India Contenders favour Autos:: BofA Merrill Lynch,

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India Contenders favour Autos
�� Preference for cyclicals continues but no clear leadership
In July, the India Contenders are mainly dominated by Auto/Dur/Services, Energy
and Software. While the Implied Allocation model is most overweight cyclical
Consumer Discretionary, Information Technology and Energy, it is underweight
Industrials, Financials, Materials suggesting that there is no clear sector
leadership in terms of earnings and price momentum. Defensive sectors are
bunched together in the middle of the spectrum (cover chart).
India Contenders: Unchanged but favors Autos/Dur/Services
The India Contenders are unchanged this month. The longest standing
Contenders are Bajaj Auto, Bank of Baroda and Tata Motors (11 months). The
other India Contenders are Coal India, HCL Technologies, Mahindra & Mahindra,
Petronet LNG, Sterlite Industries (India), Tata Consultancy Services, and Titan
Industries. Three of the ten Contenders are from Autos/Dur/Services and the only
stock which looks unattractive in our model is Maruti Suzuki (chart 6).
New India Defenders: Ashok Leyland, IRB and Lanco
The new India Defenders are Ashok Leyland, IRB Infrastructure Developer, and
Lanco Infratech. The longest standing Defender is DLF Ltd (11 months). The
other India Defenders are Housing Development & Infrastructure, Mphasis,
Oriental Bank of Commerce, Reliance Communications, Steel Authority of India,
and Unitech.


India Contenders
Company Name Sector BofAML Fundamental Page
Opinion
Bajaj Auto Auto/Dur/Services Underperform
Bank of Baroda Banks Neutral
Coal India Energy Neutral
HCL Technologies Software Buy
Mahindra & Mahindra Auto/Dur/Services Neutral
Petronet LNG Energy Underperform (
Sterlite Industries (India) Materials Buy
Tata Consultancy Services Software Buy
Tata Motors Industrials Buy
Titan Industries Auto/Dur/Services –
* New Contenders this month



India Defenders
Company Name Sector BofAML Fundamental Page
Opinion
Ashok Leyland* Industrials Underperform
DLF Ltd Div Financials Buy
Housing Development & Infrastructure Div Financials Neutral
Irb Infrastructure Developer* Industrials
Lanco Infratech* Industrials Buy
Mphasis Limited Software Underperform
Oriental Bank of Commerce Banks Buy
Reliance Communications Telecom Underperform
Steel Authority of India Limited Materials Underperform
Unitech Limited Div Financials Neutral
* New Defenders this month