The key Indian stock indices gained 0.4% as the markets hit two-year highs before paring some gains later in the day. Banking, metal and consumer stocks rose while IT and oil & gas stocks fell. Mid-cap stocks rose 0.3% while small-caps fell 0.4%. Several companies announced order wins including IVRCL, Nagarjuna Constructions and Bajaj Electricals. The document provides analysis on BGR Energy initiating coverage and maintains buy ratings on IVRCL and Nagarjuna Constructions.

1. Market Outlook
India Research
March 30, 2010
Dealer’s Diary Domestic Indices Chg (%) (Pts) (Close)
The key benchmark indices pared gains in late trade on profit taking, after BSE Sensex 0.4% 66.6 17,711
hitting their highest level in more than two years in afternoon trade. The market Nifty 0.4% 20.9 5,303
breadth, indicting the overall health of the market, was weak. Banking, metal, MID CAP 0.3% 16.9 6,779
consumer durables and auto stocks rose. The Nifty hit a two-year high in SMALL CAP -0.4% (37.2) 8,390
afternoon trade as European stocks rose in early trade. Soon the Sensex BSE HC 0.1% 7.0 5,340
followed suit, hitting a 2-year high. The market pared gains amid a bout of BSE PSU -0.0% (1.1) 8,947
volatility later. The Sensex hit a fresh 2-month high in mid-afternoon trade. The BANKEX 0.8% 87.5 10,724
Sensex and Nifty gained 0.4% each, while the BSE Mid-cap index rose by 0.3%
AUTO 0.6% 42.7 7,667
and the Small-cap index closed lower by 0.4%. Among the front-liners,
METAL 0.4% 70.5 17,980
Hindalco, M&M, HDFC, Sterlite and Sun Pharma were up by 2-3%, while
OIL & GAS 0.1% 6.6 10,240
Infosys, TCS, Tata Motors, RIL and Reliance Infra were down by 0-2%. In the
BSE IT -1.7% (96.1) 5,419
mid-cap segment, Pipava Shipyard, LIC Housing Finance, Rajesh Exports,
Glenmark Pharma and Atlas Copco were up by 5-9%, while Asian Star, MVL,
Engineers India, IBN18 and Whirlpool were down by 4-10%. Global Indices Chg (%) (Pts) (Close)
Dow Jones 0.4% 45.5 10,896
Markets Today NASDAQ 0.4% 9.2 2,404
The trend deciding level for the day is 17715/ 5292 levels. NIFTY trades above FTSE 0.1% 7.6 5,711
this level during the first half-an-hour of trade then we may witness a further Nikkei -0.1% (9.9) 10,986
rally up to 17790 – 17868/ 5341 – 5379 levels. However, if NIFTY trades Hang Seng 0.9% 184.3 21,237
below 17715/ 5292 levels for the first half-an-hour of trade then it may correct Straits Times 0.8% 22.9 2,929
up to 17636 – 17561/ 5253 – 5204 levels. Shanghai Com 2.1% 64.1 3,124
Indices S2 S1 R1 R2
Indian ADRs Chg (%) (Pts) (Close)
SENSEX 17,561 17,636 17,790 17,868 Infosys -1.0% (0.6) $60.3
NIFTY 5,204 5,253 5,341 5,379 Wipro 1.2% 0.3 $23.3
Satyam -1.3% (0.1) $5.2
News Analysis ICICI Bank 3.6% 1.5 $42.9
HDFC Bank 2.4% 3.3 $138.1
BGR Energy – Initiating Coverage
IVRCL bags four orders worth Rs868cr
Advances / Declines BSE NSE
Nagarjuna Constructions bags Orders worth Rs971cr
Advances 1,022 451
Bajaj Electricals Bags Orders worth Rs215cr
Declines 1,918 863
Refer detailed news analysis on the following page.
Unchanged 74 37
Net Inflows (Mar 26, 2010)
Rs cr Purch Sales Net MTD YTD Volumes (Rs cr)
FII 3,470 2,391 1,079 16,961 17,937 BSE 4,608
MFs 1,083 1,154 (71) (3,125) (5,134) NSE 12,651
FII Derivatives (Mar 29, 2010)
Open
Rs cr Purch Sales Net
Interest
Index Futures 1,480 1,249 231 12,055
Stock Futures 1,095 1,780 (685) 26,988
Gainers / Losers
Gainers Losers
Company Price (Rs) Chg (%) Company Price (Rs) Chg (%)
LIC Housing Fin 885 8.6 Engineers India 2,310 -4.8
Glenmark 265 5.2 NMDC 285 -4.6
Nestle 2,780 4.9 Torrent Power 289 -4.0
Shriram Trans. 542 4.7 Punj Lloyd 178 -3.9
Bajaj Holdings 600 4.4 Hindustan Copp 489 -3.7
1
Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539

2. Market Outlook | India Research
BGR Energy – Initiating Coverage
BGR Energy (BGR) has taken several bigger leaps over the years, from being a mere
manufacturer of a few BoP (Balance of Plant) components to executing Turnkey BoP
projects, and now gradually executing full-fledged EPC contracts. The company is further
scaling-up its capabilities, with a BTG manufacturing foray on the anvil. The company has
a healthy order book of Rs11,609cr (4.2x FY2010E sales), providing good revenue
visibility. During FY2009-12E, we expect the company to register a top-line and bottom-
line CAGR of 41.8% each. Currently, the stock is quoting at 14.9x and at 11.0x its
FY2011E and FY2012E EPS, respectively, which we believe is attractive. We Initiate
Coverage on the stock, with a Buy recommendation and a Target Price rice of Rs641.
IVRCL bags four orders worth Rs868cr
IVRCL Infrastructures and Projects Ltd (IVRCL) has bagged orders worth Rs868cr. The
projects are related to Water Supply and related systems, and are spread across the
regions of Bihar, Tamil Nadu and Karnataka. The Work orders are to be completed within
a timeframe ranging between 24-30 months. The Outstanding Order Book of IVRCL
stands at around Rs18,000cr or 3.0x its FY2010E revenues. We have valued IVRCL on an
SOTP basis, valuing its core construction business at a FY2012E target P/E of 14x, whereas
its stake in Hindustan-Dorr Oliver and IVR Prime have been valued on a MCap basis. We
maintain a Buy on the Stock, with a Target price of Rs240.
Nagarjuna Constructions bags Orders worth Rs971cr
Nagarjuna Construction (NCC) has secured six orders aggregating to Rs971cr. The work
orders are related to Building-related construction works for various clients. The Order
Book of NCC stands at around Rs17,000cr or 3.6x its FY2010E revenues. We maintain a
Buy on the Stock, with a Target price of Rs186.
Bajaj Electricals Bags Orders worth Rs215cr
Bajaj Electricals has announced that it has won Orders worth Rs215cr, to be executed over
the next 16-18 months. The first order is from Power Grid for Transmission Line Towers
and is worth Rs115cr. The second order, won from the Madhya Pradesh State Electricity
Board, is worth Rs101cr. This order is a rural electrification project for 90,000 homes. With
these orders, the current Order Book for the E&P Division stands at around Rs750cr, to be
executed over the next 18 months. Since the stock is trading slightly above our current
Target Price of Rs204, we have a Neutral View on it.
March 30, 2010 2

3. Market Outlook | India Research
Economic and Political News
Japan commits Rs10,535cr for infra projects in India
Govt. to borrow Rs2,87,000cr in 1HFY2011: Fin. Secy.
Govt. okays 23 FDI deals worth Rs2,300cr
Corporate News
Colgate acquires remaining 25% CC Health Care Products for Rs69.1lakh
Hindustan Dorr bags order worth Rs267cr
Gayatri Projects bags Rs602cr contract from NHAI
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint
Events for the day
Abbott India Results
March 30, 2010 3

4. Market Outlook | India Research
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