The document discusses the attractiveness of emerging markets like China and India for investments after recent corrections. It notes that valuations in countries like China have become compelling, with its P/E ratio of 13x and market cap to GDP ratio of 0.6x given that growth will remain higher than developed economies. It argues the European bailout package and low interest rates globally will drive funds back into high growth emerging markets like China and India. It highlights India's growth is driven more by domestic factors than external ones, and expects the economy to grow 8-9% in the coming fiscal year.

1. Market Strategy
June 2010
Angel Portfolio Correction puts Emerging Markets in Sweet Spot
Sector Weightage(%) Stocks Over the last one month, the European crisis has resulted in increased
risk aversion, impacting the global Equities. After the correction, valuations in the
Auto & 7.0 Maruti, Fag Emerging Markets have again become attractive, given their growth prospects.
Ancillaries Bearings, For instance, after the sharp sell-off that China witnessed over the last one month,
JK Tyres the country’s valuation has become compelling. While a part of the same is on
back of its high linkages to global economy, at 13.0x P/E and around 0.6x
Banking 28.0 SBI, Axis Bank,
Market Cap/GDP, the valuations are attractive given that the growth in the region
ICICI Bank, would still continue to be higher than the other economies. Thus, while the Equity
HDFC Bank markets have witnessed a downtrend on the back of fund outflows owing to
FMCG 3.0 ITC increased risk aversion, we believe that the same is an aberration, as global
liquidity is expected to remain robust on the back the low interest regime in the
Hotels 3.0 Taj GVK
developed world, which would chase high growth destinations.
Infra & 18.0 L&T, Reliance Infra,
Cap Goods Madhucon Projects, Moreover, the US $1trillion bailout package that was announced for troubled EU
IVRCL Infra, nations – like the US Fed’s bailout packages – is expected to resolve the crisis and
Jyoti Structures
restore confidence in the financial markets. To draw a parallel, the US bailout was
an estimated US $1.5trillion for a US $14trillion economy, which tantamount to
Media 2.0 Jagran Prakashan 11% of the GDP. In comparison, the US $1trillion European package (for four the
Oil & Gas 14.0 Reliance Industries economies of Portugal, Italy, Greece and Spain - PIGS) works out to around 24%
Pharma 4.0 Dishman Pharma, of GDP (with the combined GDP of PIGS countries being around US $4.2trillion).
Lupin
Here-on, we believe that the downsides are limited and expect the funds to flows
Metals 2.0 Electrosteel Castings towards high growth Emerging Markets like China. India, being the next
Real Estate 3.0 Anant Raj Industries high-growth economy and more resilient to the vagaries of the global
Software 12.0 Infosys, TCS, developments would also benefit from the same. Thus, though FII’s turned Net
Tech Mahindra, sellers in the Indian markets in May 2010 (Net Sale of Rs7,598cr), we expect the
trend to reverse soon.
Mphasis
Telecom 4.0 Bharti Airtel Exhibit 1: Global Equity Valuation
Country P/E(x) P/B(x) RoE(%) Mcap/
Top Picks 2010E 2011E 2010E 2011E 2010E 2011E GDP (x)
Company (Rs) CMP TP Developing Markets
India 16.1 13.8 3.2 2.7 19.7 19.9 1.0
Bharti Airtel 276 360 South Africa 11.1 8.7 2.0 1.7 17.8 19.7 1.2
ICICI Bank 866 1,166 Russia 3.9 5.6 0.8 0.7 19.6 12.2 0.4
Maruti Suzuki 1,331 1,694 China 13.0 11.0 1.6 1.5 12.7 13.7 0.6
Mexico 14.6 12.7 2.4 2.2 16.1 17.0 0.4
TCS 765 921
Brazil 10.8 9.1 1.5 1.4 14.3 15.7 0.9
Tech Mahindra 703 1,168 Developed Markets
Anant Raj 103 178 USA 11.5 10.7 2.3 2.0 19.7 19.2 0.9
UK 10.2 8.7 1.6 1.4 15.3 16.2 1.2
Dishman Pharma 198 279
Germany 10.9 9.9 1.4 1.3 12.6 12.9 0.3
Electrosteel Castings 46 72 France 10.4 9.0 1.2 1.1 11.0 12.1 0.6
IVRCL Infrastructure 177 216 Japan 15.7 15.6 1.2 1.1 7.6 7.2 0.7
Source: Bloomberg, Angel Research; Note: For India 2011 represents FY2012
Jagran Prakashan 117 160
Jyoti Structures 144 215 Indian economy on strong footing
FAG Bearings 556 712
India continues to witness acceleration in the economic activity, as evident from
Greenply 179 291 the 4QFY2010 GDP growth, which stood at 8.6%. As far as the impact of current
JK Tyres 175 242 European crisis on India is concerned, India is fairly insulated, as large part of
country’s growth hinges on domestic consumption and investments. Further, with
Taj GVK 156 240
high savings rate of 32.5% of GDP (as on FY2009), India can grow at 8-9%, with
Note: Investment period – 12 Months little dependence on external funding. The same was reflected in the way the
BSE Sensex (17,118) and Price as on economy grew in FY2009 (India’s GDP grew by around 6.7%) amidst the
June 4, 2010 challenging macro-economic environment. Thus, as we enter FY2011E, with
normal monsoons expected, Indian economy is expected to revert to delivering
8-9% GDP growth on the back of domestic consumption and investments.
Please refer to important disclosures at the end of this report.

2. Market Strategy
Exhibit 2: Indian GDP Growth Trend
11
10
9
(yoy growth)
8
7
6
5
1-Aug-05
1-Aug-06
1-Aug-07
1-Aug-08
1-Aug-09
1-Jun-05
1-Jun-06
1-Jun-07
1-Jun-08
1-Jun-09
1-Dec-05
1-Dec-06
1-Dec-07
1-Dec-08
1-Dec-09
1-Apr-06
1-Apr-07
1-Apr-08
1-Apr-09
1-Oct-05
1-Feb-06
1-Oct-06
1-Feb-07
1-Oct-07
1-Feb-08
1-Oct-08
1-Feb-09
1-Oct-09
1-Feb-10
Source: Bloomberg
The country’s fiscal deficit, the main concern area, overall is expected to further
improve following recent success of the 3G auctions wherein the government
raked in Rs68,000cr (Rs50,968cr excluding the proceeds received from the PSU’s).
The ongoing wireless broadband access (WBA) is also expected to generate good
response (current value pegged at Rs 15,000cr). Thus, the government could
conservatively rake in around Rs83,000cr as against expectations of Rs35,000cr.
This would improve the overall fiscal deficit position by around 0.7% of GDP,
thereby reducing overall government borrowings.
Concerns regard high inflation (which currently stands at around 10%) resulting in
a monetary tightening cycle and thus crippling growth, we believe is blown out. A
closer look at inflation suggests that the large part of the current inflation is on
account of food inflation, adjusted for which inflation stands at 5-6%. With
monsoons expected to be normal during the current year and on a high base,
inflation should settle down at 5-6% levels. Moreover, the current credit growth
and economic activity though has picked up, it is not in overheated zone. Thus, we
do not foresee a risk of major credit tightening, crippling the growth momentum.
Corporate Earnings – To drive the rally
On Corporate front, India Inc. ended FY2010 on a strong note, delivering robust
growth during 4QFY2010 (wherein the Sensex companies delivered 29% yoy
growth in Net Profit, well ahead of expectations). Moreover, with India’s GDP
expected to grow at 8-9% during FY2011-12E, India Inc. is expected to deliver
good growth in Profit, with the Sensex companies expected to deliver around
17.4% CAGR over FY2010-12E. Further, going ahead, at the end of the next six
months, the markets would start discounting FY2012E Earnings. At the current
juncture, the markets are trading at 13.8x FY2012E Earnings, below the long-term
average of 15x 1-year forward P/E multiple. However, given the high growth
momentum for the country, the Indian Equities are expected to trade at a
premium to these averages. Thus, with markets expected to trade at
15-17x 1-year forward Earnings, we expect the Sensex to touch levels of
19,000-21,000 by March 2011.
June 2010 2

3. Market Strategy
New Investment Ideas
Great Eastern Shipping Co. (CMP: Rs.303/ TP: Rs.396/ Upside: 31%)
Great Eastern Shipping Co. (Gesco) has contracted new building of vessels to the
tune of Rs4,500cr over next 2.5 years taking its fleet size to 45 (currently 36) for
Shipping and 23 (currently 15) for the Offshore Segment.
The Spot & Charter freight rates have recovered substantially (Baltic Dry Index rose
288% in CY2009) and are expected to sustain current levels aided by factors such
as revival in global economy, sustained higher Oil prices, higher scrapping and
slippages in the vessel delivery schedule, etc.
Gesco has filed DRHP for fresh equity issuance of its subsidiary, Greatship India,
engaged in the offshore business, which globally commands premium than the
Shipping business due to better stability and high visibility in Earnings.
We recommend a Buy on the stock, valuing the Shipping business on NAV basis at
10% discount (fetching Rs263/share) and Offshore Business at 6.5x FY2012E
EV/EBITDA (fetching Rs133/share).
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 3,100 35.5 687 45.1 11.7 6.7 0.8 3.5 1.2
FY2012E 3,980 39.7 1,079 70.8 16.5 4.3 0.7 2.5 1.0
United Phosphorus (CMP: Rs.187/ TP: Rs.228/ Upside: 22%)
United Phosphorus (UPL) figures among the Top-5 generic Agrichemical players in
the world, with a presence across major markets like the US, EU, Latina America
and India.
Total off-patent market is worth US $29bn, of which a mere US $16bn is currently
being catered by the generic players. Furthermore, 61% of the same is controlled
by the five largest generic players including UPL. Further, given the high entry
barriers by way of high investments, entry of new players is also restricted. Thus,
amidst this scenario and on account of having a low-cost base, we believe that
UPL enjoys an edge over competition and is placed in sweet spot to leverage the
upcoming opportunities in the global Generic space
Over FY2010-12E, we expect UPL to post 11% and 18% CAGR in Sales and PAT,
respectively. We expect RoCE and RoE to improve from 15% and 19% in FY2010
to 19% and 20% in FY2012E, respectively.
At current valuations of 10.8x FY2012E EPS, the stock is attractively valued vis-a-vis
its global (10.4x) and domestic (12.0x) peers, and historic average (15.0x).
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 6,010 19.0 622 14.1 18.6 13.2 2.3 7.5 1.4
FY2012E 6,524 20.0 765 17.4 19.6 10.8 2.0 6.4 1.3
June 2010 3

4. Market Strategy
Angel Model Portfolio
Sector Company CMP Target BSE 100 Angel Stance
(Rs) Price (Rs) Weightage (%) Weightage (%)
Auto / 5.4 7.0 Overweight
Ancillaries Maruti Suzuki 1,331 1,694 1.0 3.0 Overweight
FAG Bearings 556 712 0.0 2.0 Overweight
JK Tyres 175 242 0.0 2.0 Overweight
Banking 22.4 28.0 Overweight
SBI 2,226 2,596 3.0 7.0 Overweight
Axis Bank 1,190 1,459 1.6 8.0 Overweight
ICICI Bank 876 1,166 5.3 9.0 Overweight
HDFC Bank 1,847 2,220 3.7 4.0
Cement 2.7 0.0 Underweight
FMCG 5.8 3.0 Underweight
ITC 291 300 3.7 3.0 Underweight
Hotels 0.3 3.0 Overweight
Taj GVK 156 240 0.0 3.0 Overweight
Infra/ 11.5 18.0 Overweight
Cap Goods L&T 1,668 1,809 4.4 6.0 Overweight
Reliance Infrastructure 1,110 1,253 0.9 3.0 Overweight
Madhucon Projects 140 190 0.0 3.0 Overweight
IVRCL Infrastructure 177 216 0.2 3.0 Overweight
Jyoti Structures 144 215 0.0 3.0 Overweight
Media 0.4 2.0 Overweight
Jagran Prakashan 117 160 0.0 2.0 Overweight
Metals 10.0 2.0 Underweight
ElectroSteel Castings 46 72 0.0 2.0
Oil & Gas 14.9 14.0 Equalweight
Reliance Industries 1,031 1,260 9.2 14.0 Overweight
Pharma 3.7 4.0 Equalweight
Dishman Pharma 198 279 0.0 2.0 Overweight
Lupin 1,850 2,099 0.4 2.0 Overweight
Power 2,000 2,800 4.3 0.0 Underweight
Real Estate 1.9 3.0 Overweight
Anant Raj Industries 103 196 0.0 3.0 Overweight
Software 11.5 12.0 Equalweight
Infosys 2,731 3,089 7.1 4.0 Underweight
TCS 765 921 2.5 3.0 Overweight
Tech Mahindra 703 1,168 0.0 3.0 Overweight
Mphasis 572 872 0.0 2.0 Overweight
Telecom 3.2 4.0 Overweight
Bharti Airtel 276 360 2.1 4.0 Overweight
Others 2.2 0.0 Underweight
June 2010 4

5. Market Strategy
Top Picks
Large Caps
Bharti Airtel (CMP: Rs.276/ TP: Rs.360/ Upside:30%)
Bharti continues to maintain its leadership status in customer and revenue market
share helped by strong subscriber addition (33.7mn in FY2010) and high ARPU of
Rs253 (Industry average of Rs164).
The competition (price war) is unlikely to further intensify as the cost of operation
for the new players is high and unsustainable. We believe that Bharti with high
EBIDTA/minute of Rs 0.16 is relatively placed better than peers.
Valuations for Zain are perceived as expensive but would still be value accretive on
account of financial leverage from the Leveraged Buy Out structuring of the deal.
Bharti bagged 3G spectrum in 13 circles with an estimated outlay of Rs12,295cr,
which would cover 65% of its subscriber base and 69% of its revenues; this would
stress the company’s Debt position and impact Earnings by 3%.
Bharti is currently trading at 11.1x FY12E EPS, a significant discount to its historical
average of 26x and Sensex P/E of 13.8 and hence we maintain a Buy on the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 42,773 35.3 8,350 22.0 18.6 12.6 2.2 6.6 2.3
FY2012E 47,328 35.6 9,449 24.9 17.9 11.1 1.8 5.8 2.1
ICICI Bank (CMP: Rs.866/ TP: Rs.1,166/ Upside: 35%)
The Bank is well-positioned to gain market share on the back of substantial branch
expansion (substantial 1508 branches added since 3QFY2008, including entire
branch network of BoR) as well as strong Capital Adequacy at 19.4% (Tier-I at
14.2%).
Net Interest Margins of the Bank are expected to sustain on the back of increase in
CASA ratio to 42% in FY2010 from 29% in FY2009.
On the back of an improving economic environment, NPA losses are expected to
start declining. The Bank has also done lower restructuring of loans than PSU
Banks (10% of Net Worth v/s 40%+ for most PSU Banks).
The stock is trading at attractive valuations of 1.5x FY2012E P/ABV (excluding
Subsidiaries). Hence, we maintain a Buy on the stock.
Y/E Op Inc. NIM PAT EPS ABV ROA ROE P/E P/ABV
March (Rs cr) (%) (Rs cr) (Rs) (Rs) (%) (%) (x) (x)
FY2011E 18,206 2.5 5,000.1 44.8 483 1.1 11.5 19.3 1.8
FY2012E 22,269 2.5 6,765.1 60.7 518 1.3 15.0 14.3 1.7
Maruti Suzuki (CMP: Rs.1,331/ TP: Rs.1,694/ Upside: 27%)
Given India's low car penetration (12 per 1,000 v/s 21 per 1,000 in China) and
with PPP-based per capita estimated to approach the empirically-observed
inflection point for car demand of US $5,000 over the next 4-5 years, we expect
13% CAGR in domestic volumes over FY2010-12E.
Maruti has a sizeable competitive advantage over foreign entrants due to its
widespread distribution network (2,767 service and 681 sales outlets).
June 2010 5

6. Market Strategy
Moreover, with Suzuki Japan making Maruti a manufacturing hub for small cars,
to cater to increasing global demand caused by rising fuel prices and stricter
emission standards, we estimate 18% CAGR in export volumes over FY2010-12E.
We believe attractive valuations of 12.6x FY2012E EPS due to recent
underperformance provides an entry point for investors looking to play the India
consumer story.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 33,593 11.3 2,695 93.3 19.2 14.3 2.5 7.7 0.9
FY2012E 39,238 11.3 3,060 105.9 17.8 12.6 2.1 6.3 0.7
TCS (CMP: Rs.765/ TP: Rs.921/ Upside: 20%)
TCS continues to maintain its strong revenue growth and out performance led by
strong deal wins on the back of improving global macro-economic scenario.
Strong client addition, deal wins, robust hiring by IT companies, positive guidance
by peers and new services expansion highlights the improved business scenario
and revival in the overall IT spending.
TCS has displayed strong margin resilience with an improvement in profitability
(EBIDTA Margin improved from 25.8% in FY2009 to 28.9% in FY2010) despite
weak demand and declining pricing realisations. We have valued TCS at 22x on
FY2012E Earnings in line with our Target multiple for Infosys. Hence, we maintain
a Buy on the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 33,351 28.7 7,413 37.9 31.9 20.2 5.9 15.0 4.3
FY2012E 38,821 28.2 8,200 41.9 29.8 18.3 5.0 12.7 3.6
Tech Mahindra (CMP: Rs.703/ TP: Rs.1,168/ Upside: 66%)
Restructuring deal with BT ensures compensatory volumes; Muted pricing terms
may enhance with an improvement in the client's financial health.
Sustained volume traction from non-BT clients (CQGR of 15% over 1QFY2006-
4QFY2010) continues to provide revenue growth momentum, margin
improvement, geographical diversification and reduced client concentration to the
company, covering the decline in the top account.
Positive news flow from Satyam in the form of client retention, new deal wins and
favourable settlement with Upaid provides comfort on future business prospects.
The recent slide in the Euro/GBP is compensated, to a certain extent, with the
appreciation of the USD over INR and thus would not impact our estimates
significantly.
The stock is trading at a substantial 60% discount (after deducting value of Satyam
stake) to Infosys on a 1-year forward P/E v/s a 5-year average discount of 20%
and 0.9x FY2012E EV/Sales (v/s Peer average of 3x). Hence, we maintain a Buy
on the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 4,989 24.0 763 58.3 24.9 11.6 2.5 4.8 1.2
FY2012E 5,704 23.0 876 67.0 22.0 10.4 2.0 4.0 0.9
June 2010 6

7. Market Strategy
Mid Caps
Anant Raj Industries (CMP: Rs.103/ TP: Rs.178/ Upside: 73%)
Almost all of ARIL's land bank (872 acres) is exclusively located in the NCR within
50km of Delhi, with approximately 525 acres in Delhi. This land bank has been
acquired at an historical average cost of Rs300/sq ft.
We expect ARIL's two super premium Residential projects at Hauz Khas and
Bhagwandas, located in the heart of Delhi, to drive its near-term operational
visibility and help register Rs600cr Profit over the next three years. Further, ARIL
has 70% pre-lease commitments at its Manesar IT Park, coupled with five hotels
getting operational by FY2011E, which will improve rental visibility.
ARIL is trading at a 51% discount to its NAV. The stock is trading at 5.8x FY2012E
EPS and 0.7x FY2012E P/BV and hence we recommend a Buy on stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 467 91.7 372 11.8 9.7 8.7 0.8 5.1 4.7
FY2012E 785 92.3 555 17.6 12.9 5.8 0.7 3.6 3.3
Dishman Pharma (CMP: Rs.198/ TP: Rs.279/ Upside: 41%)
Dishman has incurred organic capex of Rs300cr in the last three years towards
expansion of existing facilities at its Bavla unit and building the China and HPAPI
facilities.
Post all these facilities coming on-stream FY2011E onwards, Dishman would
strengthen its ties with the Global Innovators leading to stable Revenue flow over
the long run.
Further, Revenues from the Abbott-Solvay contract, which constituted 13% of
FY2010 Sales, have also started normalizing. Also, the Carbogen Amics (41% of
FY2010 sales) is expected to witness an uptrend in FY2011. Overall, the company
has guided towards 20% growth in Top-line for FY2011E.
Dishman is currently trading at attractive valuations of 9.2x FY2012E Earnings.
Hence, we recommend a Buy on the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 1,099 24.1 142 17.4 15.8 11.4 1.7 8.3 2.0
FY2012E 1,335 25.5 174 21.4 16.8 9.2 1.4 6.5 1.7
Electrosteel Castings (CMP: Rs.46/ TP: Rs.72/ Upside: 58%)
Electrosteel Castings (ECL) is venturing into steel-making through its subsidiary
Electrosteel Integrated (EIL), which is setting up a 2.2mn tonne steel plant expected
to be commissioned by FY2012E. Further, ECL plans to list EIL to raise ~Rs300cr,
which is likely to unlock value for ECL.
ECL's backward integration initiatives through allocation of coking coal mines are
expected to result in expansion of EBITDA Margin by 1,304bp over FY2009-12E.
The company is also awaiting final environmental clearance for its iron ore mine,
which will further lower costs, but has not been factored in our estimates.
We recommend a Buy on the stock, valuing the Core business at 7x FY2012E
FDEPS and its investments in the Steel business at 1x Book Value.
June 2010 7

8. Market Strategy
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 1,706 26.2 254 6.7 14.6 6.8 0.8 5.5 1.4
FY2012E 1,818 28.0 290 7.7 14.8 5.9 0.7 4.8 1.3
IVRCL Infrastructure (CMP: Rs.177/ TP: Rs.216/ Upside: 22%)
IVRCL has a robust Order book of Rs23,375cr mainly on account of pick up and
early financial closures in the Road Segment. This would lend revenue visibility and
execution ramp up in spite of the current Andhra Pradesh crisis.
Moreover, IVRAH plans to raise money by monetising land. This would help in
funding the recently won BOT road projects.
The stock has underperformed its peers mainly on account of higher AP exposure
resulting in concerns over execution. However, we believe that higher-than-
expected order inflow from other segments (read road) would mitigate this short-
term concern.
IVRCL is trading at attractive valuations of Adj. P/E of 10.8x FY2012E Earnings.
Hence, we maintain a Buy on the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 6,663 9.3 260 9.6 12.9 13.4 2.2 10.5 1.0
FY2012E 8,294 9.4 325 12.0 14.2 10.8 2.0 9.0 0.8
Jagran Prakashan (CMP: Rs.117/ TP: Rs.160/ Upside: 37%)
Jagran (JPL) continues to post steady growth in revenues, primarily aided by
Advertisement revenues owing to its strong foothold in the Hindi belt and rising
color ad-inventory coupled with ad-rate hikes. Moreover, the Mid-Day deal (not
factored in our numbers) gives Jagran entry into the lucrative English markets thus,
filling the gap in its portfolio.
We expect JPL to sustain its operating margins at 30% levels for FY2011-12E, as
the company continues to benefit from benign newsprint prices (we have modeled
in ~10% rise in newsprint cost). Moreover, lower losses in JPL’s new initiatives and
higher operating leverage (as ad-rate hikes get absorbed), renders us optimism.
At the CMP of Rs109, Jagran is available at 14.9x FY2012E Earnings (~0.85x
PEG), which is highly attractive given its 16% Earnings CAGR, high return ratios
and strong leadership position. Moreover, Blackstone’s recent investment of
Rs225cr in the company’s promoter entity and strong Operating Cash flows make
Jagran well placed in terms of funding future growth. We maintain a Buy on the
stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 1,088 29.8 197.4 6.6 31.0 17.9 5.3 10.3 3.1
FY2012E 1,260 30.6 237.4 7.9 34.3 14.9 4.8 8.5 2.6
June 2010 8

9. Market Strategy
Jyoti Structures (CMP: Rs.144/ TP: Rs.215/ Upside: 49%)
Jyoti Structures (JSL) being one of the top-three players in the transmission EPC
space in India would continue to ride high on the back of the massive investments
lined up in the Power Sector of the country.
JSL has a healthy Order book of Rs4,150cr (1.7x FY2011E revenues), which
provides good revenue visibility and cushions it from short-term order fluctuations.
Besides, unlike peers, the large domestic presence (with exports constituting
around 10% of Order backlog), which has price variation clause, helps to insulate
margins from input price fluctuations and volatile currency movements.
Currently, the stock is trading at attractive valuations of 10.7x and 8.7x FY2011E
and FY2012E EPS, respectively. We recommend a Buy on the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 2,447 11.0 111 13.5 20.2 10.7 2.0 5.6 0.6
FY2012E 2,851 11.0 135 16.5 20.6 8.7 1.6 4.8 0.5
Small Caps
FAG Bearings (CMP: Rs.556/ TP: Rs.712/ Upside: 28%)
With increasing mechanisation, demand for bearings is expected to exceed overall
IIP growth in India. Consequently, the Industrial Segment (which accounts for
almost 50% of the Indian Bearings market) offers immense growth opportunity for
the Bearings industry.
Moreover, the Bearings Segment has a direct correlation with Auto Sector growth,
which is expected to grow at around 10% per annum over the next 2-3 years.
The stock is currently trading below its average historical valuations at 9.4x
CY2011E EPS and 1.5x CY2011E BV (v/s average of 2x 1-year forward BV).
Further, we believe that FAG Bearings scores well over its peers and is a good
long-term investment pick in view of its strong financials.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
Dec (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
CY2010E 959 15.0 85 51.3 17.1 10.8 1.7 5.0 0.7
CY2011E 1,084 15.4 99 59.4 17.0 9.4 1.5 4.1 0.6
Greenply Industries (CMP: Rs.179/ TP: Rs.291/ Upside: 63%)
GIL is foraying into the lucrative, high-growth MDF market, with the largest MDF
plant in India (1,80,000m3/yr capacity), while continuing its strong expansion in
laminates (88% capacity expansion), that is estimated to drive 25% CAGR in sales
over FY2010-12E.
GIL has leading plywood and laminates brands, supported by ad-spend as high as
3.3% of total sales (around 10% of laminates sales). The company also has the
largest distribution network of over 15,000 dealers in industry. These advantages
underpin the strong RoE profile of the company's brand-driven business model
(20% over FY2010-12E).
June 2010 9

10. Market Strategy
The stock is trading at attractive valuations of 4.9x FY2012E EPS (as against its
historical range of 3.3-9.3x 1-year forward EPS). Hence, we recommend a Buy on
the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 1,088 14.0 56.6 23.5 17.3 7.6 1.3 5.5 0.8
FY2012E 1,279 15.0 87.8 36.4 23.3 4.9 1.0 4.3 0.6
JK Tyre & Industries (CMP: Rs.175/ TP: Rs.242/ Upside: 38%)
Given the shortage of radial tyres in the Trucks & Buses Segment, the company is
set to fully utilise its enhanced capacity, and that too at higher realisations (70% of
India's total truck/bus radial tyre production), driving strong earnings growth and
improving RoEs.
Further, the Tornel acquisition turned profitable in FY2010, aided by the
restructuring exercise implemented by the company.
The stock is available at attractive valuations of 3.6x FY2012E EPS and hence we
recommend a Buy.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 5,523 9.7 178 43.3 9.7 4.0 0.7 3.8 0.4
FY2012E 6,001 10.2 199 48.4 16.6 3.6 0.6 3.3 0.3
TajGVK Hotels (CMP: Rs.156/ TP: Rs.240/ Upside: 54%)
Robust growth in foreign tourist arrivals (15.1% growth during December 2009-
March 2010 v/s -12.7% in the corresponding period last year) and increased
domestic tourist activity is enabling hoteliers to overcome the tough phase
witnessed in the recent past.
Signs of improving demand are visible with occupancy rates staying above ~70%
since 3QFY2010 and Average Room Rates rising in 4QFY2010.
Considering the revival in demand happening in business destinations like
Hyderabad and Chennai, where TAJGVK has presence, we expect the company to
be a significant beneficiary in the coming quarters.
Moreover, in comparison to its peers, the stock trades at attractive valuations of
Rs1cr FY2012E EV/Room and 12.8x FY2012E EPS. Hence, we recommend a Buy
on the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 298 40.6 56.2 9.0 17.7 17.3 2.8 9.0 3.6
FY2012E 342 42.8 76.3 12.2 20.3 12.8 2.4 7.0 3.0
June 2010 10

11. Stock Watch | June 2010
Company Name Reco CMP Target Mkt Cap Sales (Rs cr) OPM (%) EPS (Rs) PER (x) P/BV (x) RoE (%) EV/Sales (x)
(Rs) Price (Rs) (Rs cr) FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E
Agri / Agri Chemical
Bayer CropScience Neutral 735 - 2,905 1,995 2,294 12.6 12.8 44.6 51.8 16.5 14.2 4.0 3.2 27.4 25.3 1.4 1.2
Jain Irrigation Neutral 1,036 - 7,877 4,478 5,641 17.5 17.5 37.6 53.1 27.6 19.5 5.7 4.5 22.5 25.8 2.1 1.7
Rallis India Neutral 1,597 - 2,070 1,050 1,256 19.1 18.4 108.7 134.5 14.7 11.9 4.0 3.2 30.4 30.2 1.8 1.5
United Phosphorous Buy 187 228 8,231 6,010 6,524 19.0 20.0 14.1 17.4 13.2 10.8 2.3 2.0 18.6 19.6 1.4 1.3
Airlines
SpiceJet Accumulate 57 65 1,385 2,718 3,287 7.0 8.5 5.1 7.2 8.4 6.7 3.8 2.3 - 50.0 0.6 0.4
Auto & Auto Ancillary
Apollo Tyres Buy 70 88 3,505 9,003 10,108 12.5 13.1 9.0 11.0 7.7 6.3 1.5 1.3 22.6 19.8 0.5 0.5
Ashok Leyland Neutral 64 - 7,975 9,063 10,309 10.8 10.7 3.8 4.5 16.9 14.3 3.5 3.1 13.6 15.1 1.1 1.0
Automotive Axle^ Buy 366 528 626 635 750 13.5 13.5 29.5 35.2 12.4 10.4 2.7 2.4 23.7 24.5 0.8 0.7
Bajaj Auto Accumulate 2,185 2,361 30,300 14,213 15,535 19.0 18.5 137.9 147.6 15.8 14.8 7.4 5.7 54.3 43.6 2.0 1.7
Bharat Forge Accumulate 269 284 6,124 4,396 5,125 13.1 14.5 10.3 15.5 26.2 17.3 3.7 3.2 14.8 19.6 1.6 1.3
Bosch# Accumulate 5,017 5,374 15,339 5,846 6,671 18.3 18.8 236.7 268.7 21.2 18.7 4.2 3.6 19.7 19.2 2.3 1.9
CEAT Buy 134 164 496 3,372 3,738 7.6 8.0 32.5 40.9 4.1 3.3 0.6 0.5 20.1 16.0 0.3 0.3
Exide Industrie Accumulate 124 132 10,370 4,549 5,282 22.0 21.3 7.1 8.0 17.4 15.4 3.9 3.2 24.5 22.7 2.0 1.6
FAG Bearings* Buy 556 712 947 959 1,084 15.0 15.4 51.3 59.4 10.8 9.4 1.7 1.5 17.1 17.0 0.8 0.6
Hero Honda Accumulate 1,990 2,085 39,840 17,332 19,009 16.5 16.3 120.3 130.3 16.5 15.3 8.3 6.9 56.1 49.4 2.0 1.8
JK Tyre & Ind Buy 175 242 813 5,523 6,001 9.7 10.2 43.3 48.4 4.0 3.6 0.7 0.6 9.7 16.6 0.4 0.3
Mah and Mah Buy 585 688 30,426 21,646 24,613 13.2 13.3 37.3 39.7 15.7 14.7 3.6 3.1 23.2 21.2 1.6 1.4
Maruti Suzuki Buy 1,331 1,694 36,982 33,593 39,238 11.3 11.3 93.3 105.9 14.3 12.6 2.6 2.2 19.2 17.8 0.9 0.7
Motherson Sumi Buy 141 167 5,076 8,120 9,192 11.3 11.5 9.0 11.1 15.6 12.6 4.0 3.5 27.7 29.7 0.7 0.6
Subros Buy 44 60 285 998 1,109 10.3 10.3 5.2 6.0 8.4 7.3 1.2 1.1 14.7 15.2 0.4 0.3
Tata Motors Buy 772 907 47,508 106,706 116,993 9.5 9.9 55.7 69.5 13.9 11.1 3.7 3.0 20.4 26.5 0.6 0.6
TVS Motor Neutral 108 - 5,263 5,361 5,956 6.6 6.8 5.8 7.6 18.6 14.3 2.9 2.6 16.1 19.1 0.5 0.4
Banking
Axis Bank Buy 1240 1,459 50,165 10,335 13,076 3.1 3.1 70.8 95.1 17.5 13.0 2.8 2.4 16.7 19.6 - -
Bank of India Neutral 335 - 17,583 9,109 10,266 2.3 2.2 27.6 31.8 12.1 10.5 1.3 1.1 10.6 11.2 - -
Corporation Bank Neutral 537 - 7,698 3,586 4,053 2.1 2.0 76.2 85.4 7.0 6.3 1.2 1.0 17.6 17.2 - -
Dena Bank Accumulate 92 98 2,627 1,830 2,048 2.4 2.3 19.4 21.9 4.7 4.2 0.9 0.8 19.2 18.4 - -
Federal Bank Neutral 341 - 5,834 2,140 2,560 3.3 3.2 34.9 45.3 9.8 7.5 1.1 1.0 11.9 13.9 - -
HDFC Bank Buy 1,888 2,220 86,264 15,023 19,233 4.4 4.5 87.1 119.4 21.7 15.8 3.5 3.0 17.2 20.4 - -
ICICI Bank Buy 866 1,166 96,563 18,206 22,269 2.5 2.5 44.8 60.7 19.3 14.3 1.8 1.7 11.5 15.0 - -
Indian Bank Neutral 231 - 9,921 4,907 5,536 3.5 3.3 36.1 41.1 6.4 5.6 1.3 1.1 21.9 21.1 - -
IOB Neutral 92 - 5,015 4,706 5,344 2.6 2.4 10.9 19.2 8.5 4.8 0.7 0.6 8.8 14.2 - -
Oriental Bank Neutral 332 - 8,319 4,182 4,662 2.2 2.1 47.1 52.2 7.1 6.4 1.0 0.9 15.1 14.9 - -
PNB Reduce 1,016 874 32,039 13,245 15,262 3.3 3.2 126.9 144.8 8.0 7.0 1.7 1.4 22.5 21.6 - -
South Ind Bk Neutral 169 - 1,906 853 1,004 2.5 2.5 22.2 28.4 7.6 5.9 1.1 1.0 16.0 17.8 - -
Union Bank Neutral 315 - 15,916 6,970 7,991 2.5 2.4 44.7 52.2 7.0 6.0 1.5 1.3 23.7 23.1 - -
Yes Bank Neutral 292 - 9,917 1,654 2,021 2.5 2.4 16.5 18.7 17.7 15.6 2.6 2.2 15.8 15.3 - -
Capital Goods
ABB Neutral 858 - 18,174 7,543 9,027 9.6 10.7 23.1 30.6 37.2 28.0 6.4 5.3 20.8 21.1 2.3 1.9
Areva T&D Sell 289 218 6,911 3,887 4,650 8.9 10.5 5.6 9.9 51.2 29.2 7.1 6.0 14.7 22.2 1.9 1.6
BGR Energy Buy 659 722 4,742 4,444 5,746 11.0 10.9 38.7 48.1 17.0 13.7 5.3 4.1 34.7 33.6 1.1 0.9
BHEL Neutral 2,331 - 114,119 40,095 47,111 18.1 18.1 109.5 130.0 21.3 17.9 5.8 4.6 30.0 28.6 2.5 2.1
Crompton Greaves Buy 247 307 15,874 10,068 11,354 13.7 13.3 13.7 15.4 18.0 16.1 4.9 4.0 30.9 27.3 1.5 1.3
Elecon Engg Co Buy 79 102 734 1,201 1,358 15.0 15.4 7.9 10.2 10.0 7.7 1.9 1.7 20.8 23.1 0.9 0.8
Graphite India Buy 93 117 1,589 1,600 1,910 24.4 24.2 12.2 14.0 7.6 6.6 1.2 1.0 16.7 16.6 0.8 0.9
Jyoti Structures Buy 144 215 1,182 2,447 2,851 11.0 11.0 13.5 16.5 10.7 8.7 2.0 1.6 20.2 20.6 0.6 0.5
11

12. Stock Watch | June 2010
Company Name Reco CMP Target Mkt Cap Sales (Rs cr) OPM (%) EPS (Rs) PER (x) P/BV (x) RoE (%) EV/Sales (x)
(Rs) Price (Rs) (Rs cr) FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E
KEC Int Buy 489 698 2,513 4,563 5,223 10.0 10.0 41.9 49.8 11.7 9.8 2.9 2.3 27.6 26.2 0.7 0.6
McNally Bharat Engg Buy 310 486 961 2,501 3,332 9.7 9.5 27.4 34.7 11.3 8.9 2.7 2.1 28.0 26.1 0.5 0.4
Thermax Buy 689 747 8,212 4,539 5,720 11.5 11.5 29.7 37.4 23.2 18.4 6.2 4.9 29.6 29.7 1.6 1.2
Cement
ACC* Neutral 841 - 15,783 8,033 8,938 24.6 24.1 66.0 72.2 12.7 11.6 2.3 2.0 19.2 18.4 1.7 1.4
Ambuja Cements* Neutral 113 - 17,166 6,913 7,623 24.3 24.0 6.8 7.4 16.6 15.1 2.5 2.2 15.3 15.3 2.1 1.8
Grasim Buy 1,774 2,216 16,262 19,229 21,004 24.2 25.9 207.9 260.5 8.5 6.8 1.2 1.0 12.8 13.0 1.2 0.9
India Cements Buy 113 138 3,480 4,479 5,050 19.4 18.9 10.1 11.6 11.2 9.7 0.9 0.9 7.1 7.7 1.0 0.9
JK LakshmiCement Buy 63 88 767 1,376 1,570 24.4 26.1 12.5 15.7 5.0 4.0 0.7 0.6 13.9 15.4 0.6 0.6
Madras Cements Buy 102 141 2,417 2,754 3,125 19.7 22.6 6.6 10.7 15.3 9.5 1.4 1.3 9.7 14.0 1.4 1.3
UltraTechCement Buy 947 1,084 11,783 7,334 8,587 24.4 27.1 77.5 98.9 12.2 9.6 2.2 1.8 19.2 20.5 1.6 1.3
Construction
Consolidated Co Accumulate 80 85 1,477 2,389 2,807 9.0 9.2 5.9 7.0 13.5 11.4 2.1 1.8 16.9 17.3 0.7 0.6
Gammon India Neutral 201 - 2,418 5,575 6,607 9.2 9.3 10.0 12.1 20.1 16.6 1.2 1.0 6.1 6.6 0.7 0.6
Hind Constr Neutral 116 - 3,502 4,146 4,900 12.7 12.9 3.9 4.5 29.5 25.4 2.2 2.0 7.5 8.2 0.8 0.7
IRB Infra Accumulate 260 289 8,648 3,352 3,916 37.3 38.0 13.8 15.3 18.8 17.0 3.5 3.0 20.3 19.0 3.3 3.4
IVRCL Infra Buy 177 216 4,729 6,663 8,294 9.3 9.4 9.6 12.0 18.4 14.7 2.2 2.0 12.9 14.2 1.0 0.8
Madhucon Project Buy 140 190 1,031 1,701 2,120 8.9 9.8 6.4 9.8 21.7 14.2 1.7 1.5 8.0 11.2 0.7 0.6
Patel Eng Buy 379 563 2,645 3,685 4,297 16.0 15.8 31.2 32.9 12.1 11.5 1.5 1.4 13.3 12.4 1.0 0.9
Punj Lloyd Buy 119 170 3,936 11,088 13,407 9.0 9.2 8.3 12.2 14.4 9.8 1.2 1.1 8.7 11.7 0.5 0.5
Sadbhav Eng Neutral 1,267 - 1,584 1,611 1,901 11.7 11.9 70.3 79.7 18.0 15.9 3.3 2.7 19.6 18.7 1.1 1.0
Larsen&Toubro Accumulate 1,668 1,809 98,021 43,882 52,375 12.0 12.4 57.5 71.3 29.0 23.4 4.7 4.0 17.2 18.3 2.0 1.7
Consumer Durables
Bajaj Electric Neutral 203 - 1,985 2,534 2,959 10.1 10.2 16.7 20.4 12.2 10.0 3.3 2.6 24.7 24.4 0.8 0.6
Blue Star Accumulate 402 425 3,613 2,994 3,696 10.4 10.7 20.0 23.5 20.0 17.1 6.0 4.8 39.1 40.3 1.2 1.0
FMCG
Asian Paints Neutral 2,143 - 20,551 7,532 8,731 17.5 17.7 86.5 102.2 24.8 21.0 10.8 9.0 42.7 41.5 2.7 2.3
Colgate Neutral 815 - 11,080 2,268 2,599 21.9 22.1 32.5 37.1 25.0 22.0 26.8 20.7 119.6 106.1 4.6 4.0
Dabur India Neutral 192 - 16,662 3,931 4,525 19.1 19.2 6.7 7.9 28.5 24.4 10.5 8.7 40.7 38.8 4.1 3.5
GlaxoSmith Con* Neutral 1,655 - 51,021 2,279 2,667 16.1 16.4 65.1 77.2 25.4 21.5 47.6 40.2 27.7 27.8 2.7 2.3
Godrej Consumer Accumulate 343 357 1,445 2,412 2,720 20.2 20.3 12.7 14.2 27.0 24.2 1.5 1.2 45.4 40.5 4.3 3.7
HUL Neutral 252 - 54,824 19,305 21,530 13.5 13.8 9.9 11.3 25.3 22.2 18.5 16.1 90.0 90.0 2.6 2.3
ITC Accumulate 291 300 110,348 19,671 21,673 34.7 34.8 12.1 13.3 24.0 21.8 6.0 5.3 26.8 25.8 5.2 4.7
KS Oils Buy 56 94 2,217 5,838 7,035 11.2 11.6 8.3 10.2 6.8 5.5 0.9 0.8 14.6 15.6 0.5 0.4
Marico Neutral 107 - 6,544 2,983 3,349 13.7 13.6 4.5 5.1 23.8 21.2 7.9 6.2 37.8 32.8 2.2 1.9
Nestle* Neutral 2,811 - 27,099 6,015 6,956 19.4 19.7 81.6 98.5 34.5 28.5 36.2 31.8 118.2 118.6 4.4 3.8
Hotel
Taj GVK Hotels Buy 156 240 975 298 342 40.6 42.8 9.0 12.2 17.3 12.8 2.8 2.4 17.7 20.3 3.7 3.0
IT
3i Infotech Buy 66 129 1,264 2,734 3,197 20.1 19.7 14.5 17.6 4.5 3.7 0.7 0.6 16.8 16.5 1.3 1.1
Educomp Sol Buy 550 734 5,220 1,553 2,165 48.2 43.4 35.9 45.9 15.3 12.0 3.1 2.5 22.3 22.9 0.9 0.9
Everonn Edu Buy 358 602 542 393 496 34.0 32.5 25.9 30.5 13.8 11.7 2.2 1.9 17.7 17.5 0.5 0.6
HCL Tech Accumulate 387 420 26,102 13,611 15,903 21.0 20.5 22.2 26.9 17.4 14.4 3.7 3.1 22.3 23.5 1.9 1.5
12

13. Stock Watch | June 2010
Company Name Reco CMP Target Mkt Cap Sales (Rs cr) OPM (%) EPS (Rs) PER (x) P/BV (x) RoE (%) EV/Sales (x)
(Rs) Price (Rs) (Rs cr) FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E
Infosys Accumulate 2,731 3,089 156,187 25,658 31,071 34.3 33.5 118.8 140.4 23.0 19.4 5.6 4.7 26.7 26.1 5.4 4.3
Infotech Enter Buy 376 464 2,088 1,132 1,306 21.6 21.5 33.4 38.7 11.3 9.7 1.9 1.6 18.2 17.8 1.3 1.0
Mphasis Buy 572 872 11,999 5,990 7,043 25.2 25.5 54.5 64.5 10.5 8.9 3.0 2.3 32.7 29.2 1.6 1.2
NIIT Buy 63 83 1,032 1,318 1,459 13.7 14.1 5.0 5.8 12.4 10.8 1.8 1.6 15.1 15.8 0.9 0.9
TCS Buy 765 921 149,775 33,351 38,821 28.7 28.2 37.9 41.9 20.2 18.3 5.9 5.0 31.9 29.8 4.3 3.6
Tech Mahindra Buy 703 1,168 8,600 4,989 5,704 24.0 23.0 58.3 67.0 11.6 10.4 2.5 2.0 24.9 22.0 1.2 0.9
Wipro Buy 655 790 96,133 31,034 37,317 21.3 20.7 34.0 39.5 19.3 16.6 4.3 3.6 24.6 23.6 2.9 2.3
Laminates
Greenply Inds Buy 179 291 395 1,088 1,279 14.0 15.0 23.5 36.4 7.6 4.9 1.3 1.0 18.4 22.8 0.8 0.6
Lotistics
Allcargo Global* Neutral 164 - 2,147 2,352 2,686 10.9 12.2 11.6 14.3 14.1 11.5 1.7 1.5 14.9 15.3 0.9 0.8
Container Corp Reduce 1,300 1,194 16,895 4,003 4,522 26.0 25.3 63.3 70.3 20.5 18.5 3.7 3.3 18.0 17.6 3.6 3.1
Gateway Distri Buy 118 150 1,277 677 853 26.2 28.8 9.1 12.1 13.0 9.8 1.9 1.7 13.6 16.1 1.7 1.4
Media
Balaji Telefilm Neutral 50 - 325 183 238 7.2 10.3 2.5 3.7 18.9 12.8 0.8 0.8 4.3 6.1 0.3 0.2
Cinemax India Buy 51 106 144 214 264 19.6 20.9 5.7 7.7 9.4 6.9 0.9 0.9 9.3 11.7 1.0 0.9
Deccan Chronicle Buy 127 193 3,103 991 1,113 48.5 47.7 11.8 13.4 10.5 9.3 2.0 1.8 20.2 20.3 2.6 2.2
HT Media Buy 162 182 3,802 1,668 1,906 19.0 19.4 7.6 9.1 19.3 16.0 3.0 2.6 16.3 16.9 2.0 1.6
INOX Leisure Buy 64 85 393 281 351 20.0 22.7 3.7 5.8 13.0 9.3 1.0 0.9 7.0 10.1 1.5 1.2
Jagran Prakashan Buy 117 160 3,529 1,088 1,260 29.8 30.6 6.6 7.9 16.1 13.5 4.9 4.5 31.0 34.3 3.1 2.6
PVR Buy 171 211 394 510 603 13.0 15.3 9.1 12.8 17.6 10.0 1.2 1.1 7.3 9.5 1.0 0.8
TV Today Network Buy 91 140 528 328 371 21.5 23.7 9.2 10.5 10.1 8.6 1.4 1.2 14.3 14.3 1.0 0.9
Metal
Electrosteel Castings Buy 46 72 1,487 1,706 1,818 26.2 28.0 6.7 7.7 6.8 5.9 0.8 0.7 14.6 14.8 1.2 1.1
Godawari Power Buy 222 307 624 1,060 1,122 27.0 26.5 57.1 64.0 3.9 3.5 0.9 0.7 27.5 24.1 0.8 0.6
Hindalco Buy 148 208 28,297 63,898 67,521 13.0 13.8 19.1 20.3 7.7 7.3 1.1 1.0 15.9 14.6 0.6 0.7
Hindustan Zinc Buy 966 1,399 40,806 9,764 12,884 60.0 60.2 119.8 162.4 8.1 5.9 1.8 1.4 24.7 26.1 2.4 1.3
JSW Steel Buy 1,078 1,360 20,158 24,174 29,351 23.3 23.6 93.3 118.1 11.5 9.1 1.9 1.5 19.4 20.2 1.3 1.2
NALCO Sell 420 316 27,080 5,655 6,376 28.4 32.4 15.4 19.0 27.2 22.2 2.5 2.3 9.4 10.8 4.2 3.8
NMDC Reduce 274 247 108,752 11,793 14,232 82.4 81.2 18.1 21.7 15.1 12.6 5.4 4.1 41.8 36.7 7.8 6.1
SAIL Neutral 201 - 83,166 48,247 52,932 22.1 22.5 16.2 16.7 12.4 12.1 2.2 1.9 19.0 16.9 1.3 1.2
Sesa Goa Neutral 369 - 30,367 9,582 10,662 54.5 54.7 47.5 52.2 7.8 7.1 2.7 2.0 43.8 34.2 2.3 1.7
Sterlite Ind Buy 649 980 54,517 28,845 32,994 29.7 31.6 68.4 76.7 9.5 8.5 1.3 1.1 13.5 12.9 1.3 0.9
Tata Steel Buy 485 697 43,012 113,849 119,171 12.5 12.8 61.0 57.2 8.0 8.5 1.3 1.2 17.9 14.7 0.7 0.6
Oil & Gas
Cairn India Accumulate 300 315 56,909 7,863 14,761 81.2 83.9 23.2 46.1 13.0 6.5 1.5 1.5 11.8 22.6 6.7 3.5
GAIL Buy 461 580 58,433 36,672 40,840 15.9 17.6 30.3 46.1 15.2 10.0 10.6 9.1 19.6 19.4 1.4 1.2
GSPL Buy 99 120 5,560 1,134 1,208 93.4 93.3 7.7 8.4 12.9 11.7 2.9 2.5 22.8 21.0 5.9 5.0
Gujarat Gas Accumulate 288 306 3,699 1,665 2,042 21.2 20.6 17.0 20.4 17.0 14.1 4.0 3.3 23.6 23.7 1.8 1.4
IndraprasthaGas Reduce 240 210 3,360 1,403 1,636 26.2 25.8 13.3 14.5 18.0 16.5 3.6 3.2 20.0 19.5 2.1 1.8
ONGC Neutral 1,190 - 254,483 117,551 124,021 44.9 46.1 114.6 123.3 10.4 9.6 2.1 1.9 20.6 19.4 1.8 1.6
Petronet LNG Neutral 84 - 6,281 12,872 18,011 8.2 6.2 6.3 6.7 13.2 12.5 2.5 2.2 18.7 17.8 0.5 0.4
Reliance Buy 1,031 1,260 338,741 234,754 243,596 17.6 20.0 69.2 86.9 14.9 11.9 2.0 1.8 13.7 14.9 1.5 1.3
Shiv Vani Oil Buy 423 510 1,857 1,667 1,725 41.9 41.8 58.6 63.7 7.2 6.6 1.4 1.2 19.2 17.4 2.1 1.8
13

14. Stock Watch | June 2010
Company Name Reco CMP Target Mkt Cap Sales (Rs cr) OPM (%) EPS (Rs) PER (x) P/BV (x) RoE (%) EV/Sales (x)
(Rs) Price (Rs) (Rs cr) FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E
Packaging
Essel Propack Buy 44 58 685 1,350 1,811 19.5 20.3 4.0 9.9 10.9 4.4 0.9 0.8 8.4 18.5 0.9 0.6
Pharmaceuticals
Alembic Buy 45 52 603 1,286 1,445 12.7 12.5 5.6 6.7 8.1 6.7 1.4 1.2 18.7 19.5 0.8 0.6
Aventis Pharma Reduce 1,830 1,658 4,216 1,087 1,220 17.8 18.5 80.8 92.1 22.7 19.9 4.0 3.5 18.8 18.9 3.3 2.8
Cadila Health Accumulate 620 634 12,678 4,308 5,100 20.1 21.0 30.6 39.6 20.3 15.6 6.2 4.8 34.8 34.7 3.1 2.6
Cipla Accumulate 325 360 26,106 5,857 6,744 20.2 21.1 13.9 17.1 23.3 19.0 3.9 3.4 17.9 19.1 4.4 3.8
Dishman Pharma Buy 198 279 1,599 1,099 1,335 24.1 25.5 17.4 21.4 11.4 9.2 1.7 1.4 15.8 16.8 2.0 1.7
Dr Reddys Labs Neutral 1,404 - 23,700 8,416 9,797 18.9 19.4 59.1 78.1 23.8 18.0 5.1 4.1 23.8 25.2 2.9 2.4
GlaxoSmithKline Sell 2,039 1,700 17,268 2,145 2,422 35.2 35.2 65.4 73.9 31.2 27.6 8.5 7.5 29.0 28.9 7.1 6.2
Indoco Remedies Buy 408 487 502 455 537 15.4 16.6 39.5 54.1 10.3 7.5 1.5 1.3 15.2 18.7 1.2 1.0
Ipca Labs Accumulate 274 284 3,432 1,834 2,150 20.9 21.0 19.5 23.7 14.1 11.5 3.5 2.8 27.5 27.1 2.1 1.8
Lupin Buy 1,850 2,099 16,450 5,645 6,579 18.9 19.5 93.4 116.6 19.8 15.9 5.6 4.4 31.8 31.2 3.0 2.6
Orchid Chemical Neutral 143 - 1,005 1,174 1,584 17.2 18.0 9.0 14.1 15.8 10.1 0.8 0.9 5.1 8.6 1.7 1.4
Piramal Health Neutral 514 - 10,738 4,190 4,863 20.4 20.8 27.2 33.8 18.9 15.2 5.6 4.5 32.5 32.7 2.8 2.3
Ranbaxy Labs Accumulate 430 480 18,084 8,231 9,988 16.0 19.0 25.8 28.7 16.7 15.0 3.5 3.0 21.5 21.6 2.3 1.8
Sun Pharma Neutral 1,708 - 35,378 4,830 5,581 32.5 33.5 71.6 84.8 23.9 20.1 3.8 3.3 17.1 17.7 6.4 5.4
Plastics
Sintex Industries Buy 283 385 3,867 4,067 4,835 16.8 17.8 28.3 35.0 10.0 8.1 1.8 1.5 18.0 18.7 1.4 1.2
Power
CESC Buy 376 460 4,697 4,166 4,887 23.7 23.9 43.0 54.8 8.7 6.9 1.1 0.9 13.2 14.8 1.7 1.9
Guj Ind Power Buy 111 135 1,680 1,422 1,727 23.2 23.3 9.6 12.0 11.6 9.3 1.2 1.1 11.1 12.8 1.4 1.4
NTPC Accumulate 202 230 166,228 52,812 62,152 29.8 30.4 11.8 14.1 17.1 14.3 2.3 2.1 14.5 15.5 3.0 2.5
Power - Cable
Finolex Cables Buy 51 85 779 1,994 2,398 10.2 10.4 5.7 9.2 8.9 5.5 1.1 0.9 13.0 18.4 0.5 0.4
Power - Trading
PTC India Buy 104 136 3,056 10,906 13,698 1.3 1.3 5.1 6.5 20.5 15.9 1.4 1.3 7.0 8.6 0.2 0.2
Real Estate
Anant Raj Inds Buy 103 178 3,042 342 610 93.5 90.4 8.8 13.1 11.8 7.9 0.8 0.7 7.3 9.9 6.8 4.7
DLF Neutral 282 - 47,866 9,668 14,413 46.6 50.4 13.8 23.9 20.5 11.8 1.5 1.3 7.4 11.7 1.2 0.7
HDIL Buy 232 302 8,031 1,775 3,106 49.1 52.4 19.1 34.8 12.1 6.7 1.1 0.9 9.5 15.2 6.5 3.6
Retail
Pantaloon Ret Accumulate 415 469 8,550 10,704 13,137 10.1 10.1 15.6 20.4 26.7 20.4 2.6 2.4 10.4 12.2 1.1 0.9
Shoppers Stop Neutral 426 - 1,486 1,660 2,075 7.7 7.7 12.5 16.5 34.2 25.8 5.4 3.5 17.0 16.4 1.1 0.8
Titan Industries Neutral 2,249 - 9,981 5,716 7,031 8.6 8.7 72.5 92.0 31.0 24.4 10.5 8.1 38.3 37.5 1.8 1.4
Shipping
ABG Shipyard Buy 250 327 1,273 2,035 2,634 20.0 20.0 23.8 38.5 10.5 6.5 1.5 1.4 13.6 19.1 1.1 0.9
GE Shipping Buy 303 396 4,617 3,100 3,980 35.5 39.7 45.1 70.8 6.7 4.3 0.8 0.7 11.7 16.5 0.9 0.8
Sugar
Bajaj Hindusthan^ Neutral 112 - 2,138 5,485 5,133 3.7 15.2 - 9.5 - 11.7 1.1 1.1 - 9.3 0.4 0.4
Balrampur Chini Mills^ Neutral 82 - 2,393 2,922 3,009 13.4 16.0 6.4 8.8 12.8 9.4 1.8 1.6 14.2 18.0 1.0 0.9
Telecom
Bharti Airtel Buy 276 360 104,828 42,773 47,328 35.3 35.6 22.0 24.9 12.6 11.1 2.2 1.8 18.6 17.9 2.3 2.1
Idea Cellular Reduce 56 50 18,396 14,557 16,510 23.2 23.7 1.7 2.5 33.4 22.6 1.5 1.4 4.4 6.1 1.3 1.3
Reliance Comm Reduce 168 155 34,706 22,412 24,592 31.5 30.0 17.0 17.1 9.9 9.8 0.8 0.8 8.7 8.1 1.8 1.6
Note: For some stocks we have kept a BUY rating inspite of lower than benchmarked returns, as we believe these stocks have potential to get re-rated and hence would provide good upsides from a long term perspective. Source: Company, Angel Research, * estimates for CY10E and CY11E;
^ estimates for SY10E and SY11E
14

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Reports based on technical and derivative analysis center on studying charts of a stock's price
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Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%) Reduce (-5% to -15%) Sell (< -15%)
June 2010 15

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Sarabjit Kour Nangra VP-Research, Pharmaceutical sarabjit@angeltrade.com
Vaibhav Agrawal VP-Research, Banking vaibhav.agrawal@angeltrade.com
Vaishali Jajoo Automobile vaishali.jajoo@angeltrade.com
Shailesh Kanani Infrastructure, Real Estate shailesh.kanani@angeltrade.com
Anand Shah FMCG, Media anand.shah@angeltrade.com
Deepak Pareek Oil & Gas deepak.pareek@angeltrade.com
Puneet Bambha Capital Goods, Engineering puneet.bambha@angeltrade.com
Sushant Dalmia Pharmaceutical sushant.dalmia@angeltrade.com
Rupesh Sankhe Cement, Power rupeshd.sankhe@angeltrade.com
Param Desai Real Estate, Logistics, Shipping paramv.desai@angeltrade.com
Sageraj Bariya Fertiliser, Mid-cap sageraj.bariya@angeltrade.com
Viraj Nadkarni Retail, Hotels, Mid-cap virajm.nadkarni@angeltrade.com
Paresh Jain Metals & Mining pareshn.jain@angeltrade.com
Amit Rane Banking amitn.rane@angeltrade.com
Rahul Jain IT, Telecom rahul.j@angeltrade.com
Jai Sharda Mid-cap jai.sharda@angeltrade.com
Sharan Lillaney Mid-cap sharanb.lillaney@angeltrade.com
Amit Vora Research Associate (Oil & Gas) amit.vora@angeltrade.com
V Srinivasan Research Associate (Cement, Power) v.srinivasan@angeltrade.com
Aniruddha Mate Research Associate (Infra, Real Estate) aniruddha.mate@angeltrade.com
Mihir Salot Research Associate (Logistics, Shipping) mihirr.salot@angeltrade.com
Chitrangda Kapur Research Associate (FMCG, Media) chitrangdar.kapur@angeltrade.com
Vibha Salvi Research Associate (IT, Telecom) vibhas.salvi@angeltrade.com
Pooja Jain Research Associate (Metals & Mining) pooja.j@angeltrade.com
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Derivatives:
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