The key points from the document are: 1) Indian stock markets continued their upward trend during Mahurat Trading, with the BSE Sensex crossing 21,000 points and sectoral gains across auto and pharma. 2) The markets are expected to continue rising in the near term if indexes remain above support levels in early trading. 3) Orchid Chemicals redeemed outstanding foreign currency convertible bonds of $25.7 million on their due date using cash from a recent acquisition.

1. 1
Market Outlook
India Research
November 8, 2010
Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539
Dealer’s Diary
The key benchmark indices continued their uptrend during Mahurat Trading,
with the BSE Sensex getting past the intimidating 21,000 mark. Trading was
also marked by lot of stability as no major volatility was seen throughout the
trading session. All sectoral indices witnessed gains, with the auto and pharma
sectors posting the highest gains. The Sensex and Nifty ended the session with
healthy gains of 0.5% each. BSE mid-cap and small-cap indices outperformed
the benchmark indices to close the trading with gains of 0.9% and 1.5%,
respectively. Among the front liners, JP Associates, Hindalco, M&M, SBI and
HUL gained 1–4% while Jindal Steel, Tata Power and L&T lost 0–0.5%.
Among mid caps, Dish TV, Shriram City Union Finance, Onmobile Global,
Anant Raj Industries and City Union Bank gained 4–5%, while AIA Engg.,
Sadbhav Engg., Nava Bharat Ventures, Whirlpool and Alfa Laval lost 1–2%.
Markets Today
The trend deciding level for the day is 20805/6257 levels. If NIFTY trades
above this level during the first half-an-hour of trade then we may witness a
further rally up to 21005–21117/6315–6348 levels. However, if NIFTY trades
below 20805/6257 levels for the first half-an-hour of trade then it may correct
up to 20694–20494/6224–6166 levels.
Indices S2 S1 R1 R2
SENSEX 20,494 20,694 21,005 21,117
NIFTY 6,166 6,224 6,315 6,348
News Analysis
Orchid Chemicals redeems FCCBs
India Cements slashes cement price to `255 per 50kg bag
2QFY2011 Result Preview: SBI
Refer detailed news analysis on the following page
Net Inflows (November 03, 2010)
` cr Purch Sales Net MTD YTD
FII 3,421 2,123 1,297 7,473 120,836
MFs 512 909 (397) (42) (28,871)
FII Derivatives (November 05, 2010)
` cr Purch Sales Net
Open
Interest
Index Futures 140 79 61 16,488
Stock Futures 49 22 27 42,998
Gainers / Losers
Gainers Losers
Company Price (`)
chg
(%)
Company Price (`)
chg
(%)
JP Associates 134 4.4 Shriram Trans 884 (1.2)
Anant Raj Inds 138 4.1 DCHL 146 (0.8)
GMDC 170 3.1 Ispat Indus 21 (0.7)
Hindalco 232 2.7 Hind Zinc 1,301 (0.7)
GSKPharma 2,274 2.5 Essar Oils 158 (0.7)
Domestic Indices Chg (%) (Pts) (Close)
BSE Sensex 0.5% 111.4 21,005
Nifty 0.5% 30.7 6,312
MID CAP 0.9% 75.6 8,679
SMALL CAP 1.5% 164.1 11,044
BSE HC 1.1% 74.7 6,705
BSE PSU 0.7% 72.1 10,574
BANKEX 0.7% 105.0 15,066
AUTO 0.9% 88.1 10,330
METAL 0.5% 94.2 17,562
OIL & GAS 0.3% 34.9 11,183
BSE IT 0.3% 20.7 6,200
Global Indices Chg (%) (Pts) (Close)
Dow Jones 0.1% 9.2 11,444
NASDAQ 0.1% 1.6 2,579
FTSE 3.2% 180.8 5,875
Nikkei 0.9% 85.4 9,711
Hang Seng 1.4% 341.2 24,877
Straits Times 0.8% 25.6 3,266
Shanghai Com 0.3% 10.9 3,140
Indian ADRs Chg (%) (Pts) (Close)
Infosys -0.9% (0.6) $69.0
Wipro 0.1% 0.0 $15.1
ICICI Bank 0.3% 0.2 $57.6
HDFC Bank 0.6% 1.1 $186.8
Advances / Declines BSE NSE
Advances 2,311 1,146
Declines 512 230
Unchanged 53 37
Volumes (` cr)
BSE 1,908
NSE 4,224

2. November 8, 2010 2
Market Outlook | India Research
Orchid Chemicals redeems FCCBs
Orchid Chemicals announced that it has redeemed outstanding FCCBs, including
premium, of US $25.7mn (`114cr) on the due date. These bonds were earlier issued in
November 2005. We expect most of the redemption to be funded through cash received
from the Hospira deal. Post this redemption, the total FCCBs now outstanding are of US
$167mn (including premium) payable in February 2012. We remain Neutral on the stock
at these levels.
India Cements slashes cement price to `255 per 50kg bag
India Cements has reduced cement prices to `255–265 per 50kg bag, two days after the
Tamil Nadu government asked cement makers to take steps to cut the escalating cost of
the key construction component. The company, however, did not mention the prevailing
price at which it was selling to stockists. The increase in cement prices in the region had
forced some builders to import it from Pakistan and Bangladesh at cheaper rates. We had
mentioned in our earlier updates that the three rounds of price hikes carried out by cement
manufacturers in the southern region would not be sustained in totality. Going ahead, we
believe cement manufacturers would increase their production to capitalise on high prices
on the back of healthy growth in cement despatches during October 2010. This move, if
undertaken, would increase supply and put pressure on prices again. At the CMP, the stock
is trading attractively at an EV/tonne of US $79 based on FY2012E capacity. We maintain
Buy on the stock with a Target Price of `139.
Result Preview – 2QFY2011
State Bank of India
State Bank of India is scheduled to announce its 2QFY2011 results. We expect the bank to
report strong net interest income (NII) growth of 34% on a yoy basis and 3.1% on a qoq
basis. The bank’s net interest margin (NIM) is also expected to improve marginally to
2.93% qoq (calculated NIM). Operating income is expected to grow at healthy 21% yoy.
The bank will also have to increase its NPA provision coverage ratio to the RBI’s mandated
level of 70% by end-2QFY2012 from around 60% as at the end of FY2010. That said, in
2QFY2011, we expect provisioning expenses to be lower by 3.8% qoq. Net profit growth is
expected to be moderate at 20% on a yoy basis to `2,990cr. At the CMP the stock is
trading at close to fair valuations of 2.6x FY2012E ABV. We will review our target multiple
and recommendation for the stock after the results.

3. November 8, 2010 3
Market Outlook | India Research
Economic and Political News
Companies Act amendment for IFRS convergence in winter session
Govt. to mull gas allocation to power plants on November 10
Sugarcane lobby raises purchase price to all-time high
Corporate News
Govt. fixes Power Grid FPO price band at `85–90
L&T eyes US $300mn Oman refinery deal
NTPC to add 13,000MW of power capacity by 2012
Reliance Power secures US $5bn funding from US Exim Bank
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint
Events for the day
Aban Offshore Results
Eicher Motors Results
IDFC Results
Jain Irrigation Results
Jindal Saw Results
Oberoi Realty Results
SBI Results

4. November 8, 2010 4
Market Outlook | India Research
Research Team Tel: 022-4040 3800 E-mail: research@angeltrade.com Website: www.angeltrade.com
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