1. Market Outlook
India Research
July 2, 2010
Dealer’s Diary Domestic Indices Chg (%) (Pts) (Close)
The Indian markets opened weak following cues from overnight US and early BSE Sensex -1.1% (191.6) 17,509
Asian indices, which traded in red. Data from China indicating a slowdown in Nifty -1.2% (61.1) 5,251
economy has stalled the recent rally in global indices. Markets continued to drift MID CAP -0.4% (27.9) 7,121
lower during the afternoon session, as European indices opened in the negative SMALL CAP 0.1% 10.1 9,081
zone. Data showing lower food price inflation and reports of monsoon revival
BSE HC -0.6% (33.7) 5,715
induced buying, which took markets higher from the day’s lows, but the
BSE PSU -0.7% (63.2) 9,445
recovery was short-lived as markets reversed sharply. The Sensex and Nifty
BANKEX -1.1% (121.6) 10,643
closed with gains of 1.1% and 1.2%, respectively. However, BSE mid-cap and
AUTO -1.2% (102.7) 8,221
small-cap indices outperformed the broader indices as they closed (0.4%) and
0.1%, respectively. Among the front-liners, HUL, Reliance Infra, Bharti Airtel, METAL -1.7% (249.4) 14,455
NTPC and Tata Power were up by nearly 0–2%, while Sterlite Ind., Reliance OIL & GAS -1.0% (108.8) 10,765
Comm., Wipro, TCS and ICICI Bank were down by 2–3%. Among mid-caps, BSE IT -1.2% (62.0) 5,257
MVL, Blue Star, McLeod Russel, Jain Irrigation and Atlas Copco were up by 4–
6%, while Redington India, Gee Kay Finance, Kwality Dairy, Dish TV India and Global Indices Chg (%) (Pts) (Close)
Simplex Infra declined by 3–5%. Dow Jones -0.4% (41.5) 9,733
NASDAQ -0.4% (7.9) 2,101
Markets Today FTSE -2.3% (111.1) 4,806
The trend deciding level for the day is 17548 / 5265 levels. If NIFTY trades Nikkei -2.0% (191.0) 9,192
above this level during the first half-an-hour of trade then we may witness a Hang Seng -0.6% (119.9) 20,129
further rally up to 17641 – 17772 / 5299 – 5346 levels. However, if NIFTY Straits Times -0.5% (15.2) 2,820
trades below 17548 / 5265 levels for the first half-an-hour of trade then it may Shanghai Com -1.0% (24.6) 2,374
correct up to 17417 – 17324 / 5218 – 5185 levels
Indian ADRs Chg (%) (Pts) (Close)
Indices S2 S1 R1 R2 Infosys -1.4% (0.8) $59.1
SENSEX 17,324 17,417 17,641 17,772 Wipro -0.5% (0.1) $11.9
NIFTY 5,185 5,218 5,299 5,346 Satyam -1.6% (0.1) $5.1
ICICI Bank -0.5% (0.2) $35.9
News Analysis HDFC Bank 0.4% 0.6 $143.6
Cement Numbers for June 2010: Tepid show continues
Auto sales numbers for June 2010 Advances / Declines BSE NSE
Refer detailed news analysis on the following page. Advances 1,409 579
Declines 1,488 752
Net Inflows (June 30, 2010)
Unchanged 93 43
Rs cr Purch Sales Net MTD YTD
FII 1,831 2,007 (176) 10,508 31,077
Volumes (Rs cr)
MFs 649 560 89 (1,088) (8,218)
BSE 4,513
FII Derivatives (July 01, 2010)
NSE 11,899
Open
Rs cr Purch Sales Net
Interest
Index Futures 1,043 2,629 1,586 18,543
Stock Futures 781 1,325 544 28,613
Gainers / Losers
Gainers Losers
Price Price
Company Chg (%) Company Chg (%)
(Rs) (Rs)
Mcleod Russel 211 5.4 Sterlite Ind 164 (3.2)
Jain Irrigation 1,115 4.3 Rcom 192 (3.0)
EIL 323 3.2 Patel Engg 415 (3.0)
Mphasis 578 3.0 TCS 731 (2.6)
IB Power 32 2.6 PNB 1,020 (2.6)
Please refer to important disclosures at the end of this report Sebi Registration No: INB 0109965391

2. Market Outlook | India Research
Cement Numbers for June 2010: Tepid show continues
Most cement manufacturers have declared unimpressive cement dispatch numbers for
June 2010. The modest performance was on account of poor demand from the
infrastructure segment, as big projects are nearing completion along with a lull in other
construction activities due to the arrival of the monsoon. Further, dispatch growth suffered
due to a high base effect as cement dispatches in June 2009 were robust due to delayed
monsoon. Ambuja Cement’s (Ambuja) dispatches increased by modest 6.3% on a yoy
basis during June 2010 to 1.7mn tonnes as against 13.7% yoy growth recorded in May
2010. Growth in Ambuja’s dispatches was aided by its presence in the northern region,
which enjoyed relatively good demand, and the recent capacity additions made by the
company. However, ACC’s dispatches for the month declined by 1.7% yoy and stood at
1.78mn tonnes. The decline in ACC’s dispatches was due to the company’s significant
presence in the southern region, which is facing a severe slowdown in demand. JP
Associates’ cement shipments rose 65.0% yoy to 1.33mn tonnes in June 2010. The high
growth was primarily because of the massive capacity addition carried out by JP Associates
over the past few months. Shree Cement delivered modest 1.4% yoy growth in dispatches
in June 2010 to 0.80mn tonnes. We maintain a Buy rating on Grasim Industries, Ultratech
Cement, India Cements, Madras Cement and JK Lakshmi Cement. We continue to remain
Neutral on ACC and Ambuja.
July 2, 2010 2

3. Market Outlook | India Research
Auto sales numbers for June 2010
Maruti Suzuki
Maruti reported slightly lower sales numbers at 88,091 units for June 2010, up 17.3% yoy.
This includes 15,279 units of exports, up 14.6% yoy. In June 2010, the company sold
72,812 units in the domestic market, up 17.9% yoy. Maruti continues to grow at a strong
pace in the domestic A3 segment, registering growth of 32.5% for June 2010. The A3
segment comprises the company’s extremely popular models SX4 and DZire. Sales
numbers were lower compared to the previous two months of FY2011 on account of the
six-day shutdown at the company during June 2010 for a planned maintenance.
Mahindra & Mahindra (M&M)
M&M reported muted growth of 7.1% yoy in total sales to 44,152 units (41,243 units) in
June 2010, reflecting 19.8% yoy growth in auto volumes. However, tractor sales declined
by 9% yoy during June 2010, as the company is facing supply constraints from component
makers (casting and tyres). The utility vehicle segment also recorded negative growth of
3.6% yoy in June 2010 to 17,010 units (17,653 units) on account of supply constraints
(fuel injection system, casting and tyres). Three-wheelers, including the newly launched
GIO and Maximmo, posted robust 125% yoy growth in volumes to 7,559 units (3,357
units) in June 2010.
Tata Motors
Tata Motors’ total sales (including exports) of its commercial and passenger vehicles in
June 2010 stood at 67,730 vehicles, reporting 49% yoy growth. Domestic sales of Tata
commercial and passenger vehicles for June 2010 were reported at 62,602 units,
increasing 45% yoy. Sales of commercial vehicles in June 2010 in the domestic market
were at 34,791 units, growing 33% yoy. LCV sales increased 21% yoy to 19,652 units.
M&HCV sales stood at 15,139 units, increasing 52% yoy. The passenger vehicles business
reported total sales and distribution off-take of 29,948 units (27,811 Tata + 2,137 Fiat) in
the domestic market in June 2010, a 53% increase compared to 19,513 units (17,039
Tata + 2,474 Fiat) in June 2009. Sales of Tata’s passenger vehicles were at 27,811 units,
growing 63% yoy. Sales of Tata Nano were reported at 7,704 units. Sales from the Indica
range were reported at 9,003 units, lower by 12% yoy. The Indigo range recorded sales of
7,502 units, growing 113% yoy. The Sumo/Safari range reported sales of 3,602 units,
higher 9% yoy.
Two-wheelers
Hero Honda
Hero Honda reported a 16.6% yoy increase in volumes in June 2010 to 4,26,454 units
(3,65,734 units), aided by healthy growth in the motorcycle segment and scooter segment
(Pleasure reported sales of over 25,000 in June 2010). This is the 18th consecutive month
when the company has recorded sales of over three lakh units in a single month.
TVS Motors posted significant growth in June 2010 on low base of last year and on the
success of its new launches Jive and Wego. Total two-wheeler sales for the company grew
35.7% yoy in June 2010 to 156,685 units (115,488 units). Domestic sales (two-wheeler)
registered 33% yoy growth, increasing to 139,905 units (105,401 units), in June 2010.
Motorcycle sales grew by 44% yoy in June 2010, with sales of 66,452 units (46,048 units).
Sales of scooters continued their stellar run, growing by 42% to 36,742 units in June 2010
from 25,945 units in June 2009. Maintaining its upward growth trend, the company's
three-wheeler business registered sales of 3,003 units in June 2010 as compared to 753
units in June 2009. Exports posted significant growth of 66% yoy in June 2010, reporting
two-wheeler sales at 16,780 units (10,087 units).
July 2, 2010 3

4. Market Outlook | India Research
Economic and Political News
Food inflation eases to 12.9% in mid-June
Exports rise 35% in May to $16.1bn
New priority order to regulate gas flow to power projects
Corporate News
RIL files revised gas pact with RNRL in Bombay HC
Fortis makes US $3.1bn offer for Parkway
Vascon Engineers bags Rs137cr orders
Pratibha Industries bags orders worth Rs210cr
EIH buys out JV partner Amex for Rs200cr
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint
July 2, 2010 4

5. Market Outlook | India Research
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