Advice for the Wise - February 2012


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Advice for the Wise - February 2012

  1. 1. ADVICE for the WISE Newsletter – FEBRUARY 2012
  2. 2. ContentsIndex Page No.Economic Update 4Equity Outlook 8Debt Outlook 12Forex 14Commodities 15Real Estate 16 2
  3. 3. From the Desk of the CIO…Dear Investor,The month of January was marked by an unusual return of risk appetite In the current market scenario, there are several avenues to makeamongst investors globally. While we consider this to be a welcome break money provided the investment horizon is genuinely adhered to. Longfrom the excessive risk aversion towards the end of 2011, a word of term debt, mid cap equities and infrastructure companies are thecaution is due. The fundamentals underlying the global economy as well as obvious candidates for the same right now. The long term debt strategythe Indian economy have not changed much through the last month. is already yielding good results with 10 year bond prices rising by over 3%. Depending on inflation data and RBI stance going forward theHence the recent increase in the risk asset prices globally might be subject appreciation is likely to continue. The horizons about 1 to 1.5 years. Into a sharp reversal if even a minor macroeconomic hiccup were to occur in the shorter term the yields may fluctuate in unexpected direction aseither Europe or the US. The recent rise in the asset prices seems based well.more on a sharp turnaround in sentiment rather than actualdevelopments on the ground. Owing to this, the recent rally is highly Mid cap equities are looking attractive since the recent rally hassensitive to even small change in sentiments – potentially leading to a indicated a bottom of sorts to the broad market level. Even if therapid selloff. markets were to correct from the current levels, midcap equities have not rallied as much already and hence remain attractive buys. A goodTiming the markets has long been advised against by investment gurus bottom up strategy to select well-run mid cap companies is likely to beand academics alike. We do subscribe to the broad philosophy of ill effects quite sound in the present market conditions. The horizon for these ideas is 2 years – during which risk appetite should return sufficiently toof trying to catch the falling market or being excessively swayed by the transcend the now relatively cheaply available large cap equities.rising one. However, the crucial element of execution while practicing longterm investing is disciplined review. The downside of declaring a three Infrastructure has long been taking a sustained beating in terms ofyear horizon in principle but tracking portfolio value every day or every valuations as a sector. Since the earlier high prices of the infrastructureweek is that through the pressures of too low or too high levels of stocks implicitly had in them continued infrastructure development inmarkets, one is likely to commit some error or other in investing hastily or India which did not fully materialize, some fall there was imminent.divesting too soon or too little. The right approach then is to decide the However owing to high interest rates through 2011, these stocks wenthorizon of each investment to oneself a priori and stick to the same unless down much more than expected. While some of these have staged asomething utterly unexpected happens. Unlike the conventional wisdom sharp recovery in January, the sector warrants more attention goingof three years as the default horizon for any risky investment, we believe forward as the interest rates go down and infrastructure development picks up again. Our expected horizon for infrastructure turnaround is 1there are multiple different horizons possible for an investment idea. year. 3“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.19”
  4. 4. Economic Update - Snapshot of Key Markets 120 Sensex Nifty As on 31st Change over Change over 115 110 S&P 500 Nikkei 225 Jan 2012 last month last year 105 100 95 BSE Sensex 17194 11.2% (6.2%) 90 85 80 Equity S&P Nifty 5199 12.4% (5.6%) 75 Markets S&P 500 1312 4.4% 2% 9.30 Nikkei 225 8802 4.1% (14.1%) 8.80 10 yr Gsec 8.30 7.80 7.30 10-yr G-Sec Yield 8.28% (29 bps) 22 bpsDebt Markets Call Markets 8.60% (40 bps) 170 bps 31000 29000 Gold Fixed Deposit* 9.25% 0 bps 100 bps 27000 25000 23000 21000 19000 17000 RICI Index 3750 3.4% (6.7%) 15000 Commodity Gold (`/10gm) 28122 3.5% 41.2% Markets 56.00 54.00 Crude Oil ($/bbl) 110.26 2.0% 17.9% 52.00 50.00 `/$ 48.00 46.00 44.00 42.00 Forex Rupee/Dollar 49.68 7.21% (7.79%) 40.00 Markets Yen/Dollar 76.59 1.1% 7.3%* Indicates SBI one-year FD 4
  5. 5. Economy Update - Global • The Conference Board Consumer Confidence Index which had increased in December retreated in January. The index now stands at 61.1, down from 64.8 in December. • Over the last 12 months, Consumer Price Index for All Urban Consumers (CPI-U)increased 3.0 percent US before seasonal adjustment. It was unchanged in December on a seasonally adjusted basis • Nonfarm payroll employment rose by 200,000 in December, and the unemployment rate, at 8.5 percent, continued to trend down, the U.S. Bureau of Labor Statistics reported. Job gains occurred in transportation and warehousing, retail trade, manufacturing, health care, and mining. • Unemployment in the eurozone stayed at a record high in November as the impact of the sovereign debt crisis rumbled on, according to official figures. The jobless rate in the 17 nations that use the euro was Europe 10.3% in November for the second month in a row, (Oct-10.3%) according to the Euro statistics agency. • Eurozone Manufacturing Purchasing Managers Index (PMI) rose in January to 48.8 from Decembers 46.9. The PMI was boosted by Eurozone manufacturing output rising marginally, up for first time since last July. • The seasonally adjusted Markit /JMMA Purchasing Managers’ Index (PMI) is at 50.7 in January, up from 50.2 in December, signalling a second successive month-on-month improvement in manufacturing sector Japan operating conditions. • Japans jobless rate rose to 4.6% in December from 4.5% in November as the strong yen continues to squeeze manufactures. • Consumer prices declined an annual 0.1% in December on back weak demand and sluggish wages. • Indias manufacturing sector grew at its fastest pace in eight months in January as factory output surged the most on record on increased domestic and foreign demand. The seasonally adjusted HSBC Purchasing Emerging Managers’ Index (PMI), edged up to 57.5 in January from Decembers final reading of 54.2.economies • China’s PMI registered 48.8 in January, broadly unchanged from December’s reading of 48.7, a level indicating of moderate deterioration in Chinese manufacturing activity 5
  6. 6. Economy Outlook - Domestic 10.0% • In December, the RBI paused its aggressive tightening cycle IIP 8.0% that involved lifting rates 13 times since March 2010, and 6.0% then in January CRR rate was cut by 50 basis points as the 4.0% inflation slowed down and economy showed signs of 2.0% growth. 0.0% • Indias economic growth rate slowed down further to 6.9 per -2.0% Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov cent in the second quarter (July-September) of FY12 as 10 10 11 11 11 11 11 11 11 11 11 11 11 compared to 8.9 per cent achieved in the same quarter of -4.0% the previous financial year. The GDP growth rate for Q1 and -6.0% Q2 FY11 was revised downwards to 8.1 and 8.4 respectively from the previous estimates of 9.3 and 8.9%.• Indias industrial output recorded a 5.9% growth in • This was attributed largely to the negative growth in ‘mining November after witnessing a sustained slowdown over and quarrying’ and steep fall in the growth of manufacturing the past few months. The growth was led by healthy expansion of consumer durables, consume non-durables sector, as compared to their levels of growth in Q2 of 2010- and electricity generation. Factory output, as measured by 11. the Index of Industrial Production (IIP), had grown by • The burgeoning fiscal deficit situation, high inflation rate 6.4% in November last year. scenario and slowdown in corporate earnings growth have• IIP growth was supported by 6.6% growth in the stalled Indias growth story to some extent in 2011. manufacturing sector which constitutes 76% of IIP. 10.0 GDP growth Manufacturing activity surged to a six-month high in 9.0 December thanks to a spike in factory output and new orders from domestic and international firm. 8.0• During April-November, industrial production expanded 7.0 3.8%. Output grew by 7.8% in the 2010/11 fiscal year that 6.0 ended in March, slower than 10.5% clocked in the year 5.0 before. 4.0 FY10(Q2) FY10(Q3) FY10(Q4) FY11(Q1) FY11(Q2) FY11(Q3) FY11(Q4) FY12(Q1) 6
  7. 7. Economic Outlook - Domestic Growth in credit & deposits of SCBs • The Wholesale Price Index (WPI) based inflation,30.0% Bank Credit Aggregate Deposits which has remained in double digits for almost two25.0% years, declined to 7.47% in December 2011 from 9.11% in the previous month, raising popular hope that20.0% interest rates could start coming down in a few weeks.15.0% A year ago, In December 2010, it was 9.45%.10.0% • Prices of food items rose at a lower rate of 0.74% in December, compared to 8.54% expansion in5.0% Dec/10 Jan/11 Feb/11 Mar/11 Apr/11 May/11 Jun/11 Jul/11 Aug/11 Sep/11 Oct/11 Nov/11 Dec/11 November. Food articles have a 14.3% share in the WPI basket and experts attributed the moderation in inflation to cheaper food articles. Inflation in overall • As on December 30, bank credit grew 16% and deposits primary articles stood at 3.07% in December, 17.2% annually. This is the lowest rate of growth since March compared to 8.53% in November. Non-food primary 2010. Credit growth has been below the central bank’s articles, which include fibres and oil seeds also showed projection of 18 per cent since the last two months. moderation by registering an inflation of 1.48% in December, compared to 3.22% rise in the previous • At its third quarterly monetary policy review on January 24, month the central bank had injected Rs 32,000 crore into the system by lowering the CRR by half-a-percentage point to 5.5 per 10.0% cent but kept the short-term lending, or repo rate unchanged 9.5% at 8.5%. 9.0% 8.5% • On account of the slowing growth in the economy and the 8.0% Wholesale Price Index decrease in inflation, a pause is seen in the interest rate hikes. 7.5% In addition to this CRR was cut by 50 Bps. It now stands at 7.0% 5.50% * End of period figures 7
  8. 8. Equity OutlookThe beginning of CY12 has brought positive macroeconomic news as reflected by the buoyancy in PMI numbers formanufacturing and services as well as industrial production data and cool off in inflation number. The extremely negativesentiment about India seen in last quarter seems to be reversing with FIIs coming back to the market. FII’s put in Rs.10,000crs in equity markets in the month of January resulting in a market up move of 12%. The rally was lead by beaten downsectors like banking, metals and capital goods. January Performances of Key Sectoral Indices CNX Infra 19.1% CNX Midcap 16.2% Bank Nifty 24.5% CNX Metal 16.2% Nifty 12.4% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%European debt markets have calmed due to massive liquidity injection done by European central bank. Bond yields of PIIGScountries have been coming down. If Greece is able to arrive at a deal with private bond holders about the haircut in Greekbond holdings, we would expect the situation in Europe to stabilize. 8
  9. 9. Equity OutlookRBI has started the reversal of the tight monetary policy with a 50 bps cut in cash reserve ratio (CRR). The tone of the policystatement by the Governor continues to be dovish while he expressed concerns about inflation remaining sticky. The CRRcut would address structural pressure on liquidity and would add Rs.32,000 crs to the banking system. RBI governorexpressed his inability to cut repo rates just yet due to a very expansionary fiscal policy which has resulted in inflationarypressures staying elevated. RBI has maintained an end March inflation target of 7%. We believe that if January and Februaryinflation number come around 7%, RBI might start repo rate cuts in the March policy. We expect a cumulative repo rate cutof 100-150bps for this calendar year. Downward Trend in Inflation (WPI) 10 9.7 9.7 9.6 9.8 10.0 9.9 9.5 9.5 9.5 9.4 9.1 9 8 7.5 7 6 Jan/11 Feb/11 Mar/11 Apr/11 May/11 Jun/11 Jul/11 Aug/11 Sep/11 Oct/11 Nov/11 Dec/11Q3FY12 earnings have been more or less on expected lines. Private sector banks have again come up with impressivegrowth considering the extremely tough macro environment. FMCG companies have also surprised on the positive withgood sales volume numbers. The biggest beneficiaries of the reversal in policy would be interest rate sensitive sectors likebanks, autos and capital goods. We are becoming more constructive on these sectors now. Several PSU banks which werebadly beaten down look extremely attractive from a valuation perspective. Also, a large number of midcap ideas appearextremely attractive on valuation basis. From here on, a portfolio of fundamentally sound midcap companies would delivera superior return as compared to the broader markets. 9
  10. 10. Sector View Sector Stance Remarks Financial sector is undeniably the lubricant for economic growth. Whether the growth comes from consumption or investments, credit growth is inevitable. Being a well regulated sector, BFSI BFSI Overweight in India has good asset quality and capital adequacy ratios. The reversal of the interest rate cycle will assist in managing asset quality better and would lead to increase in credit growth We prefer “discretionary consumption” beneficiaries such as Cigarettes and branded garments, FMCG Overweight as the growth in this segment will be disproportionately higher vis-à-vis the increase in disposable incomes. We believe in the large sized opportunity presented by Pharma sector in India. India’s strength in generics is difficult to replicate due to quality and quantity of available skilled manpower. WithHealthcare Neutral the developed world keen to cut healthcare costs, and a vast pipeline of drugs going off-patent, Indian Pharma players are at the cusp of rapid growth. We would bet on the opportunity in Generics and CRAMS space The USD 1 trillion Infra opportunity is hard to ignore. However, The significant slowdown in E&C Neutral order inflow activity combined with high interest rates has hurt the sector. Now since the interest rate cycle has started to reverse, we have turned more constructive on this space The regulatory hurdles, competitive pressures and leverage prevent any return to high Telecom Neutral profitability levels in the short to medium term. However, incumbents have started to increase tariffs slowly and we believe that consolidation will happen sooner than expected. 10
  11. 11. Sector View Sector Stance Remarks While US and European customers of Indian IT companies are in good health, Order inflows IT/ITES Neutral might slow down in near term. However, in the next few quarters big rupee depreciation will provide cushion to IT companies earnings . Demand outlook remains robust with strong earnings growth. Raw material prices have Automobiles Neutral started coming down which would boost margins. We are more bullish on two-wheeler and agricultural vehicles segment due to lesser competition and higher pricing power. Commodity prices have corrected significantly over the last few months due to concerns Metals Neutral about growth in developed parts of the world. We believe the commodity prices will bounce back once growth recovers and hence would be positive on industrial metals space. We like the regulated return characteristics of this space. This space provides steady growthPower Utilities Neutral in earnings and decent return on capital. Cement demand will certainly grow over the next three years. But the issue is on the supply Cement Underweight side. We do see an oversupply situation for the next 3-4 quarters. We would stay away from oil PSUs, due to issues of cross subsidization distorting the Energy Underweight underlying economics of oil exploration and refinery businesses. 11
  12. 12. Debt Outlook 9.30 9.0 Yield curve 8.9 8.80 10-yr G-sec yield 8.8 8.7 8.30 8.6(%) 8.5 7.80 8.4 8.3 7.30 8.2 8.1 6.80 8.0 7.9 11.1 14.7 10.1 12.0 12.9 13.8 15.7 16.6 17.5 18.4 19.4 0.9 4.6 0.0 1.9 2.8 3.7 5.5 6.5 7.4 8.3 9.2 • The 10 year benchmark G–Sec yield decreased by 19 bps in December to close at 8.54%. • The inflation figures have come down with a reverse trend to be seen in the tight monetary policy. • The AAA rated corporate bonds are giving an yield of around 9.3%. 12
  13. 13. Debt Strategy Category Outlook Details With the pause by RBI and the expected trend reversal of the interest rates, we would not recommend investment in ShorterShort Tenure term debt funds unless money necessarily needs to be parked for Debt the shorter term by the investor. The ST funds still have high YTMs (9.5% – 10%) providing interesting investment opportunities to clients for the shorter term. Some AA and select A rated securities are very attractive at the current yields. A similar trend can be seen in the Fixed Deposits Credit also. Tight liquidity in the system has also contributed to widening of the spreads making entry at current levels attractive. With the expected trend reversal in the interest rates, we would strongly recommend investment in Longer term papers. These, while Long Tenure being available at attractive yields, also provide an opportunity for Capital appreciation due to a decrease in interest rates. Hence, these Debt would be suitable for both - investors who may want to stay invested for the medium term (exiting when prices appreciate) and those who would want to lock in high yields for the longer term. 13
  14. 14. ForexRupee movement vis-à-vis other currencies (M-o-M) 100 Trade balance and export-import data 0 Export Import Trade Balance (mn $) 8.00% 80 -5000 7.21% 60 7.00% -10000 40 6.00% 5.17% 5.37% -15000 5.03% 20 5.00% 0 -20000 4.00% -20 -25000 3.00% 2.00% • India’s exports grew 6.71% to $25.01 billion in December, 2011, compared to $23.44 billion in the same year-ago 1.00% month, while imports were up 19.81% at $37.75 billion 0.00% translating into a trade deficit of $12.73 billion. In USD GBP EURO YEN November, 2010, imports aggregated $31.51 billion.• In January, the rupee has appreciated 7%, after being the 140000 Capital Account Balance worst performing Asian currency in 2011. The gain can be 90000 attributed to the recent diversion of foreign funds towards Indian debt and equity investments. 40000• Besides active Forex intervention, RBI also took a number of -10000 FY 10 (Q2) FY 10 (Q3) FY 10 (Q4) FY 11 (Q1) FY 11 (Q2) FY 11 (Q3) FY 11 (Q4) FY 12 (Q1) steps like relaxing external borrowings norms, cuts in interbank net open positions and higher interest rates on • Capital account balance was positive throughout FY11 and deposits for non-resident Indians to stimulate capital inflows stood at `273133 Cr. at the end of the year. For FY 12, the and curb speculation. capital account is at `93,621Cr. for Q1. • We expect factors as higher interest rates to attract more• However, renewed concerns from the debt-ridden euro zone investments to India. Increased limits for investment by may lead to another round of depreciation in the current FIIs would also help in bringing in more funds though quarter, though there may not be any sharp downward uncertainty in the global markets could prove to be a movement. dampener. 14
  15. 15. Commodities After gaining for the 11th consecutive years, gold continued its uptrend 31000 in 2012. Rupee denominated gold gained 3.7% YTD. The sheen on the 29000 Gold domestic rupee gold was taken away by the rupee appreciation despite 27000 gold in dollar denomination generating an YTD return of 12%. 25000 As the Fed holds the interest rates at the current levels until end ofPrecious 2014, smart money will move into assets that would generate income 23000 21000 and outperform dollar deposit. This was clearly vindicated by the sharp Metals 19000 up move in gold on the back of short covering and fresh long positions. 17000 The current gold holdings of 2,384.8 tons in bullion-backed exchange- 15000 traded products are within 0.4 percent of December’s all-time high, indicating added bullishness to this counter. Technically, gold broke its consolidating triangle and poised to set a fresh all time high this year. With Greece and its creditors are struggling to reach an agreement on a debt swap and market buzzing that creditors might take a bigger hit than earlier planned, gold should in all probability shine this quarter. 135.0 Crude With uncertainties looming on the Greece front and tension on the 125.0 Iran disruption suicides, oil has started to show signs up cooling. Oil 115.0 trajectory should now be largely determined by the uptick in US andOil & Gas Europe economies. As the Fed indicated that US is on a slower 105.0 95.0 growth pace, it is logically to see crude oil softening. Expect oil to trade in a range. 85.0 75.0
  16. 16. Real Estate Outlook - IAsset Classes Outlook In the residential space, low sales volumes have led to a sharp decline in the absorption rate from 21.4% in Q1 2011 to 11.5% in Q3 2011. However, strong pre-launch sales have kept the developers far from any correction. Though sales have gone down to almost 35% as compared to last year, no correction has been witnessed in the prices. The over-supplied locations remain stagnant and are expected to remain so for the next two quarters. In cities like Pune, NCR, Hyderabad, Chennai and Bangalore entry points in the range of Rs. 3000 – Rs. 4600 per Residential Sqft are still valued by first time home -buyers. Infrastructure development and the new airports in these cities have supported the residential development. On an average, prices in this segment still remain affordable. Mumbai stands tall with prices at the peak in an over-supplied market also. Corrections are being reported by media, however not being witnessed on ground level. The retail investors (second home buyers) and HNI investors are postponing their decision due to expectations of price correction. Average q-o-q rental growth in 3Q11 was recorded at 2.5%. Mumbai SBD BKC was among the most expensive markets and Bangalore and Chennai among the least expensive in Asia Pacific, on the basis of Net Effective Rents. Among the fastest growing office market in the world, India is constructing 100 million Sqft every 7-10 quarters. Office stock is expected to become 500 million Sqft by 2015. The Net Absorption is expected to grow from 30.5 million Sqft in 2010 to 39.1 million Sqft in 2013. Absorption rate has been recorded at 13.3% in 3Q11. 8.5 million Sqft of office space was absorbed in 3Q11 compared to 10.5 million sq ft in 2Q11.Commercial/IT Still in the shadows of over-supply and cautious expansion approach by corporates, this segment has gone through a correction. Rates per Sqft have seen almost 30% down-trend and is expected to be stagnant for the coming 2-3 quarters. After this correction we believe the segment is bottoming out and is the best time to buy for companies looking at long term holding of real estate office space. With signs of recovery in the global economy, the Indian office markets are expected to be nearing the end of the downturn. Despite improving demand conditions, vacancies are rising in the short term due to massive infusion of office space. Markets of Bangalore, Mumbai and NCR-Delhi are leading the property cycle as rentals have started to increase in these markets. 16
  17. 17. Real Estate Outlook - II Asset Classes Outlook The FDI allowance has given lot of impetus to this sector. Since 2009 retail has seen a major transformation in all its business aspects and has been built to suit Indian way of consumerism. Low cost, wide reach, more variety, less innovation, close existence with competition, maximizing bottom line than top-line approach have been making the retailers smarter. In the retail space, unorganized markets are still a preferred choice. Most high-street locations are still expensive. Investors prefer Hi-street locations than malls since they would always have capital appreciation due to dearth of available space. Retail Of 9.9 mn sq ft forecasted for absorption in 2011, 7.1 mn sq ft has already been absorbed till 3Q11 and another 1.3 mn sq ft is pre-committed. The northern regions of India rate high on propensity to consume followed by the western, eastern and southern regions. Industrial towns are similar to each other in consumer preferences and socio-economic & demographic profiles. Most of them remain equally under-served despite recent mall developments in the last couple of years. The trend of investment in land is still nascent since lack of transparency and unclear national land acquisition policy/rules makes it tough for the organized players/investors to transact. However this seems to be a very interesting time to buy land which is being traded more as a commodity now. It is getting absorbed fast. Land Land sees immense opportunity since it can be used as a tangible asset and is the most credible pledge against business. With the growing commitment of the Government in improving infrastructure (roads, bridges, airports, rail metros), in the last 5 years many far flung areas now have very good connectivity to the CBD locations.The IC note is proposed to be presented every quarter 17
  18. 18. Why Karvy Private Wealth? Open Architecture – Widest array of products We are an open-architecture firm at two levels – asset class level and product level : • Offering COMPREHENSIVE choice of investing across all asset classes • Offering EXTENSIVE choice of multiple products from different product providers under each asset class Intensive Research We closely track the historical performance across asset classes, sub-asset classes and product providers to identify, evaluate and recommend investment products (KPW’s or third-party). We have our own proprietary methodology for evaluating products; for product providers, we also note the investment style and risk management philosophy. Our comprehensive analysis determines truly exceptional performers to be added to your portfolio Honest, unbiased adviseGroup-wide, we have no Mutual Fund or Insurance products of our own unlike most of the financial services groups (banks orbroking houses), who are doing wealth management. Neither do we have exclusive tie-up with any single insurance company likeall banks do. The KPW 3-S Service promise: When you become a Client of KPW, besides getting intelligent & practicable Investment Advice, you get the benefit of “The KPW 3- S Service Promise” : • Smooth and Hassle Free – Attention, Service & Convenience • Sharp and proactive – Portfolio monitoring and tracking • Smart –Incisive insights on markets and Investment products Pedigreed Senior Management Team A talented team of leaders with global and Indian experience, having a unique blend of backgrounds of wealth management, private equity, strategy consulting and building businesses powers Karvy Private Wealth and its operations. 18
  19. 19. DisclaimerThe information and views presented here are prepared by Karvy Private Wealth or other Karvy Group companies. The information containedherein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completenessthereof. 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 decisionsbased on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While actingupon any information or analysis mentioned here, investors may please note that neither Karvy nor any person connected with any associatedcompanies 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 fromtime 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 ofshares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. Allemployees 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 consulttheir respective tax advisers to understand the specific tax incidence applicable to them. We also expect significant changes in the tax laws oncethe new Direct Tax Code is in force – this could change the applicability and incidence of tax on investmentsKarvy Private Wealth (A division of Karvy Stock Broking Limited): Operates from within India and is subject to Indian regulations.Mumbai office Address: 702, Hallmark Business plaza, Sant Dnyaneshwar Marg, Bandra (East), off Bandra Kurla Complex, Mumbai 400 051(Registered office Address: Karvy Stock Broking Limited, “KARVY HOUSE”, 46, Avenue 4, Street No.1, Banjara Hills, Hyderabad 500 034)SEBI registration No’s:”NSE(CM):INB230770138, NSE(F&O): INF230770138, BSE: INB010770130, BSE(F&O): INF010770131,NCDEX(00236,NSE(CDS):INE230770138, NSDL – SEBI Registration No: IN-DP-NSDL-247-2005, CSDL-SEBI Registration No:IN-DP-CSDL-305-2005, PMS RegistrationNo.: INP000001512” 19
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