1. Market Outlook
India Research
July 18, 2011
Dealer’s Diary Domestic Indices Chg (%) (Pts) (Close)
BSE Sensex -0.3% (56.3) 18,562
The key benchmark indices slipped into the red to hit fresh intraday lows in Nifty -0.3% (18.7) 5,581
morning trade. The market trimmed losses in mid-morning trade as Asian MID CAP -0.1% (7.8) 7,007
stocks rose in volatile trade. The market hovered in red in early afternoon trade.
SMALL CAP 0.1% 6.8 8,363
Weakness continued in afternoon trade as European stocks declined in early
BSE HC -0.2% (14.3) 6,518
trade on caution ahead of the release of European bank stress tests results.
BSE PSU -0.5% (45.5) 8,542
The market trimmed intraday losses in mid-afternoon trade as index
BANKEX -0.3% (32.4) 12,847
heavyweight RIL rose. The market moved in a tight range in the negative terrain
in late trade. The Sensex and Nifty closed with losses of 0.3% each. The AUTO -0.6% (53.6) 8,994
mid-cap index ended lower by 0.1%, while the small-cap index closed with METAL -0.9% (125.2) 14,610
gains of 0.1%. Among the front runners, TCS, Mahindra & Mahindra, RIL, OIL & GAS -0.1% (9.3) 9,121
Wipro and HDFC Bank gained 1–2%, while Tata Motors, Sterlite Inds, ONGC, BSE IT 0.4% 21.5 5,857
Cipla and HDFC lost 1–3%. Among mid caps, SKS Microfinance, Amara Raja, Global Indices Chg (%) (Pts) (Close)
A2Z Maint & Engg, Shree Global Trd and MOIL gained 4–10%, while Anant Raj Dow Jones 0.3% 42.6 12,480
Inds, Shree Renuka Sugars, Bajaj Holdings, JM Financial and Glodyne Tech lost NASDAQ 1.0% 27.1 2,790
3–6%.
FTSE -0.1% (3.3) 5,844
Nikkei 0.4% 38.4 9,974
Markets Today
Hang Seng -0.3% (64.8) 21,875
The trend deciding level for the day is 18,671/5,592 levels. If NIFTY trades Straits Times -0.1% (4.5) 3,084
above this level during the first half-an-hour of trade then we may witness a Shanghai Com 0.4% 9.7 2,820
further rally up to 18,828 – 19,094/5,621 – 5,661 levels. However, if NIFTY
trades below 18,671/5,592 levels for the first half-an-hour of trade then it may Indian ADRs Chg (%) (Pts) (Close)
correct up to 18,405 – 18,247/5,552 – 5,523 levels. Infosys 0.4% 0.2 $61.4
Indices S2 S1 R1 R2 Wipro 0.2% 0.0 $12.8
ICICI Bank 0.1% 0.1 $47.3
SENSEX 18,247 18,405 18,828 19,094
HDFC Bank 0.4% 0.7 $178.0
NIFTY 5,523 5,552 5,621 5,661
News Analysis Advances / Declines BSE NSE
GSM net subscriber addition – June 2011 Advances 1,384 622
Tata Motors reports flat yoy global sales in June 2011 Declines 1,472 816
1QFY2012 Result Review – HT Media
Refer detailed news analysis on the following page
Unchanged 135 69
Net Inflows (July 14, 2011)
Volumes (` cr)
` cr Purch Sales Net MTD YTD
BSE 2,099
FII 2,405 2,068 338 6,475 9,145
MFs 1,011 467 544 399 3,625 NSE 8,816
FII Derivatives (July 15, 2011)
Open
` cr Purch Sales Net
Interest
Index Futures 1,515 1,703 (188) 12,900
Stock Futures 1,078 1,285 (207) 32,066
Gainers / Losers
Gainers Losers
Company Price (`) chg (%) Company Price (`) chg (%)
Jet Air 506 3.4 Anant Raj Ind. 84 (6.1)
Torrent Power 251 3.4 Oracle Financials 2,204 (3.8)
MRF 7,755 3.4 Zee Entertainment 124 (3.2)
Castrol India 574 3.0 Shree Renuka 71 (3.0) 1
GE Shipping 279 3.0 Bajaj Holdings 750 (2.9)
Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539

2. Market Outlook | India Research
GSM net subscriber addition – June 2011
Cellular Operators Association of India (COAI) reported GSM subscriber data for June
2011, which continued its declining trend in this month as well. GSM subscriber data was
reported to be weak on mom basis across all operators (except BSNL). The net subscriber
addition number stood at 9.6mn, down 10% mom, taking the total GSM subscriber base
to 598.8mn.
Weakness across the board: In June 2011, net addition run rate on mom basis for all
operators (except BSNL) dropped steeply. Among the incumbents, Idea, after adding
2.5mn plus net subscribers every month from November 2010–April 2011, reported a
drop in its net subscriber additions to merely 1.4mn, down 24.8% mom. Also, net
subscriber addition numbers of Bharti, Vodafone and Aircel dropped by down 13.5%,
14.5% and 17.3% mom to 2.1mn, 2.1mn and 0.9mn, respectively. On the other hand,
BSNL, which was reporting mom decline in its subscriber additions since the last five
months, reported a 78.8% mom jump in June 2011 with net subscriber addition of 0.8mn.
Subscriber market share of all the incumbents remained almost flat mom – Bharti at
28.3%, Vodafone at 23.6%, Idea at 15.9%, BSNL at 14.8% and Aircel at 9.7%.
All the new operators reported a sharp decline in subscriber net addition numbers for June
2011. Uninor, DB Etisalat and S-Tel reported 17.4%, 37.1% and 7.8% mom decline in net
subscriber additions, with addition numbers of 0.9mn, 0.1mn and 0.2mn, respectively.
Loop Mobile emerged as the dark horse and reported a 30.8% mom increase in
subscriber addition at 0.02mn.
Circle-wise highlights: In June 2011, the net addition run rate of Metro circle declined to
0.7mn vs. 1.0mn in May 2011. In the Metro circle, in this month again Vodafone had the
highest net additions at 0.21mn, followed by Bharti and Idea reporting 0.17mn net
additions each. Subscriber addition run rate of B circle bounced back to 3.0mn from
2.4mn in May 2011. However, subscriber additions in B and C circles declined to 3.4mn
and 1.5mn from 4.0mn and 2.1mn in May 2011, respectively. This led to a considerable
decline in their net subscriber addition market share to 39.2% and 17.7% from 41.9% and
22.4% in May 2011, respectively.
For Bharti and Idea, this kind of cooling off in subscriber net addition was along expected
lines, thus our estimates remain unchanged. Bharti continues to be a better bet due to its
low-cost integrated model (owned tower infrastructure), potential opportunity to scale up in
Africa, established leadership in revenue and subscriber market share and relatively better
KPIs. However, we remain Neutral on the telecom sector.
Tata Motors reports flat yoy global sales in June 2011
Tata Motors reported flat yoy global sales volume in June 2011, primarily due to a 12%
yoy decline in global passenger vehicle volumes. Total global volumes, however, witnessed
a marginal 1.8% mom increase to 89,846 units. Global commercial vehicle volumes
including Tata Daewoo and Tata Hispano Carrocera range posted healthy 13% yoy growth
to 45,285 units. Jaguar and Land Rover (JLR) posted lower-than-expected volume growth
as Jaguar sales witnessed a sharp 40.4% yoy decline, while Land Rover sales declined by
9.7% sequentially. JLR sales reported flat yoy growth of 0.8% (lower by 8.7% sequentially)
to 20,358 units with Jaguar and Land Rover reporting volumes of 4,038 and 16,320 units,
respectively. We recommend Neutral on the stock.
July 18, 2011 2

3. Market Outlook | India Research
1QFY2012 Result Review
HT Media
HT Media posted a good set of numbers both on the revenue and the profitability front. The
company reported top-line growth of 22.7% yoy to `494cr. Recurring earnings grew by robust
34.4% yoy on account of good revenue growth and a significant decrease in tax rate. Key
highlights for the quarter include 1) overall growth of ~17% yoy in advertising revenue, driven
by ~18% yoy growth in English and ~15% yoy growth in Hindi – however, sequentially, the
company’s advertising revenue growth in English was flat with only ~1.5% growth, though
advertising revenue in Hindi grew by ~18% qoq, 2) ~3.5% yoy/qoq increase in circulation
revenue, 3) ~75% yoy jump and ~17% qoq decline in radio revenue and 4) 174bp yoy OPM
contraction due to 253bp yoy gross margin contraction. We maintain our Accumulate rating on
the stock. The Target Price is currently under review.
Economic and Political News
70% of Indian population lives in rural areas: Census
India produces 241mn tonne of foodgrains in FY2011
Services exports up 3.2%, imports rise 2.8% in May 2011
Corporate News
RIL plans to shut 110,000 bpd VGO unit in September 2011
MMTC invites bids for sale of 2,000tn of pulses
JB Chemicals sells Russian business to J&J for `939cr
Suzlon bags `650cr order from Orient Green Power
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint
Events for the day
BASF India Results
ING Vysya Bank Results
Persistent Systems Results
Zydus Wellness Results
July 18, 2011 3

4. Market Outlook | India Research
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