Advice for the Wise - August 10


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Karvy Private Wealth’s newsletter ‘ADVICE for the WISE’ for August 2010 a ready reckoner for you to not only understand the key investment markets but also to help you make better investment choices.

It gives an overall picture of Equity, Debt, Insurance, Commodities, Forex Market, and global and domestic Economic updates.

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Advice for the Wise - August 10

  1. 1. ADVICE for the WISE Newsletter – August’10
  2. 2. Index Page No. Economic Update 4 Equity Outlook 8 Debt Outlook 16 Forex 18 Commodities 19 Alternative Assets 21 2
  3. 3. Dear Investor, However, the average expected inflation for the year has been revised upwards as well. In light of such expectations, RBI is Indian equity markets have remained largely flat through last likely to be quite unambiguous in its stance. In future we month. This was partly due to the cautious sentiments in light of expect the monetary tightening to continue. Both repo rate monetary policy tightening and partly due to lackluster corporate and reverse repo rates will continue to increase. Also the results. While both developments were largely expected, their difference between the two is likely to be reduced further in materialization kept investors looking for non-existent positive order to reduce the interest rate volatility. surprises. The mixed news from global markets has made us maintain our cautious outlook for the short term. Owing to the Debt markets reacted as expected to the rate hikes with strong economic fundamentals, our long term view for Indian marked increase in yields. Yields are likely to increase further equities remains bullish. In this context, the present market before peaking. Thus we maintain a negative outlook on long tenure debt. Investment opportunities in debt are likely to be scenario seems ripe for cherry picking of good quality stocks rather found on the credit side. The positive economic growth than investing in broad index. In terms of sectors, banking and atmosphere has reduced the credit risk considerably. consumer goods appear to be attractive bets owing to strong However this has not necessarily led to a reduction of credit credit growth and renewed vigor in consumption respectively. spreads. Carefully selected corporate credit is likely to be Private equity investments are also a good option to capture the quite attractive in terms of risk adjusted yield in the present positive long term growth momentum of Indian economy. context. The idea should be to lock in attractive interest rates in steps while the interest rate cycle peaks. In the monetary policy announced late last month, RBI has increased repo rate by 25 basis points to 5.75% (from 5.5%) and The relative calm on the front of various investment avenues reverse repo rate by 50 basis points to 4.5% (from 4.0%). RBI had can be used as a period to rebalance portfolio allocations to already increased both repo rate and reverse repo rate by 25 basis reflect the currently persisting expectations of growth rates points each on an ad-hoc basis earlier last month. The moves were and risks of different asset classes. The stability and relative largely expected owing to the sustained high inflation rate. In predictability of the current equity and debt markets allows recent weeks, most experts have increased their forecast of Indian gradual restructuring of both sides of the portfolio and also GDP growth rate for FY11 from 8.0% to 8.5%. selective investments in alternate assets. “Advisory services are provided through Karvy Stock Broking Ltd. (PMS) having SEBI Registration No: INP000001512. Investments are subject to market risks. Please read the disclaimer on slide no.23” 3
  4. 4. As on Change over Change over 130 July 30th 2010 last month last year 120 110 BSE Sensex 17,868 0.9% 14.0% 100 90 Equity S&P Nifty 5,368 1.0% 15.8% 80 markets Dec-09 Mar-10 Apr-10 May-10 Jul-09 Jun-10 Jul-10 Sep-09 Oct-09 Jan-10 Feb-10 Aug-09 Nov-09 S&P 500 1,102 6.9% 11.6% Sensex Nifty Nikkei 225 9,537 1.6% (7.9%) S&P 500 Nikkei 225 8.3 10 Yr.… 7.8 10-yr G-Sec Yield 7.80% (25 bps) 82 bps 7.3 Debt markets Call Markets 4.88% (48 bps) 188 bps 6.8 Fixed Deposit* 6.00% (0 bps) (50)bps 7/31/2009 8/31/2009 9/30/2009 10/31/2009 11/30/2009 12/31/2009 1/31/2010 2/28/2010 3/31/2010 4/30/2010 5/31/2010 6/30/2010 7/31/2010 3,500 3,300 Commodity RICI Index 3,131 6.1% 5.2% 3,100 2,900 markets Gold (`/10gm) 17,768 (5.5%) 21% 2,700 Crude Oil ($/bbl) 75.5 0.8% 7.8% 2,500 Oct-09 Aug-09 Sep-09 Nov-09 Feb-10 Dec-09 Mar-10 Jul-09 Apr-10 May-10 Jul-10 Jan-10 Jun-10 RICI 50 Forex Rupee/Dollar 46.6 0.3% 3.5% 48 46 markets Yen/Dollar 88.7 2.5% 9.3% 44 Jan-10 Jun-10 Jul-09 Aug-09 Sep-09 Jul-10 Dec-09 Feb-10 Oct-09 Apr-10 Mar-10 Nov-09 May-10 Rupee/Dollar * Indicates SBI one-year FD 4
  5. 5. • The Conference Board Consumer Confidence Index which had which had declined sharply in June, retreated further in July. The Index now stands at US 50.4 indicating growing uncertainty about the future state of the economy and labor market . • US m-o-m unemployment rate edged down to 9.5 per cent in June 10. • Euro-zone purchasing managers index surprisingly recovered to 56.7 in July from 55.6 in June indicating a continued recovery in the region. There has Europe been an improvement in both the manufacturing and services sector. Industrial production rose by 0.9% (m-o-m) and 9.4% (y-o-y). • Unemployment in the Euro zone remained at a record 10% in June for the fourth month running with almost 16m people out of work. • Japan’s industrial production dropped by 1.5% in June from the previous month signaling the nation’s export-led recovery is losing momentum. Japan • Japan’s unemployment rate increased in June 10 (m-o-m) to 5.3% from 5.2% in May 10 . These are the highest levels in the last 7 months. • The HSBC China Manufacturing Purchasing Managers Index, fell to 49.4 in July from 50.4 in June. It was the first month since March 2009 that the PMI Emerging reading was below 50 indicating contraction in the manufacturing activity. economies This reflects the the combined effect of credit tightening, property cooling measures and Beijing's measures to cut capacity in energy-intensive sectors. 5
  6. 6. IIP monthly data 15% 10% • The GDP growth rate for FY10 came in at 7.4%; 5% better than the estimated 7.2% for FY10 with FY10 0% Q4 GDP figure coming in at 8.6%. May-09 -5% Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 • For FY10, growth in construction sector remained unchanged at 6.5%, while industry and services grew at 9.3% (vs 8.2% ) and 8.5% (vs 8.7%) year on • Industrial output as measured by the Index of year. Industrial Production (IIP) grew by 11.5% (y-o-y) in May 10. While this is way below the estimated • The Finance ministry is targeting FY11 growth at 16%, combined with a manufacturing PMI of ~8.50%. We believe the current target is sustainable as we expect manufacturing and service sectors to 57.3 in June, it shows expansion in the continue to drive growth in the next few quarters, manufacturing sector. even as farm output stages a turnaround. • We believe the growth in IIP will shift from consumption led sectors to manufacturing sectors as the economy keeps improving. GDP growth 6
  7. 7. Growth in credit & deposits of SCBs 25 Bank Credit Aggregate Deposits 20 • Inflation as measured by WPI stood at 10.55% 15 (y-o-y) for the month of June-10 as compared to 10 10.16% during May 10 driven by high food and 5 fuel prices. 0 • We expect WPI inflation numbers to increase in coming months due to a direct fall out of the fuel price hike but expect moderation in m-o-m inflation numbers as the RBI continues its • Bank credit growth further improved in the month monetary tightening stance and the base effect of June as it increased by 19.6% as compared to comes into play. 18.1% in the month of May 2010 12.0% • We expect credit growth to further improve in the 10.0% Inflation next few quarters and settle at ~20% levels on the 8.0% back of improving business confidence and decline 6.0% in risk aversion on the part of banks as the 4.0% economic recovery gathers momentum. 2.0% 0.0% Jun-09 Oct-09 Jan-10 Jun-10 Dec-09 Jul-09 Feb-10 Mar-10 Apr-10 Aug-09 Sep-09 Nov-09 May-09 May-10 -2.0% -4.0% 7
  8. 8. Market valuations and outlook We believe that the time correction has been underway for a good period of time now. Indian equity markets have now remained flat for over three quarters. On the other hand, the earnings growth is panning out as per our expectations. The Sensex has remained flat but the valuations have corrected from 17.9x forward earnings (September 2009) to now 15.7x forward earnings. Our earning expectation from the Sensex is ` 1050 for FY11 and ` 1250 for FY12. If the market remains flat for a quarter or two and the earnings growth remains on track (which in our opinion is likely), the valuations should start looking comfortable. In our view, this is an appropriate time to start allocation to Indian equities with a long term view and an uncompromising attention to quality. Near Term Concerns We are cognizant of the key issues that are holding markets back despite record inflows from FIIs during this calendar year. India can do little about the developments in the western world. The economic data from US and EU is mixed and does not indicate a decisive trend so far. We are subscribers of the view that the worst may be over, but consumption in western world will suffer for a long time to come. Notwithstanding its domestic character, India will be adversely impacted in an eventuality of the crisis deepening. Back here, inflationary pressures have caused the policymakers to sit up and start monetary tightening. The quarterly results for Q1FY11 bear the scars from rising input costs in the economy. If the monsoons turn out fine as it appears, Sensex forward food inflation should be manageable, but the same cannot be opined for fuel PER will get better and commodities. It will be interesting to watch how the central bank balances if the markets remain flat for a between monetary tightening, liquidity induction and growth. quarter or two. 8
  9. 9. FII & MF data Sales growth Series1 Series2 20000 15000 10000 • Substantial improvement in sales was witnessed in Q2 & Q3 Rs. (Cr) 5000 mainly in consumption oriented sectors of the economy. Current Results by corporates show a strong Sales growth 0 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 for the current quarter while consolidated figures are yet to -5000 come. -10000 • We expect improvement in sales in upcoming quarters; -15000 especially in the manufacturing space as domestic demand picks up. • FIIs invested ` 16,617 Cr. in equities in the month of July Profit growth alone as the markets remained relatively stable throughout the month on cues of stable macroeconomic indicators. We also saw huge FII inflows in the Debt segment amounting to ` 8,100 Cr. • Mutual Funds sold around ` 4,182 Cr in the month of July as • Recent Q3 & Q4 numbers have beaten estimates with Corporates and Banks exited the markets. Banks are higher sales and better operational efficiency aiding profit currently gaining a higher rate of ~5.8% (Call rate) as growth. compared to returns given by Liquid funds. • Margins are expected to remain stable in the following quarters as lower interest costs are offset by higher raw material costs 9
  10. 10. Recommendation Sector Rationale Higher credit growth, well managed NPAs, improved capital market BFSI activities and expectations of reforms Industrials Focus on infrastructure spend intact Overweight Discretionary Robust domestic demand, income growth, favorable demographics, Consumption rapid urbanization Resilient demand in CRAMS, generics opportunity getting better and Healthcare strong pressure on governments to reduce public healthcare costs Lower volumes, affordability issues and the leverage on the balance Real Estate sheets of the companies Positive steps in the direction of fuel price deregulations, increased E&P Oil & Gas activities but under recoveries still loom large Neutral Cement Significant overcapacity build up and slow down in North, West and South India markets. Despite the macroeconomic opportunity, we are concerned about the Telecom ongoing price war and significant leverage post 3G & BWA auctions 10
  11. 11. Alpha Portfolio • Our Portfolio Management Model – Is Comprehensive and has an Inclusive Approach to Equities. It is Sector and Market Cap neutral. – Has Undiluted Market Exposure. There is no Capping of gains and No Cash calls – Is Non-restrictive and plays on all available Investment Themes such as Growth, Re-Rating etc. – Aims at generating Alpha through Active Portfolio Management – Looks towards Management of Core Investment Risks – Carries out Incisive Research to identify Winners • KPW v/s traditional equity advisory models KPW Equity Advisory Traditional Equity Advisory Long Term investing in wealth-creating, Frequent churning of the investor’s undervalued stocks portfolio Both KPW and the investor’s focus is on Advisor and Investor’s interests are generating long term returns not aligned 11
  12. 12. Investment Idea Company and Generation (Top Down & Management Profiling Bottom Up) Attribution Analysis, Periodical Portfolio Proprietary & Third Evaluation & Alpha Portfolio Party Research Rebalancing Portfolio Building & Internal Valuation & Risk Management Screening 12
  13. 13. Basic Theme A diversified portfolio of stocks that seeks Alpha through superior stock selection. The Portfolio Management adopts a comprehensive approach and invests across sectors, investment themes and market capitalization categories. Portfolio Details Absolute Returns (%) Entry Load Nil Comparatives 1 Month Since Inception Exit Load Nil (Full management fee to be levied if redeemed before 1 yr) Management Fee 1.5% p.a. Alpha Portfolio 1.4% 12.57% Profit Share 20% of Outperformance over 12% 1.04% 6.65% S&P CNX Nifty Top 10 Holdings Sector Allocation Performance ITC Ltd. 7.5% ACC Ltd. 6.5% 14% 12.57% Alpha Portfolio Mahindra & Mahindra Ltd. 5.7% Financials 12% Others 28% Reliance Industries Ltd. 5.0% 20% Cement 10% Nifty Infosys Technologies Ltd. 5.0% 12% IT HDFC Ltd 4.8% 8% 8% 6.65% Consumer Shriram Transport 4.2% Oil & Gas Goods 13% 6% SBI 4.0% 8% Auto 9% 4% ICRA 3.9% BHEL 3.9% 2% 1.40% 1.04% 0% 1M Since Inception (30/11/09) 13
  14. 14. Nifty Linked – Knockout structure • The structure is for those investors who are mildly bullish on the market and would not like to take “end of the period” or “point – to – point” risk on the market. Nature of Debenture Secured Non Convertible Debenture Face Value ` 1,00,000 Minimum Subscription ` 5,00,000 Premium Up to 25,00,000 1.5% of the Face Value of debenture Above 25,00,000 1.0% of the Face Value of debenture Tenure 15 / 18 Months Participation Rate 110% Principal Protection 100% Initial Level Average of Nifty at first three months, with a 95% floor Final Level Average of Nifty at last three months KO Rebate 16% KO Level 120% If KO is not triggered 1.1 * Max { 0, Final Level/Initial Level - 1} Barrier Observation Frequency Monthly from 4M to 12M Issuer / Rating LAA rated NBFC Listing NSE 14
  15. 15. 15/18 Months: 110% PR Entry Nifty 5200 5200 5200 5200 5200 5200 Final Nifty Level 2500 5200 6000 6200 6500 7000 Nifty Return -51.92% 0.00% 15.38% 19.23% 25.00% 34.62% Product Return 0.00% 0.00% 16.92% 21.15% 16.00% 16.00% Investment Rationale • Our in house view on Nifty is bullish, based on our assessment that the domestic economy will grow at near double digit levels led by strong growth in industry and services and resurgence in agriculture which will help drive corporate earnings growth at a CAGR of 18% to 20% over the next three years. • The product provides 110% participation on the Nifty and also provides 100% capital protection; thereby protecting the downside completely and providing returns higher than actual Nifty performance. • In case of any sharp up swings, the product ensures a coupon of 16%. • There is no end of period risk. Risks • Credit risk of the issuer. However, the debentures will be secured partly by way of creation of charge on immovable property and partly by way of hypothecation / floating charge on the current assets and / or receivables and / or other movable tangible and / or intangible assets and/or any other asset of the issuer and / or its affiliates subject to the satisfaction of the debenture trustee. 15
  16. 16. Yield curve (%) 10.00 • The benchmark 10 yr G-sec yield increased from 8.00 7.54% in June to settle around 7.8% in the 6.00 month of July. This was due to the RBI tightening 4.00 2.00 its monetary stance in the July Review. 0.00 • We believe that future monetary tightening 1.1 0.0 2.2 3.2 4.3 5.4 6.5 7.5 8.6 9.7 10.8 11.8 12.9 14.0 15.1 16.1 17.2 18.3 19.4 (Yrs.) measures is unlikely to a major impact on the longer end of the yield curve and once the inflation drops, the yields may peak out around • We expect yields at the longer end of the yield 8% levels. We expect the 10 yr G-sec yields to curve to remain stable. High inflation, monetary remain in the broad range of 7.25 – 8.0% in the tightening and rising credit growth will keep the next few quarters. yields at the longer end range bound. 10-yr G-sec yield 8.2 • Short term liquidity concerns arising from 3G 8 10 Yr. Gsec yield 7.8 auctions and advance tax payments will keep 7.6 yields at the shorter end at elevated levels. 7.4 7.2 7 • Due to rising inflationary expectations, there may 6.8 be further interest rate hike by RBI but will stabilize around 7.25 – 8% levels by year end. 16
  17. 17. Category Outlook Details We recommend short term bond funds with a 6-12 month investment horizon as we expect them to deliver superior Short Tenure returns due to high YTM and concerns over credit quality ease Debt as the economy recovers, thereby prompting ratings upgrade. Positive economic climate has reduced credit risks without a commensurate decrease in credit spreads. Some AA and select Credit A rated securities are very attractive at the current yields. A similar trend can be seen in the Fixed Deposits also. We expect yields at the longer end of the yield curve to go up. Long Tenure Yields may move to the broad range of 7.5– 8.5% in the next Debt few quarters. This may be an attractive investment once the inflationary pressure in the economy settles down. Currently however the outlook remains negative. 17
  18. 18. Rupee movement vis-à-vis other currencies (M-o-M) Trade balance and export-import data Singapore Dollar 100 Export Import Trade Deficit 0 (Mn) Euro 50 (%) Japanese Yen 0 British Pound -50 Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr-1 May- Jun-1 -20000 09 09 09 09 09 09 09 10 10 10 0 10 0 US Dollar • Exports for the month of May increased by 30.4% y-o-y -8.00% -6.00% -4.00% -2.00% 0.00% 2.00% while imports increased by 23.5% increasing the trade (%) deficit to USD 10,554 Mn. •The Rupee appreciated v/s the US dollar in the month of June due to a slow pace of recovery in the U.S. and investment into the Indian markets. The positive stress test results in the Capital account balance Eurozone, and indication of a speedier recovery of the economy than expected earlier proved to be a positive indicator for the Euro and the British Pound. • Our medium term view is that the rupee is likely to • Capital account balance was positive in the first nine strengthen further in 2010. Higher interest rates in India months for FY10 would attract large capital flows. Moreover the government is expected to simplify the rules on foreign inflows to facilitate • We expect the capital account balance to remain positive larger foreign capital inflows in the form of FDI as higher interest rates would make investment in the Indian markets attractive hence drawing investments into the market. 18
  19. 19. 20000 19000 Gold Spot 18000 • The recent correction has triggered technical shorts that might 17000 Precious take gold to much lower levels; however the physical demand 16000 15000 14000 should arrest any sharp fall in gold prices given the forthcoming Metals 7/31/2009 8/31/2009 9/30/2009 10/31/2009 11/30/2009 12/31/2009 1/31/2010 2/28/2010 3/31/2010 4/30/2010 5/31/2010 6/30/2010 7/31/2010 festival season in India. While the correction is imminent in the short term, the long term prospects of gold continue to remain attractive. 90 Crude • Last month the crude prices increased by 0.8%, and are expected to 80 trade lower in Q2 due to no significant seasonal demand (Q2 is the maintenance season for refineries) Oil & Gas 70 • Natural gas prices to trade lower in Q2 owing to speculation over 60 weak demand. Jul 09 Sep Oct Nov Dec JanFeb Mar Apr May Jun 10 10 Aug 09 09 09 09 09 10 10 10 10 10 Jul 1,050 RICI Agri • Prices of essential commodities have seen an increase of 10.7% in 1,000 950 the last month. But, due to expectations of higher production 900 Agri output, we see the prices declining in the coming months 850 • A favorable Rabi output to further cool prices in the medium term 800 Jul-09 Oct-09 Apr-10 Feb-10 Mar-10 Jan-10 May-10 Jun-10 Aug-09 Sep-09 Nov-09 Dec-09 2,700 RICI Metal • While in the last month, the metal index rose by 5.2% triggered by 2,500 2,300 Base the positive global news and decreasing LME inventories, there is 2,100 still uncertainty in the global markets. As the markets stabilize over 1,900 Metals the next six months, we could expect a modest uptrend in prices. 1,700 1,500 Nov-09 Oct-09 Jul-09 Jul-10 Dec-09 Feb-10 Mar-10 Aug-09 Sep-09 Apr-10 May-10 Jan-10 Jun-10 19
  20. 20. Overview A scheme that will invest in physical silver, gold and • Capital Protected Gold Linked Structures enable limiting the capital protected gold linked structures in a phased downside in case of adverse market movements manner. The Advisory team to run the fund consists of • Opportunity to redeem investment in physical gold Ajay Mitra, Navin Kumar, Sumit Somani, Sachin Tulsyan, Saurabh Kumar and a nominee from the business • The drawdown over a period of 6 months helps us invest into gold at different prices levels giving us an opportunity to partners and/or custodian partner average our costs. Attractiveness Product Features • Cost savings through the Scheme’s life cycle: • Size: ` 300 Crores + Green shoe option of ` 200 Crores • MBS-1 would buy gold and deposit it in a gold deposit • Maturity: 3 years (plus potential 1 year extension) scheme with ScotiaMocatta which will earn a net interest • Minimum contribution: ` 15 lacs for individual investor (` 10 of 1– 1.5% p.a. not available normally to small ticket lacs in case of single installment) , ` 25 lacs for investors. corporate/institutional investors • Physical Silver is purchased internationally and is of very • Hurdle rate: 12% compounded, annualized IRR (pre-tax) pure import quality. Through tie up with ScotiaMocatta, • Profit Sharing: 10% of net profits of the Scheme with catch up storage, custodian and insurance charges will be brought below 1% p. a. Hence, through MBS-1, there is a saving of 2%-3% due to reduced procurement prices as well as • Management fee: 1.5% p.a. of committed amount reduced storage and custodian expenses. • Setup fee: One Time Set up cost of 2% of commitment amount • Portfolio customization for investments above ` 50 Lakh • Drawdown: Single Installment, or 25% upfront and balance 75% in three equal installments of 25% each, over a period of 6m (each at an interval of 2 months) 20
  21. 21. Overview Investment Committee • ICICI Venture is launching its second real estate fund targeted • Mr. Sanjeev Dasgupta: President - Real Estate at investments in residential realty projects for the mid income • Mr. Sudarshan Bajoria: Director - Real Estate group. The fund focuses on established as well as emerging • Mr. Omprakash Srivastava: Director – Operations, Real Estate locations of Tier I cities with established infrastructure Product Features • Fund size: ` 500 Cr + green shoe option of ` 500 Cr Attractiveness • Fund tenure: 5 years with an option of two 1 year extensions • Demand for residential realty is expected to reach 7.5 million • Investment Term: 2 Years from date of initial closing units by 2013 and the highest cumulative demand will be seen • Minimum Commitment: 2,500,000 by Mumbai (1.6 million units). Bangalore and Hyderabad are • Initial Draw-down Amount: 20% of total commitment expected to witness the highest CAGR at 14%. • Expected IRR: 20 - 23% • Real Estate investments in Tier 1 cities have proven to be more • Hurdle rate: 10% per annum resilient to downturns and also provide significant upside • Upside Sharing: 20% of net profits of the fund with catch up opportunity making it an attractive investment opportunity. • Management fee: 2% p.a. of the total commitment amount • Investment strategy primarily focused on shorter tenure residential projects and hence, may result in early realization of profits. • The company has strong real estate credentials and a proven track record. 21
  22. 22. Leveraging breadth of related businesses that KARVY is in KARVY is an integrated financial services group, with Karvy Private Wealth being one of its arms. The entire group’s strengths are leveraged to provide end-to-end wealth advice to Karvy Private Wealth clients. For example, SME clients can receive advice on their personal wealth while also getting investment banking advice from the I-banking arm of Karvy. Maximum choice of products & services KARVY Private Wealth offers the widest breadth of products and services, providing clients a variety of options through a single contact. Products and services include equities, debt instruments, commodities, Mutual Funds, Insurance, Structured Products, Financial Planning, real estate advice, etc. Product-neutral advice We ensure that our recommendations are 100% product-neutral and unbiased because unlike other players, we are neither tied up with any one particular insurance company nor do we have our own mutual funds. All-India presence Set to have business in 20 - 25 cities we are poised to cater to families and businesses spread across multiple cities in India providing them with combined and integrated advice. For one-off services, if required, we can also leverage KARVY Group’s presence in 400 cities. 22
  23. 23. The information and views presented here are prepared by Karvy Private Wealth or other Karvy Group companies. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended here may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned here, investors may please note that neither Karvy nor any person connected with any associated companies of Karvy accepts any liability arising from the use of this information and views mentioned here. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above-mentioned companies from time to time. Every employee of Karvy and its associated companies are required to disclose their individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Stock Broking Ltd. The information given in this document on tax are for guidance only, and should not be construed as tax advice. Investors are advised to consult their respective tax advisers to understand the specific tax incidence applicable to them. We also expect significant changes in the tax laws once the new Direct Tax Code is in force – this could change the applicability and incidence of tax on investments 23
  24. 24. Bangalore 080-26606126 Chennai 044-45925925 Delhi 011-43533941 Hyderabad 040-44507282 Kolkata 033-40515100 Mumbai 022-33055000 Pune 020-66048791 Email: SMS: ‘HNI’ to 56767 Website: Corporate Office : 702, Hallmark Business Plaza, Off Bandra Kurla Complex, Bandra (East), Mumbai – 400 051 24