JP Morgan:: Prestige Estate-Steady it goes; till IT grows. Initiate with OW

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Prestige Estate Projects Limited
Initiation
Overweight
PREG.BO, PEPL IN
Steady it goes; till IT grows. Initiate with OW


Bangalore property is on a steady recovery path given improved outlook
and hiring trends in the IT sector. Price inflation in the city has been far
more modest vs. Mumbai/NCR. Prestige – a market leader in the city –
should be a prime beneficiary of resultant increases in demand and
pricing over the next 2-3 years. The company offers best-in-class execution
(5 year avg. deliveries of 6.5 msf), has a well diversified high quality
portfolio, and has completed some of the most marquee developments in
the city. By FY14, we estimate that the annuity portfolio would increase
c.3x driven by completion of office/retail projects in partnership with high
quality partners like CISCO and Capitaland. On the development side
margins should revert to more normal 35% levels as a large low value
project (Shantiniketan) runs off the P&L and high realization projects start
contributing. Valuations at 10.4x/7.6x FY12/13E P/E and 35% NAV
discount are also reasonable. Initiate with OW with Mar-12 price target
of Rs 180.

Buy Suprajit Engineering:: “Superior Connection”:: LKP

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Buy Suprajit Engineering “Superior Connection”



Suprajit Engineering (Suprajit) promoted by Ajith Kumar Rai is the largest
automotive cable company in India with a capacity to manufacture 75mn units
of cables. Suprajit has a 45% market share and derives more than 75% of its
`2.5bn revenues from automotive OEMs of which 60% is from the three leading
two wheeler manufacturers in India.

Coromandel International's (CIL) Q3FY11 results Review: PINC

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Coromandel International's (CIL) Q3FY11 results review


Coromandel International's (CIL) Q3FY11 results were inline
with our expectations as net sales grew by 16.3% YoY to
~Rs20.4bn (PINCe 14.7% and ~Rs20.1bn respectively). OPM
contracted slightly by 96bps to 10.8% resulting in an overall
operating profit of Rs2.2bn. Other income was down 9.2% to
~Rs331mn. Consequently, net profit increased marginally by
3.8% YoY to ~Rs1.5bn.

Buy Steel Authority of India: Earnings to rebound — valuations attractive:: Nomura

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Buy Steel Authority of India: Earnings to rebound — valuations attractive


􀁾 Action
Despite capacity expansion still two years away, we believe SAIL is a strong play
on increasing steel prices and improving earnings outlook. The stock has corrected
by 27.8% (vs a 7.8% fall in the Sensex) over the past three months on news of
FPO issuance and weak 3Q FY11 results. We believe the stock is trading at
attractive valuations and maintain our BUY with a revised price target of Rs212.
􀁡Catalysts
Improving steel prices along with timely execution of capacity expansion plans are
key triggers.
Anchor themes
SAIL is a play on strong domestic growth and captive iron ore. Raw material prices
remain high and integrated steelmakers are at an advantage. However, we reduce
our PT as capacity expansion has largely been pushed to FY14 and there are nearterm
earning risks on account of lower volumes and high coking coal prices.

Steel Authority of India Weakness extends; priced in the stock price:: Prabhudas Lilladher,

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Steel Authority of India Weakness extends; priced in the stock price


SAIL reported Q3FY11 results below our expectation, with the underlying lower‐thanexpected
realisations. We remained well ahead of the street in revising the earnings of
the company which reflect in one of the lowest earnings cut for FY11 in the street.

 Weaker‐than‐expected realisations led to disappointment in earnings: Marred
by lower‐than‐expected realisations (Rs34,287 v/s PLe of Rs35,693 per tonne),
SAIL reported disappointing set of numbers, with PAT of Rs11.07bn against PLe of
Rs12.77bn and consensus estimate of Rs14.1bn. EBITDA at Rs16.26bn fell short of
PLe of Rs18.87bn and consensus estimate of Rs21.8bn. On tonnage basis, EBITDA
grew marginally by 1.6% QoQ to Rs5,003 (PLe: Rs6088). Only positive came in the
form of better‐than‐expected volumes at 3.25m tonnes against PLe of 3.03m
tonnes.

Macquarie Research, :: OIL- Inching closer to US$100/b…

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Oil market: week in review
Inching closer to US$100/b…
 Brent continues to reach new highs, while WTI trails slightly further behind. Brent
ended the week up +5.7% at US$98.68/b, while WTI closed at US$91.60/b, a gain
of +4.1%. The week’s economic data continued to prove supportive for crude,
despite Friday’s announcement of a hike in the Chinese RRR. The Alaskan
pipeline outage provided a boost to prices as well, but was ultimately of minimal
consequence, and should be repaired in coming days. Spot correlations between
crude and equities was again nearly perfect, while currencies had a slightly lesser
(but still significant) effect. DOE data erred on the bearish side, with a headline
crude draw, but builds in product stocks, and a continuation of the recent
slowdown in demand. The CFTC report showed a large increase in noncommercial
net futures positions, while total open interest increased to a 38-
month high.
 Equity markets had a strong week, reaching new 28-month highs on Friday, as
the outlook for the US economy continues to improve. The S&P gained +1.7%
w/w, to close just above 1293.
 Looking forward, we are increasingly bullish, and find further justification for our
view in both the Brent futures curve’s strength, as well as nearly all incremental
s/d fundamentals data.

Larsen & Toubro Favorable Risk-to-Reward; Upgrade to ‘BUY’:: Emkay

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Larsen & Toubro

Favorable Risk-to-Reward; Upgrade to ‘BUY’

BUY

CMP: Rs 1,681                                       Target Price: Rs 2,015

---

n     Q3FY11 performance ahead of EMKAY and consensus estimates – revenues up 41% yoy to Rs114 bn and APAT up 32% yoy to Rs8.1 bn

n     Notable disappointment is muted order inflows (-25% yoy to Rs134 bn) – implied run-rate jumps to Rs287 bn or 21% yoy for Q4FY11

n     L&T reiterates guidance for FY11E – revenues growth 20% and stable operating margins – retain FY11E earnings of Rs69.1, but revise FY12E earnings by -3% to Rs82.4

n     Risk-to-reward is favorable, post 21% fall in stock price in last 2 months – Upgrade from ‘ACCUMULATE’ to ‘BUY’ with revised target price of Rs2,015/Share (Rs2,129/Share earlier)

Axis Bank Q3FY11 Result Update; Upgrade :: Emkay

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Axis Bank Q3FY11 Result Update; Upgrade as concerns on slippages allayed; Hold; Target: Rs1,300

n     Axis Bank (AXSB) Q3FY11 earnings at Rs8.9bn was better than our as well as street expectation driven by better than expected NIMs and NII

n     Key highlights: (1) NII growth of 28.5% led by 45.7% growth in advances (2) 13bps qoq expansion in NIMs and (3) lower slippage rate during the quarter to 1.1%

n     We believe that NIMs may contract by 12-15bps in Q4FY11 due to PSL loans but our key concerns on NPAs and provisions are allayed

n     With slippages coming under control we believe that AXSB could trade at its historic average valuations at 2.5x 1-year forward. Upgrade to HOLD with TP of Rs1,300

CLSA: buy Cadila Healthcare:: Play on domestic market

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Cadila Healthcare:: Play on domestic market


Cadila remains one of most attractive picks in the Indian pharma space
led by improving growth outlook and reasonable multiples. We see strong
drivers for Cadila’s domestic as well international businesses. With a
superior core earnings growth and return ratio profile, we believe Cadila’s
would rerate towards large cap pharma names. We have revised our
target price to Rs935/share based on 20x FY13CL core earnings
considering 24% EPS cagr over FY10-13CL.

CLSA on SAIL: Underperform --Disappointing 3Q results

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SAIL:: Disappointing 3Q results


SAIL’s 3Q net profit missed our estimates by 30% due to slightly lower ASPs,
higher coal costs & other expenditure and lower financial income. SAIL’s
margins are likely to expand in the next two quarters as steel prices
overshoot ahead of cost push but will decline in 2HCY11 when steel and raw
material prices cool off again. We cut FY11-13 EPS estimates by 18-26%
factoring in higher steel and raw material price forecasts of CLSA’s regional
team. SAIL offers strong growth over FY14-15 but we risk of delays in its
expansion projects and expect underperformance on a 12m view. U-PF stays.

Hindustan Media Ventures- Near-term pains overshadow potential gains:: Kotak Sec

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Hindustan Media Ventures (HMVL) 
Media 
Near-term pains overshadow potential gains. HMVL reported weak 3QFY11 EBITDA
at Rs185 mn (+11% yoy; +2% yoy), below our Rs250 mn expectations; the negative
variance resulted from lower-than-expected advertising revenues (Rs945 mn versus our
expected Rs1 bn) potentially due to (1) negative advertising contribution from Bihar
elections and (2) pullback of commercial advertisers given prior election experience.
However, two factors compel  a reduction in target price to Rs200 (Rs225 previously)
and downgrade to ADD (BUY previously) (1) continued investment in new markets as
well as (2) slower-than-expected ramp-up in monetization (not dissimilar from HT
Media).

PINC POWERPICKS: Jan 2011

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PINC POWERPICKS: Jan 2011

(click on name for detail report)

1. ASHOK LEYLAND

2. BAJAJ AUTO

3. IRB INFRA

4. JAGRAN PRAKASHAN

5. LUPIN

6. M&M

7. NIIT TECH

(click on name above for detail report)

NIIT TECH: BUY, TP-Rs278 (36% upside) PINC POWERPICKS: Jan 2011

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What’s the theme?
NIIT Tech has large exposure to high-growth niche verticals such as insurance and travel. New service
lines would boost non-linear growth and lead to improvement in realizations. NIIT Tech has no exposure to
the PIIGS zone and it has been able to achieve volume growth in Europe despite economic headwinds.

M&M: BUY, TP-Rs900 (22% upside) PINC POWERPICKS: Jan 2011

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M&M: BUY, TP-Rs900 (22% upside)


What’s the theme?
M&M, with significant rural presence, would benefit from strong monsoons this year. The automobile segment
is expected to record growth of 22.4% and 13.2% in FY11 and FY12 respectively, with new product launches.
The tractor segment too would grow 15.8% in FY11, underpinned by higher crop output.

LUPIN: BUY, TP-Rs537 (17% upside) PINC POWERPICKS: Jan 2011

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LUPIN: BUY, TP-Rs537 (17% upside)

What’s the theme?
Lupin is one of the best plays in the pharma space, in our view, given its strong execution capabilities,
improving financial performance, and diversifying business model. The high-margin branded generic
business has been the key differentiator. Strong growth in the US (in both branded and generic segments)
and improvement in operating margins would lead to upgrade in consensus earnings.

JAGRAN PRAKASHAN (JPL): BUY, TP-Rs165 (35% upside) PINC POWERPICKS: Jan 2011

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JAGRAN PRAKASHAN (JPL): BUY, TP-Rs165 (35% upside)


What’s the theme?
We like JPL on the back of its leadership position in UP (the largest print market in terms of readership and
print ad value), strong position in growing regions like Bihar and Jharkhand, better cost efficiency, phased
and planned expansion into other forms of media businesses, and a wider portfolio (including Mid-Day).
1HFY11 business growth (15% ad growth) strengthens our belief that it is well poised to benefit from
steady growth in the print media sector.

IRB INFRA: BUY, TP-Rs283 (34% upside) PINC POWERPICKS: Jan 2011

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IRB INFRA: BUY, TP-Rs283 (34% upside)


What’s the theme?
IRB infra is a proxy play on Indian road sector. IRB is amongst the largest BOT operator in India with in
house execution capabilities and currently have 16 BOT projects under portfolio, of which ten are
operational, five under construction and one project is in advance stage of financial closure. IRB is well
positioned to add projects worth $1bn i.e about 4-6 BOT projects per annum without any equity dilution.

BAJAJ AUTO: BUY, TP-Rs1,855 (49% upside) PINC POWERPICKS: Jan 2011

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BAJAJ AUTO: BUY, TP-Rs1,855 (49% upside)


What’s the theme?
With the success of Pulsar135 and Discover twins (100cc and 150cc), Bajaj Auto's brand-centric strategy has
been validated. The high-margin brands, Pulsar and Discover, now account for 70% of the company's motorcycle
sales. In addition, continued demand for three-wheelers and robust exports would help Bajaj Auto achieve
volume growth of 37.8% and 13.8% in FY11E and FY12E respectively. We expect profitability to be maintained
at current levels of 20%.

ASHOK LEYLAND: BUY, TP-Rs76 (29% upside) PINC POWERPICKS: Jan 2011

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ASHOK LEYLAND: BUY, TP-Rs76 (29% upside)

Sector: Auto
CMP: Rs59; Mcap: Rs79bn
Bloomberg: AL IN; Reuters: ASOK.BO



What’s the theme?
The commercial vehicle (CV) segment took a hiatus for a couple of months to absorb pre-buying due to new
emission norms, effective October 1, 2010. Following this, the domestic truck segment again picked up momentum
from December 2010 with economic growth being strong. In addition, increased production at Ashok Leyland's
Uttarakhand facility is expected to boost margins.

HDFC:: Steady quarter but outlook challenging. :: Kotak Sec,

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HDFC (HDFC) 
Banks/Financial Institutions 
Steady quarter but outlook challenging. HDFC reported PAT of Rs8.9 bn, up 33%
yoy, aided by capital gains of Rs1.7bn. Core earnings were up 20%—largely in line.
Disbursement growth at 21% yoy and loan growth at 20% yoy in 3Q remained strong
and on track. However, we find higher interest rates, ongoing competition and likely
moderating demand as headwinds in the medium term, even as valuations remain
expensive. We revise estimates, retain REDUCE with price target of Rs690 (from Rs720).  

India News Round up by Kotak Securities: 17 January 2011

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Economy News
4 India's M&A market saw a massive 166.5% surge in terms of deal value,
amounting to $51 billion in 2010 (ET).
4 The higher-than-expected wholesale price rise in December has
prompted the Prime Minister's Economic Panel to further revise upwards
the Marchend inflation forecast to up to 7% from 6.5% estimated earlier
(ET).
4 The government has stated that time and cost overruns in the
infrastructure projects have improved significantly in 2010 as compared
to the decade ago (ET).
4 The finance ministry has rejected the 9.5% interest pay out proposed on
provident fund savings for 2010-11 saying the surplus funds found by the
PF department from its past accounts were unverifiable (ET).

India Market Recap- Mon, Jan 17, 2011

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 INDICES: Sensex 18,882(+21), Nifty 5,654(+1), CNXMCAP 8,136(-74).
* VOLUMES: NSE $2.49bn(11,348), BSE $0.78bn(3,040cr), F&O $27.74bn(1,26,368cr)
* AVERAGE 10 DAYS MKT VOL: NSE $2.84bn (12,965) BSE $0.78bn (3,564)
                           F&O $28.42bn(1,29,489).
* SECTORS: REALTY -2.13%  METAL -1.21%   BANKEX +0.37%   POWER  -1.00%
           AUTO 0.08%  CAP.GOODS -1.54% PHARMA -0.53%  IT +1.93%.
* ADV-DEC RATIO : BSE500 Index 132 Advances & 364 Declines.
* INDEX GAINERS : HDFC +3%, INFOSYS, CIPLA & TCS +2%, B.AUTO, BHARTIARTL,
                  H.BANK & ITC +1%.
* INDEX LOSERS  : RELINFRA -8%, JPA & RCOM -5%, STER -4%, DLF -3%,
                  HINDALCO & LT -2%, H.HONDA, J.STEEL & T.POWER -1%.

* TOP 5 VOLUMES : LT, T.COFFEE, HDFC, SBI & INFOSYS.

* MAJOR BLOCKS  : 1) CRISIL               23,358 @ 6000.00,
                  2) MARICO            19,00,000 @  124.75,
                  3) DABUR IND         12,90,515 @   99.15,
                  4) REC LTD           10,00,000 @  262.00,
                  5) HDFC              11,67,364 @  643.50.

* BSE500 GAINERS: GITANJALI 8%, BOC +6%, SHRE ASHTAVINAY & PSL +5%, BOI,
                  ORACLE FIN & UFLEX +4%, NAVNEET PUB, HDFC & STFC +3%.
* BSE500 LOSERS : REL MEDIA, J.POLY & RELINFRA -8%, JAI BALAJI & J.SOUTH -7%
                  GLENMARK, RELCAP, RELPOWER, STER TECH & ANSAL PROP -6%.

* FII INVESTMENT FROM 1st JAN 2011 to 13th Jan 2011: $-0.54bn.

CLSA:: buy Zee Entertainment: 3QFY11 Results Update

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Zee Entertainment: 3QFY11 Results Update


Zee Entertainment 3QFY11 pre-exceptional profit at Rs1.14bn was
unexpectedly down 10%QoQ following a loss of Rs1.03bn (90% QoQ
higher) in its sports business. But advertising revenue was a surprise,
increasing 7%QoQ, aided by an improving ad environment and the
strength of a 20-plus channel network. The quarter also included Rs700m
one-time income for the premature termination of its sporting events, but
this is classified as exceptional. Adjusted for the sports business, Zee’s
Ebitda margin was 39%. Despite the downgrade in our estimates, we are
looking at 27% earnings growth for FY12-13CL and reiterate our BUY
recommendation on Zee.

FII & DII trading activity on NSE and BSE as on 17-Jan-2011

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FII trading activity on NSE and BSE on Capital Market Segment

The following is combined FII trading data across NSE and BSE collated on the basis of trades executed by FIIs on 17-Jan-2011.

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) Category Date Buy Value Sell Value Net Value FII 17-Jan-2011 2569.5 2742.5 -173

Domestic Institutional Investors trading activity on NSE and BSE on Capital Market Segment

The following is combined Domestic Institutional Investors trading data across NSE and BSE collated on the basis of trades executed by Banks, DFIs, Insurance, MFs and New Pension System on 17-Jan-2011.

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) Category Date Buy Value Sell Value Net Value DII 17-Jan-2011 1067.54 707.72 359.82

-- 

FII DERIVATIVES STATISTICS FOR 17-Jan-2011

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FII DERIVATIVES STATISTICS FOR 17-Jan-2011
	BUY		SELL		OPEN INTEREST AT THE END OF THE DAY
	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores
INDEX FUTURES	80556	2279.26	59267	1673.13	448767	12594.68	606.12
INDEX OPTIONS	393249	11026.39	405928	11469.07	1818912	51333.10	-442.69
STOCK FUTURES	99255	2648.75	87993	2308.78	1309836	33273.02	339.97
STOCK OPTIONS	13441	395.62	13934	407.35	21296	596.69	-11.74
						Total	491.67