Opening as Equity Research Analyst with KREDENT Brokerage

Opening as Equity Research Analyst with KREDENT Brokerage

We are inviting applications for our Equity Research Team.

Kredent Brokerage is one of the largest trading houses in India with substantial market share in exchange’s volume and liquidity. Kredent is a direct clearing and trading member of the NSE, MCX-SX, MCX, NCDEX and BSE.

At Kredent Equity, one of the most important initiatives is the de-risking factor. To make prudent investment plans for our clients, our highly trained analytical team researches on the probable market trends. There are openings in this research team for an Equity Research Analyst.

Pre-requisite: Candidates with a minimum of 2 years experience in the Indian Equity Market, meeting either of the following conditions can apply.

• MSc in Finance
• Indian CFA
• International CFA level 1 pass

Kindly forward your resume at rahul.s@kredent.com with the subject: Equity Research Analyst

Jubilant Food Works IPO: The Pizza is Costly

Jubilant Food Works the owner of Dominos Pizza India has come up with its IPO to raise around 300 crore rupees with the purpose of

• Repayment of Loans, and
• General Corporate Purposes

Thus, not using the IPO money for any substantial growth purpose, but the promoters just wants to en cash an opportunity to mint money in this IPO frenzy.

Jubilant operates its pizza delivery stores pursuant to a Master Franchise Agreement with

Domino’s International, which provides it with the exclusive right to develop and operate

Domino’s pizza stores and the associated trademarks in the operation of pizza stores in

India, Nepal, Bangladesh and Sri Lanka. This provides the ability to use Dominos’ globally

recognized brand name, as well as operational support for pizza and food technology,

commissary & logistics management support, global marketing and vendor development

know-how. Some facts regarding the company are

• As of November 30, 2009, Jubilant operated 286 stores in India located in 22 states including 59 cities and through a sub-franchisee
• On average, 1.81 million pizzas, including add-ons were sold each month throughout its pizza stores in India in FY09 and for the six months period ended September 30, 2009, 2.46 million pizzas (including add-ons) were sold each month

Despite the company being in a growth segment is faced with too much of competition from players like Pizza Hut, Papa John's and other local/regional food joints, because of which the margins remains subdued.

At INR145.00 the upper end of the price band, Jubilant is priced at 34.8x times of its FY2010 Diluted EPS of Rs4.16. However, based on FY09 Diluted EPS, it is at a P/E of 125x at the upper price band. This is much higher compared to the other global listed players like Domino’s (US), Papa John’s and Mcdonald’s.

Hence, I strongly believe that a retail investor should avoid subscribing to the IPO as it is an highly expensive offering and the application from the anchor investors (Not completely subscribed) front clearly highlights this fact.

The Inflation deamon

The WPI for the month of December stood at 7.31% against 6.15% in the corresponding month of the last year.The same figure posted 4.78% in the previous month. The released figure is almost in the line with the market’s expected figure

• This high figure of inflation is the resultant of high food prices and a low base effect. Government has thus, decided for the off taking of surplus stocks of wheat and rice and also efforts to be made to increase the farm-productivity
• The inflation figure is much higher than the RBI’s forecast of around 7% by March end which the central bank published in its second quarter monetary policy review Hence it will definitely going to pull a chord with the RBI and help it to determine the interest-rate and monetary policy. It is expected to tighten the monetary policy and thus, hike the interest-rates as high inflation erodes the value of money and thus decrease its purchasing-power.

Thus we believe that that one should start booking profits form the rate sensitive like banking and real estate and move towards defensives like FMCG and Pharma.

Inflation Internals

• The sub-group of primary articles rose by 14.88% y-o-y against 11.15% in Dec’08.It registered a growth of 1.25% m-o-m mainly because of high growth in the food articles, which increased by 0.45% m-o-m. The increase in the food articles was induced by the surge in prices of urad, moong, spices, condiments, vegetables, pulses and wheat
• In the same sub-group, the non-food articles increased by 3.92% m-o-m due to higher prices of raw tobacco, oil-seeds and fibers like raw jute & rubber. The index for minerals rose to 0.19% m-o-m which was due to higher prices of fire-clay, dolomite, phosporites barites and many other minerals
• The second sub-group of fuel, power, lights and lubricants increased to 4.29% y-o-y from -0.21 in Dec’08. It registered a growth of a mild 0.09% m-o-m due to higher prices of light diesel oil, furnance and neptha oil
• The third sub-group of manufactured products registered an increase of 5.17% y-o-y from 6.63% in Dec’08. it registered a growth of 0.19% m-o-m mainly because of increase in the prices of food-products, sugar, edible oils, cotton textiles and rubber and plastic products Food products rose by 0.76% m-o-m on note of higher prices of edible food products.
• Sugar rose by 0.20% while there was an increase of 2.27% in edible oils due to higher prices of oil-seeds.

Training the Teachers

If education is the foundation for the future generation, teaching automatically forms the core. In a project that will help upgrade skills of Indian teachers, including primary school teachers, the

University of Oxford has tied up with Core Projects and Technology to bring global training

standards to the country.

• The University of Oxford and Core Projects will collaborate in the field of teacher capacity building and enablement in the country
• Prime Minister Manmohan Singh has said that the national shortfall of school teachers today is about a million.
• ·Teacher training will be very critical and crucial for the success of the Sarva shiksha Abhiyan SSA); Rashtriya Madhyamik Shiksha Abhiyan (RMSA) and the Model Schools Programme.
• In India, Johnson will lead the proposed India programme on behalf of the University of Oxford.
• The project is initially slated for duration of three years; during which; the Oxford team of
• educationists; headed by Johnson; will closely work with Core projects and various stakeholders of the Indian education space

Given this noble initiative and other such projects by Core Projects, I believe that the stock is a good long term investments and should be added on dips or one could start a SIP form of investment from today.

Opening as professional trader with KREDENT

We are glad to invite applications for our Professional Derivatives Trading desk.

Kredent trading desk is one of the largest trading desk in India with substantial market share in exchange’s volume and liquidity. Kredent is the direct clearing and trading member of the NSE, MCX-SX, MCX, NCDEX and BSE. There are multiple openings in our options trading, currency trading, and commodities trading desk.

Pre-requisite: Candidates meeting either of the conditions can apply. The is no compulsion of any trading experience.

• International CFA level 1 pass
• CMT level I pass
• FRM/PFM pass

Kindly forward your resume at career@kredent.com with subject: Professional Trading

Indian Healthcare Sector

The Indian healthcare sector, we believe is well poised for growth in the long term and presents a good investment opportunity.The stocks mentioned in the report have multiplied around four fold on an average in the last one year and hence a SIP form of investment is recommended.

Please use the following link to download the report containing our top recommendations.

Bayer Corp: Making Agriculture Better

BSCL, an agro-chemical company, is subsidiary of the Euro 35 billion Bayer AG

• Its business is divided into crop protection, environmental science and bio-science

• Per hectare consumption of pesticide in India is merely 0.48 kgs, lower than 5.0 kgs per hectare in the US and again less than 10.0 kgs per hectare in Japan

• With its strong R&D, BSCL continues to offer new products to its customers

• The Company derives nearly 80.0% of its exports revenue from its Bayer AG group companies due to the cost advantages

• New products’ launch, outsourcing from parent and low pesticide penetration will drive the future growth of the Company

• Despite poor rainfall in H1FY10, the Company registered a strong performance

• Its profit in H1FY10 is Rs. 109.42 crore higher than Rs. 94.46 crore posted for FY09

• The Company has shut down its Thane plant spread over 108 acres of land, valued around Rs. 1,000.0 crore

• The sale of land could generate huge cash reserves for BSCL

• The stock could be bought at current levels with one year target price of Rs. 632.0