DAILY MORNING NOTE

10 August 2017 Current % % Indices Value 1 D YTD April-July direct tax revenue grows 19.1% Sensex 31798 (0.68) 19.42 Nifty 9908 (0.71) 21.04 Asian markets were trading lower with investors focusing on data from BSE – Mid Cap 15157 (1.66) 25.98 Japan. Japan core machinery orders fell 1.9 % compared to the expected BSE – Sml Cap 15635 (1.69) 29.79 rise of 3.7 %. Nikkei is trading lower by 0.03%, Hang Seng trading lower SGX Nifty Fut 9902 (0.16) 20.98 Sectors –Performance (BSE) by 1.32%. Sgx Nifty is trading lower by 0.40%. The markets are expected IT 10222 (0.01) 0.45 to open lower and focus will be on quarterly earnings for further Consumer Dur 17321 (0.02) 54.14 Teck 5781 (0.15) 5.14 direction. Healthcare 13195 (3.73) (10.41) The U.S. markets ended marginally lower amid lingering concerns over Auto 24323 (1.68) 20.07 Capital Goods 17417 (1.10) 27.46 geopolitical tensions between U.S & North Korea while investors focused

on quarterly earnings releases. The Dow Jones lost 37 points or 0.17% to Index FY17E FY18E FY19E SensexEPS 1441 1645 1969 close at 22,049 while NASDAQ lost 18 points or 0.28% to close at 6,352. P/E 22.07 19.33 16.15 NiftyEPS 454 527 629 What to watch P/E 21.82 18.80 15.75  Results Today: Adani Power, Adani Trans, Allcargo, Asahi India

FII Trading activities in Cash Glass, , BHEL, Bombay Dyeing, Coffee Day Ent, Deepak Date Net MTD CYTD Fertilisers, GAIL, GESCO, Gas, Cable, Heritage FII 09/08 (841) (270) 56769 Foods, Himatsingka, IFCI, IOB,KRBL, Laurus, MOIL, Motherson DII 09/08 553 9247 29572 Sumi, Page Ind, Petronet LNG, Power Finance, PTC India, Punj Figs. in Rs Cr., Source: Bloomberg. Lloyd, Religare Ent, Shipping Corp, SH Kelkar, Symphony, Union Bank, United Breweries

 April-July direct tax revenue grows 19.1% Current % % Global Indices  New India Assurance seeks SEBI nod to sell 120m shares in IPO Value 1 D YTD Dow Jones 22049 (0.17) 11.57 Corporate Nasdaq 6352 (0.28) 18.00 DAX 12154 (1.12) 5.86  Larsen & Toubro’s infrastructure arm L&T IDPL is looking to raise Nikkei 225 19729 (0.05) 3.22 around Rs 3000 cr through an infrastructure investment trust. FTSE 100 7498 (0.59) 4.97  Reliance Communications plans to issue shares to lenders for the Hang Seng 27393 (1.31) 24.51 Shanghai A Sha 3276 0.00 5.54 debt that it has raised from them. The company has a debt of ~Rs Bovespa 67671 (0.34) 12.36 45,000 cr. Strait Times 3329 0.32 15.55 Source: Bloomberg; As on 8.30 am IST  plans to launch 6 new commercial vehicle products in FY2018.

Forex Rate  Security and Intelligence Services shares to list on exchanges today. INR/USD 63.84 (0.04) 6.41  ' plans to enter into a agreement to acquire PepsiCo INR/EUR 74.93 0.30 (4.34) INR/GBP 82.90 (0.00) 0.71 India's previously franchised territories of the State of Odisha and INR/YEN (100) 58.03 0.14 0.14 parts of Madhya Pradesh along with three manufacturing units at

Cuttack, Bargarh and Bhopal.

10 August 2017 For private circulation only

Trading Insights

Insight from trading volumes

% Chg in Qty Traded Qty Traded Scrip Delivery % CMP* (OverAvg 30 days) (‘000s) Gvk Power & Infr 19 33737 32 13

Firstsource Solu 85 6446 60 36

Astral Poly 12 94 69 651

Munjal Showa Ltd 447 766 23 229

Havells India 26 1663 33 498

Godawari Power 131 807 38 129

Indian Oil Corp 26 6763 28 414

Insight from delivery

Scrip Delivery % Total Volume (‘000s) 30 days avg Delivery % CMP*

Gujarat Alkalies 76 100 61 404

Indian Oil Corp 28 6763 58 414

Ntpc Ltd 46 2870 61 174

Oil & Natural Ga 61 6606 60 166

Sunteck Realty 54 897 31 255

Asian Paints Ltd 58 607 62 1156

Oil India Ltd 33 295 44 282

*CMP-Closing Market Price

10 August 2017 2

Investment Picks

Target Target Target Target Company CMP Price/ Company CMP Price/ Price Price CMP (%) CMP (%) Alkem Labs 2050 1784 15% Indusind Bank 1720 1636 5% Arvind 419 377 11% Interglobe 1446 1305 11% 120 109 10% ITD Cemenration 202 148 36%

Aurobindo Pharma 850 684 24% Lumax Inds 1597 1329 20%

Balkrishna Industries 1781 1589 12% Manappuram Fin 122 99 24%

BHEL 200 133 50% 8609 7669 12%

Biocon 450 339 33% MCX Ltd 1302 1091 19% Cholamandalam 1370 1162 18% Mold-Tek Pack 309 275 12% Invst Narayana 376 300 26% Dhanuka Agritech 915 776 18% Hrudayalaya Dilip Buildcon 610 562 9% Petronet LNG 253 208 22%

EID Parry 420 308 36% PI Industries 980 729 34% Endurance 1031 971 6% PTC India Fin 52 39 33% Technologies Reliance Inds 1785 1599 12% Equitas hold 184 164 12% Repco Home Fin 880 672 31% Essel Propack 284 242 17% Steel Strips 1061 856 24% 121 109 12% Strides Arcolab 1130 978 16% GAIL 400 381 5% Suprajit Engg 304 274 11% Glenmark Pharma 840 646 30% Supreme Ind 1240 1050 18% GMM Pfaudler 634 567 12% 86 78 11% Gulf Oil Lubricants 1000 806 24% Thermax 1140 877 30% HDFC 1850 1731 7% Tube Invst 840 767 9% HDFC Bank 2000 1765 13%

Hero Motocorp 4278 3884 10% UPL 930 830 12%

Note : Selection criteria based on Potential upside ranging from 5 to 50%. Source: Axis Direct.

10 August 2017 3

Technical View (Equity)

Daily call Index CMP % up/dn S2 S1 P R1 R2 Nifty 9,908.05 -0.71% 9845 9875 9925 9955 10000 Sensex 31797.84 -0.68% 31595 31695 31830 31935 32070

Nifty Daily Chart

Comments:

Nifty opened with downward gap and extended its down move making day low around 9893 levels to close at day's low. Nifty closed at 9908 with a loss of 71 points. On the daily chart the index has formed a long bearish candle forming lower High-Low compare to previous session and has closed below previous session’s low indicating negative bias. The index is moving in a Lower Top and Lower Bottom formation on the daily chart indicating negative bias. The chart pattern suggests that if Nifty crosses and sustains above 9940 level it would witness buying which would lead the index towards 9970-9990 levels. However if index breaks below 9880 level it would witness selling which would take the index towards 9870-9840. Nifty is trading below 20 day SMA's which indicating negative bias in the short term. Nifty continues to remain in an uptrend in the short and medium term, so buying on dips continues to be our preferred strategy. The daily strength indicator RSI and momentum oscillator Stochastic have both turned negative and are below their respective reference lines indicating negative bias. The trend deciding level for the day is 9925. If NIFTY trades above this level then we may witness a further rally up to 9955- 10000-10030 levels. However, if NIFTY trades below 9925 levels then we may see some profit booking initiating in the market, which may correct up to 9875-9845-9800 levels

Stocks to focus for intraday Long Endurance, SCI, , Gujalkali, GSPL, Bergerpaint

Stocks to focus for intraday Short Divislab, CeatLtd., Jktyre, Federal Bk., Jindalstel

10 August 2017 4

Technical View (Currency)

Daily call Index CMP % up/dn S2 S1 P R1 R2 USD/INR 63.98 +0.30% 63.81 63.90 63.95 64.05 64.10 (Future)

USDINR (Aug. Future) Daily chart

Comments:

USDINR (Aug. Future) CMP: 63.98

USDINR opened with an upward gap and traded with extreme volatility on either side throughout the session. It closed at 63.98 with a gain of 0.30%.

On the daily chart USDINR has formed a formed a small bullish candle forming higher High-Low compare to previous session indicating positive bias. Since past five consecutive session’s USDINR is consolidating in narrow trading range (64 - 63.70 levels) indicating short term sideways trend hence any either side breakout will signal further direction. USDINR is trending below 20 and 50 day SMA's which are important short term moving averages, indicating negative bias in the short to medium term. On the daily and weekly chart USDINR continue to form lower Top lower Bottom formation indicating sustained down trend.

For the day if USDINR crosses and sustains above 64 levels then it may scale further towards 64.10-64.64.25 levels. On the downside an immediate intraday support is around 63.89 level.

The daily strength indicator RSI and the momentum indicator Stochastic both are in positive territory which supports upside momentum.

10 August 2017 5

Daily Support/ Resistance of Nifty Companies

Company Pivot Point R1 R2 S1 S2 RSI-9D ACC 1814 1836 1859 1791 1769 78 AMBUJACEM 276 279 283 271 269 61 ADANIPORTS 415 419 423 410 406 50 ASIANPAINT 1146 1153 1158 1140 1134 57 AUROPHARMA 729 738 749 718 710 30 AXISBANK 502 508 517 493 487 26 BHARTIARTL 419 424 430 413 408 52 INFRATEL 384 389 394 379 375 29 BAJAJ-AUTO 2923 2970 3028 2865 2818 48 BANKBARODA 158 160 163 155 153 32 BOSCHLTD 24211 24458 24727 23943 23696 43 BPCL 512 521 538 496 486 57 573 585 592 566 554 48 COALINDIA 246 250 254 242 239 38 DRREDDY 2129 2173 2251 2051 2007 11 EICHERMOT 32014 32556 32992 31579 31036 65 GAIL 386 390 394 382 378 58 GRASIM 1115 1126 1143 1098 1088 52 HCLTECH 881 886 890 877 872 47 HDFC 1718 1734 1749 1703 1687 58 HDFCBANK 1780 1795 1812 1764 1749 54 HEROMOTOCO 3938 3979 4045 3872 3830 62 HINDALCO 237 242 250 230 225 78 HINDUNILVR 1194 1206 1222 1178 1166 65 ICICIBANK 297 300 305 292 289 36 IBULHSGFIN 1191 1211 1227 1175 1155 45 INDUSINDBK 1644 1656 1673 1627 1615 60 INFY 963 971 978 956 948 43 IOC 418 427 440 404 395 67 ITC 276 279 284 271 268 24 KOTAKBANK 989 998 1009 979 969 49 LUPIN 979 988 1001 966 957 16 LT 1174 1183 1196 1161 1152 37 M&M 1402 1414 1429 1388 1376 45 MARUTI 7793 7848 7941 7700 7645 50 NTPC 171 173 176 169 167 63 ONGC 164 166 168 162 160 54 POWERGRID 224 226 229 221 219 56 RELIANCE 1603 1620 1638 1586 1569 54 SBIN 306 310 316 299 295 53 SUNPHARMA 502 507 513 496 491 14 TATASTEEL 616 626 635 606 596 68 TCS 2509 2522 2542 2490 2477 57 TECHM 401 406 414 393 389 47 TATAPOWER 79 80 81 77 77 18 TATAMOTORS 431 435 440 426 421 21 TATAMTRDVR 249 252 255 246 243 17 ULTRACEMCO 4056 4087 4117 4026 3995 33 288 291 295 284 281 56 YESBANK 1773 1792 1821 1744 1725 54 ZEEL 539 544 547 535 530 56 Source: Axis Direct.

10 August 2017 6

Global Equity Valuation

PER (x) PBR (x) ROE (%) Div Yield (%)

Mcap Index CY17 CY18 CY17 CY18 CY17 CY18 CY17 CY18 Indices ($bn) Value Developed US (Dow Jones) 27429 22049 18 16 3.7 3.5 21 21 2.4 2.5

US (S&P 500) - 2474 19 17 3.0 2.8 16 17 2.0 2.1

UK (FTSE 100) 3577 7498 15 14 1.9 1.8 9 13 4.1 4.3

Germany (DAX) 2244 12154 13 12 1.7 1.6 13 12 3.0 3.3

France (CAC ) 2441 5146 15 14 1.5 1.4 9 10 3.3 3.5

Japan (Nikkei 225) 5816 19722 17 16 1.6 1.5 10 10 1.9 2.0

BRIC

Brazil (Bovespa) 847 67671 13 12 1.5 1.4 12 12 3.1 3.7

Russia (Micex) 537 1976 6 5 0.7 0.6 8 11 5.5 6.1

India (Sensex) 2083 31798 20 16 2.8 2.5 14 16 1.4 1.7

China (HSCEI) 7174 10796 9 8 1.0 0.9 12 11 3.5 3.8

Asia

Hong Kong (H S I) 4875 27371 13 12 1.3 1.2 12 10 3.7 4.0

Korea (KOSPI) 1506 2347 10 9 1.1 1.0 11 11 1.6 1.8

Singapore (Strait) 556 3327 15 14 1.2 1.2 10 8 3.4 3.5

Taiwan (TWSE) 1165 10343 15 14 1.8 1.7 14 13 3.8 4.1

Source: Bloomberg

10 August 2017 7

DAILY DERIVATIVES 10 August 2017

Nifty Futures View Volatility FII Activity Nifty Active Futures 9926.7 India VIX Index 13.45 INDEX FUTURES 420 Nifty Active Futures OI 24679425 Nifty ATM Call IV 8.3 INDEX OPTIONS 1500 Change in OI 320100 Nifty ATM Put IV 14.44 STOCK FUTURES 151 Premium / Discount 18.65 PCR Index Options 0.85 STOCK OPTIONS -117 Inference Short Build up PCR F&O Total 0.83 FII Net Activity 1954

Nifty Options OI Distribution HIGHLIGHTS: Nifty Futures closed at 9926.70 decreased by 0.73% with 1.30% increased in open interest indicates short buildup. Nifty futures closed with 18 points premium compared to previous day premium of 20 Nifty Futures closed at 9926.70 point. FII's were buyers in Index Futures to the tune of 420 crores and were decreased by 0.73% with 1.30% buyers in Index Options to the tune of 1500 crores, Stock Futures were increased in open interest indicates bought to the tune of 151 crores. FII's were net buyers in derivative segment to the tune of 1954 crores. short buildup. Nifty futures closed with India VIX index is at 12.45. Nifty ATM call option IV is currently at 8.30 18 points premium compared to whereas Nifty ATM put option IV is quoting at 14.44

previous day premium of 20 poin t. Index options PCR is at 0.85 and F&O Total PCR is at 0.83. Nifty Options -Change in OI Among stock futures UBL, TITAN, ACC and IGL have witnessed long FII's were buyers in Index Futures to build up and may show strength in coming session. the tune of 420 crores and were buyers Stocks which witnessed short build up are PVR, CIPLA, CEATLTD and in Index Options to the tune of 1500 INFRATEL may remain weak in coming session. Nifty options OI distribution shows that 9800 has highest OI crores, Stock Futures were bought to concentration followed by 9700 and may act as good support for the tune of 151 crores. FII's were net current expiry. buyers in derivative segment to the Nifty call strike 10100 followed by 10200 witnessed significant OI tune of 1954 crores. concentration and may act as resistance for current expiry.

SECURITIESIndia VIX iINnd BANex i sPERIOD at 12.45. NifMarketty ATM Indsite: DLF,c HDILall ,o IBREptiALEonS TIV, INDIA is cCEM,urre JINDntlALSy aTELt 8.30, JISLJALEQS, JPASSOCIAT, JSWENERGY, WOCKPHARMA

Stockwhe rFutureas esNi f-t Longy AT MBuild pu Upt o p t i o n Market IV i s Indsite: Stock Futures - Short Build Up

Sqymuboolting aFtu t 14.44Price % Chg Open Interest % Chg Symbol Fut Price % Chg Open Interest % Chg

UBL 835.2 1.09 1264000 11.97 PVR 1363.3 -3.75 568400 8.72

TIInTAdN ex option6s21 .P05CR is1.3a5 t 0.8556 5a2n000d F&10O.73 CIPLA 563.9 -2.91 8179000 8.59

ATCoC tal PCR is 1a8t19 .0.83.3 0.28 1190400 6.90 CEATLTD 1692.9 -4.36 1878000 5.75

IGL 1235.45 0.57 1035100 3.41 INFRATE L 382.15 -0.51 11633000 5.57 Among stock futures UBL, TITAN, ACC Source:a NSE,SeeDiff,AXISDIRECTnd IGL have Research witnessed long build up and may show strength in coming session.

Stocks which witnessed short build up are PVR, CIPLA, CEATLTD and INFRATEL may remain weak in coming session.

Nifty options OI distribution shows that

Disclosures

Disclosures:

The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).

1. Axis Securities Ltd. (ASL) is a SEBI Registered Research Analyst having registration no. INH000000297. ASL, the Research Entity (RE) as defined in the Regulations, is engaged in the business of providing Stock broking services, Depository participant services & distribution of various financial products. ASL is a subsidiary company of Ltd. Axis Bank Ltd. is a listed public company and one of India’s largest private sector bank and has its various subsidiaries engaged in businesses of Asset management, NBFC, Merchant Banking, Trusteeship, Venture Capital, Stock Broking, the details in respect of which are available on www.axisbank.com. 2. ASL is registered with the Securities & Exchange Board of India (SEBI) for its stock broking & Depository participant business activities and with the Association of Mutual Funds of India (AMFI) for distribution of financial products and also registered with IRDA as a corporate agent for insurance business activity. 3. ASL has no material adverse disciplinary history as on the date of publication of this report. 4. I/We, authors (Research team) and the name/s subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect my/our views about the subject issuer(s) or securities. I/We also certify that no part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. I/we or my/our relative or ASL does not have any financial interest in the subject company. Also I/we or my/our relative or ASL or its Associates may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Since associates of ASL are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned in this report. I/we or my/our relative or ASL or its associate does not have any material conflict of interest. I/we have not served as director / officer, etc. in the subject company in the last 12-month period. Research Team Sr. No Name Designation E-mail 1 Rajesh Palviya Technical & Derivative Analyst - (Head) [email protected] 2 Vaishnavi Jagtap Technical Analyst [email protected] 3 Kruti Shah Derivative Analyst [email protected] 4 Soni Patnaik Derivative Analyst [email protected] 5 Hiren Trivedi Research Associate [email protected] 6 Kiran Gawle Associate [email protected] 5. ASL has not received any compensation from the subject company in the past twelve months. ASL has not been engaged in market making activity for the subject company.

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10 August 2017 8

Disclosures

Disclaimer: Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to the recipient’s specific circumstances. The securities and strategies discussed and opinions expressed, if any, in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient.

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10 August 2017 For private circulation only

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