Monthly Update From Mansukh (For Private Circulations Only) Issue: February 2013
Indian equity markets went through a choppy trade in the passing F&O January series expiry week with major indices getting a halt to their six weeks winning streak.While, the traders were cautious from the very beginning about the RBI's policy review, they looked concerned about the outlook of
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the apex bank. Though, RBI delivered on the street's expectation by reducing repo rate & CRR by 25 basis points each, but the undertone of the central bank was cautious and it said that the progress going forward would be slow and gradual.

It also urged the government to persist with structural reforms to enable the economy to sustain high growth. The benchmarks never looked confident during the week and just made one positive closing. Not only the domestic jitters but the global concerns too continuously weighed on the sentiments of the market, keeping any upside in check. On the same time mixed earnings season too added to the woes of the market. However government continued its effort to draw more investments by assuring a better environment in the country. The finance minister was showcasing investment opportunities in India holding discussions with leading representatives of European companies and institutional investors ahead of the budget.
The week marked the expiry of January F&O series , though the benchmarks gained about 3 percent for the series, it remained a quiet one with mid cap suffering a beating, while some individual stocks outperforming. Nifty rolls were observed at 64.37% against

the 3 month average of 65.55%, while the market wide rollover was slightly higher at 83.07% against 3 months average of 83.05%, indicating the market men are expecting a good budget. The sectors that showed strongest rollover were Infra, Capital Goods, Pharma and Media, while Technology, Automobiles, FMCG and Finance witnessed comparatively lower rollover to the February series.

Next batch of Q3 results, which would be closely eyed by the equity markets, includes earnings of ONGC, Tata Power Company, Tata Steel, Coal India, BPCL, Tata Motors, Dr. Reddy's Laboratories and Ranbaxy Laboratories, etc. Further, telecom stocks are expected to hog some limelight in the coming week, as EGOM on telecom is expected to decide on number of slots that operators should be allowed to bid for, in the upcoming spectrum auction. However, Department of Telecom has already mentioned that the minimum and maximum number of blocks for which a bidder can bid is subject to final confirmation on approval. On the global front, investor's would be eyeing two important economic data from World's largest economy, US, Jobless Claims & International Trade data on 7 & 8 Feb respectively. Therefore quite a volatile session we are expecting in upcoming series however 6160-6180 could be near term resistance levels. On the flip side any decisive breakdown below 5900 may dampens the trader's sentiment and we might see 5700-5730 where possibility of consolidation can't be rule out. HAPPY TRADING

or sms 'mansukh' to 56767
The U.S. economy shrank unexpectedly late last year, a reminder of the biggest threat it faces in 2013: sharp government spending cuts and prolonged political budget fights. A plunge in defense spending helped push the economy into negative territory for the first time since mid-2009. The contraction in the October-December quarter came in at an annual rate of 0.1 percent, according to a government estimate released on 30/01/2013. The Commerce Department said the economy shrank last quarter mainly because companies restocked at a slower rate and the government slashed defense spending. Exports also fell. Economists say some of those factors could prove temporary. Still, the slowdown from the 3.1 percent annual growth rate in the July-September quarter was unexpectedly sharp.

Consumer spending, which drives about 70 percent of the economy, added 1.5 percentage points to growth last quarter. Business investment and home construction contributed, too. But government spending cuts and slower company restocking, which can fluctuate sharply, subtracted a combined 2.6 percentage points from GDP. And a drop in exports subtracted an additional quarter-point. Defense spending plummeted more than 22 percent, the steepest drop in more than 40 years. Nearly all those


cuts were in services, such as weapons maintenance and personnel support. The fourth-quarter shrinkage in economic output comes as a shock to analysts on Wall Street, who had been expecting 1.1% growth according to a poll by news agency Reuters. Not one economist surveyed had predicted an economic contraction. It will add to pressure on the US Federal Reserve to do more to stimulate the economy. Members of its Federal Open Markets Committee are due to announce the conclusions of their latest policy-setting meeting later on Wednesday, and will have had an advance look at the economic data.

The Fed has kept overnight interest rates near zero since late 2008 and it has tripled its balance sheet to about $3 trillion through its purchases of securities, which are aimed at pushing longer-term borrowing costs lower. While the recovery from the 2007-2009 recessions has been stubbornly tepid, the Fed's policy panel voiced confidence it would remain on track with continued help from monetary policy. The Fed noted that consumer spending and business investment had picked up and the housing sector had shown further improvement. It also acknowledged calmer financial conditions in Europe, omitting a December warning that these posed a significant threat, although it said downside risks remained. The Fed's bond-buying program, under which it currently purchases $40 billion of mortgage-backed bonds and $45 billion of longer-dated Treasuries a month, is part of the central bank's unprecedented effort to spark a stronger recovery and drive down unemployment.

At the close of U.S. trading, the Dow Jones Industrial Average finished down 0.32%, the S&P 500 index was down 0.39%, while the Nasdaq Composite index fell 0.36%. Earlier Wednesday (on 30/01/2013), the Commerce Department reported that the U.S. gross domestic product contracted for the first time since the second quarter of 2009 in the three months ending December, shrinking by 0.1%. Overall quite a bullish scenario we are expecting in the upcoming month though 14280-300 could be the crucial resistance zone. On the flip side 13150 followed by 12800 may provide some important cushions at lower levels.

Source: Reuters India
Caving into growing clamour for a rate cut, Reserve Bank of India (RBI), in 'Third Quarter Review of Monetary Policy 2012-13', dropping its prolonged anti-inflationary stance, went ahead and slashed repo rate by 25 basis points to 7.75 per cent against 8 per cent earlier. Consequently, the reverse repo rate under the LAF, determined with a spread of 100 basis points below the repo rate, now stands adjusted to 6.75 per cent with immediate effect. Subsequently, the Marginal Standing Facility (MSF) rate, determined with a spread of 100 basis points above the repo rate, also stood adjusted to 8.75 per cent with immediate effect. India's apex bank was widely expected to make a modest cut in interest rates to support an economy set for its slowest growth in a decade, however deeper cut was anyways unlikely due to worries over the fiscal and external deficits and inflation.

What came as a pleasant surprise to the street, was the reduction in cash reserve ratio (CRR) of scheduled banks by 25 basis points from 4.25 per cent to 4.0 per cent of their net demand and time liabilities (NDTL) effective the fortnight beginning February 9, 2013, a move that would release around Rs 18,000

crore of primary liquidity into the banking system. Further, with regards to inflation, the RBI in report also stated the possibility to moderate below its projection of 7.5 percent by March-end. However, it added, 'suppressed inflation continues to pose a significant risk to the inflation in 2013-14. As some of the risks materialises, inflation path may turn stick.' Worried over the country's ballooning Current Account Deficit (CAD). RBI governor D Subbarao in the customary post-policy conference call said 'we will take into account what the CAD is. Monetary easing will not be driven just by inflation numbers or the inflation trajectory'. As per the RBI governor, the CAD has not only implications on macroeconomic situation but also on the price situation, inflation movement and therefore for monetary policy. It will be difficult to say that monetary policy will just look at inflation numbers and remain blind to all other variables. Further, Subbarao added that we take into account external sector developments including the size of CAD and the composition of CAD into the monetary policy action but do not target any CAD number.

Meanwhile the government has paved the way for the implementation of the proposed Goods & Services Tax (GST) though in a much diluted form as the centre has relented to some of the key demands of the states. A day after clearing Rs 34,000 crore of Central Sales Tax compensation to the states, the Centre has now agreed to make changes to the Constitution Amendment Bill for GST. Dropping from its earlier stand, the government gave permission to a phased roll-out of GST like the Value Added Tax (VAT). This means that only willing states could implement the new indirect tax system from the beginning. Contrary to the earlier proposal for a uniform GST rates across the country, now the government agreed to have a floor rate of taxation with a narrow band. Also, states will have the flexibility to opt out of it. Petroleum products would now be made part of GST, which were kept out of GST in constitution amendment bill. Moreover, the states will also get powers to raise additional resources in the time of a natural calamity.

Source: Reuters India

Bharat PetroResources (BPRL), a wholly owned subsidiary of BPCL, has informed that Petrobras, has reported a new discovery of light hydrocarbon in the concession, located in ultra deep waters of Sergipe Alagoas Basin. The discovery was confirmed through log data analysis. Studies of pressures recorded in the reservoirs and fluid samplings have indicated the presence of light hydrocarbons. The Cumbe is the first well, being drilled in the block and is located 9.4 kms north of the recent discovery well Farfan. The Environment & Forests Ministry has granted environment clearance to the Rs 14,225 crore IREP of BPCL to be implemented at Kochi Refinery. BPCL, Kochi Refinery, has a refining capacity of 9.5 MTPA, producing Euro-III/IV compliant auto-fuels and various other Petroleum Products. The project proposed by BPCL envisages increasing the refining capacity of Kochi refinery to 15.5 MTPA, modernisation of refinery to produce auto-fuels complying with Euro-IV/Euro-V specifications, and Upgradation of low value refinery residue stream to value added products.

On technical perspective, after taking significant correction from the highs of Rs 450, scrip has shown crucial resistance below Rs 360 level. At current juncture we believe scrip has the potential to recover from the current level as its technical indicators i.e. RSI and MACD also suggest some technical pull back in near term. Hence we recommended 'Buy' in this stock.



monthly research report
BPCL 380-390 358 425 445 1 Months

Hindalco Industries, the metals flagship company of the Aditya Birla Group, is an industry leader in aluminium and copper. The company's aluminium units across the country encompass the entire gamut of operations from bauxite mining, alumina refining, aluminium smelting to downstream rolling, extrusions, foils and alloy wheels, along with captive power plants and coal mines. Hindalco has finalized its arrangement for acquiring Alumina Refinary and Bauxite Mines from Novelis Do Brasil, a wholly owned subsidiary of Novelis Inc. The Alumina Refinery, with a capacity of 145 KTPA, situated in the city Brazil, has Mining Rights of over 50 million tones of Bauxite reserves. This transaction will be done by transferring the Alumina Assets of Nivelis Do Brasil into a new company to be formed in Brazil and acquisition of all the shares of the new company by AV Minerals (Netherlands) B.V. Meanwhile Hindalco Industries, the non-ferrous metals producer is likely to commission its 1.5 mtpa alumina refinery in Odisha by the end of March 2013.

On technical viewpoint, stock has shown consolidation pattern around Rs 100 and currently in upward bias. Moreover it's RSI and other technical indicators also displaying some buying opportunities in near term. Hence investors are advised to BUY this stock for a price target of Rs 150-170 in near term.



monthly report
HINDALCO 105-110 95 150 170 1 Months
   Talwalkars Better Value Fitness Ltd Target Price:` 243

Talwalkars Better Value Fitness Limited (TBVFL), is one of the largest fitness chains in India offering a diverse suite of services including gyms, spas, aerobics and health counseling under the brand 'Talwalkars'. With 128 ultramodern branches across 60 cities in the country and over 1,25,000 members, 'Talwalkars' has pioneered the concept of gyms in India and today it is a recognized name in the health and fitness industry. The Company operates following the business model comprises of 100% owned health clubs, 51% subsidiary health clubs and HiFi, the franchised gym concept.

Financials: In the last five years the Top Line of TBVFL has phenomenally grown at CAGR of 37.6%, Operating Profit grew at 49% while PAT also grew at impressive CAGR of 74% during the same period. In FY12, the Net Sales of company grew by 26.39% to Rs 109.35 crore over FY11, Operating Profit grew 23.6% to Rs 45.06 crore while, PAT of the company increased by only 26.07% to Rs 19.2 crore for the same period. In Q2FY13, The Net Sales of the company jumped 33.50% from Q2FY12, Operating Profit grew 39.2% whereas PAT surged 44% compare to corresponding quarter of the last year. OPM of the company for the same period improved by 187bps to 39.20% while PAT margin improved by 164bps to 22.37%.

Fitness Industry is highly underdeveloped in India ....
The Indian wellness industry is divided into 5 segments, Beauty services & cosmetic products, Fitness Centres, Nutrition, Alternate therapy and Rejuvenation. The fitness and slimming market in India is worth Rs. 40 billion comprising of slimming products, slimming services, fitness equipments and fitness services. Out of the four segments, the fitness services segment accounts for ~50% of the total pie. However, there are many factors like, Increase in young population and disposable income, Increase in lifestyle diseases, Increased awareness, Growth in urbanization and regional development, which influence the demand of this particular sector. The Indian fitness industry is a highly underdeveloped market compared to several developed and developing countries in the world.

Constantly looking to become a Leading Fitness Player…

Talwalkars dominates the fitness services segment in India and has a share of 8-10% of the organized market in the country and further company is looking to become a holistic fitness player with focus on each category of fitness likes personal training, Weight loss, aerobics, alternate therapy, spa. In past 9 months, company launched various new innovative product offerings like Talwalkars NuForm, Zumba classes and Reduce-Diet program. These initiatives are capable to generate high EBIDTA with lower cap-ex and will also help in improve the store sales and enhance the total member's base. Further, the company is looking to increase the price between 6%-8% across health clubs, which had not being done during the first half of the calendar year and despite theses price hikes TBVFL has witnessed increase 76% in its annual renewal.


Widening presence to Increase its footprints in smaller cities ...
TBVFL continues to dominate the health a fitness industry with 130 health clubs spread across 69 cities and towns in 18 states of India and to keep its dominance in the sector company has further planned to add 25-30 fitness centres under all formats in the current fiscal year. To penetrate in smaller townships, TBVFL has widened its footprints in tier II, III, IV cities and towns of India, the company has also developed HiFi model according to these smaller cities of India. This demonstrates the ability of the company to understand local demographics and launch centres in small pockets of India. Additionally to enhance the revenue from its existing stores company is focusing to optimize service offerings and introducing new services to leverage the current infrastructure and enhance customer portfolio.

JV with world largest Health club will help to expand network ...
To expand its business especially in leisure & sports clubs segment in India, company has joined hands with UK's David Lloyd Leisure, which has 30 years' worth of unparalleled expertise and strategic knowledge on costs, implementation and execution of such clubs, operates 91 sports, health and leisure clubs in Europe, UK and all over the world. The JV will focus on key areas like consulting, execution, management and operations of leisure and sports clubs. The company is also open to setting up and managing the clubs for third parties and has had discussions with several potential clients like builders and property dealers.

Fundamental analysis and Technical analysis are the two very broad categorized methods, which have been used to analyze securities while trading & making investment decisions. Fundamental analysis involves analyzing the characteristics of a company in order to estimate its value, while Technical analysis takes a completely different approach, it doesn't care about the valuations of the company. Technical analysts are only interested in the price movements in the market. Technical analysis attempts to understand the emotions in the market by studying the market itself, as opposed to its components. If you understand the benefits and limitations of technical analysis, it can give you a new set of tools or skills that will enable you to be a better trader or investor. In this edition, we will discuss only the fundamentals of technical analysis. It's a broad topic, so we will cover only basics, providing you with the foundation which will help you to understand more advanced concepts of technical analysis.

What is Technical Analysis?
Technical analysis is a method of evaluating securities by analyzing the statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity. In any case, technical analysts' exclusive use of historical price and volume data is what separates them from their fundamental counterparts. Unlike fundamental analysts, technical analysts don't care whether a stock is undervalued the only thing that matters is a security's past trading data and what information this data can provide about where the security might move in the future. The field of technical analysis is based on three assumptions, which have been discussed below:

Market Discounts Almost Everything: The first and a major criticism of technical analysis is that it only considers price movement, ignoring the fundamental factors of the company. However, technical analysis assumes that, at any given time the price of a stock reflects everything that has or could affect the fundamentals of the company. Technical analysts believe that the company's fundamentals, along with broader economic factors and market psychology all are priced into the stock, removing the need to actually consider these factors separately. This only leaves the analysis of price movement, which technical theory views as a product of the supply and demand for a particular stock in the market.


History Likely to Repeat Itself: Another important idea in technical analysis is that history tends to repeat itself, mainly in terms of price movement. The repetitive nature of price movements is attributed to market psychology, in other words, market participants tend to provide a consistent reaction to similar market stimuli over time. Technical analysis uses chart patterns to analyze market movements and understand trends. Although many of these charts have been used for more than 100 years, they are still believed to be relevant because they illustrate patterns in price movements that often repeat themselves.

Price Follows the Trends: In technical analysis, price movements are supposed to follow trends. This means that after a trend has been established, the future price movement is more likely to be in the same direction as the trend than to be against it. Most technical trading strategies are based on this assumption.

Summing Up: Technical analysis can be used on any security with historical trading data. This includes stocks, futures and commodities, fixed-income securities, forex, etc. In this tutorial, we have only discussed the basics of technical analysis but keep in mind that these concepts can be applied to any type of security. In fact, technical analysis is more frequently associated with commodities and forex, where the participants are predominantly traders. Hope now you would have understand the philosophy behind technical analysis, Further we will get into explaining how it really works and one of the best ways to understand what technical analysis is to compare it to fundamental analysis, which probably will be discussed in our next edition.


The US Federal Reserve on Wednesday (30/01/2013) maintained its aggressive easing policy stance in light of downside risks to the outlook, as widely expected. In a statement after a two-day FOMC meeting, the Fed said it will keep buying $85 billion a month in mortgage bonds and Treasuries, arguing the support was needed to lower unemployment. This undisputedly means continued or further Quantitative Easing from the Federal Reserve, which in turn means support for Gold & Silver Prices. The Gold & Silver markets popped higher immediately following the GDP report, on ideas the weak data will prompt the Federal Reserve to adhere to is very easy money policies presently in place. The Gold & Silver market seemed more focused on GDP rather than a report from ADP showing that the economy gained 192,000 private-sector jobs in January. The Comex Gold April contract which has not been above the $1,700 level since Dec. 18, extended its gains above the 200-day moving average & closed at $1681.6 after rising to $1685 from $1663.5. Silver Futures for March delivery on the Comex smartly shot up to #32.30 from $31.25 & closed at $32.18 however MCX Gold Feb contract slumped to Rs. 29800 and MCX Silver slide to Rs 57500 on the last day of Jan 2013 primarily due to strong Rupee/Inr.

With Silver trading at around $31 per ounce and the Gold spot price hovering around $1650, the US Mint saw some $460 million dollars shift into precious metals in the month of January alone. Proof enough that the US citizens are no longer confident in the stability of the system as a whole, and they are diversifying their assets into physical resources that will retain value Gold & more conveniently Silver. Reuters reported huge quantities of Silver Coins being bought by investors including monster boxes full with 500 1oz Silver coins sealed by US Mint. Moreover according to

monthly report

some analyst Silver looks very interesting because of the massive short position. With Silver surging above $32.30, it certainly turms into very interesting composition in charts and we might see some strong bullishness in near terms. Since 2003 silver has gained 1,012%, and in doing so it has outpaced gold. At present the overgrown supply of silver is dangerously low.

This sets us up, say Silver Experts for a huge squeeze on the silver shorts. On the Comex there is currently a giant silver position, a position that almost dwarfs the available supply of free silver. A rise in silver will almost surely rub off on gold, since there is a ratio that constantly connects them. Moreover. The policies in major economies of Monetary Easing and low interest rates will boost global liquidity, increase risk preferences in the markets and drive speculative funds into Silver, Base Metals, Equities of Emerging Nations like China or India as well as other risk assets rather than Gold now, though some size-able chunk will also be driven to Gold Investment.

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Disclaimer : :This report is for informational purposes only and contains information, opinion, material obtained from reliable sources and every effort has been made to avoid errors and omissions and is not to be construed as an advice or an offer to act on views expressed therein or an offer to buy and/or sell any securities or related financial instruments. Mansukh, its employees and its group companies shall not be responsible and/or liable to anyone for any direct or consequential use of the contents thereof. Reproduction of the contents of this report in any form or by any means without prior written permission of the Mansukh is prohibited. Please note that we and our affiliate, officers, directors and employees, including persons involved in the preparation of issuance of this material may; (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of company (ies) mentioned herein or (b) may trade in these securities in ways different from those discussed in this report or (c) be engaged any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments or the company(ies) discussed herein or may perform or seek to perform investment banking services for such Company(ies) or act as advisor or lender / borrower to such Company(ies) or have other potential conflict of interest with respect to any recommendation and related information and opinions. All disputes shall be subject to the exclusive jurisdiction of Delhi High Court.
Safe Harbor Statement :Some forward looking statements on projections, estimates, expectation, outlook etc are included in this update ot help investors / analysts get a better comprehension of the Company's products and make informed investment decisions. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints. Investors are advised to consult their certified financial advisor before making any investments to meet their financial goals.


Mansukh Institute of Financial Markets (MIFM) is an advanced research institute established by Mr. J U Mansukhani, an ex-IES Officer, who has decades of experience in financial markets and research, is the founder of Mansukh Institute of Financial Markets. MIFM is specializes in Financial Market Education and Services. MIFM is pioneers in introducing short-term job-oriented diploma programme for providing state-of-the art facilities in the field of financial markets. Specifically, it caters to the need of training and placement for the personnel engaged in financial markets like Marketing Personnel, Dealers/Arbitrageurs, Research Analysts and Managers.

To be world class Training & Education Institute shaping careers through our eminent faculty & cutting edge research & becoming a shining example of achieving such high standards as to make the alumni proud of its pedigree.

To enhance the glow of knowledge through quality educational programmes resulting in improvement of the intellectual & practical skills of individuals for their overall growth & growth of society.

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