Wipro Ltd – BUY ‘On higher grounds’ ::IIFL

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Our recent conversation with Wipro coupled with the decent
business traction has brought back confidence in the company.
Focused client engagement and simplified decision making, a
hallmark of the new structure post re-organisation, are
beginning to bear fruit. Deal pipeline, recent wins and top
clients’ performance further bear testimony to the improving
fundamentals. Margin expectations too remain sanguine with
multiple levers in place. Improved business traction and its
sustenance should lead to reduced valuation discount vis-à-vis
peers. Though we believe further proof of improving traction is
desirable, risk-reward is decidedly favourable. Upgrade to BUY.
Encouraging business traction and management commentary
Wipro, has shown decent traction in last few quarters. There has been
a continued improvement in deal pipeline, the mega/gamma clients
have shown robust growth and deal wins especially in APAC region
have been decent. A notable increase in client satisfaction index over
last six months was also seen. Management commentary maintains
status quo with no incremental negative seen on the micro level. A
lower services exposure to discretionary spends adds to the comfort.
Margin improvement to follow revenue traction; Employee
pyramid a key lever
Flat pricing, wage inflation and most notably lack of volumes had led
to a subdued margin performance at Wipro in the past year.
Management suggests sustained and predictable volume traction to be
a pre-requisite for any material improvement in margin going ahead.
Target to improve the fresher hiring ratio is expected to be a major
lever along with more efficient Fixed Price project execution. With
strong volumes seen in Q2 FY12 and improving business traction, we
expect margin performance to improve in the medium term.
Back to normalcy, valuations to improve
As the company performance veered off from its comparable peers’
performance in CY11, its valuations have fallen by 25% YTD and is
now trading at a ~20% discount to its five year average valuation.
Wipro’s discount to TCS is also large (20%). Post the restructuring
there has been an decent improvement in business traction (volume
growth in last four quarters almost at par with Infosys). While we
continue to watch for further improvement, we believe valuations
should relatively improve hereon. We upgrade the company to BUY.

BSE, Bulk deals, 27/12/2011

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Deal Date	Scrip Code	Company	Client Name	Deal Type *	Quantity	Price **
27/12/2011	531519	Ankush Finstock	INDERNEIL NAVJIT GREWAL	B	50000	7.03
27/12/2011	531519	Ankush Finstock	NIROOLA ABHIMANYU R	B	50050	7.04
27/12/2011	531519	Ankush Finstock	RAJENDRA RATILAL SHAH HUF	S	50000	7.04
27/12/2011	531519	Ankush Finstock	KALPANA RAJENDRA SHAH	S	50000	7.03
27/12/2011	531568	Ashutosh Paper	ONKAR SINGH PASRICHA	B	35000	172.00
27/12/2011	531568	Ashutosh Paper	ANITA KUMAR	B	125000	172.14
27/12/2011	531568	Ashutosh Paper	SALASAR TECHNO ENGINEERING PRIVATE LIMITED	S	85500	172.50
27/12/2011	502219	Borosil Glass	BOROSIL GLASS WORKS LIMITED BUY BACK	B	26595	849.98
27/12/2011	511720	Capman Fin	GOODWEALTH FINANCE CO.PVT.LTD	B	29600	9.57
27/12/2011	511720	Capman Fin	VINOD KUMAR KOTHARI(HUF)	S	29500	9.57
27/12/2011	511672	Clarus Finance	DHANSAGAR VINTRADE PRIVATE LIMITED	S	100000	64.55
27/12/2011	511672	Clarus Finance	APPEAR COMMODEAL PRIVATE LIMITED	S	97931	64.85
27/12/2011	511710	Cubical Fin	ASHA AGARWAL	B	75000	35.83
27/12/2011	533333	Fineotex Chem	NEELANCHAL MERCANTILE PRIVATE LIMITED	B	83000	56.00
27/12/2011	509148	Govind Rubber-$	RAHUL VINOD PODDAR	B	1050000	8.95
27/12/2011	509148	Govind Rubber-$	VISHAL FURNISHINGS LTD.	S	1050000	8.95
27/12/2011	532770	Hanung Toys	CROSSEAS CAPITAL SERVICES PRIVATE LIMITED	B	166914	106.20
27/12/2011	532770	Hanung Toys	CROSSEAS CAPITAL SERVICES PRIVATE LIMITED	S	167036	106.21
27/12/2011	530165	Kanchan Intl	ARVIND BABULALJI GOYAL	B	21073	68.27
27/12/2011	530165	Kanchan Intl	ARVIND BABULALJI GOYAL	S	19905	68.67
27/12/2011	530547	KEN Fin Serv	NEHA NANDKISHORE BHANDARI	B	20000	100.70
27/12/2011	530547	KEN Fin Serv	ESHA NANDKISHORE BHANDARI	B	24000	100.60
27/12/2011	530547	KEN Fin Serv	ASHISH CHAUDHARY	S	46800	100.76
27/12/2011	531401	Khodiyar Inds	ASHOK RAMJI MAJETHIA	B	40000	5.34
27/12/2011	531401	Khodiyar Inds	JITENDRA RAMJI MAJETHIA	S	40000	5.34
27/12/2011	507912	LKP FIN	INDIA MAX INVESTMENT FUND LIMITED	B	500000	80.00
27/12/2011	507912	LKP FIN	EVANS FRASER AND COMPANY (INDIA) LIMITED	S	500000	80.00
27/12/2011	507621	Milkfood	SUDHA COMMERCIAL COMPANY LIMITED	B	51980	68.25
27/12/2011	507621	Milkfood	PINNACLE TRADES AND INVESTMENTS	S	52000	68.25
27/12/2011	532127	Mobile Telecom	MANSUKHLAL L SHAH HUF	B	1200000	3.47
27/12/2011	532127	Mobile Telecom	ANIL BABULAL VEDMEHTA	S	1241000	3.47
27/12/2011	505525	Parichay Invest	SUNILBHAI VINUBHAI DANTANI	B	20000	36.40
27/12/2011	505525	Parichay Invest	CHIMANLAL MANEKLAL SECURITIES PRIVATE LIMITED	B	8551	36.39
27/12/2011	511734	Pasupati Fin	ASHI ARUNKUMAR TULSIAN	B	49216	22.10
27/12/2011	511734	Pasupati Fin	PASUPATI OLEFIN LIMITED	S	50000	22.10
27/12/2011	532517	Patni Computer	SUFFOLK MAURITIUS LTD	B	1350747	444.00
27/12/2011	532517	Patni Computer	MANSFIELD (MAURITIUS) LIMITED	B	727325	444.00
27/12/2011	532517	Patni Computer	MORGAN STANLEY& CO INTERNATIONAL PLC A/C GDR	S	2078072	444.00
27/12/2011	531769	PFL Infotech	PREM CHAND CHORDIA	B	50000	128.15
27/12/2011	531769	PFL Infotech	GATEWAY LEASING PVT LTD	B	39000	128.43
27/12/2011	531769	PFL Infotech	REKHA MEHTA	B	40000	127.99
27/12/2011	531769	PFL Infotech	B.K.KHULLAR & CO	B	41000	127.99
27/12/2011	531769	PFL Infotech	TRIPURARI PROPERTIES PRIVATE LIMITED	S	72000	128.38
27/12/2011	526823	Rajeswari Found	PRADEEP NARENDRA BHATT	B	25000	29.82
27/12/2011	504378	Ravinay Trad	HOTEL POLO TOWERS PRIVATE LIMITED	B	102500	293.46
27/12/2011	504378	Ravinay Trad	SHIV SHARMA	S	29000	293.47
27/12/2011	531646	RFL Intl	MAGANLAL MOOLCHAND MEHTA	B	50958	6.87
27/12/2011	513583	SB&T Intl	JAYESH MANNARLAL AJMERA	B	90000	10.31
27/12/2011	524642	SIKOZY REAL	MANISH JETHALAL KAKKA	S	24055	35.40
27/12/2011	521178	Sri Ramakrishna-$	SWATHY LAKSHMINARAYANASWAMY	B	113750	15.00
27/12/2011	521178	Sri Ramakrishna-$	SUHASINI LAKSHMINARAYANASWAMY	B	165250	15.00
27/12/2011	521178	Sri Ramakrishna-$	SRIKANTH C	B	647800	15.07
27/12/2011	521178	Sri Ramakrishna-$	LAKSHMINARAYANASWAMY NAGASWARNA	B	41000	15.00
27/12/2011	521178	Sri Ramakrishna-$	CLEARWATER CAPITAL PARTNERS (CYPRUS) LIMITED	S	1000000	15.04
27/12/2011	532298	Zenith Info	ACACIA BANYAN PARTNERS	B	77000	39.00
27/12/2011	532298	Zenith Info	ACACIA INSTITUTIONAL PARTNERS	B	385757	39.00
27/12/2011	532298	Zenith Info	ACACIA CONSERVATION FUND LP	B	237000	39.00
27/12/2011	532298	Zenith Info	ACACIA PARTNERS L.P	S	745957	39.00
* B - Buy, S - Sell
** = Weighted Average Trade Price / Trade Price

NSE, Bulk deals, 27-Dec-2011

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Date	Symbol	Security Name	Client Name	Buy / Sell	Quantity Traded	Trade Price / Wght. Avg. Price	Remarks
27-Dec-2011	CTE	Cambridge Technology Ente	ANURADHA KALRA	BUY	1,26,000	7.80	-
27-Dec-2011	CTE	Cambridge Technology Ente	D P KALRA MR.	BUY	200	7.75	-
27-Dec-2011	CTE	Cambridge Technology Ente	D P KALRA MR.	SELL	1,26,200	7.80	-
27-Dec-2011	HANUNG	Hanung Toys and Textiles	CROSSEAS CAPITAL SERVICES PVT. LTD.	BUY	1,66,810	106.01	-
27-Dec-2011	HANUNG	Hanung Toys and Textiles	CROSSEAS CAPITAL SERVICES PVT. LTD.	SELL	1,65,294	106.13	-
27-Dec-2011	INFOMEDIA	Infomedia 18 Limited	ACACIA II PARTNERS L.P.	SELL	2,83,375	9.85	-
27-Dec-2011	INFOMEDIA	Infomedia 18 Limited	ACACIA INSTITUTIONAL PARTNERS L.P	BUY	13,97,407	9.85	-
27-Dec-2011	INFOMEDIA	Infomedia 18 Limited	RUANE CUNNIFF&GOLDFARB INC SUBA/C ACACIA CONSERVATION F LP	BUY	17,00,000	9.85	-
27-Dec-2011	INFOMEDIA	Infomedia 18 Limited	RUANE CUNNIFF&GOLDFARB INC SUBA/C ACACIA PARTNERS LP	SELL	27,55,282	9.85	-
27-Dec-2011	NEHAINT	Neha International Ltd	DILIP INDRAVADAN SHAH	SELL	1,00,000	22.50	-
27-Dec-2011	PRAKASH	Prakash Industries Ltd.	RUANE CUNNIFF&GOLDFARB INC SUB A/C.ACACIA PARTNERS LP	BUY	8,23,000	35.20	-
27-Dec-2011	RANKLIN	Ranklin Solutions Limited	KANAI BANERJEE	SELL	26,115	12.75	-
27-Dec-2011	RANKLIN	Ranklin Solutions Limited	LOKKUR KRISHNA MURTHY S	BUY	26,135	12.75	-

27/12/11:: Categories Turnover (Rs. crore) Clients NRI Proprietary Trade Data

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Categories Turnover

(Rs. crore)
	Clients			NRI			Proprietary
Trade Date	Buy	Sales	Net	Buy	Sales	Net	Buy	Sales	Net
27/12/11	839.14	825.57	13.57	0.28	0.26	0.02	273.82	284.78	-10.96
26/12/11	888.50	873.89	14.61	0.29	0.33	-0.04	290.69	275.96	14.72
23/12/11	1,228.65	1,193.22	35.43	0.48	0.22	0.27	424.94	441.94	-17.00
Dec , 11	22,805.27	22,633.43	171.84	8.86	9.04	-0.18	7,871.47	7,833.37	38.10
Since 1/1/11	465,540.21	469,825.89	-4,285.68	320.43	225.28	95.16	137,094.32	136,356.25	738.08

Buy Piramal Glass Ltd - Company Report:: Unicon

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Investment Rationale:

• Focus on high-margin C&P business to drive revenues

• Significant cost advantages Labour Arbitrage

• Capacity expansion to meet the future demand

• Stronger balance sheet to support growth

Valuation:

At the CMP of ~INR 92, the stock trades at ~8.0x and 5.2x of its FY12E and FY13E earning respectively. The company has been steadily shifting its product mix from low margin commodity business to high yield specialized business of C&P. We expect the C&P contribution to company's revenue to increase from 49% in FY11 to 56% in FY13E which is expected to boost EBITDA margins from 23% in FY11 to 25% in FY13E.We have valued the company at ~8x of it FY13E earnings which is at premium compared to other domestic peers, due to PGL's better margins profile and return ratios. We maintain our BUY rating on the stock with a target price of INR143.

27/12/11: FII & DII Turnover (BSE + NSE) (Rs. crore)

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FII & DII Turnover (BSE + NSE)

(Rs. crore)
	FII			DII
Trade Date	Buy	Sales	Net	Buy	Sales	Net
27/12/11	1,038.06	823.75	214.31	497.22	592.51	-95.29
26/12/11	547.02	433.59	113.43	435.94	554.92	-118.98
23/12/11	1,281.10	1,196.83	84.27	651.02	729.57	-78.55
Dec , 11	34,999.32	36,273.92	-1,274.60	16,517.82	16,082.99	434.83
Since 1/1/11   *	597,492.29	623,252.83	-25,760.54	282,900.85	255,579.16	27,321.69

Buy Punjab National Bank; Target :Rs 1050 ::ICICI Securities

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P a c e   o f   b u s i n e s s   g r o w t h   t o   s l o w   d o w n …
We met the management of Punjab National Bank (PNB) to get an insight
of present scenario in banking industry and PNB’s current state of affairs.
The management was circumspect about credit growth and expects the
proportion of non-interest income to improve as the business slowdown
compels banks to look for other  sources of revenue. Management
expects to maintain NIM >3.5% for FY12E and expects the same to
moderate gradually. Hence, we are revising our credit growth estimate
from 19.5% to 18% for FY12E, thereby reducing the PAT estimate from |
4942.9 crore to | 4886.9 crore for  FY12E (10.2% YoY growth). We
expect16.3% CAGR PAT growth over FY11-13E to | 5991 crore
ƒ Credit growth revised from 19.5% to 18% for FY12E
The management has suggested slowing economy and high interest rate
environment may lead to a deceleration in the pace of credit growth to
16%  for  the  industry  by  FY12E.  It  has  guided  moderate  credit  growth  of
18% for PNB by FY12E compared to 30% for FY11.
ƒ Outstanding restructured assets at 6% of advances
In the Q2FY12 investor presentation, PNB had reported total restructured
assets to date worth | 19966 crore. However, the management has later
presented that outstanding restructured assets stood at | 14995 crore
(6% of advances), which is an appropriate measure. Power (SEB
exposure worth | 7800 crore), aviation and small steel companies are the
major sectors, which are under stress. In line with the management, we
expect the GNPA ratio at 2.03% and NNPA ratio at 0.89% for FY12E.
V a l u a t i o n
Strong NIM of >3.5% coupled with other income results in healthy net
profits enabling PNB to make adequate provisions for slippages. We
expect RoE and RoA at 21.3% and 1.2%, respectively, for FY13E. CAR for
the bank stands at 12.2% with the Tier I ratio at 8.4%. It expects | 1000
crore from government by FY12E, not factored in our estimates and value
the bank at 1.2x FY13E ABV maintaining our target price of | 1050.

India Economics : It’s Time to Address the Fiscal Deficit Problem ::Morgan Stanley Research,

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India Economics
Asia Insight: It’s Time to Address the Fiscal Deficit Problem


Fiscal stimulus played a key role in the post crisis recovery, however, a persistent delay in reversing government spending and the resultant increase in inflation pressures is forcing the Central Bank to tighten monetary policy to control aggregate demand which is a sub optimal policy outcome. We believe fiscal consolidation will be necessary to returning to 8% plus growth path.
Key Debates
1)
High growth post crisis – was it the result of good policy mix?
2)
How does India compare with other EM’s in its fiscal consolidation process since the crisis?
3)
What is the medium-term solution to reduce the debt to GDP ratio?
4)
What if the government does not reduce the fiscal deficit substantially?