123959270 Portfolio Managemnt

7/29/2019 123959270 Portfolio Managemnt

1/50


2/50


3/50

Conservative Mild Aggressive Aggressive

Investment Horizon 9-12 months 9-12 months 9-12 months

Return 15%-20% 20% - 25% >25%

Risk Retrun Low Risk Low Return Medium Rrisk - Medium Return High Risk - High Return

Benchmark Sensex/Nifty CNX 100 BSE 200

Review Intervals Quarterly Quarterly Monthly

9/15/2011 3


4/50

MODEL PORTFOLIO

TYPE CONSERVATIVE MILD AGGRESSIVE AGGRESSIVE

SBI AUROBINDO PHARMA JINDAL STEEL

POWER GRID CENTRAL BANK GMR INFRA

HUL DCB IVRCL LTD

ITC TATA STEEL REDINGTON INDIA

STOCKS COVERED

GODREJ CONSUMER HINDALCO AXIS BANK

HCL TECH IDEA TATA MOTORS

COAL INDIA BHARTI ESCORTS

INFOSYS UCO BANK COROMANDEL INT.

VOLTAS BAJAJ ELECTRICALS IDFC

CIPLA M& M FINANCE ICICI BANK

M&M KPIT CUMMINS SHASUN PHARMA

9/15/2011 4

MARUTI SUZUKI ADHUNIK METALIKS


5/50

SELECTED STOCKS

Market Cap > Rs. 500cr

SBI

NTPC

POWER GRID

CONSERVATIVE PORTFOLIO SECTOR

ALLOCATION%

ear et a es >=

5 Year CAGR Net Profits >= 10%*

Average Beta=0.85

HUL

ITC

GODREJ CONSUMER

BANKS &NBFC, 8

PHARMA,

AUTO, 15

Average Dividend Yield=1.5%HCL TECH

COAL INDIA

INFOSYS

,5

FMCG, 23MINING, 8

DIVERSIFIED, 8

CIPLA

M&M

IT, 15

*

9/15/2011 5


6/50

SELECTED STOCKS

Market Cap > Rs. 500cr

AUROBINDO PHARMA

IRB INFRA

CENTRAL BANK BANKS&CONSUME INFRA 8= .

Average Dividend Yield=1.4%

DCB

TATA STEEL

HINDALCO

,R

DURABLES,

8PHARMA,

8

IDEA

BHARTI

UCO BANK

STEEL,8

M& M FINANCE

KPIT CUMMINS

TELECOM,

15

IT,8

METALS,1

5

9/15/2011 6


7/50

SELECTED STOCKS

Market Ca > Rs. 500cr *

JINDAL STEEL

BATA INDIA

GMR INFRAINFRA,17

Average Beta=1.04

Average Dividend Yield=1.3%

IVRCL

REDINGTON INDIA

AXIS BANK

NBFC,25

PHARMA,TATA MOTORS

ESCORTS

COROMANDEL INT

STEEL,8

FMCG 8

8

ICICI BANK

SHASUN PHARMA

IT,8

FERTILIZER

S,8

,

9/15/2011 7

* Mkt Cap of Shasun Pharma Rs. 318cr


8/50

CompanyMarket Cap

(Rs. Cr)Beta (6M) Div Yield % CMP (Rs) Target Price (Rs) Potential Upside

, . . . .

NTPC LTD 134,401 0.9 2.3 163.0 195.0 20%

POWER GRID CORP 44,097 0.7 1.8 95.3 115 21%

, . . . .

ITC LTD 153,088 0.8 1.4 197.5 230.0 16%

GODREJ CONSUMER 13,751 0.5 1.1 424.8 530.0 25%

HCL TECH LTD 26,342 1.2 1.7 380.0 480.0 26%

COAL INDIA LTD 240,402 0.7 1.0 378.6 430.0 14%

INFOSYS LTD 128,793 1.1 1.3 2226.0 2760.0 24%

VOLTAS LTD 3,921 0.9 1.6 119.0 165.0 39%

CIPLA LTD 23,661 0.8 0.7 293.0 340.0 16%

M&M 48,561 1.1 1.3 785.0 840.0 7%

MARUTI SUZUKI 31,056 0.8 0.7 1075.0 1280.0 19%

9/15/2011 8

Average 0.85 1.7


9/50

STATE BANK OF INDIA

COMPANY PROFILE

SBI is the largest Indian banking and financial services company (by turnover and total

Rating Buy

CMP (Rs.) 1880

Target (Rs.) 2480

, .With an asset base of $352 billion and $285 billion in deposits, SBI is a regional banking

behemoth and is one of the largest financial institution in the world. It has a market share ofabout 20% in deposits and loansamong Indian commercial banks.The State Bank of India isthe 29th most reputed company in the world according to Forbes

ps e

Benefiting from its scale on the borrowing cost side, SBI generates NIM of ~3% on asustainable basis. We believe strong net interest income growth over the next few years willboost operating profits.

SBI with its return ratios of 0.8-1% RoA and 14-16% RoE is expected to trade at apremium to other public sector banks due to its scale.ma or su s ar es nc u ng e are pro a e. ssoc a e an s expec e o e

merged over the next 12-24 months have also generated RoA of 0.8- 1%, which will keepconsolidated return ratios healthy.

VALUATIONS

With strong economic growth, the financial services sector should outperform and SBI will be

ShareholdingPattern%(ason

30thJune,2011)

a significant contributor in the same. The stock is currently trading at 15.6x FY11P/E and2.2xFY11 P/B. We think the current price largely factors in most of the bad news on assetquality and with return ratios likely to improve from H2FY11 onwards, we think thisconstitutes a good entry point with a target price of Rs.2480.

59.410.88

17.45

12.27

Promoters

FIIs

DIIs

9/15/2011 9

Others


10/50

NTPC

COMPANY PROFILE

NTPC is a diversified power major with presence in the entire value chain of the powergeneration business. Apart from power generation, NTPC has already ventured into

Rating Buy

CMP (Rs.) 163

Target (Rs.) 195

U side % 20, , .NTPC ranked 341st in the 2010, Forbes Global 2000 ranking of the Worlds biggest

companies and received Maharatna status in May, 2010, one of the only four companies to beawarded this status.

INVESTMENT RATIONALE

~28% of total power generation in the country due to its focus on high efficiency. NTPC'scapacity addition shall accelerate as 14.7GW of projects under construction are expected to becommissioned over FY12-14.

Company has complete fuel supply arrangement for all its plants including under constructionones. By 2017, company targets to procure 20% of its coal requirement from own mines, 70%roug n ages an a ance roug mpor e coa .Also, in a weak sector outlook, the company stands to gain on pre-emptive steps taken bysecuring regulated PPAs for the 40GW capacity under various stages of expansion. This is akey positive in a competitive bidding regime, which will ensure secured returns with passthrough of increased fuel prices. 3.66

ShareholdingPattern%(as

on30thJune,2011)

VALUATIONS

We believe that ideal imported coal blending to optimize production cost and timely execution ofcapacity addition will be the key for NTPC. We assign a BUY rating on the stock with a targetprice of Rs.195. The stock is currently available at 2.0xFY11P/BV and 14.7x FY11P/E.

3.54 8.3

Promoters

FIIs

DIIs

9/15/2011 10

84.5Others


11/50

POWER GRID CORPORATI ON OF INDIA LTD (PGCIL )

COMPANY PROFILE

POWERGRID, the Central Transmission Utility (CTU) of the country, is engaged inpower transmission business with the mandate for planning, co-ordination, supervisionand control over complete Inter-State transmission system. POWERGRID, as on July

Rating Buy

CMP (Rs.) 95

Target (Rs.) 115

Upside % 21

2009, owns and operates about 71,600 ckt kms of transmission lines at 800/765 kV, 400kV, 220 kV & 132 kV EHVAC & +500 kV HVDC levels and 122 sub-stations withtransformation capacity of about 81,200 MVA.Recognizing the role of POWERGRID in the overall development of transmission andpower sector, Govt. of India has conferred Navratna upon status to POWERGRID in May`08.


PGCIL (61.42%owned by the Government of India) is India's Central TransmissionUtility (CTU) mandated to establish and operate regional and national grids to facilitate

transfer of power within and across regions.PGCIL lans Rs545bn of ca ex durin the XIth Five Year Plan FY08-12 ..Management expects that capex during the next plan (XIIth Plan) could be as high asRs1200bn.In 2QFY11, PGCIL received in-principle approval for the Kudankulam nuclear plantwhere transmission capacity was declared commercial in April 2009, despite generationcapacity not being operational. This precedent will enable PGCIL to approach the


30thJune,2011)

,

in generation projects will be minimized.

VALUATIONS

PGCIL stock currently trades at 2.1xFY11P/BV and 17.3xFY11P/E. Our target price ofRs.115 is based on 2.1x P/BV multiple which is ~12% discount to the historic average of

13.46

7.66 9.46Promoters

FIIs

DIIs

9/15/2011 11

. . . ers


12/50


13/50

ITC

COMPANY PROFILE

ITC

Rating Buy

CMP (Rs.) 198

Target (Rs.) 230

ITC is one of India's foremost private sector companies with a market capitalisation ofover US $ 33 billion and a turnover of US $ 7 billion. ITC has a diversified presence in Cigarettes, Hotels, Paperboards & SpecialtyPapers, Packaging, Agri-Business, Packaged Foods & Confectionery, InformationTechnology, Branded Apparel, Personal Care, Stationery, Safety Matches and other

.of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gainingmarket share even in its nascent businesses of Packaged Foods &Confectionery, Branded Apparel, Personal Care and Stationery.


'

0


30thJune,2011)

demand and flat excise duties.Non-cigarette businesses are also set to contribute to growth, with FMCG lossesdeclining, and paper, agri and hotels businesses on a healthy growth path.

VALUATIONS

14.56

35.91

49.53

Promoters

FIIs

DIIs

-

(INR52b in FY11), dividend payout is likely to settle at a higher level. The stock trades at31.3x FY11 EPS of Rs6.4. We recommend Buy with a target price of Rs.230, 16%upside.

9/15/2011 13

ers


14/50


15/50

HCL T ECHNOLOGIES

COMPANY PROFILE

Rating Buy

CMP (Rs.) 380

Target (Rs.) 480

Upside % 26

companies listed in India - HCL Technologies and HCL Infosystems. Its range of

offerings includes product engineering, custom & package applications, BPO, ITinfrastructure services, IT hardware, systems integration, and distribution of informationand communications technology (ICT) products across a wide range of focused industryverticals.


Improvement in ratio of net profit conversion into cash flow from operations and

higher than expected improvement in EBITDA margin. Strong deal pipeline and guidance of stable EBIT margin in FY12E will support stock


30thJune,2011)

re-ra ng n com ng quar er.

VALUATIONS

Taking the same into account we recommend a BUY on the stock with a price target ofRs. 480. The stock is currently trading at 15.4xFY11P/E which is attractive in

64.37

21.35

.

8.15Promoters

FIIs

DIIs

comparison to its peers.

9/15/2011 15

ers


16/50

COAL I NDIA

COMPANY PROFILE

Rating Buy

CMP (Rs.) 379

Target (Rs.) 430

Upside % 14

today is the single largest coal producer in the world. Operating through 81 mining

areas, CIL is an apex body with 7 wholly owned coal producing subsidiaries and 1 mineplanning and consultancy company spread over 8 provincial states of India.

CIL also fully owns a mining company in Mozambique christened as 'Coal Indiar cana m a a . a so manages o er es a s men s e

workshops, hospitals etc. CIL having fulfilled the financial and other prerequisites wasgranted the Maharatna recognition in April 2011.


1.55

2.08 ShareholdingPattern%(ason

30thJune,2011)

Profit sharing concept needs clarification, however we believe if the MMDR Bill wereto become operational, COAL would have the flexibility to pass on the costs to itscustomers We expect CIL to meet its offtake target of 454MT for FY12E through liquidation ofinventory.

6.37

Promoters

FIIs

DIIs

VALUATIONS

We assign a BUY rating on the stock with a target price of Rs.430 on back of increasedofftake and realization. The stock currently trades at 21.8xFY11P/E.

9/15/2011 16

90

Others


17/50

INFOSYS

COMPANY PROFILE

Infosys is the second largest IT company in India with 133,560 employees (including

Rating Buy

CMP (Rs.) 2226

Target (Rs.) 2760

Upside % 24

subsidiaries) as of March 2011. Infosys is ranked 28th globally in the list of IT servicesproviding firms. It has offices in 33 countries and development centers in

India, China, Australia, UK, Canada, Brazil and Japan. The company offers softwareproducts for the banking industry and business process management services alsoprovides end-to-end business solutions.


So far, no budget cuts have been announced, corporate health is better than in 2008and discretionary spends are lower (unlike in 2006/07) which augurs well for the IndianIT space.

VALUATIONS


30thJune,2011)

The stock currently trades at 18.5x FY11P/E. Infosys has corrected 20% over the pasttwo months and valuations are undemanding at 17.5x FY12 (guidance).We recommenda BUY rating on the stock with a target price of Rs.2760. Further, its valuation premiumto more cyclical peers (Accenture) has collapsed to only 10% now.

16.04

36.88

37.24

Promoters

FIIs

DIIs

9/15/2011 17

9.84

ers


18/50


19/50


20/50


21/50

MARUTI SUZUKI (MSIL)

COMPANY PROFILE

MSIL, a subsidiary of Suzuki Motor Corporation, Japan has been the leader of the Indiancar market for over two and a half decades. The company has two manufacturing facilitieslocated at Gurgaon and Manesar, south of New Delhi, India. Both the facilities have a

Rating Buy

CMP (Rs.) 1075

Target (Rs.) 1280

Upside % 19

com ne capa y o pro uce ove . m on , , ve c es annua y. The company plans to expand its manufacturing capacity to 1.75 million by 2013.


Series of monetary policy actions by RBI and higher interest rates led the automakers toface headwinds in the form of lower sales and in-line with this MSI reported 18% de-growthin Q1FY12 to 281526 units. Short term outlook for MSI seems bleak on the back of mutedemand, higher discounts and JPY appreciation putting pressure on profitability.However, these factors are already factored in the current price which tanked ~12% in lastone month.

Company is aggressively looking to expand its Diesel portfolio as the difference betweenpetrol and diesel prices widens on account of petrol price deregulation. Currently the


30thJune,2011)

contribution of Diesel portfolio stood at 21% in domestic sales. Maruti recently unveilednew swift at an introductory price of Rs 17 lakh or the base diesel variant which iscompeting with Toyotas Liva, Fords Figo and Hyundais Brio. In our view, MSI is placedon the best position in the form of brand loyalty, vast dealer and service network for whichthe customer is looking very closely.

54.21

18

9.08Promoters

FIIs

DIIs

VALUATIONSWe estimate gradual improvement in EBITDA margins driven by moderating RMcosts, higher operating leverage, a reduction in imports and forex stability. Currently thestock trades at 13x FY11P/E. We recommend Buy with a target price of Rs.1280 for apotential upside of 19% from current levels.

9/15/2011 21

. ers


22/50

Company Market Cap (Rs. Cr) Beta (6M) Div Yield % CMP (Rs) Target Price (Rs) Potential Upside

AUROBINDO PHARMA 3,832 1.0 1.5 131.7 165.0 25%

IRB INFRA 5,305 1.0 0.9 156.4 190.0 22%

CENTRAL BANK 6,505 1.0 2.3 98.9 130.0 31%

. . . .

TATA STEEL LTD 44,257 1.2 2.4 460.0 560.0 22%

HINDALCO INDS 27,817 1.2 0.9 145.0 185.0 28%

IDEA CELLULAR 32,637 0.7 0.0 98.4 120.0 22%

BHARTI AIRTEL 147,646 0.8 0.2 390.0 480.0 23%

UCO BANK 4,405 1.1 4.2 69.4 95.0 37%

BAJAJ ELECTRICAL 1,768 0.6 1.6 176.0 240.0 36%

M M FINAN E 6,812 0.9 1.5 649.0 720.0 11

KPIT CUMMINS 1,312 0.9 0.5 146.5 195.0 33%

ADHUNIK METALS 684 0.8 2.7 55.3 105.0 90%

AVERAGE 0.97 1.4

9/15/2011 22


23/50


24/50

IRB IN FRA

Rating Buy

CMP (Rs.) 156

Target (Rs.) 190

Upside % 22

COMPANY PROFILE

IRB Infrastructure which executed Indias first build-operate-transfer (BOT) road

project, is one of the largest operators of such ventures. Currently it has about 3404.40lane KM under operational and about 2330.4 lane KM under development. One of mostnotable project of the company is Mumbai Pune Expressway.


IRB has a robust business, construction order book of Rs.91 bn, 17 road BOTprojects, strong operating cash flows, funding capabilities, and relatively lower risk torising interest rates.


30thJune,2011)

portfolio has started generating good amount of cash flows, which is a distinguishingfactor now and can be used for funding of new projects.

VALUATIONS

At the CMP, the stock is trading at 11.5xFY11 earnings. As the valuations are nearing

13.43

3.98

7.79

Promoters

FIIs

DIIs

-

recommend a BUY rating on the stock with a target price of RS.190

9/15/2011 24

74.8 Others


25/50

CENTRAL BA NK

COMPANY PROFILE

Among the Public Sector Banks, Central Bank of India(CBoI) can be truly described as

Rating Buy

CMP (Rs.) 99

Target (Rs.) 130

Upside % 31

an All India Bank, due to distribution of its large network in 27 out of 29 States as alsoin 3 out of 7 Union Territories in India. Central Bank of India holds a very prominent

place among the Public Sector Banks on account of its network of 3656 branchesand 178 extension counters at various centres throughout the length and breadth of thecountry.

INVESTMENT RATIONALE CBoI has opened 69 new branches in Q1FY12. Total presence increased to 3,797branches with 62% of the branches servicing the rural & the semi-urban regions of thecountry.

With CBoI effecting hikes in lending rates, we believe the Bank should be able to


30thJune,2011)

. Going ahead, the impact of change in savings rate which has already been factoredin this quarter and leveraging of CD ratio can help the bank improve its margins.

VALUATIONS

2.788.51

8.5Promoters

FIIs

DIIs

, . . .

recommend a BUY at current levels with a target price of Rs130 for a potential upside of31%

9/15/2011 25

80.21 ers


26/50


27/50

TATA STEEL

Rating Buy

CMP (Rs.) 460

Target (Rs.) 560

Upside % 22

Tata Steel is the world's seventh largest steel company, with an annual crude steel

capacity of 31 million tonnes. It is the largest private sector steel company in India interms of domestic production. Tata Steel is the 8th most valuable brand according to an annual survey conductedby Brand Finance and The Economic Times in 2010.


Tata Steels Indian operations have a robust business model, higher margin &domestic demand advantage. The upcoming new capacity is expected to add torevenue & profitability along with increasing the contribution from higher margindomestic business.


30thJune,2011)

The groups strategy to restructure long products business of European operations& target high value markets is expected to yield benefits in long run. Going forward this would help the company to have flexibility in its operations soas to focus on segments having higher growth rate & keep the costs under check.

VALUATIONS

30.625.88Promoters

FIIs

DIIs

We believe the stock could deliver decent absolute returns over the next 12 monthsand recommend BUY with a target price of Rs.560. The stock is currently trading at5.6xFY11EV/EBIDTA.

9/15/2011 27

17.0626.46ers


28/50

HINDALCO

COMPANY PROFILE

Flagship company of the Aditya Birla Group is the world's largest aluminium rolling

Rating Buy

CMP (Rs.) 145

Target (Rs.) 185

Upside % 28

company and one of the biggest producers of primary aluminium in Asia. Its coppersmelter is the worlds largest custom smelter at a single location.

The acquisition of Novelis Inc. in 2007 positioned it among the top five aluminiummajors worldwide and the largest vertically integrated aluminium company in India.Today company is a metals powerhouse with high-end rolling capabilities and global

.


Hindalcos growth in earnings in the next 4-5 years will be driven by low cost, fullyintegrated aluminium capacity being set up in India and availability of captive coal for its

Mahan project in FY14.


30thJune,2011)

domestically to 4.5mtpa and 1.65mtpa is relatively on track. The additional capacitywould result in higher profitability margins on a consolidated basis.We believe Hindalco is well placed to benefit from a) its aluminium expansionplans, b) low production cost at its new capacities and c) steady capacity expansion atNovelis.

32.06

12.85

24.26 Promoters

FIIs

DIIs

VALUATIONSConsidering the huge potential we maintain a positive stance on the company andrecommend BUY with a target price of Rs185. The stock is currently trading at 5.5xFY11EV/EBITDA

9/15/2011 28

30.83

Others


29/50


30/50

BHA RTI AIRTEL

COMPANY PROFILE

Bharti Airtel is the fifth largest telecom operator in the world with over 207.8 million

Rating Buy

CMP (Rs.) 390

Target (Rs.) 480

Upside % 23

subscribers across 19 countries at the end of 2010. It is the largest cellular serviceprovider in India, with over 169.18 million subscribers as of June 2011. Airtel is the 3rd

largest in-country mobile operator by subscriber base, behind China Mobil and ChinaUnicom.


Bhartis proactive move to initiate tariff hike would be visible in the coming quartersleading to better profitability, leaving scope for telcos to expand their 3G networkaggressively. Increase in 3G penetration to ~15-20% to contribute to revenue and EBITDA growth;

most of the fixed cost is already factored in.Revenue is ex ected to row fastest in the industr on back of African o erations with

5.63


30thJune,2011)

penetration level of ~33% versus ~67% for India. Company has secured a license to operate 2G and 3G services in Rwanda. With thislicense, the company's footprint across the African continent will expand to 17countries, Rwanda being one of its fastest growing markets. The company plans toinvest over $100 million in its operations in Rwanda over the next three years.

17.59

8.48Promoters

FIIs

DIIs

VALUATIONSWith stable competition and strong growth in India over the near term, coupled withimproving visibility in Africa, we stay positive on the stock and recommend BUY with atarget price of Rs.480. At CMP, stock trades at 10.2x EV/EBIDTA for FY11.

9/15/2011 30

. ers


31/50

UCO BANK

COMPANY PROFILE

Rating Buy

CMP (Rs.) 69

Target (Rs.) 95

Upside % 37

UCO Bank Ltd is a Kolkata-headquartered Public Sector Bank (PSB) with asset size

of ~Rs1,373bn and network of 2,152 branches and 478 ATMs. The Bank has a pan-Indian presence with a strong foothold in eastern and northernIndia. UCO Banks total business touched Rs2.06bn, with deposits in excess of Rs1,224bnan a vances o s n. s cre - epos ra o s oo a . .


Structurally, the bank has had relatively higher exposure to large corporates, lowCASA of ~24% and low fee/assets.


30thJune,2011)

Going forward, we expect the banks earnings to find support from increasingexposure to the SME and retail segments, improving other income and moderatingasset-quality pressures, aided by increasing recoveries.

VALUATIONS

68.13

10.33

16.44 Promoters

FIIs

DIIs

At the CMP, the stock is trading at 1.1x FY11 ABV, which we believe does not yet factorin the improvement expected in earnings quality. We recommend BUY with a targetprice of Rs.95.

9/15/2011 31

5.1

ers


32/50

BAJ AJ ELECTRICALS LIM ITED (BEL)

COMPANY PROFILE

BEL with a turnover of Rs. 2763 cr, is a part of the US $ 7 bn (over Rs 38,000 crores)

Rating Buy

CMP (Rs.) 176

Target (Rs.) 240

Upside % 36

"Bajaj Group". It has six strategic business units Engineering &Projects, Appliances, Fans, Luminaires, Lighting and Morphy Richards.

Bajaj Electricals has distribution arrangements with Trilux Lenze of Germany (forLuminaires), tie up with Delta Controls of Canada (for Building Management Systems)

,of Italy (for Appliances), Disney of USA & Midea of China (for Fans). The company hasalso invested in Starlite Lighting for manufacture of energy saving lamps (CFL).


BEL is strongly placed in CD and Lighting segments. E & P business saw some


30thJune,2011)

. The strong distribution networks, a powerful brand, wide product portfolio, largeservice infrastructure and excellent vendor base continue to be the major areas ofstrength for the Company. The company has delivered good growth in the past. Their 5 year (FY2005-11) netsales and PAT CAGR is 32% and 80% respectively. Next leg of revenue growth is

64.789.04

11.2

14.98Promoters

FIIs

DIIs

Others

, , ,

etc.

VALUATIONS

The stock is trading at attractive valuations of 11.5xFY11P/E. We recommend Buy witha target price of Rs240 which is a price appreciation of 36% from current levels.

9/15/2011 32


33/50

MAH INDRA & MAH INDRA FINANCIAL SERVICES (MMFSL)

Rating Buy

CMP (Rs.) 649

Target (Rs.) 720

Upside % 11

COMPANY PROFILE

MMFSL is one of Indias leading NBFC through a vast network of branches providingpersonalised finance for the widest range of utility vehicles, tractors and cars, focusingon the rural and semi-urban sector.


We expect MMFS to benefit from confluence of four factors: (1) lower ruralpenetration of consumer durables (own just 10% all Indias car penetration), (2) lowermarket share (just 2-8% across various products) (3) rising rural income levels and (4)improving latent wealth.

3.55

4.52


30thJune,2011)

MMFS is strategically positioned to take advantage of the financing gap betweenbanks and the local money lenders through competitive pricing, speedier loan approvalsand doorstep lending services.

VALUATIONS

57.44

34.49

Promoters

FIIs

DIIs

We expect return ratios to sustain due to a strong growth outlook and improved

fundamentals. The stock is currently trading at 2.7x FY11P/BV. Recommend Buy with atarget price of Rs.720 for a potential upside of 11% from current levels.

9/15/2011 33

ers


34/50

K PIT CUMMINS

COMPANY PROFILE

KPIT Cummins provides technology solutions partner for global Manufacturingcorporations with special focus on Automotive, Energy & Utilities, Industrial

Rating Buy

CMP (Rs.) 146

Target (Rs.) 195

Upside % 33

Equipments, and Semiconductor industries. Highly focused approach has helpedcompany to pioneer innovative solutions and file 37 patents in the Automotive and

Semiconductor domains.


KPIT Cummins has been experiencing strong demand environment due to cyclicalup-tick in its manufacturing vertical, positive structural changes in Automotiveclients, emerging economies growth and ramp ups from newly acquired business(CPG, In2Soft and Sparta). We expect the robust growth to continue going ahead with strong Automotive

engineering demand, sustained IT spending by manufacturing clients being the keyrowth drivers.


30thJune,2011)

. KPIT has shown one of the strongest revenue growth performance within the mid-capspace with revenue growth of 46% (40% organically) due to strong demand up-tick inmajor verticals. KPIT acquired 50% stake in leading Oracle JDE enterprise serviceprovider, Systime, for ~Rs1.03bn in Q1 FY12 thus strengthening its Oracle offering

-

26.8634.3Promoters

FIIs

DIIs

- .

VALUATIONS

The stock is currently trading at 13.4x FY11P/E. We assign BUY rating to the stock witha target price of Rs.195 indicating potential upside of 33% from current levels.

9/15/2011 34

21.64

17.2

ers


35/50


36/50

CompanyMarket Cap

(Rs. Cr)Beta (6M) Div Yield % CMP (Rs)

Target Price(Rs)

PotentialUpside

JINDAL STEEL & P 46,565 1.1 0.3 523.1 640.0 22%

BATA INDIA LTD 4,359 0.8 0.6 677.7 830.0 22%

GMR INFRASTRUCTU 10,957 0.9 0.0 27.7 42.0 52%

IVRCL LTD 1,134 1.7 1.3 41.2 65.0 58%

REDINGTON INDIA 3,846 0.6 1.2 95.1 125.0 32%

AXIS BANK LTD 44,229 1.2 1.2 1057.4 1350.0 28%

TATA MOTORS LTD 46,418 1.3 2.6 147.5 181.0 23%

ESCORTS LTD 758 1.3 2.0 70.4 95.0 35%

COROMANDEL INT 8,378 0.5 2.4 294.7 350.0 19%

, . . . .

ICICI BANK LTD 100,849 1.2 1.6 871.3 1140.0 31%

SHASUN PHARMA 318 0.7 0.4 65.7 90.0 37%

9/15/2011 36

. .


37/50

J INDAL STEEL

COMPANY PROFILE

Jindal Steel and Power Limited (JSPL) is one of Indias major steel producers with asignificant presence in sectors like Mining, Power Generation and Infrastructure. With an annual turnover of over US $2.9 billion, JSPL is a part of the about US $ 15

Rating Buy

CMP (Rs.) 523

Target (Rs.) 640

Upside % 22

. .increasing production capacity, diversifying investments, and leveraging its corecapabilities to venture into new businesses. The company has committed investments exceeding US$ 30 billion in the future andhas several business initiatives running simultaneously across continents. With coalreserves in Indonesia, JSPL has mines strewn across Australia and Africa. The

Congo in addition to exploration of the precious stone in the states of Chhattisgarh &Jharkhand in India


JSPL has one of the best iron ore and coal resources in India, with assets spread


30thJune,2011)

over var ous m nera -r c coun r es. o s s ee an merc an power us nesses areinsulated from input prices. JSPL plans to increase its steel capacity 4x over the next four years and powercapacity 10x in 10 years. The stock has underperformed over the last 18-20 months, due to anticipation ofslower earnings growth over FY11-13. We expect the stock to get re-rated again, as the

58.3923.03

6.5312.05 Promoters

FIIs

DIIs

visibility of projects and earnings improves over the next 12 months.

VALUATIONS

The sock is currently trading at very attractive valuations of 12.8xFY11P/E. Werecommend BUY with a target price of Rs620 which is a price appreciation of 22% fromCMP.

9/15/2011 37

ers


38/50

BATA IN DIA

COMPANY PROFILE

Bata India is the largest retailer and leading manufacturer of footwear in India and is

Rating Buy

CMP (Rs.) 678

Target (Rs.) 830

Upside % 22

.

Company also operates a large non retail distribution network through its urban

wholesale division and caters to millions of customers through over 30,000 dealers.


be amongst the retail companies that will show growth in the current economic scenario. Over the past five years, Bata India has completely repositioned its stores by openinglarge format stores, renovating all its stores and closing down small & unviable stores. The company has more than 1200 stores in India. The company has added 108 large

format stores in CY10 and has added 29 large format Bata stores.


30thJune,2011)

zero e on s a ance s ee an ne cas o more an crores a er erecent stake sale in the real estate J/V, Bata has a strong Balance sheet and doesn'tneed debt for its expansion.

VALUATIONS

It has a strong brand recall and has its focus on profitable growth, with a historical

52.0115.07

18.23 Promoters

FIIs

DIIs

ROCE in excess of 30% and a profit CAGR of more than 21% we recommend buying

Bata with a long term perspective with a target price of Rs.830. The stock is currentlytrading at 46.3x of CY10 earnings.

9/15/2011 38

14.69ers


39/50

GMR INFRA

COMPANY PROFILE

GMR Infra

Rating Buy

CMP (Rs.) 28

Target (Rs.) 42

The GMR Group is a leading global infrastructure major. The core businesses of theGroup comprise of Airports, Energy, Highways and Urban Infrastructure (including SEZ).

Having established its credentials as a leading infrastructure conglomerate in India, theGroup has expanded its presence globally.

Amongst the airports, Hyderabad and Male are already generating operatingcash, while management expects Sabiha to turn around in the next 3-4 quarters astraffic growth continues. Delhi is the only sore spot and clarity on profitability shouldemerge once regulatory clarity does.

-


30thJune,2011)

- , . .horizon, we expect leverage to be relatively in check.

VALUATIONS

We believe that GMRIs strong execution (e.g., timely project commissioning, high rankfor Delhi airport on service quality), exit from Intergen (thus reducing debt), cash flow

12.35

8.08

8.18

Promoters

FIIs

DIIs

recommend BUY with a price target of Rs.42.The stock is currently trading at20.7xFY11EV/EBIDTA.

9/15/2011 39

. ers


40/50

IVRCL LTD

Rating Buy

CMP (Rs.) 41

Target (Rs.) 65

Upside % 58

IVRCL is a Hyderabad-based construction company and operates in niche area suchas 'water' segment, under which it executes industrial projects, irrigationworks,desalination projects and sewerage systems. In FY10, the company restructured the infrastructure ownership portfolio and mergedit into IVRCL Assets (80.5% subsidiary). IVRCL also has 52.8% stake in Hindustan Dorr

ver. Order book as at end-1QFY12 stood at INR216b, while order intake during thequarter was INR9b. L1 orders were INR24b, including an INR12b order for anunderground mining project.



30thJune,2011)

Reported order backlog at the end of June 2011 is Rs210b, book-to-bill ratio of 3.7xTTM revenue provides revenue visibility for FY11 / FY12.Company has one of the largest BOT portfolios, with diversified presence in roads anddesalination projects.

VALUATIONS

9.52

38.17

Promoters

FIIs

DIIs

Going forward we believe fund infusion in BOTs and land sales could be some of the

triggers for the stock and recommend BUY with a target price of Rs.65. The stock iscurrently trading at 6.3x of FY11EV/EBIDTA.

9/15/2011 40

.

4.01

ers


41/50


42/50

AXIS BANK

COMPANY PROFILE

The Bank was promoted jointly by the Administrator of the specified undertaking ofthe Unit Trust of India (UTI - I), LIC and GIC and other four PSU insurance

Rating Buy

CMP (Rs.) 1057

Target (Rs.) 1350

Upside % 28

companies, i.e. National Insurance Company Ltd., The New India Assurance CompanyLtd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd.

The Bank has a very wide network of more than 1281 branches (including 169Service Branches/CPCs as on 31st March, 2011). The Bank has a network of over 6270

ATMs as on 31st March, 2011.


Axis Bank has witnessed strong growth in its deposits and advances despite largebase. Total deposits and advances have grown at a CAGR of 36% and 45% to Rs.189238 cr and Rs 142408cr respectively in FY11.

The bank's efforts to reduce wholesale deposits and improve its low-cost deposit ratio


30thJune,2011)

.proportion of wholesale deposits from 41% in March 2011 to 39% in June 2011. The credit-deposit ratio at 71.8% is also low which can further improve as the creditoff-take picks up. Additionally, recent hikes in lending rates are yet to reflect on thebank's margins. All these factors would help the bank maintain the NIM at current levelsif not improve it in the coming quarters.

37.15

5.73

21.67 Promoters

FIIs

DIIs

VALUATIONSAxis is among our preferred picks in the banking sector due to its strong depositfranchise, healthy growth-return profile, and relative discount to peers We expect therelative valuation gap to narrow medium term as the macro (rates, inflation, and liquidity)turns easier. Currently the stock is trading at 2.3x FY11P/BV. We recommend BUY with

9/15/2011 42

35.45ersa pr ce arge o s.


43/50

TATA M OTORS

COMPANY PROFILE

Tata Motors Limited is Indias largest automobile company, with consolidatedrevenues of Rs.1,23,133 crores (USD 27 billion) in 2010-11. It is the leader incommercial vehicles in each se ment and amon the to three in assen er vehicles

Rating Buy

CMP (Rs.) 148

Target (Rs.) 181

Upside % 23

with winning products in the compact, midsize car and utility vehicle segments. The Company is the world's fourth largest truck manufacturer, and the world's third

largest bus manufacturer.


,benefits as its global presence helps revenues to remain less affected by anygeographical/regional slowdown. JLR witnessed a complete turnaround which has led consolidated profits spiralling~29x post the acquisition in FY08. JLR is aggressively working on product development

and would have the most refreshed portfolio in comparison to peers like BMW,Diamler~


30thJune,2011)

- . Domestically TML would gain from higher demand that would come through with thepick-up of the much needed capex cycle On the demand side we understand luxury market to be least sensitive to businesscycles in automobiles providing belief in long term volume growth with rising affluenthouseholds driven by BRIC nations.

34.8428.16

Promoters

FIIs

DIIs

VALUATIONSAt CMP, the stock trades at PER of 5.5x and EV/EBIDTA of 4.1x for FY11.We assign aBUY rating on the stock with a target price of Rs.181 indicating a 23% potential upside.

9/15/2011 43

22.98

. ers


44/50


45/50

COROMANDEL INT ERNATIONAL

COMPANY PROFILE

Coromandel International Ltd (CIL) is engaged in the business ofFertilisers, Speciality Nutrients, Crop Protection and Retail. Coromandel manufactures awide range of fertilisers and markets around 2.9 mn tons making it a leader in itsaddressable markets and the second largest phosphatic fertiliser player in India.

Rating Buy

CMP (Rs.) 295

Target (Rs.) 350

Upside % 19

n s en eavour o e a comp e e p an nu r on so u ons company, oroman e asalso introduced a range of Speciality Nutrient products including Organic Fertilisers.TheCrop Protection business produces insecticides, fungicides and herbicides and marketsthese products in India and across the globe. Coromandel is the second largestmanufacturer of Malathion and only the second manufacturer of Phenthoate. Coromandel is a part of the Rs.17,051 crores (USD 3.8 billion as on March 31, 2011)Murugappa Group


CIL, Indias largest private sector phosphatic fertilizer manufacturer is poised tobenefit the maximum from the governments changed Nutrient-Based Subsidy (NBS)

scheme. With the new NBS scheme, non-urea companies like CIL can now pass on the


30thJune,2011)

prices to user industries. CIL has announced acquisition (~73% stake) of agrochemical player SaberoOrganics with an investment of Rs4.7bn. Acquisition should incrementally add value toCIL's plant protection segment (currently ~6% of its topline) Phosphoric acid supplies of ~0.18mn MT from Tunisian JV is expected to begin fromSe t11. Kakinada ex ansion ro ect to increase ca acit to 4mn MT .a. is ex ected to

64.04

8.76

21.03 Promoters

FIIs

DIIs

get commissioned by Sept12.

VALUATIONS

We are positive on complex fertilizer space with govt.s focus on balanced usage ofnutrients. The stock currently trades at 12x FY11P/E. We recommend BUY with a target

9/15/2011 45

6.17

ers


46/50


47/50

ICICI BANK

COMPANY PROFILE

ICICI Bank is India's second-largest bank with total assets of Rs. 4,062.34 billion(US$ 91 billion) at March 31, 2011 and profit after tax Rs. 51.51 billion (US$ 1,155million) for the year ended March 31, 2011. The Bank has a network of 2,533 branches

Rating Buy

CMP (Rs.) 871

Target (Rs.) 1140

Upside % 31

and 6,700 ATMs in India, and has a presence in 19 countries, including India.

ICICI Bank offers a wide range of banking products and financial services tocorporate and retail customers through a variety of delivery channels and through its

specialised subsidiaries in the areas of investment banking, life and non-lifeinsurance, venture capital and asset management.


ICICI Bank reported a steady set of numbers for Q1FY2012 with an improvement incore income, margins and asset quality. Given the weak macro environment, the bankhas given a loan growth guidance of 18%, diversified across corporate and retailse ments. Continuous im rovin asset ualit is vulnerable to an ne ative

0


30thJune,2011)

.development in the macro environment. Since the 2008 crisis, ICICI Bank has changed itself with less risky asset and liabilityprofile. The standalone loan book now comprises lower proportion of unsecured loans.

Average CASA ratio at 40% levels is one of the largest amongst banks. Low NPLs, declining slippages and healthy provision coverage ratio at ~76%

38.6136.25

Promoters

FIIs

DIIs

. .(Tier-1 ratio at 13.4%).

VALUATIONS

Currently the stock trade at 1./8x FY11P/BV. We assign BUY rating on the stock with atarget price of rs.1140 for a potential upside of 31% from the current levels.

9/15/2011 47

25.14

ers


48/50

SHASUN PHARMA

COMPANY PROFILE

Rating Buy

CMP (Rs.) 66

Target (Rs.) 90

Upside % 37

,intermediates and enteric coating excipients with a significant presence in some key generics.Shasun has created a strong product portfolio, building on its R & D Expertise, regulatory

capabilities and multi scale production capacities.

Today, Shasun is one of the largest producers of Ibuprofen worldwide. The company offerser va ves o upro en e upro en o um, upro en ys na e an + upro en. s a so

one of the major producers of Ranitidine and Nizatidine in the world. Its products are exportedto countries across North America, Europe, Asia and Latin America.


We expect that Rhodias performance will improve significantly on back of incrementalsupplies to Vertex over the next few quarters as the volume ramp up starts for Incivek andbatch supplies get replaced with bulk orders. Further the improvement in business fundamentals led by series of initiatives like expansionof capacities and launch of new products augur well for the future.We maintain a positive outlook on the stock due to supplies for telaprevir to vertex, increasedfocus on high margin APIs and various expansion drives.


30thJune,2011)

VALUATIONSAt the CMP the stock is trading at 12.0.x for FY11P/E . We recommend BUY with a target priceof Rs. 90 46.65

36.18

Promoters

FIIs

DIIs

9/15/2011 48

8.358.82

ers


49/50

Stock Ratings

BUY The stock's total return is expected to exceed 15% over the next 12 months

ACCUMULATE The stock's total return is expected to be within 10-15% over the next 12 months

HOLD The stock's total return is expected to be within 0-10% over the next 12 months

SELL The stock's total return is expected to give negative returns over the next 12 months

NOT RATED The Analyst has no recommendation on the stock under review

RESEARCH

Name Designation EmailID ContactNumber

SharmilaJoshi HeadEquity [email protected] 09320159211

Prakash Pandey VP Research&PMS [email protected] 09313337742

Preet Gupta Sr.Researc Ana yst Fun amenta preet .gupta@ a rwea t . n 07428388302

HiteshParekh ResearchAnalyst Fundamental [email protected] 02230720306

HemenKapadia TechnicalStrategist [email protected]

PervezDanish Sr.TechnicalAnalyst [email protected] 09312873108

.

INSTITUTIONALDESK

Name Designation EmailID ContactNumber

LokeshhN.Gowda SeniorManager Sales [email protected] 02230720073

Ra anBhatia InstitutionalDealer ra an.bhatia fairwealth.in 02230720057

9/15/2011 49


50/50

Disclaimer:

This publication has been solely prepared for the information purpose and does not constitute a solicitation to any person to buy or sell a security. Whilethe information contained therein has been obtained from sources believed reliable investors are advised to satisfy themselves before making anyinvestments. Fairwealth Securities Ltd does not bear any responsibility for authentication of the information contained in the reports and consequently isnot liable for any decision taken based on the same. Further Fairwealth Research report only provides information updates and analysis. All opinions forbuying and selling are available to investors when they are registered clients of Fairwealth Investment advisory services. As a matter of practice,Fairwealth refrains from publishing any individual names with its reports. As per SEBI requirements it is stated that, Fairwealth securities Ltd, and/or

individuals thereof may have positions in securities referred herein and may make purchases or sale while this report is in circulation.

FAIRWEALTH SECURITIES LTD.

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Phone: 01243024400, Fax: 01243024474

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