1. Market Outlook
India Research
April 15, 2010
Dealer’s Diary Domestic Indices Chg (%) (Pts) (Close)
The benchmark indices opened on a negative note following weak Asian BSE Sensex -0.2% (31.0) 17,822
indices, after the US markets closed flat overnight. Though the markets slipped Nifty -0.3% (16.8) 5,323
further in the morning session, a sharp recovery ensued in afternoon trade, MID CAP -0.3% (21.2) 7,057
helping the indices inch higher. However, volatility prevailed, as markets turned SMALL CAP -0.1% (5.5) 9,087
weak in the closing session, before gaining marginally, and closed in the red for BSE HC -0.5% (24.2) 5,295
the day. Capital goods, auto, banking and metal stocks were weak. Oil BSE PSU -0.4% (40.6) 9,013
exploration stocks fell, whereas PSU OMCs rose, as crude oil prices softened
BANKEX -0.9% (94.2) 10,711
after their recent rally. The Sensex and Nifty closed with losses of 0.2% and
AUTO -1.3% (102.6) 7,647
0.3%, respectively, while the BSE Mid-cap and Small-cap indices fell by 0.3%
METAL -0.3% (55.4) 18,246
and 0.1%, respectively. Among the front-liners, Infosys, TCS, Wipro, Tata Steel
OIL & GAS -0.6% (60.1) 10,335
and Reliance Infra were up by 1-4%, while Hero Honda, RCom, HDFC, Sterlite
and ICICI Bank were down by 2-5%. In the mid-cap segment, Kwality Dairy, 3M BSE IT 3.1% 164.7 5,504
India, Phoenix Mills, Indiabulls Financial and Balrampur Chini were up by 3-
5%, while P&G, Gujarat Fluoro, India Cements, Gujarat Gas and IRB Infra were Global Indices Chg (%) (Pts) (Close)
down by 3-4%. Dow Jones 0.9% 103.7 11,123
NASDAQ 1.6% 38.9 2,505
Markets Today FTSE 0.6% 34.6 5,796
The trend deciding level for the day is 17817 / 5327 levels. NIFTY trades above Nikkei 0.4% 43.7 11,205
this level during the first half-an-hour of trade then we may witness a further Hang Seng 0.1% 17.9 22,121
rally up to 17898 – 17974 / 5352 – 5382 levels. However, if NIFTY trades Straits Times 1.6% 48.1 3,020
below 17817 / 5327levels for the first half-an-hour of trade then it may correct Shanghai Com 0.2% 4.9 3,166
up to 17741 – 17660 / 5298 – 5272 levels.
Indian ADRs Chg (%) (Pts) (Close)
Indices S2 S1 R1 R2 Infosys -0.4% (0.3) $62.8
SENSEX 17,660 17,741 17,898 17,974 Wipro 2.6% 0.6 $24.3
NIFTY 5,272 5,298 5,352 5,382 Satyam 1.7% 0.1 $5.5
ICICI Bank 0.4% 0.2 $42.8
News Analysis HDFC Bank 0.8% 1.2 $145.5
McNally Bharat Engineering – Initiating Coverage
Ranbaxy recalls two batches of antibiotics from US Advances / Declines BSE NSE
4QFY2010 Result Review: Infosys Advances 1,337 555
Refer detailed news analysis on the following page. Declines 1,563 752
Unchanged 70 47
Net Inflows (Apr 12, 2010)
Rs cr Purch Sales Net MTD YTD
Volumes (Rs cr)
FII 2,447 2,203 245 4,113 23,923 BSE 4,569
MFs 488 745 (258) (902) (6,720)
NSE 14,596
FII Derivatives (Apr 13, 2010)
Open
Rs cr Purch Sales Net
Interest
Index Futures 745 1,115 (371) 14,065
Stock Futures 1,634 1,198 437 29,893
Gainers / Losers
Gainers Losers
Company Price (Rs) Chg (%) Company Price (Rs) Chg (%)
Infosys 2,782 3.7 Hero Honda 1,976 -5.3
Indiabulls Fin 136 3.5 IDFC 176 -3.4
Balrampur Chin 97 3.5 India Cements 137 -3.7
HCL Tech 357 3.3 Cairn India 303 -2.9
Century Textiles 549 3.2 SAIL 230 -2.7
1
Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539

2. Market Outlook | India Research
McNally Bharat Engineering - Initiating Coverage
McNally Bharat Engineering (MBE) is a leading and experienced engineering, procurement
and construction (EPC) turnkey solutions provider for the core sectors of the economy, viz.
Power, Steel, Infra, etc. The company has a wide-ranging product and technology portfolio
on the back of which it offers complete solutions to its clients. Hence, we believe that MBE
is well placed to capitalise on the burgeoning industrial capex. We estimate the company
to register a CAGR of 40% in Sales and 38% in Net Profit over FY2009-12E. At Rs336, the
stock is trading at attractive valuations of 10x FY2012E Earnings and 0.5x FY2012E
EV/Sales. We Initiate Coverage on the stock, with a Buy recommendation and Target Price
of Rs467.
Ranbaxy recalls two batches of antibiotics from US
Ranbaxy is voluntarily recalling two consignments of one of its antibiotics, containing
Amoxicillin and Clavulanate Potassium, which is used to treat ear, skin and urinary tract
infections in infants and children, from the US market. The recall is a Class-II category,
which means that the use of the product is unlikely to cause any serious health problems. A
total of about 35,000 bottles has been recalled, which is slated to expire in May 2010. The
drug was manufactured in Ranbaxy’s Dewas facility in Madhya Pradesh. Although the
financial impact would be minimal, we view this development for the company as
negative, as it would affect the ongoing US FDA issues pertaining to the Dewas facility. The
stock is trading at 2.9x CY2010E and 2.1x CY2011E EV/Sales; we continue to maintain
our Reduce rating on the stock, with a Target Price of Rs445.
4QFY2010 Result Review
Infosys
Infosys registered an outstanding performance for 4QFY2010 vis-à-vis the guidance and
consensus estimates. Sequentially, the Top-line grew by 3.5% in Rupee terms, while in US $
terms it grew by 5.2%, which was 3.9% and 3.7% ahead of its revenue guidances of
Rs5,721cr and US $1250mn for the quarter, respectively. The growth was backed by
volumes, which were up by 5.2% qoq, while the pricing remained low by 1.5%. The growth
in reported currency was down on account of Rupee appreciation of 1.6% qoq vis-à-vis the
US Dollar and unfavorable cross-currency impact. The company added total 47 new
clients and entered two large transformational deals during the quarter, thereby exhibiting
an improved IT demand environment and the onset of discretionary IT spends. On the
back of in-line guidance from the company and unfavorable currency movements, we
maintain an Accumulate on the stock.
April 15, 2010 2

3. Market Outlook | India Research
Economic and Political News
Bond yields at 18-month high on tight policy expectations
Indian economy to accelerate to 8.2%: ADB
OMCs likely to get the remaining dues of roughly Rs18,000cr next month
Corporate News
Infosys wins 3-year Microsoft deal
NTPC, CIL ink deal for Jharkhand power plants
Shree Ganesh Jewellery bags order worth Rs508cr
ABB bags Rs63cr power project from HVPNL
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint
Events for the day
CMC Dividend, Results
VST Ind. Dividend, Results
Castrol India Results
April 15, 2010 3

4. Market Outlook | India Research
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