Diwali festival picks 2018

Jainam Share Consultants Pvt. Ltd.

DIWALI MUHURAT PICKS-2018

Agenda of the Presentation
Objective
Technical View & Technical 4 Diwali picks
Journey from Samvat 2074 to 2075
Fundamental Outlook
Top 8 Diwali Festival – Fundamental Picks
Brief on Diwali Festival Stocks

Technical view and Technical 4 Diwali
Festival Picks

Nifty: Weekly chart
• Currently Nifty is trading at around 10550 level
• After making high of 11760, Nifty witnessed a sharp correction of almost 1700 points.
• Nifty is now trading below the rising channel that has started from 6825 low of Feb 2016.

• Technically the current sell off may end between the zone of 10000 and 9850, which is
38.20% retracement level of the entire rise from 6825 to 11760.
• It would be a tough task for the market to make a new high. Nifty could even fall to 9500 or
9300 in an unforeseen event.
• The long term trend would change if nifty falls below 9300 mark which is 50% retracement
level. On the higher side we could expect 11000 to 11300 in next few months.
Nifty : Weekly chart

Sensex : Weekly chart
Sensex
Support: 32500-32000-31500
Resistance: 35600-35900-36300

Banknifty: Weekly chart
• On weekly chart, the prices are trading under rising channel and currently has taken
multiple time support from the rising channel drawn from the March,16 low.
• The weekly parameter have bounced from the oversold levels which hint for rally
towards 26,200 & 26,550 in the near term if the 24,300-24,100 support zones are held on
weekly closing basis.
• Breach of such channel will lead to more damages.

Top 4 Diwali Muhurat Picks
MUHURAT PICKS FOR SAMVAT 2075
Company Sector
CMP (Rs.)(As
on
02/11/2018)
Strategy Target
Stop
Loss
Time
Horizon
DRREDDY Pharmaceuticals 2420 Buy at cmp 3150-3200 2000
5-6
months
Gujarat
Ambuja
Exports Ltd
Other
Agriculture
Products
248 Buy at cmp 305-310 215
3-4
months
Dhampur
Sugar Mills
Ltd
Sugar 156 Buy at cmp 200-206 125
5-6
months
Gujarat Fluoro
chemicals Ltd
Industrial Gases 896
Buy range
911-920
1130-1140 795
5-6
months

DRREDDY: Target 3150-3200, SL-2000, Buy cmp: 2423
• The stock after a series of decline took support at the 61.8% retracement level and formed
Double bottom at support zone.
• The price has observed a breakout from the long-term falling trend line at which 50%
retracement level intersect.
• There is positive crossover in the MACD and RSI crossover at oversold zone further
validates the bullish setup.

GAEL: Target 305-310, SL-215, Buy cmp : 248
• The stock has taken support at previous breakout zone and formed a bullish candle with
an inside bar on weekly chart as shown.
• It has turned near to its 50 weekly SMA and has been closing above the same from 8 to 10
weeks. it has managed to hold its gain even after the decline in broader market which
suggest strength and support buying in the stock with positive crossover of mechanical
indicators which indicates further move.
• MACD is turning positive and also crossing zero line.
• Stock is above 50 weekly SMA, 100 weekly SMA 200 weekly SMA which suggest strong up
move.

Dhampursugar: Target 200-206, SL-125, Buy cmp: 156
• The stock has turned higher near to its previous swing low of 90-110 zones and given a
breakout from trendline on weekly chart as shown.
• It has manged to hold its gain even after the decline in broader market which suggest
strength and support buying in the stock with positive crossover of mechanical indicators
which indicates further move
• The indicators are MACD and RSI are showing upward move and ADX is also above 20.
• Very high volume is seen during breakout as shown.
• Stock is above 50 weekly SMA and 200 weekly SMA which suggest strong up move.

GUJFLOURO: Target 1130-1140, SL-795, Buy above: 911
• The stock has been consolidating since 2017.
• On the weekly charts channel breakout along with strong volumes indicate end to the
consolidation and resumption of the uptrend.
• The indicators are MACD above zero line, RSI is showing upward move and ADX is also
above 20.
• Stock is above 50 weekly SMA, 100 weekly SMA and 200 weekly SMA which suggest
strong up move.

Acknowledgement
Ø SEBI Registred Research Analyst Act,2014 complied - Registration No. INH000006448
Bibiliography --Sources
Ø Ace Equity
Ø MOSL thematic Reports (EPS Estimates)
Ø Annual Reports of particular comapnies (For Diwali Festival Fundmanetal Picks -2018)
Ø Quarterly Presentations / Websites of the particular companies
Ø Other brokers reports / research reports - refernce
Ø Governemnet websites
Disclaimer
Ø Jainam Share Consultants Pvt. Ltd is SEBI registered Research Analyst. Jainam Research Team
has put its best efforts on due diligence and research for the recommended companies.
However, neither Jainam Share Consultants Pvt. Ltd , nor any person connected with it doesnt
not gives any guarantess on accuracy or to achieve price target and not liable for any kind of
loss arised due to acting on this report.

Journey from Samvat 2074 to Samvat 2075….
ü First of let us wish you a very Happy Diwali and Prosperous New Year!!!!!!
ü The year 2018 was not a consider as good year considering the period of last Diwali
(19 October 2017) to this one.
ü Barometer Index SENSEX has given the return of 4.63% and underperformed the
asset class FD and world markets (Brazil and US) and outperformed (China, South
Korea, Germany, Hong Kong, Singapore, France, UK and Japan).
ü On YTD (1st January to till date-30th October - 2018) basis-it has given return of 0.23%
and Indian Markets are outperformed the world indices i.e. Germany, Hong Kong,
Singapore, France, Japan, South Korea, China and Europe.
ü During the samvat year the sentiment was improved by NPAs recoveries, GST benifits,
normal monsoon, Government's major actions on various schemes/policies, etc and
sentiment get affected by LTCG, interest rate hike, higher crude oil prices and
depreciation of Rupee, ILFS Fiasco - hurting Liquidities.
ü Indian Markets are in strength on the back of inflow by DIIs to Indian Capital Market,
governments reforms, but remain volatile due to global economy issues, trade war of
US-China, Mutual Fund composition changes, etc,.
ü Government has increased the expenditure on in Infrastructure which can have
positive impact on road building, construction, power infra etc..
ü The net inflow in Indian Equity Market during the Samvat 2074 to 2075 by DII worth
more than Rs.126448 crore, that shows still faith in emerging India.

Bright future
ØLower inflation
ØImproving GDP - Improvement
after GST

Gujarat Election 2017

74
91

IL&FS Defaulted

Kerala flood

SENSEX v/s Global Indices (Since 19-October-2017)

Indian Market (Since 19-October-2017)

FIIs Flows (Since October-2017)
Total FII flows since October-2017 = Rs.-16788 crore

DIIs Flows (Since October-2017)
Total DII flows since October-2017 = Rs.126448 crore

Fundamental Outlook…
ü We at Jainam Research believe that Indian Market having a lot
of inherent potential to outperform the others market in the
coming years. At present, the Nifty is trading at trailing PE of
24.65. We have estimated Nifty around 10920-11960 (Approx
SENSEX 36473-39946) for FY2019 by estimating EPS of Rs.520 and
assigning PE of 21-23x. However, the best strategy at this juncture
would be to start “ACCUMULATION”equity allocation only in the
selected fundamentally sound stocks.

Nifty EPS
Source: MOSL India Strategy Report

Scenario Analysis…
PER
Earnings Estimates
EPS 500 520 540 560 580
19x 9500 9880 10260 10640 11020
20x 10000 10400 10800 11200 11600
21x 10500 10920 11340 11760 12180
22x 11000 11440 11880 12320 12760
23x 11500 11960 12420 12880 13340
11340
11880
10920
11440
11960

The GDP-Equity Market Relationship
* There is no direct relationship between GDP and Equity market returns. There are
several factors which affect the equity returns one of which is Corporate earnings.

Will Equities Still be a bet for Future?
Expected GDP fig. source : Article in DNA Money on 25th April 2011
Current GDP 2.60 USD Trillion

The GDP-Equity Market (%) Relationship

Why our stock market is not overvalued?
Nifty P/E (x)

Why our stock market is not overvalued?
Nifty P/B (x)

PERFORMANCE OF MUHURAT PICKS FOR SAMVAT 2074
(FUNDAMENTAL)
Note: Dividend is not included in the above performance.

Diwali Festival - Fundamental Picks - 2018

About Company
ØCCL Products, (India) Limited, a global coffee manufacturer was founded in the year 1994 with
the vision of creating only finest and the richest instant coffee in the world.
ØThe company is a topmost producer and exporter of various types of instant coffee. Company
is specialized in importing green coffee from any part of the world and export processed coffee
across the globe, devoid of any duties.
ØIt has distinction of setting up India’s first Freeze Dried Instant coffee manufacturing plant in
the year 2005. Swiss & Brazilian technology at its plant is purchased from Turnkey.
ØCCL is planning grab a bigger pie in the freeze dried coffee by setting up its fourth plant in
Chittoor, Andhra Pradesh at an investment of Rs. 300 crore.
ØThe company is a topmost producer and exporter of various types of instant coffee and there
products are currently being exported to more than 85 countries.
ØCurrently selling almost 1000 different blends to customers. Swiss & Brazilian technology at its
plant is purchased from Turnkey.
ØAccording to the data of year 2017, out of the total export of instant coffee from India, CCL
product accounts for 37% of the total export.
ØCCL works on cost plus margin basis because of which there margin remain fixed and they
have been able to pass on the cost of raw material to the customers.
ØFour Subsidiaries: Continental Coffee Private Limited, Jayanti Pte Limited, Grandsaugreen SA
and Ngon Coffee Company Limited.
CCL Products (India) Ltd.

Products
Brand
Continental Xtra Continental Strong Continental Speciale

What We Like
Ø Strong Management:
Particular 2014 2015 2016 2017 2018
Equity Capital (cr.) 26.60 26.60 26.60 26.60 26.60
ROA (%) 9.26 12.64 15.63 16.32 14.95
ROCE (%) 19.04 22.76 25.91 26.85 23.02
EBITDA Margin(%) 19.83 19.34 21.89 23.61 20.97
Du Pont Analysis 2014 2015 2016 2017 2018
PATM (%) 13.89 15.19 17.89 19.34 17.75
Sales / Total Assets(x) 198.49 259.01 223.44 248.34 306.31
Assets to Equity (x) 56.89 50.56 40.64 26.87 22.17
ROE (%) 20.41 24.27 26.22 23.65 21.65
ØStable Profit Margin: CCL works on cost plus margin basis because of which there margin
remain fixed and they have been able to pass on the cost of raw material to the customers. CCL
has been able to maintain their operating profit margin above 19% in last five years.

Ø Continuous Expansion: CCL products currently have a combined capacity of 35000 tonne
per annum. CCL is setting up a freeze dried freeze dried instant coffee greenfield plant in
Chittor, Andhra Pradesh at an investment of Rs. 300 crore.
Ø Domestic Expansion: Continental Coffee Private limited subsidiary of CCL Products is serving
the domestic market. They are taking initiatives to strengthen its brand in domestic retail
coffee market under the brand name ‘Continental’.
Ø Cost Control: Company has been continuously saving fuel costs for its boiler by using rice
husk and recycled solid waste as fuel.
Ø Vietnam Based Subsidiary: Vietnam with a current combined capacity of more than 10000
MTs, per annum. Ngon Coffee is engaged in the manufacture of Instant/Soluble Spray Dried
Coffee.
Ø Raw material availability: Vietnam is the second largest producer of green
coffee beans in the world after Brazil.
Ø Tax Benefit: Company is exempt from income tax for four years starting from
the first year (from 2015 to 2018) and after that will be entitled to 50%
reduction in income tax for for nine succeeding year (from 2019 to 2027).
Ø Market Presence: Vietnam help the company to cater to the coffee needs of
ASEAN countries.

Peer Comparison
Particular Tata Coffee Ltd. CCL Products Ltd. Olam International Ltd.
Market Cap. (cr.) 1814.47 3295.10 31311.25
Sales* (cr.) 360.18 1136.67 38849.80
Sales Growth ( 5
yrs)** (%)
3.00 10.00 9.00
PAT (cr.) 186.94 148.13 2772.59
ROA (%) 6.74 14.95 3.44
ROE (%) 17.16 21.65 8.50
Total Debt/Equity 0.88 0.42 1.46
Asset Turnover
Ratio
0.56 1.15 1.23
* Instant coffee sales
** Last 5 years

Risk & Concerns
ØCoffee Prices: Unexpected fluctuation in green coffee prices may adversely affect the
profitability of the company.
ØHigh Competition: India’s instant coffee market is a duopoly of the firms Nestle and Bru
which account 55% and 45% of market share.
ØAdverse Currency Movement: CCL is an exported oriented unit and its 90% of the revenue is
generated from export so any sharp movement in currency may cause risk. It import approx. 60%
of its raw material, and all its transactions are in USD which provides it natural hedge.
ØSlowdown in Demand: Reduction in demand for instant coffee from Europe and other
countries may slowdown the export of CCL as Europe coffee market is growing at CAGR of 1.2%
and at Global level consumption level is increased at 2.2% CAGR only.
Final View
ØCompany being India’s largest manufacturer and exporter of instant coffee working with cost
plus margin basis and having global reach in more than 85 countries and selling around 1000
different blends to customers. They are currently expanding its production capacity by installing
additional 5000 Tonnes capacity being operational in FY19. They stands strong due to its product
taste and quality and are trying to build it brand name 'Continental' and have started placing
vending machines with target of installing 3000 machine.
ØWe recommend our Investors to “BUY" the stock with potential upside of 23% with Horizon of
2 years.

Valuation
Scenario
ØAccording to the current scenario Asia coffee consumption is growing at a CAGR of 4.2%
from last 4 years. So the growth of sales is assumed to grow with a CAGR of 4.2%.
Based on Profit before Interest, Depreciation and tax margin
FY 20E
Particular 5 years avg. PBIDTM (%) 3 Year avg. PBIDTM (%)
SALES 1234.51 1234.51
PBIDTM (%) 21.00 22.00
PBIDT 265.82 277.50
EV/EBITDA(x) 16.29 16.29
MCap (cr.) 4063.45 4253.71
No. of shares 13.30 13.30
Price 305.46 319.76

About Company
ØFinolex Industries Limited was incorporated as a public limited company in the year 1981 as a
manufacturer of PVC (Poly Vinyl Chloride) pipes plant at Pune.
ØIt has 3 manufacturing plants at :-
ØRatnagiri (Maharashtra) for the manufacture of PVC resin and PVC pipes including a
captive power plant.
ØUrse (Pune, Maharashtra) for the manufacture of PVC pipes.
ØMasar (Gujarat) for the manufacture of PVC pipes
ØIt is the only PVC pipe manufacturing company in India which enjoys backward integration with its
own PVC resin unit at Ratnagiri.
ØCompany is a leading manufacturer of PVC-U pipes and second largest manufacturer of PVC resin
with more than 20% market share in organised segment.
ØFinolex has various products in agriculture pipes and non-agriculture pipes:-
Agriculture Pipes: Column Pipes, PVC-U Selfit Agriculture Pipes, PVC-U Ringfit Agriculture Pipes,
Casing Pipes.
Non-Agriculture Pipes: Finolex Flowguard Plus CPVC Pipes and Fittings, Plumbing Pipes and
Fittings, Sewerage Pipes, SWR pipes and Fittings.
ØIn February 2017, Finolex and Lubrizol Corporation entered into an agreement, for the
manufacture and sale of ‘Finolex FlowGuard’ Plus CPVC (Chlorinated Poly Vinyl Chloride) pipes and
fittings in India.
ØThe PVC pipes and fittings market is expected to grow at a CAGR of 11.7% by 2020.
Finolex Industries Ltd.

Business Process

AGRICULTURE PIPES
NON-AGRICULTURE PIPES
PVC-U Agriculture Pipes Column Pipes Casing Pipes Solvent Cement
Finolex Flowguard Plus
CPVC Pipes
Plumbing Pipes Sewerage Pipes SWR pipes and Fittings

What We Like:
ØStrong distribution network with 500+ distributors, 1500 sub dealers and 18000 retail touch
points.
ØCash-n-carry business model and the cash conversion cycle has improved from 35 days in FY13 to
24 days in FY17.
ØGST implementation will help to improve the competitive positioning of the organised sector as
it will wipe out tax evasion.
ØFinolex has entered into an agreement with Lubrizol Corporation for the manufacture and sale of
CPVC pipes and fittings.
ØMajor advantage of backward integration of PVC Resin plant which helps in cost optimisation.
ØGovernment Initiatives like PMAY, AMRUT, SWACHH BHARAT MISSION, the Smart City
Programme etc will increase the demand for PVC and CPVC pipes.
ØContinuous expansion of PVC pipes - the current capacity of PVC pipes is 3,30,000 MT p.a which
will increase to 3,70,000 MT p.a by FY19.
ØGalvanized pipes are being replaced by PVC pipes which will benefit the industry.

'*'-This data is of 2017.
PEER ANALYSIS

Risk & Concerns
Ø70% of the sales is from agriculture sector so monsoon and slowdown in agriculture sector
has an adverse impact on future growth of the company.
ØVolatility in PVC/EDC spread is a key monitor for the company, and could potentially affect
profitability.
ØCompany largely import Ethylene, EDC, VCM for manufacturing of the PVC Resin so that
currency exchange rate fluctuation also risk to company.
Final View
ØAt the CMP of Rs.536, stock is trading TTM P/E of 18.08x and TTM EPS of Rs.29.83.
Company is benefiting from backward integration of PVC Resin plant for regular supply of
PVC Resin for PVC pipes which would help in cost optimisation and the company is expanding
its distribution network by increasing number of retail touch points and dealers. Also, the
company has entered into agreement with Lubrizol Corporation for CPVC pipes and fittings.
Finolex has a great scope in future because of its quality products and wide distribution
network. It also has a brand name which will help the company to capture the market.
We recommend our Investors to “BUY" the stock with potential upside of 38-48%
with Horizon of 2-2.5 years.

VALUATION
As per Q3FY18 concall, management mentioned about achieving a target of USD $1billion
(Rs.6870 cr.) by 2020. So to be little on the conservative side, the target is assumed to be achieved
by 75% by 2021.
Scenario-1 is based on 5 yrs. average PATM% and Scenario-2 is based on 5 yrs. average PBIDTM%
Scenario-1 Scenario-2
11/20/2018
5 yrs. average
PATM(%)
Sales (cr.) 5153.00
PATM (%) 7.33%
PAT (cr.) 378.00
P/E (x) 22.79
Mcap(cr.) 8607.00
No. of
shares
12.41
Price 694.00
5 yrs. average
PBIDTM(%)
Sales (cr.) 5153.00
PBIDTM(%) 14.57%
PBIDT (cr.) 751.00
EV/EBITDA
(x)
13.89
EV (cr.) 10427.00
Mcap (cr.) 10350.00
No. of
shares
12.41
Price 834.00

Lux Industries
About Company
ØLux Industries Limited was incorporated as a public limited company in the year 2001.
ØLux Industries is into the manufacturing and marketing of men and women innerwear, active
wear and sportswear.
ØIt has more than 100 products across 12 brands and the products can be divided into three
segments relating to their brand.
ØMass Segment (Lux Venus and Lux Cott's wool)
ØMedium Segment (Lux Cozi and Lux Inferno)
ØPremium Segment (ONN and Exports)
ØIt has 6 manufacturing facilities - Tirupur, B.T. Road, Dankuni, Dhulagarh, Ludhiana and Agarpara
with manufacturing capacity of 20 cr. garment pieces a year.
ØCompany exports to 47 countries largely comprising Middle East, Africa, Australia and Europe.
ØBoard has approved the merger of J.M. Hoseiry and Ebell Fashion with Lux Industries.
ØIn 2017-18, Artimas Fashion Private Limited became the wholly owned subsidiary of Lux
Industries.
ØIt has acquired manufacturing and marketing rights of Virat Kohli's brand One8 which plans to
make inroads into the men's premium innerwear segment.
ØBrand Ambassadors - Amitabh Bachchan (Lux Venus), Varun Dhawan and Sunny Deol (Lux Cozi),
Parineeti Chopra (Lyra).
ØThe domestic innerwear market in India is growing at a CAGR OF 12%.

What We Like
ØStrong Distribution Network with more than 950 distributors, 160 large format stores and 9
Exclusive Brand Outlets.
ØRevenue CAGR for last 10 years is 17.54% and company has recorded 19% yoy growth in FY18.
ØLux profit from every rupee invested in brand spending increased from 5.74% in FY13 to 9.55% in
FY18.
ØPost GST, the cost differential between the organised and unorganised sector declined from 12%
to 5%. Lux Venus off increased 26.54% in 2017-18.
ØPost merger, the bottomline figure would grow by 47%. and debt-equity ratio will come down
from 1x to 0.9.
ØEbell Fashion Ltd. which owns LYRA brand is going to merge with Lux Industries alongwith J.M.
Hoseiry. LYRA brand has a market share of 38% in the mid to premium segment.
Risk & Concerns
ØThe Cash Conversion Cycle of the company is 149 days.
ØVolatility in raw material prices such as cotton, yarn and chemicals could impact the margin of
company.
ØFast changing fashion trends.
ØIt faces severe competition from peers present in the domestic market as well as players from
the unorganized sector.
Lux Industries

LUX PAGE VIP RUPA DOLLAR
Plant
West
Bengal(4),
Punjab, Tamil
Nadu
Bangalore(9),
Hassan, Mysore,
Tiptur,
Gowbribidanur
Nashik,Harid
war
TamilNadu,
Karnataka,
Ghaziabad,
Kolkata
TamilNadu,
Kolkata,
Punjab, Delhi
Capacity
5 lakh
pieces/day
- - -
3 lakh
pieces/day
EBO 9 470 - 10 -
Distributors 950 - - 1000 915
Retailers 450000 50000 - 125000 95000
CCC 149 days 80 days 235days 126days 140 days
Revenue (cr.) 1138 2551.37 222.38 1156.76 982.52
Market Cap
(cr.)
3828.73 33180.11 321.3 2225.49 1,656
ROE(%) 27.99 45.88 28.27 19.84 18.17
ROCE(%) 24.93 64.15 42.81 27.01 21.29
PE (x) 47.84 81.05 42.85 27.89 25.35
Lux Industries
PEER ANALYSIS

Final View
At the CMP of Rs.1557, stock is trading TTM P/E of 47.27x and TTM EPS of Rs.32.59.
Company is having more than 100 products across 12 brands with strong distribution network and
has been benefited with GST. Also, LYRA brand is going to merge with Lux Industries, speeding
higher on brand building.
We recommend our Investors to “BUY on DIPs" the stock with potential upside of 14% with
Horizon of 1 year.
Lux Industries
1627 cr. 16% =>+
VALUATION

Valuation
•Assumptions:
- Revenue - 2200 cr.
- P/E multiple - 35
- PAT margin - 6.90% (current)
Lux Industries

CROMPTON GREAVES CONSUMER ELECTRICAL LTD

About Company
ØAs per scheme of arrangement between Crompton Greaves limited (CGL) and Crompton
greaves Consumer Electricals Ltd, consumer product business CGL was transferred to company
on 1st October, 2015.
ØIts business is divided into two categories:
(a) Electrical Consumer Products
(b) Lightning
ØCrompton manufactures and markets a wide variety of products ranging from fans, light
sources and luminaires, pumps and household appliances such as geysers, irons etc.
ØElectrical consumer Products contribute 68.89% (Rs. 2828.12Crs) and Lightning contributes
31.11% (Rs 1277Crs) in FY17-18.
ØCrompton has 3 plants in Baddi, Himachal Pradesh ( 2 for fans, 1 for lights), 1 plant in Baroda,
Gujarat (for lights), 2 plants in Ahmednagar, Maharashtra (for pumps), 2 plants in Goa (for fans).
ØCrompton products are available in nearly 150000 retail points.
ØThe company has nationwide network with more than 3000 distributors and strong after-
sales service support of over 500 service centers.
ØDuring de-merger, Avantha group promoters sold its stake to Advent International
Corporation’s Amalfiaco (22.34%) and Temasek Holdings Ltd (12.03%).

FANS
PUMPS
APPLIANCES
LIGHTS

WHAT WE LIKE:
ØContinuous and successful innovations in its products such as Avancer e-sense in 2015-16,
Anti-dust fan in 2016-17,new fan ‘Air 360’ and window cooler ‘TRICOOL’ in 2017-18.
ØFor over 20 years, the company has been market leader in fans and residential pumps, with
leading market position in Lightning.
ØTo offer after sales service, Crompton has over 500 service franchise with pan-India presence,
over 150 free service camps were conducted during FY17.
ØElectrical consumer products is growing by 50.48% CAGR and Lightning is growing by 50.61%
from FY16 to FY18.
ØCrompton has huge advantage as it receives tender from EESL which are in huge volume, it
did receive tender of lightning.
ØAfter De-merger, company has hired new professional and qualified management.
ØRobust Financials:
(a) Company has RoE of 54.48% and RoCE of 42.19%.
(b) Cash Conversion Cycle of 26.8 days.
(c) Interest Coverage Ratio of 8.86.

(in Crs) CROMPTON ORIENT HAVELLS BAJAJ ELECTRICALS
SEGMENTS ECD
Lightning
ECD
Lightning and switchgear
Switchgears,
Cables and wires,
Lightning and fixtures,
ECD
Consumer products,
ENGINEERING, Procurement and
Construction
SALES GROWTH(%) 50.62% 754% 0.25% 1.03%
REVENUE
CONTRIBUTION(%)
ECD
LIGHTNING
68.8%
32.2%
74.94%
25.06%
18.98%
14.24%
47.25%
EBIT MARGINS(%)
ECD
LIGHTNING
18.9%
11.53%
12.1%
8.46%
26.77%
28.35%
4.88%
GROWTH IN
SEGMENT(%)
ECD
LIGHTNING
50.5%
50.6%
N.A.
16.45%
-27.18%
-7.98%
ROE(%)
ROCE(%)
DEBT/EQUITY(X)
FCF(Rs Crs)
54.48%
42.19%
0.92
106
28.14%
28.03%
0.71
30.5
18.87%
27%
0.03
336.46
10.6%
14.76%
0.78
21.82
DISTRIBUTION 150000 retail points, 3000
distributors, 545 service
centers
100000 retailers, 1000 direct
channel partners, 350
service centers
100000 retailers, 7500
direct dealers
250000 retail outlets, 19 branch
offices, 600 distributors and 300
authorized dealers, 462 customer
care centers
PEER ANALYSIS:

Risk and Concerns:
Ø Volatility in supply or price of copper, steel and aluminum which are primary raw
materials for the manufacture of fans, pumps and other appliances.
Ø Company’s operating expense include various fixed costs which is not dependent on
sales so any shortfall in sales it will be difficult in payment of fixed costs.
Ø Crompton is dependent on single and limited number of suppliers for raw materials.
Ø Market of consumer durables requires constant technology up gradation for survival so
company need to adopt and implement this change.
Ø Entry to this industry is easy so company needs to be competitive to maintain its
position and rising competition from unorganised market.
Ø Prices have been fixed by the Energy Effeciency Services Ltd (EESL) this is likely to affect
the margins of Crompton’s lightning segment.
Ø Crompton do receives tender from EESL but at lower price so it might affect margins of
the company.

Final View:
Ø At the CMP of Rs.196.95, stock is trading TTM P/E of 34.88x and TTM EPS of Rs.5.17. Crompton
is the market leader in fans and residential pumps. It is continuously expanding and innovating
its product portfolio to meet unmet consumer needs. Crompton has strong financial
performance and it has potential to give 30% return in next 2 coming years.
Ø We recommend our investors to “BUY” the stock with potential upside of 30% with horizon
of 2 years.
Ø ROE DU-POINT ANALYSIS:
Ø Crompton is over valued but it do get justified by following points:
(a) Majority companies in this industry has high P/E like Havells has 48.42 and Bajaj
Electricals is 32.68 so P/E of industry is also high.
(b) Crompton is market leader in fans and pumps for 20 years, excellent return ratios,
positive cash flow of Rs106.89Crs.
2018 2017 2016
RoE(%) 54.48% 79.15% 92.72%
SALES/TOTAL
ASSETS(x)
1.84 2.15 2.27
ASSETS/EQUITY 3.75 5.22 7.27
PATM(%) 7.89% 7.05% 5.63%

VALUATION
Sales- Rs 4105.12Crs
EBIT margin – Electrical Consumer Durables-18.91%, Lightning-11.53%
SCENARIO-1 SCENARIO-2
Lightning Growth-15.6%
Electrical Consumer Durables-11.35%
AVERAGE-13.5%
EV/EBITDA(x) -20
LIGHTNING GROWTH-13.6%
ELECTRICAL CONSUMER DURABLES-9.35%
AVERAGE-11.5%
EV/EBITDA(x) -18
SALES- Rs. 5213.036Crs.
EBIT- Rs. 859.91Crs
EBITDA- Rs 872.91Crs
SALES- Rs 5029.67Crs
EBIT- Rs.829.49Crs
EBITDA- Rs. 842.49Crs
Multiplying by EV/EBITDA we get Rs 17458.2Crs
Less Debt and add cash we get Market Capital i.e
Rs 17168.35Crs
Multiplying by EV/EBITDA we get Rs15164.82Crs.
Less debt and add cash we get Market Cap of
Rs 14874.97Crs
Comparing with Current Market Cap it gives 30% Comparing with current market cap we get
CROMPTON GREAVES CONSUMER ELECTRICAL LTDCROMPTON GREAVES CONSUMER ELECTRICAL LTD

About Company
Ø The BSE Limited owns and operates the exchange platform (formerly, the Bombay Stock
Exchange), the first stock exchange in Asia, which was formed on July 9, 1875.
Ø It is India's largest & world's tenth largest exchange by market capitalisation, with $2.3 trillion
in total market capitalisation of listed companies.
Ø Operate in three primary lines of business, namely
Ø the listing business,
Ø market business
Ø and the data business.
Ø Supporting businesses, includs
Ø providing IT services and solutions,
Ø licensing index products such as the S&P BSE SENSEX,
Ø providing financial and capital markets training and
Ø operating corporate and social responsibility portal.
Ø It's electronic systems include
Ø BOLT+, which is our fully automated, online trading system,
Ø low latency co-location services for algorithmic traders and
Ø a realtime risk management system, which conducts real time calculations of
members' margins and limits.
BSE Ltd.BSE Ltd.

BSE Ltd.
ØDerive revenue from a number of sources, including securities services, services to corporate,
data dissemination fees, investments and deposits, and other sources.
ØIndia INX is a wholly owned subsidiary of BSE Limited. India INX launched Global Securities
Market, India’s first international primary market platform that connects global investors with
Indian and foreign issuers.
ØBSE StAR offers a platform to invest and redeem in 38 asset management companies ("AMCs")
with different mutual fund schemes.
ØBSE Hi-Tech is a credible, regulated platform for young fast-growing companies to list and gain
visibility and increase its brand presence.
ØBolt+ On Web™ is a powerful real time trading solution provided by Marketplace Tech Infra
Services Pvt Ltd , available as a Cloud Based hosted solution, which allows the user to watch
market prices and execute orders in multiple exchanges and markets instantaneously with real
time price streaming .
ØBombay Stock Exchange became the first stock exchange in the country to launch commodity
derivatives contract in gold and silver.

What We Like
Ø Strong brand recognition - Established in 1875 (Asia's first stock exchange). More than 5500
companies are registerd under this exchange. 75% of the securities/ companies are listed under
BSE.
Ø Diversified and integrated business model - Business model includes trading, clearing and
settlement of products listed and traded on the BSE, as well as the provision of data products,
IT services and solutions, index products and training.
Ø New Products and Strategic alliance to strengthen position -
Ø BSE StAR MF - According to March 2018, 38 AMC are registered under BSE star MF
with 8215 scheme available for trade. In June 2018, BSE star MF contributed 50% of
net MF inflow in equity funds. MF order are growing at CAGR of 132%.
Ø IFSC - Gift City - Commenced Operations from 16th January, 2017. INX total turnover
in FY 18 was of 2722.8 cr. and in Q1 of FY19 it it was 2904.3 cr. in a single quater.
Ø BSE and EBIX ( Joint Venture) - BSE EBIX Insurance Broking Private Ltd. to develop a
pioneering insurance distribution network in India with the goal of revolutionizing
end-to-end sales and processing of Insurance in the country.
Ø SME Segment - 235 companies was listed at end of march 2018 and income earned
from listing of SME was 3.9 cr.
Ø Commodity Derivatives (Gold & Silver) - Became the first stock exchange in the
country to launch commodity derivatives contract in gold and silver.
Ø BSE & Brink's India Pvt Ltd (Agreement) - Brink’s shall provide Vaulting and logistic
services to BSE for the purpose of storage of gold and silver commodities at various
places in India.
BSE Ltd.

Ø Non-Equity asset classes to further scale up the business profile -
Ø Debt instruments - Rs. 3.96 lakh crore was raised through BSE’s electronic bond
platform from July 2016 to March 2018.
Ø Exchange Traded Fund - BSE has 54 ETFs listed as on March, 2018. The average daily
turnover in ETF increased by 57% to Rs. 61.44 Crore from Rs. 39.05 Crore in FY 2016-
17.
Ø Strong Management - Ashishkumar Manilal Chauhan is one of the founders of India's National
Stock Exchange ("NSE") where he worked from 1992 to 2000. He is best known as the father of
modern financial derivatives in India due to his work at NSE.
Ø Strong liquidity - Cash rich, Zero debt balance sheet -
Ø * Data is as per 31st March, 2018
Ø ** Assumption - Even if the company liquidates today the amount realised from cash will be
100% and from the investment, it is estimated around 80%.
Particular Rs. (in Cr.)
% amount
considered
Per share
value
Cash & Bank 1968.97 100.00 370.11
Investment 2598.76 80.00 390.79
Per share value 760.90
BSE Ltd.

Particulars BSE NSE
Founded 1875 1992
Major Shareholders (31st
March 2018)
Deutsche Boerse AG - 4.78% LIC - 12.51%
SBI - 4.78% SBI - 5.19%
LIC - 4.74% Gagil FDI ltd. - 5.00%
Face Value 2.00 1.00
Revenue from operation (cr.) 476.98 2609.14
Total revenue (cr.) 1212.00 3032.56
PAT (cr.) 704.63 1339.13
Networth (cr.) 3425.30 7349.56
Cash & Bank Balance (cr.) 1968.97 8345.08
Investment (cr.) 2598.76 8387.74
Fixed Asset (cr.) 203.22 653.00
EPS (Rs.) 133.57 29.52
Book Value 643.25 148.48
Cash & Bank Balance/ share 370.11 168.58
Dividend per share 36.00 14.75
BSE Ltd.
Peer Comparison as per 31st March, 2018

Ø Duopoly Business - Two players in this market are BSE and NSE.
Ø Dividend Yield - The company has a good dividend track report and has consistently
declared dividends for the last 5 years. For the year ending March, 2018 BSE Limited has
declared an equity dividend of 1800.00% amounting to Rs 36 per share. At the current share
price of Rs 615.25 this results in a dividend yield of 5.85%.
Risk & Concerns
Ø Increased Competition from other exchanges - NSE having a huge share in the cash &
derivative segment there are chances that it will grasp major share in other segment too like
mutual fund, bond.
Ø Faliure of new initiatives - Faliure of initiatives like International stock exchange may leads
to loss of huge investment which will reduce the value of the share.
Ø Volatility in trading volumes will leads to profitability risk - As major operational revenue
of BSE is generated transaction charger, Depository serivces and clearing and settlement so
any reduction in trading will directly reduce its income.
BSE Ltd.

BSE Ltd.
Final View
Ø With cash and bank balance worth of Rs. 1968.97 crore + current investment of Rs. 2598.76
crore amounts to Rs. 4567.73 crore as on 31st March 2018 whereas the company is available
at a market cap. of Rs. 3095.95 crore which is less than cash plus investment. Entire business
with good brand is not fairly valued by the market. The industry is currently dominated by
two major players BSE and NSE having a duopoly in the market with bse major holding in
CDSL of 24%.
Ø We recommend our Investors to “BUY" the stock with potential upside of 30% with
Horizon of 2 years.

About Company
Ø The company was incorporated in 1981. The company is the largest passenger car manufacturing
company in India, accounting for 50% domestic passenger car market.
Ø It is a subsidiary of Japan automaker, Suzuki Motor Corporation.
Ø The company has manufacturing facilities in Gurgao and Mansar region of Haryana and production
capacity of 15 lakh unit per annum. Additional manufacturing capacity of 2.5 lakh units per annum
in Gujarat, which is owned by parent company and it exclusively supplies cars to the company at
cost price.
Ø The company has product portfolio of 16 models, catering to broad array of customer segment. Out
of 16 models, 4 models are sold through NEXA. Alto, Wagon R, Swift, Dzire, Balleno and Brezza are
the most popular models.
Ø The company launched new sales channel NEXA in 2015. A new dealership format for its premium
cars.
Sales and service outlets in India
Name Type Outlets Cities
ARENA Sales outlet 2121 1735
NEXA Premium Sales outlet 316 178
True Value Pre owned car verticle 1243 940
Commercial LCV sales outlet 190 159
Services Car service centre 3403 1659
Total 7273
Maruti Suzuki India LTD.

Popular models of Maruti Suzuki
Upcoming Models

What we like
Ø The company is outperforming the Industry in sales volume growth continuously for last 6 years.
Ø 7 Models of the company are in Top 10 Models of domestic passanger vehicles sales in FY 2018.
Topped by Alto at 2.60 lakh unit sales followed by Dzire at 1.97 Lakh unit sales and Baleno 1.90
Lakh units sales.
Ø Company market share is growing year on year in last 6 years.
Ø Company has contract manufacturing agreement with Suzuki Motors Gujarat, where in Suzuki
Motor Gujarat exclusively supplies cars to company at cost price. Suzuki Motors Gujarat aims to
take total capacity to 15 Lakh units per annum till 2025 and present capacity of 2.5 lakh units per
annum. So with Suzuki Motors Gujarat capacity MSIL total capacity will come to 30 lakh units per
annum which is double from present capacity. MSIL management aims to achieve 20 lakh units per
annum volume in FY 2020.
Ø NEXA, Maruti's new sales channel, contribution to total sales is growing year on year.
FY 2012-13 FY 20103-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18
39% 42% 45% 47% 47% 50%
Year 2015-16 2016-17 2017-18
Sales 5923 Cr. 7687 Cr. 14980 Cr.
% of Domestic sales 10% 11% 20%

Ø India's low car penetration levels makes it one of the most attractive opportunity for passanger car
industry, in comparison to Indian passenger car penetration stands at 25 cars per 1000 people, in
China 236 per 1000, in UK 470 per 1000, in Germany 556 per 1000, and in USA 360 per 1000.
Ø The company decided to launch EV in India around 2020. Company is about to start road running
tests using a fleet of 50 EV prototype vehicles in India for developing safe and easy to use EV for
Indian consumer in line with Indian climate and traffic condition.
Robust Financial
FY 2013-14 FY 2017-18
CAGR of
last 5
years
Sales 44,542 Cr. 79,809 Cr. 12%
Sales Volume 11,55,041 17,79,574 9%
Sales per Unit 3,35,417 4,01,208 4%
Net Profit per Unit 24,515 44,284 13%
Investment in Debt MF 10,141 Cr. 34,082 Cr. 27%
% of Debt MF of Total Assets 32% 57%

Peer Analysis
Maruti Hyundai Honda
Tata
Motors*
Mahindra* Toyota
Market Share 50% 12% 5% 6% 7% 4%
Sales Volume of FY
2018 (In Lakh)
17.79 5.36 1.87 1.70 2.49 1.41
Sales Volume Growth
CAGR of last 5 years
9% 7% 5% 6% 2% 2%
Dealership network 2,437 1,118 372 605 539 298
Models 16 10 8 9 14 12
*Only passenger car data are considered.

Risk & Concerns
Ø Strong launch and facelift of existing models of competitors like Tata motors, Hyundai, M&M etc.
can grab market share from MSIL.
Ø Slowdown of economy can impact the overall buying sentiment of automobile segment.
Ø Strikes by workers of company could slow down production.
Final view
At current market price of Rs 6,712 , stock is trading at TTM P/E of 25.6X and TTM EPS of
Rs.260.80. Company having leadership position among the passenger car segment, strong
distribution and service network compared to peers, launch of NEXA as a premium car segment,
strong track record, efficient management, planning to doubling capacity of production and robust
financial.
We recommend our investor to 'Buy' the stock for the target of Rs.9197 with potential
upside of 37% with horizon of 2 Years.

Valuation
Ø Management goal is to achieve 20 Lakh units production from present 17.8 lakh production in FY
2020. Valuation is done on the basis of 20 lakh production in FY 2020.
Source: FY 2017-18 Annual Report

Valuation
Assumptions
1. 20 Lakh production achieved as said by Management.
2. PAT per unit growing at 11% CAGR for next 2 years.
On PAT per unit basis
Financial Year 2019-20
Sales Volume 20,00,000
PAT per unit 53,429
PAT 10,686 Cr.
Market Cap @ 25PE 2,67,145 Cr.
Share Price 8,843
CMP (on 01/11/2018) 6,712
Upside 32%

Bandhan Bank
About Company
Ø Founded by Chandra Shekhar Ghosh, who has 37 years of experience in Microfinance
industry.
Ø Bandhan started as Bandhan Konnagar in 2001 as a non-governmental organisation
(NGO) providing microfinance services to socially and economically disadvantaged
women in rural West Bengal.
Ø The bank got its banking license in 2014 from RBI for setting up a universal bank.
Ø It was India’s largest microfinance company with AUM of ~ 8309 crore and ~70 lakh
customers.
Ø As of now, the Bank has 937 branches, 430 ATM’s and 2764 DSC’s. The bank has more
than 1.37 crore customers.
Ø In terms of area of operations of the bank, east and northeast India (especially West
Bengal, Bihar, Assam) are strongholds for the bank.
Ø The bank offers all the products that a regular bank offers; from Savings account to NRI
banking.
Ø Bandhan Bank Ltd. is one of the few financial institutions that have registered a
substantial growth in a short span of time.
Ø With historical strength in the microfinance segment, Bandhan Bank, which began
operations on August 23, 2015, is now a commercial bank focused on serving
underbanked and underpenetrated markets in India.

Bandhan Bank
Banking Industry
Ø The Indian banking system consists of 27 public sector banks, 22 private sector banks, 44
foreign banks, 56 regional rural banks, 1,589 urban cooperative banks and 93,550 rural
cooperative banks, in addition to cooperative credit institutions. Bank credit grew at 12.64
per cent year-on-year to Rs 85.511 lakh crore (US$ 1,326.78 billion) on May 11, 2018 from
Rs 75.91 lakh crore (US$ 1,131.47) on May 12, 2017.
Ø As of Q3 FY18, total credit extended surged to US$ 1,288.1 billion. It was India’s largest
microfinance company with AUM of ~ 8309 crore and ~70 lakh customers.
Ø Credit to non-food industries increased by 9.53 per cent reaching US$ 1,120.42 billion in
January 2018 from US$ 1,022.98 billion during the previous financial year.
Ø Demand has grown for both corporate & retail loans; particularly the services, real estate,
consumer durables & agriculture allied sectors have led the growth in credit.
Ø The digital payments revolution will trigger massive changes in the way credit is disbursed
in India.
Ø Rising incomes are expected to enhance the need for banking services in rural areasand
therefore drive the growth of the sector.
Ø Over past few years, Bank deposits are growing at a CAGR of 11.71% which shows a
healthy growth.

Bandhan Bank
What we like
Ø Bandhan MFI was one of the few institutions to sail through the AP crisis (2011),
demonetisation (2016), farm loan waivers, etc.
Ø It has demonstrated stellar growth at ~90% CAGR in those 10 years. Even in the last five years,
advances grew at 51% CAGR.
Ø AUM has grown from 15,578.4 crore as of FY16 to 32,340 crore as of FY18 while customer base
has increased to ~1.37 crore.
Ø Asset quality is strong at 1.2% GNPA ratio.
Ø The bank is well capitalised with Capital adequacy ratio of more than 30%.
Ø It has more ROE and ROA ratio when compared with other Banks and MFI’s in the peer.
Ø It has highest NIM when compared with it’s peers.
Ø NII has grown at a CAGR of 80% over last 2 years. Even if we consider half the growth rate, a
40% growth in AUM is also impressive.
Ø PAT of the company has grown at a CAGR of 121% over last 2 years. Again, even at conservative
growth in PAT over upcoming years, the Bank seems to have decent PAT margins.
Ø On the deposit front, the book has grown from zero as of August 23, 2015 to 33869 crore as on
FY18.
Ø The banks Cost to income ratio stands at around 35% which is one of the lowest when
compared with its peers.
Ø The CASA as a percentage of the total deposits stands at around 35% which is also a decent ratio
considering that it has recently transformed to a bank from an NBFC.

Bandhan Bank
Risk and Concerns
Ø Limited operating history and fast growing and rapidly evolving business make it difficult to
evaluate the bank’s business and future operating results on the basis of the past
performance, and future results may not meet or exceed past performance.
Ø A substantial portion of bank’s operations are located in East and Northeast India, making
the bank vulnerable to risks associated with having geographically concentrated operations.
Ø The Bank’s micro finance loan portfolio is not supported by any collateral that could help
ensure repayment of the loan, and in the event of non-payment by a borrower of one of
these loans, the bank may be unable to collect the unpaid balance.
Ø The promotor of the bank has 83% stake in the company, but RBI requires that in a Bank,
promotor can hold only 40% take. It will interesting to see how the promoter reduces its
stake.
Final Views
At the CMP of 427, stock is trading at TTM P/B of 4.99x and P/E of 37.83x. With significantly
low NPA, high Returns on Assets and Equity, strong Capital Adequacy ratio, high NIM, low
Cost to Income ratio looks as an attractive investment opportunity. At this point of time, We
believe that the fundamentals of the company will improve even as the bank moves into a
mature stage of operations.
We recommend our Investors to “BUY on DIPS" the stock with potential upside of 70%
with Horizon of 2 - 2.5 years.

Ø CNX Nifty Junior (Junior Nifty) is an index comprised of the next group of
50 most liquid stocks after S&P CNX Nifty.
Ø In fact S&P CNX Nifty and Junior Nifty may be regarded as a basket of 100
most liquid stocks in India.
Ø Stocks in Junior Nifty are filtered on their liquidity characterized by their
impact cost and market value represented by their market capitalization.
Ø The stocks comprising S&P CNX Nifty and Junior Nifty are mutually
exclusive i.e. a stock will never appear in both indexes at the same time.
Introduction to Nifty Junior Index

Company Name Industry Mkt Cap (Rs Cr)
AB Capital Finance - Investments 23741.69
ABB India Infrastructure - General 27381.74
ACC Cement - Major 27741.81
Ambuja Cements Cement - Major 42145.32
Ashok Leyland Auto - LCVs & HCVs 34272.28
Aurobindo
Pharma Pharmaceuticals 43796.59
Avenue
Supermar Retail 82744.24
Bandhan Bank Banks - Private Sector 56181.11
Bank of Baroda Banks - Public Sector 25436.64
Bharat Elec Electricals 21149.63
BHEL Infrastructure - General 27480.43
Biocon Pharmaceuticals 37650.00
Bosch Auto Anicillaries 56371.81
Britannia Food Processing 68550.79
Cadila Health Pharmaceuticals 39311.72
Colgate Personal Care 29322.77
Container Corp Transport & Logisitics 29450.85
Dabur India Personal Care 70950.84
DLF
Contruction & Contracting - Real
Estate 27880.10
General Insuran Diversified 55737.29
Godrej Consumer Personal Care 73693.06
Havells India Electric Equipment 36465.07
HDFC Life Miscellaneous 74736.12
Hind Zinc Metals - Non Ferrous 114675.26
Company Name Industry Mkt Cap (Cr)
ICICI Lombard Diversified 35053.78
ICICI Prudentia Finance - General 44775.32
Interglobe Avi Transport & Logisitics 30844.80
L&T Finance Finance - Investments 26261.20
LIC Housing Fin Finance - Housing 21864.52
Lupin Pharmaceuticals 39080.83
Marico Personal Care 40429.87
Motherson Sumi Auto Anicillaries 49979.57
MRF Tyres 26358.68
New India Assur Miscellaneous 33693.36
NHPC Power - Generation & Distribution 24365.89
NMDC Mining & Minerals 35530.48
Oil India Oil Drilling and Exploration 22703.75
Oracle Fin Serv Computers - Software 33885.07
P and G Personal Care 29214.50
Petronet LNG Oil Drilling and Exploration 32437.50
Pidilite Ind Chemicals 49829.84
Piramal Enter Pharmaceuticals 40706.18
SAIL Steel - Large 27344.08
SBI Life Insur Diversified 54265.00
Shree Cements Cement - Major 53053.44
Shriram Trans Finance - Leasing & Hire Purchase 23005.91
Siemens Infrastructure - General 32620.62
Sun TV Network Media & Entertainment 25574.12
United Spirits Breweries & Distilleries 39056.83
Vodafone India Telecommunications - Services 32015.19
Nifty Junior Companies As on 29.10.18

Ø CNX Nifty Junior was introduced on 1 January 1997 with base date being November
03, 1996 and a base capitalisation of Rs.0.43 trillion, indexed to a base value of 1000.
CAGR Last 5 Years Last 10 Years Since Inception
NIFTY NEXT 50 17% 20% 16%
NIFTY 50 11% 14% 12%
Sensex 30 10% 13% 15%
Base Date And Value
Investing in Nifty Junior Is a mix of High Returns with High Volatility -

Here is snapshot of Reliance ETF Junior BeEs -

Ø On an average, ETF carries an expense ratio of 0.44%, which means the fund
will costs you Rs.4.4 in annual fees for every Rs.1000 you invest.
Ø Portfolio transaction fees, or brokerage costs, as well as initial or deferred
sales charges are not included in the expense ratio. The expense ratio, which
is deducted from the fund's average net assets, is accrued on a daily basis.
Expense Ratio of ETFs -

Ø Since Nifty’s Inception (1995) there are very few companies which are able to
survive the waves of market like Reliance Industries, ITC, Tata Motors, etc.
Ø Index has a feature of Survivorship. What index does is, it retains the
winners and as the winners grow, more Rs.get added to it which ultimately let
your winners run. This ultimately makes the Index run. It is same like Watering
your flowers and cutting down the weeds. This combination makes it Magical.
Ø Think like- when we were born; our body consists of different types of cells
which may be, are not there right now in our body. But see the Magic, we are
still Surviving. Like this – Index as a whole also keeps growing given the fact
that the companies under it gets churned away.
NIFTY 50 : Survivorship + Winners is Magical

Ø The magic of compounding here which matters the most is the time(t) which is in
the exponential. Greater the horizon better the results.
Ø The only way to take advantage of time is to Survive. Surviving and not loosing
the capital; matters a lot.
Ø Truly, Surviving is not easy and by surviving we mean 20-30-40-or more years.
Ø The only reason to choose Index is its durability. We don’t know how long the
company survives but we can definitely say that Index will keep on growing.
ü As a wise man correctly stated “The Show Must Go On”.
A =

NIFTY Junior VS NIFTY 50
Ø Both Sachin Tendulkar and Virat Kohli are the golden stars of our Indian Cricket
Team.
Ø The above picture narrates us that if we invest in Virat Kohli today, then there is a
greater probability that he may be the next Sachin Tendulkar.
Ø So investing in Nifty Junior today can enrich your goals you saw for tomorrow.

Why ETFs ?
Ø In India, A good chunk of Fund Managers are not able to outperform their benchmark Index.
Ø They are as simple as a Novice Investor can also easily invest in it.
Ø The expense ratio of ETF’s are very minuscule compared to PMS or Mutual Funds.
How long to stay invested in ETFs ?
Ø Basically ETFs are meant for long term investing.
Ø We can also link ETFs to fulfil our future goals like- Retirement Corpus, Marriage, etc.
Ø There is no duration prescribed, but it would be beneficial for the Investors if they remain
invested for more than 20 years.
Disclaimer -
Ø The information in this presentation and examples given are for information purposes only.
Ø The content of this presentation was majorly motivated from the Presentation of Jana
Vembunarayanan in India Investing Conclave 2017.

Top 8 Diwali Muhurat Picks
MUHURAT PICKS FOR SAMVAT 2075
Company Sector CMP
(Rs.)(As on
01/11/2018)
Strategy Target Time
Horizon
CCL Products (India) FMCG 260/- Buy 319/- 2 Years
Bandhan Bank
Banking &
Finance
411/-
Buy on
Dips
650/- 2-2.5 Years
Finolex Industries Plastic Products 536/- Buy 834/- 2.5-3 Years
Lux Industries Textile 1557/-
Buy on
Dips
1755/- 1 Years
Crompton Greave
Consumer Electrict
Consumer
Durable
215/- Buy 276/- 2 Years
BSE Exchange 615/- Buy 800/- 2 Years
Maruti Suzuki Automobiles 6712/- Buy 9197/- 2 Years
Nifty Junior Bees ETF 275/-
Systematic
Investment
N.A. 10+ Years

Tejas Jariwala
Research Manager
tejas.jariwala@jainam.in
0261- 6725513
Jimit Zaveri
Research Analyst
jimit.zaveri@jainam.biz
0261- 6725514
Karan Agarwal
Research Analyst
karan.agarwal@jainam.biz
0261- 2225402
Vandana Pareek
Research Analyst
vandana.pareek@jainam.biz
0261- 2225403
Radhika Modi
Research Analyst
radhika.modi@jainam.biz
0261- 2225403
Riva Patel
Research Analyst
riva.patel@jainam.biz
0261- 2225403
Vikas Parikh
Research Analyst
vikas.parikh@jainam.biz
0261- 2225401
Dharmin Shah
Research Analyst
999dharmin@gmail.com
0261- 2225401

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