Research Update with Emkay; 3 November, 2010

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n        Research Update Included

Motherson Sumi Q2FY11 Result Update; Below expectation, Lower rating to Accumulate; Target: Rs 200

n    Results below expectation due to lower sales/profitability at SMR/other subsidiaries. Standalone entity delivers stellar performance

n    SMR’s FY10 performance driven by repeat business for old/existing models. Business from new programs from 2011

n    Demand outlook remains strong across geographies adjusting impact of incentive schemes of last year

n    Lower FY11/FY12 EPS by 18%/4%. Lower rating to ACCUMULATE

JK Tyre & Industries Ltd Q2FY11 Result Update; Lower sales hinder performance, maintain BUY; Target: Rs 195

n    Results below est. due to lower tonnage offtake. Tonnage sales at 64,000 tons (+1.5% YoY and -8% QoQ), despite QoQ increase in utilization rate by 100 bps to 93% hinder

n    EBIDTA per ton improve 11% QoQ despite 10% increase in rubber prices. High rubber prices (> Rs 190/kg) remains a concern.  Price hikes are necessity to protect margins

n    Capacity expansion plans on course with total capex of ~ Rs 24 over next four to five years. Capex in first phase is Rs 930 mn funded in the ratio of 2:1 D/E

n    Lower our FY11E EPS by 19% to Rs 26.9 due to higher rubber prices. Expect price hike with a lag, fine tune or FY12 EPS to Rs 39.5 (-3%). Retain BUY with a TP of Rs 195

Punj Lloyd Q2FY11 Result Update; Slow But Sure, Maintain HOLD; Target Price: Rs 132

n    Punj Lloyds performance exceeds expectations – APAT at Rs239 mn versus expectation of Rs182 mn

n    Reports impressive Ebidta margins of 9.2%- highest in last 8 quarters- despite UK 1.2 mn provision in Simon Carves

n    Revenues of Rs1.7 bn booked on Libya project – progress underway but remains below expectations

n    Confident on current order backlog and negates repetition of past concerns – retain FY12E estimates and Maintain HOLD rating with price target of Rs132/Share