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Market View:

If there is more pain, invest More

 As we have discussed, market is in consolidation mode. Some results of midcap stocks arencouraging. There are certain interesting data which suggest that an investor should invest mmeaningful decline in the market. Have you ever seen the Sensex fall for two consecutive yearsback to history of last 20 years, it only happened once in 2000 and 2001. The Sensex fell by 20.18% respectively. Isnt it surprising that the index was down two years together only once in years? The question arises that 20 years is not a significantly long period but it is really interesee the yearly movement of stock markets world over in last many decades. Mr. Meb Fstatistician has compiled the data. Two consecutive down years is very difficult to pin point. Wthree years are the rarest of the rare. As per Mr. Faber it has happened just 6 times in last 37which is just 2% of the time. Four consecutive down years happened only 1% while five down ye

row has never happened. Our interest is to see what happened after the fall for two, three or fosecutive years.

The reversion to the mean is a well known rule of statistics which plays a significant role here aset classes have this peculiar tendency to hover around their equilibrium level after some timthey move away from their equilibrium level, faster they come back to that level. Mr. Faber hasoped this theory to predict the return of asset classes after they have fallen in a row. If the asset down two, three, four and five years in a row, one can expect future two year total returns of 4080% and 100%. In other words if there is a meaningful downside for consecutive years, oneinvest more.

Mr. Meb Faber is particularly bullish on emerging markets. He is not talking only about India.

interesting to know that India is having another kind of reversion to the mean and that is as stany asset class. The reversion to the mean of profit margins. If profit margins revert to their meacould be a 70% upside from here on. If earnings were to grow at the historical rate of 15% andmargins were to rise to their 10 year average of 13.5% from the current 12.2% an EPS of Rs. 1become Rs. 168 by f.y.18. Which is nearly a 70% jump. Here there is a prediction that the Sensmultiple remains at the current level of around 19x.

Mr. Faber has supported our claim of the idea of mean reversion and reversion in profit margin possible as good as in any asset class. Considering this, it will be convincing to invest more witbout of pain. Technically, our market has a strong support in the range of 7550-7600 andresistance at 7850-7900.

K a m a l J h a v e r i

M D - J h a v e r i S e c u r i t i e s

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mailto:jstreet@jhaveritrade.commailto:jstreet@jhaveritrade.commailto:jstreet@jhaveritrade.commailto:jstreet@jhaveritrade.commailto:jstreet@jhaveritrade.commailto:jstreet@jhaveritrade.commailto:jstreet@jhaveritrade.commailto:jstreet@jhaveritrade.commailto:jstreet@jhaveritrade.commailto:jstreet@jhaveritrade.commailto:jstreet@jhaveritrade.commailto:jstreet@jhaveritrade.commailto:jstreet@jhaveritrade.commailto:jstreet@jhaveritrade.commailto:jstreet@jhaveritrade.commailto:jstreet@jhaveritrade.commailto:jstreet@jhaveritrade.commailto:jstreet@jhaveritrade.com

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Company Basics

E Code 538268

E Symbol WONDERLA

UITY (  in Cr.) 56.50

T.CAP (  in Cr.) 2182.90

Financial Basics

FV ( ) 10.00

EPS ( ) TTM) 10.41

P/E (x) (TTM) 37.11

P/BV (x) (TTM) 5.51

BETA 0.6705

RONW (%) 20.00

Share Holding Pattern

Holder’s Name % Holdin

Foreign 12.38

Institutions 4.38

Promoters 70.99

Non. Promoters 0.00

Public & Others 9.01

Govt Holding 3.25

uation : WONDERLA is trading at  381. We recomm end “Accumulate” with target price of   498 ,

 16.62.The stock currently trades at 32.47x of FY 16E, 27.93xof FY17E and 22.98x of FY

mpany Update : Wonderla Holidays Ltd.

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ekly Market Recap :

arket Eye Week ahead :

Mon: HUL, Deepak Nitrite earnings

Tue: Century Plyboard, HFCL, Repco home, SRF, Radico Khaitan earnings

Wed: Apollo Tyres, Asian Paints, Havells India, Kotak Mahindra, Oriental Bank, TD Power System, Mold-Tek Packagi

ngs

Thu: CPI data for the month of April 2016, IIP data for the month of March 2016, Arvind, Dr Reddys Labs, Glenm

Cementation, Nestle, Graphite India earnings

Fri: Bank of Baroda, Cadila Healthcare, Central Bank, UCO Bank, United Breweries, United Breweries earnings

Sat: Relaxo Footwear, Uttam Sugar, Vinati Organics earnings

Pledged Asset

dged asset is collateral pledged by a borrower to a lender (usually in return for a loan). The lender has the right to seize the cborrower defaults on the obligation. In some cases, the lender may require the borrower to place pledged assets such as

rities in a separate account that the lender controls.

ged assets give lenders a sense of security, which is why pledged-asset loans often receive better interest rates than un

s.

round The World

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owledge Corner :

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utual Fund Corner

4-

Source : - www.valueresearchonlin

nd Name

heme Name Kotak Emerging Equity Scheme Regular Plan

C Kotak Mahindra Asset Management Company Ltd

e Small Cap

egory Open-ended and Equity

nch Date  March 2007

nd Manager Pankaj Tibrewal

Assets

 Rs. 817.5 crore as on Mar 31, 2016

Top 10 Sector Break-Ups

Sector Weights Fund

 Financial 17

 Engineering 13

 Cons Durable 10

 Chem ica ls 9.

 Services 9.

 Construction 6.

 Healthcare 6.

 Textiles 4.

  Techno logy 4.

 Metals 3.

Composition (%)

Equity 95

Debt 4.

Cash 0.

Risk Analysis

Volatility Measures

Standard Deviation 19

Sharpe Ratio 1

Beta 1

R-Squared 0 Alpha 15

tory 2013 2014 2015 2016

(Rs) 13.14 24.61 26.68 26.41

l Return (%) -5.07 87.32 8.42 -1.02

Nifty 50 -11.83 55.93 12.48 0.20

S&P BSE Mid Small -0.42 32.95 0.38 3.12

k (Fund/Category) 29/32 17/50 25/41 8/36

e e k H i g h ( R s ) 14.22 24.61 27.86 -

Week Low (Rs) 9.78 12.31 24.35 -

Assets (Rs.Cr) 69.33 274.15 792.54 776.16

ense Ratio (%) 2.79 2.89 2.71 -

Fund StyleInvestment StyleGrowth Blend Value

Large

Medi

Sma

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nd Performance v/s S&P CNX Nifty

FundCNX Nify

based to 10,000)

http://www.valueresearchonline.com/

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mmodity Corner

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DAMENTAL:  

OMMENDATION : BUY GOLD JUNE @ 29800 SL 29350 TGT 30600-31000,BUY SILVER JULY @ 40600 SL 39500 TGT 41500-42500

DAMENTAL: Base metals prices ended with losses where aluminum and copper prices ended with more than four percent losses follkness in others as market braced for sell-off by funds reversing bets on higher prices, while expectations of an oversupplied market addesure. The economic recovery in the Euro area is expected to continue, supported by household consumption and rebounding investments, ain on the downside, the European Central Bank said in a regular economic bulletin. Chinese data released last week showed factory activd’s top metals consumer shrank for a 14th consecutive month in April has blunted optimism over demand for metals. Monthly trade data both exports and imports fell more than expected in April, added to concerns over the health of the worlds second largest economyped 1.8% from a year earlier, worse than forecasts for a decline of 0.1%, while imports dropped 10.9%, compared to expectations for a fall left China with a surplus of $45.6 billion last month, the General Administration of Customs said. The Labor Department reported that t

omy added 160,000 jobs last month, the smallest increase since September and well below the 202,000 jobs forecast by economists. Thment rate remained steady at 5%.The one bright sport of the report showed that average hourly earnings rose by eight cents or 0.3%, brin-on-year increase to 2.5% from 2.3% in March. The report saw investors all but abandon expectations for a June rate hike, with most invesng the next U.S. rate hike coming in September. Remarks by a senior Federal Reserve official indicated that U.S. interest rates could er than expected. New York Fed President William Dudley said that it was reasonable to expect two rate hikes this year despite weakcted April data on hiring. The U.S. services sector expanded in April as new orders and employment accelerated, bolstering views that eth would rebound. In the week ahead, investors will continue to focus on U.S. economic reports to gauge if the world’s largest economy gh to withstand further rate hikes in 2016, with Fridays retail sales data in the spotlight. In addition, there are more than a half-dozen Fed sp as traders search for more clues on the timing of the next U.S. rate hike.OMMENDATION : BUY COPPER JUNE @ 312 SL 306 TGT 324-330 , BUY ZINC MAY @ 122 SL 119 TGT 126-130,BUY NICKEL MA50 TGT 602-630, BUY ALUMINIUM MAY @ 108.00 SL 110.50 TGT 105.50-103.00 , BUY LEAD MAY @ 114.00 SL 110.00 TGT 118.50-1

DAMENTAL: 

OMMENDATION : BUY CRUDE OIL MAY @ 2960 SL 2800 TGT 3120-3240 ,SELL NAT GAS MAY @ 144 SL 152 TGT 136-130

BULLION

BASE METALS

ENERGY

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mmodity Corner

USD/INR

6-

rex Corner

EUR/INR

GBP/INR

JPY/INR

rket Eye Week ahead :

On the daily chart prices are trading in the rising wedge like pattern which is a short term bearish pattern. Supporhe same is pegged at 66.68 and breach of the same will confirm the pattern and can trigger panic selling which

can drag the prices to lower levels of 65.50.

The Average Directional moving index (ADX) is below 20 on both daily and weekly charts indicating rangemovement of pair the whole week on broader basis.

Level S2 S1 CP R1 R2 High Low Cl

SD/INR  

Level S2 S1 CP R1 R2 High Low Cl

PY/INR  

Level S2 S1 CP R1 R2 High Low Cl

BP/INR  

Level S2 S1 CP R1 R2 High Low Cl

UR/INR  

rket Recap :

The Indian rupee dipped lower at commencementbut bounced back in early trades on Monday, 09May 2016 on increased selling of the Americancurrency by banks and exporters. Besides, higher opening of the domestic equity market backed uphe rupee.

The domestic currency opened at Rs 66.50 againsthe dollar and recovered to a high of 66.40 so far 

uring the day.

n the spot market, the Indian unit was last seenrading at 66.43.

Meanwhile, the U.S. dollar index, which measureshe greenback’s strength against a trade-weighted

basket of six major currencies, rose 0.14% to 93.96.

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Nifty last week opened at 7822.70, attained a high at 7890.25 and fell to a low 7678.35. Nifty finally closed the week at hereby showed a net fall of 116 points on week to week basis.

We had said last week that if a minor correction or retracement of the rise from 7516 to 7978 is witnessed then traders etracement levels of the rise for accumulation. Nifty made low of 7701 and bounced back. Continue to hold long with profit evels placed at 7767-7856-7891. In the event of a breakout and close above 7992 expect the rally to be witnessed towards upply zone of 8217-8235.

7-

treet Recommendations Report Card

Top Fundamental Stocks

Stocks Rec. Date CMP on Rec. CMP Target

AbsoluteReturn @

CMPSta

na Auto 22/02/2016 133 140 181 5% B

Educare 1/2/2016 164 169 230 3% B

ware-Wall Ropes 28/12/2015 425 334 550 -21% B

spun syntax 23/11/2015 121 106 223 -12% B

co Pharma 2/11/2015 509 456 636 -10% B

21/09/2015 1140 1363 1374 20% B

uwalia contracts 24/08/2015 235 272 368 16% B

nite Computer Sol. 20/07/2015 190 216 255 14% B

bika Cotton Mills 18/05/2015 880 822 1149 -7% B

bhav Engineering4/5/2015 298 254 430 -15% B

kar speciality

micals16/03/2015 152 177 251 16% B

FL 16/02/2015 252 196 368 -22% Accum

Today Network 27/01/2015 222 319 337 44% B

M 12/1/2015 1238 1327 1452 7% B

ells India 27/10/2014 274 341 346 24% B

C India Fin. Ser. 7/7/2014 39 38 45 -3% B

ni Port 5/7/2014 280 194 347 -31% Accum

d-Tek Packaging 04/04/2016 138 149 179 8% B

nderla Holidays 25/04/2016 387 383 498 -1% Accum

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treet Short Term Call Status

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treet Short Term Call Status

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One call on daily basis is given keeping view of short term trading on closing basis.Time frame and expected % of return is also mentioned with the suggested call.

This call are purely given on technical trading system generated by the Technical Research Desk.Generally Expected Return on investment is 5-6 % with time horizon of 6-7 days.Profit Booking update is considered if on an average expected return exceed 3.50-4.00 % against Expected return of 5-6%Risk- Reward ratio percentage wise depends on the volatility of stock Normally it stands ( 3 : 9)

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