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Saturday, December 31, 2016

LIC of India: Critical Illness Benefit

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LICs Critical Illness Benefit




S Karthikeyan, FChFP
Insurance & Investment Consultant.
GF B.Sai Kripa Apts.
37,Tharamani 100 feet Road
Velachery,Chennai – 600 042.
Tel : 044 - 2243 5757 / Mob: 98400 40041,
 karthikeyan@winwortgroups.com
www.winworthgroups.com 


Planning is bringing the future into the present - Alan Lakein

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Investing Mantra's 
Investing Mantra's - Investment

Planning is bringing 
the future into the present
 so that you can do something 
about it now.
- Alan Lakein


                                                                                                                                                                                       Mr. Suresh Parthasarathy,
Registered Investment Advisor,(SEBI),
Columnist,
Founder,Myassetsconsolidation.com
Mobile 98404 54737
CRISIL rating : MSE 3
Skype:suresh.partha
See what i am tweeting :@parthasuresh.

Financial Market - 7 Questions On Top of Our Minds at The End of 2016..!

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7 Questions On Top of Our Minds at The End of 2016..!

5minwrapup,  Equitymaster.com

Eventful would be an understated adjective for 2016. What started as a year of hope, has ended to be a year of bleak stark uncertainties.
 And this is not just about demonetisation!

In fact, am quite sure that there is a lot more that even you are worried about.

Take a pen & paper and put down the questions that you would want to ask and to whom. I just did. And I am looking forward to the replies to these questions in 2017...


1.   To Prime Minister Mr. Narendra Modi
80% of your reforms seem to address about 20% of India's economic challenges. When and what will be the 20% policy changes that solve 80% of our problems?

The list is long: Jan Dhan Yojana, Swachh Bharat, Digital India, Skill India, Make in India, and so on. You could claim these are initiatives are steps towards Acche Din. But honestly, all these moves put together still aren't enough.
Demonetisation was, no doubt, a bold move. But numbers suggest that it will hardly rid the system of black money. As time runs out before the next elections, what will be the game changer?
2.   To RBI Governor Mr. Urjit Patel..!
At what point will the central bank take action to weed out the structural incentives for corruption in the Indian banking system? Depositors are losing trust in banks. 
They ignored the loan-for-bribe scandal. They were patient with the banks. But one scam after the other is taking a toll. What will the RBI do to rid India banks from the perception of being the 'new corrupt'?
3.   To SEBI Chief Mr.  UK Sinha..
Can we have a 'Most Credible Companies Index' to compete with the Sensex?

Most investors in India use the BSE Sensex as a benchmark for safety and returns. But the Tata fiasco shows that companies with the most market cap and liquidity may not always be safe and credible. 
Do lay investors not deserve to know which companies in India are the most credible? Such an index, along with the Sensex, would serve investors well.
4.   To Niti Ayog Vice Chairman Mr. Arvind Panagaria
Why don't you think the impact of demonetisation on India's GDP will be significant?

The smallest shops to the biggest industries in India have seen demand fall by as much as 50% since 2016, 8 November. This isn't likely to improve until sufficient currency is made available. 
Digital payment options aren't enough. What then is that math behind your optimistic prediction? And when will Niti Ayog be known for better planning than the erstwhile Planning Commission?
5.   To US President-Elect Mr. Donald Trump..!

Will you change the definition of 'fair and reasonable' in US trade deals like you did in your real estate deals?

The book Trump Strategies for Real Estate suggests that you have, from time to time, changed the definition of 'fair and reasonable' to make your real estate deals more profitable. 
Should Indian companies with US trade relations expect Trump shockers like these during your presidency?
6.   To US Fed Chief Ms. Janet Yellen..!
How long will you and your fellow central bankers in the eurozone use fake monetary policies to stay in your job?

Fake reasons to keep interest rates low. Fake money to keep asset prices high. Fake monetary policies to keep your job. 
None of this is any longer a mystery. What else will you and your fellow central bankers pull out of your hats to stave off a collapse of the financial system (a collapse that you helped create)?
7.   To Mr.  Warren Buffett..!

If you were starting Berkshire today with a small amount of capital and had the choice between India, China, and the US for a base, where would you go and why?

In your philanthropic pledge to the Bill and Milinda Gates Foundation in 2006, you wrote,

'My wealth has come from a combination of living in America, some lucky genes, and compound interest.'

With the same genes and magic of compound interest, do you think India or China would be a better place to start Berkshire today?

Cash withdrawal Limit from ATMs Enhanced to Rs. 4,500 from December 30, 2016

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Reserve Bank of India (RBI) has released a circular dated 30.12.2016 and enhanced the daily ATMs withdrawal Limit from Rs. 2,500 to Rs.4.500. 

However Weekly / Daily Limit of Bank (including ATM) still unchanged and maintained at same level of Rs. 24.000.

Further RBI has also directed that Bank that Cash from ATMs shall be  disbursed mainly in the denomination of Rs. 500 Notes.

RBI Notification
RBI/2016-17/204
DCM (Plg) No. 2142/10.27.00/2016-17
December 30, 2016

The Chairman / Managing Director/ Chief Executive Officer,
Public Sector Banks/ Private Sector Banks / Foreign Banks/
Regional Rural Banks / Urban Cooperative Banks/ State Cooperative Banks
District central Cooperative Banks

Dear Sir,

Cash withdrawal from ATMs – Enhancement of daily limits
Please refer to our circular DCM (Plg) No. 1424/10.27.00/2016-17 dated November 25, 2016 on “Withdrawal of cash from bank deposit account - Relaxation”.

On a review of the position, the daily limit of withdrawal from ATMs has been increased (within the overall weekly limits specified) with effect from January 01, 2017, from the existing ₹ 2,500 to ₹ 4,500  per day per card. There is no change in weekly withdrawal limits.Such disbursals should predominantly be in the denomination of ₹ 500.

The relaxation of withdrawal limits as enabled by our circular DCM (Plg) No. 1437/10.27.00/2016-17 dated November 28, 2016 remains unchanged.

Yours faithfully,
(P. Vijaya Kumar)
Chief General Manager

Friday, December 30, 2016

SHARES to Buy in 2017 Recommend by Geojit BNP Paribas

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SHARES to Buy in 2017 Recommend by Geojit BNP Paribas

Pidilite Industries Target Rs. 770

Pidilite Industries is a pioneer in consumer & speciality chemicals in India having a dominant position in the adhesive and sealants business in India with market share of 70%.

Robust distribution network and continuous focus on developing new and innovative products will further aid in augmenting market share and strengthen its brand equity. As a result, Pidilite is a strong play on recovery in discretionary spending and thus, we recommend buy .

Havells India Target Rs. 388

Havells is a leading player in electrical consumer goods with key verticals include switchgears, cables & wires, lighting fixtures and consumer appliances.

Though the current liquidity crunch is expected to impact the company's consumer durables segment in H2FY17, but given the long-term benefit of shift from unorganised to organised segment, the future prospects are positive.

HDFC Bank Target Rs. 1,387

HDFC Bank has a proven track record of higher than industry growth rate with best in-class asset quality and high profit margins in the past five years. We expect HDFC Bank to continue outpacing industry credit growth rate and factor 19% CAGR in advanc es over FY16-18E.

Strong contribution from retail segment (50% of domestic loan book) adds strength to the loan growth outlook.Higher share of working capital and retail financing in total loan book reduces risk of any negative surprise on asset quality front.

Crisil Target Rs. 2,609

Crisil, with a market share of around 60%, enjoys leadership position in rating business. It also provides research and risk & advisory services, which has reduced cyclicality in its revenue and profitability. Crisil has consistently outperformed the industry over the last 10 years and maintained strong RoE of 30%.

Revival in global economy will support growth momentum in research business and measures from RBI to deepen the corporate bond market will give boost to the rating business.

Escorts Target Rs. 345

Escorts, the third largest manufacturer of agricultural tractor is well-placed to benefit from demand recovery as a result of initiatives such as farm consolidation and farm machanisation, through recent product launches and strategic decisions to improve distribution channels. 

 Geojit BNP Paribas believe, temporary slowdown in the rural demand is more than factored in at the current prices.


FROM ET 

SHARES to Buy in 2017 by Recommend Motilal Oswal Securities

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SHARES to Buy in 2017 by  Recommend Motilal Oswal Securities

Tata Motors Target Rs. 610

JLR volumes and revenues expected to grow at CAGR 12.5% and 15%, respectively , over FY 17-19E, driven by new product launches.This coupled with mix improvement and full benefit of forex would drive realisations and revenues.

JLR's EBITDA margins expected to improve sharply from Q2FY17 levels of 10.3% to 17% by FY19 driven by realisation of forex benefit, mix improvement, benefits of modular platform and operating leverage.

ICICI Bank Target Rs. 337

Strong capitalisation (CET1 of 13%), significant improvement in granularity of the book (52% retail and SME), sharp improvement in liability profile (CASA ratio of 40%) is helping ICICI Bank to build a low risk business without much impact on core earnings.

On asset quality , high proportion of incremental disbursement to A and above rated corporate and recognition of actual stress on balance sheet will reduce concerns over asset quality in FY17.

Canfin Homes Target Rs. 2,260

Low cost funding from NCDCPpublic deposits is expected to increase to 60% by FY18E from 35% in FY16. This is expected to translate into expansion of spreads from 2.23% in FY16 to 2.9% in FY18E. It has set a target of achieving loan book of Rs. 35,000 crore by 2020 which translates to a 33% CAGR in loan book, which is much higher than the 20-22% growth expected for its peers.

Motilal Oswal Securities estimate Canfin's loan book to compound at 28% CAGR over FY16-18E.

Sterling Tools Target Rs. 1,207

The company has started work on the phaseI expansion for a new plant in Gujarat. Total capex for the project will be Rs, 50 crore, likely to be commissioned by September 2017.Conducive macro factors like good monsoons, 7th pay commission roll out, passage of GST, increasing localisation by OEMs will propel the company on growth path, going forward. 

Motilal Oswal Securities expect earnings growth of 20% over FY16-18E.
The stock is trading at 15.1x FY18E EPS of `60.3. We value the company at 20 times FY 18E EPS with a target price `1,207.

APL Apollo Tubes Target Rs. 1,248


Motilal Oswal Securities  expect the domestic ERW pipe market to grow at a CAGR of 9% over FY16-19E to 10 million tonnes by FY19E. 

The bulk of the growth will come from the construction and infra segments (airports, mall & prefabricated structures) using the structural pipes followed by demand from traditional applications. APL is planning to expand its capacity. 

SHARES to Buy in 2017 by Recommend Kotak Securities

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SHARES to Buy in 2017 by Recommend Kotak Securities

NIIT Target Rs. 103

The initiatives taken by the new management have led to consistent improvement in revenue growth and earlier-than-expected benefits on margins over the past six quarters.

Kotak Securities remain optimistic on the prospects of NIIT.NIIT has launched new programs in S&C business and added new clients in CLS, which should support future growth.

Mirza International Target Rs. 119

Mirza intends to grow Redtape business by aggressive marketing and increasing focus on online business. It is also planning to foray in the affordable segment under a new brand, Bondstreet, in the domestic market. It intends to penetrate this segment by offering quality products at a competitive price to its competitors.

MIL has a fully integrated model and has a track record of generating 20% plus RoCE and positive operating cash flows, based on robust margins and control over working capital.

Mold Tek Packaging Target Rs. 260

Mold Tek Packaging is a leading manufacturer of high-quality rigid plastic packaging products (Rigid plastic packaging) and a pioneer is Inject Mold Labelling (IML) for lubricants, paints and FMCG industry.

Mold Tek Packaging stands to gains in the coming years from the increasing share of IML, backward integration and expansion in the food and FMCG industry. The stock trades at 12.5x FY18E earnings, and on EVEBITDA, It trades at 7.5x FY18E.

Natco Pharma Target Rs. 750

Strong R&D capabilities and focus on creating a niche product portfolio sets Natco apart from its peers. For the coming years we expect both US and domestic formulations to further lead the growth and enable the company in posting 58% revenue CAGR and 87% PAT CAGR over FY1518E. 

The stock we believe will continue to trade at higher multiples given the events lined up over the next 6-12 months.

PNC Infra Target Rs. 142

PNC has track record of timely and before schedule completion of projects and received early completion bonus. It has robust current order book of Rs.62.2bn.


This gives high revenue growth visibility for the next 2-3 years. It has consistently enjoyed margins of about 12-14%, which is good for road-construction company .

SHARES to Buy in 2017 Recommend by Centrum Broking

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SHARES to Buy in 2017  Recommend by Centrum Broking

Deccan Cement Target Rs. 1,290

DCL has 50 years of limestone reserves, 18MW of CPPs (~70-75% captive) and easy access to fly-ash and coal. Its manpower and capital costs are one of the lowest in the industry . Its well-diversified sales across entire south and Maharashtra region helped DCL generate higher EBITDAMT and a steadier EBITDA margin compared to its peers. 

Its return ratios are currently among the best in the industry and are sustainable on its continued strong OCFFCF. DCL has used its strong FCF to de-lever its balance sheet.

Fiem Industries Target Rs 1,475..!

Over the years, FIEM has reported robust top-line growth and best-inclass margins. Further, the company has not only gained traction with existing clients but has also been adding new clients and products. Extensive R&D set-up has enabled FIEM to offer superior design and development capabilities to its customers.

FIEM is the first company in India to have an NABL accreditation for photometry lab to test automotive lamps.

IFGL Refractory Target Rs. 220

There is a strong opportunity for IFGL to gain steady market share globally with its strong FCF generation and low leverage with consistent payouts. 

It has well-funded asset base providing large incremental growth opportunity at very little capex.

Techno Electric Target Rs. 445

Centrum Broking inference of average RoE of 35% and RoCE of 86% in the EPC business. 

The company's debtequity is among the lowest in the industry . Its strong niche in substation EPC works and ability to compete with large MNCs has helped the company win contracts and deliver on profitability and growth.

Apar Industries Target Rs. 705


Apar, with its dominant market share and diverse product mix of conductors, transformer oil and E-beam cables, will be the key beneficiary of the uptick in the T&D capex cycle. .Cost efficiency, pricing discipline, near exhaustion of low margin export orders, efficiency in

SHARES to Buy in 2017 Recommend by IIFL

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SHARES to Buy in 2017 Recommend by IIFL

After the demonetisation chaos, the government is expected to be proactive in terms of policy actions ­ both in and outside the Budget. The Indian economy is expected to be back on the recovery path from the second half of 2017 as the liquidity crunch wanes and the pent-up demand comes back to the fore.

Most market participants say Indian equities will perform well in 2017, and the Nifty, which gave negative returns in the past two consecutive years, has the potential to scale new lifetime highs.

IIFL

Maruti Suzuki Target Rs, 6,100

IIFL are bullish on Maruti Suzuki on account of strong volume growth despite demonetisation.Significant waiting period, enhanced capacities along with new product launches will ensure continued volume outperformance.

Low dealer inventory will lead to higher wholesales vs. retails sales.At our target price, the stock is trading at 22xFY18E.

ONGC Target Rs. 230

IIFL are bullish on ONGC as rampup in production from the redevelopment projects in Mumbai High (North & South) will help in volume pick. 

Benign crude prices will ensure minimal or zero underrecoveries. We believe that the net realisations will rise in FY18 leading to decent outperformance going forward.

CESC Target Rs. 750

IIFL are positive on CESC due to sector beating earnings growth of >25% CAGR till FY19E on the back of commencement of Chandarpur IPP PPA (600MW) and stable Kolkata utility business. 

Lower fuel costs and efficient energy sourcing from Haldia plant will improve margins. 

The stock is currently priced at 5.5x FY17E EV EBITDA. Any monetisation of non-core retail business will lead to further triggers for the stock.

City Union Bank Target Rs. 156

IIFL believe Citi Union Bank is an outperformer in terms of capitalisation, asset quality and returns (ROA). 

This is driven by its niche business model (working-capital lending), healthier margins, superior non-interest income and lower cost ratio that resulted in healthier ROA compared to its peers. 

IIFL are expecting the PAT to grow at 20% CAGR over FY16-18E while ROA and ROE to be at 1.5% and 18%, respectively . The stock is currently trading at 2x PB FY18E.

Navneet Publications Target Rs. 135

Navneet Publication is one of the most profitable education companyies in India. Supported by aboveaverage monsoon, IIFL expect a rec ove r y i n s a l e s f r o m t h e contribution of Maharashtra business. 

The stationery business is expected to improve due to focus on export business.


Considering the high ROE and strong growth going forward, we expect strong earnings growth in FY18. At our target price, the stock is trading at 18xFY18E.


Tuesday, December 27, 2016

Focus Shifting to Affordable and Mid-segment housing

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 Focus Shifting to Affordable and Mid-segment housing

PE Focus On Housing Projects Set To Increase

Over USD 2.8 billion worth of platforms already in place; focus shifting to affordable and mid-segment housing

  By Mr. Anuj Puri, JLL India

Partnerships, often between investors and developers, create a pool of money that is available for all projects matching a specific set of criteria without having to go through the time-consuming approval process. These partnerships are also called platforms. Over the past two-three years, India has seen creation of various such equity or debt platforms.

So far, more than USD 2.8 billion worth of platforms are already in place, largely equity-based and showing a shift in focus to residential, especially the affordable and mid-housing projects. This model of investment is expected to grow further in the future.



Source: JLL Capital Markets Research


Why equity kept away from residential realty and how this may change for the better

From a historic high seen in 2009, when the share of private equity (PE) inflows into residential real estate peaked to 60% of the overall pie, it has gradually reduced to 10% in 2016. This 10% figure is same as the investment split seen in 2006, which was the first time equity’s interest, was tracked into the residential asset class. PE investment was entirely focused on the commercial asset class in the initial few years.
 
Anuj Puri, JLL India
Post the global financial crisis (GFC) in 2008, equity infusion has been largely restricted to office projects closer to completion. Various reasons led to equity investors shying away from investing in residential projects. Among them, a major reason was lack of uniformity in rules followed by the states. Other reasons included project delays, limited legal options for investors, and inadequate transparency and corporate governance.




Source: JLL Capital Market Research

However, through the implementation of RERA (Real Estate [Regulation and Development] Act) and demonetisation, the government has worked towards removing all major inconsistencies in the system. While the real estate business has currently taken a step back due to these, it will set a very strong foundation for long-term growth. Equity investments at such times can work extremely well for long-term investors.
With limited cash outflows allowed until completion of the project (thanks to the RERA) and lower demand for properties (thanks to demonetisation and the Benami Property Act), developers will remain under pressure. Money circulation will slow down and the new cash flow generation will reduce further.

With limited scope for further leverage, developers will be open to providing good entry points to the long-term equity investors. While a few equity-related risks would continue, attractive entry points will provide a higher margin of safety to equity investors. The table above illustrates how a few investors have already realised this and taken steps accordingly.

Top-five criteria for equity investors in choosing the right partners for creation of platforms:

·         High focus on corporate governance
·         Proven corporate track record
·         Alignment of investment and operational philosophy among the partners
·         Skin in the game (equity infusion by the developer)
·         Potential for long-term successful partnership.

About the author.
Mr. Anuj Puri, Chairman & Country Head, JLL India

For media contact

Arun Chitnis
Head – Corporate Communications & Media Relations
JLL India 
Level 6, Amar Avinash Corporate Plaza
Bund Garden Road,
Pune 411001.
Tel: (020) 30930441 Fax: (020) 40196101
Mob: +91 9657129999



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