Nifty 18210.95 (-0.31%)
Sensex 61143.33 (-0.34%)
Nifty Bank 40874.35 (-0.88%)
Nifty IT 35503.9 (0.97%)
Nifty Financial Services 19504.75 (-0.74%)
Adani Ports 745.85 (-0.54%)
Asian Paints 3094.65 (4.20%)
Axis Bank 787.50 (-6.46%)
B P C L 427.70 (-0.78%)
Bajaj Auto 3776.50 (-0.40%)
Bajaj Finance 7482.15 (-4.75%)
Bajaj Finserv 18012.00 (-1.86%)
Bharti Airtel 702.35 (0.88%)
Britannia Inds. 3697.85 (0.14%)
Cipla 922.50 (1.65%)
Coal India 173.60 (-0.83%)
Divis Lab. 5149.35 (2.60%)
Dr Reddys Labs 4662.70 (-0.08%)
Eicher Motors 2583.90 (-0.25%)
Grasim Inds 1728.40 (-0.63%)
H D F C 2915.00 (0.12%)
HCL Technologies 1177.15 (0.89%)
HDFC Bank 1642.80 (-0.60%)
HDFC Life Insur. 693.85 (0.55%)
Hero Motocorp 2690.15 (-0.38%)
Hind. Unilever 2396.60 (-1.65%)
Hindalco Inds. 479.85 (-1.28%)
I O C L 130.80 (-0.53%)
ICICI Bank 835.00 (0.68%)
IndusInd Bank 1142.55 (-1.07%)
Infosys 1728.95 (1.48%)
ITC 238.45 (0.74%)
JSW Steel 684.90 (-1.36%)
Kotak Mah. Bank 2188.25 (-1.03%)
Larsen & Toubro 1784.55 (-0.65%)
M & M 886.80 (-0.87%)
Maruti Suzuki 7356.25 (0.81%)
Nestle India 19004.60 (-1.11%)
NTPC 141.30 (-1.33%)
O N G C 157.90 (-3.19%)
Power Grid Corpn 190.25 (-0.08%)
Reliance Industr 2627.40 (-1.26%)
SBI Life Insuran 1186.00 (1.19%)
Shree Cement 28107.75 (1.19%)
St Bk of India 519.15 (1.29%)
Sun Pharma.Inds. 825.10 (1.43%)
Tata Consumer 818.75 (1.22%)
Tata Motors 497.90 (-2.11%)
Tata Steel 1326.15 (-1.30%)
TCS 3489.75 (0.21%)
Tech Mahindra 1567.85 (0.29%)
Titan Company 2460.10 (0.22%)
UltraTech Cem. 7354.20 (1.17%)
UPL 741.50 (3.96%)
Wipro 671.10 (0.44%)

Why To Maintain An Emergency Corpus

Why To Maintain An Emergency Corpus
27/04/2018

What is an emergency corpus?

An emergency corpus or fund holds liquid money set aside for emergencies and unforeseen situations. It is a cushion to fall back on during contingencies like a job loss, critical medical issues, delay in income, or, in worst case scenario, death.

These emergencies or situations can be classified as short-term and long-term. A short-term emergency could be a healthcare expenditure or a delay in receiving one’s salary, whereas a long-term emergency could be a job loss. For small trading businesses, an emergency fund is essential as it offers security.

In many instances, traders recklessly invest a large portion of their personal funds into their business. Due to the volatile nature of the stock markets, it is difficult to guarantee if the invested funds would result in profit or loss. There are instances where even the smartest traders have become bankrupt. An emergency fund is mandatory to brace such calamities.

One of the reasons small businesses fail is due to the dangers of taking short-term credit, i.e. availing loans on credit cards or unsecured personal loans. The high rates of interest charged on these loans, however, eat up into the trader’s turnover.

Plan your emergency

The emergency fund should be a pivotal part of your business plan. However, it is just as important to understand when the fund should be used. It is essential to have a list of events that you consider grave enough to access your emergency fund. These could entail:

  • A sudden volatility in the market
  • Economic crisis or downturn
  • Personal disability or health emergency
  • Natural or man-made disasters

Regardless, not every unforeseen event should be considered as an excuse to use up the emergency fund. It is important to be crystal clear of your reasons to use the emergency fund.

On the other hand, maintaining an extra liquid asset apart from the emergency fund would also help you make the most of profitable opportunities. For instance, investing in a good IPO or an event-driven stock trade. Liquid assets make your business sturdier and more adaptable.

Maintain separate accounts

Just as your personal account is separate from your business account, your emergency account should also be separate from your business account. This will reduce the temptation to utilize the emergency fund during ‘non-emergencies’. To reiterate, the emergency fund should be kept off limits except for certain set of circumstances.

A savings account is a good place to save the emergency fund. Never keep your emergency funds in a form that might attract a penalty for early withdrawal or those that would take time to liquidate. It is tempting to place it in a fixed deposit scheme, but remember that liquidity is the motto. Even putting it in a mutual fund could risk its value.

The amount

The thumb rule for a personal emergency fund can be applied here. For starters, you must save at least three months of operating expenses as an emergency fund. To do this, the total monthly expenses of your trading business should be calculated. The expenses should include your monthly investment amounts, brokerage charges, and other miscellaneous expenditure.

If you are a trader who takes high risk, then the emergency fund has to be tweaked accordingly.

Depending on your risk appetite and calculations, you can create a fund that covers three-six months of your expenses. Once you are prepared for every eventuality, your mind will be at peace and you can be more confident with your trades in the future.

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5 Stocks for next week 8th Jan-12th Jan 2018

5 Stocks for next week 8th Jan-12th Jan 2018
by Gautam Upadhyaya 01/05/2018

AJANTA PHARMA - BUY

Stock AJANTA PHARMA
Recommendation The stock has managed to give a breakout from its sideways consolidation on the daily chart. The stock has also shown good strength on the daily and weekly MACD Histogram.
Buy/Sell Range Target Stop Loss
Buy(cash) 1518-1525 1590 1474
NSE Code Market Cap(Rs in Cr) 52-week High /low 200 Day M.A
AJANTPHARM 13385 1870/1106 1418

JUST DIAL - BUY

Stock JUST DIAL
Recommendation The stock has given a flag pattern breakout and has also breached the declining trend line backed by a surge in volumes on the daily chart. The stock has taken support along the 10-day EMA on the weekly chart. 
Buy/Sell Range Target Stop Loss
Buy(cash 548-552 584 527
NSE Code Market Cap(Rs in Cr) 52-week High / low 200 Day M.A
JUSTDIAL 3697 619/326 459

NIIT TECH - Buy

Stock NIIT TECH
Recommendation The stock has given a breakout from its sideways consolidation on the daily chart backed by a surge in volumes; the stock has also taken support along the rising trend line on the daily chart.
Buy/Sell Range Target Stop Loss
Buy(cash) 666-671 698 648
NSE Code Market Cap(Rs in Cr) 52-week High /low 200 M.A
NIITTECH 4085 696/401 558

INDUSIND BANK - BUY

Stock INDUSIND BANK
Recommendation The stock has managed to give a breakout above the declining trend line on the daily chart and has managed to give a breakout from its sideways consolidation on the weekly chart. The stock has also witnessed bullish crossover on the daily MACD indicator which affirms our positive view on the stock.
Buy/Sell Range Target Stop Loss
Buy (cash) 1690-1700 1758 1657
NSE Code Market Cap(Rs in Cr) 52-week High / low 200 M.A
INDUSINDBK 101955 1818/1137 1562

INDIAN OIL CORPORATION - SELL

Stock INDAIN OIL CORPORATION
Recommendation The stock is in a lower top lower bottom chart structure on the daily chart and has given a close below its support levels. The weakness shown on the MACD histogram accentuates our negative view on the stock.
Buy/Sell Range Target Stop Loss
SELL-Jan Futures 385-387 374 393.2
NSE Code Market Cap(Rs in Cr) 52-week High /low 200 M.A
IOC 186369 462/341 393

Research Disclaimer

Next Article

Top 5 ELSS for 2018

Top 5 ELSS for 2018
by Jitender Singh 01/05/2018

Equity Linked Savings Scheme (ELSS) is a type of equity mutual fund in which investments up to Rs1.5 lakh per financial year are tax deductible under section 80C. In other words, investors don’t have to pay tax on investment up to Rs.1.5 lakh in ELSS. By investing in ELSS, an investor in the 30% tax bracket can save Rs.46,350 as tax.

Below table exhibits the amount of tax one can save by investing Rs.1.5 lakh in ELSS for different tax slabs.

Tax Bracket 5% 20% 30%
Tax Saving Rs.7,725 Rs.30,900 Rs.46,350

*Includes 3% cess also

Besides tax benefits, ELSS investments also offer other benefits discussed below.

  1. Wealth creation with tax-saving – Historically, it has been seen that ELSS schemes have given significantly higher returns than other tax saving schemes like PPF, 5-year FD, EPF, etc.
  2. Shortest lock-in period – ELSS has a lock-in period of 3 years, which is the shortest among all tax-saving instruments.
  3. Tax free capital gains: The long-term capital gains from investment are tax-free.
  4. Dividends are tax-free: Dividends received are tax-free in the hands of the investor right from the year of investment.
  5. Low investment amount: Investors can start investing with Rs500 in lump sum or via SIP in ELSS. Since it is difficult to invest a lump sum amount in one go, SIP helps a person to invest small amounts at regular intervals. SIP payment is auto-debited from your bank account every month.

ELSS is the best way to save tax and create wealth in the long term. Below are the top 5 recommended ELSS funds.

Scheme Name Fund Manager Corpus (cr) 1 Y (%) 3 Y (%) 5 Y (%)
Aditya Birla SL Tax Relief '96(G) Ajay Garg Rs.4,349 41.6 16.3 21.6
Axis LT Equity Fund(G) Jinesh Gopani Rs.15,408 35.7 12.2 22.4
DSPBR Tax Saver Fund-Reg(G) Rohit Singhania Rs.3,571 34.4 15.6 20.1
IDFC Tax Advt(ELSS) Fund-Reg(G) Daylynn Pinto Rs.798 52.2 17.4 21.6
Reliance Tax Saver (ELSS) Fund(G) Ashwani Kumar Rs.10,157 44.2 13.3 22.4

1 year returns are absolute; 3 year and 5 year returns are CAGR.
AUM as of November 2017, Returns are as on January 02, 2018

Aditya Birla SL Tax Relief ‘96 Fund

  • Aditya Birla SL Tax Relief ‘96 Fund does tactical allocation between large cap and mid-= cap stocks to ensure optimal risk reward.
  • As of November 2017, the fund has invested ~37% of its AUM in large cap stocks, ~55% in mid cap stocks and ~7% in small cap stocks to generate higher returns.

Axis Long Term Equity Fund

  • Axis Long Term Equity mutual fund  invests in companies with sustainable profit growth to generate wealth over 3-4 years.
  • Besides, the fund manager follows bottom-up approach to select the companies.
  • As of November 2017, the fund has invested ~66% of its AUM in large cap stocks while ~30% in mid cap stocks to generate alpha.

DSPBR Tax Saver Fund

  • DSPBR Tax Saver Fund primarily invests in large cap stocks with some tactical allocation to midcap and small cap stocks to generate higher returns.
  • The fund manager follows buy-and-hold strategy for majority of the portfolio. He also takes active and tactical calls to exploit the market opportunities.
  • As of November 2017, the fund has invested ~71% of its AUM in large cap stocks and ~22% in mid cap stocks to generate higher returns.

IDFC Tax Advantage (ELSS) Fund

  • IDFC Tax Advantage (ELSS) Fund does tactical allocation between large cap, mid cap and small cap stocks to generate higher returns.
  • As of November 2017, the fund has invested ~46% of its AUM in large cap stocks, 29% in mid cap stocks and 20% in small cap stocks in order to generate higher returns.

Reliance Tax Saver (ELSS) Fund

  • Reliance Tax Saver (ELSS) Fund does tactical allocation between large cap, mid cap and small cap stocks to generate high returns.
  • The fund invests in potential leaders with high growth prospects.
  • Generally, the fund takes 2-3 sector call at a time and invests in high conviction mid cap stocks.
  • As of November 2017, the fund has invested ~60% of its AUM in large cap stocks, 25% in mid cap stocks and 15% in small cap stocks in order to generate higher returns.

Research Disclaimer

Next Article

5 short term trades

5 short term trades
by Gautam Upadhyaya 02/06/2018

Short term calls are the buy/sell recommendations generated on the basis of technical and derivative data points with a trading horizon of 2-5 days. The objective is to capture stocks displaying strong momentum or a short-term reversal in trend. Short term calls will be generated in cash and F&O segments. The calls should be executed when the underlying price is quoting within the mentioned range.

1) Reliance Industries Limited - Buy

Stock

Reliance Industries Limited

Recommendation

The stock has formed a large bullish engulfing candlestick pattern and has witnessed a strong bounce from its 200-day EMA backed by a surge in volumes. Derivative data indicates fresh long formation.

Buy/Sell

Range

Target

Stop Loss

Buy (Cash)

1100-1110

1325

960


2) Tata Power Company Limited - Buy

 

Stock

Tata Power Company Limited

Recommendation

The stock is on the verge of a flag pattern breakout on the daily chart and has taken support along the rising trend line. It has also shown positive momentum on the weekly MACD histogram. Derivative data indicates fresh long formation in the stock.

Buy/Sell

Range

Target

Stop Loss

Buy(Cash)

75-76

91.5

65

3) ITC Ltd - Buy

Stock

ITC Ltd

Recommendation

The stock has witnessed a positive bounce from its support levels on the weekly chart (89-period EMA). It has also managed to give a close above its 200-day EMA on the daily chart. Derivative data indicates fresh long positions in the stock.

Buy/Sell

Range

Target

Stop Loss

Buy (Cash)

Rs280-283

Rs324

Rs254

 


Research Disclaimer

Next Article

5 Stocks for next week 5th Feb-9th Feb 2018

5 Stocks for next week 5th Feb-9th Feb 2018
by Gautam Upadhyaya 02/06/2018

MARUTI SUZUKI INDIA- SELL


Stock

MARUTI

Recommendation

The stock has breached its support levels on the daily chart and has witnessed a bearish crossover on the daily MACD indicators. Maruti has also given a close below its 10 period EMA on the weekly chart, which affirms our negative view on the stock.

Buy/Sell

Range

Target

Stop Loss

SELL(FEB FUTURES)

8980-9020

8600

9293

NSE Code

Market Cap(Rs in Cr)

52-week High /low

200 Day M.A

MARUTI

273140

10000/5804

8028


 

HDFC BANK- SELL


Stock

HDFC BANK

Recommendation

The stock has breached its support levels along the rising trend line and is on the verge of witnessing a bearish crossover on the daily MACD indicator. The stock has formed a shooting star candlestick pattern on the weekly chart.

Buy/Sell

Range

Target

Stop Loss

SELL(FEB FUTURES)

1948-1960

1880

1993

NSE Code

Market Cap(Rs in Cr)

52-week High /low

200 Day M.A

HDFCBANK

504763

2014-1294

1743


 

PIRAMAL ENTERPRISES-SELL

Stock

PIRAMAL ENTERPRISES

Recommendation

The stock has faced resistance along the declining trend line and has given a breakdown on the daily chart. Derivative data suggests fresh short position, which is indicated by a rise in O.I and decline in price.

Buy/Sell

Range

Target

Stop Loss

SELL(FEB FUTURES)

2642-2658

2505

2749

NSE Code

Market Cap(Rs in Cr)

52-week High /low

200 M.A

PEL

47779

3083/1700

2611


 

POWER FINANCE- SELL

Stock

POWER FINANCE

Recommendation

The stock has breached its support levels on the weekly chart after witnessing a sideways consolidation for nearly seven months. The stock has formed a large bearish candlestick patter on the daily chart. Derivative data suggests fresh short formation in the stock indicated by rise in open interest and decline in price. We expect the negative trend to continue in the following week.

Buy/Sell

Range

Target

Stop Loss

 Buy

110-112

104

115.8

NSE Code

Market Cap(Rs in Cr)

52-week High /low

200 M.A

PFC

29291

169/110

126


 

BRITANNIA LTD- BUY


Stock

BRITANNIA LTD

Recommendation

The stock is in a rising channel formation on the weekly chart and has given a positive bounce from its support levels. We expect the positive momentum to continue in the stock.

Buy/Sell

Range

Target

Stop Loss

Buy

4715-4729

4910

4572

NSE Code

Market Cap(Rs in Cr)

52-week High /low

200 M.A

BRITANNIA 

56787

4963/2918

4258


Research Disclaimer

Next Article

5 Stock Tips This Dussehra

5 Stock Tips This Dussehra
by Nikita Bhoota 02/06/2018

Dussehra is considered to be an auspicious festival in India. On this day, Lord Rama has killed Ravana. This festival signifies the victory of good over the evil. Similarly, an investor can overcome their loss-making investments by adding the right stocks in their portfolio. Based on research, fundamentals and valuations, we recommend the following stocks for investment this Dussehra.

Infosys

Infosys is the second largest IT Company in India. The company’s service lines are more focused on discretionary spends like ADM and ERP constituting 67% of the revenues. On the vertical front, BFSI accounts for 33% of the revenue. Geographically, North America contributes ~61.9% of the revenue followed by Europe (~22.5%) in FY17. We expect 11% revenue CAGR over FY17-19E due to pickup in BFSI and retail segment supported by higher customer spends in the US. Similarly, large deal wins will keep the growth momentum. We expect 8% EBITDA CAGR over FY17-FY19E due to increasing focus on cost optimization. We expect 5% PAT CAGR of over FY17-FY19E. The appointment of Mr Nandan Nilekani as the non-executive chairman would restore a sense of security among investors, employees, and clients. We expect an upside of 15% from CMP of Rs 898 over a period of 1 year.

Year Net Sales (Rs Cr) OPM (%) Net Profit (Rs Cr) EPS (Rs) PE (x) BVPS (Rs) P/BV (x)
FY17 68,485 27.2 14,353 62.5 14.4 296.2 3.0
FY18E 70,746 26.6 14,326 62.4 14.4 358.6 2.5
FY19E 76,058 27.1 14,993 65.3 13.8 423.9 2.1

Source: 5paisa research

Aurobindo Pharma

Aurobindo Pharma Limited (Aurobindo) manufactures generic pharmaceuticals and active pharmaceutical ingredients in India. The company's product portfolio is spread across six major therapeutic categories of antibiotics, anti-retrovirals (ARV), CVS, CNS, gastroenterological, pain management, and anti-allergic.  It derived 79% of revenue from generic pharmaceuticals and remaining from active pharmaceutical ingredients in FY17. Geographically, US business contributes 44% to Aurobindo’s total revenue.  We expect 20% revenue CAGR over FY17-FY19E due to strong pipeline of 134 products which majorly includes niche and high value products. Clearance to unit 7 in Hyderabad is also beneficial for the company. Further, recent approval for serum and tablet formulations of gRenvela will also boost the revenues. We expect margins to improve by 110 bps as strategic backward integration of marketing with API manufacturing is expected to reduce the intensity of ongoing pricing pressure. We expect 28% PAT CAGR over FY17-FY19E. We expect an upside of 15% from CMP of Rs 698 over a period of 1 year.

Year Net Sales (Rs Cr) OPM (%) Net Profit (Rs Cr) EPS (Rs) PE (x) BVPS (Rs) P/BV (x)
FY17 15,089 23.1 2,301 39.3 17.5 161.0 4.3
FY18E 16,301 23.2 2,386 40.7 16.9 201.7 3.4
FY19E 18,173 25.5 2,947 50.3 13.7 252.0 2.7

Source: 5paisa research

Manappuram Finance

Manappuram Finance is an NBFC, offering gold loans, microfinance, housing loans and commercial vehicle loans. Its AUM comprised of gold loan (81.4%), microfinance (13.14%), housing finance (2.2%) and others (1%) in FY17. We expect income to grow at 28% CAGR over FY17-FY19E on account of pickup in gold segment. The company is strongly focusing on short-term gold loans owing to current volatility in gold prices. Manappuram is also focusing on housing finance and microfinance and targets to derive 50% of revenue from these segments in next three years. We expect AUM to grow at 20% CAGR over FY17-FY19E. We expect GNPA to remain flat at 0.8% in FY18E. We expect an upside of 18% from CMP of Rs 95 over a period of 1 year.

Year NII (Rs Cr) Net Profit (Rs Cr) EPS (Rs) ROE (%) P/BV
FY17 1,943 726 1.7 24.8 2.8
FY18E 2,185 836 2.0 24.9 2.5
FY19E 2,489 959 2.3 24.9 2.1

Source: 5paisa research

Titan

Titan Company is India’s leading player in branded jewellery, watches and precision eyewear. Its revenue consists of Jewellery (78%), Watches (15%), Eyewear (3%) and others (4%) in FY17. We expect 42% revenue CAGR over FY17-FY19E on account of sub-brand Rivaah in wedding jewellery segment. With this, Titan targets to reach 40% market share in FY21E vs 22% in FY17E. Additionally, the entry in high value studded jewellery will also support the revenue growth. Recently, government has fixed GST rate of 3% (expected 5%) on gold which bodes well for the company. We expect EBITDA margins to improve by 90bps over FY17-FY19E on account of cost saving initiatives by the company. Titan is a debt free company which lends financial stability. We expect 60% PAT CAGR over FY17-FY19E. We expect an upside of 15% from CMP of Rs 587 over a period of 1 year.

Year Net Sales (Rs Cr) OPM (%) Net Profit (Rs Cr) EPS (Rs) PE (x) BVPS (Rs) P/BV (x)
FY17 12,614 9.5 761 8.6 68.5 48.6 12.1
FY18E 15,075 9.9 1,019 11.5 51.1 60.0 9.8
FY19E 17,968 10.4 1,285 14.5 40.6 74.5 7.9

Source: 5paisa research

Asian Paints Ltd (ASL)

Asian Paints is the largest paint manufacturer in India with market share of 53% in decorative paints and has a strong dealer network of ~45000 dealers. We expect revenue CAGR of 14% over FY17-FY19E on account of strong demand for decorative paints due to shorter repainting cycle (repainting forms 65% of the decorative paint demand). ASL is working on 2 Greenfield projects (Mysuru-6,00,000 KL and Vishakhapatnam- 5,00,000KL) to expand its decorative paint capacity.  The first phase of both the capacities- 3,00,000 KL will be completed by FY19E. GST will reduce the tax arbitrage for the unorganized segment (30% of industry) and will provide additional benefit to the organized players in the long run. We expect EBITDA CAGR of 14% over FY17-FY19E due to shift from distemper to external emulsion (high margin) in decorative paint business. We expect PAT CAGR of 11% over FY17-FY19E. We expect an upside of 15% from CMP of Rs 1161 over a period of 1 year.

Year Net Sales (Rs Cr) OPM (%) Net Profit(Rs Cr) EPS (Rs) PE (x) BVPS (Rs) P/BV (x)
FY17 15,290 19.8 2026 21.1 55 79.3 15.1
FY18E 17,244 19.6 2173 22.7 51 93.8 12.8
FY19E 19,908 19.9 2533 26.4 44 110.7 10.8

Source: 5paisa research