Market Mantra
Mauritius maul! Markets set for a free fall at start
Loopholes in certain taxations may be things of the past. The move to tax capital gains on the sale of shares of domestic companies by entities based in Mauritius is sure to unnerve the street at start. The Protocol for amendment of the Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains between India and Mauritius was signed by both countries at Port Louis, Mauritius on Tuesday. The Protocol will tackle the long pending issues of treaty abuse and round tripping of funds attributed to the India-Mauritius treaty, curb revenue loss, prevent double non-taxation, streamline the flow of investment and stimulate the flow of exchange of information between India and Mauritius. It is expected to improve transparency in tax matters and help curb tax evasion and tax avoidance. Existing investments, i.e. investments made before 1.4.2017 will not be subject to capital gains taxation in India.
The outlook is a gap-down start. Indices could see a free-fall at start. Global cues do not really matter for now. Kotak Mahindra Bank, Apollo Tyres, Asian Paints, Havells India, Oriental Bank Of Commerce and Indian Bank are among the results scheduled for the day.
Trading ideas (Time period: 1-3 days)
Tata Motors May Futs (SELL, below Rs388, Target Rs374, SL Rs395): Tata Motors has confirmed trend reversal after it retreated back from long term resistance line last week. The same also coincides with 50% retracement of the entire move from Rs606 to Rs266. A move below Rs380 will lead to major breakdown from rising wedge pattern. Also, in yesterday's trade it also confirmed evening star pattern, suggesting reversal after an extended upmove. (Duration 5 days)
Derivative strategies (Time period: Till expiry)
² Sell Fut Just Dial May Below Rs725 with SL of Rs751 for target of Rs673
Lot size: 500 Remarks: Net maximum profit of Rs26,000 and net maximum loss of Rs13,000
Corporate Snippets
² Crompton Greaves has launched a smart ceiling fan which could sense the temperature in the room and change the speed accordingly, in order to accelerate its growth in a fan market which is growing at a slow pace. (ET)
² Tata Steel has achieved a major breakthrough in its industrial park being developed at Gopalpur in south Odisha with the project getting the status of a Special Economic Zone (SEZ). (BS)
² Kotak Mahindra Prime said Tuesday it will raise Rs 500 mn by issuing debentures on a private placement basis. (BS)
² Maruti Suzuki has urged its component suppliers to make investment for the future as the company's requirements are expected to grow, with it predicting double-digit expansion in annual sales at least until 2020. (ET)
² Emami Ltd has relaunched male fairness cream Fair and Handsome to consolidate its share in the Indian market, for which it will launch a new advertising campaign with its brand ambassador Shah Rukh Khan. (ET)
² The government has asked global automotive technology companies Bosch and Cummins to provide retrofitting technology to convert old diesel vehicles into electronic vehicles. (BL)
² Havells India Ltd on Tuesday said Karnataka Industrial Areas Development Board has allotted land admeasuring 62 acres to it at Vasanthanarasapura Industrial Area, Tumkur, Karnataka, for establishing a unit for manufacturing of cable & wire, MCB, LED, electronics, solar lights at a tentative rate of Rs 4.03 mn/acre. (BL)
² The Madras High Court has sanctioned the scheme of amalgamation of Natco Organics Ltd, a wholly owned subsidiary of the company with Natco Pharma Ltd. (BS)
Economy snippets
² Corporate India's merger and acquisition activity witnessed a significant uptrend in April and touched $3.64 billion, over two-fold jump over the corresponding period last year. (BS)
² Government has initiated a probe into dumping of certain radial tyres from China that are used in buses, lorries and trucks and may end up imposing duty on them to protect the domestic industry. (ET)
² The state of Tamil Nadu has been placed on top in terms of growth in live investments attracted by the irrigation sector. Compounded annual growth rate (CAGR) was over 32% between 2004-05 and 2014-15. (BS)
Result table
| Rs m | Revenue | YoY % | PAT | YoY % |
| Century Plyboards | 4,547 | 11.1 | 405 | (15.5) |
| Kaveri Seed | 438 | 9.9 | (75) | (696.0) |
| Kirloskar Brothers | 5,024 | (7.7) | 211 | (41.5) |
| SRF | 9,061 | 5.1 | 861 | 46.4 |
| Zee Entertainment | 15,316 | 13.7 | 2,606 | 12.9 |
Warm Regards,
Amar Ambani
IIFL
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