1. K E Y N O T E
Keynote Capitals Institutional Research - Industry Monitor November 08, 2011
Industries covered
• Banks
• Cement
• Infrastructure
• IT
• Media & Entertainment
Executive Summary
ICICI Bank planning to restructure some corporate debt
ICICI Bank, the country's largest private sector bank, is planning to restructure some corporate debts
in the coming quarters. "Yes, one, of course, cannot rule out the possibility of one or two large
projects or corporates needing restructuring for that matter,” Chanda Kochhar, MD and CEO of the
bank, said.
Impressive volume growth despite two price hikes
Cement companies have shown impressive growth in sales in October despite two consequent price
hikes. This has happened mainly on the back of fresh demand from real estate companies and
restocking by big dealers. The exception has been UltraTech Cement, which has registered a 7%
drop in sales due to the ongoing Telangana agitation. It has a facility at Tadpatri in Andhra Pradesh
and another at Malkhed, Karnataka.
Slowdown in economy already factored in Infra sector
Over past 12 months there has been slowdown in infrastructure spending further added by economic
slowdown. However, number of initiative like benefits in infra bonds has been taken which the
spending in infra has started picking up over a month ago. PFC will be raising `16500Cr bonds, NHAI
has fasten the process of awarding road projects and has already awarded 3500kms till October
,2011, Mining activities also has been under radar. So, looking as the current scenario infra stocks
seems to be attractive at current valuation tough there some concerns of corporate governance. It is
recommended to be selective in picking up stocks. Stocks like IRB infra, IL&FS Transport, Tata
power, GMR Infra, Mundra port, etc to perform well going ahead.
IT index ends lower on weak European cues
BSE IT index closed at 5762.20, down -1.17% during the last week vis-à-vis its previous week. The
loser on the BSE IT index were TCS, Infosys, Wipro and HCL TECH, down 1.84%, 1.07%, 0.34% and
2.64%, respectively. Patni computers, Mphasis and Tech Mahindra were gainers on the BSE IT index.
MPA-TV.NXT: Indian TV industry is expected to grow at 12% over the next five
According to recent report published by MPA-TV.NXT, Indian TV industry is expected to grow at 12%
over the next five year to reach $15bn. The report also predicts that profitability will improve as
consolidation begins. With half the size of China, the report ranks Indian TV industry better than China
because ‘operating leverage’ is better in India. The report says that it is easier to do business in the
media sector in India.
Weightages in major indices
Sectors Sensex Nifty BSE 500 CNX 500
Banks 23.79% 24.05% 23.69% 22.39%
Cement 0.61% 0.51% 0.67% 0.67%
Infrastructure 8.47% 8.64% 7.73% 7.60%
Information & Technology 14.32% 12.67% 9.66% 9.68%
Media & Entertainment - - 0.78% 0.78%

2. K E Y N O T E
Banking Industry Monitor
Banking Industry and its contribution to Indian equities
Banking and other Finance firms together have the highest weightage in the Sensex and BSE 500
with 23.79% and 23.69% respectively. The major players in BANKEX Index are the private banks
namely ICICI Bank (27.14%), which is the second largest bank in India with HDFC Bank LT (23.96%).
Other banks include SBI (14.93%), Axis Bank (8.05%) and Kotak Bank (5.42%). The sector’s
weightage in CNX Nifty is 24.05% and in CNX 500 is 22.39%.
ICICI Bank planning to restructure some corporate debt
ICICI Bank, the country's largest private sector bank, is planning to restructure some corporate debts
in the coming quarters. "Yes, one, of course, cannot rule out the possibility of one or two large
projects or corporates needing restructuring for that matter,” Chanda Kochhar, MD and CEO of the
bank, said. "But I do not expect these restructurings or NPAs to come as a huge shock and the
percentage that you have seen this quarter is a high percentage. I do not expect this kind of
percentage to repeat quarter on quarter,'' she added.
ICICI Bank's net profit grew 22% to `1,503.2Cr in Q2FY12 while its net non-performing loans dipped
to 0.93%. Its provision cover decreased 50% to `319Cr while net restructured assets were `2,501Cr.
The bank restructured loans worth `743Cr in the second quarter. "This was mainly because the entire
microfinance portfolio got restructured in one go in the same quarter. This is not really an indicative
rate of accretion for the quarters going forward, but yes one or two projects or companies would
definitely get added to the restructured portfolio,'' she added.
Banks can't have more than 10 general managers for business up to `1.5 lakh crore
According to the proposed norm of finance ministry, the banks should not have more than 10 general
managers for business up to `1.50 lakh crore, against the previous rule of 20 GMs for `1 lakh crore. It
has also suggested a 1:3:9 ratio of GM, DGM and AGM in government banks. "This is the first time
that the ministry has stepped into such micro manpower management of public sector banks," a bank
chairman told ET, requesting anonymity. This will create a battery of surplus manpower in senior
categories and top bankers said that they may have to put a halt in promotions at senior levels.
However, existing officials will be allowed to continue till retirement. According to the ministry's
proposed rules, PNB can have a maximum of 37 GMs till March 2012, while BOB and BOI can have
35 and 34, respectively. These banks will be allowed to add one GM each for every `15,000Cr of
incremental business. SBI will not have to follow the proposed norm as it is guided by a separate act.
Pranab to inaugurate SBIs 14th branch in Jangipur on November 11
SBI is all set to open a new branch at Sammati Nagar, Jangipur, a rural business centre. A senior SBI
official said the finance minister is expected to inaugurate the branch on November 11, two days after
the bank announces its second quarter and half yearly results. In the last couple of years, banks have
collectively opened as many as 22 branches in this district sub-division but most of these are in
Jangipur town where the need is little, leaving the rural centres still grossly under-banked. Overall,
banks have merely 73 branches for a population of 18 lakh in Jangipur, an economy driven by wages
from bidi making.
RBI relaxes norms for AMCs to open branches
RBI has allowed authorised money changers (AMCs), including banks, to open additional branches in
metros without adhering to the old criteria of maintaining a ratio in number of branches in metro and
non-metros cities. "In order to provide more flexibility to authorised persons to decide the location of
their branches, it has been decided to dispense with the criteria of 1:1 ratio between metro and non-
metro branches," the Reserve Bank said in a notification. "We expect branches to be diversified and
to be meeting the demand of tourists, etc.," it said. Authorised banks and Full Fledged Money
Changers are allowed to provide facility for reconversion of Indian Rupees to the extent of `50,000 to
foreign tourists on receipt of valid passport, VISA and ticket confirmed for departure within 7 days
along with original ATM slip.

3. K E Y N O T E
Cement Industry Monitor
Impressive volume growth despite two price hikes
Cement companies have shown impressive growth in sales in October despite two consequent price
hikes. This has happened mainly on the back of fresh demand from real estate companies and
restocking by big dealers. The exception has been UltraTech Cement, which has registered a 7%
drop in sales due to the ongoing Telangana agitation. It has a facility at Tadpatri in Andhra Pradesh
and another at Malkhed, Karnataka.
With the rise in demand, companies have managed to pass on a portion of their incremental
production cost to end users. Prices were hiked by `10-50 a bag (on an average) each in two
installments last month.
Real estate body approaches CCI against cement cartelisation
Real estate developers body National Real Estate Development Council (NAREDCO) has
approached the Competition Commission of India (CCI) seeking intervention against the alleged
cement cartelisation hitting real estate developers.
“It is not possible that within three months the cement prices would shoot up by 66%. These prices
are being pushed up due to artificial scarcity being created by cement cartels that is adversely
affecting our business. We have requested CCI's intervention to free supply of cement so that prices
return to normal.” President NAREDCO and Raheja Developers Chairman and Managing Director, Mr
Navin Raheja said.
Jaypee Group to hive off part of cement business, in talks with Temasek
The Jaypee Group is negotiating with investors to sell a part of its cement business as the real
estateto-power group tries to pare debt, which is over $8bn or `40,000Cr, by more than a third.
The group's managing director, Manoj Gaur, said a number of investors, including Temasek Capital,
an investment house based in Singapore, had been approached.
Jaypee's cement business is housed in Jaiprakash Associates, a listed company that has a cement-
making capacity of 28mn tonnes a year, making it India's third-largest cement producer, behind
capacities owned by Germany's Holcim and the Aditya Birla Group.
Aditya Birla Group likely to bid for Aussie company New Hope
Indian conglomerate Aditya Birla group is understood to have started the process to bid for acquiring
Australian coal Company New Hope valued at an estimated $5.2bn.
Talks between Aditya Birla group, which owns Hindalco Industries and UltraTech Cement, and New
Hope have moved beyond "initial stages", industry sources said, adding that the $35bn conglomerate
is likely to appoint advisors in the next few days for the deal.
New Hope is estimated to hold a total coal resources of 1,529 million tonnes (MT), with a proven
reserve of 324 MT as on March 31, 2011.
The Australian miner is also in the process of seeking regulatory permission to increase its production
up to 10 MTPA and extend the mine life by about 30 years.

4. K E Y N O T E
Infrastructure Industry Monitor
Infra Sector Weekly Update
The Sector has underperformed 3.34%, 1.45%, 1.97% and 1.49% over Sensex, BSE500, Nifty and
CNX500 respectively. However, Reliance Infra was the top performer by 3.48%, 4.18%, 3.68% and
4.16% whereas Engineers India was the worst performer by 6.75%, 6.05%, 6.67% and 6.19% over
Sensex, BSE500, Nifty and CNX500 respectively.
Power Grid to set up transmission network in Gujarat
The company is likely to set up transmission network in Gujarat by October next year. The company
plans to invest around `5000Cr for setting up this transmission network which will connect Bhachau,
Morbi, Lalpar and Halvad in Gujarat's Kutch district. PGCIL has commissioned transmission system
for two units of the Mundra Ultra Mega Power Project in Gujarat. These are part of the transmission
system associated with Mundra UMPP, being implemented by Power Grid at an estimated cost of
about `5000Cr. The 4000MW Mundra project, being developed by Tata Power, will be the first UMPP
to start power generation in the country.
L&T’s arm bags orders worth `875Cr
The company has achieved a major breakthrough in the urban infrastructure segment internationally
by bagging twin orders worth Riyal Omani 68.40mn or about `875Cr from the Muscat Municipality and
from the Ministry of Transport and Communication, Sultanate of Oman. The orders are for
construction of the Wadikabir-Darsait road and the Mahlah-Ghubbrat Al Tam-Ismaiyah road. The
Wadikabir-Darsait road project is scheduled to be completed in 24 months. It involves design and
construction of flyovers and underpasses along the Wadikabir-Darsait road. The Mahlah-Ghubbrat Al
Tam-Ismaiyah project is to be completed in 41 months and involves 45 km road works, four bridges
and cross-drainage work.
IVRCL secures contract worth `972.07Cr
The company has bagged orders aggregating worth `972.07Cr. Of which, the company’s
transportation division bagged order worth `917.80Cr. This includes construction of Tunnel T-74R
(between Km 125 and 134) on Dharam-Qazigund section of Udhampur-Srinagar-Baramulla New BG
Railway Line Project (Package T-74R) awarded to IVRCL JV by Ircon International, New Delhi (A
Govt. of India Undertaking). The completion period of the contract is 36 months.
Siemens gets nod to merge SVAI and Morgan with itself
The Company has received an approval for the proposed scheme of amalgamation of Siemens VAI
Metals Technologies (SVAI) and Morgan Construction Company India (Morgan) with the company
with the appointed date being October 01, 2011. The board at its meeting held on October 29, 2011
has approved for the same. The board of directors of the company, after due consideration, approved
the share exchange ratio as determined by independent valuer - Grant Thornton. The fairness opinion
on the valuation is provided by ICICI Securities, a category - I merchant banker. The share swap ratio
for the proposed scheme has been determined as 1318 equity shares of the face value of `2 each
fully paid up of the company for every 100 equity shares of the face value of `100, fully paid up of
SVAI.
Havells India’s Q2 jumps by 20% at `70.24Cr
The Company’s net profit for the quarter has increased by 19.92% at `70.24Cr whereas the same
was at `58.57Cr for the quarter ended September 30, 2010. Company’s total Income has surged by
28.46% at `851.98Cr for the second quarter of the current fiscal whereas the same was at `663.23Cr
for the corresponding quarter of the previous year. During the period, company’s cables and wires
business clocked in revenue of `369.18Cr, electrical consumer durables segment registered revenue
of `122Cr. Besides, the firm's lighting and fixtures had revenue of `137.44Cr during the quarter.

5. K E Y N O T E
IT Industry Monitor
IT Industry and its contribution to Indian equities
IT sector has weightage of 9.66% and 9.68% in BSE 500 and CNX 500 with major stocks are Infosys,
TCS and Wipro. The sector is also represented through BSE IT and CNX IT indices. IT sector
companies also constitute major portion of Sensex and Nifty with weightages of 14.32% and 12.67%.
Infosys is planning to invest ` 800Cr
Infosys is planning to invest about `800Cr in Kerala over the next five years to expand its operations
and expects to generate 10,000 new jobs. Infosys has set a target of 45,000 campus recruits this year
and has already recruited about 15,000. Infosys is also working with 28 Engineering Colleges in
Kerala to improve the quality of students passing out from there. Infosys contributed around `608
crores to the total IT exports from Kerala, which was around `3,200Cr.
Infosys aims to expand revenue share from Europe: Ashok Vemuri
The company has target of revenue contribution of 40% from US, 40% from Europe and 20% from
Asia. Currently Infosys contribute 65% from US, 22% from Europe and 13% from rest of the world.
TCS plans 45,000 campus hires
TCS has embarked on a massive recruitment drive. The company, which has already began its
recruitment process for 2012-13, has handed out 35,000 letters since August and is looking to give
another 10,000 offers. The average annual salary is pegged at `3.2lakh. The company has hired
32,000 from campuses across India in the current fiscal (2011-12).
TCS bags treasury automation project
TCS signed a contract with the Karnataka government to automate its treasury and finance
department functions. The six-year deal is valued at `94Cr. According to the contract, TCS will
establish the Khajane-II system for the integrated financial management across all spending and
resource mobilisation of the government.
Infosys, Wipro and IBM are in discussion with tower infrastructure company Indus Tower for a
contract.
Infosys, Wipro and IBM are in discussion with tower infrastructure company Indus Tower for a
contract, potentially in the range of $500-600 million (`2,430-2,916Cr).
United Health selected HCL Tech to support transition
HCL Technologies has been chosen by the United Health Group, a leading US healthcare player, to
support its transition to ICD-10 diagnostic and procedure codes.

6. K E Y N O T E
Media Industry Monitor
Major listed Media & Entertainment companies included in BSE 500 and CNX 500 indices are Zee
Entertainment Enterprises, Dish TV India, Sun TV Network, Jagran Prakashan and UTV Software
Communications, while the sector's weight age is 0.78% in both the indices.
MPA-TV.NXT: Indian TV industry is expected to grow at 12% over the next five years to reach
$15bn by 2016
As per the report, titled ‘The India TV Industry - Act Two’ released by Media Partners Asia (MPA) -
TV.NXT, `32,000Cr Indian TV business is set to grow at 12% in spite of all its problems. The report
takes a hard look at India’s TV networks, beyond their channel and genre dominance to come up with
a weighted scorecard index, based on seven parameters, which included flagship channels, bouquet
strength, scalability and financial strength and parentage. The picture that emerges is of a
fundamentally good television market, hounded by issues that are clearly hampering growth —
primarily that of pay revenues, falling profitability and a regulatory muddle. The report predicts that
profitability will improve as consolidation begins. There are some signs of that happening in
entertainment television already. Star and Zee have formed a joint venture for distribution, Walt
Disney just bought our UTV and Sony might buy ETV.
With half the size of China, the report ranks Indian TV industry better than China because ‘operating
leverage’ is better in India. The report says that it is easier to do business in the media sector in India.
More important, as the report points out the internet is not playing the disruptive role as it is in China.
Thanks to that and the huge numbers, India’s television industry’s revenues is expected to grow 12%
over the next five years to reach $15bn by 2016’ says the report.
Digitization of TV signals to involve investment of upto `40,000Cr
Digitization of TV signals, which will give consumers much broader choice of channels at low price, to
be completed by 2014 year end, expected an investment of upto `40,000Cr.
Once the digitalization completed, the government would earn `30,000Cr each year on various
accounts, including subscription. The move is expected to benefit broadcasters also as it will remove
the need for paying carriage fee to cable operators, bringing down the cost of operations. At present,
carriage and placement fee contribute nearly 20% of the total cost of running a channel.
Government to amend law to make removal of Prasar Bharti CEO easier
The government will introduce a legislation in the Parliament session beginning this month, which will
make removal of the CEO of public broadcaster Prasar Bharti easier. Once the amendments to the
Prasar Bharti Act are carried out, the Supreme Court will not be required for the purpose, said
Information and Broadcasting Minister Ambika Soni. The government's move comes in the backdrop
of the problems it encountered in the case of CEO Mr. B S Lalli, who was suspended in the wake of
allegations of financial irregularities during the Commonwealth Games.
Star India-Zee Group alliance under CCI scanner
Competition watchdog, Competition Commission of India (CCI) has found prima facie evidence that
the alliance between leading electronic media conglomerates Star India and Zee Group could lead to
abuse of dominant position, as the two jointly commands a market share of over 60% of Indian TV
distribution market. The CCI has send notices to the two companies to explain their position. In May
2011, Star Den Media Services Pvt Ltd. and Zee Turner Ltd. had announced a joint venture to
combine distribution of their respective channel bouquets in the country.

7. K E Y N O T E
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