1. Market Outlook
India Research
July 12, 2011
Dealer’s Diary Domestic Indices Chg (%) (Pts) (Close)
BSE Sensex -0.7% (136.7) 18,721
The key benchmark indices fell on weak US job data and as eurozone debt
Nifty -0.8% (44.6) 5,616
worries resurfaced. The market came off lows after an initial slide triggered by
MID CAP -0.3% (22.0) 6,974
weak Asian shares. The intraday recovery proved short-lived. The market came
SMALL CAP -0.4% (35.3) 8,340
off highs in mid-morning trade and extended the decline in early afternoon
BSE HC -0.1% (5.9) 6,431
trade, with the S&P CNX Nifty sliding to a fresh intraday low. The market
extended losses in afternoon trade as European stocks opened lower. A bout of BSE PSU -0.7% (60.2) 8,496
volatility was witnessed in mid-afternoon trade as the key benchmark indices BANKEX -1.4% (179.1) 12,741
pared losses soon after hitting fresh intraday lows. The market closed down with AUTO -0.1% (4.2) 9,097
the Sensex and Nifty losing 0.7% and 0.8%, respectively. The mid-cap and METAL -1.5% (230.6) 14,733
small-cap indices closed down by 0.3% and 0.4%, respectively. Among the front OIL & GAS 0.1% 11.9 9,032
runners, ONGC, M&M, ITC, RCom and Sterlite Inds gained 0–2%, while BSE IT -1.7% (107.3) 6,092
Hindalco, DLF, Wipro, Infosys and JP Associates lost 2–4%. Among mid caps, Global Indices Chg (%) (Pts) (Close)
SKS Microfinance, Motherson Sumi, Godrej Properties, KGN Inds and Shree Dow Jones -1.2% (151.4) 12,506
Global Trading gained 5–10%, while DB Realty, Polaris Software, Glodyne NASDAQ -2.0% (57.2) 2,803
Tech, Blue Dart and Peninsula Land lost 3–6%.
FTSE -1.0% (61.4) 5,929
Markets Today Nikkei -0.7% (68.2) 10,070
Hang Seng -1.7% (379.2) 22,347
The trend deciding level for the day is 18,748/5,624 levels. If NIFTY trades
Straits Times -1.1% (33.9) 3,117
above this level during the first half-an-hour of trade then we may witness a
Shanghai Com 0.2% 4.9 2,803
further rally up to 18,187–18,913/5,645-5,675 levels. However, if NIFTY
trades below 18,748/5,624 levels for the first half-an-hour of trade then it may
correct up to 18,653–18,584/5,594-5,572 levels. Indian ADRs Chg (%) (Pts) (Close)
Indices S2 S1 R1 R2 Infosys -3.1% (2.1) $65.1
Wipro -2.3% (0.3) $13.3
SENSEX 18,584 18,653 18,817 18,913
ICICI Bank -2.0% (1.0) $47.0
NIFTY 5,572 5,594 5,645 5,675
HDFC Bank -3.0% (5.4) $176.1
News Analysis
TNPCB issues closure notice to Orchid Chemical unit Advances / Declines BSE NSE
1QFY2012 Result Review - Sintex Advances 1,291 529
1QFY2012 Result Preview - Infosys Declines 1,568 861
Refer detailed news analysis on the following page
Unchanged 114 78
Net Inflows (July 08, 2011)
` cr Purch Sales Net MTD YTD
Volumes (` cr)
FII 3,155 2,479 676 6,430 7,752
BSE 3,214
MFs 537 785 (248) 3 3,128
NSE 8,660
FII Derivatives (July 11, 2011)
Open
` cr Purch Sales Net
Interest
Index Futures 1,099 1,777 (678) 13,050
Stock Futures 913 1,168 (255) 31,224
Gainers / Losers
Gainers Losers
Company Price (`) chg (%) Company Price (`) chg (%)
Dish TV India 90 3.3 Unitech 34 (5.9)
CESC 335 2.6 Hindalco Inds 180 (4.4)
Adani Enter 719 2.4 JSW Steel 847 (4.0)
MRF 7,385 2.2 SAIL 132 (3.5)
Gujarat State Pet 99 2.1 Axis Bank 1,264 (3.3) 1
Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539

2. Market Outlook | India Research
TNPCB issues closure notice to Orchid Chemical’s unit
Just a few weeks after clearing an USFDA inspection, Orchid Chemicals &
Pharmaceuticals’ Cephalosporin API manufacturing facility in Alathur (Chennai) has been
issued a closure notice by the Tamil Nadu Pollution Control Board (TNPCB) over
non-compliance issue relating to disposal of solid waste. The Alathur facility has been
manufacturing a range of oral and sterile Cephalosporin APIs (it is an antibiotic used to
treat infection and inflammation) since 1994. The facility caters to developed markets such
as the US, Europe and Japan. The Company is in active dialogue with the TNPCB officials
and is confident of resolving the issues and bringing the plant to a fully operational stage
at the earliest. We maintain Buy on the stock with a target price of `373.
1QFY2012 Result Review
Sintex
Sintex reported strong top-line growth for 1QFY2012. The company’s net sales grew by
22.1% yoy to `1,112cr on the back of strong growth of 32% yoy in the monolithic segment
to `473cr (`358cr). The company’s OPM expanded by 193bp yoy to 17.0% (15.1%),
largely on the back of a decline in other expenditure, which fell by 323bp yoy. Net profit
increased by 19.9% yoy to `94.6cr (`78.8cr). Despite the OPM expansion, PAT margin
contracted by 15bp yoy to 8.5% (8.7%) because of higher tax provision during the quarter.
We continue to maintain our Buy recommendation on the stock with a target price of
`212. We may revise our estimates and target price post the concall today.
1QFY2012 Result Preview
Infosys
Infosys is set to announce its 1QFY2012 results. We expect a modest performance by the
company, with revenue at US$1,664mn vs. US$1,602mn in 4QFY2011, up 3.9% qoq, led
by volume growth of 2.7% qoq. In rupee terms, revenue is expected to grow by 2.6% qoq
to `7,435cr vs. `7,250cr in 4QFY2011. EBITDA margin is expected to decline by 276bp
qoq to 29.3% due to negative impact of annual wage hikes, effective from April 1, 2011.
PAT is expected to come in at `1,689cr.
Key points to watch out for are a) management’s commentary on the macro picture
and b) revision, if any, in USD revenue growth guidance for FY2012, which we expect to
increase by 1% to 19–21% yoy. We maintain our Buy recommendation on the stock with a
target price of `3,424.
July 12, 2011 2

3. Market Outlook | India Research
Economic and Political News
Finance Ministry to raise budget tax collection target
Ministers’ panel clears Food Security Bill
Ministry’s coal supply policy hits merchant power companies
Draft bill clears decks for ultra mega mine projects
Corporate News
Tatas may roll out Nano from Indonesia too
HDFC Bank, Union Bank of India and OBC raise base rates by 25bp each
Pfizer, Ranbaxy tie up with ITC to sell OTC products in rural areas
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint
Events for the day
Geojit BNP Results
Infosys Results
Koutons Retail Results
July 12, 2011 3

4. Market Outlook | India Research
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