1. Market Outlook
India Research
April 26, 2010
Dealer’s Diary Domestic Indices Chg (%) (Pts) (Close)
The Indian markets opened strong in contrast to weak Asian markets and fall of BSE Sensex 0.7% 120.2 17,694
European markets in the previous session post news of Greece’s worse than Nifty 0.7% 34.8 5,304
expected deficit. Volatility was evident as markets gave up early gains only to MID CAP 0.3% 21.4 7,132
rise swiftly again by mid-session. Markets witnessed another sharp sell-off from
SMALL CAP 0.5% 46.7 9,200
day’s highs to touch intra-day lows. While buying resumed from lower levels in
BSE HC -0.2% (10.8) 5,323
final session, markets stayed extremely choppy and closed with fair gains. The
BSE PSU 0.3% 30.8 9,031
Sensex and Nifty closed with gains of 0.7% each. The BSE Mid-cap and Small-
BANKEX 1.7% 180.3 11,074
cap indices underperformed the benchmark index as they gained 0.3% and
0.5% respectively. Among the front-liners, ICICI Bank, Jaiprakash Associates, AUTO 0.3% 22.0 7,771
L&T, M&M, and DLF were up by 2-3%, while ACC, Bharti Airtel, Sun Pharma, METAL -0.8% (137.6) 17,653
Wipro and Hero Honda were down by 1-2%. In the Mid-cap segment, Sterlite OIL & GAS 0.7% 66.7 10,094
Technologies, Religare Enterprises, State Bank of Jaipur, SKF India and HSBC BSE IT 0.0% 0.7 5,381
Invesdirect were up by 6-12%, while Indiabulls Financials, Shree Renuka Sugar,
Shriram City, REI Six Ten and Triveni Engg were down by 3-4%. Global Indices Chg (%) (Pts) (Close)
Dow Jones 0.6% 70.0 11,204
Markets Today
NASDAQ 0.4% 11.1 2,530
The trend deciding level for the day is 17651/ 5295 levels. If NIFTY trades FTSE 1.0% 58.3 5,724
above this level during the first half-an-hour of trade then we may witness a
Nikkei -0.3% (34.6) 10,914
further rally up to 17769–17843/ 5320–5336 levels. However, if NIFTY trades
Hang Seng -1.0% (210.5) 21,244
below 17651/ 5295 levels for the first half-an-hour of trade then it may correct
Straits Times 0.3% 7.8 2,988
up to 17577–17459/ 5279–5254 levels
Shanghai Com -0.5% (16.0) 2,984
Indices S2 S1 R1 R2
Indian ADRs Chg (%) (Pts) (Close)
SENSEX 17,459 17,577 17,769 17,843
Infosys -0.5% (0.3) $62.0
NIFTY 5,254 5,279 5,320 5,336 Wipro -2.9% (0.7) $23.3
News Analysis Satyam 0.2% 0.0 $5.5
ICICI Bank 4.4% 1.9 $44.9
ABG Shipyard wins an order worth Rs385cr HDFC Bank 0.7% 1.0 $150.9
Results Reviews: AREVA T&D, Corporation Bank, HDFC Bank, ICICI Bank,
Pantaloon Retail, RIL, Wipro
Advances / Declines BSE NSE
Results Previews: GCPL, Indoco Remedies, Maruti Suzuki, Sterlite
Advances 1,372 602
Refer detailed news analysis on the following page.
Declines 1,550 719
Unchanged 87 37
Net Inflows (Apr 22, 2010)
Rs cr Purch Sales Net MTD YTD
FII Volumes (Rs cr)
4,239 2,491 1,748 6,997 26,807
MFs 940 692 248 (1,611) (7,430) BSE 4,695
NSE 13,207
FII Derivatives (Apr 23, 2010)
Open
Rs cr Purch Sales Net
Interest
Index Futures 1,615 1,549 66 14,709
Stock Futures 3,816 3,471 345 32,465
Gainers / Losers
Gainers Losers
Company Price (Rs) Chg (%) Company Price (Rs) Chg (%)
Oriental Bank 339 4.8 Nestle 2,731 -4.7
UCO Bank 66 4.2 Shriram Trans. 528 -4.5
ICICI Bank 976 3.4 Indiabulls Fin. 129 -4.1
IDBI Bank 125 3.3 Sh. Renuka Sug. 64 -4.0
JP Associates 157 3.0 ABB 823 -3.4
1
Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539

2. Market Outlook | India Research
ABG Shipyard wins an order worth Rs385cr
ABG Shipyard has received new orders of 3 dry bulk vessels worth Rs385cr from Precious
Shipping (Thailand) which will be delivered within three years with one vessel getting
delivered each year. This is positive as order inflow was subdued in CY2009 and expect
order inflow to improve for company on account of improving scenario for shipping
industry. ABG's total order book stands at Rs12,100cr, of which the unexecuted portion is
around Rs9,000cr and is executable by FY2014E. This translates to 5.8x FY2010E
revenues, thus providing strong revenue visibility. Further management has indicated of
receiving Rs500cr from Essar and Rs35cr in form of subsidy pertaining to 4QFY2010
which will ease leverage. At the current market price the stock is trading at 6.3x FY2012E
earnings and 1.1x FY2012E book value. We maintain our Buy recommendation with
target price of Rs 354/ share.
Result Reviews
Areva T&D (1QCY2010)
Areva T&D India reported a dismal 1QCY2010 performance, which was well below our
estimates both on the top-line and bottom-line front. The company posted a top-line
de-growth of 10.7% yoy to Rs777cr (Rs870cr) for 1QCY2010, on back of slower than
expected execution of the outstanding order book. On the operating front, the company
extended its weak performance reporting a sharp dip in EBITDA margin by 707bp to 5.4%
(12.5%). Consequently, net profit for the quarter plunged 93.2% yoy to Rs3cr (Rs51cr),
which was well below our estimates. We maintain our Neutral recommendation on the
stock.
Corporation Bank
Corporation Bank reported a growth in Net Profit of 20% yoy to Rs312cr (Rs260cr), which
was ahead of our expectations, mainly on account of lower provisions for tax. The core
operating performance of the bank was in-line with our expectations. The key positive from
the results was robust growth in core non-interest income and an improvement in bank’s
asset quality. The advances growth of the bank shot up to 30.3% yoy in 4QFY2010 taking
the total advances to Rs63,203cr. The CASA ratio of the bank improved to 28.5% (from
23.3% in 3QFY2010, but lower than 31.0% in 4QFY2009) which is a seasonal
phenomenon usually in fourth quarter of every year. The bank continued its robust
performance in core fee income resulting in sequential improvement of 8.5% which was
attributable to a strong 25.8% qoq growth in Commission Exchange, Brokerage during the
quarter. The absolute level of Gross NPAs decreased by 13.5% sequentially to Rs651cr.
The gross NPA ratio of the bank improved to 1.0% (compared to 1.3% in 3QFY2010),
while Net NPAs stood at 0.3% (from 0.5% in 3QFY2010). The bank also improved its
provision coverage ratio to 70% from 65.7% in 3QFY2010. At the CMP, the stock is
trading at 5.9x FY2012E EPS of Rs85.4 and 1.0x FY2012E Adjusted Book Value of Rs526.
We believe that the stock sufficiently reflects the medium term positives at these valuations;
hence, we have a Neutral rating on the stock.
April 26, 2010 2

3. Market Outlook | India Research
HDFC Bank
HDFC Bank reported a Net Profit growth of 32.6% yoy to Rs837cr, in line with our
estimates. Strong Business growth, improvement in Profitability and asset quality, coupled
with strong traction in CASA deposits, were the key positives from the results. Advances
registered a yoy growth of 28.7% to reach Rs1,27,262cr. Deposits reached Rs1,67,404cr
in 4QFY2010, up by 17.2% from Rs1,42,812cr in 4QFY2009. The CASA ratio increased
to 52% of total deposits during 4QFY2010, as against 44.4% as at 4QFY2009 and 51.7%
as at 3QFY2010. NIMs improved to 4.4% in 4QFY2010, as against 4.2% in 3QFY2010.
The asset quality of the bank improved sequentially, with Gross NPAs at 1.4% (1.6% in
3QFY2010) and net NPAs at 0.3% (0.4% in 3QFY2010). The NPA coverage ratio based
on specific provisions was at 78.4% in 4QFY2010, as compared to 72.4% in 3QFY2010
and 68.4% in 4QFY2009. At the CMP, the stock is trading at 16.4x FY2012E EPS of
Rs118.7 and 3.1x FY2012E ABV of Rs634.4. We maintain a Accumulate on the stock, with
an upward revised Target Price of Rs2,212, implying a return of 14%.
ICICI Bank
ICICI Bank’s net profit increased by 35.2% yoy, which was in line with our estimates. The
key positives from the results are further improvement in CASA to 41.7% and a declining
trend in slippages from retail loans for 4 consecutive quarters, though we would have liked
to see higher balance sheet and network growth from this quarter. Total deposits increased
by 2.2% qoq (declined by 7.5% yoy) to Rs2,02,017cr during 4QFY2010; advances
increased by 1.1% qoq (a decline of 17.0% yoy) to Rs1,81,206cr. The de-growth in
advances was sharper than expected especially considering the strong uptick in systemic
credit demand during 4QFY2010. The sharp drop in the advances book was attributable
to the repayments from retail, and short term corporate loans. The key positive from the
results was the improvement in the Bank’s CASA ratio to 41.7%% (from 39.6% in
3QFY2010 and 28.7% in 4QFY2009). The asset quality of the bank showed signs of
stabilising, with gross slippages at Rs700cr, driven by a sharp declining trend in slippages
in retail loans. At the CMP, the Bank’s Core Banking business (after adjusting Rs307 per
share towards the value of the subsidiaries) is trading at 1.9x FY2012E ABV of Rs518. We
value the Bank’s subsidiaries at Rs307 per share and the core Bank at Rs862 (2.25x
FY2012E ABV). We maintain a Buy on the stock, with a Target Price of Rs1,169, implying
an upside of 20.0%.
Pantaloon Retail (3QFY2010)
Pantaloon Retail (PRIL) reported a decent 3QFY2010 performance, The company posted a
top-line growth of 25.3% yoy to Rs2058cr (Rs1642cr) for 3QCY2010 as Value , Lifestyle
and Home retailing posted a higher growth on the back of low base effect of last year as
well as pick-up in consumer sentiment. . On the operating front, the EBITDA improved by
24.6%yoy to Rs215.6cr (Rs173cr) while the margins were flat on yoy basis. Consequently,
net profit for the quarter improved by 62.7% yoy to Rs55.9cr (Rs34.4cr). We maintain our
Accumulate recommendation on the stock with a 15 month Target Price of Rs469.
April 26, 2010 3

4. Market Outlook | India Research
Reliance Industries
RIL reported lower-than expected 4QFY2010 numbers on the Top-line and EBITDA front.
Top-line increased 120.7% yoy to Rs57,570cr (Rs26,082cr) primarily on the back of the
164.7% yoy growth in Refining Revenues to Rs51,250cr (Rs19,365cr) and a whopping
486.7% yoy increase in Oil & Gas Revenues to Rs4,318cr (Rs736cr). Growth in the
Refining Segment was driven by the increase in Refining throughput during the quarter
coupled with the increase in crude oil prices. Crude oil processed during the quarter was
higher by 114.4% yoy to 16.7mn tonnes (7.79mn tonnes) following commissioning of the
SEZ refinery. KG-D6 gas production further scaled up in the current quarter with average
production increasing to 60mmscmd. During the quarter, RIL reported GRMs of US
$7.5/bbl (US $9.9/bbl) as against our expectation of US $8.5/bbl. Benchmark complex
Singapore Margins, during the quarter, stood at around US $4.9/bbl. Thus, RIL managed
to earn a spread of US $2.6/bbl, which was lower than spread seen in 3QFY2010. The
primary reason for the lower-than-expected spread over the benchmark Singapore
margins is the absence of fuel oil in RIL's product slate (notably fuel oil spreads improved
during 4QFY2010 in turn aiding expansion of the benchmark Singapore margins).
Moreover, the benchmark refining margins in RIL's target markets, viz. North America (US
Gulf Coast Margins) was lower at US $3.0/bbl. EBIT Margins of the Petrochemical
Segment was in line with our expectation following the significant softening of PP spreads
on a yoy a basis. Petchem Margins strengthened on a qoq basis on account of strong
Petrochemical deltas. Oil & Gas EBIT Margins declined by a substantial 2,457bp yoy to
39.4% (64.9%) on account of higher Depreciation of KG-D6. Operating Profit grew by
60.1% yoy to Rs9,136cr (Rs5,707cr), which was lower than our estimate by 7.6% on
account of lower than expected Refining Margins. Depreciation during the quarter
exceeded our estimate spiking 134.6% yoy on account of the additional depreciation of the
SEZ refinery and KG-basin gas facility. Interest expenditure was largely flat at Rs525cr,
down 0.9% yoy. Other Income at Rs615cr, fell 39.7% yoy and came in higher than our
estimate of Rs500cr. PAT grew 19.1% yoy to Rs4,710cr (Rs3,627cr), which was lower than
our expectation of Rs5,109cr mainly because of lower-than-expected Refining Margins. Tax
rate during the quarter was lower at 19.2% as against our expectation of 21.0%.
Overall, RIL has successfully executed its two mega ventures, viz. KG basin gas and the SEZ
refinery with minimal execution problems. We expect these ventures to be likely key drivers
of Profitability over the next couple of years. Ramp up of gas production and higher oil
production would likely increase the share of E&P in the Profit matrix. We believe the key
factors to watch out for in the near term are Supreme Court verdict on the KG-basin gas
dispute and inorganic growth plans pursued by RIL. In case of litigation, we have already
factored the adverse impact of the same post the high court judgment. Thus, there exists
limited downside on this count. Given its valuation of 1.9x FY2012E P/BV, we believe that
the company is relatively undervalued at current levels. We maintain a Buy on RIL, with a
Target Price of Rs1,260, translating into an upside of 15.9% from current levels.
Wipro
Wipro recorded a 0.7% qoq growth (6.9% yoy growth) in its overall Net Revenue in
4QFY2010 to Rs6,978cr. In Rupee terms, combined IT Service Revenues clocked a 1.9%
qoq growth (6.7% yoy growth), backed by a 4.1% qoq growth in volumes. The company
won two $100mn size deals and acquired 27 new clients during the quarter. Wipro
recorded a 28bp qoq contraction (26bp yoy expansion) in its overall EBITDA Margins at
21.6% mainly due to unfavorable cross currency movements and due to wage hike.
However despite of lower margins the company reported a 1.5% qoq (22.4% yoy) jump in
the Bottom-line to Rs1,236cr mainly due to higher other income. At the current levels, we
maintain an Accumulate on the stock with Target Price of Rs790.
April 26, 2010 4

5. Market Outlook | India Research
Result Previews
Godrej Consumer Products
Godrej Consumer Products (GCPL) is expected to announce its 4QFY2010 results. For
4QFY2010, the company is expected to post a robust 55% yoy growth in its Top-line to
Rs530cr (Rs343cr) and a 20% yoy growth in its Earnings to Rs71cr (Rs59cr) aided by 39%
yoy increase in its operating profit to Rs91cr (Rs66cr). Post the Tura and Megasari
acquisitions of GCPL, we have revised our Target Price to take into account GCPL's wider
portfolio, stronger performance of its International business, likely acquisition of the
remaining 51% stake in GSL from Sara Lee and a potential upside trigger from further
acquisitions (likely in Latin America). Owing to recent run up in the stock, we recommend
an Accumulate rating with the revised Target Price of Rs329 (Rs310).
Indoco Remedies
Indoco Remedies (Indoco) is slated to announce its 4QFY2010 results today. Net Sales is
expected to increase by 5.9% to Rs90.0cr (Rs85.0cr) however OPM is expected to expand
by 632bp to 14.2% on back of higher Gross Margins and lower Other Expenses. As a
result, Net Profit is expected to increase by 56.5% to Rs6.1cr (Rs 3.9cr). We continue to
maintain a Buy on the stock with a Target Price of Rs487.
Maruti Suzuki
Maruti Suzuki is slated to announce its 4QFY2010 numbers. For the quarter, we expect the
company to post a growth of 32% in its Top-line to Rs8,320cr (Rs6,308cr), driven by 21.5%
yoy growth in volumes and 10.5% yoy increase in realization. On the operating margin
front, we expect the company’s OPM to increase by 460bp yoy to 13.5%. The Bottom-line
is expected to register a growth of 94% yoy to Rs706cr (Rs364cr), aided largely by Top-line
growth and Margin expansion. We maintain our Buy rating on the stock with a Target Price
of Rs1756.
Sterlite
Sterlite is slated to announce its 4QFY2010 results. The company is expected to register
65.6% yoy jump in top-line to Rs7,180cr led by higher realisations. Consequently, on the
operating front, EBITDA margins are expected to expand by 1,150bps to 29.2%. Hence,
the bottom-line is expected to grow by 137.7% yoy to Rs1,422cr. We maintain a Buy on
the stock with a Target Price of Rs980.
April 26, 2010 5

6. Market Outlook | India Research
Economic and Political News
Govt. hike cane FRP by 7% to Rs139quintal
Govt. to infuse Rs15,000cr in PSU banks in 2010-11
Fin. Min. may block PSBs from teaser rate play
Corporate News
NTPC plans to raise US$500mn through ECB
IFC to invest US$60mn in Apollo Tyre
EID Parry buys GMR’s agri-business arm
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint
Events for the day
Accentia Tech. Results
Allied Digital Results
Astrazeneca Pharma. Results
Bihar Tubes Dividend, Results
Bosch Results
Cholamandalam Dividend, Results
Godrej Consumer Dividend, Results
Indoco Remedies Results
Maruti Suzuki Results
Religare Enterprise Results
Sterlite Industries Results
UCO Bank Results
April 26, 2010 6

7. Market Outlook | India Research
Research Team Tel: 022-4040 3800 E-mail: research@angeltrade.com Website: www.angeltrade.com
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April 26, 2010 7