Reiterate Sell on TCOM/MTNL as outlook remains lackluster : Goldman Sachs

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Reiterate Sell on TCOM/MTNL as outlook remains lackluster
Reiterate Sell ratings on TCOM and MTNL
We revise down our 12-month SOTP-based target price on TCOM 10% to
Rs220 (8% downside potential) and our 12-month DCF-based target price
on MTNL 17% to Rs40 (13% downside potential) as we adjust our models
to factor in their weaker-than-expected 3Q results. Retain Sell ratings.
Near-term resolution of TCOM’s surplus-land issue still less likely
As per CNBC (Mar 21), the India telcos minister has ordered a probe into
the delay in the demerger of TCOM’s surplus land — with findings in the
next 2-3 weeks. Subsequently, TCOM stated on March 24 that reports
about a demerger of surplus-land are speculative and TCOM has not
received any recent communication from the government on this issue.
Acting against a swift resolution to the issue are: 1) TCOM would have to
pay the capital gains taxes and stamp duties, which would likely
discourage TCOM from monetizing these assets, in our view; and 2) The
time needed to get the requisite approvals (already pending for the last 9
years). Note that the land bank makes up 46% of our valuation on TCOM.
TCOM: Lower our estimates to factor in weaker operations
We cut EBITDA estimates 7%-8% over FY11-13E as: 1) 3Q results missed
our estimates 6%; 2) higher-than-expected contribution from low-margin
international business (margins of 4% vs. 24% for domestic business). Our
EPS estimates also fall by a proportionate amount. TCOM is currently
trading at 2.4X FY12E P/B (ROE: -24.6%) and 11.5X FY12E EV/EBITDA,
which are at premium to the Asian telcos' average of 1.9X/5.7X. Risks: 1)
Lower-than-expected tariff decline, 2) Value unlocking due to resolution of
surplus land issue.
MTNL: Downside to EPS due to MNP and higher costs
To factor in the higher than estimated negative impact from MNP we
reduce our FY11-13E revenue estimates by 1-3%. Combined with higher
staff cost, we increase our FY11E/FY12E/FY13E EBITDA loss estimates by
37%/14%/4% to Rs8.5 bn/Rs8.5 bn/Rs7.4 bn —and note these are well
below Bloomberg consensus in FY12/FY13 of -Rs780mn/+Rs262mn. Our
EPS estimates also fall by a proportionate amount. Risks: 1) Faster-thanexpected
uptake in the broadband business; 2) Lower-than-expected
decline in subscriber market share.

Coal India- New path, but no more hikes in FY12 :Macquarie Research,

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Coal India
New path, but no more hikes in FY12
Event
􀂃 Non core sector to subsidise core sector? Lots of investor interest has
been generated due to the recent price hike, and there is speculation about a
further increase to the base rate. We believe that the core sector, which
accounts for 70% of Coal India’s production, may not see any major increase
as the government battles rising losses at SEBs. The higher increase allowed
for the non core sector was possibly a compensation for the same issue.
􀂃 We have raised our earnings estimates because of this and have increased
our TP to Rs370 from Rs340. However, we maintain a Neutral
recommendation and would be more positive only on dips.

ICC Cricket World Cup 2011: Who will win Indo-Pak match at Mohali?

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ICC Cricket World Cup 2011: Who will win Indo-Pak match at Mohali?

Share your opinion and VOTE NOW (see top right corner)

INDIA WILL WIN... that's what WE BELIEVE.. do you?

Implications of Accenture 2Q11 Results for India IT :Morgan Stanley

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India IT Services
Implications of Accenture
2Q11 Results for India IT
Quick Comment: Our key takeaways from Accenture1
results for India IT vendors are: 1) IT services as a
sector is capable of delivering a strong revenue growth
even in the current uncertain environment; and 2) India
IT vendors have indicated that discretionary spending
with clients is picking up. Accenture's strong revenue
growth/bookings in consulting/outsourcing further add to
the trend in our view.

Macquarie Research, Oil & Gas Markets volatile in wake of Japanese catastrophe

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Oil & Gas Atlas
Markets volatile in wake of Japanese
catastrophe
Energy Market Indices WoW Changes
⇒ S&P/TSX Energy Index: +2.3%
⇒ S&P 500 E&P Index: +2.7%
⇒ Oil Service Sector Index: 0.0%
⇒ UK FTSE Oil & Gas Producers Index: +0.5%
⇒ Asia Pacific Oil & Gas Producers Index: -0.8%
Weekly Market Recap
WTI crude oil futures experienced another volatile week, closing on Friday at
US$101.22/bbl, essentially flat WoW. On Monday, oil prices dropped below
US$100/bbl over concerns demand from Japan would decline in the wake of the
earthquake. Geopolitical tensions in the Middle East pushed oil back above
US$104/bbl later in the week before Libya declared a cease fire on Friday. Henry
Hub gas futures rose more than 7% over the previous week after government
storage data showed a larger-than-expected weekly draw of 56bcf versus consensus
of 49bcf from winter inventories. Analysts also expected continued support from
stronger crude futures and increased imports of liquefied natural gas by Japan.
Last week we published a revised oil price forecast. We believe recent political unrest
in Egypt, Libya and other (MENA) countries has increased the supply risk for global
crude production. Forecasted Brent prices were increased to US$117/bbl for 2011
(from $97) and US$120/bbl in 2012 (from $116) and lowered to US$119.00/bbl for
2013 (from $120). The revision did not translate directly for WTI, reflecting high crude
inventories at Cushing, which has seen WTI at a deep discount to Brent. Our 2011
WTI price revised to US$110/bbl (from $95), though 2012 was largely unchanged at
US$115/bbl (from $114) and 2013 dropped marginally to US$117/bbl (from $119).
In our European space, we published two reports on the back of our price deck
update, identifying Marathon, Repsol, Royal Dutch Shell and Statoil as the biggest
winners in 2011 EPS estimates, while in our European E&P universe we moved
Valiant Petroleum and Faroe Petroleum to Outperform (from Neutral), maintaining all
other ratings unchanged. In the midst of the unfortunate Japanese disaster, we
identified Royal Dutch Shell, along with BG Group and ExxonMobil to benefit the
most from a tightening LNG market (Statoil from an overall world gas market
tightening). Following Chevron’s Analyst Day, we retain our Outperform rating,
acknowledging limited near-term catalysts. In the middle of the week, ENI called on
Europe to abandon sanction’s against the Gaddafi regime in Libya.
We initiated coverage on two companies last week, PetroFrontier (PFC CN) and Strad
Energy Services (SDY CN). PetroFrontier is an exploration-stage oil and gas company
with a core operational focus in Australia’s onshore Georgina Basin, where it
controls an average 64% working interest in 13.6m contiguous acres of oil and gas
exploration permits. We rate the stock as Outperform with a C$10.00 target price
marked at 0.5x our RENAV of $20.00/sh; the stock closed on Friday at $3.56/sh.
Strad Energy Services is a North American oilfield services company that generates
most of its revenue through rentals. We initiated with an Outperform rating and a
C$7.50 price target, which is based on 4.7X 2012 EV/EBITDA.

IPO Gray Market Premium: PTC Financial; Shilpi Cable : March 27th 2011

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Company Name	Offer Price	Premium
	(Rs.)	(Rs.)
PTC India Financial Services	26 to 28	Discount
Shilpi Cable	65 to 69	4 to 5

  

PTC FINANCIAL SERVICES IPO:: Allocation Status

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Or CLICK HERE TO SEE ALLOTMENT STATUS

Buy Jyothy Laboratories; Target : Rs 244 : Acquisition spree….ICICI Securities,

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Jyothy Laboratories (JLL) is all set to expand its foothold in the
fabricare segment. JLL has acquired a 14.9% stake in Henkel India Ltd
from Tamil Nadu Petro Products Ltd (TNPL) in an all-cash deal worth |
60.73 crore and acquired a 100% stake in Delhi-based Diamond Fab
Care (DFC) for | 30 crore. The acquisitions are synergistic to JLL as
Henkel and Jyothy have a synergistic portfolio (with both being present
in fabric care, dish wash, personal care and the household care
segments) and DFC would help it to expand its foothold in the laundry
care business in the Delhi NCR region.
Details of the Henkel deal
JLL has acquired the 14.9% stake from TNPL (having 17% stake) at | 35
per share (~22% discount to the CMP of | 45). It is an all-cash deal and
would be funded through internal accruals. Further, JLL is planning to
participate in the bidding of 50.9% stake sale of Henkel AG in Henkel India
for its homecare and personal care brands, namely, Henko, Mr White,
Chek, Pril, Fa, Neem and Margo.
Details of Diamond Fab Care deal
JLL has acquired a 100% stake in Delhi-based DFC Services for ~| 30
crore. The acquisition is to be funded by money (| 100 crore) raised
through a 26% stake sale of JFSL to IL&FS PE fund. DFC is a Delhi NCR
based laundry services company that caters both to retail as well as
institutional clients and has a total turnover of ~| 10 crore.
Valuation
At the CMP of | 205, the stock is trading at 18.5x its FY11E EPS of | 11.1
and 15.6x its FY12E EPS of | 13.2. We believe the strategic investments
are synergistic for JLL. However, the acquisition of the 51% stake in
Henkel would be a challenge for it as Henkel’s margins are very low and it
has a debt of ~| 455 crore on its books. Moreover, JLL would have to
invest huge funds in rebranding and relaunching Henkel’s products that
could further pressurise margins. Hence, we are revising our target price
to | 244 valuing JLL at 19x its FY12E EPS of | 13.2 with a BUY rating.


Diamond Fab Care (DFC)
DFC is a Delhi-based laundry services firm with 36 fabric care stores
across Delhi, Gurgaon, Ghaziabad, Faridabad and Noida. The company is
as old as JFSL (started operations around November, 2009) with a total
turnover of around | 10 crore. Like JLL, it caters both to retail (60% of
sales) and institutional clients (40% of sales).
JLL plans to complete the acquisition of DFC by March, 2011 and
consolidate its accounts from April, 2011 onwards. With DFC having
achieved break even this year, we believe JFSL would not face any
pressure on the operational front. Further, JLL has plans to further
increase the number of stores in Delhi under its own brand name (JFSL)
and gradually transform the DFC stores under the JFSL brand.
With DFC operating at ~60% margins in the retail segment, ~15% margin
in the institutional segment and having achieved its break even within 1.5
years of operation we believe the company has received a good response
from its clients. Hence, the acquisition seems to be a positive for the JFSL
business.


Henkel India Limited
Henkel India is the subsidiary of Henkel AG, the Germany based
company, which holds 50.97% stake in the company. The public and
institutions hold 32.33% and TNPL holds 16.7% (before JLL’s purchase).
The company’s major brands in India are Henko detergent, Chek
detergent, Mr White detergent, Neem toothpaste, Fa, Margo soap, Pril
dish wash products and Schwarzkopf professional hair care business. The
company is planning to exit all its business except Schwarzkopf.


With Henkel’s performance being subdued over the years, the acquisition
of the 51% stake would require the company to revamp its operations
completely. Also, huge expenses would be required for re-building the
existing brands in order to maintain sales growth. However, the major
concern that remains is the debt of | 455 crore on Henkel’s balance sheet,
which could continue to keep the bottomline under pressure in the wake
of already higher expenses and strained margins.

DSP BlackRock Small and Midcap Fund: Invest- Business Line

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Mid and small-cap stocks have had a torrid time over the last five years, failing to keep up with blue-chips in the rally and falling more sharply during corrective phases in the market. In fact, a comparison of returns on the CNX Midcap index with the Nifty shows that the mid-cap index has lagged on five-year annual returns, managing about 10.6 per cent to the Nifty's 11 per cent.

This consistent underperformance has widened the valuation gap between large and mid-cap stocks,providing an entry opportunity in to mid-caps for investors who are targeting high returns over the long term. The DSP BlackRock Small and Midcap Fund appears a good option.

Beating the index: DSPBR Small and Midcap Fund has been the rare mid-cap fund to easily beat the mid-cap benchmark over the past three years. Less than half the mid-cap funds in operation beat the CNX Midcap in this period. Only three funds matched DSPBR's record.

True mid-cap focus: The fund's stringent focus on mid- and small-cap companies, rather than emerging large-caps, makes for a higher return potential for its portfolio. About 71 per cent of the portfolio was invested in stocks below the Rs 7,500 crore market cap threshold .

Controlled risk: Even while staying ahead of the category average in a rising market, DSPBR Small and Midcap fund contained the downside in its NAV during the recent market fall to levels close to the Midcap Index.

The CNX Midcap Index has lost 21 per cent and the entire class of mid-cap funds lost 21.3 per cent. The DSPBR Small and Midcap Fund's NAV shed 20 per cent in this period.

The fund uses a mix of raised cash and derivative positions, a focus on low PE stocks and a very diversified portfolio to contain the risks associated with the wild swings in mid-cap stock prices. Having raised its cash position from about 6 per cent to 11 per cent between September and November 2010, just ahead of the recent market fall, the fund has since retained fairly high cash/debt at about 15 per cent of the assets.

The sector profile of the portfolio suggests a value-focussed bottom-up approach to stock selection that may pay off well in a challenging environment. The fund's top holdings were such under-researched names as Trent, EID Parry, Areva T&D and Indian Hotels leading the list. The fund's offbeat preferences may help contain portfolio swings during volatile market phases.

Macquarie Research, Asia Oil&Petrochemicals Refining margin marched forward

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Asia Oil&Petrochemicals
Refining margin marched forward
Refining and petrochemical update
 Refining margin strengthened. Singapore gross refining margin climbed
27% WoW to US$9.1/bbl, as crude oil shed some of the previous gains on
concerns over demand loss following Japan’s earthquake and Libya’s talk of a
potential ceasefire.

Ranbaxy - Zee Entertainment - Mahindra & Mahindra- India Strategy:: Deutsche Bank,

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Ranbaxy: Risk of Comprehensive plan becoming a Consent Decree [Abhay Shanbhag]
Complex regulatory process, few precedents and limited guidance in addressing GMP issues force us to analyse Comprehensive Settlements (CS). In last 1 year 2 CS have been converted into CDs - with long, unpredictable timelines. Of 17 CDs in 20 years, only 5 were resolved over 4-7 years & 3 plants have been permanently shut. Compared to peers, Ranbaxy is yet to show any formal progress over 2.5 years from getting ensnarled. While recent CDs do not carry fines; the long, unpredictable timelines will aggravate its operating leverage. Maintain SELL.

Sizzling Stocks :Jaiprakash Associates ;Hindustan Oil Exploration Company- Business Line

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Jaiprakash Associates (Rs 90.3)

Jaiprakash Associates grabbed traders' attention last week by recording a remarkable turnaround and soaring over 10 per cent higher. The stock has key medium-term support in the zone between Rs 80 and Rs 90 and it is currently attempting to reverse higher from here.

The medium-term trend in the stock is still up and it needs to close below Rs 75 before investors get perturbed.

The stock will, however, face resistance at Rs 119 and Rs 142 in the months ahead.

Investor with short to medium-term horizon should exit the stock on reversal from either of these levels. Key long-term resistances are at Rs 187 and Rs 224.

Hindustan Oil Exploration Company (Rs 200.8)

HOEC too rose from the ashes to surge over 25 per cent last week. The stock was hovering in its long-term support zone between Rs 160 and Rs 170 since the last week of February.

A sharp reversal from this zone will take the stock up to Rs 240 or Rs 290 in the ensuing months.

The long-term view on the stock will, however, turn positive only on close above the second target.

The support zone between Rs 160 and Rs 170 will continue to cushion the stock in the near-term. Subsequent targets are at Rs 150 and then Rs 93

UBS:: Petronet LNG -Management meeting key takeaways

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UBS Investment Research
Petronet LNG
Management meeting key takeaways
􀂄 Dahej operable capacity could be higher
Recent media reports on RIL’s reply to the Directorate General of Hydrocarbons
(DGH) indicated gas production from D1/D3 and MA field at 47mmscmd (while
RIL indicated these are estimates). Spot cargoes could be higher if RIL production
is lower. Also, operable capacity at Dahej could go up to 12MMTPA, if they do
night unloading and optimise the process. Management has guided for sales of 9.6-
9.7 MMTPA and 10.9-11.0 MMTPA in FY11 and FY12.

Consider going long on Bharti Airtel- Business Line

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Bharti Airtel: Last week's firm close turned the short-term outlook positive for Bharti Airtel. The stock is ruling at a crucial level now. One more conclusive close above Rs 342 could lift the stock towards Rs 365. But the overall outlook would remain negative as long as it stays below Rs 415-425. The immediate support appears at Rs 320-325, breaching it could weaken it to Rs 277. There is however a minor support zone at Rs 301-303.

F&O pointers: The Bharti Airtel futures saw fresh accumulation of open interest positions in April futures and a long rollover from March series. The rollover of open interest stood at 25 per cent. Option trading also indicates a positive bias as calls witnessed unwinding of open interest. On the other hand, puts saw heavy accumulation of open interest positions. However, option trading in April contracts for Bharti Airtel futures indicates a neutral view, as both calls and puts witnessed a marginal accumulation in open interest.

Strategy: Traders can consider going long on Bharti Airtel futures (market lot 1,000) only if the stock moves past Rs 342. In that event, traders can keep the stop loss at Rs 342 on a closing day basis (spot price). Exits can be made at Rs 352 or Rs 365, if momentum sustains.

LIC Housing Finance: The stock has been moving in a narrow range over the last one month. Only a break from the Rs 170-217 range could set a clear trend for the stock. LIC Housing Finance finds immediate support at Rs 190. The stock is likely to move in 190-210 range during the short term.

F&O pointers: LIC Housing Finance added fresh short positions on Friday. It also saw healthy rollover (27 per cent rollover in open interest). Option trading also indicates a neutral view with slightly tilted positive bias. Market lot is 1,250.

Strategy: Traders can consider writing LIC Housing Finance 210 call, which closed Friday at Rs 2.25. Note that in this strategy the maximum profit is the premium collected while the loss could be unlimited. The strategy, therefore, is for high-risk appetite traders only. Writing (selling) options also involves margin commitments.

Follow-up: Last week, we had advised traders to consider going short on CNX-IT and HDIL. Stop-loss would have got triggered for both the strategies

Indian Oil Corp - Leader of the pack… - ICICI Securities

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Leader of the pack…
Indian Oil Corporation (IOC), a leading PSU company in the oil & gas
sector in India, has business interests across the entire hydrocarbon
value chain including refining, pipelines, marketing, petrochemicals, E&P
activities, etc. It operates eight refineries with a total capacity of 51.2
mmtpa in FY10 and has ~46% share in marketing of petroleum
products in India. IOC’s recent capacity addition in petrochemicals
would provide stability to its earnings, going forward. We expect IOC to
report CAGR of 3.6% and 10.9% in revenues and net profits,
respectively, over FY11E-13E to | 3,45,064 crore and | 7,171.6 crore. We
recommend BUY rating on the stock with a price target of | 334.
Largest refiner in country
The IOC group is India’s largest integrated downstream player with the
largest refining capacity and product pipeline network. With the recent
expansion of the Panipat refinery from 12 mmtpa to 15 mmtpa, the
refining capacity of the IOC group has increased to 64.7 mmtpa while
IOC’s standalone capacity has increased to 54.2 mmtpa. We believe IOC
would be one of the major beneficiaries of the recent increase in refining
margins. We believe the increase in standalone crude oil throughput to
54.6 mmtpa in FY13E coupled with increase in refining margins from
US$5.6 per bbl in FY11E to US$6.4 per bbl in FY13E would increase the
profitability of the company. IOC is further augmenting its refining
capacity by setting up a 15 mmtpa refinery at Paradip at a project cost of
| 29777 crore, which would be complete by Q4FY13E.
Retail sales volume to increase at 4.4% CAGR over FY11-13E
We expect IOC’s retail sales volumes to increase from 67 mmtpa in FY11E
to 73 mmtpa in FY13E at 4.4% CAGR over FY11-13E. IOC’s earnings are
least sensitive to crude oil prices compared to its peers. This would
relatively protect the downside risk to the stock in the scenario of higher
crude oil prices. IOC’s recent capacity addition in the petrochemicals
segment would provide stability to its earnings, going forward.
Valuation
IOC is trading at 10.5x FY12E and 10.2x FY13E EPS of | 28.8 and | 29.5,
respectively. We are initiating coverage on the stock with BUY rating and
a price target of | 334 (valuation based on average of P/BV multiple: | 332
per share and P/E multiple: | 336 per share).


Investment Rationale
IOC, the leading PSU company in the oil & gas sector, has business
interests across the entire hydrocarbon value chain including refining,
pipelines, marketing, petrochemicals, E&P activities, etc. It operates
eight refineries with total capacity of 51.2 mmtpa in FY10 and has
~46% share in marketing of petroleum products in India. We believe
IOC would be one of the major beneficiaries of the recent increase in
refining margins. We expect refining margins to increase from US$5.6
per bbl in FY11E to US$6.4 per bbl in FY13E. IOC’s earnings are least
sensitive to crude oil prices compared to its peers. This would relatively
protect the downside risk to the stock in a scenario of higher crude oil
prices. IOC’s recent capacity addition in the petrochemical segment
would provide stability to its earnings, going forward. We expect IOC to
report CAGR of 3.6% and 10.9% in revenues and net profits,
respectively, over FY11E-13E to | 3,45,064 crore and | 7,171.6 crore. We
recommend BUY rating on the stock with price target of | 334.
Largest refiner in country
The IOC group is India’s largest integrated downstream player with the
largest refining capacity and product pipeline network. With the recent
expansion of the Panipat refinery from 12 mmtpa to 15 mmtpa, the
refining capacity of the IOC group has increased to 64.7 mmtpa while
IOC’s standalone capacity has increased to 54.2 mmtpa. We believe IOC
would be one of the major beneficiaries of the recent increase in refining
margins. We believe the increase in standalone crude oil throughput from
52 mmtpa in FY11E to 54.6 mmtpa in FY13E coupled with an increase in
refining margins from US$5.6 per bbl in FY11E to US$6.4 per bbl in FY13E
would increase the profitability of the company. IOC is further
augmenting its refining capacity by setting up a 15 mmtpa refinery at
Paradip at a project cost of | 29777 crore. It would be complete by
Q4FY13E. We expect the new refinery to be commercially operational
from Q1FY14E.


Valuation
IOC is trading at 10.5x FY12E and 10.2x FY13E EPS of | 28.8 and | 29.5,
respectively. We are initiating coverage on the stock with BUY rating and
a price target of | 334 (valuation based on average of P/BV multiple: | 332
per share and P/E multiple: | 336 per share).
IOC’s EPS would decrease from | 29.5 (Brent oil price: US$85 per bbl,
government share: 50%) to | 25.2 (government share: 54.5%) in FY13E if
crude oil prices sustain at US$100 per bbl. However, its EPS would
increase to | 42 per share in FY13E if crude oil prices decline to US$70
per bbl.
Exhibit 131: Valuation table
Valuation based on Price / BV Multiple
Adjusted Book Value for FY13E (|Crore) 55163.7
Adjusted number of shares (Crore) 239.9
Adjusted Book Value per share (|) 230.0
Add: Listed investments (25% discount to CMP) 71.9
Book Value of core business (| per share) 301.9
Multiple 1.10
Fair Value per share (|) 332
Valuation based on P / E multiple
Profit after tax for FY13E (| Crore) 7171.6
Less: Other Income adjusted for tax (| Crore) 1403.5
Adjusted profit after tax for FY13E (| Crore) 5768.1
Number of shares (Crore) 242.8
Adjusted EPS for FY13E (|) 23.8
Multiple 11.0
Fair value per share without investments (|) 261.3
Add: Value of Investments (| per share)
Listed investments (25% discount to CMP) 71.0
Other Investments 3.5
Fair value per share (|) 336
Weighted Target Price (| per share) 334
Source: ICICIdirect.com Research

Birla Corporation:: Well placed in high growth markets…:ICICI Securities

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Well placed in high growth markets…
We recently met the management of Birla Corporation to understand the
company’s business and future plans. Birla Corp (BCL) is promoted by the
MP Birla group and has two major segments viz. cement and Jute which
contributes ~93% and 6% of the total revenue respectively. The
company has also presence in other segments like Auto trim parts, PVC
goods and Iron & Steel casting, however these segments has minimal
contribution to the total revenue. BCL has installed cement capacity of 6.0
million tonnes (mtpa) and having presence in northern, central and
eastern region. The company is expanding its cement capacity to 9.3
mtpa by FY12E by adding 1.5 mtpa in FY11E and 1.8 mtpa in FY12E. It
has also captive power capacity of 56.8 MW and expanding it by ~108
MW to reach ~164 MW by FY13E.
Capacity expansion to 9.3 mtpa by FY12E
BCL has two integrated cement units at Satna (MP) and Chanderia (RAJ)
and grinding units at Durgapur (WB) and Raebareli (UP). The total cement
capacity was 6.0 mtpa at the end of FY10. The company is expanding its
cement capacity of Satna (MP) unit by 1.5 mtpa which has already been
commissioned and under trial stages. This will take the total capacity to
7.5 mtpa by FY11E. Further the company is expanding the capacity of
Chanderia (RAJ) unit by 1.2 mtpa and Durgapur-I (WB) unit by 0.6 mtpa
which are expected to be commissioned by Q2FY12. The total cement
capacity will reach to 9.3 mtpa by FY12E after completion of the
expansion projects.
Power capacity addition of ~108 MW by FY13E
BCL had captive power capacity of 56.8 MW at the end of FY10, which
sources ~70% of the total power requirement by the cement business.
The company has recently commissioned 15 MW of waste heat recovery
power plants (WHRP) in Q2FY11 taking captive power capacity to ~72
MW. Further it is adding 7.5 MW of WHRP which is likely to be
commissioned by Q3FY11. Also, the company is planning to add 85 MW
of thermal power capacity, of which 35 MW at Satna (MP) and 50 MW at
Chanderia (RAJ), which is likely to come on stream by Q2FY13E. The total
power capacity will reach to ~164 MW by FY13E.
De-leveraged balance sheet
The company had net cash & equivalents of | 771.7 crores at the end of
FY10. The strong balance sheet would help the company to meet its
capital expenditure plans.
Outlook
The company has better market mix as it has presence in high growth
regions like north, central and east. We believe that the cement prices
would remain firm on account of favourable demand supply scenario in
these regions. However, we don’t have any rating on the stock.


Valuation
The company has better market mix as it has presence in high growth
regions like north, central and east. We believe that the cement prices
would remain firm on account of favourable demand supply scenario in
these regions. However, we don’t have any rating on the stock.
At the CMP of | 380 per share, the stock is trading at 5.3x its FY10
earnings and 3.1x its FY10 EBITDA. On EV/Tonne basis, it is trading at $78
per tonne on FY10 cement capacity.

IL&FS Transportation Networks (ITNL): BUY- Business Line

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Infrastructure stocks have been battered in the market on concerns about poor order inflow or delay in execution. While the concerns are not unfounded, some of the attractive companies in the sector are at a steep discount to their average valuations. The stock of IL&FS Transportation Networks (ITNL), one of the largest road developers in the country, lost 25 per cent from its IPO in March 2010.

A well-balanced mix of toll and annuity road projects, rich experience of its parent (the IL&FS group) in financing and conceptualising road projects, a strong order-book that provides earnings visibility for the next three years and diversification into urban infrastructure projects bode well for high earnings growth over the next couple of years. Investors with a three-year perspective can consider buying the stock, especially on any broad market dips.

At the current market price of Rs 205, the stock trades at 12 times its trailing consolidated earnings and nine times its expected consolidated earnings for FY-12. Its current valuation is also at par with its smaller (in terms of revenue) peer, IRB Infrastructure Developers.

Currently both road developers and contractors trade at similar valuations. We believe road developers deserve a premium compared with pure contractors, given the former's steady cash flows from operating toll/annuity roads. This factor attains greater importance during periods of slowdown as well as tight liquidity or high interest rates.

BALANCED MIX

ITNL has a 50:50 mix of toll and annuity projects (totalling 22 operational and under execution) that provide a balance between risk and steady returns. While projects such as the Chennani-Nashri highway in Jammu and Kashmir (under execution), which are prone to the risk of volatility in traffic volume, have been awarded on an annuity basis (where revenue flow is fixed irrespective of traffic volumes), the more lucrative stretches such as the Rajkot Jetpur and Vadodara Halol project in Gujarat have a toll model. In this model, ITNL adopts a de-risking strategy of auctioning some stretches where it feels toll collection could be volatile.

Shree Renuka Sugars: Management meeting takeaways :Kotak Sec,

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Shree Renuka Sugars: Management meeting takeaways
• Curious case of high current liabilities
• Price of raw sugar hedges moved up to US cents23 per lbs from US cents20
• Refining margins have improved a bit to US$100/ton
• We retain our REDUCE rating with a revised target price of Rs75 (Rs90 previously)

Kotak Sec: Bajaj Electricals meeting reiterates our faith in consumer growth; positive for Crompton (BUY, TP: Rs310)

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Industrials: Bajaj Electricals meeting reiterates our faith in consumer growth; positive for
CG
• Meeting with Bajaj Electricals - more confidence in consumer business growth story
• CG Consumer business: 23% of consolidated EBIT; leader in fans, pumps and large
player in lights
• Industrials (20% of consolidated EBIT) is largely LT motors; has similar characteristics
as consumers
• Brand, distribution network, SCM, design are key; competition will rise but not
overnight
• CG (BUY, TP: Rs310) on diversified business, resilient consumer business, overseas
business recovery

UBS- Indraprastha Gas: Management meeting key takeaways

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UBS Investment Research
Indraprastha Gas
Management meeting key takeaways
􀂄 Faridabad/Gurgaon dispute resolution could take time
Resolution of the Faridabad/Gurgaon dispute may take a while and is separate from
the Petroleum & Natural Gas Regulatory Board (PNGRB) issue. Owing to the
PNGRB Supreme Court case, the award of Round 3 and 4 of CGD may take time.
The next Supreme Court hearing is likely to be on 3 May 2011.

Hindustan Petroleum Corp (HPCL)::High sensitivity to crude oil prices… :ICICI Securities

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High sensitivity to crude oil prices…
Hindustan Petroleum Corporation (HPCL), a Fortune 500 company, is
engaged in refining and marketing of petroleum products in India. It
operates two refineries with 16.3 mmtpa capacity in FY11E and has
~18% share in marketing of petroleum products. HPCL, in a joint
venture with Mittal Energy, is setting up a 9 mmtpa refinery at
Bhatinda, which would be operational in FY12E. We expect HPCL to
report CAGR of 8.2% and 9.8% in revenues and net profits, respectively,
over FY11E-13E to | 1,56,022.8 crore and | 1,142.1 crore. We
recommend a BUY rating on the stock with a price target of | 372.
Capacity expansion, more value-added products to drive refining growth
HPCL’s refining capacity increased from 14.8 mmtpa in FY10 to 16.3
mmtpa in FY11E. Upgrading of refineries will produce more value-added
products. Also, the greenfield refinery at Bhatinda with a capacity of 9.0
mmtpa in JV with Mittal Energy would drive refining growth over the next
two years. We expect standalone crude oil throughput to increase from
14.7 mmtpa in FY11E to 18.2 mmtpa in FY13E and refining margins to
improve from US$4.5 per bbl in FY11E to US$5.5 per bbl in FY13E.
Retail sales volume to increase at 6.9% CAGR over FY11-13E
We expect HPCL’s retail sales volumes to increase from 26.8 mmtpa in
FY11E to 30.6 mmtpa in FY13E at 6.9% CAGR over FY11-13E. HPCL’s
earnings are more sensitive to crude oil prices than its peers as the
marketing business has a higher share. HPCL’s EPS would decrease from
| 33.7 (Brent oil prices: US$85 per bbl, government share: 50%) to | 20.9
(government share: 54.5%) in FY13E if crude oil prices sustain at US$100
per bbl. However, its EPS would increase to | 70 per share in FY13E if
crude oil prices decline to US$70 per bbl.
Valuation
We believe capacity expansion, increase in retail sales volume and higher
refining margins would create value for investors, going forward. HPCL is
trading at 10.5x FY12E and 10x FY13E EPS of | 32.2 and | 33.7,
respectively. We are initiating coverage on the stock with BUY rating and
price target of | 372 (valuation based on average of P/BV multiple: | 374
per share and P/E multiple: | 370 per share).


Investment Rationale
Hindustan Petroleum Corporation (HPCL), a Fortune 500 company, is
engaged in refining and marketing of petroleum products in India. It
operates two refineries with capacity of 16.3 mmtpa capacity in FY11E.
HPCL, in a joint venture with Mittal Energy is setting up a 9 mmtpa
refinery at Bhatinda, which would be operational in FY12E. We expect
standalone crude oil throughput to increase from 14.7 mmtpa in FY11E
to 18.2 mmtpa in FY13E and refining margins to improve from US$4.5
per bbl in FY11E to US$5.5 per bbl in FY13E. It has ~18% share in
marketing of petroleum products. We expect HPCL’s retail sales
volumes to increase from 26.8 mmtpa in FY11E to 30.6 mmtpa in FY13E
at 6.9% CAGR over FY11-13E. We expect HPCL to report CAGR of 8.2%
and 9.8% in revenues and net profits, respectively, over FY11E-13E to |
1,56,022.8 crore and | 1,142.1 crore. We recommend a BUY rating on the
stock with a price target of | 372.
Capacity expansion, more value-added products to drive refining growth
HPCL’s refining capacity increased from 14.8 mmtpa in FY10 to 16.3
mmtpa in FY11E. Upgrading of refineries will produce more value added
products while the greenfield refinery at Bhatinda with a capacity of 9.0
mmtpa in JV with Mittal Energy would drive refining growth over the next
two years. The refinery was built at a capital expenditure of | 18919 crore.
It will produce petroleum products in compliance with Euro IV emission
norms. HPCL is also upgrading its Mumbai and Vishakhapatnam refineries
to enhance the production of value-added products like LPG, MS and
HSD. This project would be commissioned at a cost of about | 7000
crore. We expect standalone crude oil throughput to increase from 14.7
mmtpa in FY11E to 18.2 mmtpa in FY13E and refining margins to improve
from US$4.5 per bbl in FY11E to US$5.5 per bbl in FY13E.



Valuation
We believe capacity expansion, increase in retail sales volume and higher
refining margins would create value for investors, going forward. HPCL is
trading at 10.5x FY12E and 10x FY13E EPS of | 32.2 and | 33.7,
respectively. We are initiating coverage on the stock with a BUY rating
and a price target of | 372 (valuation based on average of P/BV multiple: |
374 per share and P/E multiple: | 370 per share).
HPCL’s EPS would decrease from | 33.7 (Brent oil prices: US$85 per bbl,
government share: 50%) to | 20.9 (government share: 54.5%) in FY13E if
crude oil prices sustain at US$100 per bbl. However, its EPS would
increase to | 70 per share in FY13E if crude oil prices decline to US$70
per bbl.
Exhibit 115: Valuation table
Valuation based on Price / BV Multiple
Adjusted Book Value for FY13E (|Crore) 12277.1
Adjusted number of shares (Crore) 33.9
Adjusted Book Value per share (|) 362.1
Add: Listed investments (25% discount to CMP) 53.3
Book Value of core business (| per share) 415.4
Multiple 0.90
Fair Value per share (|) 374
Valuation based on P / E multiple
Profit after tax for FY13E (| Crore) 1142.1
Less: Other Income adjusted for tax (| Crore) 227.2
Adjusted profit after tax for FY13E (| Crore) 914.9
Number of shares (Crore) 33.9
Adjusted EPS for FY13E (|) 27.0
Multiple 10.0
Fair value per share without investments (|) 269.9
Add: Value of Investments (| per share)
Listed investments (25% discount to CMP) 53.3
HPCL - Mittal Energy 36.2
Other Investments 10.9
Fair value per share (|) 370
Weighted Target Price (| per share) 372
Source: ICICIdirect.com Research

RBI: Borrowing to keep money market in repo mode : BofA Merrill Lynch

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RBI: Borrowing to keep money
market in repo mode
Bottom line: Borrowing to keep money market in repo
􀂄 The just-released April – September Central government borrowing calendar
supports our view that the RBI will keep the money market in repo mode for
now to fight inflation. Our liquidity estimates suggest that banks will need
borrow about 1% of book (of about Rs500bn) at the RBI’s repo window at
6.75-7% till June. Against this backdrop, we expect the RBI to postpone OMO
beyond June. Its Mohanty group has just recommended that OMO should be
triggered off when the money market deficit exceeds 1% of bank book. At the
same time, we continue to expect the RBI to OMO Rs1600bn in 2HFY12
when the Center’s net borrowing is likely to overshoot by Rs400bn.

Deutsche bank, News Headlines: March 27, 2011

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News Headlines
Proposed economic reforms in India (Reuters)
The government has introduced wide-ranging tax, banking and pension reform bills into parliament, but political opposition may derail some of the most ambitious reforms mooted during the ruling coalition's second term in government.
Finance Minister introduces pension bill in parliament (Reuters)
The finance minister introduced a long-awaited pension bill in parliament that would pave the way for private players in the sector and help cut government spending.
Food inflation snaps easing trend in mid-March (Reuters)
Food inflation snapped a three-week easing trend in mid-March and fuel inflation remained at elevated levels, keeping pressure on the RBI to rein in broader inflation.

IT Services -Strong global cues from Accenture and Oracle :: RBS

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IT Services
Strong global cues
Accenture and Oracle reported strong results overnight. We believe this implies
that the demand environment for Indian IT services continues to improve. We
reiterate our positive view on the sector with Infosys as our top pick, besides our
Buy on TCS and HCL Tech.

Indian Banking – sector data update (data as of 11 March 2011) ::RBS

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Deposits increased by Rs565bn in the fortnight ended 11 March 2011 (Rs417bn growth in the
previous fortnight). Deposit growth was 16.6% yoy as of 11 March 2011 (18.1% yoy as of 12
March 2010). Deposit mobilisation has picked up in the recent past and appears to be gaining
some momentum, partly due to 100-150bp hikes in deposit rates by most banks since August -
September 2010.
Loans grew 23.2% yoy as of 11 March 2011 (16% yoy as of 12 March 2010). Absolute net loans
grew Rs456bn for the fortnight ended 11 March 2011 (vs Rs259bn growth in the previous
fortnight).
The liquidity situation appears to be improving marginally. Banks have been net borrowers from
Reserve Bank of India to the tune of about Rs830bn average daily in March 2011 till date (about
Rs900bn average in January 2011 and Rs780bn in February 2011).
The three-month certificate of deposit (CD) rate has risen to 10.1% (+490bp yoy) and the 12-
month CD rate has gone up to 10.2% (+380bp yoy). In general, a sustained flattening of this yield
curve will put pressure on net interest margins.
The ytd deposit growth was 14.4%, ytd loan growth was 18.9% and the incremental ytd loan-todeposit
ratio is about 95%.
Base rates for lending are now 9.0-9.5% and we believe a further 50-75bp hike in lending rates
will likely moderate the incremental demand for loans. One-year term deposit rates are now 8.25-
8.50% and we believe a 50-75bp hike in deposit rates will likely accelerate deposit growth.
Going forward, a combination of rising deposit growth and a moderation in loan growth should
lead to a more balanced scenario. Given the stock-price correction and our expectation that the
gap between deposit growth and loan growth will narrow, we are cautiously optimistic on the
sector. As earlier, we continue to prefer public sector banks (PSBs) over private sector, (PSBs, in
general are trading at 1.0-1.7x FY12 book value and 6.0-9.0x earnings, based on our estimates).
Our top PSB picks are the State Bank of India, Punjab National Bank and Bank of Baroda

NFO subscription: Taking the ASBA route- Business Line

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In our earlier column we discussed about demat accounts and how investors can bring all their physical mutual fund units into the demat account. This week we look at how ‘ASBA' can be used when applying for mutual fund units through the new fund offer route and how units are listed in the exchanges for trading.

Voltas -Upbeat on domestic outlook :: BofA Merrill Lynch

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Voltas
Upbeat on domestic outlook
􀂄 Maintain Buy on earnings recovery & attractive valuation
Voltas is gearing up for a stronger FY12 and an even better FY13. It expects the
strong growth in domestic sales, contributing to 70% of sales, to continue, and
exports to do better in FY12, compared to the 20% decline in FY11. The stock has
fallen 40% since Nov2010, led by profit declines in Q2 and Q3FY11. We expect it
to re-rate from a PE of 12.8xFY12e, driven by stronger profit growth starting in
Q1FY12, led by a sustained jump in air conditioner sales and a pick up in Middle
East project execution.

Citi:: Telecom: All Eyes on Charge-Sheet Filing on 2G Spectrum Probe

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India Connect
All Eyes on Charge-Sheet Filing on 2G Spectrum Probe
 Past week’s India telecom trading – The Indian market posted a strong
performance, finishing the week up 5.2%. Idea performed in line with the market,
while Bharti bettered the market by 1.4%. RCOM, however, which had run up
significantly in the two preceding weeks on the back of towerco deal, lagged the
market (+2.2%) as no further details on the possible sale emerged.
 2G spectrum investigation: Charge-sheet to be filed this week – The much
awaited charge-sheet by the investigating authority is expected to be filed during
the week and will be the key focus for the Street. The authority could also file
additional charges over the coming months as the investigation progresses.
 MNP: trends remain firm – COAI has disclosed that 5m subscribers have opted
for MNP to date. The GSM incumbents continue to be net gainers, led by
Vodafone and Idea. RCOM on the other hand has failed to reverse subscriber
losses hurting in both GSM and CDMA networks. We continue to believe that it is
still early days and MNP is likely to impact all operators’ rev/min (post-paid tariffs
are 40% higher v/s pre-paid) and wireless margins (sub acquisition cost). These
however have already been built in to our estimates.
 New Telecom Policy: Some positives begin to emerge – Media reports indicate
that the operators have found consensus across three key areas – 1) lowering of
uniform license fees to 6% (6-10% currently), 2) dilution of M&A norms to
encourage sector consolidation and 3) rejecting bringing towercos under the
licensing ambit. While dilution of M&A norms has been almost a certainty now, any
move to lower license fees should be a positive as it will help partially offset the
impact of the excess spectrum charges/license renewals on the incumbents.
 Next week’s outlook – CBI much awaited charge-sheet filing for the 2G spectrum
probe could throw up some new information or unexpected surprises, which in turn
could impact price action. We expect RCOM to remain weak ahead of the filing.

BUYAban Offshore :: In calm, shallower waters : target INR689: BNP Paribas

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In calm, shallower waters
􀂃 Tenders floated for ONGC orders, catalysts come back
􀂃 Captive domestic market to enable cashflows from older rigs
􀂃 NOK bond pre-payment, a key instance of debt restructuring
􀂃 Upgrade to BUY at TP of INR689, based on 7x FY12E EBITDA

JP Morgan: BUY Tata Steel - TCP sale completed in UK

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Tata Steel Ltd Overweight
TISC.BO, TATA IN
TCP sale completed; We do not see any negative
impact on earnings for UK ops


• Completes sale of Teeside plant assets: Tata Steel announced the completion
of sale of certain assets of the partially mothballed Teeside (TCP capacity of
3.5MT) to Sahaviriya Steel (SSI) for $469MM (vs. indicative value of
$500MM). The TCP facility had to be mothballed in Feb-10 following the
inability by its consortium of buyer to meet the offtake agreement (that offtook
~78% of TCP’s production under LT agreement). The transaction follows the
initial announcement of the deal in Aug-10 and the definitive agreement signed
last month. The asset sale transaction includes the Redcar BF, Redcar & South
Bank coke oven, TCP's power generation facilities and the Lackenby
steelmaking and casting facilities. Tata Steel will continue to operate the tube
mills, section and beam mill. While the TCP sale is part of our cash flows, we
view the completion as positive event and expect portfolio rationalization to
continue.

UBS :Healthcare Sector -Multiple policy positives

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UBS Investment Research
India Healthcare Sector
Multiple policy positives
􀂄 Service tax on healthcare services rolled back
The service tax on healthcare services provided by private hospitals with AC and
more than 25 beds, which was announced during the budget, has been rolled back.
This will reduce some of the concerns over hospitals’ incremental pricing power,
in our view.
􀂄 Investment-linked depreciation benefits
Additionally, hospital companies can expense new investments in the first year of
operation and offset profit from other operating facilities against capex.
􀂄 Hospitals to get infrastructure status
There have been media reports about Infrastructure status for hospital investments.
We spoke with Apollo Hospitals. The potential benefit for hospitals can be reduced
interest costs.
􀂄 Tax benefit from 80(IB) to continue till 2013
Hospitals enjoy tax benefit 80(IB), which provides hospitals with a tax break on
profit during the first five years of operations. The tax benefit is set to expire in
March 2013. Therefore only hospitals commissioned prior to March 2013 will
enjoy this benefit. However, we do not believe that this is material since hospitals
do not record significant profit in the first five years of operations.


Hospitals to get infrastructure status
A possible benefit from this is that hospitals may be able to raise funding at a
preferred rate. Assuming a 2% reduction in interest cost, we estimate Apollo
Hospitals and Fortis Healthcare would be able to achieve interest cost saving of
Rs0.9bn and Rs0.8bn, respectively, over FY12-FY15.


Investment-linked tax benefits
As per the provisions, hospitals will be able to expense the investments in
hospitals in the year the investment is made. We believe this would
subsequently result in a positive impact on cash flows (and not on reported
taxes).
We await further details on the policies before revisiting our estimates.

Glenmark Pharmaceuticals -Another OC approval: It all adds up!: Macquarie Research

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Glenmark Pharmaceuticals
Another OC approval: It all adds up!
Event
 GNP announced final approval from USFDA for their generic version of
Ovcon tablets by Warner Chilcott, Inc. This is the fourth female hormonal
product approved and has a market size of US$30m per IMS Health, with
two other generic players in the market. With this approval the total
market size for the hormonal product approved for GNP in US is now
~ US$140m.

Bharat Petroleum Corp (BPCL) Upstream: A differentiator- ICICI Securities

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Upstream: A differentiator -Bharat Petroleum Corporation (BPCL), one of the leading oil & gas
companies in India, is engaged in refining, marketing and exploration &
production (E&P) activities. Over the years, BPCL has evolved from an
oil refining and marketing entity to a group also with a presence in the
E&P segment across India as well as globally. The success of the E&P
portfolio would be the key catalyst for the stock, going forward. The
increase in refining margins from US$4.1 per bbl in FY11E to US$5.5 per
bbl in FY13E would contribute to its profit growth. We expect BPCL to
report CAGR of 3.7% and 14.6% in revenues and net profits,
respectively, over FY11E-13E to | 1,59,004.5 crore and | 1,570.3 crore.
We recommend BUY rating on the stock with a price target of | 624.
Higher refining margins to drive profit growth
We believe an increase in crude oil throughput from 21.5 mmtpa in FY11E
to 22.6 mmtpa in FY13E coupled with an increase in refining margins
from US$4.1 per bbl in FY11E to US$5.5 per bbl in FY13E would drive its
profit growth in the next couple of years. BPCL, in a JV with Bharat Oman
Refineries (BORL), has set up a 6 mmtpa refinery at Bina, which is
expected to start commercial production from Q1FY12E.
E&P portfolio - key growth catalyst
BPCL, through its wholly-owned subsidiary, Bharat Petro Resources
(BRPL), has participating interests (PI) in 26 exploration blocks, in India
and abroad. BPRL has made significant oil & gas discoveries in Brazil and
Mozambique over the last couple of years that hold sizable reserve
potential. It plans to invest | 7,500 crore in E&P activities by FY15E.
Valuation
We believe the increase in refining margins and success of the E&P
portfolio would create value for investors, going forward. BPCL is trading
at 13.3x FY12E and 13x FY13E EPS of | 42.4 and | 43.4, respectively. We
are initiating coverage on the stock with BUY rating and price target of |
624 (valuation based on average of P/BV multiple: | 616 per share and P/E
multiple: | 631 per share).


Valuation
We believe the increase in refining margins and success of the E&P
portfolio would create value for investors, going forward. BPCL is trading
at 13.3x FY12E and 13x FY13E EPS of | 42.4 and | 43.4, respectively. We
are initiating coverage on the stock with BUY rating and price target of |
624 (valuation based on average of P/BV multiple: | 616 per share and P/E
multiple: | 631 per share).
BPCL’s EPS would decrease from | 43.4 (Brent oil prices: US$85 per bbl,
government share: 50%) to | 29.2 (government share: 54.5%) in FY13E if
crude oil prices sustain at US$100 per bbl. However, its EPS would
increase to | 81.3 per share in FY13E if crude oil prices decline to US$70
per bbl.
Exhibit 97: Valuation table
Valuation based on Price / BV Multiple
Adjusted Book Value for FY13E (|Crore) 13524.9
Adjusted number of shares (Crore) 32.8
Adjusted Book Value per share (|) 412.6
Add: Listed investments (25% discount to CMP) 61.7
Add: E&P value 86.2
Book Value of core business (| per share) 560.4
Multiple 1.1
Fair Value per share (|) 616
Valuation based on P / E multiple
Profit after tax for FY13E (| Crore) 1570.3
Less: Other Income adjusted for tax (| Crore) 527.5
Adjusted profit after tax for FY13E (| Crore) 1042.8
Number of shares (Crore) 36.2
Adjusted EPS for FY13E (|) 28.8
Multiple 12.0
Fair value per share without investments (|) 346.1
Add: Value of Investments (| per share)
Listed investments (25% discount to CMP) 55.9
Bharat Oman Refinery Ltd 59.4
Numaligarh Refinery 12.5
E&P value (BPRL) 86.2
Treasury shares 53.6
Other Investments 16.8
Fair value per share (|) 631
Weighted Target Price (| per share) 624
Source: ICICIdirect.com Research

Eros International Media – Positive news flow on state taxes :: RBS

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The Maharashtra State Budget proposes abolishment of 4% VAT on transfer of copyrights of
films. Separately, the Rajasthan Government proposes removal of 30% E-tax on tickets
priced below Rs50. We see tax rationalisation as a structural driver for profitability.

IndusInd Bank, Get on board -BNP Paribas

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IndusInd Bank, Get on board
􀂃 Loan growth momentum and stable NIMs to continue
􀂃 CASA progression on track; we expect 30% by FY12
􀂃 Further ROA expansion from fee income streams
􀂃 Trades at 2.4x FY12E adj BV for FY12E adj RoE of 18%

Weekly Review Report - March 26, 2011 :Angel Broking

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Bulls bounce back - Markets likely to rally further
Sensex (18816) / Nifty (5654)
In our previous Weekly report, we had mentioned that the
markets have been oscillating in the range of 17470 / 5233
on the downside and 18737 / 5608 on the upside since the
past six weeks. We had also mentioned that on the Daily chart,
we see probability of a pattern that resembles a "Pennant", if
the indices close below 17700 / 5300 levels, and on the upside
resistance is at 18310 - 18490 - 18736 / 5500 - 5550 - 5600
levels. The week began on a weak note, made a low of 17792
/ 5348 from where a strong rally was witnessed that led the
indices to break past, and close above the mentioned resistance
levels.
Both Sensex and Nifty ended with net gain of 5.2% vis-à-vis
the previous week.
Pattern Formation
􀂄 On the Daily chart, we are observing that the prices have
broken out of an Ascending triangle pattern on the Nifty chart.
However the Sensex chart indicates that the said pattern would
confirm if the Sensex closes above 18850 levels.
􀂄 On the Weekly chart, we are witnessing that the momentum
oscillator's viz. Stochastic and the RSI are positively poised which
suggests continuation of the up move.

NTPC- Korba declared COD, but not to benefit from merchant sale; Goldman Sachs

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NTPC (NTPC.BO)
Neutral Equity Research
Korba declared COD, but not to benefit from merchant sale; Neutral
What's changed
NTPC declared a commercial operation date (COD) of 500 MW Unit #7 of
Korba and commissioned 500 MW Unit#6 of Farakka during this week
taking the total installed capacity to 33,694 MW. The capacity addition so
far for FY11 is 1.5GW vs its target of 4.2GW for FY11E. Further, NPTC has
synchronized the 660MW Unit 1 of Sipat I and it could be declared
commercially operational over the next few weeks.

Buy Marico - Sweekar divested; target price of INR 150 -Deutsche bank,

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Marico has announced the sale of its edible oil brand Sweekar to Cargill.
Sweekar was never a focus brand for Marico and the management had
stated its intention of divesting the brand a few years back. The transaction
could have also been forced due to the high sunflower oil prices which is
the key raw material for sweekar. Marico's other edible oil brand,Saffola,
uses Khardi oil, Rice bran oil and corn oil. Saffola has been growing volumes
in double digits and continues to remain the focus area for the company.
Over the last 2 years, Marico had launched 2 low price variants of Saffola -
Saffola Active and Saffola Tasty to make the brand sweekar somewhat redundant
for them. The two brands together are roughly 25% of saffola's
portfolio.We estimate that the sweekar sales would have been close to INR
1700 mn, 5%-6% of overall sales.
Cargill had earlier bought "Rath" brand from Agrotech foods. Rath was also
a non-focus brand for Agrotech. The annual sales of Rath were reported to
be about 1200 mn and the company reported a profit of INR 1750mn from
the transaction as exceptional income in 3QFY11.
Marico has outperformed sensex by about 16.9% y-t-d on expectations of
copra prices falling down from historic levels due to the start of the flush
season. Although the fall in prices have been lower than expected, all vegetable
oil prices have started to show a downward trend including Palm oil,
sunflower oil, soyabean oil, rapesead oil etc. Falling vegetable oil prices
benefits Marico the most as the company operates at the permium end of
all the segments that it operates in. The gross margins of Parachute is
40-45% and for saffola is 30-35% as against 10%-30% for the competition
We maintain Buy with a target price of INR 150 per share.