Commodity Report 30th January 2020 - Get Daily Commodity Research Reports

In-line quarter, PAT growth boosted by lower input cost & taxesRating: HOLD | CMP: Rs 748.20 | Target Price: Rs 810 | Upside: 8.30%Escorts reported Q3FY20 results which are in line with our estimates. Garnering of market share from other dominant players and higher operating efficiencies were key highlights. EBITDA was up by 6% and Profit by 11.19% on YoY basis. Strong dealer network in northern and central India, better Rabi crop prospects, lower interest rate regime, rural recovery aided by ongoing food inflation and better product offering augurs well for the company. All its business divisions stand on a strong footing and are poised to capture growth. Pick up is expected in Agri Machinery, Construction Equipment and Railway Products division.Recommendation: HOLD We have been recommending a buy on Escorts since per share price of Rs.598. Buy recommendation has there on it in both our advisory porfolio’s namely ‘Short Term Advisory Portfolio’ and ‘Multicap Advisory Portfolio’. The company stands on strong financials. The balance sheet is almost net-debt free, has healthy return ratios and operating margins, and ROE is in excess of 20%. We recommend to hold the same for a per share target price of Rs. 810, valuing the company at a PER of 18xFY21e.In-line quarter, Encouraging volume growth Rating: BUY | CMP: Rs 741 | Target Price: Rs 875 | Upside: 17.92%Godrej Consumer products reported healthy Q3FY20 numbers. The company did remarkably well to register 7% volume growth for India business. In a slowing economy and falling discretionary consumer spends the company managed to pull off revenue growth of around 2% and Net Profit growth of 5%. Household insecticides remained its forte where both volume and value growth was delivered. Blended realization was lower for soaps and hair colours segment on account of price discounts and consumer offers, topline of both segments de-grew by around 4%. International business was better off delivering a constant currency sales growth of 11% and EBITDA margin expansion of 80 bps on YoY basis. Going forward we believe the company’s new product offering will garner traction as economy recovers and discretionary consumer spends return back with fury. Recommendation : BUYWe have recommended a buy on Godrej Consumer Products LTD. in our Multicap Advisory portfolio at per share price of Rs. 692. Company’s healthy balance sheet, high return ratios, robust cash flows, and high operating margin provide much needed margin of safety in times of economic slowdown. We believe the company will embark on a journey of mid teen top and bottom line growth from FY21 onwards. We recommend buy on it for a per share target price of Rs. 875, valuing the company at a PER of 35xFY21e. Disclaimer: This document has been prepared by IndiaNivesh Securities Limited (“INSL”), for use by the recipient as information only and is not for circulation or public distribution. INSL includes subsidiaries, group and associate companies, promoters, employees and affiliates. INSL researches, aggregates and faithfully reproduces information available in public domain and other sources, considered to be reliable and makes them available for the recipient, though its accuracy or completeness has not been verified by INSL independently and cannot be guaranteed. The third party research material included in this document does not represent the views of INSL and/or its officers, employees and the recipient must exercise independent judgement with regard to such content. This document has been published in accordance with the provisions of Regulation 18 of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is not to be altered, transmitted, reproduced, copied, redistributed, uploaded or published or made available to others, in any form, in whole or in part, for any purpose without prior written permission from INSL. This document is solely for information purpose and should not to be construed as an offer to sell or the solicitation of an offer to buy any security. Recipients of this document should be aware that past performance is not necessarily a guide for future performance and price and value of investments can go up or down. The suitability or otherwise of any investments will depend upon the recipients particular circumstances. INSL does not take responsibility thereof. The research analysts of INSL have adhered to the code of conduct under Regulation 24 (2) of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is based on technical and derivative analysis center on studying charts of a stock’s price movement, outstanding positions and trading volume, as opposed to focusing on a company’s fundamentals and, as such, may not match with a report on a company’s fundamentals. Nothing in this document constitutes investment, legal, accounting and/or tax advice or a representation that any investment or strategy is suitable or appropriate to recipients’ specific circumstances. INSL does not accept any responsibility or whatever nature for the information, assurances, statements and opinion given, made available or expressed herein or for any omission or for any liability arising from the use of this document. Opinions expressed are our current opinions as of the date appearing on this document only. The opinions are subject to change without any notice. INSL directors/employees and its clients may have holdings in the stocks mentioned in the document. This report is based / focused on fundamentals of the Company and forward-looking statements as such, may not match with a report on a company’s technical analysis report. Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report: Dharmesh Kant)

Currency pivot levels Currency pair Close Change (%) Resistance 1 Resistance 2 Pivot Support 1 Support2 USDINR 71.45 -0.13 71.5033 71.5567 71.4367 71.3833 71.3167 EURINR 78.785 -0.23 78.8883 78.9917 78.7967 78.6933 78.6017 GBPINR 93.06 -0.14 93.1575 93.2575 93.0550 92.9550 92.8525 JPYINR 65.61 -0.30 65.6842 65.7558 65.5733 65.5017 65.3908   Cross-currency update Currency pair Close Change (%) Dollar index 98.05 0.09 EURUSD 1.1007 -0.13 GBPUSD 1.3017 -0.07 USDJPY 109.01 -0.10   USDINR 26 February 2020 expiry option update Options LTP Change (%) OI OI (Prev.) CE  72.50 0.08 -13.51 44975 -1.65 CE 72.00 0.17 -13.92 128529 0.45 CE 71.50 0.3475 -10.9 140910 42.01 CE 71.00 0.6175 -8.86 127090 4.43 CE 70.50 1.02 -5.77 24803 10.07           PE 72.00 1.105 7.28 6795 62.17 PE 71.50 0.71 10.08 94991 9.02 PE 71.00 0.3875 11.51 61141 38.24 PE 70.50 0.17 17.24 111129 11.83 PE 70.00 0.06 14.29 60822 23.66 Note: Previous day’s movement in option activities RBI reference rate (29 January2020) 1 USD 1 GBP 1 EURO 100 YEN 71.1875 92.7194 78.4221 65.2400   Technical view on major currency pairs USDINR (February Futures) The USDINR pair had a neutral trade yesterday, and after trading in the range of 71.35–71.45 settled at 71.45 as compared to the previous day’s close of 71.5450. On the other hand, the US dollar stayed neutral after the Federal Reserve kept rates steady and signalled that it was in no hurry to move off the sidelines. Technically, the USDINR pair found support at 71.40, which coincides with the 23.6% Fibonacci projection line on the above chart, indicating a bullish momentum in the near future. On the upside, a break above 71.55 will open the door for the next resistance of 71.65–71.85. Alternatively, on the downside, 71.35 will act as a crucial support and a break below will test the next support of 71.20–71.05.Trend: Neutral After upbeat economic data from the UK yesterday, the pound witnessed a mild recovery against the rupee and after hitting a day’s high 93.1550 settled at 93.0675 levels. The data showed, that the annual house price growth jumped to a 14-month high this month in the UK. Property values across the UK were 1.9% higher than a year earlier, marking the strongest annual growth since November 2018, when it was also at 1.9%. Technically, the GBPINR pair remained above its immediate support of 92.70, and rebounded from 92.9525 levels yesterday. However, the momentum trend still looks bearish as pair is trading below its SMA on the EOD chart. Further, RSI 14 and its 9 SMA are showing a bearish crossover, which is supporting the bearish outlook. Today, a break below 92.70 will cause the pound to test its next support of 92.40–92.20. Alternatively, any rise towards 93–93.20 will create the probability for a correction towards 92.40.     Trend: Bearish   Major economic data and events released yesterday/earlier today  Major economic data & events scheduled for the day Time Currency Economic indicators Forecast Previous Possible impact All Day CNY Bank Holiday - - - 6:00am AUD Import Prices q/q 0.40% 0.40% Neutral All Day EUR German Prelim CPI m/m -0.60% 0.50% Negative 1:30pm CHF KOF Economic Barometer 97.00 96.40 Positive 30th-31st CNY Foreign Direct Investment ytd/y - 6.00% - 2:25pm EUR German Unemployment Change 5K 8K Positive 2:30pm EUR Italian Monthly Unemployment Rate 9.70% 9.70% Neutral 3:30pm EUR Unemployment Rate 7.50% 7.50% Neutral Tentative EUR Italian 10-y Bond Auction - 1.35|1.3 - 5:30pm GBP BOE Monetary Policy Report - - -   GBP MPC Official Bank Rate Votes 0-3-6 0-2-7 Positive   GBP Monetary Policy Summary - - -   GBP Official Bank Rate 0.75% 0.75% Neutral   GBP Asset Purchase Facility 435B 435B Neutral   GBP MPC Asset Purchase Facility Votes 0-0-9 0-0-9 Neutral 7:00pm USD Advance GDP q/q 2.10% 2.10% Neutral   USD Advance GDP Price Index q/q 1.80% 1.80% Neutral   USD Unemployment Claims 215K 211K Neutral 9:00pm USD Natural Gas Storage -197B -92B Positive 11:30pm EUR German Buba President Weidmann Speaks - - -  Impact: High | Low | Medium  Note: Economic data expectations are based on median forecast by economists or Reuters and Bloomberg survey. Here, a positive impact indicates currency could appreciate and negative indicates currency could depreciate against the US dollar. Technical chart source: TickerNews Source: TickerNews, Forexfactory.com, forexlive.com, Reuters, and investing.com *DOS – Depends on Statement. DOV – Depends on Votes. Disclaimer: This document has been prepared by IndiaNivesh Securities Limited (IndiaNivesh), for use by the recipient as information only and is not for circulation or public distribution. This document is not to be reproduced, copied, redistributed or published or made available to others, in whole or in part without prior permission from us. This document is not to be construed as an offer to sell or the solicitation of an offer to buy any currency pair. Recipients of this document should be aware that past performance is not necessarily a guide for future performance and price and value of investments can go up or down. The suitability or otherwise of any investments will depend upon the recipients particular circumstances. The information contained in this document has been obtained from sources that are considered as reliable though its accuracy or Completeness has not been verified by IndiaNivesh independently and cannot be guaranteed. Neither IndiaNivesh nor any of its affiliates, its directors or its employees accepts any responsibility or whatever nature for the information, statements and opinion given, made available or expressed herein or for any omission or for any liability arising from the use of this document. Opinions expressed are our current opinions as of the date appearing on this material only. IndiaNivesh directors and its clients may have holdings in the currencies mentioned in the report.)