balance 

8 

13 

CH: Industrial Production YoY 

CH: Retail Sales YoY 

IN: CPI YoY 

14 

JN: Industrial Production MoM 

UK: CPI YoY 

US: Retail Sales Advance MoM 

UK: PPI Output NSA MoM 

IN: Wholesale Prices YoY 

15 

US: FOMC Rate Decision (Upper Bound) 

UK: Jobless Claims Change 


UK: ILO Unemployment Rate 3Mths 

US: Industrial Production MoM 

20 

JN: Trade Balance 

UK: Rightmove House Prices MoM 

EC: Construction Output MoM 

21 

JN: All Industry Activity Index MoM 

UK: PSNB ex Banking Groups 

EC: ZEW Survey Expectations 

22 


US: Existing Home Sales 

EC: Consumer Confidence 

US: FHFA House Price Index MoM 

27 

US: Markit US Services PMI 

US: Dallas Fed Manf. Activity 

IN: Eight Infrastructure Industries 

28 

US: GDP Annualized QoQ 

US: Consumer Confidence Index 

UK: Nationwide House PX MoM 

US: Richmond Fed Manufact. Index 

US: Personal Consumption 

29 


US: Personal Income 

UK: Mortgage Approvals 

EC: Consumer Confidence 

US: Pending Home Sales MoM 

IN: India, US: United States, EC: European Union, UK: United Kingdom, CH: China, JN: Japan 

2 

US: Initial Jobless Claims 

EC: ECB Main Refinancing Rate 

US: ADP Employment Change 

UK: Markit/CIPS UK Construction PMI 

US: Continuing Claims 


CH: CPI YoY 

JN: Machine Orders MoM 

CH: PPI YoY 

US: Wholesale Inventories MoM 

9 

16 

UK: Bank of England Bank Rate 


EC: CPI YoY 

US: CPI MoM 

US: Philadelphia Fed Business Outlook 

23 


US: New Home Sales 

JN: Nikkei Japan PMI Mfg 

EC: Markit Eurozone Manufacturing PMI 

US: Markit US Manufacturing PMI 

30 

JN: Industrial Production MoM 


UK: GDP QoQ 

US: Chicago Purchasing Manager 

EC: CPI Estimate YoY 

US: Change in Nonfarm Payrolls 

US: Durable Goods Orders 

US: Unemployment Rate 

US: Factory Orders 

US: Trade Balance 

3 

10 

US: U. of Mich. Sentiment 

JN: PPI YoY 

JN: Tertiary Industry Index MoM 

IN: Industrial Production YoY 

IN: Exports YoY 

US: Housing Starts 

US: Building Permits 

17 

24 

US: U. of Mich. Sentiment 

US: Durable Goods Orders 

US: Cap Goods Orders Nondef Ex Air 

JN: Small Business Confidence 

31 

44

Services at Ashika Capital Limited (ACL) 

Capital Markets 

Fund Raising 

Advisory 

• Issue Management 

• IPO / FPO 

• Right Issue 

• Qualified Institutional 

Placement 

• Open Offer 

• Takeover 

• Buyback 

• Delisting 

• Overseas Listing 

• Underwriting 

• Private Equity 

• Venture / Growth Capital 

• Pipe 

• Debt Syndication 

• Project Finance 

• Team Loan 

• Working Capital Loan 

• Acquisition Funding 

• Construction Finance 

• M & A 

• Merger / Acquisition / Disposal 

• Management Buy-outs / 

Buy-ins 

• Leveraged Buy-outs 

• Joint Ventures 

• Strategic Partnership 

• Spin-Offs 

• Divestment 

• Corporate Restructing 

• Capital Restructing 

• Finance Restructing 

• Business Valuation 

• Espo Valuation 

• Fairness Opinion 

For Debt Fund Raising: 

Mr. Anirudh Sarvaiya - Sr. Manager 

ACL - anirudh.s@ashikagroup.com 

Mr. Aagam Vakharia - Sr. Manager 

ACL - aagam.v@ashikagroup.com 

For Mergers & Acquisition: 

Mr. Mihir Mehta – Sr. Manager 

ACL - mihir.m@ashikagroup.com 

For Equity Capital Markets: 

Mr. Niraj Kothari – AVP 

ACL - nirajkothari@ashikagroup.com 

For any valuable input or other 

discussion & business opportunity 

please send a mail to: 

Mr. Vaibhav Jain – President 

ACL - vaibhav@ashikagroup.com

Group Companies 

Ashika Credit Capital Ltd. 

(RBI Registered NBFC) 

CIN No. L67120WB1994PLC062159 

Ashika Stock Broking Ltd. 

(Member : NSE, BSE, MCX-SX, Depository 

participant of CDSL/NSDL) 

CIN No. U65921MH1994PLC171897 

Ashika Global Securities Pvt. Ltd. 

(RBI Registered NBFC) 

CIN No. U65929WB1995PTC069046 

Ashika Capital Ltd. 

(SEBI Authorised Merchant Banker) 

CIN No. U30009WB2000PLC091674 

Ashika Commodities & Derivatives 

Pvt. Ltd. 

(Member : NCDEX, MCX, NMCE, ICEX, 

NSPOT & ACE) 

CIN No. U51909WB2003PTC096985 

Head Of?ce 

Trinity 

226/1, A.J.C. Bose Road 

7th Floor, Kolkata-700020 

Phone: 033-40102500 

Fax No: 033-22891555 

Email: ashika@ashikagroup.com 

Corporate Of?ce 

1008, Raheja Centre, 

214, Nariman Point, 10th Floor 

Mumbai-400021 

Phone: 022-66111700 

Fax No: 022-66111710 

Email: mumbai@ashikagroup.com 

www.ashikagroup.com 

SNEHA ARTS • 9830090320

Ashika_Monthly_Flip_Insight_June_2016

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