Model Portfolio - September 2017.

Status check on the recommendations

Scrip	Recommendation	Target achieved\Not achieved?	Returns
Graphite India Ltd.	BUY at CMP of INR. 266 and further add on declines to the levels of INR. 257, for a target of INR. 330-340.	​Targets Achieved. Scrip made a high of INR. 388 and September wrapped up with the candle closing at the level of INR. 371.70. In October, the scrip made an all time high of INR. 496.90.	87%
Uflex Ltd.	BUY at CMP of INR. 437 and further add on declines to the levels of INR. 423, for a target of INR. 488-515.	Targets Achieved @ INR. 494.	17%
Nandan Denim Ltd.	BUY at CMP of INR. 153 and further add on declines to the levels of INR. 147, for a target of INR. 188-210.	Targets Achieved @ INR. 186.70.	22%
Future Retail Ltd.	BUY at CMP of INR. 571 and further add on declines to the levels of INR. 552, for a target of INR. 625-640.	Partially Targets Achieved @ INR. 592.	7%
Arvind Ltd.	BUY at CMP of INR. 385 and further add on declines to the levels of 375, for a target of INR. 430-465.	Partially Targets Achieved @ INR. 418.	13%

Last updated on 01 Nov, 2017.

Recommendations

The equity markets have delivered a return of close to 8% - 9% compounded annual growth rate (CAGR) over the last three years till August 2017, largely led by strong flows from the FIIs and DIIs. The Sensex gained 7.56% between July (FY-15 - FY-17) with mid-cap and small-cap indices gaining some momentum last month.

The Nikkei Manufacturing PMI in India unexpectedly jumped to 51.2 in August of 2017 from 47.9 in July as disruptions stemming from confusion over a new national sales tax eased. The figure beat market estimates of 49.3, supported by a rebound in output and new orders while new export orders increased for the third consecutive month and employment expanded the most since March 2013. Technically, we might see another 120 to 180 points upside from the current levels. Downside support levels are estimated between 9788-9690 and upside resistance holds at the level of 10033-10120. Global geo political event is the main risk currently. It is highly recommended to have a stock specific approach in the present scenario.

Company	Investment Rationale	Recommendation & Target
Graphite India Ltd.	The company is the pioneer in India for manufacture of graphite electrodes as well as carbon and graphite specialty products. The company mainly operates in three segments: graphite and carbon, power, and others. The company posted 16.40% rise in net profit to INR. 29 Cr. for the quarter ended June 30, 2017. EBITDA margins improved to 16.10% during the first quarter of FY-18 compared with 10.30% in the same period last year. The company had a capacity utilization of 95% in the first quarter of FY-18 against 68% in the same period last year. Increased expenditure on affordable housing, roads, and infrastructure will provide thrust to the sector as well as company.	BUY at CMP of INR. 266 and further add on declines to the levels of INR. 257, for a target of INR. 330-340.
Uflex Ltd.	It is a holding company engaged in the manufacture and sale of flexible packaging products. It also offers a flexible packaging solution to its customers across the globe. Its products include printed, laminated, metalized, co-extruded, coated, embossed, plain plastic films, and hologrammed sticker sheets. It offers finished packaging to a range of products, such as snack foods, candy and confectionery, sugar, rice and other cereals, beverages, tea and coffee, dessert mixes, and noodles. Continuous innovation & production excellence has been a hallmark. Better Q1FY17 performance than peers. TCPL PAT decreased by 60%, Essel Propack net profit declined by 8.9%, sales increased by 6%, while UFlex PAT increased by 8% and sales  by 7%. Strong global sales and distribution network along with presence in all verticals of flexible packaging value chain and  customers in about 140 countries. Good monsoon will increase rural consumption and GST will help organized sectors like FMCG companies.	BUY at CMP of INR. 437 and further add on declines to the levels of INR. 423, for a target of INR. 488-515.
Nandan Denim Ltd.​	The Gujarat based company and part of the Chirpal group is a textile manufacturer and positions as the second largest denim manufacturer in India and fifth largest in the world. The company is currently engaged in manufacturing denims, cotton fabrics, and khakis. In FY17, denim contributed to around 93% of the revenues while others are only 7%. Improvement in margins on account of healthy financials along with reduction in cotton prices. Beneficial policies of the Central and State Government will help the Company. NDL gets 5% interest subsidy and 10% capital subsidy for 7 years under the Central Textile policy. The company plans full backward integration in FY18. This would help meet a significant percentage of yarn requirement in-house, which would increase the margins and give more control on the supply chain. The demand for Indian denim has witnessed a robust growth over the past four years, growing at a CAGR of 23.6% during this period. The per capita consumption of denim is the lowest in India at 0.3 pairs per person, showcasing the vast opportunity to expand.	BUY at CMP of INR. 153 and further add on declines to the levels of INR. 147, for a target of INR. 188-210.
Future Retail Ltd.	An Indian based company, which is engaged in the business of retailing a range of household and consumer products through departmental store facilities under various formats. The company is primarily engaged in the business of multi-brand retail trade. The company has access to approximately 20 compact hypermarket easy day stores and over 210 supermarket easy day stores. The company has its own logistic arm, Future Supply Chain Solutions, which ensures the smooth and timely travel of goods across the country.  Robust Q1FY17 result: The company posted a 110% rise in net profit and 18% rise in sales YoY. The company plans to increase the number of Big Bazaar stores from 235 as on 31 March, 2017 to 350 stores in the coming 3-5 years. The company is restructuring the existing establishment, merging 69 ezone stores into larger stores, such as Big Bazaar to provide more products under one umbrella and leveraging operations and customer reach.	BUY at CMP of INR. 571 and further add on declines to the levels of INR. 552, for a target of INR. 625-640.
Arvind Ltd.	Arvind Limited is a textile company. The company's principal products and services are finished fabrics and garments. Its segments are Textiles; Brands and Retail; Real Estate, and others. The company, through its subsidiary, Arvind Lifestyle Brands Limited, markets branded apparel and licenses international brands in India. Its brands portfolio includes international brands, such as Arrow, US Polo, Izod, Elle, and Cherokee. It also operates MEGAMART apparel value retail stores. It also has a presence in telecom business directly and through joint venture companies. Foray into Omni-channel play. One stop for apparel requirements. Arvind has been constantly building on the technical textile business and have been looking for newer opportunities for joint ventures with global companies to either bring in technology or access to international customers. It has plans to open 100 new retail stores in FY18 under power brands (30 stores under each brand) and 7 to 8 stores (5 stores for Sephora and 2 or 3 stores of GAP) under specialty retail segment. Revenues for the quarter grew 18% YoY to INR. 2475 Cr. The growth was accelerated by higher growth in brand & retail segment, which grew 22% YoY Power brands grew 15% YoY to INR. 417 Cr.	BUY at CMP of INR. 385 and further add on declines to the levels of 375, for a target of INR. 430-465.

* CMP is the closing price as on 06 Sep, 2017.

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