Pre-Session: Shares may extend gains

27-Feb-18: Market is seen opening higher tracking positive cues from Asian markets. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could rise 51 points at the opening bell.

Overseas, Asian shares were trading higher following gains on Wall Street overnight. The US market rose on Monday, 26 February 2018, in a broad-based rally led by technology shares. In the latest economic data, US new home sales fell 7.8% in January 2018 from the previous month, to an annualised pace of 593,000, the Commerce Department said.

Investors are focusing on the US Federal Reserve chairman Jerome Powell's congressional testimony on monetary policy and the economy. Powell will testify on the central bank's semi-annual report on monetary policy and the economy on Tuesday, 27 February 2018, before the US House of Representatives' Financial Services Committee.

Closer home, foreign portfolio investors (FPIs) sold shares worth a net Rs 1119.51 crore yesterday, 26 February 2018, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 1409.45 crore yesterday, 26 February 2018, as per provisional data.

Among corporate announcements, Punjab National Bank (PNB) has revealed additional unauthorised transactions related to the scam by billionaire diamantaire Nirav Modi and his uncle and business partner, Mehul Choksi, increasing the estimated size of the fraud by $204.25 million (about Rs 1322 crore). The disclosure was made to stock exchanges late yesterday, 26 February 2018.

ACC and Ambuja Cements announced after market hours yesterday, 26 February 2018, that they are not proceeding with the merger proposed in May last year. There are certain constraints to implementing the merger at present, said the cement majors in separate stock exchange filings. The merger, however, remains the ultimate goal, the companies maintained.

The boards of both companies have approved an arrangement for sale and purchase of materials and services on mutually agreed terms in a bid to maximise synergies and unlock additional value for shareholders, the statements added. ACC and Ambuja Cements will disclose the details of the arrangement to its shareholders when it seeks their nod via postal ballot.

Domestic stocks jumped yesterday, 26 February 2018, tracking positive global stocks. The barometer index, the S&P BSE Sensex, surged 303.60 points or 0.89% to settle at 34,445.75. The Nifty 50 index gained 91.55 points or 0.87% to settle at 10,582.60. Both the Sensex and the Nifty hit 3-week closing high.

Today's Calls:
#Buy the shares of the Tata Motors Ltd at around Rs.375-376, for short term targets of Rs.396-421. Tata Tiago for the first time outsold Maruti Suzuki Celerio and Hyundai Eon to become the eight-largest selling cars in January 2018, according to a data based on SIAM domestic sales.  For Tata Motor Futures, the 1st resistance comes at Rs.379 followed by Rs.384.

#In case of Nifty_Spot, my view is that: as long as it does not break the rock solid support of 10400, the BULLS have nothing much to worry. The large caps will more or consolidate around the current range while the action would be seen in the broader market.

#There is no stopping of P C Jewellers Ltd today as the stock touched Rs.346, intrayday on the news that market watchdog Securities and Exchange Board of India (SEBI) has issued an order against Mumbai-based Abhirati Trading but the order did not hold Vakrangee Limited responsible for any misdeed in the ongoing alleged campaign against the IT company.

#Buy Aban Offshore Ltd at around Rs.173-174, T: Rs.T: Rs.191/206/218. SL: Rs.166. Crude oil started the week with gains thanks to comments from Saudi Arabia’s Energy Minister Khalid al-Falih and reports of a slowdown in exports from Libya’s Mellitah oil terminal.
WTI was trading at US$63.63 a barrel at the time of writing and Brent crude was changing hands at US$66.98, after on Saturday Al-Falih said that Saudi Arabia’s oil production over the first three months of 2018 would be much lower than the amount allowed under the 2016 production cut agreement. Al-Falih added that exports were estimated to average 7 million bpd in the three-month period.
At the same time, the minister said he hoped OPEC and its partners could relax the production restrictions in 2019 and progress on the permanent cooperation framework that was mentioned earlier this year. Following these comments, Brent crude briefly jumped over US$67 a barrel, but later in the day eased down again. U.S. production, near record highs, put a cap on the gains.

~~Powered by Capital Market - Live News

P C Jeweller Ltd: Buy

CMP of Spot: Rs.332.35

Lot Size of Futures: 1500

CMP of March Futures : Rs.334.50

Premium: Rs.2.15

Change in OI: 3.91%

Short term Targets for Future: Rs.360/377

For Future-->S1, S2 and S3: Rs.327/Rs.321/Rs.315

For Future-->R1, R2 and R3: Rs.341/Rs.347/Rs.354

For Spot-->T1, T2 and T3: Rs.374/Rs.424/Rs.496

Triggers:

#PC Jeweller Limited started operations in April 2005 with one showroom at Karol Bagh, New Delhi and is today one of the fastest growing jewellery retail chain with 85 showrooms across 68 cities and 20 states. According to my sources, the company is planning to open 15 more retail counters across India.
Not only that: after lurking inflation fears in the US and meltdown of the real estate sector in India, followed by introduction of LTGT by the FM in this budget, people are shifting to gold. This is likely to keep the demand for Gold buoyant  in the coming months.

#Chief Financial Officer (CFO) of the company in an interview said that the company will stick to its strong fundamentals and their expansion plans are on track. He also clarified about having no business agreement with Vakrangee Ltd and that none of the company's promoters have sold any stake in the firm.

Vakrangee Ltd, a banking and financial services provider, on January 25, 2018 purchased 20 lakh shares of PC Jeweller Ltd for ~Rs.112 crore through an open market transaction.
The shares were acquired at an average price of Rs.561.71, which amounted to ~0.51% stake in the company. This price somewhat gives us the idea as to where the share price of P C Jewller Ltd can shoot in the short term. 

#The impact of Nirav Modi and Mehul Choksi scam though had been seen in stock price of many

Photo: Zee Business

jewelry firms on 16 February, '18, but PC Jeweller reversed the trend on that day and emerged as the top gainers in this sector. The share price of this company jumped by nearly 7% during the day.

#PC Jewellers Ltd also recently clarified that the company does not use the instruments of LUT/LOC etc in its business transactions. Moreover, it does not have any international transactions in diamond. It procures all its diamond from local markets on cash basis only.

#Though post Nirav Modi scam, bankers will become more alerted in terms of credit transfer, and considering the process of investigation, however for the companies like P C Jewelers Ltd fundamentals will speak and it will have minimal impact on getting loan from banks/financial institutions.
There is another silver lining too: according to Kotak Institutional Equities, exposure of 18 banks’ overall book (12 public sector banks and six private sector ones) to the gems and jewellery sector is only about 1% --- for now, the problem appears limited to PNB. Hence, there is no reason to get too much anxious on the credit delivery front by the banks to the Jewelry sector.

#It is pertinent to mention here that the stock of P C Jewelers Ltd fell from around Rs.580 - plus which is made in late January, 2018 and hence the change of appreciation from the CMP is very bright. It is also likely to benefit from dilution of Nirav Modi brand, due to elimination one of its major competitors in the gems and jewelry segment.

#The company stressed that it’s expansion plans are on track as planned. “We are moving ahead as per our laid down business plans of opening new stores and working on launching new collections. The company continues to witness very good footfalls and sales in this quarter as well,” it said in a clarification to the stock exchanges, early this month. PC Jeweller further said none of the company’s promoters has sold any stake in the firm (mentioned earlier) or pledged its shares as collateral with any institution. 

#With 60% of gold demand coming from rural India, the Union Budget’s focus on boosting rural and farm incomes could benefit big brands such as Titan Co Ltd and PC Jeweller Ltd. 

#There is a belief in the market that the implementation of the Goods and Services Tax (GST) has enhanced bullion purchases from organised vendors. The GST, touted as the country's biggest indirect-tax reform since Independence, introduced a 3% levy on gold from July 1, 2017 nudging customers to shift purchases to organised high-street bullion businesses from street-corner jewellers. In other words the retail jewellery segment is now witnessing a major shift of customers toward the organised players, and PCJ is a major beneficiary of the same.  The New Delhi-based Jeweler is therefore, expecting good growth in SSG (same stores sales growth) as well as in new stores segments. 

#Jewelry demand generally picks up a month before Dhanteras and continues till April-May every year due Festive and Wedding seasons; which keeps the demand for the yellow metal buoyant. Hence, going forward we could see robust performance of the company.

#The company is showing enviable performance during the last two quarters, viz.Q2FY18 and Q3FY18. PC Jeweller Ltd last month reported a 52% increase in its net profit at Rs.162.71 crore for quarter ended December on higher sales. The company, which has 84 retail jewellery stores across the country, had posted a net profit of Rs.106.97 crore in the year-ago period, the company. It is to be remembered that PC Jewellers Ltd posted a 40.83% jump in standalone net profit at Rs.150.59 crore for the quarter ended September on strong sales. Net profit was Rs.106.93 crore in the same period of the previous year.
The company said that the rollout of the goods and services tax (GST) as a very major structural change, has resulted in a major "disruption" for unorganised players in all the sectors of the economy. "Demonetisation and implementation of GST are helping us increase market share as the industry is getting organised," the company said in last November. Therefore, similar performance is likely to be exhibited in Q4FY18 too according to my sources, who refused to be named.

#Lastly, the story of investment in Gold is not Rich Vs Poor, as is commonly perceived but as a means or avenue to store wealth by a section of Indian population, especially the housewives -- and this has been going on since centuries. Hence, its demand as a hedge against inflation in the short term, in countries like UK, USA and India is expected to continue. 
2ndly, the branded jewelry stores are a play on India's ever growing retail sector, where I find immense potential after the government of India gave their consent for FDI in multi-brand retailing. 
Who knows, whether in future the International jewelry brands like Harry Winston, Cartier, Buccellati, Tiffany & Co, etc will partner with reputed Indian brands like P C Jeweller or not. If this happens then the stock of P C Jewelers Ltd might cross Rs.1000 (one thousand), as well. Also, it is worth mentioning here that Tiffany jewels are not only famous in America but now in Asia as well.

Bibliography:
i) The Economic Times
ii) Zee Business
iii) The Times of India
iv) The Hindu BusinessLine
v) Live Mint

Market Pulse

Key benchmark indices hovered in positive zone in morning trade after an initial upmove triggered by positive Asian stocks. At 11:50 IST, the barometer index, the S&P BSE Sensex, was seen at 34,061.22 up 241.72 points while the Nifty was trading at 10,466.80 up 84.1 Metal and mining stocks gained across the board. Telecom stocks rose.

Domestic stocks edged higher in early trade tracking positive Asian stocks.

The S&P BSE Mid-Cap index was up 0.95%. The S&P BSE Small-Cap index was up 0.96%. Both these indices outperformed the Sensex.

The broad market depicted strength. There were more than two gainers against every loser on BSE. 1,548 shares rose and 565 shares fell. A total of 84 shares were unchanged.

Overseas, Asian stocks were trading higher as investors continue to debate the outlook for central bank policy normalization and the impact of higher bond yields. Meanwhile, Japan's core consumer price index rose for a 13th straight month in January, increasing by 0.9% from a year earlier, matching December's rate of growth, data from the Ministry of Internal Affairs and Communications showed today, 23 February 2018.

In US, the Dow and the S&P 500 closed higher while the Nasdaq slipped yesterday, 22 February 2018 as investors grappled with the threat from higher interest rates. On the data front, initial US jobless claims fell by 7,000 to 222,000 in the seven days ended 17 February 2018, marking the second lowest level since the end of the 2007-2009 recession.

Back home, Sun Pharmaceutical Industries (up 4.16%), Yes Bank (up 2.39%) and ICICI Bank (up 1.16%) edged higher from the Sensex pack.

Metal and mining stocks gained across the board. Vedanta (up 2.03%), JSW Steel (up 2.42%), Tata Steel (up 3.35%), Steel Authority of India (Sail) (up 3.01%), National Aluminium Company (up 2.15%), Hindustan Zinc (up 2.1%), Jindal Steel & Power (up 3.98%), Hindalco Industries (up 1.77%), NMDC (up 1.46%), Hindustan Copper (up 1.84%) edged higher.

Telecom stocks rose. Bharti Airtel (up 1.81%), Idea Cellular (up 0.55%), Tata Teleservices (Maharashtra) (up 1.15%) and Reliance Communications (up 0.91%) rose. MTNL (down 1.86%) fell.

Shares of Bharti Infratel fell 0.57%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.

KSB Pumps gained 1.89% after net profit rose 21.1% to Rs 27.35 crore on 30.9% growth in net sales to Rs 328.19 crore in Q4 December 2017 over Q4 December 2016. KSB Pumps' board recommended dividend of Rs 6 per share for the year ended 31 December 2017. The results were announced after market hours yesterday, 22 February 2018.

Today's Calls:

#How many of you bought the shares of Reliance Infrastructure Ltd today morning at around Rs.444 reading my blog inputs.. Book some profit at around Rs.457 and wait for dips to enter.

#Buy beaten down P C Jewelers Ltd Futures at around Rs.333.15 for a short term target of Rs.377, SL: Rs.326. This stock will give up super duper returns in the short term.

It is pertinent to mention here that the stock of P C Jewelers Ltd fell from around Rs.580 - plus which is made in late January, 2018. However, it will benefit from dilution of Nirav Modi brand, due to elimination one of its major competitors in the gems and jewelry segment.  Moreover, on January 25, 2018 Vakrangee bought 20,00,000 shares of PC Jeweller at Rs.561.71 on the NSE. Earlier, the Delhi-based jewelry retailer PC Jewellers Ltd, denied that there was any reason for having worries that the company may be linked with Vakrangee, another firm that is under the scanner for allegedly manipulating its own stock. Investors were worried because Vakrangee has a tiny stake in PC Jeweler. Also, the company’s finance head Sanjeev Bhatia came on TV at the beginning of this month and said: “We have no business agreement with Vakrangee and none of our promoters have sold any stake in the firm. Besides, With 60% of gold demand coming from rural India, the budget’s focus on boosting rural and farm incomes could benefit companies such as Titan Co Ltd., Tribhovandas Bhimji Zaveri Ltd., PC Jeweller Ltd.

#Those who are holding the shares of 3i Infotech Ltd (Rs.5.65) should wait for the scrip to give a closing above Rs.6.30 to take fresh positions. This is a wonderful company and long term investors would definitely get benefited.

#Those who are holding the shares of Housing Development & Infrastructure Ltd (HDIL, CMP: Rs.49.90) should add the scrip on every decline with a SL at Rs.47. It is good that it is out of the F&O basket, due to obvious reasons. Now we can look for targets of Rs.91-97-121 in the coming days. Remain invested and average on every dip.

~~with inputs from Capital Market - Live News...

Reliance Infrastructure Ltd: Buy

CMP (Cash): Rs.439.50

CMP (Futures): Rs.443.50

Book Value: Rs.948.49

P/E: 9.50

Industry P/E: 14.51

EPS: Rs.46.40

Face Value: Rs.10

Dividend Yield: 2.04%

1st Target: Rs.460 for Futures

Triggers:

#Reliance Infrastructure (RInfra) recently said it won a Rs.3,647 crore contract from

Photo: The Hindu BusinessLine

Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) for work related to Uppur Thermal power project. With this contract, Reliance Infrastructure Limited's EPC order book now stands at over Rs.15,000 crore.

#With a clear focus to position itself in India's growing infrastructure sector, and a number of projects in the offing, in areas as diverse as power, metro rails, nuclear power plants, air quality control, marine, railways, ports, and mega infrastructure projects, RInfra is targeting EPC opportunities worth Rs.2 lakh crore and increase the EPC order book to Rs.50,000 crore by FY19, the management of the company said earlier.

#Reliance Infrastructure earlier said in a statement that its consolidated net profit is Rs.410 crore ($64 million) in December,  '17 quarter against Rs.375 crore in the year-ago period, registering an increase of 9%, prior to Indian Accounting Standards (Ind AS) adjustment in the third quarter. The Total income FY18 went down marginally to Rs.6,345.97 crore from Rs.6,484.45 crore in the year-ago period. 

The company expects Delhi-Agra and Pune-Satara projects to be completed in 2018. About Mumbai Metro One, it said its revenue was Rs.76 crore in Q3FY18, registering an increase of 27% year-on-year.

#Defence business: The company said it has strategic partnership agreement with Dassault Aviation. The Dassault Reliance Aerospace Ltd JV has 51% stake of Reliance. The JV will play a major role in meeting the offset obligation of Rs.30,000 crore for “Rafale 36” contract. The foundation stone was laid for the manufacturing facility in Mihan, Nagpur (Maharashtra). The JV will also represent unequalled Foreign Direct Investment (FDI) of over €100 million by Dassault- largest Defence FDI in one location in India. It also said Reliance Infra has won Delhi Metro arbitration award against DMRC worth Rs.5,000 crore including interest. The Delhi high court has reserved order for the above arbitration claim. It also won arbitration award for two road projects i.e. NK Toll Road & DS Toll Road worth Rs.170 crore.

#The Competition Commission of India had already given approval for the proposed 100% sale of Reliance Infrastructure’s integrated Mumbai power business to Adani Transmission. In December, 2017, Gautam Adani-led Adani Transmission has signed a definitive agreement to acquire Anil Ambani-led Reliance Infrastructure’s power generation and distribution business in Mumbai in a deal valued at Rs.13,251 crore. While there will be an upfront payment of Rs.13,251 crore, Reliance Infrastructure will also get regulatory assets under approval estimated at Rs.5,000 crore and net working capital on closing estimated at Rs.550 crore, making the total consideration around Rs.18,800 crore. Transaction is expected to be completed by March 2018. 

#RInfra will utilise the proceeds of this transformative transaction entirely to reduce its debt. This is the largest ever debt reducing exercise by any corporate. This monetisation is a major step in RInfras deleveraging strategy for future growth.  RInfra will focus on upcoming opportunities in asset light EPC and Defence businesses, the management of the company said.

With this deal, RInfra, which is sitting on a debt of nearly Rs.20,000 crore, would become debt-free, with up to Rs.3,000 crore cash surplus, the company said. 

#The Global research firm JPMorgan maintained its overweight stance on the stock with a target of Rs.630. It said that the implied equity value of the deal is Rs.6,250 crore i.e. two times regulated equity base.

#“Our focus is on defence sector. Yes, there is competition in defence sector. Yes, government is the customer. But we are completely committed to succeed in the defence sector,” Ambani in September, 2018  said. He told shareholders that with the acquisition of Pipavav Defence & Offshore Engineering and the subsequent tie ups with international companies makes Reliance Infrastructure one of the two companies in India which are strategically positioned to participate in the government’s programme to build submarines. 

“With regard to Reliance Naval, the mandatory requirement for change of ownership is what we’ve achieved with our 31% shareholding. We have the ability to increase our shareholding to 36%. We will be shortly announcing a rights issue and through the rights issue, we will have the ability to increase our shareholding,” Ambani said. 

He also said that Reliance Infrastructure is engaging with Japanese companies with the intention of participating in India’s ambitious Rs.1 lakh crore-bullet train project. 

#Reliance Naval and Engineering Limited, a subsidiary of Reliance Infrastructure Ltd is the first private sector company to build warships. The company created history in July 2017 by tandem launching two Naval Offshore Patrol Vessels (NOPVs)," the statement said.  At present, Reliance is one of the two private sector shipyards in India to undertake large and tactical programmes of the Indian Navy and Indian Coast Guard like indigenous aircraft carriers, landing platform docks, frigates and P75I submarines.
Reliance Infrastructure Limited, Reliance Infrastructure Limited, through its subsidiaries, is actively pursuing various defence businesses. Reliance Naval and Engineering Limited has a large ship building/repair infrastructure in India. The company is the first private sector company in India to obtain the licence and contract to build NOPVs (Naval offshore patrol vessels) for the Indian Navy.

#Motilal Oswal Securities believes the correction in midcaps has made stock picking a bit less challenging. The brokerage believes that the recent weakness offers a good opportunity to accumulate quality stocks where valuations had turned expensive. 

Conclusion: Buy the stocks of Reliance Infrastructure Ltd in futures for a very short term target of Rs.460. The stock has medium term targets of Rs.570--597.

Bibliography:
i) The Economic Times
ii) The Business Standard
iii) Business Today
iv) The Hindu BusinessLine, etc

Market Pulse

Domestic stocks nudged lower in early trade on negative Asian stocks. At 9:20 IST, the barometer index, the S&P BSE Sensex, was down 96.74 points or 0.29% at 33,748.12. The Nifty 50 index was down 34 points or 0.33% at 10,363.45.

Trading could be volatile as traders roll over positions in the F&O segment from the near month February 2018 series to March 2018 series. The February 2018 F&O contracts expire today, 22 February 2018.

The S&P BSE Mid-Cap index was down 0.31%. The S&P BSE Small-Cap index was down 0.33%. Both these indices underperformed the Sensex.

The market breadth, indicating the overall health of the market, was weak. On the BSE, 849 shares fell and 360 shares rose. A total of 48 shares were unchanged.

Overseas, Asian shares slipped on the risk of faster hikes in US interest rates. US stocks ended a tumultuous session yesterday, 21 February 2018 firmly lower after minutes from the Federal Reserve's most recent policy-setting meeting sparked a fresh wave of volatility. Minutes of the January 30-31 Federal Open Market Committee meeting showed that officials saw a stronger economy than at the end of 2017 and that more rate increases were in the offing.

An index that tracks US manufacturers rose to a nearly 3½-year high in February and a gauge for service-oriented companies hit a six-month peak, according to IHS Markit's flash PMI. The manufacturing index rose to 55.9 from 55.5. The services barometer climbed to 55.9 from 53.3.

Back home, ONGC (down 1.45%), Maruti Suzuki India (down 0.91%) and HDFC (down 0.74%) edged lower from the Sensex pack.

Mahindra & Mahindra (M&M) slipped 0.78%. M&M said that it has signed a share subscription & shareholders agreement and a share purchase agreement for acquisition of up to 1,296 equity shares and subscribing upto 6,074 compulsory convertible cumulative preference shares which on an as-converted to equity share basis, would result in the company holding in aggregate 22.9% of the equity share capital of Carnot Technologies on a fully diluted basis. The announcement was made after market hours yesterday, 21 February 2018.

Carnot Technologies is an Indian company, which provides products and services related to internet connected devices for monitoring performance of vehicles and equipment. It had a turnover of Rs 1.2 crore for FY 2016-17.

Acquisition of shares in Carnot is expected to support company's businesses by developing information technology solutions for its products. The indicative time period for completion of the acquisition is 31 March 2018. The cost of acquisition is Rs 6.06 crore.

Today's Calls:

#Intraday BUY Apollo Tyres Ltd at around Rs.262.25, SL: Rs.258, T: Rs.268-272. You can take delivery position also. 

#Buy Infosys Ltd at around Rs.1154, SL: Rs.1132, T: Rs.1180-1195. You can take delivery positions also.
Infosys  Ltd, a global leader in consulting, technology and next-generation services, has been positioned as a Leader in The Forrester Wave™: Applications Management and Digital Operations Services (AMDOS), Q4 2017. The report published by independent research firm Forrester Research Inc recognizes Infosys with the highest possible scores in the industry momentum, strategy for digital transformation and strategy for personnel criteria.
The Forrester Wave - AMDOS study evaluated 12 top service providers in an in-depth assessment across 26 criteria for capabilities in delivering application management and digital operation services in a growing digital era. These 12 service providers were evaluated under three high-level classifications: current offerings, strategy and market presence.
Moreover a weak INR is likely to push up  most of the stocks in the Information Technology sector and Infosys Ltd being a leader in this field is likely to get 1st mover advantage. Indian IT industry expects to grow exports at 7-9% in the coming fiscal, slightly higher than its expected growth of 7.8% in the current financial year, Nasscom said.

#Intraday buy Biocon Ltd\ around Rs.588, SL: Rs.580, T: Rs.605-609. This is an intraday call and hence don't take delivery positions. Target of Rs.609 has almost been achieved as it made a high of Rs.608.40, till now.

#Buy USD-INR at around Rs.65.00, SL below Rs.64.85, T: Rs.65.30 on T+1 basis.

#The market is likely to recover in the 2nd half and keep your buy positions open albeit with stop losses. 

~~with inputs from Capital Market - Live News..

Pre-Session: Market may see high volatility on F&O expiry

22-Feb-18: Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could slide 85 points at the opening bell. Trading could be volatile as traders roll over positions in the F&O segment from the near month February 2018 series to March 2018 series. The February 2018 F&O contracts expire today, 22 February 2018.

Overseas, Asian shares slipped on the risk of faster hikes in US interest rates. US stocks ended a tumultuous session yesterday, 21 February 2018 firmly lower after minutes from the Federal Reserve's most recent policy-setting meeting sparked a fresh wave of volatility. Minutes of the Jan. 30-31 Federal Open Market Committee meeting showed that officials saw a stronger economy than at the end of 2017 and that more rate increases were in the offing.

An index that tracks US manufacturers rose to a nearly 3½-year high in February and a gauge for service-oriented companies hit a six-month peak, according to IHS Markit's flash PMI. The manufacturing index rose to 55.9 from 55.5. The services barometer climbed to 55.9 from 53.3.

Back home, key benchmark indices logged modest gains yesterday, 21 February 2018 as bargain hunting helped indices stage a comeback after prior three-day fall. The Sensex rose 141.27 points or 0.42% to settle at 33,844.86, its highest closing level since 16 February 2018.

The trading activity on that day showed that the foreign portfolio investors (FPIs) sold shares worth a net Rs 1214.18 crore yesterday, 21 February 2018, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 1375.48 crore yesterday, 21 February 2018, as per provisional data.

Among corporate news, Mahindra & Mahindra (M&M) said that it has signed a share subscription & shareholders agreement and a share purchase agreement for acquisition of up to 1,296 equity shares and subscribing upto 6,074 compulsory convertible cumulative preference shares which on an as-converted to equity share basis, would result in the company holding in aggregate 22.9% of the equity share capital of Carnot Technologies on a fully diluted basis. The announcement was made after market hours yesterday, 21 February 2018.

Carnot Technologies is an Indian company, which provides products and services related to internet connected devices for monitoring performance of vehicles and equipment. It had a turnover of Rs 1.2 crore for FY 2016-17.

Acquisition of shares in Carnot is expected to support company's businesses by developing information technology solutions for its products. The indicative time period for completion of the acquisition is 31 March 2018. The cost of acquisition is Rs 6.06 crore.

~~Powered by Capital Market - Live News....

Pre-Session: Market may Open on Positive Note

21-Feb-18: Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could rise 12 points at the opening bell.

Overseas, Asian stocks were trading on a mixed note. Chinese markets will reopen tomorrow, 22 February 2018 after holidays. The US Federal Reserve will today, 21 February 2018 release minutes of its Jan. 30-31 meeting, Janet Yellen's last as chair, where officials kept the rate unchanged.

US stocks snapped a six-day winning streak yesterday, 20 February 2018 with the Dow and S&P 500 weighed down by a steep loss for Walmart as investors also watched climbing bond yields, which could make equities less attractive at current levels.

Back home, domestic stocks ended the volatile session of trade yesterday, 20 February 2018 with small losses amid subdued global stocks. The Sensex fell 71.07 points or 0.21% to settle at 33,703.59.

The trading activity on that day showed that the foreign portfolio investors (FPIs) sold shares worth a net Rs 850.35 crore yesterday, 20 February 2018, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 1437.24 crore yesterday, 20 February 2018, as per provisional data.

Among corporate news, Reliance Industries (RIL) and Eros International Media (Eros India) will be in spotlight. RIL and Eros International PLC (Eros) announced on 20 February 2018 that RIL, through a subsidiary, has agreed to subscribe to a 5% equity stake in NYSE listed Eros at a price of $15 per share, which represents an 18% premium to last closing price. The transaction is subject to customary regulatory and other approvals. The announcement was made after market hours yesterday, 20 February 2018.

Furthermore, RIL and Eros India announced that they have agreed to partner in India to jointly produce and consolidate content from across India. The parties will equally invest up to Rs 1000 crore in aggregate (approximately $150 million) to produce and acquire Indian films and digital originals across all languages.

~~Powered by Capital Market - Live News...

Market Pulse

After an initial volatility, stocks extended early gains and hit fresh intraday high in morning trade.

At 11:07 IST, the barometer index, the S&P BSE Sensex, was trading at 33,877.68 up 103.02 points or 0.31% and NSE was seen at 10,400.75 up 22.35 points or 0.22%. Metal and mining stocks gained. Telecom stocks saw mixed trend.

Stocks struggled for direction in opening trade amid mild volatility. Soon the key benchmark indices nudged higher and posted small gains in early trade.

The S&P BSE Mid-Cap index was up 0.42%. The S&P BSE Small-Cap index was up 0.43%. Both these indices underperformed the Sensex.

The market breadth, indicating the overall health of the market, was strong. On the BSE, 1,366 shares rose and 808 shares fell. A total of 99 shares were unchanged. Breadth was negative in early trade.

Overseas, Asian stocks were trading lower as Treasury yields climbed back toward recent four-year highs. Chinese markets will reopen on Thursday, 22 February 2018. US markets remained closed yesterday, 19 February 2018 in observance of Presidents Day.

Back home, Tata Steel (up 1.51%), Hero MotoCorp (up 1.3%) and TCS (up 1.21%) were the top gainers from the Sensex pack.

IndusInd Bank rose 0.85% after the bank said it has no direct credit exposures to Nirav Modi nor any indirect credit exposures basis the Letter of undertaking (LOU) issued by Punjab National Bank (PNB). As regards Gitanjali Gems, the bank has a small, two digit exposure, not linked to any LOUs. The announcement was made during market hours today, 20 February 2018.

Metal and mining stocks gained. Vedanta (up 2.22%), JSW Steel (up 1.39%), Tata Steel (up 1.6%), Steel Authority of India (Sail) (up 2.12%), National Aluminium Company (up 1.32%), Hindustan Zinc (up 1.41%), Jindal Steel & Power (up 1.56%), Hindalco Industries (up 1.56%), NMDC (up 2.41%), Hindustan Copper (up 0.8%) edged higher.

Telecom stocks saw mixed trend. Bharti Airtel (up 1.23%), Idea Cellular (up 0.67%), MTNL (up 1.09%) and Tata Teleservices (Maharashtra) (up 0.63%) gained. Reliance Communications (down 0.7%) fell.

Shares of Bharti Infratel fell 0.85%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.

JSW Energy rose 1.2% after the company said it signed a pact with the Government of Maharashtra for the manufacturing electric vehicles and energy storage systems. In addition to the earlier Memorandum of Understanding (MoU) with the Government of Gujarat with respect to electric vehicles (EV) manufacturing and associated businesses, the company has now entered into another MoU with the Government of Maharashtra for setting up facilities for the manufacturing of EV and energy storage systems in the state of Maharashtra. The announcement was made after market hours yesterday, 19 February 2018.

Vascon Engineers rose 2.31% after the company said it formally signed an agreement with Lina Ashar Foundation, Mumbai to develop a built-to-suit property at one of the company's land holdings in Pune. The announcement was made after market hours yesterday, 19 February 2018.

Under the agreement, Vascon will construct and deliver a total builtup area of approximately 135,000 square feet (SqFt) on long term lease to Lina Ashar Foundation, the school operator, in phases. The planned Billabong High International School will provide state-of-the-art infrastructure in terms of design and facilities to create a unique learning experience that will be first of its kind in the city.

Today's Calls:

#TV Vision Ltd (up 4.93%) is doing well today and has hit the Upper Circuit at Rs.18.10 in the NSE.. I hope you (Premium Members and my Blog Readers) have completed averaging the scrip yesterday.

#Yesterday's Call to the Premium Members: Buy NIFTY FUTURE around 10330-10335, SL: 10275 (CASH/SPOT), T: 10404-10425 ==> Target achieved. Book Profits....

#Buy Raymond Ltd at around Rs.952, SL: Rs. 942, T: Rs. 971-978 on T+1 basis. This  is a pure chart based call. Exit Raymond Ltd around COST price of Rs.952. Call Closed.

~~With inputs from Capital Market - Live News...

Winning Strokes

Photo: Udayavani

Trading for the week started on a subdued note as key indices logged modest losses as sentiment was marred by loan fraud cases in the PSU banks. The barometer index, the S&P BSE Sensex, lost 236.10 points or 0.69% to settle at 33,774.66. The Nifty 50 index lost 73.90 points or 0.71% to settle at 10,378.40. The last week's detection of a massive fraud at a Mumbai branch of the state-run Punjab National Bank (PNB) continued to weigh on sentiment. The latest reports suggesting a loan fraud case in PSU banks by now defunct Rotomac Pens also marred sentiment.

The recent rebound in global crude oil prices also raised concerns of its adverse impact on fiscal deficit as India imports most of its oil requirements. The Sensex settled below the psychological 34,000 mark after drifting below that level in early trade. The market dropped for the second day in a row.

A bout of volatility was seen in early trade as the key benchmark indices opened higher but quickly erased gains to sink in the negative zone. Stocks extended slide and hit fresh intraday low in morning trade. Key benchmark indices hovered in negative zone in mid-morning trade. Selling aggravated and indices nosedived to hit fresh day's low in afternoon trade. Domestic stocks continued to languish and hover near intraday low in mid-afternoon trade. Key indices cut losses in late trade.

The Sensex lost 236.10 points or 0.69% to settle at 33,774.66. The index slumped 456.39 points or 1.34% at the day's low of 33,554.37. The index rose 112.20 points or 0.33% at the day's high of 34,122.96.

The Nifty 50 index dropped 73.90 points or 0.71% to settle at 10,378.40. The index dropped 149.55 points or 1.43% at the day's low of 10,302.75. The index gained 37.05 points or 0.35% at the day's high of 10,489.35.

The S&P BSE Mid-Cap index declined 1.05%. The S&P BSE Small-Cap index fell 0.99%. Both these indices underperformed the Sensex.

Among the sectoral indices on BSE, the S&P BSE Healthcare index (down 1.1%), the BSE Auto index (down 1.11%), the BSE Capital Goods index (down 1.56%), the BSE Metal index (down 1.6%), the BSE Oil & Gas index (down 1.01%) and the BSE Realty index (down 1.12%) underperformed the Sensex. The BSE IT index (down 0.52%), the BSE Telecom index (down 0.53%) and the BSE Bankex index (down 0.57%) outperformed the Sensex.

The broad market depicted weakness. There were almost three losers against every gainer on BSE. 2,017 shares fell and 734 shares rose. A total of 162 shares were unchanged.

The total turnover on BSE amounted to Rs 4070.05 crore, lower than the turnover of Rs 4116.26 crore registered during the previous trading session.

Capital goods stocks edged lower. BEML was down 2.47%, ABB India 1.92%, Bharat Electronics 1.29%, Bharat Heavy Electricals (Bhel) 1.06%, and Siemens fell 2.31%. Punj Lloyd was up 0.49% and Thermax rose 1.82%.

PSU bank stocks continued to bleed following detections of frauds in some psu banks. State Bank of India was down 1.51%, Dena Bank 4.43%, Canara Bank 1.3%, and United Bank of India fell 2.36%.

Bank of Baroda slumped 5.48%, Allahabad Bank 6.3%, Bank of India 4.07% and Union Bank of India slumped 7.19%. The Central Bureau of Investigation (CBI) reportedly today, 19 February 2018, grilled Vikram Kothari, owner of the now defunct Rotomac Pens in Rs 800 crore loan fraud case. The Bank of Baroda had approached the CBI with a complaint against Kothari. Kothari had reportedly borrowed Rs 800 crore from various public sector banks including Allahabad Bank, Bank of India and Union Bank of India.

Punjab National Bank (PNB) lost 7.36%, extending recent steep losses triggered by the bank detecting a $1771.69 million fraud at a single branch in Mumbai. PNB made the announcement before trading hours on 14 February 2018.

PNB announced before trading hours on 14 February 2018, that it detected some fraudulent and unauthorised transactions (messages) in one of its branch in Mumbai for the benefit of a few select account holders with their apparent connivance. Based on these transactions, other banks appear to have advanced money to these customers abroad. In the bank these transactions are contingent in nature and liability arising out of these on the bank shall be decided based on the law and genuineness of underlying transactions. The quantum of such transactions is $1771.69 million (approximately). The matter is already referred to law enforcement agencies to examine and book the culprits as per law of the land. The bank said it is committed to clean and transparent banking.

PNB clarified after market hours on 15 February 2018, that on 16 January 2018, the partnership firm of Nirav Modi group approached PNB branch at Brady House, Mumbai and presented a set of import documents with a request to allow buyers' credit for making payment to the overseas suppliers. Since there was no sanctioned limit in the name of the above firms, the branch officials requested the firms to furnish at least 100% cash margin for issuing Letter of Undertaking (LOU) for raising buyer's credit. On denial, the firms contested that they have been availing such transactions since past several years.

Metal and mining stocks declined. JSW Steel lost 2.97%, Steel Authority of India (Sail) 1.3%, Hindustan Copper 2.16%, National Aluminium Company 2.36%, Hindustan Zinc 0.22%. Jindal Steel & Power 0.64%, and NMDC 1.83%. Hindalco Industries 0.32% and Vedanta rose 0.33%.

Vakrangee was locked in 5% lower circuit at Rs 233.20 on profit booking after a recent rally. Shares of Vakrangee surged 27.57% in five trading sessions to settle at Rs 245.45 on Friday, 16 February 2018, from its close of Rs 192.40 on 8 February 2018.

Meanwhile, the Sensex has declined 522.81 points or 1.52% in two sessions to its ruling index, from a close of 34,297.47 on 15 February 2018.

Overseas, European shares were trading lower. Asian shares rose as sentiment improved gradually from a recent shakeout that stemmed from fears of creeping inflation and higher borrowing costs. Markets in China, Hong Kong and Taiwan remain closed for the holiday. US markets are closed today, 19 February 2018 in observance of Presidents Day.

Japanese exports rose for a 14th straight month in January 2018, helped by continued demand from Asia for equipment to make semiconductors, data from Japan's finance ministry showed today, 19 February 2018. Exports grew 12.2% in January from a year earlier, following a 9.3% year-on-year gain in the previous month.

In US, the Dow industrials and S&P 500 logged their sixth straight advance on Friday, 16 February 2018 but the Nasdaq lagged its peers, as political drama sparked turbulent trade late in the session. Special Counsel Robert Mueller announced the indictments of 13 Russian nationals and three Russian entities, accusing them of interfering in the 2016 US presidential election. The indictment said the defendants were supporting Donald Trump's campaign and disparaging Hillary Clinton.

#Today, two buy calls were initiated for the Premium Members during the dying hours of the market: 

(i) Buy NIFTY FUTURE around 10330-10335, SL: 10275 (CASH/SPOT), T: 10404-10425....

(ii) Buy the shares of Jai Corp Ltd at around Rs.165, SL: Rs.161 for a very short term target of Rs.172, .

Join Premium Information Service or trade through my associated brokerage house BMA Wealth Creators Ltd, with a minimum portfolio size of Rs.2 lakhs to be a part me and stay ahead of others. I am giving special discounts to the small investors (Portfolio Size: below Re.1 lakh), till 28 February, '18. Hence, you are requested to avail of the same, till the offer lasts. 

#The shares of TV Vision Ltd (Rs.17.10) is probably near its bottom and hence a bounce is expected from the oversold levels. If we look at the December, '17 quarter results of the company we would find that its total revenue had moved up to Rs.27.81 crore as against Rs.26.04 crores in the September, '17 quarter. Also, the PBDT  of company for Q3FY18 is Rs.2.02 crore as against Rs.16 lakhs in the September, '17 quarter. It is due to Depreciation and Tax component that the company came out with loss in the December, '17 quarter.

The year 2018 is expected to be action packed since it will be a big year before the general elections in 2019. The company is likely to hike the ad rates going forward. Also, similar to the telecommunications sector, television broadcasting organisations, including direct-to-home (DTH), cable services and headend in the sky (HITS) require huge investments in setting up technology and distribution networks and, as such, are ‘asset-rich’ organisations.

Indian Budget, '18-19, was a big thumbs up for Digital India and digitisation. With a view to promote digitization, the government of India is set to make the necessary investments in robotics, IoT, AI, digital manufacturing and big data analysis with the NITI Aayog to establish a national programme to direct efforts in the artificial intelligence. The governmemt has committed itself to the development of technology along with concentrating on AI and its application, a revolutionary move for the digital industry. The ministry has decided to double its Digital India budget to around Rs.3000 crore. 

The ministry has also proposed to set up 5 lakh Wi-Fi hotspots to give access to 5 crore rural citizens, which means digital and internet penetration into smaller pockets of the country will result in increased data consumption across India. The move will help brands, agencies and OTT players to create target content for such markets. 

Moreover, the government's thrust to rural infrastructure and agriculture in the budget could lead to additional broadcast revenues and may increase the number of TV households in India. As the standard of living increases, electrification expands and affordability goes up, the rural India will buy more television sets and the penetration will increase. A lot of the freedish homes might also get converted to pay TV homes, adding up to the subscription revenues of the broadcasters. 

“Our baseline study indicated that economic prosperity and higher living standards goes hand in hand with TV penetration and higher TV consumption. With only two-thirds of Indian homes having access to TV, there is huge headroom for growth here, and this year’s budget should help drive up TV ownership and consumption in rural India," Dasgupta said.

Besides, advertising expenditure in India is expected to grow at 13% to touch Rs.69,346 crore in 2018 over 2017, according to a forecast by WPP-owned media agency GroupM in its report This Year Next Year (TYNY). This is higher than 10% that GroupM put out for 2017.

Therefore at the CMP of Rs.17.10, the share of the company having 5-established TV channels and having great plans ahead is available at the price of dirt. The scrip of TV Vision Ltd, should get ultimate support in the range of Rs.15.3-Rs.17.

~~with inputs from Capital Market - Live News....

TV Vision Ltd: Buy

CMP: Rs.17.85

Market Cap: Rs.62.73 crore

Book Value: Rs.34.54

Industry P/E: 46.79

Introduction: The company started its broadcasting business in 2010 by launching Music and Youth

Channe "Mastiii". The bouquest of channels as grwon from one ion 2010 to five in 2015. The company expanded its footprint into Digital Media by launchng digital channel "Happii-Fi".After the scheme of amalgamation and arrangement, the broadcasting business of the of SAB Group is now being run by TV Vision Ltd. 

Shareholding Pattern: The promoters hold 37.63%, while the general public hold 62.37%. Among the general group, Central Bank of India hold 8.85% while insurance companies hold 0.58% of the shares of the company. Others who has a sizable holding in the company are:

#Assent Trading Pvt Ltd -- 6.26%

#Aranav Trading ad Investments Pvt Ltd -- 6.63%

#Kalash Trading and Investments Pvt ltd --- 5.72%

#Keynote Enterprises Pvt Ltd -- 5.44%

The corporates and large investors hold 52.69% leaving around 9.68% in the hands of the small investors. This gives low float and correspondingly increase the valuation of the share price. 

Financial: The company's financials got hit due to demonetization in Q2FY18 and Q3FY18.

However, speaking sequentially the financials of the company are showing some improvements. The total income of the company for Q3FY18 came as Rs.27.18 crore as against Rs.26.04 crore in Q2FY18 and Rs.44.60 crore in Q3FY17. 

The net loss of the company came down to Rs.3.6 crore in Q3FY18 as against Rs.4.68 crore in Q2FY18 and a net profit of Rs.2 crore in Q3FY18. Accordingly the EPS for Q3FY18 came to (-)Rs.1.03 from (-)Rs.1.34, showing marked improvement, sequentially. It is pertinent to mention here that the figures cannot be compared on Q-o-Q basis due to demonetization effect and hence sequential comparison seems to the best measure to asses its financial prowess.

Triggers: 

#The company is into broadcasting and content production. It is operating 5 (Five) TV channels namely, Mastiii, Dabangg, Dhamaal, Maiboli and Dillagiii. Mastiii, the Hindi Music TV Channel continues to  main the numero uno position in the target market and is holding position of the "Unchallenged No.1 Music & Channel for over one year".

#Dabangg, the Regional Entertainment Channel has continued its key position among its competitors. The Channel has added more regional flavour in its programming while focusing on increase in Bhojpuri content for the Channel. 

#Channel "Dhammal" positioned as youth and music channel for the state of Gujarat is showing steady performance while the regional Marathi Channel "Maiboli" has established itself as a strong player in the Marathi segment with its unique programming mix. It has strengthened its content offering by telecasting World TV Premier of famous Marathi movies. 

#"Dillagiii", the Channel which was launched with intention of catering to LCI regions, caters to large Indian population base across all age groups and is expected to improve its performance as the twins effects of demonetization and GST wanes off. And despite a challenging market, the improvement in financials on sequential basis is an indication of a turnaround and its ability to generate free Cash Flow. 

#The company has been closely monitoring the developments and are taking strategic steps to respond positively to the changing environments. It is also working on a blue print to make a bouquet of nine plus channels in variuos generes which includes existing bouquet of five channels and also having big plans to enter into the Hindi GEC space along with new regional channels and niche category channels. The company is well established in regional space with currently three region specific channels catering to different regions.

Conclusion: The company's broadcasting business is growing at a rapid pace. It currently operates 5 TV channels as mentioned above and with the success of the launched channels, TV Vision management intends to expand further in the broadcasting space and new age media. The requirement of funds is proposed to be met from both equity and debt from issuance of appropriate securities as defined in the resolutions and from both domestic and international markets. The funding would be an appropriate mix of equity and debt to meet with the objective of optimization of the cost as well as conservation of financial management. Let us elaborate a bit on its TV Channels:

a) MASTIII

“Mastiii” - India’s No.1 Music & Youth Channel from the network bouquet of SABGROUP, has

created a mark for itself and emerged as an un-paralleled and unchallenged #1 channel of the genre. The channel having a universal appeal caters to a variety of music lovers of various age groups becoming the most loved Music channel in India. Being the market leader, Mastiii has introduced and successfully implemented many first of its kind innovative properties, such as Mastiii Doubles which has gone to become the number 1 music show in its respective time band, Mastiii Star wars, a one of its kind battle in which Bollywood superstars fight it out with their hit songs hereby engaging the viewers not only through broadcast but also through social media. Everyday part of the channel has been very systematically planned to cater to every mood of the viewer during the day giving the audience a mix of peppy, romantic, retro and Bollywood blockbuster old and new Hindi songs.

b) DABANGG

“Dabangg” one of SABGROUP’s premier regional entertainment channels was launched to cater to the

audience of U.P., Bihar & Jharkhand. The Channel is widely distributed in the targeted territory. Bhakti Sagar a devotional show which has become the favorite amongst the viewers followed by back to back Bhojpuri movies & Hindi movies. With the vast movies library and exclusive World Television Premiers the channel is set to take the audiences entertainment quotient several notches higher. But the entertainment does not just stop there, having a change in programming during the festive periods the channel tries to give its audience a feel of the festivities right on their television screens.

c) MAIBOLI

Having spread its wings in the North SAB GROUP ventured out to capture Maharashtra with its

regional Marathi channel “Maiboli”, launched to cater and entertain the Maharashtrian audience. In the recent past the channel has gone ahead and given established market players a stiff competition. With shows such as Filmy Gappa which gives latest updates on what’s happening in the Marathi movie industry, Bolte Tare where the channel interacts with various Marathi celebs & one devotional programme named Amrut Manthan in the morning time band and multiple Marathi movies & Songs, the channel has become a complete family entertainer for the region.

d) DHAMAAL

“Dhamaal” is the youth focused regional channel for the territory of Gujarat. The programming of the channel includes music and "Gujju Bhai" gags along with shows such as “Dhamaal Ek Minut Ni” and “Dhamaal Youngsterni”. The channel is very well distributed in the targeted territory.

e) DILLAGIII

“Dillagiii” a dedicated TV channel for small towns & villages of India including towns with a population of less than one lakh (known as LC1 markets) across regions. Dillagiii is a family entertainment channel, believes in touching people's hearts through movies & gags by Raju. The Channel stands for the most invaluable things in life – love, family, fun & memories.

Thus, from the above discussion we find that the shareholders of the company has a great future ahead, if they buy the scrip of the company near the CMP of Rs.17.85 and keep holding, for short term targets of Rs.27-29 and medium term target of Rs.41-42.