Sharekhan ValueLine Sep 08.PDF MIMO

CONTENTS
from sharekhan’s desk

Nothing decisive yet
The strong macro-economic head winds at home continue
to blow, taking their toll on the stock market. Last month,
the concerns over the continuing double-digit inflation,
slowing economic growth and tightening monetary
conditions kept the market bound in a range (in line with
our stated view in the August 2008 issue) and the benchmark
index, the Sensex, ended the month with a loss of about 100
points. But the good thing is that it is holding on and not
letting go of any opportunity to regain the lost ground.
05
sharekhan special
Monthly economy review
The BSE Bankex has outperformed the Sensex by a wide
margin since the recovery of the broader market after touching
a low of 12,576 on July 16, 2008. For the period July 1–
August 19, the BSE Bankex has appreciated by 22.3% compared
with a 12.2% increase in the Sensex. The recovery in the banking
stocks has primarily been driven by the widespread expectations
of reforms in the banking sector as well as the easing of the
inflationary pressures (global commodity prices have declined
in the past few weeks).
33
valueline regulars
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Earnings
Guide
Viewpoint
38 I
Sharekhan ValueLine 2 September 2008
REPORT CARD
STOCK IDEAS STANDING (AS ON SEPTEMBER 05, 2008)
COMPANY RECO PRICE RECO CURRENT PRICE AS ON GAIN- ABSOLUTE PERFORMANCE RELATIVE TO SENSEX
PRICE TARGET DATE RECO 05-SEP-08 LOSS (%) 1M 3M 6M 12M 1M 3M 6M 12M
EVERGREEN
HDFC 2,700.0 2,912.0 19-Nov-07 Buy 2,284.0 -15.4 1.9 1.9 -6.9 18.8 -0.4 5.4 1.0 21.8
HDFC Bank 358.0 1,482.0 23-Dec-03 Buy 1,247.1 248.3 17.5 7.2 -3.1 11.4 14.8 10.9 5.2 14.1
Infosys Technologies 689.1 2,130.0 30-Dec-03 Buy 1,710.5 148.2 7.8 -4.4 27.9 -3.7 5.4 -1.1 38.8 -1.3
Larsen & Toubro 3,536.0 4,044.0 18-Feb-08 Buy 2,620.0 -25.9 1.1 -2.6 -16.6 2.3 -1.2 0.8 -9.5 4.9
Reliance Ind 567.0 3,025.0 5-Feb-04 Buy 2,083.0 267.4 -4.0 -6.7 -3.6 9.6 -6.2 -3.5 4.7 12.4
Tata Consultancy Services 852.5 1,121.0 6-Mar-06 Buy 839.5 -1.5 3.5 -11.0 -0.8 -19.6 1.2 -7.9 7.7 -17.6
APPLE GREEN
Aditya Birla Nuvo 714.0 2,035.0 6-Dec-05 Buy 1,190.2 66.7 0.5 -6.5 -20.6 -8.1 -1.8 -3.3 -13.8 -5.8
Apollo Tyres 34.4 50.0 28-Nov-06 Buy 36.5 6.1 26.0 -3.5 -11.9 -5.9 23.1 -0.2 -4.3 -3.6
Bajaj Auto 586.2 719.0 15-Nov-05 Buy 612.0 4.4 17.6 - - - 14.9 - - -
Bajaj Finserv 545.0 687.0 26-May-08 Buy 523.3 -4.0 16.2 - - - 13.6 - - -
Bajaj Holdings 741.9 ** 26-May-08 Buy 495.2 -33.3 40.9 -17.2 6.3 2.6 37.7 -14.3 15.4 5.1
Bank of Baroda 239.0 361.0 25-Aug-06 Buy 294.3 23.1 8.6 29.9 -6.1 11.0 6.1 34.3 1.9 13.7
Bank of India 135.0 365.0 25-Aug-06 Buy 284.5 110.7 1.6 11.0 -3.3 21.0 -0.7 14.8 4.9 24.0
Bharat Bijlee 192.3 1,747.0 29-Nov-04 Hold 1,390.0 622.8 15.0 -21.7 -44.9 -41.5 12.4 -19.0 -40.1 -40.1
Bharat Electronics 1,108.0 1,610.0 25-Sep-06 Buy 945.0 -14.7 -2.9 -16.9 -29.0 -46.2 -5.1 -14.1 -23.0 -44.9
Bharat Heavy Electricals 602.0 2,230.0 11-Nov-05 Buy 1,725.0 186.5 3.3 20.2 -15.5 -7.1 0.9 24.3 -8.3 -4.7
Bharti Airtel 625.0 1,100.0 8-Jan-07 Buy 803.3 28.5 1.2 1.9 7.7 -3.8 -1.1 5.4 16.9 -1.4
Canara Bank 213.0 234.0 25-Aug-06 Buy 227.5 6.8 17.0 21.5 1.9 -2.4 14.3 25.7 10.6 0.0
Corp Bank 218.0 321.0 19-Dec-03 Buy 292.0 33.9 10.2 -5.2 -0.6 -9.2 7.7 -2.0 7.9 -6.9
Crompton Greaves 88.1 367.0 19-Aug-05 Buy 255.8 190.2 11.6 18.2 -10.6 -13.5 9.0 22.3 -2.9 -11.3
Elder Pharma 298.0 508.0 26-Apr-06 Buy 331.0 11.1 2.8 -8.2 -13.6 -15.1 0.5 -5.1 -6.2 -13.0
Glenmark Pharma 599.0 754.0 17-Jul-08 Buy 670.0 11.8 4.0 1.8 46.4 83.0 1.6 5.3 58.9 87.6
Grasim 1,119.0 2,252.0 30-Aug-04 Buy 1,963.0 75.4 6.7 -5.8 -26.8 -32.0 4.3 -2.5 -20.6 -30.3
HCL Technologies 103.0 266.0 30-Dec-03 Hold 244.5 137.4 14.4 -13.2 -5.2 -16.1 11.8 -10.3 2.9 -14.0
Hindustan Unilever 172.0 280.0 24-Nov-05 Buy 245.0 42.4 2.8 6.1 8.1 19.1 0.4 9.7 17.3 22.1
ICICI Bank 284.0 965.0 23-Dec-03 Buy 688.0 142.3 11.9 -3.7 -24.9 -19.7 9.3 -0.4 -18.5 -17.7
Indian Hotel Company 76.6 146.0 17-Nov-05 Buy 76.3 -0.5 -9.3 -27.4 -33.8 -35.3 -11.3 -24.9 -28.1 -33.7
ITC 69.5 247.0 12-Aug-04 Buy 189.8 173.0 0.7 -10.5 4.5 11.9 -1.6 -7.4 13.4 14.6
Lupin 403.5 840.0 6-Jan-06 Buy 750.1 85.9 -0.8 13.5 42.6 23.5 -3.1 17.4 54.8 26.6
M&M 232.0 708.0 1-Apr-04 Buy 585.0 152.2 13.2 6.2 -13.4 -15.8 10.6 9.8 -6.0 -13.7
Marico 7.7 77.0 22-Aug-02 Buy 58.5 659.7 7.4 -5.3 -4.2 2.5 5.0 -2.1 3.9 5.0
Maruti Suzuki 360.0 865.0 23-Dec-03 Buy 682.0 89.4 21.0 -7.2 -23.4 -22.4 18.2 -4.0 -16.8 -20.5
Piramal Healthcare 146.0 434.0 16-Mar-04 Buy 345.1 136.3 2.2 -5.1 27.4 40.1 -0.2 -1.8 38.3 43.6
Punj Lloyd 519.0 532.0 12-Dec-07 Buy 295.6 -43.0 7.6 9.9 -12.6 6.4 5.1 13.6 -5.2 9.1
Ranbaxy 533.5 506.0 24-Dec-03 Buy 448.2 -16.0 -5.6 -4.9 10.9 23.4 -7.7 -1.7 20.4 26.5
Satyam Computers 181.5 521.0 30-Dec-03 Buy 417.2 129.8 9.8 -10.4 6.8 -2.9 7.3 -7.4 15.9 -0.5
SBI 476.0 1,801.0 19-Dec-03 Buy 1,520.0 219.3 1.6 15.3 -17.0 2.4 -0.7 19.2 -9.9 4.9
Tata Motors 473.0 545.0 29-Mar-04 Hold 420.9 -11.0 7.6 -18.7 -37.4 -36.4 5.2 -16.0 -32.0 -34.8
Tata Tea 789.0 970.0 12-Aug-05 Buy 719.7 -8.8 0.4 -2.1 -4.2 0.0 -1.9 1.2 4.0 2.5
Wipro 418.0 463.0 9-Jun-06 Hold 428.3 2.5 3.9 -9.0 7.8 -2.6 1.5 -5.9 17.0 -0.1
EMERGING STAR
3i Infotech 66.0 180.0 6-Oct-05 Buy 109.2 65.4 -1.6 0.4 -3.1 -23.7 -3.9 3.9 5.2 -21.8
Aban Offshore 330.4 3,569.0 3-Mar-05 Buy 2,279.8 590.0 -13.7 -36.7 -41.0 -22.8 -15.6 -34.6 -36.0 -20.9
Alphageo India 150.0 480.0 29-Nov-06 Buy 364.0 142.7 -12.5 -14.8 -30.8 1.3 -14.5 -11.8 -24.9 3.8
Axis (UTI) Bank 229.4 901.0 24-Feb-05 Buy 686.0 199.1 4.0 -0.4 -18.8 12.2 1.6 3.0 -11.9 15.0
Balaji Telefilms 231.0 268.0 9-Jul-07 Buy 172.0 -25.5 -2.8 -7.1 -12.9 -31.9 -5.0 -3.9 -5.5 -30.2
BL Kashyap 1,095.0 1,356.0 27-Sep-07 Buy 974.0 -11.1 -2.0 -25.5 -38.0 10.7 -4.3 -23.0 -32.7 13.4
Cadila Healthcare 297.5 372.0 21-Mar-06 Buy 330.5 11.1 6.8 19.8 40.3 10.5 4.4 23.9 52.3 13.3
Jindal Saw 635.0 910.0 20-Sep-07 Buy 578.4 -8.9 4.3 1.8 -28.2 -5.3 2.0 5.2 -22.0 -2.9
KSB Pumps 399.0 451.0 3-Oct-05 Buy 315.0 -21.1 -10.6 19.3 -8.1 -37.4 -12.6 23.4 -0.2 -35.8
Navneet Publications 56.8 80.0 22-Aug-05 Buy 67.4 18.7 -5.9 -22.6 -35.9 14.2 -8.1 -20.0 -30.4 17.0
September 2008 3 Sharekhan ValueLine

REPORT CARD
STOCK IDEAS STANDING (AS ON SEPTEMBER 05, 2008)
COMPANY RECO PRICE RECO CURRENT PRICE AS ON GAIN/ ABSOLUTE PERFORMANCE RELATIVE TO SENSEX
PRICE TARGET DATE RECO 05-SEP-08 LOSS (%) 1M 3M 6M 12M 1M 3M 6M 12M
Network 18 476.0 651.0 20-Jun-07 Buy 203.0 -57.4 15.8 0.1 -43.5 -46.8 13.1 3.5 -38.7 -45.5
Nucleus Software Exports 248.5 272.0 12-Dec-06 Hold 169.0 -32.0 -5.9 -30.5 -36.9 -54.1 -8.0 -28.1 -31.6 -53.0
Opto Circuits India 338.0 460.0 13-May-08 Buy 324.1 -4.1 -2.8 3.8 -19.3 10.9 -5.0 7.4 -12.4 13.6
Orchid Chemicals 254.0 300.0 16-Jan-06 Buy 242.0 -4.7 -4.2 7.8 2.5 18.8 -6.4 11.5 11.3 21.7
Patels Airtemp 88.2 135.0 7-Dec-07 Buy 58.0 -34.3 -10.6 -0.9 -10.3 42.7 -12.6 2.5 -2.7 46.2
Television Eighteen India 110.0 355.0 23-May-05 Buy 239.0 117.3 9.5 -20.4 -40.3 -42.1 7.0 -17.7 -35.2 -40.6
Thermax 124.2 564.0 14-Jun-05 Buy 487.0 292.1 8.9 17.2 -23.5 -22.6 6.4 21.2 -17.0 -20.7
Zee News 54.0 79.0 18-Oct-07 Buy 46.1 -14.6 7.5 -11.7 -3.7 -25.5 5.0 -8.7 4.5 -23.6
UGLY DUCKLING
Ashok Leyland 38.0 39.0 23-May-06 Hold 32.7 -13.9 12.9 5.1 -3.6 -10.0 10.3 8.7 4.6 -7.8
Aurobindo Pharma 684.0 914.0 28-May-07 Buy 316.0 -53.8 7.5 16.3 1.3 -47.5 5.1 20.3 10.0 -46.2
BASF 220.0 330.0 18-Sep-06 Buy 274.9 25.0 -2.4 12.2 26.8 3.5 -4.7 16.1 37.6 6.1
Deepak Fert 50.6 169.0 17-Mar-05 Buy 87.5 72.9 -15.7 -9.2 -19.3 -18.3 -17.7 -6.1 -12.4 -16.3
Genus Overseas 101.0 502.0 6-Jul-05 Buy 300.0 197.0 4.6 -29.0 -43.1 -38.9 2.3 -26.6 -38.3 -37.3
ICI India 250.0 622.0 26-May-05 Buy 487.0 94.8 -5.1 -9.0 -3.8 -4.1 -7.2 -5.9 4.4 -1.7
India Cements 220.0 260.0 28-Sep-06 Buy 143.0 -35.0 0.8 -7.3 -27.2 -44.3 -1.5 -4.2 -21.0 -42.9
Indo Tech Transformer 199.0 460.0 28-Nov-06 Buy 390.0 96.0 14.2 -2.1 -33.1 -29.5 11.6 1.2 -27.4 -27.8
Ipca Laboratories 660.0 875.0 5-Nov-07 Buy 558.0 -15.5 -0.1 -5.7 -5.0 -18.8 -2.4 -2.5 3.1 -16.8
Jaiprakash Associates 25.0 289.0 30-Dec-03 Buy 167.0 568.0 1.4 -10.3 -21.2 -3.2 -0.9 -7.3 -14.5 -0.8
KEI Industries 39.4 84.0 30-Aug-05 Buy 36.0 -8.6 -8.1 -32.6 -54.6 -55.8 -10.2 -30.3 -50.7 -54.7
Mahindra Lifespace 799.0 828.0 9-Jan-08 Buy 458.1 -42.7 2.5 -18.5 -7.1 -9.6 0.1 -15.7 0.8 -7.3
Mold Tek Technologies 155.0 169.0 19-Dec-07 Buy 69.6 -55.1 9.3 -2.1 -29.1 -48.6 6.8 1.2 -23.0 -47.3
Orbit Corporation 800.0 808.0 17-Dec-07 Buy 307.8 -61.5 18.4 -34.7 -47.3 -35.6 15.7 -32.5 -42.8 -34.0
Punjab National Bank 180.0 587.0 19-Dec-03 Buy 504.5 180.3 5.7 11.6 2.9 9.3 3.3 15.4 11.7 12.0
Ratnamani Metals 270.0 1,110.0 8-Dec-05 Buy 770.0 185.2 -0.6 9.2 -11.8 -30.4 -2.8 12.9 -4.3 -28.7
Sanghvi Movers 53.0 298.0 5-Aug-05 Buy 206.6 289.8 -2.6 -3.6 -8.6 8.1 -4.8 -0.3 -0.8 10.8
Selan Exploration 58.0 345.0 20-Mar-06 Buy 271.1 367.4 -12.9 25.1 82.3 158.5 -14.9 29.3 97.9 164.9
Shiv-Vani Oil & Gas 370.0 725.0 4-Oct-07 Buy 546.0 47.6 3.0 -0.5 2.9 77.1 0.6 2.9 11.7 81.5
SEAMEC 190.0 253.0 12-Oct-06 Buy 117.7 -38.1 -7.4 -15.4 -22.4 -47.9 -9.5 -12.5 -15.7 -46.6
Subros 41.2 50.0 26-Apr-06 Buy 31.5 -23.7 7.2 -7.7 -20.9 -25.8 4.8 -4.5 -14.2 -24.0
Sun Pharma 302.0 1,640.0 24-Dec-03 Buy 1,518.9 402.9 5.7 11.2 21.1 61.1 3.3 15.0 31.4 65.1
Surya Pharma 139.0 205.0 2-Dec-05 Buy 96.2 -30.8 -10.9 -2.9 -1.6 20.4 -12.9 0.4 6.8 23.4
Tata Chemicals 411.0 515.0 31-Dec-07 Buy 319.6 -22.3 -4.4 -3.0 7.2 34.4 -6.6 0.3 16.3 37.8
Torrent Pharma 185.0 260.0 4-Oct-07 Buy 199.5 7.8 10.3 40.8 36.0 -1.6 7.8 45.6 47.7 0.9
Unity Infraprojects 692.0 871.0 26-Feb-08 Buy 438.5 -36.6 10.8 -3.6 -31.8 -25.1 8.3 -0.3 -26.0 -23.2
UltraTech Cement 384.0 735.0 10-Aug-05 Buy 587.2 52.9 5.4 -2.5 -31.2 -37.7 3.0 0.8 -25.4 -36.2
Union Bank of India 46.0 180.0 19-Dec-03 Buy 151.3 228.9 11.0 26.0 -2.0 11.3 8.5 30.3 6.3 14.1
Wockhardt 248.0 318.0 24-Dec-03 Buy 207.0 -16.5 10.9 -20.5 -35.1 -45.0 8.3 -17.8 -29.5 -43.6
Zensar Technologies 342.0 380.0 18-Jun-07 Hold 142.9 -58.2 -1.2 11.9 23.5 -32.6 -3.4 15.8 34.0 -30.9
Vulture's Pick
Esab India 60.0 575.0 21-May-04 Buy 420.0 599.9 11.9 13.6 -7.8 -9.1 9.4 17.5 0.1 -6.8
Orient Paper 21.4 57.0 30-Aug-05 Buy 35.3 64.7 -14.3 -5.1 -18.5 -22.0 -16.2 -1.9 -11.5 -20.1
WS Industries 51.0 86.0 2-Dec-05 Buy 62.4 22.4 27.7 -11.5 -30.7 -7.2 24.8 -8.5 -24.8 -4.9
CANNONBALL
Allahabad Bank 73.0 95.0 25-Aug-06 Buy 65.0 -11.0 6.4 -10.6 -31.5 -24.2 3.9 -7.6 -25.6 -22.3
Andhra Bank 85.0 90.0 25-Aug-06 Buy 59.5 -30.0 2.0 -14.5 -25.7 -26.0 -0.3 -11.6 -19.3 -24.2
Gateway Distriparks 190.0 236.0 11-Aug-05 Buy 89.7 -52.8 0.3 -7.3 -12.5 -29.8 -2.0 -4.1 -5.0 -28.1
International Combustion 350.0 519.0 20-Sep-05 Buy 322.0 -8.0 -1.2 -13.8 -21.4 -16.3 -3.5 -10.9 -14.7 -14.2
J K Cements 149.0 250.0 17-Nov-05 Buy 128.5 -13.8 1.8 -4.5 -18.5 -22.1 -0.5 -1.2 -11.5 -20.2
Madras Cements 1,498.0 4,000.0 17-Nov-05 Buy 2,550.0 70.2 -3.4 -2.0 -26.2 -31.5 -5.6 1.4 -19.9 -29.8
Shree Cement 445.0 950.0 17-Nov-05 Buy 598.8 34.6 0.7 -15.6 -50.2 -54.7 -1.6 -12.8 -45.9 -53.5
TFCI 17.1 30.0 25-Jun-07 Buy 20.7 21.1 14.0 -1.4 -24.3 -15.4 11.4 2.0 -17.9 -13.3
** Price under review

FROM SHAREKHAN’S DESK
from sharekhan’s desk Nothing decisive yet
The strong macro-economic head winds at home continue to blow, taking their toll on the
stock market. Last month, the concerns over the continuing double-digit inflation, slowing
economic growth and tightening monetary conditions kept the market bound in a range (in
line with our stated view in the August 2008 issue) and the benchmark index, the Sensex,
ended the month with a loss of about 100 points. But the good thing is that it is holding on
and not letting go of any opportunity to regain the lost ground.
Giving it hope now and then is crude oil. With crude oil relenting below the psychologically
important barrier of $110 per barrel, the bias has turned positive. The sentiments are also
aided by the moderation in inflation in the domestic economy. After a gap of 28 weeks, the
inflation rate moderated to 12.40% for the week ended August 16, 2008 followed by a
further decline to 12.34% for the week ended August 23, 2008. What’s more, the inflation
rate could moderate further in the coming weeks as the impact of lower prices of non-
administered oil products like air turbine fuel and naphtha get reflected in the inflation
numbers. Besides, the higher base effect would provide temporary relief to aid inflation
figures during September.
Having said this, it might be early days yet to pronounce that the tide has turned for good
and the stage is set for a decisive move upwards. The market is likely to remain in a
consolidation phase and continue with the good work of building a strong base. Not
surprisingly so, as the macro head winds are still strong and the possibility of further monetary
tightening cannot be ruled out. Especially against a backdrop of a strong credit growth and
the continued buoyancy in the overall consumption demand. In addition to this, the monetary
policy would have to take into account the considerable boost in disposable income resulting
from the salary hikes to government employees and the farm debt waiver. The market is also
likely to wait for the new Reserve Bank of India chief to settle down and gauge his stance on
the monetary policy. Moreover, the rising concerns of a prolonged global slowdown would
remain as an important overhang on the market.
The gross domestic product (GDP) growth is showing distinct signs of moderation but the
growth would remain impressive on relative terms. The GDP growth stood at 7.9% in
Q1FY2009 as against the heady growth of over 9% seen in every quarter between March
2006 and September 2007. A slowdown in manufacturing activity (a growth of 5.6% against
that of 11% a year ago) and electricity generation (a growth of 2.6% vs a 7.9% growth a
year ago) slowed down the GDP growth during the first quarter. On the brighter side, the
fact that our economy would clock a growth of around 7.5-7.7% in 2008-09 regardless of
the surging prices of commodities including crude oil and the continued credit squeeze globally,
and the hardening interest rates at home points to our economy’s resilient nature. After all,
compared with the recessionary fears in Europe and US economy, the expected GDP growth
of close to 7.5% for the next two years is rather respectable and the second fastest growth
rate among the emerging economies.
contd....

FROM SHAREKHAN’S DESK
from sharekhan’s desk But whether the same is enough to attract global liquidity to Indian market remains
questionable. The foreign institutional investors (FIIs), the key driver of the market in the
last bull run, are likely to maintain their cautious view on Indian equities. The ongoing
slowdown in the developed economies and the global credit squeeze have affected the
foreign fund flows into the emerging economies and the FIIs remain sellers in the Indian
market. In August 2008, they sold equities worth Rs1,212 crore at net level. But there
have been some exceptionally good days. For instance, the FIIs bought equities worth
Rs1,132 crore on a single day when crude oil plunged to $105 a barrel on an intra-day
basis.
In the intermediate term, the possible triggers to attract global liquidity could come in the
form of some concrete steps in terms of pushing for reforms in the scheduled parliamentary
session in October. After all, the reason why the market had welcomed the July 22 win of
the no trust vote by the United Progressive Alliance government was that it had expected
the stalled financial sector reforms to gain momentum after the exit of the anti-reformist
Left parties from the coalition. Apart from introduction of pension and banking reforms
in the monsoon session, any development to raise non-planned revenues through 3G auction
and/or divestment would be welcomed by the market.
The outcome of the dispute between Reliance Industries Ltd (RIL) and Reliance Natural
Resources over the supply of natural gas from RIL’s D6 gas fields in the Krishna-Godavari
(KG) Basin is another significant event that would strongly influence the sentiments. The
hearing of the case has been going on at the Bombay High Court for a long time without
nearing any conclusion. The court is slated to meet again on September 29, 2008 for
further hearing of the case and some sort of decision is expected this time. Another important
development pending finalisation is the Nuclear Suppliers Group’s approval to India-
specific waiver as part of the 123 nuclear deal between India and the USA. At time of
releasing this issue the 45-member nuclear supplier’s group continued to ponder over the
issue. The outcome of this meeting will have implications for the market.
Given the uncertainties on the macro front and some key events ahead, the market is
likely to remain volatile in the near term. Under the circumstances, caution should be
exercised at all times. Stock-specific activities will, however, continue to yield positive
returns. So invest in the market under guidance. Needless to say that Sharekhan, your guide
to financial jungle, will continue to apprise you of money-making opportunities in the stock
market from time to time.

SHAREKHAN TOP PICKS
SHAREKHAN TOP PICKS

Sharekhan top picks
Volatility was the order of the day for the stock markets in disclosures in the company’s annual report. The portfolio’s
September 2008, after a sharp run-up in the previous month. The performance was also affected due to corrections observed in L&T
Nifty and the Sensex declined by 3.9% and 4.5% respectively during and Reliance Industries, after a sharp rally in the two stocks in the
the month as on September 5, 2008. Sharekhan’s recommended previous month. We have made just one change in our
stocks outperformed the broader markets as the portfolio of Top recommendation list for September 2008. We have replaced Satyam
Picks declined by only 1.2% during the month. The two stocks Computers with HDFC. Satyam Computers has been replaced
added last time, Glenmark Pharma and Punj Lloyd, rendered a because of weak result expectations on account of an expected
strong performance, rising by 5.1% and 2.3% respectively. salary hike. On the other hand, we believe that the expectations of
The performance of the portfolio was dented by the lacklustre a hike in the foreign direct investment limit in the insurance sector
performance of Aban Offshore due to certain detrimental would act as a strong trigger for HDFC.
NAME CMP* PER ROE (%) TARGET UPSIDE
(RS) FY08 FY09E FY10E FY08 FY09E FY10E PRICE (%)
Aban Offshore 2,280 - 7.3 5.1 34.5 91.7 60.6 3,569 56.5
Bharti Airtel 803 22.8 17.8 14.7 24.9 28.3 27.6 1,100 36.9
Glenmark Pharma 670 26.4 23.4 17.0 37.3 30.1 29.4 754 12.5
HDFC 2,284 33.4 26.2 22.4 21.4 19.4 20.0 2,912 27.5
Hindustan Unilever 245 30.2 25.8 22.3 85.0 121.2 98.9 280 14.3
ITC 190 22.9 20.0 16.6 27.7 27.2 27.3 247 30.1
Larsen & Toubro 2,620 35.3 23.9 17.5 20.0 23.8 25.8 4,044 54.4
Punj Lloyd 296 27.9 17.1 12.9 16.0 17.6 18.5 532 80.0
Reliance Industries 2,083 19.7 15.7 11.6 22.8 19.6 20.0 3,025 45.2
Shiv-Vani Oil & Gas 546 25.3 16.9 11.3 17.3 17.3 19.0 725 32.8
Sun Pharmaceuticals 1,519 21.2 18.6 18.5 29.8 26.3 21.6 1,640 8.0
TCS 840 16.4 14.3 12.5 40.5 35.6 32.3 1,121 33.5
* CMP as on September 05, 2008
NAME CMP PER ROE (%) TARGET UPSIDE

ABAN OFFSHORE 2,280 - 7.3 5.1 34.5 91.7 60.6 3,569 56.5
Remarks: Aban Offshore, one of the largest oil drilling companies in Asia, is benefiting from increased oil exploration and production activities globally. The resulting
robust demand environment is leading to firm day rates for the company’s assets.
In addition to re-pricing of its assets at higher day rates, the company is also benefiting from the efforts taken to substantially ramp up the asset base
through organic and inorganic initiatives. We expect the company to receive three jack-up rigs in the next couple of quarters, which would significantly
improve its financial performance going forward.
The company is also looking to raise capital, which we view as a positive, as it would result in reducing the high debt levels of the company.
At the current market price the stock trades at 7.3x FY2009 and 5.1x FY2010 estimated earnings. We maintain our Buy call on the stock.
BHARTI AIRTEL 803 22.8 17.8 14.7 24.9 28.3 27.6 1,100 36.9
Remarks: Bharti Airtel with over 24% market share is a leader in the Indian telecom space. On average, the company has been adding more than 2 million subscribers
every month and currently has a subscriber base of approximately 72 million.
The embedded value in the company's tower business offers considerable downside support to the stock price. Bharti Infratel (with 22,000 towers in
circles other than the 16 covered by Indus Towers) has raised $1 billion through placement to the leading foreign institutions. It has been valued in the
range of $10-12.5 billion depending on the actual performance in FY2009. This apart, Bharti Infratel would hold 40% stake in Indus Towers (formed along
with Vodafone and Idea Cellular).
Despite the competition led pricing pressures, Bharti has been able to sustain its operating margins at 41-42%
At the current market price the stock trades at 17.8x FY2009 and 14.7x FY2010 estimated earnings.

SHAREKHAN TOP PICKS

GLENMARK PHARMA 670 26.4 23.4 17.0 37.3 30.1 29.4 754 12.5
Remarks: Through the successful development and outlicencing of three molecules in a short span of six years, Glenmark has proved itself as India’s best play on
research-led innovation. In a short span of six years and with a cumulative investment of a meagre $50 million, Glenmark has built a pipeline of 13 molecules.
The company has managed to clinch four outlicencing deals for its developmental molecules collectively worth $734 million and has already received $117
million in initial milestone payments for the same.
Glenmark’s core business comprising generics in the USA and branded formulations in Latin America, other semi-regulated markets and India, has seen
stupendous success due to its focus on niche specialties and brand building. We expect the core business to grow at a CAGR of 34% over FY2008-10 driven
by a CAGR of 40% in the generic segment and a CAGR of 29% in the branded formulation business.
Glenmark has recently decided to restructure its business into two separate entities: Glenmark Pharmaceuticals (comprising branded formulations and
discovery research) and Glenmark Generics (comprising the generic formulation business). The realignment will not only allow the company to sharpen
focus and align management bandwidth but also enable the two entities to shift to the next level of growth. GGL would be a 100% subsidiary of GPL and
would be listed on the Indian bourses.
At the current market price, Glenmark is discounting its consolidated FY2009 earnings by 23.4x and its consolidated FY2010 earnings by 17x. We maintain
our Buy recommendation on Glenmark with a SOTP-based price target of Rs754 (Rs550 for the base business of branded and generic formulations & APIs,
and Rs204 for the discovery R&D business).
HDFC 2,284 33.4 26.2 22.4 21.4 19.4 20.0 2,912 27.5
Remarks: HDFC is engaged in providing housing loans to individuals, corporates and developers. Besides its core business, HDFC holds interest in banking, asset
management and insurance through its key subsidiaries.
The recent monetary tightening, in the form of a hike in CRR/SLR and other reserve requirements, has leveled the playing field between banks and NBFCs
as far as the housing loan space is concerned. Moreover, a close rival (ICICI Bank) has priced itself out from the housing space, which augurs well for the
HDFC’s core housing finance business.
Operationally, the company remains in strong position with a cost-income ratio (excluding treasury) of 9.1% compared with that of45-50% for major banks.
In addition, the asset quality of the company remains robust with GNPA of 0.84% (90+ days outstanding as % of portfolio).
Key subsidiaries continue to perform well. HDFC is contemplating listing its life insurance subsidiary (HDFC Standard Life) in the current fiscal, which would
help unlock substantial value. Also, implementation of the proposed hike in FDI for insurance sector augurs well for the company.
We value HDFC based on sum-of-the-parts model at Rs2,912 (including Rs871 for the subsidiaries). At the current market price of Rs2,281, the stock
trades at 3x FY2009E book value/share excluding the value of the subsidiaries.
HINDUSTAN UNILEVER 245 30.2 25.8 22.3 85.0 121.2 98.9 280 14.3
Remarks: HUL is the largest FMCG company in India, occupying ~20% of the Indian consumer space. With dominance across categories such as soaps, detergents,
personal care products, food and beverages, it stamps its presence as an FMCG giant.
With increasing per capita income fueling consumerism and upgradation of lifestyle of the Indian consumer, HUL’s revenues and profitability are expected
to gain momentum.
Further, hefty free cash flow generation has led to huge cash reserves for HUL and rich dividends (dividend yield of ~3.7%) for its shareholders over the years.
At the current market price, the stock trades at 22.3x its CY2009E EPS of Rs11. We maintain our Buy recommendation on the stock.
ITC 190 22.9 20.0 16.6 27.7 27.2 27.3 247 30.1
Remarks: ITC’s cigarette business that has dominance in the category continues to be a cash cow for the company. ITC has chalked out aggressive roadmap for
making a mark in the Indian FMCG market. With successful brands such as Bingo, Sunfeast and Aashirwaad already in the reckoning among the best in the
industry, ITC’s non-cigarette FMCG business is on a strong footing. The company has further ventured into the personal care category with the launch of
Superia and Fiama Di Wills soaps and shampoos that would compete with the likes of the products of HUL and P&G.
Aggressive expansion plans in hotels and paper segments would ensure inclusive growth across segments for the company.
We believe ITC has a well-diversified business model with multiple revenue drivers that would ensure sustained growth for the company. It thus remains
our top pick in the sector. At the current market price, ITC trades at 16.6x its FY10E earnings. We maintain our Buy recommendation on the stock.
LARSEN & TOUBRO 2,620 35.3 23.9 17.5 20.0 23.8 25.8 4,044 54.4
Remarks: Larsen & Toubro (L&T), the largest engineering and construction (E&C) company in India, is a direct beneficiary of the strong domestic infrastructure
development and industrial capital expenditure (capex) booms.
The international business is expected to emerge as one of the key drivers going forward with immense opportunities from the Gulf Corporation Council markets.
There lies innumerable opportunities in the new verticals in which the company is entering, namely ship building, defence, railways, thermal and nuclear power.
The company is likely to maintain its margins going forward despite rising costs on the back of rising operational efficiencies, larger ticket-size and more
complex nature of orders, better raw material sourcing and integration, and higher contribution of its new businesses which carry higher margins.
L&T’s current order book of Rs58,200 crore provides strong visibility to its future earnings. We value the core business of L&T at 25x FY2010E earnings, or
Rs3,038 per share, while we value the subsidiaries at Rs1,006 per share of L&T. At the current levels, the stock is trading at 17.5x its FY2010E consolidated
earnings. We maintain our Buy recommendation.

SHAREKHAN TOP PICKS

PUNJ LLOYD 296 27.9 17.1 12.9 16.0 17.6 18.5 532 80.0
Remarks: Punj Lloyd Ltd (PLL) is the second largest EPC player in the country with a global presence. We believe PLL with SEC and Simon Carves is well integrated
and poised to tap the global opportunity available in hydrocarbons and infrastructure sectors.
PLL has witnessed a five-fold increase in its average order size from $30 million to about $130-140 million. This move-up on the value chain has made PLL
more competitive in executing larger and complex orders.
We expect the spectacular order flow to continue for PLL. The current order book of Rs20,162 crore is 2.6x its FY2008 sales and imparts strong visibility.
We expect PLL’s consolidated revenues and profits to grow at a CAGR of 30.5% and 44.1% respectively over FY2008-10E.
We recommend a Buy on the stock with a price target of Rs532. At the current market price the stock trades at 17.1x and 12.9x its FY2009E and FY2010E
fully diluted EPS respectively.
RELIANCE INDUSTRIES 2,083 19.7 15.7 11.6 22.8 19.6 20.0 3,025 45.2
Remarks: With nine oil and gas discoveries during the year and a portfolio of 34 exploration blocks, the company holds a great promise in the E&P business. At
present, the company’s reserves are estimated at 9 billion barrels of oil equivalents.
On the back of complex configurations of the existing and upcoming refineries of RPL, the company is likely to continue to earn strong gross refining
margins. Refining volumes would double as the RPL refinery becomes operational during the third quarter.
At the current market price, the stock is trading at 15.7x FY2009E and 11.3x FY2010E consolidated earnings. We maintain our Buy recommendation on the
stock with a price target of Rs3,025.
SHIV- VANI OIL & GAS 546 25.3 16.9 11.3 17.3 17.3 19.0 725 32.8
Remarks: With a fleet of 29 onshore drilling rigs and six seismic survey crew, Shiv-Vani Oil & Gas Exploration (SOGEL) has emerged as the largest onshore service
provider catering to oil and gas exploration companies.
Augmentation of assets by the company is well timed in the industry up-cycle as heightened exploration activity has led to a severe shortage of resources
with service providers, leading to firming up of day rates (or billing rates per km in case of seismic survey) for various services. Moreover, the order backlog
of over Rs5,300 crore (over 9x FY2008 revenues) provides strong revenue-growth visibility.
The consolidated revenues and earnings are expected to grow at CAGR of 47.3% and 49.8% respectively over the three-year period FY2008-10.
Despite the robust growth prospects, the scrip is available at attractive valuations of 16.9x FY2009 and 11.3x FY2010 earning estimates. We recommend
Buy on the stock.
SUN PHARMACEUTICALS 1,519 21.2 18.6 18.5 29.8 26.3 21.6 1,640 8.0
Remarks: Sun Pharma's track record of delivering consistent and robust growth while maintaining strong profitability and return ratios makes it the best Indian play
in the generic space.
With 98 abbreviated new drug applications (ANDAs) pending USFDA approval and a filing rate of 30+ ANDAs per year, Sun Pharma has one of the strongest
product pipelines for the US market. The company is amongst the top three players in around 15 of the 25 products that it sells in the US market.
With a strong focus on the chronic lifestyle diseases, Sun Pharma's domestic formulations business has been outperforming the industry growth by a
wide margin. Sun Pharma maintains the numero uno ranking with neurologists, cardiologists, diabetologists and orthopedics.
It is an aggressive participant in the Para IV patent challenge space. Having already monetised three of its Para IV wins (oxcarbazepine, pantoprazole and
amifostine), approvals and launch of generic Effexor XR and clarity on Taro acquisition would act as triggers for the stock.
The stock is quoting at 18.6x FY2009E earnings and at 18.5x FY2010E earnings.
TCS 840 16.4 14.3 12.5 40.5 35.6 32.3 1,121 33.5
Remarks: TCS, one of the largest software services exporters from India, is expected to benefit from the increased outsourcing activities due to slowdown in the USA.
TCS has delivered decent performance during FY2008 considering the strong rupee appreciation and will continue to deliver good performance based on
its strong global delivery model. Going ahead TCS’s restructuring initiatives with put back the company on a strong growth trajectory.
TCS is well poised to achieve back-ended growth on the back of strong pipeline of 25 deals of more than $50 million. Moreover the company intends to add
30,000-35,000 employees, which clearly gives the revenue visibility.
At the current market price, TCS is trading at attractive valuation of just 12.5x FY2010 estimated earnings. We maintain our Buy recommendation on the
stock with price target of Rs1,121.

Larsen & Toubro 19
Lupin 20
Stock
Update
Madras Cement
Mahindra & Mahindra
Mold-Tek Technologies
Navneet Publications (India)
Nucleus Software Exports
20
21
21
22
22
Opto Circuits India 23
Orchid Chemicals & Pharmaceuticals 23
Orient Paper and Industries 24
Aban Offshore 11
Patels Airtemp India 24
Aditya Birla Nuvo 11
Punj Lloyd 25
Andhra Bank 12 Ranbaxy Laboratories 25
BASF India 12 Ratnamani Metals and Tubes 26
Balaji Telefilms 13 Sanghvi Movers 26
Bharat Bijlee 13 Selan Exploration Technology 27
Bharat Heavy Electricals 14 Subros 27
BL Kashyap & Sons 14 Sun Pharmaceutical Industries 28
Crompton Greaves 15 Surya Pharmaceutical 28
Deepak Fertilisers & Petrochemicals Corporation 15 Tata Chemicals 29
Elder Pharmaceuticals 16 Tata Motors 29
HCL Technologies 16 Tata Tea 30
Infosys Technologies 17 Torrent Pharmaceuticals 30
International Combustion (India) 17 Unity Infraprojects 31
ITC 18 Wipro 31
Jindal Saw 18 Wockhardt 32
KSB Pumps 19 WS Industries India 32

STOCK UPDATE
ABAN OFFSHORE
EMERGING STAR BUY; CMP: RS2,131 AUGUST 27, 2008
COMPANY DETAILS
Price target: Rs3,569
Price target revised to Rs3,569
Market cap: Rs8,055 cr On a consolidated basis, the company’s debt further increased to Rs13,043.4 crore (a
52 week high/low: Rs5,555/2,122 debt:equity of 16:1) against Rs10,852.5 crore in the previous year on account of a
NSE volume (No of shares) : 1.7 lakh higher capital expenditure (capex).
BSE code: 523204 Aban has also informed in its annual report that the Russian Federal State Property
NSE code: ABANLOYD Agency (SPA) has filed a proceeding seeking invalidation of the bareboat charter agree-
Sharekhan code: ABANLOYD ment between Arktik and Beta Drilling (for rig Murmunskaya) and between Arktik
Free float (No of shares) : 1.5 cr
and Venture Drilling AS (for Deep Venture). Although the company assures that they are
likely to win the case, any negative surprise from the above would have a negative im-
SHAREHOLDING PATTERN pact on the future earnings of the company, as the two rigs combined are expected to
Others contribute almost $169 million (about Rs677 crore) to the consolidated top line in FY2009.
Non promoter
14% As on March 31, 2008, the outstanding value of hedged forward covers/derivatives
coporates
3% stood at Rs1,872.04 crore (Rs1,523 crore currency forward contracts and Rs349 crore
interest swaps).
FII / Institutions
Promoters On account of delay in the deployment of some of the rigs, higher borrowing cost,
22%
61% slight modifications in our day rate and exchange rate assumptions, we are revising
our estimates downwards by 10.1% for FY2009 and by 6.6% for FY2010.
PRICE PERFORMANCE As of now, the global majors in the offshore service segment are quoting at one-year
(%) 1m 3m 6m 12m forward price earnings ratio (PER) of 7.8x and at an EV/EBIDTA of 6.6x. We value
Absolute -20.6 -44.6 -43.9 -18.6 Aban at 8x FY2010 earnings, which is slightly higher than the global average on
account of its higher return on equity (RoE) despite its high debt currently. Conse-
Relative to Sensex -21.8 -38.0 -31.7 -20.0
quently, we maintain our Buy recommendation on the stock with a revised price
target of Rs3,569.
The author doesn’t hold any investment in any of
the companies mentioned in the article. For further details, please visit the Research section of our website, sharekhan.com
ADITYA BIRLA NUVO

APPLE GREEN BUY; CMP: RS1,301 AUGUST 28, 2008
COMPANY DETAILS
Acquires Apollo Sindhoori
Market cap: Rs12,356 cr
Aditya Birla Nuvo (ABN) has acquired a 56% stake in Chennai-based retail broking com-
52 week high/low: Rs2502/1035
pany Apollo Sindhoori Capital investments Ltd (ASCIL) for Rs198.8 crore. The deal val-
NSE volume (No of shares) : 1.4 lakh
ues ASCIL at Rs335 crore ie Rs64.1 per share. ABN would make an open offer to the
BSE code: 500303
shareholders of ASCIL as per SEBI guidelines to acquire additional stake in the company.
NSE code: ABIRLANUVO
Sharekhan code: ABIRLANUVO ASCIL is a South India based equity and commodity broking outfit with 798 offices and
Free float (No of shares) : 5.7 cr 1,59,000 clients. The acquisition adds to ABN’s portfolio of financial services offerings as
SHAREHOLDING PATTERN the company is already present in life insurance, asset management, distribution and wealth
Others management, NBFC, insurance broking and private equity businesses. We believe ABN
19% would derive significant synergies from the acquisition from cross selling of products across
Non promoter
coporates
Promoters these ventures apart from scaling up the core business of ASCIL. Also ASCIL being a listed
40%
3% entity, ABN could consolidate related businesses in the company to raise further capital if
need be in the distant future.
Institutions
38%
At the acquisition price of Rs64.1 a share, ASCIL is valued at 8.1x its book value as on
March 31, 2008 and 16.1x its FY2008 EPS of Rs3.97. We believe the deal is expensive
PRICE PERFORMANCE compared to listed peers and the bleak near-term outlook for the broking industry. Never-
(%) 1m 3m 6m 12m theless the acquisition provides ABN entry into broking business and may hold value in
Absolute 4.3 -10.3 -25.1 -1.5 the long term. We remain positive on ABN and maintain our sum-of-the-parts price target
Relative to Sensex 3.9 1.3 -7.6 1.0 of Rs2,035.


STOCK UPDATE
ANDHRA BANK
CANNONBALL BUY; CMP: RS59 AUGUST 04, 2008
COMPANY DETAILS
Price target: Rs90
Price target revised to Rs90
RESULT HIGHLIGHTS
Andhra Bank reported a PAT of Rs77.6 crore indicating a decline of 45.0% yoy.
BSE code: 532418 The NII for Q1FY2009 came in at Rs346.3 crore, largely flat despite a healthy growth
in the advances (23% yoy), as the reported margins contracted by 71bps yoy to 2.76%.
NSE code: ANDHRABANK
Sharekhan code: ANDHBANK The non-interest income declined by 9.7% yoy to Rs118.7 crore on the back of a
treasury loss of Rs1 crore in Q1FY2009.
The operating expenses were largely stable at Rs259.7 crore during the quarter mainly due
SHAREHOLDING PATTERN
to a 2.9% decline in staff expenses, while other operating expenses grew by 11.9% yoy.
Public &
others Notably the provisions witnessed a significant (over ten-fold) jump and stood at Rs122.7
14% crore. The spike was primarily due to a significant (Rs86 crore) MTM loss on the
bank’s investment book.
Foreign
19%
Promoter The asset quality of the bank remained healthy with an improvement on absolute and
52%
relative basis. The %GNPA came in at 1.15%, down 37bps yoy, while the %NNPA
MF & FI
were down 10bps to 0.10%.
15% The growth in the advances though lower as compared to the industry growth, was at
PRICE PERFORMANCE healthy 23% yoy, while the deposits registered a growth of 20.6% yoy.
(%) 1m 3m 6m 12m We are lowering our earnings estimate for FY2009 by 16.4% to account for higher
Absolute 8.0 -29.3 -35.6 -28.2 than expected MTM losses on the investment portfolio. Further we are raising our
cost of equity assumptions to factor in the higher 10-year G-sec yields. At the CMP of
Rs59 the stock trades at 5.0x 2009E EPS, 2.6x 2009E PPP and 0.8x 2009E BV. We
maintain our Buy recommendation with a revised price target of Rs90.
BASF INDIA
UGLY DUCKLING BUY; CMP: RS282 AUGUST 01, 2008
COMPANY DETAILS
Price target: Rs330
Revenues driven by agro products
Market cap: Rs794 cr
RESULT HIGHLIGHTS
NSE volume (No of shares) : 65,718
BASF India (BASF) delivered a strong performance in Q1FY2009 well above our ex-
pectations. During the quarter the net sales increased by 61.4% year on year (yoy) to
BSE code: 500042
Rs380.8 crore as compared to Rs236.0 crore in the corresponding quarter last year.
NSE code: BASF
The sales growth was mainly driven by a strong 134.2% year-on-year (y-o-y) growth
Sharekhan code: BASF
in the sales of agricultural products and nutrition segment followed by the perfor-
Free float (No of shares) : 1.3 cr mance-products segment (up 28.0% yoy).
Others
The operating profit margin (OPM) during the quarter improved by 90 basis points to
25% 15.1% on a y-o-y basis. Consequently the operating profit grew by a healthy 71.8% to
Rs57.4 crore. Segmental margins for the chemical segment improved significantly to
Promoters
35.8% as compared to 29.4% in Q1FY2008 while the margins declined in the rest of
53% the segments.
Institutions
18% The net profit for the quarter stood at Rs36.6 crore indicating a strong growth of
Foreign
84.4% yoy.
4%
PRICE PERFORMANCE We expect the consumption boom in the company’s user industries (white goods, home
(%) 1m 3m 6m 12m furnishings, paper, construction and automobiles) to continue and hence we remain
Absolute 5.3 31.0 15.8 -1.2 optimistic on the company’s growth prospects. At the current market price of Rs281
the stock is trading at 9.2x FY2009E consolidated earnings and an enterprise value
Relative to Sensex -1.6 56.5 41.0 5.7
(EV)/earnings before interest, depreciation, tax and amortisation (EBIDTA) of 5.3x.
The author doesn’t hold any investment in any of We maintain our Buy recommendation on the stock with a price target of Rs330.

STOCK UPDATE
BALAJI TELEFILMS
EMERGING STAR BUY; CMP: RS169 AUGUST 19, 2008
COMPANY DETAILS
Price target: Rs268
Balaji and Star part ways
Balaji Telefilms Ltd (BTL) and the Star group have ended the four-year-long exclusiv-
52 week high/low: Rs388/147 ity contract under which the Star group had the right of first refusal on content pro-
NSE volume (No of shares) : 1.4 lakh duced by BTL and BTL could not air any other content on the rival channels during
BSE code: 532382 the time when its shows were being aired on Star Plus.
NSE code: BALAJITELE
Sharekhan code: BALAJITELE
We believe the exclusivity agreement with the Star group had of late hampered the
growth of BTL’s volumes, especially in the prime time slots. With the end of the exclu-
sivity contract, BTL now has the leeway of offering new shows during the prime time
SHAREHOLDING PATTERN on the other Hindi general entertainment channels.
Others
31% Promoters
With the termination of the agreement, the promoters of BTL have gained the right to
40% buy the Star group’s 25.99% stake in BTL at Rs190 per share within the next 240
days. We understand from the BTL management that the acquisition of the additional
Non promoter stake by the promoters shall not trigger an open offer.
coporates
3% Institutions It has been decided to close one of the two top earning shows for BTL—Kyunki Saas
26% Bhi Kabhi Bahu Thi and Kahaani Ghar Ghar Kii—by November 2008 and replace by
PRICE PERFORMANCE a new show. This has increased the downside risk to the future earnings of BTL, as the
new show may not do equally well, thereby affecting the company’s performance at
(%) 1m 3m 6m 12m
the operating level.
Absolute -1.9 0.6 -19.0 -24.9
Relative to Sensex -8.8 18.8 -1.2 -28.3 We maintain our Buy recommendation on the stock with a price target of Rs268.

BHARAT BIJLEE
APPLE GREEN HOLD; CMP: RS1,238 AUGUST 05, 2008
COMPANY DETAILS
Price target revised to Rs1,747
RESULT HIGHLIGHTS
52 week high/low: Rs4,068/1,175
During Q1FY2009 the net sales of Bharat Bijlee Ltd (BBL) declined by 8.6% to Rs105.6
crore. The sales declined mainly due to disruption in production and non-shipment of
BSE code: 503960 one of the orders.
NSE code: BBL
The operating profit of the company declined by 33.5% year on year (yoy) to Rs13.2
Sharekhan code: BHARATBIJ
crore resulting in a 467-basis-point decline in the OPM to 12.5%. The margins de-
Free float (No of shares) : 0.4 cr clined on the back of lower absorption of fixed costs due to lower sales volume.
SHAREHOLDING PATTERN The net profits of the company declined by 39.2% yoy to Rs7.7 crore, well below our
Others
Promoters expectations. Lower than expected operating performance led to a lower-than-esti-
32% mated net profits.
36%
The current order book of the company stands around Rs350 crore.
The new capacity of 3,000MVA is expected to come on stream by the end of Q2FY2009
and would start contributing to the top line from Q3FY2009. After this capacity ex-
Institutions Foreign pansion, BBL’s total capacity would go up to 11,000MVA from 8,000MVA at present.
23% 9%
We have revised our earnings for BBL mainly to account for the lower than expected
PRICE PERFORMANCE revenue growth and lower operating margins going forward. We now expect BBL to
(%) 1m 3m 6m 12m report CAGR of 17.2% and 14.2% in its revenues and profits respectively. Subse-
Absolute -5.9 -44.1 -58.8 -47.2
quently our FY2009 and FY2010 earnings per share (EPS) now stand at Rs142.3 and
Rs167.5 per share respectively.
We maintain Hold on the stock with a revised price target of Rs1,747. At the current
The author doesn’t hold any investment in any of market price the stock is trading at price-earnings of 7.4x FY2010E eps.

STOCK UPDATE
BHARAT HEAVY ELECTRICALS

APPLE GREEN BUY; CMP: RS1,783 AUGUST 08, 2008
COMPANY DETAILS
Where is the slowdown?
Market cap: Rs87,294 cr Slew of orders reasserts our confidence: During Q2FY2009 till date Bharat Heavy Electricals
52 week high/low: Rs2930/1327 Ltd (BHEL) has bagged close to Rs9,135 crore worth of orders including orders from interna-
tional utilities and its first 1,600MW (2x800MW) order from the Tamil Nadu Electricity Board
NSE volume (No of shares) : 14.6 lakh based on super critical technology. While the company has acknowledged Rs5,435 crore worth
BSE code: 500103 of orders, media reports suggest the company is also close to winning a Rs1,700 crore order
NSE code: BHEL from GVK Power (2x270MW). This takes the company’s order backlog to a staggering 4.9x
Sharekhan code: BHEL its FY2008 revenues. This provides strong visibility to BHEL’s revenues, going forward.
Free float (No of shares) : 15.8 cr Standardisation of equipment a key positive: Apart from awarding a 2x500MW contract
(valued at Rs2,200 crore), Maharashtra Power Generation Company (Mahagenco) has
SHAREHOLDING PATTERN also floated tenders for power equipment for its three sites in the state each with a capacity
Others of 250MW. In the recent past, the utility has been floating tenders for equipment rating
Institutions
6% between 200-300MW mainly to invite competition and better pricing. In order to execute
10%
these orders BHEL has to re-design its boilers. However, Mahagenco’s order of 250MW
shows the utility’s willingness to go back to the Indian standard rating of 250MW equip-
Foreign
ment, which has few manufacturers in the global markets. This in turn would reduce the
16%
competition for BHEL. Hence we could see more order flowing in for BHEL in the future.
Promoters
Our view: BHEL’s recent order wins and its ability to bag orders not only from govern-
68% ment utitiites but also from private players including international markets asserts our
PRICE PERFORMANCE confidence on the company’s prospects and the ability to meet our estimates of Rs40,000-
50,000 crore worth of orders in FY2009. We believe standardisation of equipment (250MW
(%) 1m 3m 6m 12m
and 500MW) would help BHEL not only in bagging orders but also in hastening its execu-
Absolute 20.7 -0.8 -11.9 6.7 tion process, as lesser reengineering would be required to meet client’s requirements. We
Relative to Sensex 7.6 12.9 1.2 4.2 reiterate our Buy call on the stock with a price target of Rs2,230. At the current market
price the stock is trading at price to earning of 17.6x and an enterprise value/earnings
The author doesn’t hold any investment in any of before interest, depreciation, tax and amortisation of 11.8x our FY2010 estimates.
BL KASHYAP & SONS

EMERGING STAR BUY; CMP: RS1,040 AUGUST 01, 2008
COMPANY DETAILS
Results in line with expectation
RESULT HIGHLIGHTS
52 week high/low: Rs2,300/494
BL Kashyap & Sons’ (BLK) top line grew by 36.9% year on year (yoy) to Rs414.1
crore in Q1FY2009. The Q1FY2009 revenues include revenues worth Rs29 crore from
BSE code: 532719
construction work for Soul Space Projects, BLK’s real estate subsidiary.
NSE code: BLKASHYAP
Sharekhan code: BLKASHYAP The operating profit margin (OPM) improved by 25 basis points to 11.9% during the
Free float (No of shares) : 0.6 cr quarter. Consequently, the company’s operating profit grew by 39.8% yoy to Rs49.2 crore.
SHAREHOLDING PATTERN The net income grew by 30.4% yoy to Rs36.2 crore in line with our expectation of
Public/Others Rs35.3 crore largely on account of higher other income of Rs10.3 crore.
7%
For BPTP order aggregating to Rs1,040 crore, construction work has been delayed as
FII / Institutions approvals from the local authority is pending and BLK now expects the construction
22% to start in December 2008. For FY2009, the company now expects the revenues to be
in the range of Rs2,100-2,300 crore (this factors in Rs100 crore from construction of
Promoters Soul Space Projects and only Rs40-50 crore from BPTP order).
71%
The order inflow remained healthy during the quarter. The company witnessed order inflow
PRICE PERFORMANCE
of Rs415 crore in Q1FY2009 and its current order book now stands at Rs3,070 crore. The
(%) 1m 3m 6m 12m company expects the order book to reach Rs3,500 crore by the end of August 2008.
Absolute -6.8 -37.7 -42.9 18.4
Relative to Sensex -12.9 -25.5 -30.4 26.7
At the current market price the stock is trading at 12.6x FY2009 earning estimates and
8.9x FY2010 earning estimates after adjusting for the valuation of Soul Space Projects.
The author doesn’t hold any investment in any of We maintain our Buy recommendation on the stock with price target of Rs1,356.

STOCK UPDATE
CROMPTON GREAVES
APPLE GREEN BUY; CMP: RS253 AUGUST 18, 2008
COMPANY DETAILS
Price target: Rs367
Annual report review
Market cap: Rs9,269 cr During FY2008, the overseas power system business of Crompton Greaves Ltd (CGL)
52 week high/low: Rs454/195 reported a 28% year-on-year (y-o-y) growth in its revenues to Rs2,959.7 crore, aided
NSE volume (No of shares) : 5.7 lakh by strong performance of its key subsidiaries Pauwels and Ganz.
BSE code: 500093 The company has concluded a capital expenditure (capex) of Rs283.4 crore during the
NSE code: CROMPGREAVE financial year primarily in the overseas power system business. The return on capital
Sharekhan code: CROMPTON employed (ROCE) of the power system division improved from 26.6% to 31.3%.
However further analysis shows a significant improvement in the RoCE (62.9% in
FY2008 as against 43% in FY2007) of the domestic power business, which led to an
SHAREHOLDING PATTERN improvement in the entire business unit.
Others
26% Highlighting the key balance sheet items, the debt of the consolidated entity reduced
Promoters by Rs62.5 crore mainly on account of repayment of loans of the stand-alone company.
39% CGL continued its efficient working capital management. The working capital (net of
cash) was at 27.5 days of sales vis-à-vis 30.2 days in FY2007.
Institutions The management indicated that with higher capital efficiency, inventory turns and cost
21% Foreign minimisation, the company will focus on achieving higher growth rate both organi-
14% cally as well as though strategic acquisition. However, the management remained cau-
PRICE PERFORMANCE tious on the global economy outlook and the subsequent slowdown in the demand
from the USA, UK and the Euro zone.
(%) 1m 3m 6m 12m
Absolute 14.1 14.3 -15.4 -13.0 We reiterate CGL as our top preferred pick and continue to remain upbeat about the
company’s business prospects. We recommend a Buy on the stock with a price target
Relative to Sensex 3.0 30.8 1.2 -12.4
of Rs367. At the current market price, the stock trades at price to earnings (P/E) of
15.9x and 12.6x our FY2009E and FY2010E earnings respectively.
DEEPAK FERTILISERS & PETROCHEMICALS CORPORATION

COMPANY DETAILS
Price target: Rs169
Q1 net profit doubles
Market cap: Rs985 cr RESULT HIGHLIGHTS
52 week high/low: Rs178/78 The Q1FY2009 net profit of DFPCL stood at Rs44.9 crore, almost double compared
NSE volume (No of shares) : 4.1 lakh with Rs22.6 crore in Q1FY2008. This was largely driven by availability of gas from
BSE code: 500645 GAIL in Q1FY2009, significant ramp-up in sales volumes and surge in realisations.
NSE code: DEEPAKFERT The net sales increased by 49.1% yoy to Rs327.6 crore on the back of a robust growth
Sharekhan code: DPKFERT in both business segments due to the availability of additional gas during the quarter.
Free float (No of shares) : 5.1 cr Chemical segment: The revenues increased by 52.1% yoy to Rs231.3 crore on the
SHAREHOLDING PATTERN back of improved capacity utilisation.
Public &
Fertiliser segment: The revenues were up by 44.1% yoy to Rs98.9 crore due to an
others increase in the manufacturing activity.
29% Realty segment: The Company’s specialty mall for interiors and exteriors, Ishanya
Promoter Mall, registered revenues of Rs3.1 crore during the quarter.
42%
DFPCL’s operating profit grew by 64.5% yoy to Rs63.6 crore in Q1FY2009, with the
Foreign OPM increasing by 180 basis points to 19.4%.
6%
MF & FI Chemical segment: The segmental PBIT increased by 96.4% to Rs80.2 crore with
23% the PBIT margin increasing from 26.9% in Q1FY2008 to 34.7% in Q1FY2009.
PRICE PERFORMANCE Fertiliser segment: The fertiliser segment registered a segmental profit of Rs4.0 crore
during the quarter as against a loss of Rs2.8 crore in Q1FY2008.
(%) 1m 3m 6m 12m
We have fine-tuned our earnings estimates for FY2009 to factor in the higher than ex-
Absolute 28.3 6.8 -15.2 7.1
pected growth in Q1FY2009. At the CMP of Rs112, the stock is trading at 8.1x its FY2009E
Relative to Sensex 12.5 19.3 -3.2 6.8 earnings and 6.3x its FY2010E earnings. In view of the visibility of its future earnings,
Ishanya, the company’s specialty mall for interiors and exteriors, is valued at Rs28.7 per
The author doesn’t hold any investment in any of share. We maintain our Buy recommendation on the stock with a price target of Rs169.
the companies mentioned in the article.
For further details, please visit the Research section of our website, sharekhan.com

STOCK UPDATE
ELDER PHARMACEUTICALS
COMPANY DETAILS
Price target: Rs508
Results in line with estimates
RESULT HIGHLIGHTS
Elder Pharmaceuticals (Elder) has reported a revenue growth of 17.1% for Q1FY2009
to Rs146.1 crore. The revenue growth was driven by continued momentum in the
BSE code: 532322 company's star brands (Eldervit, Shelcal, Amrifru and Fairone), strong contribution
NSE code: ELDERPHARM from exports through its joint venture in Ghana, the mega success of its three products
Sharekhan code: ELDERPHARM (Shelcal CP, Phyto Omega and Hibor) and strong performance of the active pharma-
Free float (No of shares) : 1.2 cr ceutical ingredients (API) business.
SHAREHOLDING PATTERN Elder has reported a 90-basis-point expansion in its operating profit margin (OPM) to
Public 19.3% for the quarter. Consequently the operating profit of the company rose by
13%
Foreign 22.6% to Rs28.3 crore in Q1FY2009.
34%
Elder’s net profit rose by 16.1% to Rs17.5 crore in Q1FY2009. The net profit growth
Promoters was in line with our estimates despite substantial increase in the interest cost (on ac-
Institutions
38%
11%
count of the new external commercial borrowing made by the company and an in-
Non-
Promoter crease in the interest rates) and depreciation charge during the quarter (due to com-
Corporate missioning of new capacities).
4%
PRICE PERFORMANCE The management has provided a rosy outlook for the next two to three years and
expects to maintain its revenue momentum at around 20-25% with operating margins
(%) 1m 3m 6m 12m
of around 21-22%.
Absolute -1.0 -12.9 -18.5 -18.5
At the current market price of Rs326 the stock is trading at 6.9x FY2009E earnings
Relative to Sensex -12.8 1.9 0.6 -18.0
and at 5.5x FY2010E earnings. We maintain our Buy recommendation on Elder’s
stock with a price target of Rs508.
HCL TECHNOLOGIES
APPLE GREEN HOLD; CMP: RS240 AUGUST 05, 2008
COMPANY DETAILS
Price target: Rs266
RESULT HIGHLIGHTS
HCL Technologies (HCL) has reported a revenue growth of 11.5% quarter on quarter
(qoq) and 34.5% year on year (yoy) to Rs2,168.9 crore for Q4FY2008. In dollar terms the
BSE code: 532281 revenues grew by 3.9% qoq to US$503.9 million driven largely by volume growth of 4.1%
NSE code: HCLTECH
Sharekhan code: HCLTECH The earnings before interest and tax (EBIT) margin improved by 123 basis points to
19.5% due to favourable currency impact (191 basis points), higher utilisation (85
basis points), higher realisation (14 basis points) and grants offered in northern Ire-
SHAREHOLDING PATTERN land (43 basis points). However this was partially offset by higher SG&A expenses
Public & (108 basis points), cash flow hedge accounting (82 basis points), depreciation (10 basis
Others
6 points), change in service mix (10 basis points). Consequently the company’s EBIT
% Institutions grew by 19% qoq to Rs423.5 crore during the quarter.
24%
The company’s net income went down by 58.8% qoq to Rs141.1 crore largely on
Non-Promoter
Corporate
account of foreign exchange (forex) losses of Rs299.9 crore during the quarter
3%
Promoters At the current market price the stock is trading at the attractive valuation of 11.5x
67% FY2009 earnings estimate and 10.2x FY2010 earnings estimate. Moreover at the cur-
PRICE PERFORMANCE rent market price the stock offers good dividend yield to the investors. These factors
(%) 1m 3m 6m 12m could provide upside in the near term. However we remain concerned about the
company’s aggressive and inconsistent forex hedging policy. The company has
Absolute -6.9 -26.0 -20.4 -24.2
unrecognised forex loss of US$140 million at the end of Q1FY2009. If the rupee
Relative to Sensex -14.4 -11.4 1.0 -22.2 stabilises at this level it could drag the company’s profitability significantly. Hence we
maintain our Hold recommendation on the stock with revised price target of Rs266.

STOCK UPDATE
INFOSYS TECHNOLOGIES
EVERGREEN BUY; CMP: RS1,703 AUGUST 25, 2008
COMPANY DETAILS
Axon to strengthen presence in Europe & SAP practice
Market cap: Rs97,412 cr Infosys Technologies (Infosys) has announced that it has agreed on the terms for the
52 week high/low: Rs2140/1212 recommended cash offer for a leading UK-based SAP consulting company Axon Group
NSE volume (No of shares) : 18.2 lakh plc (Axon). The deal is valued at GBP407.1 million (Rs3,310 crore or GBP6 per share
BSE code: 500209 of Axon) for a 100% stake.
NSE code: INFOSYSTCH Axon reported revenues of GBP204.5 million (Rs1,660 crore) and a profit after tax
Sharekhan code: INFOSYS (PAT) of GBP20.2 million (Rs160 crore) in CY2007. At transaction value, Infosys has
Free float (No of shares) : 47.8 cr acquired Axon at enterprise value (EV)/sales of 2x (1.9x including the free cash of
GBP25 million on Axon’s books as on December 2007) and price earning (PE) mul-
SHAREHOLDING PATTERN tiple of 20.2x. The acquisition seems to be reasonably priced given the recent acquisi-
Promoters tions by some of the other frontline companies at EV/sales of 2.5-3x.
17%
Others On the earnings front, the acquisition is likely to be earnings per share (EPS) neutral in
41% FY2010.
Foreign Axon’s shareholding pattern is fairly fragmented, with the institutions holding more
Institutions
34% than 45% stake. However, Infosys has approached and has received consent from the
8%
founding promoters and some key employees, who hold 18.1% stake. Hence, institu-
tional consent is now important for Infosys to acquire the required majority stake in
PRICE PERFORMANCE Axon. The management seems confident on the same and in fact is looking at acquir-
(%) 1m 3m 6m 12m ing 100% equity in Axon.
Absolute 7.5 -7.7 8.9 -3.5 At the current market price, the stock is trading at 16.5x FY2009 earnings estimate
Relative to Sensex 5.1 7.5 29.9 -5.7 and 15x FY2010 earnings estimate. We maintain our Buy recommendation on the
stock with price target of Rs2,130.
INTERNATIONAL COMBUSTION (INDIA)

CANNONBALL BUY; CMP: RS346 AUGUST 05, 2008
COMPANY DETAILS
Price target: Rs519
Q1 results in line with estimates
52 week high/low: Rs914/280 For Q1FY2009 International Combustion India Ltd (ICIL) has reported a growth of
BSE volume (No of shares) : 3,633 13.1% in its revenues to Rs22.9 crore. The growth is in line with our expectations.
BSE code: 505737 Looking at the performance of the various segments, the material handling equipment
Sharekhan code: INTLCOMB
(MHE) division has reported a revenue growth of a modest 4% to Rs17.1 crore. The
geared motors and gear box division (GMGBD) has reported a strong revenue growth
Free float (No of shares) : 0.1 cr of 59.6% to Rs6.1 crore. The GMGBD has also reported a 440-basis-point improve-
SHAREHOLDING PATTERN ment in its margins to 6.7%.
The operating profit of ICIL grew by 1% to Rs4.9 crore. The operating profit margin
(OPM) fell by 255 basis points to 21.5%. The decline was mainly due to an increase in
Others the raw material cost. The raw material cost as a percentage of sales increased by 225
44% Promoters basis points to 49.1%.
53%
The interest cost stood at Rs0.1 crore. The depreciation charge rose by 13% yoy to Rs0.8 crore.
The other income increased by 187% yoy to Rs0.7 crore on account a high interest
Institutions Foreign
income on its investments. Consequently, the net profit grew by 8.9% to Rs3.1 crore
2% 1%
as against our estimate of Rs3 crore.
PRICE PERFORMANCE The order book of the company stood at Rs60 crore at the end of the first quarter as
(%) 1m 3m 6m 12m against Rs56 crore at the end of Q4FY2008.
Absolute 8.3 -23.8 -33.3 -18.7 We maintain our estimates for ICIL. We also maintain our Buy call and price target of
Relative to Sensex -0.5 -8.8 -15.4 -16.6 Rs519 on its stock. At the current market price the stock trades at 5.6x FY2009E
earnings and enterprise value (EV)/earnings before interest, depreciation, tax and am-
The author doesn’t hold any investment in any of ortisation (EBIDTA) of 2.5x on FY2009 estimate.

STOCK UPDATE
ITC
COMPANY DETAILS
Price target: Rs247
Tobacco curbs may hurt in long term
Market cap: Rs69,180 cr In order to curb the production of tobacco and the consumption of tobacco products in
52 week high/low: Rs239/157 the country the government is implementing several measures.
NSE volume (No of shares) : 52.9 lakh It has set up a fund of Rs5,000 crore to encourage tobacco farmers to diversify into other
BSE code: 500875 crops. The plan also includes financial support to the tobacco farmers to rehabilitate
NSE code: ITC them from the major tobacco producing states like Karnataka and Andhra Pradesh.
Sharekhan code: ITC
The health ministry in India is planning to make the listing of ingredients, such as tar,
Free float (No of shares) : 182.0 cr nicotine and monoxide, on cigarette, bidi and the other tobacco product packs manda-
SHAREHOLDING PATTERN tory from next year.
The above measures come at a time when the government is already in the process of
Others implementing its earlier guideline of carrying a pictorial warning on all tobacco products.
46% Promoters
52%
Conclusion
Non promoter We have reservations about the government’s ability to successfully implement these mea-
corporates sures, considering the profitability of growing tobacco for the farmers and the hefty contri-
2% bution of cigarettes and other tobacco products to the nation’s exchequer. However, we
PRICE PERFORMANCE believe these measures reiterate the government’s intention to ultimately curtail the con-
(%) 1m 3m 6m 12m
sumption of tobacco products and hence do not augur well for ITC’s cigarette and tobacco
export businesses over to long term. Since it is not known when these measures may be put
Absolute -2.7 -10.1 -7.1 13.8
into practice, we are leaving our estimates for the company unchanged. At the current mar-
Relative to Sensex -3.0 1.5 14.6 16.7 ket price of Rs184 the stock trades at 19.3x FY2009 EPS of Rs9.5 and 16.1x FY2010E EPS
of Rs11.4. We maintain our Buy recommendation on the stock with a price target of Rs247.
JINDAL SAW
COMPANY DETAILS
Price target: Rs910
Q2 report card beats expectations
RESULT HIGHLIGHTS
Jindal Saw’s Q2CY2008 numbers are ahead of our expectations on account of a higher
top line and a better than expected margin.
BSE code: 500378
NSE code: JINDALSAW The revenues from the Indian operations grew by a strong 34.8% year on year (yoy) to
Sharekhan code: JINDALSAW Rs1,017.5 crore on the back of a strong growth in the submerged arc welded (SAW)
pipe sales.
SHAREHOLDING PATTERN On the back of a favourable product mix, greater efficiencies and the hive-off of the US
division, the operating profit margin (OPM) continued to improve and reached 16.6%
Public &
Others Foreign during the quarter (after adjusting for Rs7.2 crore export duty). Consequently, the
16% 17% operating profit grew by 5% to Rs168.5 crore.
The interest cost was higher on account of a Rs12-crore foreign exchange (forex) loan
Institutions translation loss and a net settlement of Rs17 crore made towards forward contracts
23% and options. We have treated both the items as “extraordinaries” and adjusting for the
Promoters same, the profit stood at Rs106.4 crore.
44%
The company’s order book stood at $1.09 billion at the end of the quarter, to be
PRICE PERFORMANCE
executable by April/May 2009.
(%) 1m 3m 6m 12m
To factor in the higher than expected borrowing cost, we have marginally downgraded
Absolute 2.2 -21.8 -40.9 -25.0
our earnings estimate for CY2008 by 4.3% to Rs58.9 and that for CY2009 by 1.3%
Relative to Sensex -4.6 -6.5 -28.0 -19.8 to Rs89.3. At the current levels, the stock is trading at 6.1x its CY2009E earnings. We
maintain our Buy recommendation on the stock with a price target of Rs910.

STOCK UPDATE
KSB PUMPS
COMPANY DETAILS
Price target: Rs451
Strong quarter
RESULT HIGHLIGHTS
KSB Pumps’ Q2CY2008 results are better than our expectations owing to a stronger
than expected top line and higher margin.
BSE code: 500249
NSE code: KSBPUMPS In Q2CY2008, the company’s top line improved smartly by 32.6% to Rs149 crore
Sharekhan code: KSBPUMPS while its margin increased by 630 basis points year on year (yoy) and by 220 basis
Free float (No of shares) : 0.6 cr points sequentially to 18.3%.
SHAREHOLDING PATTERN Looking at the Q2CY2008 results of the segments separately, the pump division has re-
Foreign
Public & 1% ported a strong performance for the quarter. Its revenues grew by 37.2% to Rs118.8
Others
Institutions
crore. The valve division’s revenues grew by 20% to Rs30.3 crore. The profit before inter-
12%
17% est and tax (PBIT) margin of all the divisions too improved both yoy and sequentially.
Non-promoter
corporate Consequently, the overall operating profit of the company grew by 102.5% to Rs27.3 crore.
5%
A higher other income helped the net profit to grow by a good 113.9% to Rs17.1 crore.
Promoters
65% As highlighted in our previous notes, we do not expect the margins to reach the previ-
ous levels. We expect the operating profit margin (OPM) to sustain in the region of
PRICE PERFORMANCE
16%. We upgrade our CY2008 earnings estimate by 8.5% to Rs32.4 in view of the
(%) 1m 3m 6m 12m excellent performance in the second quarter. We also upgrade our CY2009 earnings
Absolute 26.7 -6.8 -10.8 -43.6 estimate by 2.3% to Rs34.9.
Relative to Sensex 18.4 11.4 8.7 -39.6
At the current market price, the stock is trading at 9.5x its CY2009E earnings. We
The author doesn’t hold any investment in any of maintain our Buy recommendation on the stock with a price target of Rs451.
LARSEN & TOUBRO

EVERGREEN BUY; CMP: RS2,628 AUGUST 21, 2008
COMPANY DETAILS
Market cap: Rs76,698 cr Larsen & Toubro (L&T) had a brilliant FY2008, as the stand-alone revenues rose by
52 week high/low: Rs4,670/2,100 43.1% led by excellent performance of the stand-alone company as well as its key
NSE volume (No of shares) : 12.3 lakh subsidiaries. The margins of the company improved despite rising costs due to
itsexcellent execution capabilities and judicious choice of orders.
BSE code: 500510
NSE code: LT L&T (stand-alone) incurred a capital expenditure (capex) of about Rs1,647 crore in
FY2008, which is extremely significant considering its last year net block of Rs1,756
Sharekhan code: L&T
crore. Despite huge investments, the company has maintained its return ratios, as its
Free float (No of shares) : 25.2 cr RoCE stood at 29.1%, while the RoNW was at 26.6%.
SHAREHOLDING PATTERN To our positive surprise, the company further improved its working capital manage-
Foreign ment. The net working capital cycle was reduced to 24.4 days in FY2008 as against
19% 30.1 days in FY2007. The company also continued to generate strong cash flows dur-
Public & Others
38%
ing the year, with the cash flows from operations standing at Rs2,049 crore in FY2008.
The company has a strong cash and cash equivalent position of Rs6,131 crore on a
consolidated level, which shall be used to fund its future projects. Furthermore, the
Non-promoter Institutions debt-equity ratio remains comfortable at 1.14:1 on a consolidated basis.
corporate holding 38%
5% The order book of Rs53,000 crore (as on March 31, 2008) provides excellent visibil-
ity. L&T also highlighted the tremendous opportunities from the Gulf region, which it
PRICE PERFORMANCE is looking to capitalise considering its already-established presence in the region.
(%) 1m 3m 6m 12m
Diversified business model (both across products as well as geographies), opportuni-
Absolute 7.2 -8.2 -21.2 16.2 ties from international operations, strong order book, and huge possibilities from its
Relative to Sensex -0.6 6.9 -6.3 12.8 new initiatives are likely to fuel L&T’s growth going forward. At the current market
price, the stock is trading at 17.6x its FY2010E consolidated earnings. We recommend
The author doesn’t hold any investment in any of a Buy on the stock with our sum-of-the-parts based price target of Rs4,044.

STOCK UPDATE
LUPIN
COMPANY DETAILS
Price target: Rs840
Expanding branded franchise
RESULT HIGHLIGHTS
Lupin has entered into a multi-year promotion and marketing agreement for the
AeroChamber Plus® line of products with Forest Laboratories, Inc. Under the terms
BSE code: 500257
of the agreement, Lupin Pharmaceuticals, Inc, USA, will use its 50-person sales force to
NSE code: LUPIN
promote the product to paediatricians.
Sharekhan code: LUPLTD
Free float (No of shares) : 4.0 cr Lupin already employs around 50 people in the USA for the promotion of its branded
SHAREHOLDING PATTERN product, Suprax, to paediatricians. Through this deal Lupin will be able to leverage the
Public &
field force to increase its revenues without any incremental spend on front-end mar-
others keting. Further, the deal would also provide Lupin an opportunity to extend its branded
Non-promoter 10%
corporate franchise with the paediatricians in the USA.
2%
Domestic Promoters
The above-mentioned deal would present an upside to our current estimates, as it
Institutions 51% would provide Lupin with incremental revenues without any increase in its costs. We
20%
believe Lupin would make a distribution margin of 10-15% on the marketing of the
Foreign
17%
AeroChamber Plus® range of products which would flow directly to the bottom line in
the absence of any additional cost. Due to the lack of clarity on the size of the opportu-
PRICE PERFORMANCE
nity, we have not factored in the upside from this deal into our estimates.
(%) 1m 3m 6m 12m
Absolute 7.8 10.8 44.7 24.6 At the current market price of Rs736, Lupin is discounting its FY2009E earnings by
16.2x and its FY2010E earnings by 13.5x. Keeping in mind the strong business funda-
Relative to Sensex 0.2 30.9 76.7 18.8
mentals and the growth potential of the company, we maintain our Buy recommenda-
tion on Lupin with a price target of Rs840.
MADRAS CEMENT
CANNONBALL BUY; CMP: RS2,614 AUGUST 01, 2008
COMPANY DETAILS
Results above expectations
RESULT HIGHLIGHTS
Madras Cement's Q1FY2009 revenues grew by 31% yoy to Rs615 crore. The cement
volumes of the company during the quarter increased by 11.1% yoy to 1.6 million
BSE code: 500260 tonne. The cement realisation per tonne increased by 14.9% yoy to Rs3,643 per tonne.
NSE code: MADRASCEM
The operating profit margin (OPM) declined by 270 basis points yoy to 36.2%. The
Sharekhan code: MADCEM drop in the OPM was mainly on account of an overall increase in the cost. Conse-
Free float (No of shares) : 0.7 cr quently the operating profit reported a growth of 22% to Rs222.9 crore.
SHAREHOLDING PATTERN On per tonne basis, the power & fuel cost increased by 32.9% yoy due to higher coal
Institutions price. The freight cost rose by 16.9% due to increase in diesel prices. The raw material
18% cost increased by 38.9%. The employee cost increased by 4.1% while the other ex-
Foreign Promoters penses swelled by 9.4%.
5% 42%
The interest expenses surged by 143.9% to Rs19.7 crore while the depreciation rose
by 31.5% to Rs31.5 crore. The increase in the interest and depreciation costs was on
Public &
account of capacity additions carried out by the company.
others The net profit thus reported a growth of 13.3% to Rs114 crore.
35%
PRICE PERFORMANCE Going ahead we expect volume growth and cost saving from wind power to shield the
company’s earnings. Thus we expect the company to post an earnings per share (EPS)
(%) 1m 3m 6m 12m of Rs360.3 and Rs418.2 in FY2009 and FY2010 respectively. At the current market
Absolute -9.3 -18.5 -34.1 -21.4 price of Rs2,614, the share trades at 7.3X and 6.3X its FY2009 and FY2010 earnings
Relative to Sensex -15.3 -2.7 -19.7 -15.9 and an enterprise value (EV)/earnings before interest, depreciation, tax and amortisa-
tion (EBIDTA) of 5.3X and 4.2X for FY2009 and FY2010 respectively. We maintain
our Buy recommendation on the stock with a price target of Rs4,000.

STOCK UPDATE
MAHINDRA & MAHINDRA

COMPANY DETAILS
Price target: Rs708
RESULT HIGHLIGHTS
The Q1FY2009 results of Mahindra & Mahindra are marginally lower than our esti-
mates. The stand-alone net sales of the company grew by 26.1% to Rs3,293.4 crore.
BSE code: 500520
NSE code: M&M The automotive segment’s revenues rose by 24.5% to Rs1,873.2 crore. The farm equip-
Sharekhan code: M&M ment division reported a revenue growth of 27.5%.
Free float (No of shares) : 17.2 cr An increase in the interest expenditure and a higher depreciation charge led the ad-
SHAREHOLDING PATTERN justed net profit to grow by 11.1% to Rs217.5 crore. Taking into account a forex loss
Public & of Rs77.9 crore, the reported PAT declined by 16.7% to Rs159.3 crore.
Others Promoters
17% 23% On a consolidated basis, the gross revenues grew by 29% to Rs7,557.3 crore while the
profit after minority interest grew by 36.7% to Rs409.5 crore in Q1FY2009.
M&M has announced the merger of Punjab Tractors Ltd with itself in the ratio of
three shares of PTL for one share of itself. M&M will be acquiring the assets of Kinetic
Foreign
34%
Institutions Motor Company through a new company to be formed. The consideration for the
26%
acquisition is a sum of Rs110 crore in addition to a 20% stake to Kinetic in the new
PRICE PERFORMANCE company. M&M will hold the balance 80% of the new company’s equity.
(%) 1m 3m 6m 12m
We downgrade the earnings multiple on standalone earnings from 10x to 9x. We
Absolute 16.1 -16.8 -16.9 -16.7 continue to value M&M on a sum-of-the-parts basis valuing the core business at
Relative to Sensex 4.0 -3.5 2.8 -16.8 Rs365 and subsidiaries at Rs343. We maintain Buy on M&M with a revised price
target of Rs708.
MOLD-TEK TECHNOLOGIES
COMPANY DETAILS
Price target: Rs169
Results in line with expectations
Mold-Tek’s Q1FY2009 revenues grew by 23.1% year on year (yoy) to Rs33.9 crore.
BSE volume (No of shares) : 68,532 While the plastic division’s revenues grew by 24% yoy to Rs29.1 crore, the KPO
BSE code: 526263 division’s revenues grew by 18.2% yoy to Rs5 crore during the quarter.
Sharekhan code: MOLDTEK The operating profit margin (OPM) improved by 312 basis points to 16.1% during the
Free float (No of shares) : 0.6 cr quarter on account of better profitability of the plastic division. The earnings before
interest and tax (EBIT) margin of the plastic division improved by 10 basis points to
7.7% during the quarter. Consequently, the company’s operating profit grew by 52.6%
Others yoy to Rs5.5 crore during the quarter.
Promoters
40%
45% The interest and depreciation grew by 63.2% and 20.6% respectively during the quar-
ter. In terms of taxes, the company did not provide for tax provision due to scheme of
de-merger. Consequently, the company’s net income grew by 54.9%. yoy to Rs4.2
Non promoter crore, which is in line with our expectations.
coporates
15% The company also announced that the high court of Andhra Pradesh (AP) has ap-
PRICE PERFORMANCE proved the de-merger of its structural engineering KPO operations and the plastic pack-
aging product manufacturing division.
(%) 1m 3m 6m 12m
Absolute 14.1 -4.4 -40.5 -44.8 We maintain our earnings estimates for FY2009 and FY2010. At the current market
price, the stock is trading at attractive valuation of 4.9x FY2009 earnings estimate and
Relative to Sensex 1.7 8.7 -31.7 -46.1
3.7x FY2010 earnings estimate. We maintain our Buy recommendation on the stock
The author doesn’t hold any investment in any of with price target of Rs169.

STOCK UPDATE
NAVNEET PUBLICATIONS (INDIA)

COMPANY DETAILS
Price target: Rs80
Higher tax outgo affects bottom line
RESULT HIGHLIGHTS
Navneet Publications Ltd (NPL) posted a robust revenue growth of 22.1% to Rs242.5
crore in Q1FY2009 on the back of its stationery business, which grew by 58.8%yoy.
BSE code: 508989
The top line was ahead of our expectation of Rs229.6 crore for the quarter.
NSE code: NAVNETPUBL
Sharekhan code: NAVNEET The core publication business registered a growth of only 7.1% yoy to Rs153.1crore,
Free float (No of shares) : 3.6 cr which is below our expectation of 12.0% for the quarter. The PBIT margin of the
SHAREHOLDING PATTERN business improved by 103 basis points to 37.4% in Q1FY2009.
Others The OPM declined by 233 basis points yoy to 27.2% on account of higher raw mate-
32% rial cost and advertising & sales promotion activities in Q1FY2009. Thus the operat-
ing profit grew by only 12.4% to Rs65.9 crore during the quarter.
Higher interest charges coupled with higher incidence of tax led to a 4.7% decline in
Promoters
the adjusted net profit to Rs40.2 crore in Q1FY2009.
Institutions 61%
7% Though NPL’s core publishing business registered a subdued growth during Q1FY2009,
we expect the company to achieve our FY2009 revenue and earnings estimates. The statio-
PRICE PERFORMANCE
nery business of the company is gaining good momentum in the domestic as well as the
(%) 1m 3m 6m 12m international market and going forward it could be major revenue driver for the company.
Absolute 1.7 -29.9 -42.4 21.6
Relative to Sensex -5.0 -16.2 -29.9 30.1
At the current market price of Rs70 the stock trades at 11.1X its FY2009 earnings per
share (EPS) of Rs6.3 and 9.2X EPS of Rs7.6. We maintain our Buy recommendation
The author doesn’t hold any investment in any of on the stock with a price target of Rs80.
NUCLEUS SOFTWARE EXPORTS

EMERGING STAR HOLD; CMP: RS171 AUGUST 26, 2008
COMPANY DETAILS
Price target: Rs272
Market cap: Rs555 cr We present below the highlights of the recently released annual report (FY2008) of Nucleus
52 week high/low: Rs414/165 Software Exports Ltd (NSEL).
NSEL continued its revenue growth momentum in FY2008 and grew by 30.5% year
BSE code: 531209
on year (yoy) to Rs228.7 crore during the year.
NSE code: NUCLEUS
Sharekhan code: NUCSEX The company incurred net capital expenditure (capex) of Rs15.5 crore during the year for
Free float (No of shares) : 1.3 cr facility development and intends to invest around Rs35crore for its SEZ expansion plans.
SHAREHOLDING PATTERN In terms of return ratios, the return on capital employed (RoCE) and the return on net
Public & worth (RoNW) declined to 31.7% and 28.6% respectively in FY2008 on account of a
Others Institutions
18 17% lower net profit margin (because of a high employee cost) and an increase in the other
% current assets as well as in the loans and advances.
Non Promoter
Corporate
6%
The company continues to have a strong balance sheet with cash and cash equivalent
of Rs94.1 crore in FY2008 compared with Rs81.9 crore in the previous year. The
Promoters
operating cash flow decreased by 58.6% yoy to Rs24.4 crore due to an increase in the
59% loans and advances, and the other current assets. On the positive side, the days sales
PRICE PERFORMANCE outstanding (DSO) came down to 86 days in FY2008 from 91 days in FY2007.
(%) 1m 3m 6m 12m At the current market price, the stock is trading at a multiple higher than that of 3i
Absolute -2.9 -34.7 -36.2 -51.4 Infotech even though NSEL has a slower earnings growth rate. Therefore, we maintain
Relative to Sensex -4.2 -25.3 -22.8 -52.1 our Hold recommendation on the stock with a price target of Rs272. At the current
market price the stock trades at 9.6x FY2009E earnings and 6.9x FY2010E earnings.

STOCK UPDATE
OPTO CIRCUITS INDIA

COMPANY DETAILS
Price target: Rs460
Strong margin expansion
RESULT HIGHLIGHTS
Opto has reported a top line growth of 83.8% to Rs177.4 crore for Q1FY2009. The
revenues are marginally lower than our estimate, mainly due to a lower than expected
BSE code: 532391 contribution from the recently acquired Criticare Systems. The invasive segment grew
NSE code: OPTOCIRCUI by 72% whereas the non-invasive business grew by 48%, driven by new product
Sharekhan code: OPTOCIRC launches. Criticare contributed revenues of ~Rs30 crore (for two months). On exclud-
Free float (No of shares) : 6.6 cr ing the contribution from Criticare, the organic growth was ~52%.
SHAREHOLDING PATTERN Opto’s OPM expanded by 80 bps yoy and by 230 bps on a sequential basis to 31.5%.
Public
The margin expansion was driven by a lower raw material cost. The dip in the raw
20% Promoters material cost was primarily due to a reduction in the promotional spend and distribu-
30% tion of free samples. The operating profit grew by 88.7% to Rs55.8 crore.
Non-promoter
corporate Opto’s net profit growth was restricted to 61.4% to Rs44.9 crore, largely due to a
10% higher than anticipated interest cost. The interest cost grew to Rs10.9 crore, largely
Institutional due to the $56-million debt raised to fund the Criticare acquisition.
5% Foreign In order to account for the lower than expected revenues, the stronger margins and the
35% higher interest cost, we are revising our estimates for Opto. We are revising our revenue
PRICE PERFORMANCE estimate for FY2009 and FY2010 downwards by 2.6% and 0.9% respectively. Our profit
(%) 1m 3m 6m 12m estimates for FY2009 and FY2010 have been downgraded by 5.4% and 2.8% respec-
tively. Our revised EPS estimates stand at Rs19.9 for FY2009 and Rs29.7 for FY2010.
Absolute 16.4 -2.6 -21.5 17.8
Relative to Sensex 3.5 11.3 -6.4 15.0 At the current market price of Rs338, Opto is trading at 17.0x FY2009E and 11.4x
FY2010E its fully diluted earnings. We maintain our Buy recommendation with a price
target of Rs460.
ORCHID CHEMICALS & PHARMACEUTICALS

COMPANY DETAILS
Price target: Rs300
Disappointing performance
RESULT HIGHLIGHTS
Orchid’s Q1FY2009 results have been disappointing due to lower top-line growth,
margin pressures, higher than anticipated interest burden and forex translation losses.
BSE code: 524372
NSE code: ORCHIDCHEM
The revenues grew by 21.9% yoy to Rs287.7 crore. The growth was restricted due to
absence of new launches.
Sharekhan code: ORCHID
The OPM shrank by 370 bps to 24.2% due to an increase in staff costs and rising
power and fuel costs. The declining margin restricted the operating profit growth to
SHAREHOLDING PATTERN 5.7% at Rs69.7 crore.
Public &
others Promoters Orchid’s net level declined by Rs31.6 crore due to poor operating performance, higher inter-
14% 16% est costs and MTM translation losses on foreign currency liabilities of Rs58.8 crore (pre-tax).
Orchid’s debt level remains high at ~$300 million (excluding the FCCBs) as reflected
Foreign
17%
in the 50% yoy increase in the interest cost.
Non-promoter
Orchid has launched Tazo-Pip in Canada and Australia and has received the approval
corporate
36% Institutions to launch the product in Europe. The company is expecting the approvals for launch-
17% ing the product in the USA within the next one month. The approval and launch of
PRICE PERFORMANCE Tazo-Pip in the USA would act as a major trigger for the stock.
(%) 1m 3m 6m 12m The management has downgraded its growth guidance for FY2009 from 30% earlier
Absolute 5.6 4.4 6.9 17.9 to 15-20% now due to the delay in the launch of Tazo-Pip in the USA and Europe.
Relative to Sensex -7.0 22.2 31.9 18.7 At the current market price of Rs260 Orchid is discounting its FY2009E earnings by
15.9x and its FY2010E earnings by 12.1x. We maintain our Buy recommendation
The author doesn’t hold any investment in any of with a price target of Rs300.

STOCK UPDATE
ORIENT PAPER AND INDUSTRIES

VULTURE’S PICK BUY; CMP: RS35 AUGUST 29, 2008
COMPANY DETAILS
Price target: Rs57
Integrating vertically
The board of Orient Paper and Industries Ltd (OPIL) has approved the purchase of the
52 week high/low: Rs85/29 chemical division of GMMCO at Amlai, Madhya Pradesh. The division currently sells
NSE volume (No of shares) : 1.6 lakh its entire produce of calcium hypochlorite, 23% of its liquid chlorine output and 18%
BSE code: 502420 of its caustic soda lye yield to OPIL’s Amlai paper mills. Thus, the acquisition will lead
NSE code: ORIENTPPR to vertical integration for OPIL’s paper business, resulting in suitable benefits. The
Sharekhan code: ORIENTPAP transfer of the business will be effective from October 1, 2008.
The acquisition involves the transfer of Rs10.18 crore worth of net assets by GMMCO
to OPIL. Being a small acquisition we do not expect the move to have any significant
Others
17%
impact on the profitability of OPIL’s paper division.
Promoters
Non promoter 36% The OPIL board has also approved increasing the power generation capacity at Amlai
coporates paper mills from the current 22 MW to 43MW at a cost of Rs140-150 crore. This
16% expansion will be sufficient to meet the entire requirement of the paper mills, including
the ongoing expansion of the tissue paper manufacturing capacity by 15,000 tonne.
Institutions
31% OPIL is in the process of expanding its cement capacity from the current 3.4 million
PRICE PERFORMANCE tonne to 5 million tonne which along with a 50MW captive power plant at Devapur is
(%) 1m 3m 6m 12m expected to come on stream by the end of FY2009.
Absolute -3.5 -10.1 -27.3 -14.2
OPIL is currently trading at low valuations of 2.5x its FY2010E earnings per share.
Relative to Sensex -1.6 4.8 -8.8 -10.0 We believe it is a value buy at these levels. Hence, we maintain our Buy recommenda-
tion on the stock with a price target of Rs57.
PATELS AIRTEMP INDIA

COMPANY DETAILS
Price target: Rs135
Good performance
Market cap: Rs31.6 cr RESULT HIGHLIGHTS
Patels Airtemp’s Q1FY2009 results are ahead of our expectations on the back of a
BSE volume (No of shares) : 19,066 stronger than expected top line growth. The net sales for the quarter rose by 58.3% to
BSE code: 517417 Rs13.2 crore.
Sharekhan code: PATELAIR The operating profit margin (OPM) continued to remain strong at 18.8% improving
Free float (No of shares) : 0.33 cr by 200 basis points year on year (yoy). Consequently the operating profit grew by
SHAREHOLDING PATTERN 76.9% to Rs2.49 crore during the quarter. Stable interest and depreciation costs led to
a staggering profit growth of 105.4% to Rs1.34 crore.
Foreign
2% Currently the company has an order book of Rs54 crore as compared to Rs50 crore at
the end of the previous quarter. The management also hopes to maintain its margins
Promoters going forward.
34%
Public & We expect a strong second quarter for the company as the export orders from Iran and
Others Germany are likely to be booked. The order inflows also remain steady for the com-
64% pany so far and the management is pretty confident that the same is likely to be sus-
PRICE PERFORMANCE tained going forward too.
(%) 1m 3m 6m 12m At the current market price the stock is available at 4.1x FY2009E earnings and 3.5x
Absolute 9.0 -0.8 -29.1 52.8 FY2010E earnings. We maintain our Buy recommendation on the stock with a price
Relative to Sensex 1.8 18.6 -13.6 63.5 target of Rs135 valuing the company at 9x FY2009E earnings.


STOCK UPDATE
PUNJ LLOYD
COMPANY DETAILS
Price target: Rs532
Market cap: Rs8,940 cr During FY2008, Punj Lloyd Ltd (PLL) reported a robust 51.2% y-o-y growth in its
52 week high/low: Rs589/183 revenues to Rs7,752.9 crore, led by a strong 100.5% increase in the standalone busi-
NSE volume (No of shares) : 28.1 lakh ness to Rs4,488.6 crore. The reported net profit grew by 82.2% to Rs358.4 crore.
BSE code: 532693 In FY2008, the company incurred a total capital expenditure (capex) of Rs440 crore,
NSE code: PUNJLLOYD however there was a significant increase in the capital works in progress from Rs70.9
Sharekhan code: PUNJLLOYD crore in FY2007 to Rs206.1 crore in FY2008.
Free float (No of shares) : 16.8 cr The company’s secured loans went up to Rs1,350.7 crore in FY2008 as against
SHAREHOLDING PATTERN Rs1,123.2 crore in the previous year. The secured borrowing rose during the year
Others mainly due to increasing working capital requirement of the company.
17%
The working capital (net of cash) for PLL consolidated stood at 75.6 days of the net
Promoters sales in FY2008, sharply up from 36.6 days in FY2007. In the standalone entity, the
Institutions 45% net working capital was high at 151 days of the net sales, but was down from 191 days
16%
of the net sales in FY2007. The working capital requirement increased due to strong
execution of the projects undertaken by the company.
Foreign
22% We have refined our earnings estimates to reflect the higher borrowing cost of the
company. Subsequently our FY2009E and FY2010E fully diluted earnings per share
PRICE PERFORMANCE
(EPS) stand at Rs17.3 and Rs22.9 per share respectively. At the current market price,
(%) 1m 3m 6m 12m the stock trades at 17x and 12.9x our FY2009E and FY2010E earnings respectively.
Absolute 43.3 -8.7 -7.3 10.0
We remain positive on PLL given the visibility to the revenues on the back of the strong order
Relative to Sensex 26.6 0.5 0.3 6.3 book position (2.6x FY2008 revenues) and strong execution capability displayed in the re-
cent past. We reiterate out Buy recommendation on the stock with price target of Rs532.
RANBAXY LABORATORIES
COMPANY DETAILS
Price target: Rs575
Strong operating performance
RESULT HIGHLIGHTS
Ranbaxy delivered a mixed performance for Q2CY2008. While the revenues and net
profit have been below our estimates, the operating performance has been ahead of
BSE code: 500359 our expectations.
NSE code: RANBAXY
The revenues grew by 13% to Rs1,821.2 crore, due to the poor performance across
Sharekhan code: RANBAXY
the key Western European countries, Africa and India.
Including the other operating income, the OPM expanded by 350 bps to 16.9% caus-
SHAREHOLDING PATTERN ing the operating profit to grow by 44% yoy to Rs326.1 crore. The margin improve-
Public ment was led by an improved gross margin due to a better product and market mix.
Non- 19%
Promoter The PAT stood at Rs22.9 crore, down by 91.4% yoy. The net profit was dragged
promoter
34%
corp down by a higher than expected forex translation losses of Rs193.1 crore.
4%
The company has reduced its EBITDA margin guidance for CY2008 from 17.5-18%
Institutions earlier to 17% currently due to the cancellation of the NDDR de-merger.
23%
Foreign The launch of the open offer by Daiichi Sankyo pursuant to the receipt of SEBI ap-
20%
proval and clarity on the US FDA and the US DoJ investigations would drive the stock
PRICE PERFORMANCE in the near term, whereas the launch of generic Imitrex in Q4CY2008 and further
(%) 1m 3m 6m 12m news flow on monetisation of FTF opportunities would act as triggers for the stock in
Absolute -4.8 5.0 44.8 30.0
medium to long term.
Relative to Sensex -11.1 25.5 76.4 39.0 At the current market price of Rs510 Ranbaxy is discounting its CY2008E base earn-
ings by 36.5x and its CY2009E base earnings by 21.7x. We maintain our Buy recom-
The author doesn’t hold any investment in any of mendation with a SOTP price target of Rs575.

STOCK UPDATE
RATNAMANI METALS AND TUBES

COMPANY DETAILS
Results in line with expectations
RESULT HIGHLIGHTS
52 week high/low: Rs1,495/625
The Q1FY2009 results of Ratnamani Metals and Tubes Ltd (RMTL) are in line with our
expectations. The company’s revenues grew by 31.4% to Rs249.7 crore on account of a
BSE code: 520111 strong volume growth in both the stainless steel (SS) and carbon steel (CS) pipe segments.
NSE code: RATNAMANI
The operating profit of the company grew by 24.1% to Rs56.4 crore in the quarter.
Sharekhan code: RATNMET The operating profit margin (OPM) declined by 133 basis points to 22.6% due to an
Free float (No of shares) : 0.4 cr increase in the other expenses. The company’s other expenses as a percentage of sales
SHAREHOLDING PATTERN increased by 353 basis points to 11.2% in Q1FY2009.
Others
RMTL’s interest cost declined by 29.8% to Rs3.6 crore while its depreciation charge
29%
rose by 20.9% to Rs6.4 crore in Q1FY2009.
During the quarter, the company made a provision to the tune of Rs7.86 crore for a mark-to-
market (MTM) loss on its exposure to foreign exchange (forex) contracts. We have consid-
Institutions Promoters ered this as a one-off item. Consequently, the net profit of the company grew by 35.6% to
3% 58% Rs30.6 core. The reported net profit increased by 12.6% to Rs25.5 crore in the quarter.
Foreign
10% The combined order book of the company stood at Rs700 crore at the end Q1FY2009
as against Rs650 crore at the end of Q4FY2008.
PRICE PERFORMANCE
We have revised our earnings estimates for FY2009 and FY2010 mainly to factor in
(%) 1m 3m 6m 12m the lower OPM in the future and the MTM forex loss. Our fully diluted earnings per
Absolute 16.5 -11.6 -29.5 -17.6 share (EPS) estimates for FY2009 and FY2010 now stand at Rs126.2 and Rs152.3
Relative to Sensex 2.6 3.5 -13.0 -17.1 respectively. We reiterate our Buy call on the stock with a price target of Rs1,110 per
share. At the current market price the stock trades at price-to-earnings of 6.2x and
5.2x its FY2009 and FY2010 estimates.
SANGHVI MOVERS
COMPANY DETAILS
Price target: Rs298
Another quarter of excellent performance
RESULT HIGHLIGHTS
Sanghvi Movers Ltd (SML) has reported an excellent performance for Q1FY2009.
BSE code: 530073 The revenues of the company grew by 48.5% to Rs78.7 crore in Q1FY2009. The power
NSE code: SANGHVIMOV sector was the largest contributor to the top line, accounting for 33.8% of the net revenues.
Sharekhan code: SANGMOVE The operating profit of the company grew by 45.1% to Rs58.9 crore. On a high base
Free float (No of shares) : 2.4 cr of last year the operating profit margin (OPM) declined by 340 basis points to 73.2%.
SHAREHOLDING PATTERN The increase in the operating expenses as a percentage of sales also contributed to the
Others decline in the OPM.
26%
The interest cost and the depreciation charge rose by 37.4% and 32.4% year on year
Promoters (yoy) to Rs10.1 crore and Rs14.7 crore respectively. Consequently, the net profit grew
45%
Institutions by 56.7% to Rs22.7 crore as against our estimate of Rs15.7 crore.
4%
The company added 19 new cranes during the quarter for a total capital expenditure
Foreign (capex) of Rs66 crore. SML’s total fleet size now stands at 295 cranes.
25%
We have fine-tuned our FY2009 and FY2010 earnings estimates to Rs19.8 and Rs24.7
PRICE PERFORMANCE per share respectively. This change is mainly to factor in the company’s performance
(%) 1m 3m 6m 12m in Q1FY2009, the increase in its borrowing cost and taking the key inputs from its
Absolute 25.4 -13.8 -22.0 24.6 latest annual report. At the current market price the stock discounts our FY2009E and
Relative to Sensex 17.1 2.9 -4.9 33.3 FY2010E earnings by 11.3x and 9.1x respectively.
We reiterate our Buy call on SML with price target of Rs298 on the stock.

STOCK UPDATE
SELAN EXPLORATION TECHNOLOGY

COMPANY DETAILS
Price target: Rs345
RESULT HIGHLIGHTS
Selan Exploration Technology has reported a blow-out performance for Q1FY2009.
The company’s net revenue leapfrogged by 364% year on year (yoy) to Rs35.8 crore
BSE code: 530075
during the quarter. On an annual comparison basis, the growth was driven by a close
NSE code: SELAN
to 98% jump in its average realisation. However, the positive surprise was the surge of
Sharekhan code: SELAEXP
133% in the sale volume to around 71,500 barrels in Q1FY2009.
SHAREHOLDING PATTERN Due to the sharp jump in the realisation and the benefits from the smart ramp-up in the
volumes, the operating profit margin stood at 84.9%, the highest ever in any quarter.
Promoters This resulted in a close to five-fold jump in the reported earnings to Rs17.8 crore. This
Others 40% is ahead of the net earnings for the entire fiscal 2008.
49%
In terms of guidance, the company expects to ramp up its production volumes to
Foreign 5,00,000-7,00,000 lakh barrels over next three years. This would essentially mean a
Non promoter
2%
coporates close to four-fold jump in the volumes over FY2008.
9%
We have revised our estimates significantly for FY2009 and FY2010. To arrive at the
PRICE PERFORMANCE price target of Rs345, we have discounted the cash flow over the life of the fields by
(%) 1m 3m 6m 12m 15% with production anticipated to peak out at 6,50,000 barrels by FY2013.
Absolute 68.2 17.7 81.3 165.1
At the current market price the stock trades at 8.9x FY2009 and 7.6x FY2010 esti-
mated earnings. We recommend a Buy call on the stock.
SUBROS
COMPANY DETAILS
Price target: Rs50
RESULT HIGHLIGHTS
The Q1FY2009 results of Subros are ahead of our expectations on account of a higher
sales growth during the quarter.
BSE code: 517168
NSE code: SUBROS The top line of the company grew by 11.1% year on year (yoy) to Rs175.2 crore in
Q1FY2009. The growth was led by an increase of 27% in the volume. The realisation
Sharekhan code: SUBROS
declined by 12.4% during the quarter. The realisation dropped because Subros sup-
Free float (No of shares) : 7.2 cr plied only components for newer models of passenger cars during the quarter instead
SHAREHOLDING PATTERN of full kits comprising compressors and components.
Public &
The operating profit margin (OPM) declined by 50 basis points leading to an operating
Others
24% profit growth of 7.3% to Rs20.6 crore. A higher other income and a lower depreciation
Promoters charge led the profit after tax (PAT) to grow by 20.2% to Rs7.87 crore in Q1FY2009.
40%
Institutions The company has received a letter of intent from Tata Motors for supplying air-condi-
9% tioning systems to Nano in India. For exports, Subros plans to set up assembly opera-
tions in Thailand to meet the needs of Nano in that country.
foreign
27% In view of the lower than expected profit margin, we are downgrading our EPS esti-
PRICE PERFORMANCE mates for FY2009 and FY2010 by 9.6% to Rs5.6 and by 12% to Rs7.8 respectively.
(%) 1m 3m 6m 12m At the current market price of Rs34 the stock is trading at compelling valuations of
Absolute 27.5 -23.0 -31.8 -22.2 4.4x FY2010E EPS and 1.8x FY2010E enterprise value (EV)/earnings before interest,
Relative to Sensex 13.3 -12.0 -18.7 -24.0 depreciation, tax and amortisation (EBIDTA). The stock’s valuations are at a huge
discount to that commanded by its peers. We maintain our Buy recommendation on
the stock with a revised price target of Rs50.

STOCK UPDATE
SUN PHARMACEUTICAL INDUSTRIES

UGLY DUCKLING BUY; CMP: RS1,482 AUGUST 27, 2008
COMPANY DETAILS
Israeli court rules in Sun’s favour
Market cap: Rs19,557 cr Israeli court, Tel-Aviv has announced a verdict in favour of Sun Pharmaceutical Indus-
52 week high/low: Rs1,530/890 tries (Sun) against the motion of Taro Pharmaceutical Industries (Taro) to conduct a
NSE volume (No of shares) : 2.4 lakh special tender offer.
BSE code: 524715
NSE code: SUNPHARMA Sun will now be in a position to complete the previously announced tender offer at
Sharekhan code: SUNPHARM $7.75 per share through its subsidiary, Alkaloida Chemical Company Exclusive Group
Free float (No of shares) : 7.5 cr (Alkaloida).
SHAREHOLDING PATTERN The employees of Taro have demanded that Sun raise the job security offered from
Public and two years to five years. Sun reiterated that it plans to use all of the existing Taro facili-
other
6%
Foreign ties and has no plans to lay off people.
21%
Institutions The US Federal Trade Commission (FTC) has approved Torrent Pharma to buy out
5%
Non-promoter
Sun's rights and assets relating to the manufacture and sale of the three versions of
corp Carbamazepine to avoid Sun’s monopoly after the proposed acquisition takes place.
Promoter 4%
64% This decision from the Israeli court and the FTC in Sun’s favour is positive for the com-
PRICE PERFORMANCE pany and has reinforced our view that Sun will be able to successfully close the deal.
(%) 1m 3m 6m 12m
At the current market price of Rs1,482, Sun is valued at 18.3x FY2009E and FY2010E
Absolute 6.2 9.0 31.4 66.9
fully diluted earnings. We reiterate our Buy recommendation on the stock with a price
target of Rs1,640 (20x FY2010E earnings).
SURYA PHARMACEUTICAL
COMPANY DETAILS
Price target: Rs205
Results beat expectations
52 week high/low: Rs151/69 Surya Pharmaceutical (Surya Pharma) reported an impressive 52.6% increase in the
NSE volume (No of shares) : 16,866 revenues to Rs158.1 crore in Q1FY2009. The revenue performance was in line with
BSE code: 532516 our estimate of Rs153 crore and was driven by an increase in the active pharmaceuti-
NSE code: SURYAPHARM cal ingredient (API) business (due to de-bottlenecking and capacity expansion) and
growing contributions from the recently commenced menthol business.
Sharekhan code: SURYAPHARM
Free float (No of shares) : 0.94 cr The operating profit margin (OPM) shrank by 70 basis points to 17.0% during
Q1FY2009 primarily due to an escalation in the material cost and a doubling of the
SHAREHOLDING PATTERN staff cost. This caused the operating profit to grow by 46.9% to Rs26.9 crore. The
Institutions
1% Foreign margins reported by the company were ahead of our expectations.
3%
Public Driven by a strong operating performance, the net profit grew by an impressive 38.3%
Promoters
24%
35%
to Rs14.1 crore in Q1FY2009. This was despite a substantial jump in the interest and
depreciation costs due to the commissioning of new capacities during the quarter. The
profits reported by the company exceeded our expectations of Rs11 crore.
Non-
Promoter The company is setting up a new manufacturing plant in Jammu. With the commis-
Corporate sioning of this facility, Surya Pharma will enter the high-margin injectable business. As
37%
per the management the Jammu facility has the potential to generate almost Rs350-
PRICE PERFORMANCE 400 crore in revenues when utilised at 100% level. We expect the Jammu facility to
(%) 1m 3m 6m 12m contribute an incremental Rs75 crore to the company’s revenues in FY2009.
Absolute 21.2 -7.6 -4.3 31.1 At the current market price of Rs114, Surya Pharma is trading at 3.8x its FY2009E
Relative to Sensex 11.4 10.7 21.3 34.4 diluted earnings of Rs29.7 and 2.8x its FY2009E diluted earnings of Rs39.9. At the
current prices, the stock offers a remarkable combination of strong growth at cheap valu-
The author doesn’t hold any investment in any of ations. We maintain our Buy recommendation on the stock with a price target of Rs205.

STOCK UPDATE
TATA CHEMICALS
COMPANY DETAILS
Price target: Rs515
Performance boosted by new fertiliser policy
RESULT HIGHLIGHTS
Q1FY2009 results of Tata Chemicals Ltd (TCL) were above our expectations. The
consolidated revenues grew by 94.1% yoy to Rs2,192.4 crore on account of spectacu-
BSE code: 500770 lar performance of the fertiliser segment. However the results are not strictly compa-
NSE code: TATACHEM rable with the same quarter last year due to GCIP acquisition in Q4FY2008.
Sharekhan code: TATACHEM The consolidated operating profit increased by 96% yoy to Rs505.3 crore with oper-
Free float (No of shares) : 16.7 cr ating margins expanding by 20bps to 23% in Q1FY2009. The consolidated PAT in-
SHAREHOLDING PATTERN creased by 116.8% to Rs235.9 crore with the margins expanding by 250bps to 12.1%.
Others On a segmental basis:
Promoters
24% Fertilisers: The revenues from the fertiliser segment increased by 166.3% yoy to Rs932
29%
crore while the segmental profit increased more than four fold to Rs187.2 crore. The
PBIT margin jumped up to 20.1% yoy, as import parity pricing for phosphate fertilisers
resulted in higher realisations.
Foreign Chemicals: The revenues from the chemical segment increased by 62.5% yoy to
Institutions 12%
Rs1,271.0 crore on the back of GCIP acquisition. The segmental profits improved by
35%
54.4% yoy to Rs213.9 crore, while the PBIT margin declined to 16.8%.
PRICE PERFORMANCE
In view of the firm soda ash prices in mid term, we continue to remain positive on the
(%) 1m 3m 6m 12m stock. We have fine-tuned our estimates after incorporating the impact of recently
Absolute 15.3 -7.8 7.8 25.8 acquired company GCIP. We have revised our earnings estimates from Rs23.9 to Rs26.7
Relative to Sensex 7.7 10.2 31.3 34.6 for FY2009 and from Rs32.2 to Rs35.8 for FY2010. At the CMP of Rs330, the stock
is trading at 9.2x its FY2010E diluted EPS and EV/EBIDTA of 5.5x. We maintain our
The author doesn’t hold any investment in any of Buy recommendation on the stock with price target of Rs515.
TATA MOTORS
COMPANY DETAILS
Price target: Rs545
RESULT HIGHLIGHTS
Tata Motors’ results for Q1FY2009 are below our expectations.
BSE code: 500570 The net sales for the quarter grew by 14.4% to Rs6,928.4 crore on the back of a 3.9%
NSE code: TATAMOTORS volume growth and a 10.1% realisation growth.
Sharekhan code: TATAMOTORS An increase in the expenses, such as raw material, employee cost and other expenses,
Free float (No of shares) : 20.1 cr led the operating profit margin to decline by 130 basis points to 7.7%. Hence, the
operating profit dropped by 2.9% to Rs530.5 crore.
Daimler A higher other income and a lower tax outgo helped the adjusted PAT to grow by
Public & Chrysler 59.3% to Rs412.37 crore. After accounting for a forex loss of Rs199.9 crore and a
7%
Others Promoters profit of Rs113.7 crore on the sale of the stake in Tata Auto Components, the reported
16% 34% net profit declined by 30.1% to Rs326.2 crore.
FIIs It has not reported the consolidated results for Q1FY2009 since the financial statements
15%
Institutions/
of Jaguar and Land Rover are under compilation and have not been finalized yet.
ADR/GDR
MFs/Banks
14%
14%
Our outlook on the CV industry remains cautious considering the lower availability of
finance, the rising interest rates.
PRICE PERFORMANCE
In view of the pressure on the company’s profit margin, we downgrade our consoli-
(%) 1m 3m 6m 12m
dated estimate for FY2009 by 7.3% and that for FY2010 by 12%. At the current
Absolute -3.2 -38.8 -46.0 -39.1 levels, the stock trades at 6.5x its FY2010E consolidated earnings and is available at
Relative to Sensex -14.8 -28.4 -33.4 -38.7 an EV/EBIDTA of 3.1x. We maintain our Hold recommendation on the stock with a
revised price target of Rs545.

STOCK UPDATE
TATA TEA
COMPANY DETAILS
Price target: Rs970
Scaling global presence
Market cap: Rs45,547 cr Auction tea price jumped by 46.7% from Rs59.4 per kg in March 2008 to Rs87.2 per
52 week high/low: Rs1,014/586 kg in June 2008 on account of a demand-supply mismatch in the domestic tea market.
NSE volume (No of shares) : 1.0 lakh This rise in the auction tea price impacted the margins of Tata Tea in Q1FY2009. The
BSE code: 500800 company implemented a price hike of Rs2-8 per kg across its branded tea portfolio to
NSE code: TATATEA combat the input cost pressure. We believe on account of continuous increase in the
Sharekhan code: TATATEA auction tea prices, the company would have to undertake further price hikes to minimise
Free float (No of shares) : 40.0 cr the pressure on its margins going forward.
SHAREHOLDING PATTERN The non-alcoholic offerings by the company, such as green tea, herbal tea and fruit tea,
are gaining momentum in international markets, while black tea is growing moder-
Promoters
Others ately in the key markets. Tetley Canada's Earl Grey Green Tea and Mango Passionfruit
35%
38% Açai Green Tea are getting good response in the North American markets. This has
helped Tata Tea to achieve a leadership position in the Canadian market with a market
share of 41% in volume terms in FY2008.
Institutions To expand its green tea portfolio and to focus on expanding into new geographies, the
27% company is eyeing Chinese and Russian markets. Towards this end Tata Tea has set
PRICE PERFORMANCE up a (70:30) joint venture with Zhejiang Tea of China.
(%) 1m 3m 6m 12m The huge pile of cash (Rs1,320 crore) would help the company to focus on its newer
Absolute 7.9 -15.1 3.0 10.7 initiatives and achieve inorganic growth. At the current market price of Rs737, the
Relative to Sensex -6.5 -9.0 9.5 4.9 stock trades at 12.0x FY2009 and 10.0x FY2010 earnings estimates. We maintain our
Buy recommendation on the stock with price target of Rs970.
TORRENT PHARMACEUTICALS
COMPANY DETAILS
Price target: Rs260
Strong operating performance
RESULT HIGHLIGHTS
Torrent has reported a revenue growth of 16.8% to Rs390.6 crore for Q1FY2009.
BSE code: 500420
The domestic branded formulation business grew by only 0.8%, due to the higher
than expected sales force attrition during Q2FY2008.
NSE code: TORNTPHARM
Heumann Pharma & Co Generika KG, Germany reported decline in sales by 12% yoy
Sharekhan code: TORRPH
due to the pricing pressures and the market-led restructuring of operations. However,
Free float (No of shares) : 2.2 cr with the shift of manufacturing and the rationalisation of the field force, the profitabil-
SHAREHOLDING PATTERN ity of the business improved during the quarter.
Non-promoter The CM business grew by 24.3% to Rs37.3 crore, on the back of expanded capacities.
corporate
2% Public The international business (excluding Heumann) grew by 80.3% to Rs125.7 crore,
8% driven by a robust sales growth in Brazil, Europe and Russia.
Institutional
5% Torrent’s OPM expanded by 310 bps to 17.4%, causing the operating profit to grow
Foreign by 52.8% to Rs68.0 crore.
12%
The robust operating performance caused Torrent’s PAT to grow by 84.1% to Rs49.3
Promoters crore. The EPS stood at Rs5.8 per share.
73%
To reflect the lower revenue base of FY2008, the lower growth in the domestic formu-
PRICE PERFORMANCE lation business, the higher growth on the export front and the higher than expected
(%) 1m 3m 6m 12m margin expansion, we have downgraded our FY2009 revenue estimate by 9.4% to
Absolute 16.4 10.1 14.1 -15.3 Rs1,550.9 crore and upgraded the profit estimate by 5.6% to Rs166.3 crore.
Relative to Sensex 3.4 25.8 36.0 -17.3 At the current market price of Rs185, Torrent is discounting its FY2009E earnings by
9.4x and FY2009E earnings by 8.5x. We maintain our Buy recommendation with a
price target of Rs260.

STOCK UPDATE
UNITY INFRAPROJECTS
COMPANY DETAILS
Price target: Rs871
Market cap: Rs551 cr On a standalone basis, Unity Infraprojects (Unity) reported a strong financial perfor-
52 week high/low: Rs1,120/348 mance in FY2008. The company’s top line and bottom line grew by 56.5% and 41.7%
NSE volume (No of shares) : 25,989 respectively in FY2008. The lower growth in the bottom line was due to a decline in
BSE code: 532746 the operating profit margin (OPM).
NSE code: UNITY The company’s order book grew by 20.7% year on year (yoy) to Rs2,410.5 crore. At
Sharekhan code: UNITYINFRA the end of Q1FY2009, the order book has further increased to over Rs3,000 crore. On
Free float (No of shares) : 40.8 lakh the back of this strong order book, we expect the company’s top line and bottom line to
SHAREHOLDING PATTERN grow at a CAGR of 29.3% and 26.5% respectively during the period FY2008-2010.
Others Unity’s working capital requirement increased significantly on account of increase in
10% loans and advances. The increase in loans and advances was due to rise in the ad-
FIIs
14% vances to contractors and suppliers. Furthermore, the company loaned Rs100 crore to
MF / its subsidiaries.
Institutions
The Company’s debt to equity ratio remained comfortable at 0.8 in FY2008 inspite of
7%
Promoters the long-term debt of Rs189.2 crore. Moving ahead, the company can fund its work-
69% ing capital requirement from its internal accruals and cash balance.
PRICE PERFORMANCE
Unity’s RoCE declined to 21.7% in FY2008 from 26.3% in FY2007 on account of a
(%) 1m 3m 6m 12m decline in EBIT margin and an increase in the working capital requirement.
Absolute 22.2 -5.9 -36.2 -19.4
To factor in the higher interest cost due to increased debt, higher depreciation and
Relative to Sensex 21.9 6.2 -21.3 -17.4
decline in the margins, we have revised our FY2009 earnings estimate down by 2.3%
and FY2010 earnings estimate by 0.2%.
WIPRO
COMPANY DETAILS
Price target: Rs463
KEY TAKEAWAYS FROM ANNUAL REPORT
Wipro’s hedge position had increased significantly at the end of FY2008. In Q1FY2009,
the rupee depreciated by approximately 7%. This led to unrecognised foreign exchange
BSE code: 507685 (forex) losses of Rs900 crore on the balance sheet under the head “Other comprehen-
NSE code: WIPRO sive income”. The hedging policy of the company could drag the company’s profitabil-
Sharekhan code: WIPRO ity significantly in the coming years if the rupee stabilises at the current level.
Free float (No of shares) : 30.1 cr The long-term debt of the company had also increased from Rs53.6 crore in FY2007
SHAREHOLDING PATTERN to Rs1,452.2 crore in FY2008 on account of the external commercial borrowings (ECBs)
Institutional made to fund the acquisitions.
8%
Public &
Non promoter
Wipro’s return on capital employed (RoCE) had declined to 16.1% in FY2008 from
others 22.5% in FY2007. The decline could be attributed to the recent acquisitions.
corporate
11%
2% Infocrossing was negative at the operating level at the time of the acquisition. Going
forward, the management has indicated that Infocrossing’s margins are expected to
improve significantly.
Promoter
79%
We have revised our exchange rate assumption to Rs42 and Rs41 for FY2009 and
FY2008 respectively. However, we continue to be worried about the company’s hedg-
PRICE PERFORMANCE
ing position. We have factored in a forex loss of Rs300 crore each for FY2009 and
(%) 1m 3m 6m 12m FY2010. Consequently, we have revised our earnings estimate downward by 2.4% for
Absolute 12.9 -14.3 -1.6 -4.5 FY2009 and by 0.5% for FY2010. We had also seen a significant decline in the RoCE
Relative to Sensex 9.6 2.9 21.3 -7.4 and return on net worth (RoNW) of the company during FY2008. Hence, we believe
Wipro should trade at a 20% discount to Infosys Technologies. We maintain our Hold
The author doesn’t hold any investment in any of recommendation on the stock with a revised price target of Rs463.

STOCK UPDATE
WOCKHARDT
COMPANY DETAILS
Price target: Rs318
RESULT HIGHLIGHTS
Wockhardt’s Q2CY2008 has been robust on the core business front—its revenues
NSE volume (No of shares) : 54,723 grew by 48.3% to Rs935.0 crore in Q2CY2008.
BSE code: 532300
Wockhardt’s net profit grew by a mere 3.8% to Rs106.3 crore, due to a nine-fold jump
NSE code: WOCKPHARMA in the interest cost.
Sharekhan code: WOCKLTD
Wockhardt had issued $108.5 million worth of FCCBs, which are due for redemption
Free float (No of shares) : 2.9 cr in 2009. The conversion price of these bonds is at Rs486 per share, which is 2.4x the
SHAREHOLDING PATTERN current market price. If the FCCBs fail to get converted, the company would have to
Non-promoter redeem the bonds at total cost of $32 million.
corp Public
11% We have revised our exchange rate assumptions and hence upgraded our revenue esti-
2%
Institutions mate for CY2008 by 1.6% to Rs3,516.7 crore and that for CY2009 by 1.2% to
10% Rs3,924.1 crore. To factor in the higher than expected interest burden and the forex
Foreign translation losses, we are downgrading our CY2008 pre-exceptional profit estimate by
3% 12.9% to Rs347.0 crore and our CY2009 profit estimate by 10.2% to Rs453.3 crore.
Promoters
The various financial challenges of high interest costs, high gearing ratio and the risk of
74%
non-conversion of the outstanding FCCBs caused us to de-rate the stock. Consequently,
PRICE PERFORMANCE we have lowered our P/E multiple target from 12x earlier to 8x, thereby arriving at a fair
(%) 1m 3m 6m 12m value of Rs331. We have also deducted the FCCB premium of Rs.13 per share from the
Absolute 11.2 -34.8 -42.8 -42.4 fair value of Rs331, thereby arriving at a price target of Rs318 per share.
Relative to Sensex 8.8 -24.1 -31.7 -43.8 At the current market price of Rs200, the stock values at 6.3x its CY2008E earnings
and at 4.8x its CY2009E earnings. We maintain our Buy recommendation with a re-
The author doesn’t hold any investment in any of vised price target of Rs318.
the companies mentioned in the article.
WS INDUSTRIES INDIA
VULTURE’S PICK BUY; CMP: RS49 AUGUST 06, 2008
COMPANY DETAILS
Price target: Rs86
RESULT HIGHLIGHTS
In Q1FY2009 WS Industries’ (WSI), net revenues grew by 8.9% year on year (yoy) to
Rs51.9 crore as against our estimate of Rs52.4 crore.
BSE code: 504220
NSE code: WSI The operating profit of the company declined by 17.1% to Rs5.9 crore implying an
Sharekhan code: WSIND operating profit margin (OPM) of 11.4%. The OPM contracted by 355 basis points
Free float (No of shares) : 1.2 cr on the back of the increase in commodity prices, mainly metals and crude oil.
SHAREHOLDING PATTERN The tax rate came in at 35.5%, sharply higher than 12.2% in the corresponding quar-
ter of the last year. The tax was higher than estimated mainly due to higher deferred
Others Promoters tax. Consequently the net profit of the company declined by 50.4% to Rs2 crore.
42% 42%
The current order book of the company at the end of Q1FY2009 stood at Rs180 crore.
The expansion on upcoming capacity of the company in the Andhra Pradesh special eco-
nomic zone (SEZ) is running on schedule and expected to come on stream by mid FY2009.
Institutions Foreign In our view this capacity would be the growth driver for the company going forward.
10% 6%
We have revised our FY2009E and FY2010E earnings per share (EPS) by 5.5% and
PRICE PERFORMANCE 2.4% to Rs7.1 and Rs9.7 per share respectively mainly to factor in the lower margin
(%) 1m 3m 6m 12m due to high power & fuel cost and higher cost of raw materials.
Absolute -4.5 -42.6 -55.7 -30.8
At the current market price the stock trades at 6.9x and 5x our fully diluted earnings
Relative to Sensex -14.5 -33.5 -45.3 -30.8 per share (FDEPS) estimates for FY2009 and FY2010 respectively. We maintain Buy
with a price target of Rs86.

SHAREKHAN SPECIAL
SHAREKHAN SPECIAL AUGUST 20, 2008

Monthly economy review
Economy & Banking Equity market
India’s trade deficit stood at US$9.8 billion in June 2008, which The volumes in the equity market have improved in recent
is lower compared with the deficit of US$10.8 billion in the weeks, buoyed by the uptick in the future and option (F&O)
previous month but up 29.6% year on year (yoy). The year- volumes. The MTD fund flows indicate that the foreign institu-
till-date (YTD) trade deficit has now widened to US$30.4 bil- tional investors (FIIs) have turned net buyers while the local
lion from US$21.5 billion in the comparable period of the last mutual funds have turned net sellers. This is contrary to the
fiscal. trend seen in July 2008.
In the same month, the country’s industrial production grew The total assets under management (AUMs) for the mutual fund
by 5.4%. Though the growth is better compared with the last industry continued to decline in July 2008. On a year-on-year
month’s 4.1%, the same is well below the 8.9% growth seen in (y-o-y) basis, the growth rate in the AUMs declined for three
industrial output a year ago. On YTD basis, the growth in the months in a row and stood at 13.9% in July 2008 as compared
Index of Industrial Production (IIP) stands at 5.2%, which is with 32.2% in June 2008.
nearly half the growth achieved in the comparable period of
the last year. Clearly, the trend of moderating growth contin- Insurance
ues with disappointing performance by capital goods (a 5.6% In June 2008, the life insurance industry had put up a good
growth vs a 23.1% last year). The near-term outlook for indus- show due to the strong performance by the private sector play-
trial production remains weak primarily because (1) the growth ers. Despite the slowdown in the equity market and an uncer-
in the leading indicators is sharply lower than expected and (2) tain economic environment, the growth momentum in the new
the fuller impact of the central bank’s monetary tightening would business premium (NBP) was sustained. While the private play-
be felt over the coming months. ers witnessed a robust 80.4% growth yoy in NBP, Life Insur-
ance Corporation (LIC) saw a decline for the month (down
Inflation accelerated to 12.44% for the week ended August 2,
25.2% yoy).
2008 compared with 4.39% a year ago and 12.01% in the pre-
vious week. Importantly, on a week-on-week (w-o-w) basis, the On the non-life insurance front, the industry continued to grow
absolute increase in the Wholesale Price Index (WPI) has gained at a slower pace (up 13.1% yoy) mainly due to a lower growth
momentum. Considering the current price trends in food prod- in the private space (up 15.8% yoy). However, the double-digit
ucts and articles, and the erratic nature of the south-west rain- growth achieved by the public sector players after almost a year
fall in this year, it seems the Reserve Bank of India (RBI)’s tar- of a single-digit growth was encouraging.
get of reducing inflation to 7% by the end of FY2009 is un-
likely to be met. Outlook
The credit growth (as on August 1) has moderated to 26.2% The BSE Bankex has outperformed the BSE Sensitive Index (Sensex)
yoy from the high of 26.6% in June 2008, reflecting the impact by a wide margin since the recovery of the broader market after
of the recent monetary tightening. The deployment rate (ie the touching a low of 12,576 on July 16, 2008. For the period July 1–
credit-deposit [CD] ratio) has cooled off to 71.2% from the August 19, the BSE Bankex has appreciated by 22.3% compared
high of 72.1% in June 2008, as deposit growth has accelerated with a 12.2% increase in the Sensex. The recovery in the banking
to 22.1% yoy. stocks has primarily been driven by the widespread expectations
of reforms in the banking sector as well as the easing of the infla-
In line, the money supply (M3) growth too has tapered off to tionary pressures (global commodity prices have declined in the
19.6% (as on August 1, 2008) from the high of 22.5% in May past few weeks). However, against the backdrop of tight liquidity
2008. Consequently, liquidity remains tight with the call money conditions, moderating credit growth and a likely strain on the
rates hovering around the repo rate level (9%). quality of banking assets, the fundamental outlook for the banking
sector remains bleak over next few quarters. Hence, the upside to
Though some of the key monitorables (credit growth and de-
banking stocks may be largely capped in the short term. However,
ployment, M3) have cooled off from their peaks, the same re-
from the perspective of a medium to longer term, the banking stocks
main well above the RBI’s target levels. This implies the possi-
look attractive at the current valuations.
bility of further monetary tightening.

SHAREKHAN SPECIAL
ECONOMY & BANKING
Trade deficit
0 70 The trade deficit stood at US$9.8 billion in June 2008, up 29.6%

60
yoy compared with a deficit of US$7.6 billion in June 2007.
-2
The YTD trade deficit has widened to US$30.4 billion from
50
-4 US$21.5 billion in the comparable period of FY2007.
$ billions
40
-6 Growth in imports (25.9% yoy for June 2008) continues to
30
-8
outpace growth in exports (23.5% yoy in June 2008), driven
20
by the ballooning of the oil import bill. Compared with May
-10 10 2008, the growth in imports has declined by 120 basis points
-12 0 (bps) while that in exports has improved significantly yoy. The
Feb-07
Mar-07
Jul-07
Feb-08
Mar-08
softening of the prices of commodities, especially crude oil, in

Jan-07
May-07
Jun-07
Jan-08
May-08
Jun-08
Sep-07
Nov-07
Dec-07
Oct-07
Aug-07
Apr-07
Apr-08
global markets should help reduce the trade deficit in the months
Trade Balance LHS Exp grow th (%) Imp grow th (%) to come.
Industrial production
In June 2008, the IIP grew by 5.4%. Though the IIP growth
18
is better compared with that of 4.1% seen last month, the
16
same is well below the 8.9% growth recorded a year ago.
14
Clearly, the growth continues to moderate. The 5.6% growth
12
in the capital goods production is well below the year-ago
10 level of 23.1%. Production of consumer goods remains
(%)
8 healthy at 10% yoy, buoyed by an improvement in the out-

6 put of both durables (a growth of 3.5% vs a decline of 3.6%
4 a year ago) and non-durables (an increase of 12.2% vs a
2 growth of 6.3% a year ago).
0

Jul-04
Jul-05
Jul-06
Jul-07
The near-term outlook for industrial production remains weak

Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
primarily because the growth in the leading indicators is sharply

IIP 3MMA IIP yoy grow th lower than expected and the fuller impact of the RBI’s mon-
etary tightening will be felt over the coming months.
LEADING INDICATORS:
Capital goods imports registered a 29.8% growth in July 2008 compared with 21% growth in the previous month. However, the
growth remains below the 48.5% growth seen a year ago.
Sales of commercial vehicles grew by a muted 2.9% yoy in July 2008, the growth is well below the 10.3% increase recorded in the
previous month but largely in line with the 2.5% growth seen a year ago.
Manufacturing exports grew by a surprising 22.6% yoy in July 2008 compared with a 19.3% growth a year ago.
Growth in non-food credit remains strong at 26.1% yoy for July 2008 compared with a 23.2% growth seen a year ago.
The author doesn’t hold any investment in any of the companies mentioned in the article.

MUTUAL FUNDS
MUTUAL GAINS AUGUST 11, 2008

Sharekhan’s top equity fund picks
The market exhibited extreme volatility during July 2008, swing- market was attracting a high premium during its recent multi-year
ing nearly 7,750 points, after finally closing 1,400 points higher. bull run because of the strong earnings growth prospects of India
The extreme volatility was caused by a myriad of events—the dis- Inc, it is worried by the significant slowdown in the corporate earn-
turbing weekly inflation data, first quarter results of Indian com- ings growth.
panies; a high-decibel political drama over the 123 nuke deal; some
There are some positive developments too that give the market hope.
unexpected rate hike by the Reserve Bank of India (RBI); more
For one, the political uncertainty over the nuclear deal has ended
turmoil in global financial markets and shocking serial blasts in
for now. After much theatrics that lasted for days, the Congress
Ahmedabad and Bangalore.
party won the “No Trust” vote on July 22, 2008, taking the mar-
After touching a record high of $147.27 a barrel on July 11, crude ket up by over 800 points the following day. Now that the Left
oil prices have fallen to a three-month low of $117.42 but still con- parties are out of the government, the government shall press for
tinue to be high enough to keep the central government’s finances the operationalisation of the nuclear deal and the financial sector
under strain. Moreover, even though crude oil has corrected sig- reforms aggressively in the absence of any interference from the
nificantly in the past one month, opinion is still divided on whether Left parties.
crude oil has entered a bear phase, especially in the backdrop of
In a nutshell, many of the market’s concerns have been allayed in
the recent missile test-firing by Iran despite the threat of more sanc-
the past few weeks. At home, the political uncertainty has ended
tions from the United Nations.
and monsoon has revived whereas globally, commodities includ-
Another global concern that is still alive pertains to the global fi- ing crude oil have corrected significantly and sentiments in global
nancial crisis triggered by the collapse of the US subprime market stock markets have improved. However, our market is not out of
some time back. The writedowns and credit market losses of glo- the woods yet. The concerns over rising inflation and slowing
bal banks due to their exposure to US subprime market continue growth in the domestic economy persist. The market will take time
and have risen to $480 billion. Last month, even the US govern- to recover from the pain inflicted by the RBI’s relentless rate hikes
ment-sponsored mortgage giants Fannie Mae and Freddie Mac that may have caused structural damage to the country’s economy,
came close to bankruptcy. The news of the near insolvency of these thereby affecting its long-term growth prospects. Globally also, high
two government-backed mortgage enterprises created quite a tur- crude oil prices have slowed down economies worldwide, the trem-
moil in global financial markets. The two beleaguered lenders were, ors of the credit crisis are still being felt far and wide, and the USA
however, bailed out by the US Federal Reserve (Fed). is not out of harm’s way yet. Moreover, though it has softened but
crude oil is still expensive at $117 a barrel levels and could even
In the USA, the place of the origin of the credit crisis, the economy
become dearer if tensions between Iran and the USA erupt again
continues to stagnate. The nation’s gross domestic product (GDP)
over the former’s nuclear programme.
grew at an average rate of 1.4% in the first six months of 2008. On
the other hand, inflation continues to rise. The employment rate The market is swinging away from the extreme end of despair and is
went up to 5.7% in July, the highest in more than four years. To evenly poised now. This could essentially result in a consolidation phase.
help revive the economy, the Fed kept the benchmark rate un-
We have identified the best equity-oriented schemes available in
changed at 2% at its August 5, 2008 meeting.
the market today based on the following three parameters: the past
At home, inflation in the domestic economy has been another of performance as indicated by the one and two year returns, the
the market’s persistent concern. Though inflation has remained Sharpe ratio and Fama (net selectivity).
stable in the past few weeks, it has crossed the 12% mark. Inflation
The past performance is measured by the one- and -two year re-
is expected to remain in double digits till the base effect wears off
turns generated by the scheme. Sharpe indicates risk-adjusted re-
by the year end. Since inflation is likely to remain in double digits
turns, giving the returns earned in excess of the risk-free rate for
in the coming months, we expect some more monetary tightening
each unit of the risk taken. The Sharpe ratio is also indicative of the
from the central bank.
consistency of the returns as it takes into account the volatility in
As a result of the RBI’s monetary tightening, growth has visibly the returns as measured by the standard deviation.
slowed down and business confidence has taken a dip. The Index
FAMA measures the returns generated through selectivity, ie the
of Industrial Production rose by just 5% during April-May 2008
returns generated because of the fund manager's ability to pick the
compared with 10.9% in April-May 2007.
right stocks. A higher value of net selectivity is always preferred as
India Inc’s earnings growth too has slowed down in the past couple it reflects the stock picking ability of the fund manager.
of quarters because of contracting margins due to the rising cost of
We have selected the top 10 schemes upon ranking on each of the
capital and raw materials. In the first quarter of FY2009, the Sensex’
above four parameters and then calculated the mean value of each
adjusted earnings excluding oil grew by 12.5% year on year vs
of the four parameters for the top 10 schemes. Thereafter, we have
expectations of an 11.6% growth. Since interest rates are likely to
calculated the percentage underperformance or over performance
go higher, growth will remain under pressure. The coming quar-
of each scheme (relative performance) in each of the four param-
ters are expected to fully reflect the impact of the rising capital cost
eters vis a vis their respective mean values.
and the other macro-economic challenges. Since the Indian stock

MUTUAL FUNDS
For our final selection of schemes, we have generated a total score THEMATIC/EMERGING TREND FUNDS
for each scheme giving 30% weightage each to the relative perfor- Scheme Name NAV Returns as on Jul 31, 08 (%)
mance as indicated by the one and two year returns, 30% weightage
3 Months 1 Year 2 Years
to the relative performance as indicated by the Sharpe ratio and
the remaining 10% to the relative performance as indicated by the DSP Merrill Lynch India Tiger 36.17 -18.53 -10.31 23.16
FAMA of the scheme. ICICI Prudential Infra 24.53 -15.79 7.47 35.24
All the returns stated on next page, for less than one year are abso- SBI Magnum COMMA 19.30 -14.90 1.73 24.47
lute and for more than one year, the returns are annualised. SBI Magnum Sector Umbrella 41.06 -16.85 -7.27 19.46
Contra
AGGRESSIVE FUNDS Tata Equity P/E 31.13 -15.13 -3.22 26.23
MID-CAP CATEGORY Tata Infrastructure 28.20 -17.13 -3.59 26.71
Scheme Name NAV Returns as on Jul 31, 08 (%) Templeton India Equity Income 14.37 -9.97 0.41 22.88
3 Months 1 Year 2 Years
Templeton India Growth 79.17 -14.18 2.28 22.91
IDFC Premier Equity 18.55 -14.14 5.26 38.43
UTI Dividend Yield 18.71 -11.91 0.91 21.11
Reliance Growth 317.47 -14.16 -2.05 28.01
Indices
Birla Sun Life Mid Cap 68.64 -19.16 -14.48 18.18
Indices BSE Sensex 14355.75 -16.96 -7.67 15.57
BSE Sensex 14355.75 -16.96 -7.67 15.57 BALANCED FUNDS
OPPORTUNITIES CATEGORY Scheme Name NAV Returns as on Jul 31, 08 (%)
Scheme Name NAV Returns as on Jul 31, 08 (%) 3 Months 1 Year 2 Years
3 Months 1 Year 2 Years DSP Merrill Lynch Balanced 44.84 -10.74 1.86 19.22
DWS Investment Opp. 30.16 -17.05 6.07 30.78 FT India Balanced 34.98 -13.30 -7.21 14.62
ICICI Pru Dynamic Plan 68.86 -12.91 -6.30 20.03 SBI Magnum Balanced 37.08 -13.45 -5.75 13.69
IDFC Imperial Equity 13.28 -16.24 -2.28 17.54 Tata Balanced 54.26 -12.96 -5.68 16.67
ING L.I.O.N 14.45 -5.37 4.42 22.50
Indices
Kotak Opportunities 33.98 -18.20 0.60 22.99
Crisil Balanced Fund Index 2681.10 -11.04 -0.59 13.06
Tata Equity Opportunities 63.94 -16.66 -6.98 19.65
TAX PLANNING FUNDS
Indices
Scheme Name NAV Returns as on Jul 31, 08 (%)
BSE Sensex 14355.75 -16.96 -7.67 15.57
EQUITY DIVERSIFIED/CONSERVATIVE FUNDS 3 Months 1 Year 2 Years
Scheme Name NAV Returns as on Jul 31, 08 (%) Fidelity Tax Advantage 13.35 -15.05 -10.45 18.20
3 Months 1 Year 2 Years Principal Personal Taxsaver 77.36 -17.97 -12.84 25.25
Birla Sun Life Frontline Equity 55.78 -16.58 -7.34 20.65 SBI Magnum Tax Gain Scheme 93 45.06 -17.59 -10.18 16.96
DSP Merrill Lynch Top 66.39 -14.36 -1.40 22.85 Sundaram BNP Paribas Taxsaver 31.10 -13.99 1.60 22.85
100 Equity Indices
DWS Alpha Equity 61.04 -15.47 2.53 21.42
BSE Sensex 14355.75 -16.96 -7.67 15.57
HDFC Growth 56.82 -14.17 -3.22 23.56
HDFC Top 200 123.90 -13.37 -2.90 19.01 Every individual has a different investment requirement, which
HSBC Equity 82.91 -13.55 2.57 22.93 depends on his financial goals and risk-taking capacities. We at
Kotak 30 78.21 -15.23 -1.76 21.03 Sharekhan first understand the individual’s investment objectives
Sundaram BNP Paribas Growth 75.34 -14.90 -1.22 18.44 and risk-taking capacity, and then recommend a suitable portfolio.
Sundaram BNP Paribas 72.26 -13.14 5.49 24.40 So, we suggest that you get in touch with our Mutual Fund Advi-
Select Focus sor before investing in the best funds.
Sundaram BNP Paribas SMILE 21.25 -16.93 1.30 19.97
UTI Mastershare 38.00 -15.06 -5.83 18.13
Indices The author doesn’t hold any investment in any of the companies mentioned in the
BSE Sensex 14355.75 -16.96 -7.67 15.57 article.

SECTOR UPDATE
FERTILISER AUGUST 08, 2008

Reviewing the new investment policy in urea
CCEA APPROVES NEW INVESTMENT POLICY IN UREA reduce its subsidy bill. The new investment policy is positive for
urea producing companies like Chambal Fertilisers & Chemicals,
The Cabinet Committee has approved policy for new investments Nagarjuna Fertilisers, Zuari Industries and Tata Chemicals.
in the urea sector. Following are the highlights of the policy:
The additional urea from the revamp of existing units (within 4yrs SUBSIDY DUES TO BE PAID IN CASH
of notification) will be recognised at 85% of IPP with the floor and The govt has announced that it will make cash payments to
ceiling price of US$250 and US$425 per tonne respectively. fertiliser companies as settlement against the fertiliser subsidies
The urea from the expansion of existing units (within 5yrs of due to them for FY2009. The highlights of the plan are:
notification) will be recognised at 90% of IPP within the above The govt will immediately pay to the fertiliser companies a sum of
mentioned price limits. Rs22,000 crore to be funded by loans to be raised from SBI and
The urea from the revived units of HFCL and FCIL (within the other PSBs, interest on which would be borne by the govt;
5yrs of notification) will be recognised at 95% of IPP within The govt will release additional Rs31,000 crore (actual bud-
the afore mentioned price limits. getary allocation) within the next 3mths, the details about
The price of urea from greenfield projects will be derived this payment have not been disclosed;
through a bidding route with % discount over IPP and with an Collectively, this would result in a cash outflow of Rs53,000
appropriate floor and ceiling price to be worked out by the crore from the govt’s coffers in the next 3mths.
department of fertilisers based on prevailing gas prices. The decision to pay subsidy dues in cash augurs well for the
The coal gasification-based urea projects will be treated at par cash-strapped fertiliser companies, as it would help them to meet
with brownfield or greenfield projects. their working capital requirements and reduce their capital costs.
The JV projects abroad will be encouraged through firm offtake Most of the fertiliser companies stand to benefit from this move.
contracts with pricing decided on the basis of prevailing mar- However, the payment method for the remaining subsidy por-
ket conditions and in mutual consultation with the joint ven- tion would remain a key monitorable in the days to come. Tata
ture company in accordance with the pricing principle recom- Chemicals remains our top pick among the fertiliser companies.
mended by the Sen Committee. For further details, please visit the Research section of our website, sharekhan.com
We believe, the new pricing policy ensures better profitability for The author doesn’t hold any investment in any of the companies mentioned in the article.
urea producing companies and will also help the government to
INSURANCE AUGUST 08, 2008

Insured growth
According to the latest data released by the IRDA, the first premium FDI HIKE ON CARDS
collection of life insurance companies witnessed a robust growth in
June 2008. The new business premium (NBP) for the industry as a Since the opening up of the insurance sector in 2001 to private and
foreign players, the Indian life insurance sector has grown at an
whole grew by 19.8% yoy in June 2008. The overall performance
accelerated pace. Most of the private sector players have entered
was however dragged down by a 25.2% yoy decline in the new busi- the life insurance space with a foreign partner holding 26% equity
ness premium collection of LIC. Notably, the new business premium in the company—the maximum permissible limit for a foreign part-
collection for the private sector players increased significantly by ner. With the left parties out of the ruling coalition now, the mar-
80.4% yoy. Among the private sector players, SBI Life recorded a kets are abuzz with expectations that the government is likely to
stellar performance with a five-fold y-o-y increase in its APE. undertake the long-pending reforms across the sectors. Among oth-
For the quarter ended June 2008, the NBP for the industry increased by ers, the list of reforms includes increasing the foreign direct invest-
14.6% yoy. However on a qoq basis, the NBP for the industry saw a ment (FDI) limit to 49% from the current 26% in the insurance sector
as well as liberalising norms for the entry of more private or foreign
decline of 57.5%. LIC’s market share in Q1FY2009 declined to 37.2%
players in the sector. Foreign players have always been keen to enter
as compared to 59.4% in Q1FY2008. For June, LIC’s market share the Indian market looking at the substantial growth opportunity.
declined to 35.9% as compared to 57.4% during the year ago period.
In the private sector space, SBI Life’s market share increased to 16% Valuation
from 8.4% in Q1FY2008 taking it to the second position right after While most of the insurance companies under our coverage are well
ICICI Prudential Life Insurance, which continues to occupy No.1 spot. poised to take advantage of this reform, we believe Bajaj Finserv would
miss out this significant opportunity. We have valued Bajaj Finserv, fac-
Outlook toring in just 26% holding (assuming Allianz SE exercises the option
The performance of the private sector players, inspite of the eco- and hikes the stake up to 74% subject to regulatory approvals) in the
nomic slowdown and downturn in the equity markets, provides life insurance business. Hence we see limited downside price risk for
some respite. Though LIC’s performance remains a major drag on Bajaj Finserv. We believe Aditya Birla Nuvo and HDFC would be the
the industry growth, the continued growth momentum of private major beneficiaries with the insurance sector reforms coming into play.
sector players provides some hope for the future growth potential For further details, please visit the Research section of our website, sharekhan.com
of the sector. We maintain our positive outlook on the sector. The author doesn’t hold any investment in any of the companies mentioned in the article.

VIEWPOINT
APAR INDUSTRIES
VIEWPOINT CMP: RS149 AUGUST 26, 2008
Beneficiary of power T&D spends
About the company Cash on books: Cash and bank balance on books appear to be
high at Rs485.4 crore. However, on closer scrutiny, we find that
Apar Industries is a leading manufacturer of power conductors and Rs411.4 crore out of the same is due to margin money against let-
transformer oils in India with a strong global footprint.
ters of credit for the company’s imports of raw material.
Business segments Forex derivatives: In FY2008, the company provided for mark to
Conductors: Apar Industries is a dominant player in the conductors’ market (MTM) losses worth Rs5.89 crore for a contract expiring
space with a 23% share in the domestic market. The company cur- on October 2008, while it did not provide for MTM losses worth
rently has a total effective manufacturing capacity of 75,000 metric Rs11.27 crore (as on March 31, 2008) for another contract expir-
tonne per annum (mtpa) with plants in Silavassa and Nalagarh. ing on May 2009.
The current order book of the division stands at Rs600 crore, which
is executable over the next 10-12 months.
Outlook
Transformer oils: Apar Industries is a leading producer of trans- With power sector expected to show a strong growth in foresee-
former oils with a 50% share in the domestic market. Transformer able future Apar Industries, which derives more than 60% of its
oils, which provide insulation and cooling to transformers, consti- revenue from the business, is well placed to benefit from it. We like
tute around 5-8% of transformer’s cost Apar Industries’ businesses and believe that the company’s domi-
nant position in both transformer oils and conductors businesses
Automotive lubricants: For its automotive lubricant business, Apar In-
would help drive the revenue growth going forward. The manage-
dustries has entered into a 50:50 JV with ENI, Italy. Under the terms of
ment has guided for a 15-20% growth in the top line as well as the
agreement, the JV company would market the lubricants under AGIP
bottom line going forward. However, we believe that the operating
brand and lubricants would be manufactured at Apar’s Rabale plant.
margin of the company would continue to remain under pressure
Other products: Apart from transformer oils, the company also manu- in the near future, as the company executes more lower-margin
facturers white oil, rubber oil and oils for other industrial uses. export orders and volatility in commodity prices. At the current
Key concerns market price, the stock is trading at 5.9x and 4.1x consensus EPS
Fluctuation in raw material cost: Given the fluctuation in the prices, estimates of FY2009E and FY2010E.
the company hedges itself against the price rise of these commodi- For further details, please visit the Research section of our website, sharekhan.com
ties though LME, however volatility in key input prices could ham- The author doesn’t hold any investment in any of the companies mentioned in the article.
per the profitability of the company.
CIPLA
VIEWPOINT CMP: RS240 AUGUST 29, 2008
Richly valued
We attended the annual general meeting of Cipla held in Mumbai plans to launch seven products in the USA during FY2009 and
on August 28, 2008. maintain its ANDA filing rate of 20-25 ANDAs per year.
Cipla continues to maintain its organic growth strategy and Cipla has launched the CFC-free Salbutamol inhaler in Den-
believes that fostering strategic alliances and partnerships is the mark and Portugal, and is expecting to launch it in the UK by
best way forward for the company.
the end of FY2009. Overall, the company is working on nine
The management has guided towards a revenue growth of 12- inhalers of which certain products have completed clinical trials
15% in FY2009. The guidance provided by the management and are in final stages of regulatory approvals. The company
indicates that there would be a visible slowdown in the growth
expects to launch these in FY2009 in the European market.
in the coming quarters.
Cipla has earmarked a capex of Rs1,000 crore over the next two
Cipla is exploring joint ventures/strategic alliances to build its
years. Even though the aggressive capex is making Cipla’s busi- presence in newer segments like biotechnology and biosimilars.
ness model increasingly capital intensive, leading to lower asset The company expects to be marketing at least one or two biotech
turnover ratios and declining productivity of assets, the same is products across the world in the next two years.
indicative of the management’s strong outlook for the future. As per our quick estimates, we expect Cipla to deliver earnings
With substantial investments in research and development (R&D; of Rs10.2 per share in FY2009E and of Rs12.4 per share in
5% of sales in FY2008), the technical know-how fees has be- FY2010E, which implies a price/earnings ratio of 23.6x
come a significant component of Cipla’s total income. The man- FY2009E earnings and of 19.4x FY2010 earnings. We feel
agement has indicated that it has received ~Rs37 crore in techni- that the stock is richly valued considering the limited near-term
cal know-how fees in the first five months of FY2009 and based
on its product pipeline it expects this trend to continue. visibility on future growth opportunities.
Cipla has tie-ups with 17 players in the USA for marketing 118 For further details, please visit the Research section of our website, sharekhan.com
abbreviated new drug applications (ANDAs). The company The author doesn’t hold any investment in any of the companies mentioned in the article.

SHAREKHAN EARNINGS GUIDE Prices as on September 05, 2008
Company Price Sales Net Profit EPS (%) EPS PE (x) ROCE (%) RONW (%) DPS Div
(Rs) Growth Yield
FY08 FY09E FY10E FY08 FY09E FY10E FY08 FY09E FY10E FY10/FY08 FY08 FY09E FY10E FY08 FY09E FY08 FY09E (Rs) (%)
Evergreen
HDFC 2284.0 3,053.2 3,540.4 4,131.1 2,436.2 2,475.0 2,898.9 68.4 87.1 102.1 22% 33.4 26.2 22.4 - - 21.4 19.4 25.0 1.1
HDFC Bank 1247.1 7,511.0 13,020.6 16,051.8 1,589.7 2,252.2 3,136.6 44.9 53.1 67.1 22% 27.8 23.5 18.6 - - 17.1 15.6 8.5 0.7
Infosys Tech 1710.5 16,692.0 21,560.0 24,965.2 4,659.0 5,793.8 6,391.8 79.3 101.3 111.7 19% 21.6 16.9 15.3 38.7 37.8 33.8 32.5 33.3 1.9
Larsen & Toubro 2620.0 29,350.4 38,622.6 48,185.9 2,167.7 3,195.4 4,364.5 74.3 109.5 149.5 42% 35.3 23.9 17.5 17.9 19.0 20.0 23.8 17.0 0.6
Reliance Ind 2083.0 137,147.0 137,858.6168,722.0 15,326.0 20,912.3 28,237.2 105.5 132.9 179.5 30% 19.7 15.7 11.6 13.4 22.8 19.6 13.0 0.6
TCS 839.5 22,862.0 28,533.0 32,832.0 5,019.0 5,732.0 6,589.0 51.3 58.6 67.3 15% 16.4 14.3 12.5 33.0 30.4 40.5 35.6 14.0 1.7
Apple Green
Aditya Birla Nuvo 1190.2 12,134.0 16,108.9 20,582.1 104.6 428.5 637.8 9.2 37.7 56.0 147% 129.4 31.6 21.3 3.8 4.0 2.8 7.3 5.8 0.5
Apollo Tyres 36.5 3,693.9 4,458.1 5,019.9 219.2 206.5 219.1 4.5 4.2 4.5 0% 8.1 8.7 8.1 23.6 19.1 18.0 14.7 0.5 1.2
Bajaj Auto 612.0 8,663.3 9,851.4 10,799.4 756.0 839.1 953.7 52.3 58.0 65.9 12% 11.7 10.6 9.3 24.2 37.6 52.7 40.7 20.0 3.3
Bajaj Finserv 523.3 106.3 - - 44.0 - - 3.1 - - - 168.8 - - - - - - - -
Bajaj Holdings 495.2 355.3 - - 307.0 - - 30.3 - - - 16.3 - - - - - - 20.0 4.0
Bank of Baroda 294.3 5,962.8 6,485.5 7,602.5 1,435.6 1,672.9 1,986.9 39.3 45.8 54.4 18% 12.6 10.8 5.4 - - 15.8 16.4 8.0 1.6
Bank of India 284.5 6,369.6 7,531.3 8,809.5 2,032.9 2,565.0 2,996.7 38.7 48.8 57.0 21% 7.4 5.8 5.0 - - 24.2 22.2 4.0 1.4
Bharat Bijlee 1390.0 562.4 658.3 772.1 72.6 80.4 94.7 128.5 142.3 167.5 14% 10.8 9.8 8.3 61.3 50.0 43.1 35.1 30.0 2.2
BEL 945.0 4,060.3 4,801.5 5,624.0 805.5 879.5 1,009.2 100.7 109.9 126.2 12% 9.4 8.6 7.5 32.6 30.9 23.1 21.5 18.0 1.9
BHEL 1725.0 19,365.5 24,222.6 31,516.5 2,792.8 3,600.3 4,964.3 57.1 73.5 101.4 33% 30.2 23.5 17.0 42.3 43.3 25.1 25.8 15.3 0.9
Bharti Airtel 803.3 27,025.0 35,618.0 42,466.0 6,700.8 8,563.8 10,409.2 35.3 45.1 54.7 24% 22.8 17.8 14.7 30.8 28.3 24.9 28.3 0.0 0.0
Canara Bank 227.5 5,750.7 5,740.2 6,211.1 1,565.0 1,704.3 1,887.5 38.2 41.6 46.0 10% 6.0 5.5 4.9 - - 19.1 18.9 8.0 3.5
Corp Bank 292.0 2,143.0 2,333.9 2,580.0 734.9 763.9 845.6 51.2 53.3 58.9 7% 5.7 5.5 5.0 - - 18.4 16.9 10.5 3.6
Crompton Greaves 255.8 6,832.3 8,315.3 9,995.9 405.0 520.0 659.5 11.2 14.3 18.1 27% 22.8 17.9 14.1 33.8 34.9 31.5 29.8 1.6 0.6
Elder Pharma 331.0 548.1 652.3 769.7 71.8 88.6 110.9 38.2 47.2 59.0 24% 8.7 7.0 5.6 14.3 15.0 18.4 18.7 2.5 0.8
Glenmark Pharma 670.0 1978.3 2524.8 3377.7 631.3 723.1 994.8 25.4 28.6 39.3 24% 26.4 23.4 17.0 29.6 29.1 37.3 30.1 0.7 0.1
Grasim 1963.0 10,278.1 10,612.4 12,260.2 2,016.0 1,725.3 2,170.6 219.1 187.5 236.8 4% 9.0 10.5 8.3 35.7 - 27.2 - 30.0 1.5
HCL Tech** 244.5 7,639.4 9,537.4 11,574.5 1,036.3 1,442.6 1,654.1 15.1 20.8 23.6 25% 16.2 11.8 10.4 29.3 35.0 24.4 27.3 9.0 3.7
HUL* 245.0 13,717.8 16,147.8 18,270.6 1,769.1 2,076.2 2,391.5 8.1 9.5 11.0 17% 30.2 25.8 22.3 102.2 143.8 85.0 121.2 9.0 3.7
ICICI Bank 688.0 16,114.9 17,862.1 23,168.8 4,157.7 4,649.3 5,994.8 37.4 41.8 53.9 20% 18.4 16.5 12.8 - - 10.9 9.7 11.0 1.6
Indian Hotel Co 76.3 1,764.5 1,998.9 2,356.8 377.4 433.9 551.4 6.3 6.0 7.0 5% 12.1 12.7 10.9 22.2 19.6 18.5 13.7 1.9 2.5
ITC 189.8 13,947.5 16,394.1 19,708.6 3,120.1 3,576.6 4,303.8 8.3 9.5 11.4 17% 22.9 20.0 16.6 33.1 33.8 27.7 27.2 3.5 1.8
Lupin 750.1 2706.4 3395.4 3971.0 335.1 400.7 481.0 37.9 45.4 54.4 20% 19.8 16.5 13.8 22.2 17.8 31.9 20.2 10.0 1.3
M&M 585.0 10,804.6 13,704.2 15,218.8 933.1 1,041.2 1,123.7 39.0 37.6 40.5 2% 15.0 15.6 14.4 21.8 17.3 21.5 18.1 11.5 2.0
Marico 58.5 1,906.7 2,264.8 2,678.2 166.0 183.2 231.1 2.6 3.0 3.8 21% 22.5 19.5 15.4 39.8 34.8 63.3 45.1 0.7 1.1
Maruti Suzuki 682.0 17,936.2 20,513.0 25,277.7 1,730.8 1,810.1 2,082.4 59.9 62.6 72.1 10% 11.4 10.9 9.5 34.4 25.1 20.6 18.0 5.0 0.7
Nicholas Piramal 345.1 2848.3 3326.1 3825.4 367.7 443.1 533.3 17.6 21.2 25.5 20% 19.6 16.3 13.5 23.8 24.8 33.7 30.9 4.2 1.2
Punj Lloyd 295.6 7,752.9 10,459.5 13,201.5 321.2 555.9 734.7 10.6 17.3 22.9 47% 27.9 17.1 12.9 12.9 17.3 16.0 17.6 0.4 0.1
Ranbaxy* 448.2 6,648.0 7,876.9 9,006.3 774.5 541.6 974.7 15.9 11.1 20.1 12% 28.2 40.4 22.3 11.4 8.5 16.7 9.2 8.5 1.9
Satyam Com 417.2 8,473.0 11,278.0 13,316.0 1,688.0 2,201.0 2,568.0 25.2 32.2 37.2 21% 16.6 13.0 11.2 27.9 30.7 23.3 25.2 3.5 0.8
SBI 1520.0 25,716.2 27,829.4 33,063.9 6,729.1 6,866.7 8,265.0 106.6 108.8 131.0 11% 14.3 14.0 11.6 - - 15.5 13.3 21.5 1.4
Tata Motors 420.9 35,651.5 41,185.9 46,945.0 2,167.7 2,166.8 2,433.6 54.4 54.6 60.8 6% 7.7 7.7 6.9 30.8 28.9 22.7 20.3 15.0 3.6
Tata Tea 719.7 4,392.3 4,831.5 5,306.5 339.7 377.3 452.4 55.1 61.2 73.4 15% 13.1 11.8 9.8 8.5 9.2 12.0 10.4 35.0 4.9
Wipro 428.3 19,759.0 25,051.0 29,833.0 3,224.0 3,905.0 4,545.0 22.1 26.7 31.1 19% 19.4 16.0 13.8 16.1 16.4 24.9 25.0 6.0 1.4
Emerging Star
3i Infotech 109.2 1,205.3 2,320.3 2,933.9 169.4 253.2 304.2 9.8 14.7 17.7 34% 11.1 7.4 6.2 12.1 14.0 13.0 11.9 1.5 1.4
Aban Offshore 2279.8 2,021.1 4,303.9 5,030.8 317.4 1,187.5 1,685.5 84.0 314.3 446.1 130% 27.1 7.3 5.1 9.8 19.3 34.5 91.7 3.0 0.1
Alphageo India 364.0 81.6 112.0 140.0 12.6 18.7 24.7 22.9 33.4 44.1 39% 15.9 10.9 - 39.8 45.6 35.1 28.6 1.5 0.4
Axis (UTI) Bank 686.0 4,380.8 5,788.6 7,463.6 1,071.0 1,371.7 1,768.6 29.9 38.3 49.4 29% 22.9 17.9 13.9 - - 16.4 14.8 6.0 0.9
Balaji Telefilms 172.0 378.4 497.5 558.4 96.1 112.0 129.8 14.7 17.2 19.9 16% 11.7 10.0 8.6 40.6 39.1 28.4 26.9 3.5 2.0
BL Kashyap 974.0 1,542.7 2,142.0 3,036.0 115.4 150.1 211.5 56.2 73.1 103.0 35% 17.3 13.3 9.5 42.4 38.5 32.9 31.4 4.0 0.4
Cadila Healthcare 330.5 2,324.5 2,779.4 3,188.8 261.4 321.0 384.2 20.8 23.5 28.1 16% 15.9 14.1 11.8 17.8 19.4 24.6 24.7 4.5 1.4
Jindal Saw # 578.4 6,787.8 4,293.3 5,474.5 280.3 330.6 500.8 40.0 58.9 89.3 49% 14.5 9.8 6.5 22.2 16.7 11.3 12.1 6.3 1.1
KSB Pumps 315.0 465.4 551.8 613.5 45.0 56.5 60.7 25.9 32.4 34.9 16% 12.2 9.7 9.0 32.7 35.9 18.9 20.0 5.5 1.7
Navneet Pub 67.4 411.1 478.2 552.4 56.6 60.0 72.1 5.9 6.3 7.6 13% 11.4 10.7 8.9 19.2 18.5 24.5 22.2 2.4 3.6
Network 18 Fincap 203.0 657.2 - - 21.1 - - 10.9 - - - 18.7 - - - - - - - -
Nucleus Software 169.0 288.7 352.4 432.0 61.7 58.6 81.3 18.7 17.8 24.7 15% 9.0 9.5 6.8 31.7 22.7 28.6 20.2 3.0 1.8
* Year CY instead of FY ** June ending company
# FY2008 figures are for 15 months; EPS annualised.

Company Price Sales Net Profit EPS (%) EPS PE (x) ROCE (%) RONW (%) DPS Div
(Rs) Growth Yield
FY08 FY09E FY10E FY08 FY09E FY10E FY08 FY09E FY10E FY10/FY08 FY08 FY09E FY10E FY08 FY09E FY08 FY09E (Rs) (%)
Opto Circuits India 324.1 468.1 835.1 1148.6 133.3 189.4 282.6 14.2 19.9 29.7 45% 22.8 16.3 10.9 33.1 26.3 36.5 35.3 5.0 1.5
Orchid Chemicals 242.0 1,238.9 1,492.7 1,756.0 143.3 157.7 207.6 14.8 16.3 21.5 21% 16.4 14.8 11.3 10.2 11.0 22.0 9.3 3.0 1.2
Patels Airtemp 58.0 54.3 75.0 87.1 5.2 7.6 8.9 10.4 15.0 17.5 30% 5.6 3.9 3.3 47.4 51.4 30.9 31.9 1.5 2.6
TV18 India 239.0 401.2 524.2 670.6 25.5 53.5 98.8 2.1 4.5 8.3 99% 113.8 53.1 28.8 11.7 15.7 8.3 16.4 2.0 0.8
Thermax 487.0 3,481.5 4,205.7 5,211.0 288.6 366.0 448.4 24.2 30.7 37.6 25% 20.1 15.9 13.0 66.2 61.4 38.3 35.9 8.0 1.6
Zee News 46.1 367.1 492.3 594.1 37.1 53.0 74.6 1.5 2.2 3.1 44% 30.7 21.0 14.9 29.7 30.1 19.0 22.7 0.4 0.9
Ugly Duckling
Ashok Leyland 32.7 7,729.1 8,743.0 9,704.0 466.5 428.7 514.3 3.5 3.2 3.9 5% 9.3 10.2 8.4 24.7 16.3 21.7 18.2 1.5 4.6
Aurobindo Pharma 316.0 2,622.9 3,143.7 277.9 348.4 - 45.8 57.1 - 22% 6.9 5.5 - 13.4 - 15.7 - 3.3 1.0
BASF 274.9 1,053.6 1,217.4 1,379.9 57.5 86.0 98.5 20.4 30.5 34.6 30% 13.5 9.0 7.9 26.4 34.9 17.9 23.4 7.0 2.5
Deepak Fert 87.5 1,040.9 1,178.6 1,328.8 103.1 121.4 156.3 11.7 13.8 17.7 23% 7.5 6.3 4.9 10.4 10.5 15.0 16.4 3.5 4.0
Genus Power Infra 300.0 483.3 677.6 839.5 51.6 75.1 97.5 36.6 45.6 59.8 28% 8.2 6.6 5.0 27.9 22.4 20.2 22.9 0.0 0.0
ICI India 487.0 938.7 960.4 1,130.0 72.1 111.8 126.7 18.8 29.2 33.1 33% 25.9 16.7 14.7 13.2 18.0 8.8 12.7 8.0 1.6
India Cements 143.0 3,044.3 3,814.0 4,327.1 664.6 712.1 723.4 23.6 25.3 25.7 4% 6.1 5.7 5.6 24.0 25.3 25.5 21.9 2.0 1.4
Indo Tech Trans 390.0 189.9 277.9 335.6 39.0 48.8 56.0 36.7 46.0 52.7 20% 10.6 8.5 7.4 44.1 42.0 36.3 33.5 6.0 1.5
Ipca Laboratories 558.0 1,091.4 1,283.2 1,487.3 135.9 171.3 208.4 54.4 68.5 83.3 24% 10.3 8.1 6.7 23.7 25.2 25.6 25.8 8.0 1.4
Jaiprakash Asso 167.0 3,985.0 5,903.0 8,031.1 610.0 749.3 981.9 4.9 6.0 7.9 27% 34.1 27.7 21.1 11.9 12.4 14.5 15.8 1.0 0.6
KEI Industries 36.0 874.7 1,180.3 1,498.7 43.5 65.2 93.7 5.6 8.4 12.0 46% 6.4 4.3 3.0 20.2 24.2 25.3 29.3 0.5 1.4
Mahindra Lifespace 458.1 231.1 349.8 722.6 66.4 110.4 244.9 16.2 27.0 59.9 92% 28.3 17.0 7.6 7.6 8.8 7.7 11.4 2.5 0.5
Mold Tek Tech 69.6 102.0 134.9 169.3 10.9 17.0 22.3 9.4 14.7 19.2 43% 7.4 4.7 3.6 22.5 29.2 35.6 41.8 2.0 2.9
Orbit Corporation 307.8 705.5 1,025.3 1,204.6 235.8 260.0 366.7 51.9 57.3 80.8 25% 5.9 5.4 3.8 51.8 30.9 44.8 20.8 5.5 1.8
PNB 504.5 7,531.7 8,542.0 9,324.5 2,048.8 2,347.5 2,764.2 65.0 74.5 87.7 16% 7.8 6.8 5.8 - - 19.6 20.1 13.0 2.6
Ratnamani Metals 770.0 845.1 1,104.5 1,393.7 90.0 122.1 150.7 100.0 126.2 152.3 23% 7.7 6.1 5.1 44.1 45.8 49.5 40.0 7.0 0.9
Sanghvi Movers 206.6 254.3 338.1 403.8 72.8 85.8 106.9 16.8 19.8 24.7 21% 12.3 10.4 8.4 24.4 24.4 24.0 22.8 3.0 1.5
Selan Exploration 271.1 34.5 106.5 127.2 12.9 53.5 62.5 9.0 33.0 38.5 107% 30.1 8.2 7.0 27.1 64.7 23.6 38.9 - -
Shiv-Vani Oil & Gas 546.0 573.9 916.8 1,245.6 107.5 161.0 241.2 21.5 32.3 48.3 50% 25.3 16.9 11.3 38.3 26.0 17.3 17.3 - -
SEAMEC 117.7 170.4 243.3 278.8 37.0 71.5 107.2 10.9 21.1 31.6 70% 10.8 5.6 3.7 15.9 24.3 13.5 20.7 - -
Subros 31.5 662.7 720.7 873.3 29.0 33.4 46.9 4.8 5.6 7.8 27% 6.6 5.6 4.0 18.8 19.3 15.8 15.2 0.4 1.3
SunPharma 1518.9 3356.5 4034.7 4316.9 1486.9 1691.6 1700.9 71.8 81.7 82.1 7% 21.2 18.6 18.5 31.1 28 29.8 26.3 10.5 0.7
Surya Pharma 96.2 496.7 650.0 800.0 46.7 53.5 71.7 32.3 29.7 39.9 11% 3.0 3.2 2.4 13.5 12.8 21.7 19.9 - -
Tata Chemicals 319.6 6,023.1 9,183.4 10,155.1 476.9 651.1 872.0 19.6 26.7 35.8 35% 16.3 12.0 8.9 9.2 15.8 12.8 15.1 9.0 2.8
Torrent Pharma 199.5 1,354.8 1,550.9 1,737.2 134.7 166.3 185.4 15.9 19.7 21.9 17% 12.5 10.1 9.1 19.9 22.1 29.3 28.9 3.5 1.8
Unity Infraprojects 438.5 849.5 1,157.0 1,420.4 60.0 74.9 96.0 44.9 56.0 71.8 26% 9.8 7.8 6.1 21.7 21.8 18.2 19.1 4.0 0.9
UltraTech Cement 587.2 5,509.2 6,602.4 6,823.3 1,007.6 1,002.5 846.3 80.4 80.0 67.6 -8% 7.3 7.3 8.7 40.7 34.5 37.4 27.7 5.0 0.9
Union Bank of India 151.3 4,173.3 4,649.1 5,503.6 1,387.1 1,445.7 1,725.0 27.5 28.6 34.1 12% 5.5 5.3 4.4 - - 26.8 23.2 4.0 2.6
Wockhardt* 207.0 2,653.1 3,516.7 3,924.1 385.7 347.0 453.3 35.2 31.7 41.4 8% 5.9 6.5 5.0 13.4 14.6 30.3 18.6 11.3 5.5
Zensar Tech 142.9 782.9 971.7 64.0 82.1 - 28.0 33.8 - 18% 5.1 4.2 - 24.5 24.1 25.2 24.1 3.8 2.7
Vulture's Pick
Esab India* 420.0 343.0 409.6 483.3 53.4 65.0 77.1 34.7 42.2 50.1 20% 12.1 10.0 8.4 90.6 82.8 51.5 47.7 15.5 3.7
Orient Paper 35.3 1,295.8 1,472.0 1,892.5 204.4 214.4 270.4 10.6 11.1 14.0 15% 3.3 3.2 2.5 57.2 39.0 42.6 32.1 1.2 3.4
WS Industries 62.4 227.0 273.4 315.2 13.7 15.6 21.4 6.2 7.1 9.7 25% 10.1 8.8 6.4 19.2 15.2 16.7 14.9 0.5 0.8
Cannonball
Allahabad Bank 65.0 2,642.2 2,597.1 2,987.0 974.7 876.9 1,009.5 21.8 19.6 22.6 2% 3.0 3.3 2.9 - - 23.6 18.1 3.5 5.4
Andhra Bank 59.5 2,001.2 2,073.9 2,208.1 575.6 570.5 644.4 11.9 11.8 13.3 6% 5.0 5.1 4.5 - - 18.0 16.7 4.0 6.7
Gateway Distri 89.7 267.8 462.8 649.8 72.7 93.2 109.4 6.3 8.1 9.5 23% 14.2 11.1 9.5 15.1 14.3 14.5 21.6 3.5 3.9
ICIL 322.0 95.2 117.9 132.9 11.7 14.6 16.9 49.0 61.3 70.7 20% 6.6 5.3 4.6 41.0 40.5 23.8 23.3 8.0 2.5
J K Cements 128.5 1,458.3 1,569.0 2,358.0 265.2 216.3 304.0 37.9 30.9 43.5 7% 3.4 4.2 3.0 26.0 17.2 25.2 17.3 5.0 3.9
Madras Cements 2550.0 2,011.9 2,654.9 3,156.0 408.3 429.8 501.1 343.4 361.4 421.4 11% 7.4 7.1 6.1 30.4 22.4 42.4 31.5 40.0 1.6
Shree Cement 598.8 2,065.9 2,399.0 2,509.8 287.9 309.6 274.8 82.6 88.9 78.9 -2% 7.2 6.7 7.6 24.3 26.2 42.8 32.7 8.0 1.3
TFCI 20.7 27.6 40.7 48.0 16.3 22.4 25.0 2.0 2.8 3.1 24% 10.4 7.5 6.7 - - 6.6 8.2 1.0 4.8
* Year CY instead of FY ** June ending company

Remarks
Evergreen
HDFC HDFC provides housing loans to individuals, corporates and developers. It has interests in banking, asset
management and insurance through its key subsidiaries. Three of these--HDFC Bank, HDFC Life Insurance and
HDFC Mutual Fund--are valued at Rs871 per share of HDFC. As these subsidiaries are growing faster than HDFC,
the value contributed by them would be significantly higher going forward.
HDFC Bank HDFC Bank has merged Centurion Bank of Punjab with itself and the reported numbers for Q1FY2009 represent the
financials of the merged entity. Relatively high margins (compared to its peers), strong branch network and better asset
quality make HDFC Bank a safe bet.
Infosys Tech Infosys is India's premier IT and IT-enabled service company. It is one of the key beneficiaries of the strong trend of
offshore outsourcing. It is relatively better positioned to weather the current uncertainties related to a possible
slowdown in the USA and its fallout on the overall demand environment.
L&T Larsen & Toubro, being the largest engineering and construction company in India, is a direct beneficiary of the strong
domestic infrastructure boom. Strong potential from its international business, its sound execution track record,
bulging order book, and strong performance of subsidiaries further reinforce our faith in it. There also lies great
growth potential in some of its new initiatives.
Reliance Ind With nine oil and gas discoveries during the year and a portfolio of exploration blocks, Reliance Industries holds a
great promise in the exploration business. The refinery business would continue to perform well. This along with
growing contribution from the retail business provides a well-diversified growth opportunity.
TCS TCS pioneered the IT service outsourcing business from India and is the largest IT service firm in the country. It is
a leader in most service offerings and is in the process of further consolidating its leadership position through the
inorganic route and large deals.
Apple Green
Aditya Birla Nuvo Aditya Birla Nuvo participates in India's four most exciting sectors: garments, insurance, telecom and IT/IT enabled
services. It has a perfect strategy: to earn cash from its cash cow businesses, such as carbon black, rayon and fertilisers,
and invest in high-growth businesses, such as garments, insurance, telecom and IT/IT enabled services.
Apollo Tyres Apollo Tyres is the market leader in the truck and bus tyre segment with a market share of 28%. We expect the sharp
rise in CV sales in the past year to trigger the tyre-replacement cycle in a big way. The company is likely to benefit from
the strong growth opportunities and its powerful position in the market.
Bajaj Auto Bajaj Auto is a leading two-wheeler automobile company. It is moving up the value chain by concentrating on the
executive and the premium motorcycle segment. Export business across markets is doing well. The pick-up in three-
wheeler segment should help in improving its profitability further.
Bajaj Finserve Bajaj Finserv is the only pure insurance play available in the market currently. It has the second largest market share
in the fast growing life insurance segment and is also present in the general insurance segment.
Bajaj Holdings Bajaj Holdings is the holding company having a 30% stake each in Bajaj Auto and Bajaj Finserv. The two-wheeler
sales are expected to improve going forward with new product launches. The insurance business makes it the second
largest player in the insurance space.
Bank of Baroda BoB, with a wide network of over 2,800 branches across the country, has a stronghold in the western and eastern
parts of India. BoB has laid out aggressive plans to grow supplementary businesses including insurance and online
broking, which should boost its fee income. We expect its earnings to grow at a CAGR of 18% over FY2008-10E.
Bank of India BOI has a wide network of branches across the country and abroad. With diversified portfolio, better asset quality
and steady asset growth, we expect a strong 21% growth (CAGR) in its earnings over FY2008-10E.
Bharat Bijlee Bharat Bijlee, a leading transformer manufacturing company, shall benefit from the huge investments in the T&D
sector. The company is increasing its capacity to 11,000MVA from 8,000MVA at present. This will enable it to capture
the demand in the transformer business.
Bharti Airtel Bharti Airtel is leading the wireless telephony revolution and has emerged as the largest mobile operator in the country.
In addition to the robust growth in revenues, the focus on cost efficiencies and high-margin non-voice business are
more than mitigating the impact of declining trend in the tariffs.
BEL BEL, a public sector unit involved in manufacturing electronic, communication and defence equipment, is benefiting
from the enhanced capital expenditure outlay in the budget to strengthen and modernise security systems. Moreover,
civilian and export orders are also expected to aid the overall growth in the revenues. However, the performance has
been below expectation in the first nine months and the recommendation on the stock has been downgraded to Hold.

Remarks
BHEL BHEL, India's biggest power equipment manufacturer, will be the prime beneficiary of the four-fold increase in the
investments being made in the Indian power sector. Its order book of Rs95,000 crore stands at around 4.4x FY2008
revenue and we expect BHEL to maintain the growth momentum.
Canara Bank Canara Bank, with a wide network of 2,513 branches across the country, has a stronghold in the southern parts of
India, especially in Andhra Pradesh and Karnataka. We expect its earnings to grow at a CAGR of 10% over FY2008-
10E.
Corp Bank Corporation Bank has one of the lowest cost/income ratio and the highest Tier-I CAR. This leaves ample scope for
the bank to leverage the balance sheet without diluting the equity, quite unlike the other state-owned banks. The bank
is most aggressive on technology implementation with all its branches under Core Banking Solution, covering 100%
business of the bank. It has superior asset quality as well.
Crompton Greaves The outlook is buoyant for Crompton Greaves' key business of industrial and power systems. A consolidated order
book of Rs6,004 crore generates clear earnings visibility. The synergy from the acquisition of Pauwels, GTV and
Microsol will drive its consolidated earnings.
Elder Pharma With leading big brands like Shelcal and Tiger Balm, pharma company Elder Pharma is set to make the most of the
domestic demand with line extensions and new molecules. New in-licencing agreements will ensure good growth for
the company. It is also looking to expand its global footprint through acquisitions. Having already made 2 acquisitions
in Europe, the company is on the lookout for more acquisition opportunities in markets like Latin America.
Glenmark Pharma Through the successful development and outlicencing of three molecules in a short span of six years, Glenmark is
India's best play on research-led innovation. Glenmark has built a pipeline of 13 molecules and has managed to clinch
four outlicencing deals worth $734 million. Its core business has seen stupendous success due to its focus on niche
specialties and brand building.
Grasim Grasim Industries is in the process of augmenting its cement capacity by 4.5MMT at Kotputli in Rajasthan by
Q3FY2009. Apart from this, it is also raising its VSF capacity at Harihar in Karnataka by 31,000 tonne by Q3FY2010.
The volume growth due to capacity additions in cement and VSF divisions will drive the earnings of the company.
HCL Tech HCL Tech is one of the leading Indian IT service vendors. It has been able to successfully ramp up the business from
the large-sized deals bagged over the past few quarters, which has considerably improved its revenue growth visibility.
HUL HUL is India's largest fast moving consumer good (FMCG) company. The volume growth is picking up in FMCG
sector and HUL is likely to be a key beneficiary. The rural demand growth will be icing on the cake. HUL has regained
the pricing power in all the product segments. Turn-around of loss-making businesses and cost reduction measures
should help it improve its profitability.
ICICI Bank ICICI Bank is India's second largest bank. With strong positioning in the retail advance segment, it enjoys a healthy
growth in both loans and fee income. However, the deteriorating asset quality is a cause for concern. Its various
subsidiaries add ~Rs382 to the overall valuation. The bank has successfully raised Rs20,000 crore, which would fund
its growth for the next three years. In addition, the expected listing of ICICI Securities should help the bank unlock
substantial value.
Indian Hotels Co The tight demand-supply scenario in the hotel industry will push up the ARRs in the short term and we expect Indian
Hotels Co (India's largest hotel company) with its pedigree of hotels to be the key beneficiary of this trend. We expect
its earnings to grow at a strong 20.9% CAGR over FY2008-10.
ITC ITC's plan to diversify from the key business of cigarettes is paying off with the non-cigarette businesses of hotels,
paper, agri-products and personal care & food reporting a strong growth in revenues. The cigarette business would
nurture the growth of the businesses that are at nascent stage. As ITC gains leadership position in each of these
businesses, we expect its valuations to improve further, reducing the gap between its valuation and that of HUL.
Lupin Leading pharma company Lupin is set to take off in the export market by targeting the US market (primarily for
formulations) while maintaining its dominance in the anti-TB segment globally. Further, with an expanded field
force and therapy focused marketing division, Lupin's branded formulation business in the domestic market has
been performing better than the industry. Lastly, Lupin's ongoing R&D activities are expected to yield sweet fruits
going forward.
M&M M&M is a leading maker of tractors and utility vehicles (UVs) in India. Its UV sales remain strong. Its investments
with world majors in passenger cars and commercial vehicles have helped it diversify into various auto segments. The
acquisitions made by its subsidiary Systech will pay off over the coming three years. The value of its subsidiaries adds
to the sum-of-the-parts valuation.

Remarks
Marico Marico is India's leading FMCG company. Its core brands, Parachute and Saffola, have a strong footing in the market.
It intends to play on the broader beauty and health platform. It follows a three-pronged strategy that shall ensure
its growth in the long term. The strategy hinges on expansion of existing brands, launch of new product categories
and growth through acquisitions. Thus while Marico has entered new categories like health foods and Kaya clinics,
it has also expanded its presence in markets such as UAE and South Africa through acquisitions.
Maruti Udyog Maruti Udyog is India's largest small car maker. This is the only pure passenger car play. With new launches, the company
is expected to outperform the market growth rate. Suzuki has identified India as a manufacturing hub for small cars
for its worldwide markets. Increased indigenisation and cost control measures would help improve the margins.
Nicholas Piramal Pharma major Nicholas Piramal is ready to gain from the ramp-up in its contract manufacturing deals with MNCs.
Further, the acquisition of Pfizer's Morpeth facility in the UK adds glory to its global contract manufacturing strength.
The demerger of its R&D division will unlock value of its impressive R&D pipeline.
Punj Lloyd Punj Lloyd Ltd (PLL) is the second largest EPC player in the country with a global presence. In FY2007, PLL acquired
SEC and Simon Carves, which helped PLL in plugging gaps in services offered by it. The average order size and execution
capability of PLL has also increased significantly making it the only player capable of competing with L&T, the largest
EPC player in the country.
Ranbaxy Ranbaxy, India's largest pharmaceutical company, is the best play on global generics with its geographically-
diversified product portfolio and aggressive product introduction strategy. Exclusivity opportunities in the USA,
along with strong expansion in semi-regulated markets, will drive its growth. Its recent takeover by Daiichi Sankyo
would result in new business opportunities including expansion into the fast-growing Japanese generics market.
Satyam Comp Satyam is among the top five Indian IT service companies. In the past few quarters, it has been able to bag some large-
sized deals and has further consolidated its leadership position in enterprise solutions segment.
SBI Despite being the largest bank of India, SBI is growing at a high rate which is commendable. Its loan growth is likely
to remain healthy at ~20% with improving core operating performance and stable net interest margins. Successful
merger of associate banks could provide further upside for the parent bank. The asset quality of the bank would remain
a key monitorable.
Tata Motors Tata Motors is one of the leading automobile companies of India with diverse product portfolio across commercial
vehicles and cars. Both segments are witnessing a slowdown due to tight financing situation. However, with
infrastructure spending, the long-term prospects continue to be positive.
Tata Tea Over the past two years, Tata Tea has transformed itself from just a commodity (tea) seller to a branded tea maker.
It has recently acquired management control of Mount Everest Mineral water, owner of the Himalayan brand. This
makes the company a complete beverage company having presence in the entire vertical: tea, coffee and water. However
its valuation is much cheaper than that of its peers.
Wipro Wipro is one of the leading Indian IT service companies. The revival in the BPO business, strong traction in its existing
IT service business and the incremental growth from the recent inorganic initiatives have considerably improved the
growth visibility in the global software service business.
Emerging Star
3i Infotech 3i offers software products and solutions to the banking, financial services and insurance (BFSI) sector. The growth
momentum is expected to continue due to healthy order book and recent acquisitions. It has relatively low exposure
to US and European markets and consequently is largely insulated from the uncertain global environment.
Aban Offshore Aban Offshore, one of Asia's largest oil drilling companies, is benefiting from the increase in oil exploration and
production activities globally. The re-pricing of its existing assets at significantly higher day rates and efforts taken
to substantially ramp up the asset base through organic and inorganic routes would significantly improve its financial
performance over the next few years.
Alphageo Alphageo provides seismic survey and other related support services to oil exploration & production companies in
India. The recent order wins and a healthy pipeline of orders have considerably improved the company's revenue
growth visibility.
Axis Bank Over the last few years, Axis Bank (UTI Bank) has grown its balance sheet aggressively. We expect the quality of its
earnings to improve as the proportion of fee income goes up. Axis Bank has also raised capital, which would help
it to maintain its growth momentum for the next three years. However, the asset quality will be a key monitorable
in the quarters to come.

Remarks
Balaji Telefilms Balaji Telefilms Ltd (BTL) is a play on the fast growing demand for quality TV content in India. It is by far the leader
in the TV content production space. The flurry of entertainment channels along with their willingness and ability to
spend more on good content will boost BTL's revenues.
BL Kashyap With its proven execution skills, reasonably large-scale of operations and an established customer base, BL Kashyap
& Sons (BLK) is well poised to ride the construction boom in India. Unlike most of its peers, it has a de-risked business
strategy of providing contractual construction services and has consciously avoided exposure to long duration
infrastructure projects that are prone to delays and are much more capital intensive.
Cadila Cadila's improving performance in the US generic and French market, along with the steady progress in the CRAMS
space, enriches its growth visibility. With key subsidiaries turning profitable, Cadila is all set to harvest the fruits of
its long-term investments.
Jindal Saw Jindal Saw, the largest pipe maker in India, is set to benefit from the huge opportunity arising out of rising global E&P
activities. Its strong order book of $1.09 billion, coupled with margin expansion as a result of better product mix
and sell-off of the US division, would continue to drive its earnings going forward.
KSB Pumps KSB Pumps, a leading maker of pumps and valves, is a beneficiary of the investments lined up in India's power and
industrial sectors. The strong order inflow in the pump business and the capacity expansion would drive its growth.
Navneet Pub Publishing major Navneet's earnings will continue to grow in FY2009 backed by strong performance from some of
its new initiatives such non-paper stationery products and Urdu publications, along with the publication business,
which is expected to achieve a moderate growth during FY2009. Entry into e-learning business could turn out to be
the growth driver for the company.
Network 18 Network 18, the holding company of the TV18 group, owns the best media properties through its holdings in TV18
and GBN. While TV18 owns business channels CNBC and Awaaz, and Internet properties such as moneycontrol.com,
it is taking big steps to make a mark in print media. GBN controls CNN-IBN and IBN-7. GBN has successfully launched
a Hindi general entertainment channel, Colors, via its tie-up with Viacom. Network 18 also operates a full-fledged
home shopping network inclusive of a dedicated home shopping channel. We expect Network 18 to create value
through its holdings.
Nucleus Software Nucleus Software offers a comprehensive suite of software products to banking and financial service companies
globally. Its flagship product "FinnOne" is rated as the highest selling retail banking product in the IBS annual ranking
review 2006. The niche positioning and a robust order book provide a reasonably healthy growth outlook.
Orchid Chem Niche product opportunities in the USA are driving the growth of Orchid. Its entry into European and Canadian markets
will further boost its sales in the coming years. With UK MHRA approval for its plants and marketing tie-ups in place,
Orchid is all set to make its entry into the European market, which will catapult its growth to a different trajectory.
Opto Circuits A leading player in manufacturing medical equipment like sensors and patient monitors, Opto has diversified into
the invasive space where it supplies stents for medical use. Lower cost base and attractive pricing strategies have enabled
Opto's stents to gain acceptance globally. Steady growth in the non-invasive segment and increasing acceptance of
DIOR, a revolutionary cardiac balloon, in Europe would drive Opto's growth. Further, Criticare acquisition will
enable Opto to diversify into gas monitoring systems and strengthen its position in the USA.
Patels Airtemp Patels Airtemp, the manufacturer of heat transfer technology products, would benefit immensely from the strong boom
in its user industries, particularly oil and gas, refineries, and power. It currently has a strong order book of Rs54 crore
and the order inflow is expected to grow at 45-50% annually for the next two years.
TV18 India TV18 is India's leading news media company. It owns the nation's top business news channels, CNBC TV-18 and
Awaaz. It also owns a repertoire of web properties such as moneycontrol.com, poweryourtrade.com and
commoditiescontrol.com. TV18 is making moves in print media with its recent acquisition of Infomedia India, content
partnership with Forbes and JV with Jagran Prakashan for business dailies. The buoyant economic fundamentals
augur well for its media properties. With top-notch management it remains one of the best media companies in the
country.
Thermax The continued rise in India Inc's capital expenditure will benefit Thermax' energy and environment businesses. Its
order book stands at Rs2,803 crore, which is 0.81x FY2008 consolidated revenues.
Zee News Zee News operates a unique bouquet comprising six regional entertainment channels and four news channels. The
key revenue contributors are Zee News, Zee Marathi and Zee Bangla, with the latter two channels being the leaders
in their respective genres. Zee News is making steady progress in garnering better market share in Telugu and Kannada
markets, which would drive its growth going forward. Also, the flow of hefty subscription revenues in future augurs
well for the company’s growth. The company will soon launch Tamil regional entertainment channel to make a mark
in the largest regional entertainment market in India.

Remarks
Ugly Duckling
Ashok Leyland Ashok Leyland is the second largest CV player in the industry. Its short-term performance may get affected due to
slowdown in the segment due to rising interest rates. Long-term prospects appear bright. Initiatives on value
engineering and e-sourcing of materials should help in maintaining the margins going forward.
Aurobindo Aurobindo, with 106 ANDAs, 117 DMFs and 11 USFDA approved facilities in hand, is well positioned to exploit
the US generic opportunity going forward. Further, its expansion into Europe and other emerging markets and likely
incremental revenue flow from its largest approved ARV product basket would fuel the revenue growth. Galloping
Pen-G prices and higher formulation growth would expand the margin of the company going forward.
BASF India BASF India is set to benefit from the changing demographics and the resulting consumption boom in India. BASF is
building a 9,000 tonne per annum engineering plastics compounding plant at its existing Thane facility. The company
is likely to benefit from the new capacity additions, as it would help the company cater to the growing demand from user
industries like automobiles, construction, white goods, home furnishings, and paper.
Deepak Fert DFPCL manufactures and supplies industrial chemicals and ANP fertilisers. With Dahej-Uran pipeline into operation,
the company would benefit from higher capacity utilisation and increased ammonia capacity. The company recently
agreed to form a JV with Yara International USA. The JV will provide DFPCL stability and flexibility in its operations
through Yara International's leadership in the ammonia value chain.
Genus Power Inf Genus, India's leading electric meter manufacturing company, is all set to reap the benefits of APDRP’s initiatives like
100% metering programme and replacement of mechanical meters by electronic meters. A healthy order book of
Rs645 crore will maintain the growth in its revenues and profitability.
India Cements With the modified capex plan, India Cements will join the league of top five cement players with a capacity of 14MMT
at the end of FY2009. Higher cement prices in the south coupled with the higher volume growth will drive the earnings.
Indo Tech The demand for transformers is on an upswing, thanks to high power-generation targets of the government. The
annual demand for transformer is expected to be around 95,000MVA whereas the current capacity of transformer
industry stands at around 75,000MVA. To cater to this opportunity transformer maker Indo Tech is increasing its
capacity, which will result in a strong earnings growth.
Ipca Lab A well-known name in the domestic formulation space, Ipca has successfully capitalised on its inherent strength in
producing low-cost APIs to tap export markets. The company's ongoing efforts in the branded promotional business
in emerging economies, revival in the UK operations, pan-European initiatives and a significant scale-up in the US
business will drive its formulation exports.
ICI India The outlook for the company is positive due to its increased focus on premium products. Due to the discontinuation
of some of its businesses, the top line growth may look subdued. The company has Rs1,000 crore of liquid investments
on its book, which would translate into free cash and cash equivalents of around Rs265 per share. Moreover with
ICI UK getting acquired by Akzo Nobel, the company would get access to wider portfolio of products coming from
Akzo Nobel’s stable.
Jaiprakash Asso Jaiprakash Associates, India's leading cement and construction company, is all set to reap the benefits of the huge
investments to be made in developing India's infrastructure. The Yamuna Expressway (earlier Taj Expressway) along
with the recently won Ganga Expressway Project as well as the real estate business will add significant value to the
stock price of the company going ahead. Listing of its power subsidiary will also unlock value for the investors. Further,
the financial closure for Yamuna Expressway improves the visibility for the execution of the project.
KEI Industries KEI makes stainless steel wires, cables and winding wires. It is expected to be a major beneficiary of the pick-up in
investments in the power generation and transmission and distribution sectors. On the back of these investments we
expect its revenues and earnings to grow at a CAGR of 30.9% and 46.7% respectively over FY2008-10E.
Mold Tek Tech Mold Tek Technologies has a steady-growing plastic packaging business and is aggressively scaling up the knowledge
process outsourcing (KPO) business that is slated to grow at a CAGR of over 150% over the next three years. The
de-merger of two businesses into separate entities would unlock value in its KPO business.
Mahindra Lifespace Mahindra Lifespace Developers is the only private sector player who has operational SEZ, the Chennai SEZ, in the
country. Leveraging on this rich expertise, the company is planning to develop one more SEZ in Jaipur. We also expect
significant improvement in the margins primarily due to higher revenue contribution from Chennai's non-processing
area and better realisation for Jaipur SEZ processing area. Consequently, we expect the company's net income to grow
at CAGR of 139.1% over FY2007-10.

Remarks
Orbit Corp Given its unique business model, Orbit is expected to leverage on huge massive redevelopment opportunities in
southern and central Mumbai. We expect Orbit's top line and bottom line to grow at a CAGR of 84.6% and 85.7%
respectively during FY2007-10. Furthermore, we believe Orbit will enjoy positive cash flow over the next three years
primarily due to its strategy to pre-sell a large part of its projects during the construction phase itself.
PNB PNB has one of the best deposit mixes in the banking space with low-cost deposits constituting over 40% of its total
deposits. A strong retail franchise and technology focus will help the bank boost its core lending operations and fee
income related businesses.
Ratnamani Metals Ratnamani is the largest maker of stainless steel tubes and pipes in the country. Given the buoyant demand for stainless
steel tubes and pipes from its clients, including BHEL and L&T, and a strong order book of Rs700 crore, we expect
its revenues and earnings to grow at a CAGR of 28.6% and 29.4% respectively over FY2008-10E.
Sanghvi Movers Sanghvi Movers is the largest crane hiring company in Asia. It is a perfect asset play on the upsurge in the country's
capex cycle. The usage of cranes is an essential part of investment spending and of the projects being undertaken by
Indian companies; this bodes well for the company. Its strong cash flows make it an attractive investment.
Selan Exploration Selan is an oil exploration & production company with five oil fields in the oil rich Cambay Basin off Gujarat. The
initiatives taken to develop and monetise the oil reserves in its Bakrol and Lohar oil fields are likely to significantly
ramp up the production capacity and thereby lead to re-rating of the stock.
SEAMEC SEAMEC, with its fleet of four MSVs, is a key beneficiary of higher rates for MSVs due to the surge in oil exploration
spends. SEAMEC IV, which is upgraded into a diving support vessel, has commenced its operations since March 2008.
Deployment of the same at a much higher rate would boost the company's overall performance.
Shiv-vani Shiv-Vani Oil & Gas Exploration has emerged as the largest onshore oil exploration service provider in the domestic
market. Services offered by the company include seismic survey, drilling and work-over, gas compression and coal
bed methane integrated services. The earnings are estimated to show a CAGR of over 49.8% during FY2008-10
period.
Subros Subros, the largest integrated manufacturer of automobile air conditioning systems in India, is expected to be a prime
beneficiary of buoyancy in the passenger car segment. It is a strong play on growth plans of Maruti Udyog and Tata
Motors, who are expanding their capacities. It plans to double its capacity in next two years which in turn will maintain
momentum in its earnings growth.
Sun Pharma With a strong hold in the domestic formulation market, an impressive growth in the US outfit, Caraco, Sun Pharma
has recently become an aggressive participant in the Para IV patent challenge space. Having already garnered four
exclusivity opportunities in the USA, further news flow on the Para IV challenges would drive the stock.
Surya Pharma A shift to a high-margin product portfolio is the name of the game, and Surya is well aware of it. Expansion of existing
capacities, entry into the high-margin injectables and earnings from menthol products would drive the fortunes of
this company.
Tata Chemical Tata Chemicals, the leading soda ash producer in India, is set to benefit from upturn in the soda ash cycle. With the
recent acquisition of GCIP, the company has become the second highest soda ash producer in the world with a
combined capacity of 5.5mmtpa. The company is also one of the leading manufacturers of nitrogen and phosphate
fertilisers in India. The company is de-bottlenecking its urea capacity to 1.3mmtpa by September 2008 and is expected
to benefit from regulatory changes in the fertiliser industry.
Torrent Pharma A well-known name in the domestic formulation market, Torrent has been investing in expanding its international
presence. With the investment phase now over, Torrent should start gaining from its international operations in
Russia and Brazil. The impending turnaround of its German acquisition, Heumann, will also drive the profitability
of the company.
UltraTech Cement Going forward, UltraTech should benefit from capacity expansion and investment in captive power plants. Despite
our expectation of subdued cement prices going forward, UltarTech's top line will grow by 15% in FY2009E. A
4.9MTPA capacity expansion in Andhra Pradesh and savings accruing on account of new captive power plants will
improve the cost efficiencies. Further, synergies with Grasim Industries will reduce its freight & marketing cost, thereby
boosting its operating margin.
Unity Infra Unity Infraprojects, being a leading construction company with well diversified expertise across projects, is expected
to be a key beneficiary of the real estate sector's growth and the government's thrust on infrastructure spending. We
expect its top line and bottom line to grow at CAGR of 37.8% and 31.4% respectively over FY2007-10 on the back
of a strong order book and healthy order inflows.
UBI Union Bank has a strong branch network and an all-India presence. The net NPAs are below 1%, indicating strong
asset quality while maintaining a healthy asset growth. With an average return on equity of over 24% during FY2008-
10E, the bank is available at an attractive valuation.

Remarks
Wockhardt A stream of new launches in the USA and sustained momentum in the domestic business will ensure good growth
for Wockhardt. The acquisition of Negma Laboratories and Morton Grove will propel the company to a new growth
trajectory as synergistic benefits start flowing in. Further, the likely approval of bio-similars in USA, EU and other
geographies would drive Wockhardt in medium to long term.
Zensar Zensar, promoted by the RPG group, has effectively utilised the inorganic route to gain critical mass in the fast growing
enterprise solutions segment and extend its presence in newer markets.
Vultures’s Pick
Esab India ESAB India is a leading manufacturer of electrodes and welding equipment. A double-digit growth in the manufacturing
sector would boost demand for its products and aid growth. Change in positioning from low margin, high volume
products to quality and high margin products would further boost profitability.
Orient Paper Orient Paper is in the process of increasing it capacity from 3.4 million tonne to 5 million tonne. The 50MW captive
power plant at Devapur cement plant is also progressing as per schedule and is expected to be commissioned by
Q4FY2009. The new capacities are expected to drive the earnings of the company.
WS Industries WSI, country's leading insulator maker, is all set to benefit from the three-fold rise in investment in the power T&D
segment. A strong order book of about Rs180 crore and a shift to higher-margin hollow insulators will drive the
earnings. The company is planning to develop a 10 lakh sq ft IT park at Chennai. Taking WSI's current 59% stake
in its realty venture, we arrive at a value of Rs29.1 per share for the realty venture alone.
Cannonball
Allahabad Bank Allahabad Bank, with a wide network of over 1,900 branches across the country, has a stronghold in the northern
and eastern parts of India. With an average RoE of over 20% during FY2008-10E, the bank is available at an attractive
valuation.
Andhra Bank Andhra Bank, with a wide network of over 1,200 branches across the country, has a stronghold in the southern parts
of India, especially in Andhra Pradesh. We expect its earnings to grow at a CAGR of 6% over FY08-10E.
Gateway Dist Gateway Distriparks, a port-based logistic facilitator, has strong presence at JNPT, the country's biggest port. It has
a market share of 25%. The recently won contract from the Punjab state government to operate a CFS near JNPT
for a period of 15 years will provide the much-needed trigger for the volume growth going ahead. The company's
foray into the rail operation business will be a trigger for its earnings in the long term.
ICIL International Combustion, which makes gear motors & boxes, polymers, heavy engineering equipment etc, is a good
play on India Inc's current capex plans, especially in the sugar and steel industries. The emerging outsourcing trend
in the gear motor space should lead to an earnings surprise.
J K Cements Delayed capacity expansion coupled with subdued cement prices has resulted in a weak outlook for the stock in the
near term. However once the entire capex comes on stream by the end of FY2009, the company will be in a position
to deliver an improved performance for FY2010. The company has also announced that it is setting up a grey cement
plant in Fujirah at an estimated investment of Rs1,400 crore.
Madras Cements Strong cement consumption in the southern region would continue to drive the earnings of Madras Cements, one
of the most cost efficient producers of cement in India. The 3-million-tonne expansion of the company will provide
the much needed volume growth in the future.
Shree Cement Shree Cement's 1-million-tonne sixth clinker line has come on stream in March 2008. The cement capacity of the
company now stands at 9.1 million tonne. Thus, going ahead we expect the volumes will drive the earnings of the
cement company.
TFCI TFCI provides financial assistance to hotel and tourism sector. As TFCI is exposed only to this sector, its performance
is inextricably linked to the prospects of this sector. This was largely responsible for TFCI's earlier financial problems.
However, things are now looking very promising for TFCI with improved asset quality and strong loan demand due
to significant expansion plans lined up by the hotel and tourism sector. We expect TFCI's earnings to grow at a CAGR
of 16% over FY2008-10.

Agartala
Sharekhan Partners Betul Gandhinagar Kishangarh
Mrs. Sukla Ghosh Mr Vivek Agrawal Mr Urvish Shah Mr Abhishek Rathi
Tel: (0381) 2314095 Tel: (07141) 233233 / 234533 / 329415 Tel: (02712) 30583058 Tel: (01463) 326755
Ahmedabad Bharuch Gangashahar Kolkata
Mrs Asha Tejas Patel/Mr Tejas Patel Mr Amit Luharuka/Mr Zubin Jambusarwala Mr Ashok Bafna Mr Sibdas Tapadar / Mr Suchanda Chudhary
Tel: (079) 69465183 Tel: (02642)226243 / 226244 / 327642 Tel: (0151) 3290782 / 2222311 Tel: (033)5514 1949 / 2578 9022 / 2578 8516
Mr Ibrarul Haque Mohd Akhtar Bhilwara Godhara Mr Kailash Todi
Tel: (079) 26826115/6451/53 Mr Atul Goyal Mr Bhavin Patel Tel: (033) 2655036/ 26550739/ 26553761
Mr. Dharmeshkumar Bhanderi Tel: (01482) 247868 / 321868 Tel: (02672) 249791 / 92 / 93 / 326555 Mr Rajendra K Agarwal
Tel: (079) 22730103 / 104 Bhimavaram Tel: (033) 22131373 /74
Gonda (U P)
Mr. Tejas Amin Mr P Srinivasa Rao Mr Kameshwar Gupta Lakhimpur
Tel: (079) 30021096 Tel: (08816) 221011 / 221033 / 221044 Tel: (05262) 223150 / 224560 / 221504 Mr Sanjeev Bajpai
Bhinmal Tel: (05872) 259681
Ms. Falguni Asim Mehta Himatnagar
Tel: (079) 26440394 Mr Sanjay Jain / Ms Babita Jain Ms Neeta Soni Lalitpur
Tel: (02969) 220050/221850 Mr Pankaj Arora / Mr Sanjay Sabharwal
Mrs. Daxa Vimal Patel Tel: (2772) 244573/574
Bhubaneswar Tel: (05176) 274397 / 274398
Tel: (079) 26464013 Howrah
Mrs. Paulomi Sanjay Golaskar Mr Ashok K Tripathy Mr Snehashis Ray / Mr Somen Lucknow
Tel: (079) 40035001 Tel: (0674) 2536821 / 2533618 / 2533598 Tel: (033)26786351 Mr Anupam Atal
Mr Ashok Tripathy / Mr Ranjit Pal Tel: (0522) 2287000 / 7001 / 7002
Mrs. Kuntal Vijay Modi Hubli
Tel: (079) 26850577 Tel: (0674) 2302607 / 3098968 Ms Nanda Umrani Mr Manish Gupta
Akola Billimora Tel: (0836) 4256666 / 4256338 / 37 / 39 Tel: (0522) 2201626 / 2231056 / 3290325
Mr Ruju Bhatia Mr Piyush Gandhi Hyderabad Mr Kuldeep Darbari
Tel: (0724) 2432595 Tel: (02634) 324236/ 286100 Ms Lakshmi Anantha Tel: (0522) 2257721 / 2259064
Allahabad Bokaro Steel City Tel: (040) 32950585 / 985 Mr Prashant Khuntia
Mr Ramesh Soni / Mr Sanjaykumar Soni Mr Mihir Kumar Jha Tel: (0522) 3234465 / 4017698 / 4006506
Mr Yasoob Akbar Hussain /
Tel: (0532) 2461512 / 2461961 Tel: (06542) 231087/ 92 / 233716 to 21 Mr Mukesh Kushwaha
Mr Gulam Mohammad Hashim
Alwar Calicut Tel: (040) 24574114 / 24514610 / 55710065 Tel: (0522) 5548317
Mr Kushal Sacheti / Mr Sanjay Sacheti Mr Mohan Das Mr Neeraj Verma / Mr Mukesh Varma
Indore
Tel: (0144) 2360880 / 3090307 /2360670 Tel: (0495) 2741962 / 3043331 Tel: (0522) 2326680 / 2326681 / 4003847
Mr Dilip Bagora
Amalner Chakulia Tel: (0731) 4067967 Mr Shakeel Ahmed Khan
Mr Satish Khanderia Mr Prabhat Kumar Lodha Tel: (0522) 2288888 / 89
Tel: (06594) 233393 / 233200 Jabalpur
Tel: (02587) 224089 / 227589 Mr Saurabh Bardia Mr Avdesh K Gupta
Chandigarh Tel: (0522) 24045901 / 02 / 4045901
Arrah Tel: (0761) 4007775 / 4017877
Mr Yuvraj Gupta
Mr Kamal Das / Ms Gunjita Das Jaipur Mr Mahendra Kumar
Tel: (0172) 4614441
Tel: (06182) 238885 / 237745 / 559966 Mr Sachin Singal Tel: (0522) 4025838
Chennai
Arsikere Tel: (0141) 5114137 / 3230943 Ms Seema Sarraf
Mr Kesarichand Sethia
Mr Jagan M Das / Mr B R Srinivasa Prasad Tel: (0522) 4024880
Tel: (044) 25386019 / 42162188 / 25390865 Jalandhar
Tel: (08174) 230345/ 230990/ 233045 Mr Gaurav Mittal / Mr Gurpreet Chugh Mr Shailesh Agarwal
Mr Shanmugharaj Gnanaselvi
Aurangabad Tel: (0181) 5055201-4 Tel: (0522) 4008193, 9415311710
Tel: (044) 42029037 / 38 / 39
Mr Kishor Soni Jammu Malegaon
Mr Prasad
Tel: (0240) 2361240/2339627/2336780 Mr Ajay Kapoor Mr Sanjay Agrawal / Mr Vijay Agrawal
Tel: (044) 23451091/92 / 43554458 / 61
Tel: (0191) 2574145 / 2548971/ 2540131 Tel: (02554) 329750 / 257915
Mr Mahesh Rengutwar / Mr Rahul Zambad Mrs Hemamalini Chandrashekhar /
Tel: (0240) 2336311 / 2344320 Mangalore
Mr S R Chandrasekaran Jamshedpur Mr Pradeep Rao / Mr Girish Revankar
Bahraich Tel: (044) 24328413 / 42111352/ 42111353 Mr Dilip Agarwal Tel: (824) 2441318 / 2412901 / 902/903
Mr H P Srivastav Mr Arvindhan M Tel: (0657) 2428034 / 2426182 / 2235903
Mankapur
Tel: (05252) 228284 / 228285 Tel: (044) 42023724 Jhansi Mr Manish Tripathy / Mr Kameshwar Gupta
Balrampur Chhapra Mr Tarun Gandhi Tel: (05265) 231500 / 234163
Mr K N Gupta Mr Ravi Gupta Tel: (0510) 2446751 / 53 / 54
Margao
Tel: (05263) 234740 / 234520 Tel: (06152) 232994 / 221936 Junagadh Mr Suresh Fernandes
Bangalore Chhindwara Mr Hiren Mehta Tel: (0832) 3235892 / 2710877/78
Mr B G Anirudh Mr. Sanket Chouksey Tel: (0285) 3295429/ 3295506 Motihari
Tel: (080)26560931/26560938/26564591 Tel: (07162) 236104 Kakinada Mr Anil Kumar
Mr Malar Anand Coimbatore Mr N Eshwara Rao Tel: (06252) 239398 / 239547
Tel: (080) 23548398 / 41544577 / 41532382 Mr Madanlal R Tukrel Tel: (0884) 6661691/92/93 Muzzaffarpur
Tel: (0422) 4370411 / 511 / 611 / 811 Kanchipuram Mr Manoj Lohia
Mr Pankaj Bafna / Mr Bhavesh Mehta
Mr R Palaniswamy/Mr P S Senthil Kumar Mr K S Saravanan Tel: (0621) 2269982 / 84 / 3297311
Tel: (080) 23445136 / 41136914
Tel: (044) 4216406 / 07 Tel: (044) 27231809 - 27231754 Mysore
Mr Nagendra Gupta Prashanth
Cuttack Kankroli Mr Dinesh Bhansali / Mr Vijayraj
Tel: (080) 26522725 / 26522736
Mr Ashok Tripathy / Bichitra Pramanick Mr Kushgra Mehta / Mr Saket Sharma Tel: (0821) 4262374 / 2420453
Ms Lakshmi Jayaram Tel: (02952) 329330 / 329331 / 329334
Tel: (0671) 2431451 / 2431452 / 2431453 Nagda
Tel: (080) 41247101 / 22216158
Dahod Kanpur Mr Pavan Banka
Mr Vinod Mahajan Mr Lalit Singhal
Mr. Jignesh N Kabrawala Tel: (07366) 246320 / 244252 / 248478
Tel: (080) 32002235 / 57689123 / 26719287 Tel: (0512) 2307045/ 46/ 47
Tel: (02673) 242876 Nagpur
Mr Chandrashekhar B Mr Girish Chandra Tandon
Mr. Mahendra Kadia/Mr. Prakash Mamnani Mr Vishal Asnani
Tel: (080) 22274353 Tel: (0512) 2364535
Tel: (02673) 645569/248869/223722 Tel: (0712) 6615385/ 86
Beawer Karaikudi
Dehradun Mr Sushil Parakh
Ms Mamta Chauhan/Mr Rajendra Chauhan Ms Vallippan Chitra
Mr. Bhagat Singh Negi Tel: (0712) 2525584 /2535584/ 5611861
Tel: (01462) 325855 / 512915 / 510315 Tel: (04565) 329253 / 230806
Tel: (0135) 6457725-28 Mr Pankaj Bhavnani
Belgaum Karumathampatty
Dhanbad Tel: (0712) 2766033 / 2775292
Mr Sameer / Mr Chandrakant Anvekar Ms K Parvathavarthini
Mr Dhiraj Mr Pramod Kumar Bagdi
Tel: (0831) 2427077 / 2427978 / 4206399 Tel: (0422) 4218005 / 4218006
Tel: (0326) 2301714 / 15 Tel: (0712) 2723487 / 2721963 / 2773905
Bettiah Dhule Karwar
Mr Niraj Chowdhary Mr Samit Thakkar
Tel: September 2008
(06254) 241512/522 / 234246 / 238733
Mr Jagdish Agarwal 39Mr Uttam Maruti Pavaskar
Tel: (08382) 229108
Sharekhan
Tel: (0712) 6617009 / 6613112 ValueLine
/ 6619453
Tel: (02562) 237676 / 237576/ 238043
Namakkal
Sharekhan Partners Pune Sri Ganganagar Vasco
Mr K Srinivasan Mr Vashu Balani Mr Mukesh Singhal Mr Parag Mehta
Tel: (04286) 309304 Tel: (020) 27414751/ 27415293/ 27413657 Tel: (0154) 12471881 / 882, 2475510 Tel: (0832) 2512361
Nanpara Srinagar Vijaywada
Mr Prashant Vaibhav Mr Nilesh Shah
Mr Irshad Mushtaq Kashoo Mr Shaym / Mr Nagendra Kumar
Tel: (05253) 234645 Tel: (020) 24454477 / 24458839
Tel: (0194) 2485730 / 2452836/ 2457078 Tel: (0866) 2550713 / 2554811
Narkatiaganj Mr Gopal Harsule Sumerpur Visakhapatnam
Mr. Sushil Agrawal Tel: (020) 25656573 Mr Bharat Kumar Mr. V. Vankatram
Tel: (06253) 242269 Tel: (02933) 252971/ 254392 Tel: (0891) 2505642/2505643
Nashik Mr M Ramachandran Surat
Tel: (020) 27030823 / 32519655/ 32908149 Mumbai
Mr Suyog Khandve Mr Biren Chhatrapati
Tel: (0253) 2597942 Mr Manoj Lalwani (Andheri)
Mr Amit Ashok Ghatol Tel: (0261) 5537174-73 / 2772114
New Delhi Tel: (022) 26351629 / 26351653
Tel: (020) 25533598/ 25510838/ 65239348 Mr Shreyas Shroff
Mr Tarun Bansal Tel: (0261) 2474400 / 3215800 Mr Abhijit Periwal (Andheri)
Tel: (011) 23288539 / 23243131 Mr Kalera Sanjay Vashulal Tel: (022) 26733643-44/ 55021968/ 69
Thiruvalla
Mr Rajiv Mehta Tel: (020) 26452442 Mr Jacob Varkey / Mr Vijayakumar K K Mr Dipesh Chadva (Andheri)
Tel: (011) 30888835 / 36 / 37 / 38 Tel: (0469) 2631046 / 2631048 Tel: (022) 40794242/ 40794212
Mr Suhas Bhalchandra Chatane
Mr Balender Singh Negi Thrissur
Tel: (020) 26990406 Mr Dipen Shah / Mr Ashish Shah (Babulnath)
Tel: (011) 40590739 to 743 Mr T R Gangadharan
Mr Ketan Ashok Shah Tel: (022) 23610772 / 23610773 / 361 1073
Orai Tel: (0487) 2605877/ 2607055
Mr Sanjay Agarwal Tel: (020) 26331485 Mr K Venugopal Ms. Payal Gulabdas Lal (Kandivali)
Tel: (05162) 252569 / 257485 Tel: (0487) 2402475 / 2399501 Tel: (022) 28651242 / 28624966
Raipur
Padra Tel: (0487) 2425098 / 3950724 Mr Jagdish V. Gada (Dahisar)
Mr Premchand Jain / Mr Pukhraj R Bardia
Mr Mukesh Nandlal Thakkar Tel: (0771) 4033229 / 4049451 / 2292632 Tirunelveli Tel: (022) 28282306 / 28281308/ 28281490
Tel: (02662) 224664 / 224665 Mr N Kameswaron
Mr Vipul Kothari Mr Prakash V Gor / Mr Dilesh (Dombivli)
Tel: (0462) 2320544 / 545 / 549
Patan Tel: (0771) 4001004 / 4017773 Tel: (0251) 5617530 / 2862890 / 895
Mr Shripal D Shah Tirupur
Rajamundry Mr B Jagan Mr Sachin Morakhia (Fort—Horniman Circle)
Tel: (02766) 325759 / 329873
Mr P Satyanarayan Tel: (0421) 4322356/ 4243656 Tel: (022) 2265 9327/ 22659734
Patna Tel: (0883) 5575561 / 62 / 92 Trichy Ms Salome A. Shah (Fort—Ali Chambers)
Mr Krishna Rungta
Rajkot Mr. Mothi Padmanaban Tel: (022) 2270 3909/11
Tel: (0612) 2213112 / 16
Mr Ketan Masrani / Mr Mihir Tel: (0431) 2700997 / 4011131
Mr Mohammed Ata Ashaf Mr Somen Sangani
Tel: (0281) 2227687/ 3044777 Udaipur (Fort—Jeevan Udyog Bldg)
Tel: (0612) 2226495 / 2232432 / 2205334
Ramgarh Mr Ananth Acharya Tel: (022) 2207 7566 / 2207 0427
Mr Ajay Kumar Tel: (0294) 2426945/6/ 3292512/ 2005079
Mr Rajeev Murarka Mr Premal Sanghvi
Tel: (0612) 2222649 / 5582761 Mr Narendra Harkawat
Tel: (06553) 230710
Mr Vivek Anand (Fort—Mahendra Chamber)
Tel: (0294) 5121322/2567667
Tel: (0612) 2266230 Ranchi Tel: (022) 66632921 / 22 / 23
Mr Pravin Murarka /Mr Rajiv Murarka Udumalpet
Ms Renu Bairoliya Mr R Sampath Mr Nikhil Shah (Fort)
Tel: (0651) 2208205 / 2312715/ 2207979
Tel: (0612) 2238428 Tel: (04252) 225323 Tel: (022) 22871500 / 22041050/ 70/90
Mr Subinoy Banerjee Utraulla
Mr Alok Kumar Mr Rajiv Sheth (Fort)
Tel: (0651) 3295162 Mr Phoolchand Dwivedi
Tel: (0612) 222953/4/5 Tel: (022) 22722781 / 82
Raxual Tel: (05265) 253277 / 253278
Mr Rajesh Choudhary Mr Vikash Agarwal Ms Monisha Mehta / Mr Gaurav Shah
Tel: (0612) 2616104 / 3954835 / 2623797 Vadodara (Ghatkopar)
Tel: (06252) 221275 Mr Viresh Chandrakant Thakkar
Pavaratty Tel: (022) 25100068/ 65768801/ 2/21
Sagar Tel: (0265) 2233457 / 2233460
Mr Abhilash Ramanathan Mr H V Ramamurthy Mr Hemant Kumar Garg (Mahim)
Tel: (0487) 2645372 / 3209047 / 2645374 Mr Tejas Shah
Tel: (08183)220055 / 44 Tel: (0265) 2783040 / 3013040 Tel: (022) 24456715 / 24466291
Pali Mr Mohit Sadarangani Ms Indu Mahendra Purohit (Malad)
Mr Raja Jain
Mr Amar Chand Sancheti Tel: (0265) 3084223/ 26 Tel: (022) 28806704 / 28823510
Tel: (07582) 403931
Tel: (02932) 510050 / 227729
Sahada Mr Bharatbhai Patel Mr Chetan Miyani/Mrs Naina Miyani
Patna Mr Naresh Lalchand Jain Tel: (0265) 2711647/2713648/5539684 (Mira Road)
Mr Vidyanand Singh Tel: (02565) 223529 / 227207 Mr Mittal Naik Tel: (022) 2813 1522 / 28130220
Tel: (0612) 2207887 / 3252643 Tel: (0265) 5545557 / 5505001
Sarni Mr Kishor Shah (Prabhadevi)
Perinthalmanna Valsad
Mr Vaibhav Agrawal Tel: (022) 66662444
Mr Narayanan Purayannur Mr Kaushal C Gandhi
Tel: (07146) 278488 / 277499 Tel: (02632) 243636 Mr Sanjay Yewale (Thane)
Tel: (04933) 396839
Sitamarhi Tel: (022) 25379061 / 25375135
Pudukkottai Varanasi
Mr Shiv Kumar Sarawagi / Mr Nikhil Goenka
Mr Venkatachalm Mr Lalji Choube Mrs Latika S Dudani (Ulhasnagar)
Tel: (06226)252400 / 256384
Tel: (04322) 232843 Tel: (0542) 2507621 / 2507619 Tel: (0251) 2570700 /2563535
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Agra
Sharekhan Branches Bhavnagar Goa-Vasco
F-3, First Floor, Friends Trade Center, Nehru Nagar, Opp.Anjana Gangotri Plaza, Plot No-8A 3 rd Floor , Opp Dakshinamurti Shop No 4, Gabmar Apt, Gr Flr Swatantra Path , Vasco, Goa -2.
Cinema, M.G.Marg, Agra-282 002. Tel: (0562) 4032053/54/57/60 School, Waghawadi Road, Bhavnagar, Gujarat - 364 001. Gorakhpur
Ahmedabad - Maninagar Tel: (0278) 2573938/2573939/2571333/3201333 Shop No 17, 1st Floor, M.P. Building, Golghar,
208, Rajvi Complex, Opp Rambaug Police Station, Maninagar, Bhubaneshwar Gorakhpur - 273001. Tel: (0551) 2202645 / 2202683.
Ahmedabad-380 008. Tel: (079) 65410102 / 65410829 A/B-2nd Floor, 501/1741, Centre Point, Unit No.3, Kharvel Guwahati
Ahmedabad - Navrangpura Nagar, Bhubaneshwar-751 001. Tel: (0674) 6534373. House No-60, Chandra Prabha Barua Lane, Pub Sarania,
201/202, Dynamic House, Near Vijay Cross Road, Navrangpura, Bhilai Guwahati-781003.
Ahmedabad-380009. Tel: (079) 66060141to 52 216, 1st Floor, Khichariya Complex, Nehru Nagar chowk, Bhilai
(C.G.) 490006 Tel: (0788) 4092512 / 4092672. Guntur
Ahmedabad - Sattelite D.No.5-87-89, 2nd Lane, Beside HDFC Bank, Lakshmipuram
406, Shivalik Corporate Park, B/H IOC Petrol Pump Near., Bhiwandi Main Road, Guntur - 522 007. Tel: (0863) 6452334.
Shyamal Cross Road Sattelite, Ahmedabad-380 015. Office no 1&2, Presidency Plaza, Khadipar Road, Nr Shivaji
Tel: (079) 6525 48 08 / 09/10/11/12 /13 Chowk, Bhiwandi- 421 302. Tel: (02522) 645690 to 96. Gurgoan
Ahmedabad - Paldi Bhopal GF 10, JMD Regent Square, DLF Phase- II, Opp Sahara Mall,
302, Gangandeep Towers, Opp Bank of India, Paldi Cross Road, House No 15-B, 1st Floor, Plot No 9-B, Malviya Nagar, Gurgaon Road, Gurgaon-122001. Tel: (0124) 4104555.
Paldi, Ahmedabad-380 007. Rajbhawan Road, Bhopal-462 003. Tel: (0755) 4291600. Gurgoan-II
Ahmednagar Bhuj SCF 89, 1st Floor, Sector 14, Urban Estate, Gurgoan - 122 001.
Shop No 1 & 2, Kaware Complex, Vasant Talkies Road, 1st Floor, RTO Relocation, Opp Fire brigade Station, Bhuj, Tel: (0124) 4115431/32.
Ahmednagar-414 001. Tel: 0241-6611011 to 20. Kutch-370 001. Tel: (02832) 229463/229473/229483 Gwalior
Ajmer Bikaner Portion No.3, 1st Floor, Parimal Complex, Opp Kotchar
195/11, Rajhonda, Kutchery Road, Ajmer-305 001. 102, Nagpal Complex, First Floor, Opp DRM Office, Bikaner, Petrol Pump, Gwalior -474 009. Tel: (0751) 4069570 to 575.
Tel: (0145) 6100919 / 6100920 / 2422665. Rajasthan-334 001. Tel: (0151) 6450803 / 6450804. Hyderabad
Allahabad Borsad 7-1-22/3/1-5/C, Afzia Towers, 1st Floor, Begumpet,
1st Floor, Shop No.14 & 15, Vashishti Vinayak Tower, G -1 / 2 , Krishna Hospital Bulding , Suryamandir Rd , Nr. Panch Nala , Hyderabad-500016 Tel: (040) 66827469-70 (D) 4020354.
Nr Yatrik Hotel, Tashkant Marg, Civil Lines, Allahabad-211 003. Borsad -388 540. Tel: (02696) 224212/13/14 Hyderabad-Begum Bazar
Tel: (0532) 6452910. Calicut 14-7-21, 14-7-21A, Ground Floor, Opp AP Mahesh Bank,
Aligarh 1st Floor, 6/1002 F, City Mall, Opp YMCA, Kannur Road, Begum Bazar, Hyderabad-12. Tel: (040) 66742880 - 99.
5, Vaishno Compound, Samad Road, Aligarh (UP). Calicut-673001. Tel: (0495) 6450307/308/312/314/316/317
Tel: (0571) 2506637 / 2503859. Indore
Chandigarh
Ambala 102-104, Darshan Mall, 15/2 Race Course Rd,
SCO 489-490, 2nd Floor, Sector-35C, Chandigarh, Punjab - Indore - 452 001. Tel: (0731) 4205520 to 24
167/18, 1st Floor, Adjoining Airtel Office, Rai Market, 160035. Tel (0172) 6540233 /6540183 / 6540158
Ambala Cantt - 133001. Tel: (0171) 6450284to 87. Jaipur
Chengannur Flat No 401/402, 4th Floor, Green House, Ashok Marg,
Amravati Door NO.XIV/263(7 & 8), 1st Floor, Bin Towers, Hospital
Tank Plaza, Above Union Bank. Rajkamal Squre. C-scheme, Jaipur-302001. Tel: (0141) 6456098 / 6456114.
Junction, Chengannur- 689121.
Amravati -444 601.. Tel: (0721) 6451282/83 Jaipur- Tonk Road
Chennai - Alwarpeth
Amritsar 68, C P Ramasamy Road, 3rd Floor, Alwarpet, 10, Kailash Puri, Tonk Road, Jaipur-17. Tel: (0141) 650 5003-4.
5 Deep Complex, 1st floor , Opp Doaba Automobiles , Court Road, Chennai - 600 018. Tel: (044) 43009001/02/03/04/05 Jalgaon
Amritsar - 143001. Tel: (0183) 6451903 / 904 / 905. Ground Floor, Ramdayal Plaza, Near Kiran Tea, Navi Peth,
Chennai - Chetpet
Anand G-2, Salzburg Square, 107-Harrington Road, Chetpet, Jalgaon - 425001. Tel: (0257) 2239461.
F/5, Prarthana Vihar Complex, Near Panchal Hall, Vidyanagar Road, Chennai-600031. Tel: (044) 28362800 / 2900 / 28363160.
Anand, Gujarat-388 001. Tel: (02692) 245615 to 16 / 655022. Jamnagar - K. P. House
Chennai - Parrys K. P. House, 2nd Floor, Opp Dhanvantri College Ground, Pandit
Anand - Vidyanagar Nehru Marg, Jamnagar- 361 008. Tel: (0288) 2541861-63.
1st Floor, P.M.Chamber, Mota Bazar, Vallabh Vidyanagar, Anand, Begum Isphani Complex, No 44 Armenian Street, Parrys,
Gujarat - 388120. Tel: (02692) 655015 to 17. Chennai - 600001. Tel: (044) 64552951 / 52/ 53 / 54 Jamshedpur
Chennai - Purasawalkam UG, 2&3 Shreeji Arcade, 76B, Pennar Road, Sakchi,
Angamaly Jamshedpur-831001. Tel: (0657) 2442000 / 01 / 02 / 03 .
1st Floor, Kachappilly Towers(Uco), Aluva Road, Angamaly, F-13, Dr Rajivi Tower, 231/28 Purasawalkam High Road,
Pin-683572 (Kerala). Opp Gangadeeshwar Temple Tank, Chennai - 7. Tel: (044) Jodhpur
42176004 to 9. A-3, 1st Floor, Olympic Tower, Station Road,
Ankleshwar
F-1, F-2 & F-3, 1st Floor, Shree Narmada Arcade, Opp HDFC Bank, Coimbatore Jodhpur-342001. Tel: (0291) 2648000 / 4 / 5
Ankleshwar - 393002. Tel: (02646) 227120/21. Vignesvar Cresta, 2nd Block, 3rd Floor, Junagadh
Asansol 1095 - Avinashi Road, P N Palayam, Coimbatore -641037. 6/7/8, 2nd Floor, Raiji Nagar, Motibaug Raod,
1st Floor, Block C , Parvathi Arcade, Ashram More, G.T.Road, Tel: (0422) 2213434/2214282/2218252. Junagadh-362001. Tel: (0285) 2650434.
Asansol-713301 (W.B). Cuttack Kanpur
Bangalore - Jayanagar Gajanan Complex, 2nd Floor, Haripur Road, Dolamundai, 515 & 516, Kan Chambers, 14/113, Civil Lines, Kanpur -1.
442, "Vasavi Plaza" 3rd Floor, 11th Main, Opp Global Trust Bank, Cuttack- 753001 Tel: (0671) 2432340 to 45.
Kalyan
IV Block, Jayanagar, Bangalore -11. Tel: (080) 64527428 to 31. Dehradun Shop No. 9,10,11,Navjyoti Darshan Apt., Near Purnima Talkies,
Bangalore - Gandhinagar 58, Rajpur Road, Opp. Hotel Madhuban, Dehradun-248001. Murbad Road, Kalyan(W), Pin: 421304. Tel: (0251) 2211342.
Brigade Majestic, 201 A Block,25 Kalidasa Marg, 1st Main Road, Tel: (0135) 2740 190 to 94. Kannur
Gandhinagar, Bangalore -9. Tel: (080) 64527413 to 15. Erode Ramananda Compound,1st Floor, TPN 264 A, N.H 17, Talap,
Bangalore - Koramangala Akhil Plaza, Block No.1, T.S.No.121, Perundurai Road, Kannur - 670002, Kerala. Tel: (0497) 6451515 / 6451616.
Emerald Towers, No 147, KHB Colony, 5th Main, 5th Block, Opp Padmam Restaurant, Erode - 638011.
Koramangala, Bangalore-560 095. Tel: (080) 64527477 to 79. Kochi
Tel: (0424) 2241000/ 2241005. Chicago Plaza, 1st Floor, Rajaji Road, Ernakulam,
Bangalore - Indiranagar Erode - Gobichettipalayam Kochi-682 035. Tel: (0484) 2368411/12/13/17
1132, Anand Embassy, 3rd Floor, Above Food World, 100 Feet Chamundeswari Agencies Bldg, 279, Cutchery Street,
Road, Indiranagar, Bangalore-38. Tel: (080) 64527465 to 67. Sathy Main Road, Gobichettipalayam-638 452. Kochi - Vyttila
Bangalore - Malleshwaram Tel: (04285) 229013/14/15. Thondiyil Plaza, 31/757-D, Thammanam Road, Vyttila Junction,
No 311, 2nd Floor, 2nd Main, Between 15th and 16th Cross, Kochi, Kerala - 682019. Tel: (0484) 6460120 /6460121.
Faizabad
Sampige Road, Malleshwaram, Bangalore-3. Tel: (080) 64527401-03. Mehramat Plaza, 4099, Civil Lines, Near Pushpraj Guest Kodungallur
Bangalore - Marathalli House, Rly Station Road, Faizabad-224001. Tel: (05278) 1st Floor, Thoppil Tower, Near Pvt Busstand, Chanthapura,
Unit no. 201 / B, 2nd Floor, Sigma Arcade -II, Marathalli, 320720 /220740. Kodungallur - 680664. Tel: (0480) 2810147/157/167
Bangalore – 560037 Tel: (080) 42063278 / 79 / 80 /81 Faridabad Kolhapur
Bangalore - Electronic City SCF 16, 1st Floor, Near ICICI Bank, Sector 15 Market, No 5, 3rd Floor, Ayodha Tower, Bldg No 1,511 / KH -1/2,
2nd Floor, Shop No. 5, Shopping Complex Road, Electronic City, Faridabad-121003, Haryana. Tel: (0129) 2220825 /26/27. E-Ward, Dabholkar Corner, Station Road, Kolhapur - 416 001.
Bangalore-560100. Tel: (080) 65395261 to 66 Gandhidham Tel: (0231) 6687063 -66
Bangalore - Banashankari Plot No.147, Sector 1 A, Near Big Byte Resturant, Kolkata
No.77 1st Floor, N.R.Towers, 100Ft Ring Road, Bhanashankari, 3rd Gandhidham –370201. Tel: (02836) 323113 / 323114. Kankaria Estate, 1st floor, 6-Little Russell Street,
Stage, 5th Block, Bangalore-560 085. Tel: (080) 26421481 to 85 Gandhinagar Kolkata - 700 071. Tel: (033) 22830055 / 22805555.
Bangalore - BTM GF/04, Infocity-Super Mall-2, Infocity, CH-0 Circle,
No: 736/C, 7th Cross, 11th Main Mico Layout, BTM 2nd Stage, Gandhinagar-382 009. Tel: (079) 64512663. Kolkata - Dalhousie
Bangalore-76. Tel: (080) 653952 70 to 75 / 420560 31 to 34 2nd Floor, Jardine Henderson Bldg. 4, Dr Rajendra
Ghaziabad Prasad Sarani (Clive Row), Kolkatta-1.
Bardoli J-3, 2nd Floor, RDC Raj Nagar, Ghaziabad-201001. Tel: (033) 22317691; 22317692.
303/304, Millenium Mall, Opp.Sardar Vallabhbhai Patel Musium, Tel: (0120) 4154358
Station Road, Bardoli-394 003. Tel: (02622) 657229. Goa-Mapusa Kolkata - Durgapur
St. Anthony Apartment, Ground Floor, Shop No B/17, Feira Alta, 111/95, Nachal Road, Benachity, Dist Burdwan, Durgapur,
Bareilly Kolkata - 713 213. Tel: (0343) 6452701 /02/03
148, Civil Lines, Bareilly-243 001. Tel: (0581) 2511581 to 85. Mapusa, Goa - 403507. Tel: (0832) 6453383 - 86 / 6521513.
Bharuch Goa-Panaji Kolkata - Howrah
221-227, 2nd Floor, Dream Land Plaza, Opp Nagar Palika, Station Hotel Manoshanti Building, Ground Floor, Dr D V Road, 42, Dobson Road, Prakash Mansion, Near A.C.Market, Howrah,
Road, Bharuch - 392 001. Tel: (02642) 244998/99. Panaji, Goa-403001 Tel: (0832) 6453407 to 412. Kolkata-711 101. Tel: (033) 64523471 to 80.
A-206, Phoenix House, 2nd Floor, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013.
Kolkata - Saltlake (Advisory)
Sharekhan Branches
Palakkad Varanasi
DL-78, Sector - 2, Saltlake City, Kolkata 700 091. 1st Floor, Shree Laxmi Vilas Buildings, 2nd Floor, Banaras TVS Bldg., D-58/12, A-7, Sigra,
Tel: (033) 23581826 to 29. G. B. Road, Palakkad- 678 014. Tel: (0491) 6450179 / 6450188. Varanasi - 221 010 (UP). Tel: 0542 - 222 1073 / 75 /81 / 83
Kolkata - Gariahat Patiala Vellore
1, Ekdalia Road, Gariahat, Kolkata – 700019 (W.B.) SCO- 135, Chotti Baradari, Patiala -147 001 (PUNJAB) 20/B, First East Main Road, Land Mark Building, 2nd Floor,
Tel: (033) 40075901 - 10 Tel: (0175) 6622200 /01/02/03/04/05. Gandhi Nagar, Vellore - 632006 Tel: (0416) 6454306 to 310.
Kollam Pulgaon Vijaywada
First Floor, A. Narayanan Shopping Complex, Kadappakada, Khurana Complex, Near Balaji Hotel, Nachangoan Road, Centurian Plaza, D. No: 40-1-129, 2nd Floor, Old Coolex
Kollam - 691008. Tel: (0474) 2769120 to 25. Pulgaon - 442 302. Building, M. G. Road, Vijaywada - 520 010.
Lucknow Pune - F C Road Tel: (0866) 6619992/6629993.
2/159, Vivek Khand, Gomti Nagar, Lucknow - 226 010. 301, Millenium Plaza, 3rd Floor, Opp Fergusson College main Gate, Vizag
Tel: (0522) 4009832 to 33. Shivaji Nagar, Pune-411 004. Tel: (020) 66021301 - 06. 10-1-35/B, Third Floor, Parvathaneni House, Val Tair Uplands,
Lucknow (Hazratganj) Pune - Bun Garden CBM Compounds, Vishakhapatman - 530003.
1st Floor, Marie Gold, 4,Shahnajaf Road, Hazaratganj, 285, Tara Baug, Opp ICICI Bank - Bund Garden Road, Koregaon Park Tel: (0891) 6673000/6671744.
Lucknow-226 001. Tel: (0522) 4010342 / 43. Road, Pune - 411 001. Tel: (020) 66039301 / 66039302. Wardha
Lucknow - Rajajipuram Pune - Satara Road Radhe Complex, 2nd Flr, Indira Mkt Road, Above Akola Urban
Neeru Enclave, Jal Sansthan Crossing, CP, 7/201, Sector - 7, Raja 404, Landmark Centre, S No 46/1B+2B, Plot No. 2, Opp City Pride co-op Bank, Wardha-442001. Tel: (07152) 645023 to 26.
Ji Puram, Lucknow - 226017. Tel: (0522) 2418996 /97 / 98. Theatre, Pune-9. Tel: (020) 66206341 to 66206350. Mumbai - Andheri
Ludhiana Pune - Nigdi Samarth Vaibhav, Office No 114, 1st Floor, Off Link Road,
SCO 145 1st Floor Feroze Gandhi Market, Near Ludhiana Stock ABC Plaza (Agarwal Complex), 2nd Flr, Plot No 6, Sector No 25, Oshiwara, Andheri (W), Mumbai-400 053.
Exchange, Ludhiana -141001. Tel: (0161) 6547349 / 459 /469. Bhel Chowk, Pradhikaran, Nigdi, Pune-44. Tel: (020) 66300690-97. Tel: (022) 66750755 to 58.
Madurai Puri Mumbai - Borivali
Saran Centre, A-2, 1st Floor, 19, Gokhale Road, Plot No-463, Redcross Road, Puri -752 001 (Orissa). Shop No 105 / 106, Kapoor Apartment, Punjabi Lane Corner,
Chinnachokikulam, Madurai-625 002. Tel: (0452) 436 0303. Tel: (06752) 228859 / 228861 / 228862 / 228863. Borivali (W), Mumbai-400092. Tel: (022) 65131221 to 24.
Mangalore Pondicherry Mumbai - Ghatkopar
C-1, 1st Floor, Presidium Commercial Complex, Anand Shetty 312/10, Vallar Salai,Vengata Nagar, Saram Revenue Village, 202, Sai Plaza, 2nd Floor, Junction of Jawahar Road &
Circle, Attavar, Mangalore - 575001. Tel: (0824) 6451503-4. Pondicherry - 605001. Tel: (0413) 4304904 to 09. R. B. Mehta Marg, Ghatkopar (E), Mumbai 400 077.
Tel: (022) 2510 8844 / 2510 8833.
Meerut Raipur
105, Om Plaza, Begum Bridge Road, Meerut-250001 (U.P.) "Ridhi House", 27/218, New Shanti Nagar, Raipur (Chattisgarh)- Mumbai - Goregaon
Tel: (0121) 4028354/55/56. 492007. Tel: (0771) 4217777, 4281172, 4001004. 103, 1st floor, Plot No. 343, Above ICICI Bank, S.V. Road,
Jawahar Nagar, Goregaon (W), Mumbai- 400 062.
Mehsana Rajkot Tel (022) 67418570.
14-15, 1st Floor, Prabhu Complex, Near Rajkamal Petrol Pump, 102/103, Hem Arcade, Opp Vivekanand Statue, Dr Yagnik Road,
Mehsana - 384002. Tel: (02762) 248980/249012. Rajkot-360001 Tel: (0281) 2482483/84/85. Mumbai - Kandivali
Om Sai Ratna Rajul CHS, Corner of Patel Nagar, M G Road,
Muradabad Rajkot - Ring Road Kandivali (W), Mumbai-400 067. Tel: (022) 6725 0491 to 5.
Shankar Datta Sharma Marg, Opposite Police Station, Nanamava Survey No. 70/71, A Type Unit No. 14 , Opp. Solitire
Civil Lines , Muradabad-244 001. (UP) Buidling, 150ft Ring Road, Bhaktidham, Rajkot - 360005. Mumbai - Kandivali (Thakur Village)
Shop No 37, EMP-6, Jupitar CHS Ltd,Evershine Milleniam
Mysore Salem Paradise, Thakur Village, Kandivali (E), Mumbai- 400 101.
Shop No.3, Mythri Arcade (Next to Saraswathi Theatre), Sri Ganesh Tower, 561, 2nd Floor, Saradha College Main Road,
Kantharaj Urs Road, Chamaraja Mohalla, Saraswati Puram, Salem - 636 007. Tel: (0427) 6454864 / 65/ 66. Mumbai - Khar
Mysore-570 009. Tel: (0821) 6451601 / 6451602 1st Floor, Matru Smruti, Plot No.326, Linking Road, Khar (W),
Sangli Mumbai 400 052. Tel: (022) 65135333 - 65133972 to 76.
Nadiad Ranjit's Empire, Office No-36,37,38, 2nd Floor, CS No.517 , Opp.
201/202, City Point Complex, Near Parash Cinema,Santram Zillaparishad, Sangli-416416. Mumbai - Lower Parel
Road, Nadiad - 387001. Tel: (0268) 2550555. "C" Phoenix House, 4th Floor, Senapati Bapat Marg,
Satara Lower Parel, Mumbai-400 013. Tel: (022) 6618 9300.
Nagpur (C A) First Floor, Shree Balaji Prestige, Powai Naka, Satara,
409/412, Heera Plaza, Near Telephone Exchange Square, Maharashtra – 415001. Tel: (02162) 239824. Mumbai - Malad
Central Avenue, Nagpur-440 008. Tel: (0712) 2731922/23. 502, Rishikesh Apartment, Opp to N L High School, S.V.Road,
Siliguri Malad (West), Mumbai- 64. Tel: (022) 6513 3969.
Nagpur - Dharampeth 2nd Floor, Ganeshayan Bldg,112,Sevoke Road, Beside Sunflower
54, Park Residency, Khare Town, Dharampeth, Shopping Mall, Siliguri-734001. Tel: (0353) 6453475 -79. Mumbai - Matunga
Nagpur - 440 010. Tel: (0712) 6610752 to 56. Flat No 4B, Ground Floor, Ashwin Villa, Telang Road, Matunga
Secunderabad (E), Mumbai - 400019. Tel: (022) 6513 9230/31/32
Navsari Marrideep Bldg, 1st Floor, 12-5-4, Vijayapuri, Opp St Annes College,
1-Nirmal Complex, 1st Floor, Station Road, Sayaji Road, Tarnaka, Secunderabad-500 017. Mumbai - Mulund
Navsari - 396 445. Tel: (02637) 652300/652400/248888. Tel: (040) 64533871 to 75. Shop No.7-10, Runwal Towers, Opp Goverdhan Nagar,
L B S Marg, Mulund (W), Mumbai-400 080.
Nashik - Ashok Stambh Surat Tel: (022) 67251240 to 54.
6-Sancheti Tower, Opp Circle Cinema, Ashok Stambh, M-1 to 6,Jolly Plaza, Mezzanine Floor, Athwa Gate,
Nashik-422 002. Tel: (0253) 6610990-999. Surat - 395 001. Tel: (0261) 6560310 to 6560314. Mumbai - Opera House
Gogate Mansion, Gr Floor, 89- Jagannath Shankar Seth Road,
New Delhi - Bharakhamba Road Surat - Advisory Girgaum, Opera House, Mumbai -4. Tel: (022) 6610 5671-75.
903 & 903A, Kanchenjunga Bldg., 18-Bharakhamba Road, 419, Jolly Plaza, Athwagate, Surat-1. Tel: (0261) 6646841-45.
New Delhi-110001. Mumbai - Powai
Thrissur A-Wing, Unit No A 201/203/204, Galleria Building,Hiranandani
Nashik - College Road Pooma Complex, M G Road, Thrissur-1. Tel: (0487) 2446971-73. Garden, Powai, Mumbai- 400 076. Tel: (022) 67024772 - 73.
5 SK Open Mall, Yeolekar Mala, Near BYK College, Thodupuza
College Road, Nashik-422 005. Tel: (0253) 6610975 to 978. Mumbai - Raghuvanshi
II Floor - Magalam North end, Idukki Road, Near KSRTC Bus Stand, Raghuvanshi Mills Compound, Krishna House, 3rd Floor, S B
New Delhi - Pusa Road Thodupuzha-685584. Marg, Lower Parel, Mumbai – 400 013. Tel: (022) 6699 7163.
5, Pusa Road, Opp. Bal Bharti Public School, New Delhi-110005. Trichy - Cantonment
Tel: (011) 45064908 / 28750726/27. Mumbai - Thane
F-1, Achyuta, 111-Bharatidasan Salai, Cantonment, Trichy-620001 Gaurangi Chambers , 1 st Floor, Opp Damani Estate,
E-4, 2nd Floor, Inner Circle, Above Pizza Hut, Connaught Place, (Tamilnadu). Tel: (0431) 4000705 / 2412810 L B S Marg , Thane - 400 602. Tel: (022) 67913961/62.
New Delhi-110 001. Tel: (011) 66095731 / 66095705. Tirupur Mumbai - Stock Exchange (Rotunda)
New Delhi - Greater Kailash Ram Arcade, No 27, Muncif Court Street, 23rd Floor, East Wing, P.J.Tower, Rotunda Building, Mumbai
M-43, 2nd floor, M-Block, Main Market, GK-1, New DelhiI -110 048. Tirupur- 641 601. Tel: (0421) 6454316 to 20. Samachar Marg, Fort, Mumbai-23. Tel: (022) 66105600-10
Tel: (011) 64580204 to 64580211. Trivandrum Mumbai - Vashi
New Delhi - Pitampura Laxmi Bldg, 1st Floor, T.C.No.26/430, Vanrose Road, Persipolis Bldg., 108, 1st floor, Opp. St. Lawrence School,
411/412, Agarwal Cyber Plaza,Netaji Subhash Palace, Trivandrum - 695 039. Tel: (0471) 6450657 / 58 / 59. Sector-17, Navi Mumbai-400703. Tel: (022)27882979-82.
Pitampura, New Delhi - 110034. Tel: (011) 6458 0310. Tirur Shop No 32, Welfare Chambers, Sector-17, Vashi,
New Delhi - Karkardooma Kayal Madathil Arcade, Ground Floor, Nauvilangadi, New Mumbai - 400705. Tel: (022) 67124657 - 58
Unit No.504, 5th Floor, V4 Tower, Community Center, Pookkayil Bazar, Tirur - 676 107. Tel: (0494) 6451601 to 05.
Karkardooma, New Delhi- 110092.Tel. (011) 43047000-002. Mumbai - Vile Parle
Udaipur 7-Alka CHS, Ground Floor, Dadabhai Road, Vile Parle (W),
New Delhi - Vasant Vihar 17 C, Kutumb Apt, Opp. ICICI Bank, Madhuban, Udaipur-313001. Mumbai - 400056. Tel: (022) 26253010/11/12/13
E-20, Basant Lok Community Center,Vasant Vihar,
New Delhi -110057. Tel: (011) 46095712-16. Tel: (0294) 6454647 PCG Branch
New Delhi - Mayur Vihar Vadodara
6-8/12, Sakar Complex, 1st Flr, Opp ABS Tower, Haribhakti PCG - Kolkata
202 & A1 , Sri Durga Ji Shopping Complex , PKT-II, Mayur Vihar, Kankaria Estate, 2nd Floor, 6-Little Russell Street,
Phase-I, New Delhi -110091. Tel: (011) 45064908 - 9. Extension, Vadodara-390 015. Tel: (0265) 6649261-70.
Vadodara - Manjalpur Kolkata - 700 071. Tel: (033) 22830055
New Delhi - Rajouri Garden PCG - Mumbai
A - 29, 2nd Floor, Ring Road, Rajouri Garden, New Delhi - 110027. 1st Floor, Rutukalsh Complex, Tulsidham Char Rasta,
Manjalpur, Vadodara - 390 011. Tel: (0265) 2647970-71. "C" Phoenix House, 4th Floor, Senapati Bapat Marg,
Tel: (011) 45608923 to 26. Lower Parel, Mumbai-400 013. Tel: (022) 6618 9300.
Noida Vapi
P-12A, 3rd Floor, BHS Liberty, Sector-18, Noida - 201 301. Royal Fortune, D-101, E-101, 1st Floor, Vapi-Daman Road, Sharekhan Representative Office
Tel: (0120) 6472 476 to 87. Vapi - 396 191. Tel: (0260) 6452931 to 36
Varachha - Surat Dubai
Ottapalam 213, Nasir Lootah Bldg, Khalid Bin Walid Street (Bank Street),
1st Floor, KVM Plaza, Main Road, Ottappalam, G-18/19, Rajhans Point, Varachha Main Road, Varachha Road,
Surat - 395006. Tel: (0261) 3244900. P.O. Box: 120457, Dubai, U A E. Tel: 971-4-3963889
Kerala - 679 101. Tel: (0466) 2344145/46/47. Direct : 971-4-3963869.

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CONTENTS

from sharekhan’s desk

September 2008 3 Sharekhan ValueLine

Sharekhan ValueLine 4 September 2008

from sharekhan’s desk Nothing decisive yet

September 2008 5 Sharekhan ValueLine

Sharekhan ValueLine 6 September 2008

SHAREKHAN TOP PICKS

NAME CMP PER ROE (%) TARGET UPSIDE

September 2008 7 Sharekhan ValueLine

NAME CMP PER ROE (%) TARGET UPSIDE

Sharekhan ValueLine 8 September 2008

NAME CMP PER ROE (%) TARGET UPSIDE

September 2008 9 Sharekhan ValueLine

Sharekhan ValueLine 10 September 2008

ADITYA BIRLA NUVO

The author doesn’t hold any investment in any of

September 2008 11 Sharekhan ValueLine

Sharekhan ValueLine 12 September 2008

The author doesn’t hold any investment in any of

September 2008 13 Sharekhan ValueLine

BHARAT HEAVY ELECTRICALS

BL KASHYAP & SONS

Sharekhan ValueLine 14 September 2008

DEEPAK FERTILISERS & PETROCHEMICALS CORPORATION

September 2008 15 Sharekhan ValueLine

Sharekhan ValueLine 16 September 2008

INTERNATIONAL COMBUSTION (INDIA)

September 2008 17 Sharekhan ValueLine

Sharekhan ValueLine 18 September 2008

LARSEN & TOUBRO

September 2008 19 Sharekhan ValueLine

Sharekhan ValueLine 20 September 2008

MAHINDRA & MAHINDRA

September 2008 21 Sharekhan ValueLine

NAVNEET PUBLICATIONS (INDIA)

NUCLEUS SOFTWARE EXPORTS

Sharekhan ValueLine 22 September 2008

OPTO CIRCUITS INDIA

ORCHID CHEMICALS & PHARMACEUTICALS

September 2008 23 Sharekhan ValueLine

ORIENT PAPER AND INDUSTRIES

PATELS AIRTEMP INDIA

The author doesn’t hold any investment in any of

Sharekhan ValueLine 24 September 2008

September 2008 25 Sharekhan ValueLine

RATNAMANI METALS AND TUBES

Sharekhan ValueLine 26 September 2008

SELAN EXPLORATION TECHNOLOGY

September 2008 27 Sharekhan ValueLine

SUN PHARMACEUTICAL INDUSTRIES

Sharekhan ValueLine 28 September 2008

September 2008 29 Sharekhan ValueLine

Sharekhan ValueLine 30 September 2008

September 2008 31 Sharekhan ValueLine

Sharekhan ValueLine 32 September 2008

SHAREKHAN SPECIAL AUGUST 20, 2008

September 2008 33 Sharekhan ValueLine

0 70 The trade deficit stood at US$9.8 billion in June 2008, up 29.6%

softening of the prices of commodities, especially crude oil, in

8 healthy at 10% yoy, buoyed by an improvement in the out-

The near-term outlook for industrial production remains weak

primarily because the growth in the leading indicators is sharply