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Volume 1 | Issue 2
homecoming FOR INDIANS ACROSS THE WORLD
JUNE 2012
A MaXposure Media Group Publication
M oney M antra S pice S aga Wellne s s Diar y A r t M ontage Welcome H ome
Winecation
Clinking glasses on a holiday & how
NRI SERVICES
contents 04
welcome home
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Axis House, 3rd floor, C-2, Wadia International Centre, P. B. Marg, Worli Mumbai-400025 India Tel: +91.22.24256333 www.axisbank.com
10 13
homecoming
Volume 1 | Issue 2
Indulge yourself in wine vacation at Indian vineyards
FOR INDIANS ACROSS THE WORLD
A MaXposure Media Group Publication
Published by: MaXposure Media Group India Pvt. Ltd. Publisher & COO: Vikas Johari CEO & Managing Director: Prakash Johari CFO: Kuldip Singh Features Editor: Nidhi Raj Singh
spice saga
A trip to Goa, the foodie destination
M oney M antra S pice S aga Wellne s s Diar y A r t M ontage Welcome H ome
Head Office: Unit No. F2B, Second Floor, MIRA Corporate Suits, Plot No. 1&2, Ishwar Nagar, Mathura Road, New Delhi - 110065 Tel: +91.11.43011111, +91.11.47411100
Winecation
Clinking glasses on a holiday & how
West | Mumbai | TV Industrial Estate, Unit No. B-22 (Basement) A. K. Ahire Marg, Worli, Mumbai 400018, Maharashtra Tel: +91.22.61991111, Fax: +91.22.61991115
finer notes
JUNE 2012
NRI SERVICES
Ahmedabad | Top floor, Navrang Bldg. Opposite Pizza Hut, Near Swastik Char, Rasta, Navrangpura, Ahmedabad - 380 009, Gujarat Tel: +91.79.6510235
Cleveland and Sydney Music Festivals 2012
East | Kolkata | Sudarshan Business Centre, 7B Rani Rash Moni Road, Kolkata-700 013 West Bengal Tel: +91.33.22658479
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money mantra
18 08 12 16 20
art montage
Trailing the past and present of Sufi culture in India
The final edition of series on Panchakarma, the Ayurveda detoxification
www.maxposure.in Rights: Axis NRI magazine printed and published by Vikas Johari on behalf of MaXposure Media Group India Pvt. Ltd. (MMGIPL) for Axis Bank and published at MMGIPL, Unit No. F2B, Second Floor, MIRA Corporate Suits, Plot No. 1&2, Ishwar Nagar, Mathura Road, New Delhi - 110065 Tel: +91.11.43011111, +91.11.47411100
Special Economic Update
Reprints as a whole or in part only with the written permission of the publishers, quoting “Axis NRI magazine” for texts and pictorial material. No responsibility can be taken for the loss of unsolicited manuscripts, photographs or artwork. The views and opinions expressed or implied in the magazine are those of the authors and do not necessarily reflect those of MMGIPL or Axis Bank. All efforts have been made while compiling the content of this magazine, but we assume no responsibility for the effects arising there from. MMGIPL does not assume any liability for services or products advertised herein Axis NRI magazine India is distributed to all Axis Bank NRI customers abroad. Axis NRI magazine appears monthly.
Stock Ideas Market Outlook Expert Speak
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Overwhelmed by your encouragement for the first issue of homecoming, we are ready with our second one. Amidst the challenging times, the Reserve Bank of India has made some important announcements that we would like to share with you. We are glad to inform that you (our NRI/ PIO readers) can now transfer funds from your Non Resident Ordinary (NRO) account to Non Resident External (NRE) account, which was not allowed earlier. However, this fund transfer will be within the overall ceiling of USD one million per financial year (1 April-31 March) subject to payment of applicable taxes. Other good news is that your beneficiary in India could earlier receive up to 12 remittances per calendar year (1 January - 31 December) under the Money Transfer Service Scheme. However, this limit has now been increased to 30 remittances per calendar year implying that your relatives in India can now receive up to 30 remittances per calendar year through MoneyGram, Xpress Money and other similar operators. In this edition of homecoming, the Axis Bank Advisory Team has brought out a special report on depreciating rupee value along with the Indian and world market scenario in 'Money Mantra' section. Our expert for this issue, Mr. Chandresh Nigam speaks on equity markets and recently launched 'Axis Focused 25 Fund'. Apart from these finance updates, we know how much you love to explore your homecountry, be it its destinations, cuisine or culture. So, to bring you a step closer to the warmth of your homeland, we have features on Sufi music, best places to enjoy your food in Goa and more on Panchakarma, the Ayurvedic way of detoxifying the body system. We will be delighted to receive your feedback and suggestions as always. Sincerely,
Hyderabad | Executive Business Club, Mount Banjara Apartment, 1st floor, Road no 12, Banjara hills, Hyderabad-500034, Andhra Pradesh Tel: +91.40.66786800,+91.9700001177 Fax: +91.40.66785800 Chennai | FL 9, Alsa Mall, First Floor, 149 Montieth Road, Egmore, Chennai- 600008, Tamil Nadu Tel: +91.44.42015685, Fax: +91.44.42015684
wellness diary
2 | AX I S N RI | JU N E 2 012
South | Bangaluru | 1010 A Wing, 10th Floor, Mittal Towers, M.G. Road, Bangaluru-560001, Karnataka Tel: +91.80.40921037-38 Fax: +91.80.41510657
Dear Reader,
Raj Kishore Prasad Head – International Retail, Axis Bank Disclaimer The report and information contained herein is of confidential nature and meant only for the selected recipient and should not be altered in any way, transmitted to, copied or distributed, in any manner and form, to any other person or to the media or reproduced in any form, without prior written approval of Axis Bank. The material in this document/report is based on facts, figures and information that are obtained from publicly available media or other sources believed to be reliable and hence considered true, correct, reliable and accurate but Axis Bank does not guarantee or represent (expressly or impliedly) that the same are true, correct, reliable and accurate, not misleading or as to its genuineness, fitness for the purpose intended and it should not be relied upon as such. The opinion expressed (including estimates, facts, figures and forecasts) is given as of the date of this document is subject to change without providing any prior notice of intimation. Axis Bank shall have the rights to make any kind of changes and alterations to this report/ information as may be required from time to time. However, Axis Bank is under no compulsion to maintain or keep the data/information updated. This report/document does not mean an offer or solicitation for dealing (purchase or sale) of any financial instrument or as an official confirmation of any transaction. Axis Bank or any of its affiliates/ group companies shall not be answerable or responsible in any way for any kind of loss or damage that may arise to any person due to any kind of error in the information contained in this document or otherwise. This document is provided for assistance only and should not be construed as the sole document to be relied upon for taking any kind of investment decision. The recipient is himself/herself fully responsible for the risks of any use made of this information. Each recipient of this document should make his/her own research, analysis and investigation as he/she deems fit and reliable to come at an independent evaluation of an investment in the securities of companies mentioned in this document (including the merits, demerits and risks involved), and should further take opinion of own consultants, advisors to determine the advantages and risks of such investment. The investment discussed or views expressed herein may not suit the requirements for all investors.
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Axis Bank, its associates, officers and/or employees may have interests in any products referred to in this document by acting in various roles including as distributor, holder of principal positions, adviser or lender. Axis Bank, its associates, officers and/or employees may receive fees, brokerage or commissions for acting in those capacities. In addition, Axis Bank, its associates, officers and/or employees may buy or sell products as principal or agent and may effect transactions which are not consistent with the information set out in this document. Axis Bank and its affiliates do business that relates to companies and/ or instruments covered in this document, including market making and specialized trading, risk arbitrage and other proprietary trading, fund management, commercial banking, extension of credit, investment services and investment banking. Axis Bank sells to and buys from customers the securities and/or instruments of companies covered in this document as principal or agent. Axis Bank makes every effort to use reliable and comprehensive information, but makes no representation that it is accurate or complete. Axis Bank has no obligation to inform you when opinions or information in this document change. Facts and views presented in this document have not been reviewed by, and may not reflect information known to, professionals in other Axis Bank business areas, including investment banking personnel. Axis Bank accepts no liability whatsoever for any loss or damage of any kind arising out of the use of the contents in this document. Axis Bank’s comments are an expression of opinion. While Axis Bank believes the statements to be true, they always depend on the reliability of Axis Bank’s own credible sources. The contents of this newsletter should not be considered/construed as a marketing material from the Bank and is neither intended to solicit any kind of deposit(s) in any country from where it is read, viewed and/or downloaded.
J U N E 2 012 | A X I S N RI | 3
We l co m e H o m e
can head for a 45-minute tour of vineyard and winery to know your wine better. After the trip, a tasting session awaits you.
The Wine Trail
A wine vacation is one of the best ways to enjoy Indian Monsoon in style
No matter how much one travels around the globe, it always feels special to explore new destinations in one’s home country. With Indian vineyards offering tasting sessions and Indian wines not just tucked away at the end of the restaurant menus, a wine vacation is the latest travel trend.
With Monsoon hitting most parts of India by June end, taking a wine vacation is the perfect way to enjoy green countryside with a bottle of robust red or sparkling white wine. With many Indian vineyards offering resorts, guest-rooms and tasting rooms, wine enthusiasts can experience the magic of Indian wine regions and Monsoon - simultaneously.
Fratelli Wines Vineyards, Akluj For someone who has been on wine vacations in other parts of the world, the Fratelli Wines Vineyards of Akluj comes as a pleasant surprise. It resembles Italian vineyards with similar landscape if not exactly the same – thanks to the Syrah Hill of Dharwad and rows and rows of grape harvest of Motewadi and Nimgaon. A four hour drive from Lohegaon International Airport Pune will take you to Akluj, a small hamlet. The futuristic facade of the guesthouse jutting out in middle of the vineyards is the first thing to grab your attention. The modern interiors of four massive bedrooms with different color themes (more in the pipeline) combine 4 | AX I S N RI | JU N E 2 012
contemporary style and comfort. You can have a relaxed time playing pool or gazing at harvests from your French window. However, the highlight remains the same – world class Indian wines! In a short span of time, Fratelli has created a niche for itself with its impeccably international wine quality. The amount of hard work put in at each step is evident in every sip that you take. With renowned viticulturist Piero Masi on-board they are creating wines that follow Italian tradition but are Indian in their making. You cannot miss their Chenin Blanc, Merlot, Sangiovese and Chardonnay. The USP of Fratelli hospitality is that you feel you have arrived home. Gate No 131, Zanjewadi Taluka, Malshiras, Solapur District, Maharashtra Contact: +91 967 300 2336, +91 779 841 8593, +91 983 336 8727
The Gateway Hotels & Resorts, Ambad, Nashik Clear sky, lush greenery, pleasant breeze, and fruity smells…that’s exactly how the
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P-17, MIDC Ambad, Mumbai-Agra Road, Nashik, Maharashtra Contact: +91 253 6604499
Beyond, Sula Vineyards, Nashik
by sayanti banerjee and nidhi raj singh
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With well-appointed meeting rooms, internet access and specialty restaurants serving authentic local cuisine as well as a wide variety of Indian and international fares, you can mix business with pleasure.
Here’s the perfect antidote for stressed city life. Thirty-four-room Beyond is the very first vineyard resort of India with tranquil vineyard setting as a backdrop. The winethemed rooms are named after different grape varietal or Sula wines. Enjoy the lake view from the private balcony of your room. If you prefer a more private experience then stay at the three bedroom villa. The Red Room lets you unwind, relax and enjoy the locally harvested high quality wines while soaking up the peaceful view at the lounge. The White Room – a 1,000 sq. ft. hall with state-of-the-art audio visual equipment – is ideal for offsite conferences. The stay also includes a complimentary tour of vineyards followed by a wine tasting session at the tasting room and dining at Café Rose. Take a dip in the pool, kayak in nearby Gangapur Lake or go for a leisurely bike ride on winding country roads.
From L-R (Clockwise): Couple enjoying their wine; Grover Vineyards, Bengaluru; Beyond, Sula Vineyards, Nashik
vineyard town Nashik is. Appreciated by wine connoisseurs, it is located 187km from Mumbai. Combined with luxury stay at the Gateway Hotels & Resorts - Ambad, Nashik, it makes up for a wonderful vacation. A Taj Residency earlier, the architecture of the resort is inspired by the palaces of nawabs with pristine white edifice surrounded by 11 acres of lush landscaped garden, a pool and restaurants, and has 70 rooms including three suites. After a sumptuous meal, you
Gate 36/2, Govardhan Village, Off Gangapur-Savargaon Road, Nashik, Maharashtra Contact: +91 253 223 1663 / 1720
Grover Vineyards, Bengaluru Unlike other wine regions of India, Nandi Hills enjoys a pleasant weather w w w.ax is bank . co m
J U N E 2 012 | A X I S N RI | 5
We l co m e H o m e
With Indian vineyards offering resorts and tasting sessions, an Indian wine vacation is the next in-thing
The Gateway Hotels & Resorts - Ambad, Nashik
throughout the year. Located 40 km north of Bengaluru, it is a picturesque region dotted with sloping green hillsides and miles of forestland inhabited with wildlife. Spread over 410 acres Grover Vineyards was established in 1988 and is covered with lush grapes, strung from trellises with Cabernet Sauvignon, Shiraz, Viognier and Sauvignon Blanc varietals. Moderate rain strike, sunny days and cool nights create a unique temperate micro-climate for the wine grapes with richness and aromatic complexity. You can enjoy a personalized tour of the extensive wine trails across the property and winery barrel room. 63, Raghunathapura, Devanahalli Road, Doddaballapur, Bengaluru, Karnataka; Contact: +91 22 2204 3885
Vallee de Vin Vineyards, Nashik Sanjengaon, the quaint little village nestled in the sylvan Sahyadri valley is 6 | AX I S N RI | JU N E 2 012
home to Vallee de Vin Vineyards. The tranquility of the region adds to the experience of the guided 45-minute vineyard and winery tour offered by the vineyard, everyday between 11am5pm followed by an exclusive wine tasting session. A tour taken without a wine tasting session doesn't involve any charges. Booking in advance for groups of more than six people is recommended. Gate No 967 & 1026, Post Sanjegaon, Taluka Igatpuri, District - Nashik, Maharashtra; Contact: +91 2553 204 379, +912553204379
Chateau Indage, Nashik and Narayangaon With over 2,000 acres of vineyards in different parts of the country, it was founded in1982 and is best known for its premium range of Chantilli wines, including Chardonnay and Cabernet
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Sauvignon. It is located on the outskirts of Narayangaon, around 85 kilometers from Pune on the Pune-Nashik Highway. You cannot really check into a hotel in their vineyard but still can enjoy a wonderful evening with best of wine and dine at Ivy restaurant on the premises. Take a pick from their well stocked wine bar, where visitors can taste and buy six varieties. If you arrive by 11 in the morning on weekends you’ll be able to participate in a one and half hour tour of the vineyard as Chateau Indage offers winery tours too. Nashik and Narayangaon, Maharashtra Mumbai Office: 33 B, Sir Pochkhanwala Road, Worli Mumbai Contact: +91 2132 245977 F eedback Disclaimer: The views and opinions expressed or implied in the magazine are those of the authors and do not necessarily reflect those of publisher or Axis Bank.
M o n ey M an t r a
Special Economic Update
RBI is doing its bit to curtail the speculation in FX markets and to attract flows
INR – Vulnerability Persists Axis Bank Advisory Team brings to you a special report on declining rupee value and its driving factors.
Chart 2: INR REER has dipped below mean valuations but does not imply a bounce back
INR: Vulnerability persists
as well as to attract FDI, such dynamics may not improve. RBI is doing its bit to curtail the speculation in FX markets, and to attract flows, even as the move to open up the capital account to debt flows is a double edged sword for it increases the country’s external sector vulnerability. The ball is firmly in the government’s court now!
USD/INR is trading in the vicinity of 56 levels against the dollar, after recently breaching that threshold. The INR has now lost almost one-fourth of its value against the dollar in the last one year, and has depreciated ~10% over the last two months, in a reversal of the trend seen earlier this year. What are the drivers? The INR decline can be seen in the backdrop of both domestic and global developments. Speculation of a “Grexit” from the Euro Zone has gathered momentum after the popularity of the mainstream (pro-bailout) political parties came under question post the elections held in early May. Consequently, probability attached to a similar outcome in other bigger economies under tough austerity programs has increased as well (premium on Spanish 10 year funding relative to Germany at record ~5% levels), weighing down on non-safe haven assets, including EM currencies such as INR (Chart 1). 8 | AX I S N RI | JU N E 2 012
INR undervalued now, signalling a
near term bounce back? It is difficult to assess the fair value of the currency, it being dependent on methodology adopted. However, even a simplistic exercise of observing the INR Real effective exchange rate (REER) would be useful. Significant volatility is seen in individual currency pairs, such as USD/INR, and observing REER would also give a more comprehensive picture of competitiveness (vis-à-vis our key trade partners)
Will the weaker Rupee help India’s exports? The answer is negative again. As the chart 3 illustrates, the periods of improving export prospects have in fact been synchronous with an increasing REER, i.e. an appreciating INR. The Indian exports seem to be more responsive to external demand prospects compared to the valuation of the INR.
Chart 1: FIIs have withdrawn funds from all regional economies in April and May
India specific factors certainly have a role to play as well, especially as the INR has underperformed its peers. The toxic mix of high fiscal deficits contributing to a high current account deficit and consequent inflation risks despite weak growth has magnified the impact of global risk aversion on the INR. Moreover, unless decisive steps are embarked upon to lower the subsidy bill
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Improving export prospects have been synchronous with an increasing REER, i.e. an appreciating INR
The Chart 2 shows that the INR REER has now dipped ~12% from its highs in July’11, and is now below its mean valuations of the last 4 years. However, it may also be observed that INR REER traded more than one standard deviation below its mean levels for almost one year post the Lehman collapse, and is still high relative to post-Lehman days. Expectations of any quick bounce-back premised on the undervaluation thesis may thus not be suitable.
F eedba ck Chart 3: Strong exports coexist with a strong INR; weakening INR does not imply better export prospects
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J U N E 2 012 | A X I S N RI | 9
S p i ce S a g a
High On Goa
Baga Beach Contact: +91 832-2277331
Lila Café If you’re looking for the best breakfast in Goa, this is where you’ll get it that too any time of the day! Run by a German couple, Ingo and Elizabeth, this picturesque café is on the banks of the Baga River. A day-time only eatery, it has a charming ambience – thatched roof, bamboo chairs and an airy setting. This is the place for croissants, so don’t miss them. Other must-try options include sour dough bread, pumpernickel bread, Hungarian goulash and smoked kingfish.
It may be synonymous with a huge dose of Vitamin ‘Sea’ and revelry, but Goa is definitely more than that. Food is one thing that makes this beach state tick… 24 hours, 365 days. by teja lele desai
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Be it authentic Italian pizza, gourmet Greek dishes, French food, BBQ or the Goan seafood spread, food is an intrinsic part of the Goan experience. Every season, new restaurants come up in this supremely competitive market, eager to make a mark. Many, unable to sustain themselves, fold up by the next season. But the ones that are synonymous with good food remain constant. Here's a round up of some of the best restaurants of Goa – places where you must set aside your reading glasses and beach bag and get down to the business of eating.
Martin's Corner The unassuming Martin's Corner springs up a surprise with its extensive menu and sumptuous desserts. It started as a small shop where locals would come to play a game of carrom and have a bite. The growing clientele and popularity necessitated an expansion and today Martin's Corner is a popular eatery. Try the sorpotel, sausage bread and pork chilli fry. And the cheesecake. Don't be surprised if you find yourself rubbing shoulders with Amitabh Bachchan or Sachin Tendulkar with his family, a regular here. 10 | A X I S N RI | J U N E 2 012
Betalbatim Beach, Salcette Contact: +91 832-2880413 www.martinscornergoa.com
Near Baga River, Arpora-Baga Contact: +91 832-2279843 www.lilacafegoa.com
Souza Lobo This Goan institution believes that it’s neither a restaurant nor a shack – it’s a state of mind. Ruling the roost in touristfriendly Calangute for 78 years now, the setting is simple with dhaba like interiors. However, waiting in queue for a table is often a possibility – for guests have been coming here for decades to sample the fried fish, Goan sausages and crab xacuti.
Lloyd’s If you’re looking for an authentic Goan food fix don’t miss Lloyd’s. The specialty is that there’s no proper and fixed menu. Lloyd’s is an after-hours kind of place where party hoppers drop by as they shift venues. This garage, converted into a four-table eatery, dishes out the best beef, chicken and pork steaks in Goa.The crumb-fried tiger prawns, pork chops and chicken xacuti are also super.
Calangute Beach Contact: +91 832-2281234 www.souzalobo.com
Brittos The oldest restaurant in Goa, Brittos is one of those must-do-when-you’redoing-Goa places. Located in Baga, it can be horribly crowded in peak season. Set up by Cajie in 1965, Brittos is now operated by his son, Cajeten. Once a shack, it now resembles a laidback and grungy restobar. The prawn curry and the pork vindaloo are manna from heaven for those who love their spicy food.
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Candolim Beach Contact: +91 9823032273
Fusion
Go Goa in the Monsoon Most people miss out on a Goa that’s refreshing, romantic and beautiful in Monsoon. The beaches may not be as much fun, but there’s wildlife sanctuaries that are open all round the year – try Mollem National Park and Cotigao Wildlife Sanctuary. Visit the magnificent Dudhsagar Falls at its beautiful and rain-fed best. Goa also hosts a series of festivals around this time. The most popular, Sao-Joao (the fertility feast of Saint John the Baptist), is celebrated in late June and involves men jumping into overflowing village wells to retrieve bottles of Feni. Don’t miss the wonderful spice plantation in Savoi, after a long and exhilarating drive through dense jungles and hills from Ponda.
This isn’t one of those restaurants that get tourists passing by as it is slightly off track. But Fusion, voted the best European restaurant in Goa, more than makes up for the distance. Started by Vaishaali, a Le Cordon Bleu trained chef, and Lokesh Sood offers superlative continental food. Don’t miss their beef
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na pedra (slices of beef with your choice of sauce and fries), carpaccio tenderloin and the house specialty – the signature steak. For those with a sweet tooth, creamy lemon mousse is a must-try. Majorda Beach, Salcete Contact: +91 9890064833 www.fusiongoa.com
A Reverie Aakritee’s passion for food and Virendra’s passion for Goa led to A Reverie, which they describe as a ‘Zen retreat in a space colony’. Located near Calangute Beach, A Reverie has a stunning ambience. The disco balls, crystal and shell chandeliers and many artistic lamps create a warm appeal. The striking bar, supported by pillars and multitude of tables and sofas invite you over. The cuisine is an international mix – vegetarian thali coexists with chicken liver pate and slow-roasted duck leg confit. Don’t miss it! Gauravaddo Beach, Calangute Contact: +91 9823174927
Baba Au Rhum Set up by a French couple, Dayini Feraud and her husband, Leo Michaud, Baba Au Rhum provides a gorgeous setting for gorging on French-style food. The informal blue walls, orange fans, thatched roof and wooden tables create an atmosphere to linger. Savor many varieties of salads, sandwiches, baguettes and croissants but don’t miss their pizza, fired fresh from their wooden oven. Arpora Beach Contact: +91 9822078759 F eedba ck Disclaimer: The views and opinions expressed or implied in the magazine are those of the authors and do not necessarily reflect those of publisher or Axis Bank.
J U N E 2 012 | A X I S N RI | 11
M o n ey M an t r a
Mutual Funds Performance
Stock Ideas
Here’s a lowdown on the current performance of key mutual funds such as diversified, large-caps, short term funds and MIPs.
In this issue, we present to you the valuation for two stocks - Larsen & Toubro and IPCA Laboratories Ltd. While the first is valued at ` 316/share, the latter is ` 375/share. Read on to find out why.
LARSEN AND TOUBRO L&T is a US $11.75 billion technology, engineering and construction company with global operations. It derives ~88.2% (FY12) of its revenues from Engineering & Construction (E&C) business and balance from other businesses. The company is a direct proxy to the Indian infrastructure story and is into a host of infrastructure activities like construction of roads and bridges, ports and harbors, airports, buildings and factories, etc. L&T has a robust order backlog of `1457 billion (March 2012). Given the strong
Valuation Table CMP 1201
Year to
Diluted EPS
EPS growth
P/E
31-Mar
(Rs)
(%)
(x)
2012
72.2
2013E
73.9
2.4%
16.3
2014E
82.1
11.1%
14.6
16.6
visibility in revenues on account of order book which is ~2.7x FY12 revenues, we remain positive on the stock. L&T will also be a direct beneficiary of value unlocking of its subsidiaries. We expect value
unlocking to happen in L&T IDPL over next three years. L&T IDPL has number of infrastructure projects spread across the roads, ports and rail. We believe L&T IDPL should get a premium valuation versus its peers due to its expanding portfolio, established execution track record and a relatively lower capital cost. Valuation: We value L&T on SOTP basis wherein we value L&T’s core business at `1226 (15x FY14E P/E) and the subsidiaries at `316/share to arrive at a target price of `1542/share.
IPCA LABORATORIES LTD. IPCA Laboratories incorporated in 1949 is a fully integrated company producing branded and generic formulations, API’s and intermediates. IPCA Laboratories has a strong presence in the domestic markets with more than 150 formulations across therapies and is a market leader in the antimalarial and rheumatoid arthritis segments. It derives a substantial portion of its revenues (60%) from the export formulation business primarily the US and Europe. IPCA has been increasing its 12 | A X I S N RI | J U NE 2 012
Valuation Table CMP 1201
Year to
Diluted EPS
EPS growth
P/E
31-Mar
(Rs)
(%)
(x)
2012
72.2
2013E
73.9
2.4%
16.3
2014E
82.1
11.1%
14.6
16.6
penetration in these markets by expanding the list of generic drugs. IPCA has filed for 25 ANDA’s out of which 12 are approved. IPCA plans to file 10-12 ANDA’s every year over the next two-three years which will drive growth for IPCA Laboratories over next few years. IPCA Laboratories
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is also an established player in the API business and is a low cost producer of select API’s. It has scaled up its API’s from around 40 in 2003 to 95 API’s in 2011, which has enhanced its level of vertical integration in its formulation business. Valuation: IPCA is slated to generate a PAT CAGR of 23% for FY12-FY14 and is attractive at the current valuation of 10.8x FY14E EPS of `33.4. We value IPCA Laboratories at `375 which discounts its FY14E EPS by 11.2xs.
Diversified Equity Scheme Name Axis Equity Fund DSP Black Rock Equity Fund HDFC Equity Fund ICICI Prudential Dynamic Plan UTI Opportunities Fund Index BSE-200
NAV
Compound Annualized
9.9 14.9 242.2 100.5 26.7
Other Attributes
1 Year (8.5) (9.3) (13.2) (6.7) (1.8)
3 Years N.A. 10.4 12.5 13.7 12.2
5 Years N.A. N.A. 8.5 7.5 12.1
(12.9)
4.1
2.5
AUM 632 2,600 9,916 4,119 2,814
Std. Dev. 9.3 35.0 44.0 33.0 33.0
AUM 2,901 3,274 4,625 11,381 830
Std. Dev. 35.7 28.5 32.3 37.4 28.7
Sharpe Ratio (1.0) 0.6 0.6 0.6 0.7
Expense Ratio 2.5 1.9 1.8 1.8 1.9
Large-caps Scheme Name
NAV
Birla Sun Life Frontline Equity Fund DSP Black Rock Top 100 Equity Fund Franklin India Bluechip Fund HDFC Top 200 Fund Reliance Top 200 Fund Index BSE Sensex
78.2 93.1 198.0 186.1 11.9
Compound Annualized 1 Year (10.2) (7.2) (7.4) (11.1) (7.7)
3 Years 7.6 8.8 10.2 10.1 6.5
5 Years 7.0 7.8 7.2 9.3 N.A.
(12.3)
3.5
2.2
Other Attributes Sharpe Ratio 0.5 0.6 0.6 0.6 0.5
Expense Ratio 1.9 1.8 1.8 1.8 2.1
Short Term Funds Scheme Name
NAV
Axis Short Term Fund Birla Sun Life Dynamic Bond Fund IDFC Super Saver Income Fund - Short Term Templeton India Short-Term Income Plan UTI Short Term Income Fund Index Crisil Short-Term Bond Fund Index
11.7 18.3 22.3 2170.4 18.7
Compound Annualized
Other Attributes
1 Year
2 Years
3 Years
AUM
9.1 10.7 9.8 9.6 10.4
7.2 8.0 7.2 7.7 8.5
N.A. 7.7 6.5 8.4 7.7
206 5,348 2,198 4,707 418
9.0
7.0
6.3
Std. Dev. 2.7 3.7 2.4 2.2 3.4
Sharpe Ratio 1.3 1.4 1.8 1.8 1.4
Sharpe Ratio (1.0)
Expense Ratio 1.3 1.2 1.3 1.3 0.5
Avg Mat. (Mths) 13.1 N.A. 20.6 11.4 21.7
YTM
Expense Ratio 2.3
Avg Mat. (Yrs) 1.0
YTM
N.A. 10.0 9.7 10.5 N.A.
MIPs Scheme Name
Axis Income Saver Birla Sun Life Monthly Income Plan II Wealth 25 Plan DSP BlackRock MIP Fund Reliance Monthly Income Plan Birla Sun Life Monthly Income UTI Monthly Income Scheme Index Crisil MIP Blended Index
NAV
Compound Annualized
Other Attributes
1 Year
2 Years
3 Years
AUM
10.7
2.6
N.A.
N.A.
183
Std. Dev. 2.0
18.8
4.8
5.4
7.2
240
8.6
0.7
2.1
N.A.
9.8
21.0 23.4 38.9 21.0
9.6 7.3 6.1 5.9
6.9 6.8 6.3 5.6
7.8 9.8 7.5 7.4
202 4,142 476 396
5.9 10.1 6.4 5.4
0.8 0.9 0.9 0.9
2.1 1.6 2.0 1.8
2.3 3.3 N.A. 3.5
0.0 9.3 9.7 N.A.
5.8
5.4
5.8
F eedback
N.A.
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J U N E 2 012 | A X I S N RI | 13
A r t M o n t a g e
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Soul stirring India’s rich legacy of classical music has got richer with the Sufi genre. With an ever-increasing fan following of Sufi music, Indian artistes are keen to practise and popularise the culture. by ratna rau
Sufi is not just a form of music, it’s an enriching experience. As put by Hazrat Inayat Khan, a Sufi philosopher and practitioner himself, "any person who has knowledge of both outer and inner life is a Sufi.” In a world dealing with the flip side of development, Sufi music can soothe tired senses. This is perhaps why there’s a rapid spurt in the number of Sufi musicians in India. While the great Sufi singer Abida Parveen has made Sufism a household name in India, there are many others who are popularising the form even among the uninitiated.
Popularity leads to experimentation, and that’s what is happening with Sufi music too
The essence In India, Sufi thoughts find expression through several musical genres including Qawwali, Qaul, Qalbana, Ghazal, folk forms from Rajasthan, Sindh & Punjab, Sufiyana kalam from Kashmir. Of all these, Qawwali has become the most popular. Shankar Shekhar, a popular Sufi singer explains the philosophy and says, “The soul of Sufism is its emphasis on love as the central motif of spirituality. Sufi music means trance.”
14 | A X I S N RI | J U NE 2 012
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One of the latest fusions of Sufi music is Sufi Kinship, which combines traditional Sufi, western and contemporary musical thought while maintaining the Indian melodic framework and nuances. It is conceived and promoted by Pandit Bhajan Sopori and Abhay Rustum Sopori. Shashank Shekhar cautions, “Fusion is good if done with a profound vision and integrity.”
The popularity Even as Sufi music becomes the in-thing in India, it’s originality is somewhere getting lost in the modern interpretations. Says Pandit Bhajan Sopori, “It’s nice that the in-vogue Sufi music has received wide acclamation and appreciation. But the question is that do people really understand the Sufi thought and the Sufism as a philosophy. Or for that matter do most of the new age performers also know what they are singing. I doubt. What I mostly find is a market led transformation resulting in long hair, aerobic exercises, shrieking Guitar sounds, etc. I wish I could visualize Baba Bulleshah or Baba Farid or Hafiz Sheerazi or Laleshwari and Shekh-Ul-Alam of Kashmir or Sachal Sarmast of Sindh in this getup.” Echoes Ragini Rainu, “Sufi music is the ‘in thing’ right now so anyone who can sing tries his / her talent. There is nothing wrong in it but will give better survival chances if there is a sound musical and spiritual background with years of training and riyaz.”
Fast fusion Popularity leads to experimentation, and that’s what is rapidly happening in this genre too. Newer elements like Sufi-rock, Sufi-kathak and Sufi-Ghazal are becoming part of the Sufi culture in India. Manjari Chaturvedi, a leading Kathak dancer has come up with her own form of dance and is the only performing artiste of Sufi kathak. She says, “The thought of ‘nisbat’ the connect with the formless Almighty while residing in this body and striving complete surrender to the Almighty is incredible. Qawwalli music was my first base for music for Sufi Kathak then, gradually now I perform with Punjabi Sufi music, kashmiri Sufi music, rajasthani Sufi music and Irani Sufi music.” Talking about experimentation, Sufi exponent Ragini Rainu, says, “Any
experimentation is good if it retains the tradition and its core philosophy. I would describe it like a painting exhibition by various artists. The substance and the theme is the same but interpretations changes. At the same time people need to respect this art.”
F eedba ck Top: Abhay Rustum Sopori; Shashank Shekhar Facing Page: Manjari Chaturvedi
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Disclaimer: The views and opinions expressed or implied in the magazine are those of the authors and do not necessarily reflect those of publisher or Axis Bank.
J U N E 2 012 | A X I S N RI | 15
M o n ey M an t r a
Market Outlook The month of May was marked by risk off trade globally. We bring to you an outlook on domestic and global market fronts.
On the global front, GDP climbed at a 1.9% annual rate from January through March, down from a 2.2% prior estimate
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The Indian equity market continued its losing streak with BSE Sensex falling by 6.4% during the month as India’s weak economic growth spooked investors. What also added to investors turning jittery was Greece’s potential exit from the euro-zone and its contiguous effect on other bigger EU nations. The mid-cap index lost 6.5% in-line with the Sensex; the small-cap index underperformed both the indices and declined by 7.3% during the month. The Indian Rupee continued to remain under pressure and hit a record low of 56.52 amid concern on negative news flows from Greece on its political front, reversal in foreign capital flows and growth inflation mix turning adverse, with inflation remaining high even as growth indicators are weak.
On the global front, GDP climbed at a 1.9% annual rate from January through March, down from a 2.2% prior estimate. On the Europe front, the OECD cut its economic outlook for the euro-zone and expects gross domestic product to contract by 0.1% in 2012; it also cut its forecast for 2013 growth to 0.9% from 1.4%.
Indian rupees feeling the valuation crunch
Our expected Sensex target for April 2013 is 19,600 which translates to an expected return of 20.9% per annum 16 | A X I S N RI | JU NE 2 012
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On the domestic front, India’s gross domestic product (GDP) came as a big disappointment standing at 5.3% in the January to March quarter of FY12 from the year-ago period, its slowest growth in nine years. The downward revision in the GDP growth rate is mainly on account of lower performance in
manufacturing and trade, hotels, transport and communication than anticipated. A part of the weakening in 4QFY12 growth is also driven by adverse base effect. March IIP growth fell to -3.5% YoY against growth expectations of 1.5%. WPI inflation accelerated to 7.2% in April vs. 6.9% in March, led mainly by primary articles, as even the base effect was favourable. Overall from a valuations standpoint, post recent sell off, the equity markets looks very attractive from a medium to long term perspective. Hence, we have revised our outlook on equity from ‘Marginal Underweight' to ‘Marginal Overweight’. Our expected Sensex target for April 2013 is 19,600 which translates to an expected return of 20.9% p.a. from equities over the next 12-18 months. On a market capitalization basis we are relatively overweight on largecaps as compared to midcaps and smallcaps. On the sectoral front, we are overweight on Pharma and Infrastructure. On the debt side, we expect the RBI to reduce repo rate by another 25bps to 50bps over next one year. Currently, the yield curve is flat and we expect yield curve to steepen, which would benefit shorter end rates that could see a fall. This provides investors the opportunity to lockin investments at a higher yield and also to benefit from capital appreciation as yields ease going forward.
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On the longer end of the yield curve, OMOs by RBI as well as an expectation of another rate cut primarily led by lower than expected GDP numbers, have in turn led G-sec yields to rally during the month. Going forward, on account of high government borrowing programme, there would be steady supply of government paper, which would put pressure on longer end of the curve; however, further rate cuts, OMOs and lower growth would provide support to yields and help them inch lower. We view that long bond yields are likely to be volatile in coming months. We would recommend investors that for strategic asset allocation, fresh money can be deployed above 8.50% - 8.60% levels on the new 10 year benchmark with an investment horizon of 1 year to 15 months. For tactical allocation, investors can look at investing at above 8.50% to 8.60% levels and redeem if yields ease off to 8% to 8.25% levels. F eedba ck J U N E 2 012 | A X I S N RI | 17
We lln e s s D i ar y
Rejuvenate, Recharge, Renew Considered the cornerstone of Ayurveda, panchakarma is essentially a system of five procedures that work towards alleviating ailments by getting to the root cause and balancing tridosha – vata, pitta and kapha. We bring to you the second and final edition of our series on Ayurveda by an expert. by dr aashish phadke
Nasya - Metered instillation of drug through nostrils
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Our stressful lifestyle has lead to several problems such as hair loss, weakening memory and poor eye sight. This procedure helps to tackle these problems and treat conditions like high glass power, computer vision syndrome and also disorders related to nose such as allergic rhinitis, sinusitis, deviated nasal septum (DNS) etc.
What is the secret of keeping a healthy mind, body and soul? Apart from a balanced diet and regular exercise there are certain specific ways to not only keep the body in best shape but also cleanse the system. It is panchakarma – the Ayurveda procedure that does seasonal cleansing of the body and also alleviates conditions such as body ache, cervical spondylitis, skin diseases, bronchial asthma, arthritis, facial paralysis and more. Since Ayurveda treats each individual differently based on their unique body composition or the tridoshas, an Ayurveda expert first understands and then suggests the right procedure for an individual. So Ayurveda and panchakarma therapy may be gaining popularity all across the world we need to understand that it is a highly specific procedure and not like an over-thecounter pill. So, a person cannot just turn up at a doctor’s clinic asking to undergo basti or vamana without the knowledge of these procedures and why he needs them. Alternatively, if a physician does not have a sound knowledge about the procedures, he should not recommend procedures to a person. As our sages said. Panchakarma is like a sword - when wisely used, it can prove to be a tool of self defense but one wrong move can lead to a deep wound. The five steps of panchakarma begins
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with a preparatory procedure known as poorvakarma or snehana (oleation therapy) and swedana (sudation therapy). Though preparatory in nature, these are also used solitarily for several vata predominant disorders such as aches, arthritis, frozen shoulder, neck and back pain. Following are the five steps of panchakarma:
Specific diseases such as cervical spondylitis and facial paralysis are also treated with medicine administered through the nasal route.
Vamana (induced metered emesis) The kapha predominant diseases like bronchial asthma and eczema, and pitta predominant diseases like hyperacidity can be cured with this procedure.
Virechana (induced metered purgation) This process is extremely useful in pitta predominant conditions such as skin disorder, urticarial rash, etc.
Ayurvedic procedures begin with a consultation
Ayurveda treats each individual differently based on their unique body composition or the tridoshas - vata, pitta and kapha Join us on
Basti (induced metered purgation by medicated enema) It could be of two types – anuvasana (retention enemas) and niruha (evacuation enema). Administered for vata predominant conditions, this process can help alleviate conditions such as paralysis, arthritis,
Irritable Bowel Syndrome (IBS), etc.
Raktamokshan (bloodletting) This procedure is used to alleviate conditions such as difficult oozing eczema, skin diseases, herpes zoster, etc. Apart from these five basic procedures under panchakarma, there are special therapies advocated in ancient textbooks of Ayurveda and practiced for managing various disorders.
Kati Basti It is a procedure of applying heat to the sacral or lumber region by retaining warm medicated oils, which are specially formed on that area. It proves to be an effective method to tackle painful conditions of low back region, spondylolysthesis, disc prolapsed, rheumatic arthritis etc.
Hrid Basti As the name suggests, this procedure includes application of medicated oils or herbal decoctions over the heart for 20 minutes. It strengthens heart, relieves deep seated anger and sadness.
Shirodhara This process includes continuous pouring of decoction, oil or other herbal liquid on the forehead, allowing it to flow over the scalp using a special instrument known as Shirahseka. It relieves ailments such as stress, hypertention, psychological disorder, cranial nervous disorders, insomnia, and improves sense organs and complexion. There are a number of Ayurveda resorts and retreats in India that offer panchakarma and also advice on leading a healthy lifestyle. These are Somatheeram Ayurveda Resort, Thiruvananthapuram, Kerala; SwaSwara, Om Beach, Gokarna; Soukya - Dr Mathai's International Holistic
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A form of Basti procedure to cure neck pain
Health Centre, Bengaluru; Indus Valley Ayurveda Centre, Mysore, Karnataka; Ista Hyderabad, Andhra Pradesh and Kairali Ayurveda across the world. Dr Aashish Phadke, MD, Ayurveda, Mumbai, MIIM (Gold Medal) is Ayurveda and Panchakarma Consultant at Dr Aashish Phadke’s Ayurvision – Centre for Ayurveda & Panchakarma Therapy, Mumbai & Navi Mumbai, India. Those interested to know more, log onto to www.ayurvision.com. F eedba ck Disclaimer: The views and opinions expressed or implied in the magazine are those of the authors and do not necessarily reflect those of publisher or Axis Bank.
J U N E 2 012 | A X I S N RI | 19
M o n ey M an t r a
Finer Notes
Expert Speak
There are moments when you just close your eyes and let yourself be transported to another world by your favorite sounds and music. Such was the magic of the music festivals when all roads lead to Cleveland and Sydney, where Indian maestros came together to create a musical extravaganza.
Our expert for this issue, Mr. Chandresh Nigam speaks on equity markets and recently launched 'Axis Focused 25 Fund'.
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What are your views on the Indian equity markets from a valuation standpoint? Where do you see markets headed over the next one year? What are your views on earnings growth? Indian markets are trading at 12x Fy13e earnings. Valuations of markets are at cyclical lows and they make a very attractive entry point into equities for the long term investor. Given the sluggish growth outlook, we expect the earnings growth in Fy13 to be about 10%. There have been FII outflows recently due to the prevailing global concerns. Do you see FIIs putting money into the domestic market going ahead? How is India placed amongst its emerging market peers as an investment destination according to you? FII have invested $8.5bn in Indian equities this calendar year until May 2012. India is still one of the favored investment destinations within EM, given the favorable macro dynamics and long term growth story. Thus, the investment appetite of FIIs remains strong. From a portfolio construction perspective: A. Which sectors are you positive/overweight on currently and why? We are positive on health care, private sector banks and consumer goods. We think these sectors offer good growth opportunities and have a better resilience to adverse macro environment.
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B. Which sectors are you negative/ underweight on currently and why? We are underweight on power and infra stocks given the challenges companies are facing in the sector. What is your market cap bias currently (large-cap v/s small and mid-cap) and why? Any advice for long term and short term specifically with respect to mid-cap bias. Each fund has its defined asset allocation depending on the risk measure for the fund. The allocation across various asset classes and across market cap is as per the objective of the fund. Mid-caps have corrected significantly, and as and when market recovers, they have the likelihood of outperforming the large-caps. What is your current investment strategy w.r.t. portfolio construction? What would be your current stance in terms of defensive/aggressive portfolio structuring, growth v/s value bias, and your cash holdings in the portfolio? Each of our funds has its own respective investment style. We are focused on long term value and sustainable growth across our portfolios. Axis Mutual Fund has recently launched a New Fund Offer called 'Axis Focused 25 Fund'. What is the strategy of the fund and how the addition of this fund would add value to the client’s overall portfolio?
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'Axis Focused 25' is a large-cap biased open-ended product designed to run a concentrated portfolio of not more than 25 stocks. The portfolio shall comprise high conviction ideas in quality businesses that can generate superior returns over medium to long term. What would you advise to the retail investor with fresh money to invest? Mutual funds are an attractive option for retail investors to plan their investments both for long and short term. Indian markets are trading at cyclical lows and offer an attractive entry point for long term investors. We believe these are those few rare opportunities to invest into a structural high growth market like India at relatively lower valuations. Mr. Chandresh Nigam has been with Axis AMC since December 2009. He holds a B. Tech. from IIT Delhi and a PGDM from IIM Calcutta. In his earlier stints, he has been with TCG Advisory, ICICI Prudential AMC and has also spent time with Zurich India AMC. F eedback
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Co-sponsored by Axis Bank, the festivals brought the best of Indian classical music and much more to non-resident Indians.
The Cleveland Thyagaraja Festival 2012 First celebrated in 1978, the Cleveland Thyagaraja Festival is the largest Indian classical music festival organized outside India. It is spearheaded by Aradhana Committee, a group of volunteers, who work closely with various other Carnatic music organizations in the United States and Canada to bring artistes to Cleveland for the festival. The 35th edition of this 11-day festival was attended by over 8,000 attendees with 2,000 appearing for the opening weekend. The festival took place at the Music Building of Cleveland State University. This year it was celebrated
between April 4-15 with Axis Bank co-sponsoring it. Some of the artistes who performed at the festival included Mangala Isai, Seshampatti Sivalingam (nadaswaram), K. Selvam (nadaswaram, S. Gajendran (thavil), M. Subramanian (thavil) among others. The festival also included the annual T. Temple Tuttle Memorial Music Competition held at the Conference Center at the Hilton Garden Inn in downtown Cleveland and Margam, a dance workshop covering 'padams' and 'javalis' in the tradition of Nrithya Rathnakara Smt. Kalanidhi Narayanan. To know more about the festival, please click here.
Sydney Music Festival 2012 It was an ultimate musical experience
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that saw renowned artistes enthralling thousands of music aficionados. The festival was co-sponsored by Axis Bank and organized by Swara-Laya Fine Arts, a non-profit cultural organization formed to develop classical music and dance among the local community. Some of the main artistes performing at the festival were Balamuralikrishna, T V Sankaranarayanan, Sudha Ragunathan, T M Krishna and accompanied by R K Sriramkumar, Lalgudi Vijayalakshmi and Avaneesawaram Vinu on violin and Mannargudi Easwaran, Tanjore K. Murugaboopathi and Patri Satish Kumar on mridangam. The festival included lecture-demonstrations and workshops for the local musicians, dancers and learning students. This year, it was organized on June 9-11, 2012. To know more please click here. J U N E 2 012 | A X I S N RI | 21