9am with Emkay 8 April, 2011

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

9am with Emkay

8 April, 2011

Contents

n        Research Views

Tech Mahindra wins a US$ 250 mn managed services contract from Vodafone Australia

Tech M has won a US$ 250 mn 5 year deal from Vodafone Hutchinson Australia as per press reports (please find attached the press report (http://delimiter.com.au/2011/04/07/tech-mahindra-takes-control-of-vhas-it/). As part of this deal, Tech M would be the sole managed services provider to Vodafone Hutchinson which runs the Vodafone and ‘3’ brands in Australia. Our channel checks indicate that Tech M would replace incumbents IBM, Accenture and TCS on this contract. We note that Tech M’s win at Vodafone Australia follows a similar 3 year contract win from Vodafone Qatar ( Source: Media reports) a couple of months back

Per initial discussions with the company, this deal does not involve any cash commitments or asset/people transfer by Tech M to Vodafone however the company would incur transition costs initially. In terms of revenues ramp up , co indicated that financial impact of delivery ramp up will start reflecting meaningfully from Q2FY12 onwards.

We have a HOLD rating on Tech M with a price target of Rs 730.

n        Research Update Included

Consumer Sector Report; Rule of the game... Monopoly to win!!!

n    Absolute market leadership lends the necessary edge to rule the industry in a fiercely competitive market landscape

n    Strong brand equity and  higher pricing power will help companies maneuver brand innovations along with pricing interventions to maintain their market position and financial profitability

n    We prefer stocks with a competitive edge, primarily driven by sharp focus on brands that have healthy and sustainable volume growth potential

n    Premium valuations justified - Initiate coverage on Colgate, GSK Consumer and Nestle. Maintain our view on Marico, Jubilant Foodworks and Titan; Upgrade Asian Paints to ACCUMULATE

n        Technical Comments

Nifty

Nifty concluded the third consecutive session on a horizontal note after trading in a narrow range throughout the day. It was just floating around its 20-HSMA in a directionless mode. Unless, Nifty goes past the resistance of downward sloping trendline, possibility of a pullback remains alive. However, the final confirmation of the correction will come in only on the break of 5810. But since the overall trend is up, primarily we are only looking for a 38.2% pullback of the entire rally from 5348 to 5944, which is placed 5718. Above all, we still maintain our bullish target of 6250 in the short term.