Friday Flash September 11 2009

8/9/2019 Friday Flash September 11 2009

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FOR REG AC CERTIFICATION, SEE THE END OF THE TEXT OF THIS REPORT, PRECEDING THE DISCLOSURES. FOR OTHER IMPORTANT DISCLOSURES, REFER TO THE END OF THIS MATERIAL.

Sanjeev [email protected]: +91-22-6634-1229

Bhavesh [email protected]: +91-22-6634-1498

Sunita BaldawaSunita [email protected]: +91-22-6634-1325

Precocious 16K . During the past week, the BSE-30 index gained 819 points (5.3%) to close at 16,217.The gains were led byoptimism in global markets and continued flows from FIIs (US$340 mn in the past five trading secessions). RelianceIndustries, ICICI Bank and L&T were the largest gainers, together contributing 415 points to the index rise. Inflation rose to -0.12 for the week ended August 29, 2009 versus -0.21 in the preceding week .

Market highlights for the week ending Thursday, September 10, 2009

Largest gainers: Jindal Saw (26%), Sterlite Industries (19%), Mindtree (14%),

Largest losers: Patni Computer Systems (-5%), Mphasis BFL (-5%), Tech Mahindra (-4%)

India StrategyFriday Flash

September 11, 2009

BSE-30: 16,217

INDIA

Source: Bloomberg

% Change 1 week

HANG SENGBSE 30

HS CHINA AFFFTSE 100S&P/ASX 200

NASDAQ COMPSTI

TAIWAN WTDS&P 500

NIKKEI 225KOSPI

KL COMP

HS CHINA ENT

DJIA

0 1 2 3 4 5 6 7 8

Relative performance of regional indices (% Change 1 Week) Flows in emerging markets

Source: Bloomberg

Date Taiwan Indonesia Philippines Thailand India Total

Investments in past week (US$ mn)

2-Sep-09 75 (47) (9) (14) (117) (112)

3-Sep-09 192 (11) (11) 4 12 187

4-Sep-09 46 (3) (1) 2 (12) 33

7-Sep-09 161 18 - 33 215 4278-Sep-09 600 27 (7) 123 241 984

Total 1,073 (16) (27) 148 340 1,518


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Kotak Institutional Equities Research, September 11, 2009 2

OUR TOP RECOMMENDATIONS

Kotak Institutional Equities, Top-10, March fiscal year-ends, 2009-11E

Source: Company, Bloomberg, Kotak Institutional Equities estimates

Mkt cap. CMP TargetCompanies Sector Rating (US$ mn) (Rs) (Rs) 2009 2010E 2011E 2009 2010E 2011E 2009 2010E 2011EState Bank of India Banking BUY 24,564 1,882 1,870 143.7 129.8 149.1 13.1 14.5 12.6 Oil & Natural Gas Corporation Energy BUY 51,931 1,181 1,400 89.6 115.8 136.4 13.2 10.2 8.7 4.8 3.7 3.0Infosys Technologies Technology BUY 26,443 2,240 2,500 102.4 106.7 120.0 21.9 21.0 18.7 16.3 15.0 12.5Hindustan Unilever Consumer products BUY 11,747 262 320 9.5 10.6 12.2 27.5 24.8 21.6 21.0 18.5 16.0ITC Consumer products BUY 17,750 229 255 8.7 10.3 11.8 26.4 22.2 19.4 16.2 13.6 12.0Reliance Infrastructure Utilities BUY 5,467 1,174 1,250 62.7 63.7 68.6 18.7 18.4 17.1 23.5 21.4 17.0Hindustan Zinc Metals BUY 7,229 832 825 64.6 57.3 74.1 12.9 14.5 11.2 8.9 9.0 6.1Bharti Airtel Telecom ADD 32,520 417 425 22.3 26.9 30.6 18.6 15.5 13.6 10.9 9.2 7.9Larsen & Toubro Industrials ADD 19,414 1,601 1,725 50.1 62.1 78.4 31.9 25.8 20.4 20.1 14.9 12.2PSU bank basketBank of Baroda Banking ADD 3,414 454 480 60.9 60.9 62.1 7.5 7.5 7.3 Corporation Bank Banking BUY 1,119 379 420 62.3 58.0 57.1 6.1 6.5 6.6 Punjab National Bank Banking BUY 4,515 696 800 98.0 100.7 115.2 7.1 6.9 6.0 Union Bank Banking BUY 2,369 228 280 34.2 32.4 35.4 6.7 7.0 6.4 BSE-30 16,217

EPS (Rs) P/E (X) EV/EBDITA (X)


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6/37Kotak Institutional Equities Research, September 11, 2009 6

REGIONAL VALUATION SUMMARY

Valuation summary of regional indices, Calendar year-ends, 2008-10EEarnings growth (%), P/E (X) and PEG ratio of regional indices

Source: Thomson Datastream

Earnings growth (%) P/E (X) PEG ratio (X)Index 2008 2009E 2010E 2008 2009E 2010E 2008 2009E

Brazil MSCI BRAZIL (9.4) (10.3) 26.3 12.2 13.6 10.8 NA 0.5

China I/B/E/S CHINA (19.3) 24.9 25.0 28.3 19.6 15.7 1.1 0.8

Hong Kong I/B/E/S HONG KONG (40.8) 9.1 14.9 19.2 15.8 13.8 2.1 1.1 India MSCI INDIA (14.7) 14.2 21.4 21.3 18.3 15.1 1.5 0.9

Korea MSCI KOREA (38.6) 40.3 33.8 20.4 14.5 10.9 0.5 0.4

Malaysia MSCI MALAYSIA (13.4) (17.1) 15.3 14.2 17.1 14.8 NA 1.1

Mexico MSCI MEXICO 8.4 (27.1) 19.3 11.7 16.1 13.5 NA 0.8

Russia MSCI RUSSIA 3.1 (42.8) 28.3 5.2 9.1 7.1 NA 0.3

Taiwan MSCI TAIWAN (69.1) 17.8 81.1 36.8 31.3 17.4 NA 0.4

Thailand MSCI THAILAND 13.9 16.5 16.7 14.0 12.0 10.3 0.8 0.7

Asia - Emerging markets MSCI EM ASIA (32.3) 17.3 29.6 20.2 17.1 13.2 1.2 0.6


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VALUATION SUMMARY OF BRICS SECTORS (2)

Valuation summary of BRICs sectors, Calendar year-ends, 2008-10E

Source: Thomson Datastream

Earnings growth (%) P/E (X) PEG ratio (X)Index 2008 2009E 2010E 2008 2009E 2010E 2008 2009E

PropertyIndia MSCI India Real Estate Industry Group (46.0) (43.2) 35.4 18.9 33.3 24.6 NA 0.9 China MSCI China Real Estate Industry Group (9.7) 7.0 28.7 16.7 15.7 12.2 2.4 0.5 Technology

India MSCI India Software & Services Industry Group 8.8 (5.6) 13.2 19.1 20.2 17.8 NA 1.5 China MSCI China Software & Services Industry Group 62.3 60.0 34.8 67.5 42.2 31.3 1.1 1.2 Brazil MSCI Brazil Software & Services Industry Group 70.7 10.6 12.9 15.1 13.6 12.1 1.4 1.1 TelecomRussia MSCI Russia Diversified Telecommunications Services Industry (62.4) 112.0 47.3 29.0 13.7 9.3 0.3 0.3 India MSCI India Telecommunication Services Sector 4.7 (12.6) 8.2 10.8 12.4 11.5 NA 1.5 China MSCI China Telecommunication Services Sector 22.3 (2.9) 1.2 12.5 12.9 12.7 NA 10.4 Brazil MSCI Brazil Telecommunication Services Sector (32.4) 2.5 41.2 12.5 12.2 8.7 5.0 0.3

UtilitiesRussia MSCI Russia Utilities Sector - 19.1 45.6 29.1 24.5 16.8 1.5 0.5 India MSCI India Utilities Sector 9.4 11.8 11.4 21.4 17.6 15.8 1.8 1.5 China MSCI China Utilities Sector (89.9) 784.4 21.4 144.7 16.4 13.5 0.2 0.8 Brazil MSCI Brazil Utilities Sector 11.6 1.9 6.8 9.3 9.2 8.6 4.9 1.3



BSE-SENSEX KEY PARAMETERS

Key fundamental indicators of BSE-30 IndexBSE-30 Index P/B, EV/EBITDA and 12-month forward rolling P/E, September 1999- current

Source: Bloomberg, RBI, Kotak Institutional Equities

4

8

12

16

20

24

28

S e p - 9

9

S e p - 0

0

S e p - 0

1

S e p - 0

2

S e p - 0

3

S e p - 0

4

S e p - 0

5

S e p - 0

6

S e p - 0

7

S e p - 0

8

S e p - 0

9

12 months rolling forward P/E (X)

0

2

4

6

S e p - 9

9

S e p - 0

0

S e p - 0

1

S e p - 0

2

S e p - 0

3

S e p - 0

4

S e p - 0

5

S e p - 0

6

S e p - 0

7

S e p - 0

8

S e p - 0

910

20

30P/B (X) RoE (%) (RHS)

4

8

12

16

20

S e p - 9

9

S e p - 0

0

S e p - 0

1

S e p - 0

2

S e p - 0

3

S e p - 0

4

S e p - 0

5

S e p - 0

6

S e p - 0

7

S e p - 0

8

S e p - 0

9

EV/EBITDA (X)

1,000

5,000

9,000

13,000

17,000

21,000

S e p - 9

9

S e p - 0

0

S e p - 0

1

S e p - 0

2

S e p - 0

3

S e p - 0

4

S e p - 0

5

S e p - 0

6

S e p - 0

7

S e p - 0

8

S e p - 0

9

Sensex 10X 12X 15X

(3,000)

1,000

5,000

9,000

13,000

17,000

21,000

A u g - 9

9

A u g - 0

0

A u g - 0

1

A u g - 0

2

A u g - 0

3

A u g - 0

4

A u g - 0

5

A u g - 0

6

A u g - 0

7

A u g - 0

8

A u g - 0

90.0

0.6

1.2

1.8

Sensex M3 adj P/E (X, RHS)Poly. (M3 adj P/E (X, RHS))


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MARKET PERFORMANCE

PERFORMANCE OF BENCHMARK INDICES PERFORMANCE OF GLOBAL INDICES PRICING PERFORMANCE OF SENSEX SECTORS TOP GAINERS AND LOSERS (STOCKS UNDER KOTAK COVERAGE) TECHNICAL INDICATORS



RELATIVE PERFORMANCE OF INDIAN MARKETS

Source: Bloomberg, Kotak Institutional Equities

Key performance of benchmark indices(base 100 as of September, 2008) Weekly performance of the benchmark indices

1-month performance of the benchmark indices 6-month performance of the benchmark indices

% Change 1 month

0 4 8 12 16 20

BSE Small Cap

BSE Mid Cap

CNX Bank

Nifty index

Sensex index

Nifty Junior% Change 6 months

0 30 60 90 120 150 180

BSE Small Cap

Nifty Junior

CNX Bank

BSE Mid Cap

Sensex index

Nifty index

0 1 2 3 4 5 6

CNX Bank

Sensex index

Nifty index

Nifty Junior

BSE Small Cap

BSE Mid Cap % Change 1 Week

20

60

100

140

180

S e p - 0

8

O c t - 0

8

N o v - 0 8

D e c - 0 8

J a n - 0

9

F e b

- 0 9

M a r - 0 9

A p r - 0 9

M a y - 0 9

J u n - 0

9

J u l - 0 9

A u g - 0

9

S e p - 0

9

Sensex Nifty BSE Mid Cap

BSE Small Cap Nifty Junior NSE Banking


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% Change 6 months

BSE 30STI

HS CHINA ENTS&P/ASX 200

KOSPITAIWAN WTDNIKKEI 225

FTSE 100NASDAQ COMP

KL COMPHS CHINA AFF

S&P 500DJIA

HANG SENG

0 20 40 60 80 100 120

% Change 1 week

HANG SENGBSE 30

HS CHINA AFFFTSE 100S&P/ASX 200

NASDAQ COMPSTI

TAIWAN WTDS&P 500

NIKKEI 225KOSPI

KL COMP

HS CHINA ENT

DJIA

0 1 2 3 4 5 6 7 8

% Change 3 months

S&P/ASX 200KOSPI

STITAIWAN WTD

FTSE 100HANG SENG

NIKKEI 225KL COMP

NASDAQ COMPHS CHINA ENT

S&P 500DJIA

BSE 30

0 5 10 15 20 25

Note:(a) Returns are adjusted for the currency changesSource: Bloomberg, BSE, Kotak Institutional Equities

BSE-SENSEX VERSUS REGIONAL INDICES

Weekly performance 3-month performance

6-month performance CYTD performance

% Change YTD

BSE 30TAIWAN WTD

HS CHINA ENTSTI

KOSPIHANG SENG

S&P/ASX 200KL COMP

NASDAQ COMPFTSE 100

HS CHINA AFFNIKKE I 225

S&P 500DJIA

0 10 20 30 40 50 60 70 80


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SECTORAL PERFORMANCE


Market performance of Sensex sectors, September 10, 2009Mkt cap. Change (%) Relative change (%)(US$ m) 1-Day 1-mo 6-mo 1-Year 1-Day 1-mo 6-mo 1-Year

Automobiles 26,701 (1.4) 15.1 138.6 70.0 (1.7) 6.5 20.1 53.7 Banking 71,705 0.3 9.7 120.6 18.1 0.1 1.5 11.0 6.7 Consumers 29,524 0.0 0.7 34.3 13.8 (0.2) (6.8) (32.4) 2.9

Cement 8,120 (1.3) (0.3) 75.1 32.7 (1.5) (7.8) (11.9) 20.0 Diversified 6,722 (2.4) 11.9 253.9 43.4 (2.6) 4.0 78.1 26.6 Energy 115,759 (0.5) 5.1 82.0 10.3 (0.7) (2.7) (8.4) (0.3) Industrials 42,279 0.7 7.9 112.1 28.3 0.5 (0.1) 6.7 16.0 Metals 26,056 1.5 12.1 210.9 14.7 1.3 3.7 56.4 3.7 Pharmaceuticals 5,130 (1.4) (0.4) 23.0 (19.0) (1.6) (7.8) (38.1) (26.8)

Property 14,303 (2.7) 13.0 194.8 (15.7) (2.9) 4.6 48.4 (23.7) Telecom 45,433 1.6 11.7 58.8 (4.0) 1.4 3.4 (20.1) (13.2) Technology 65,244 0.7 5.6 119.4 29.5 0.5 (2.2) 10.4 17.1 Utilities 46,577 (0.3) (0.8) 32.8 19.5 (0.5) (8.2) (33.2) 8.0 Sensex sum 503,554 0.2 8.0 98.7 10.6


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TECHNICAL INDICATORS


Volume momentum analysis

Price Change (%)

Company5-day average

volumes % increase (1 month basis)Mahindra & Mahindra Financial 194,629 134 (3.4)

Havells India 272,312 116 8.6Dr Reddy's Laboratories 659,439 113 2.6Oriental Bank of Commerce 2,063,531 97 30.3Bharat Electronics 168,677 93 (1.7)Jindal Saw 1,016,786 86 34.2

Volume Positive Momentum(5-day volume v/s 30-day volume)

Price Change (%)

Company5-day average

volumes % decrease (1 month basis)Shriram Transport 55,979 (90) 7.3

J&K Bank 50,393 (70) 27.0Hexaware Technologies 684,298 (66) 14.6Sadbhav Engineering 2,546 (64) 15.3Patni Computer Systems 679,478 (60) 5.2Mahindra Life Space Developer 75,634 (59) 16.3

Volume Negative Momentum(5-day volume v/s 30-day volume)

Avg dailyvalue traded

Institutional participationin total turnover

Date Sensex (US$ mn) FII% MF%Aug-08 14,565 4,107 14.3 3.3 Sep-08 12,860 4,344 19.6 3.7 Oct-08 9,788 3,632 19.3 4.0 Nov-08 9,093 3,247 12.8 3.7 Dec-08 9,647 3,458 9.9 3.3 Jan-09 9,424 3,233 11.8 4.1 Feb-09 8,692 2,653 11.4 3.3 Mar-09 9,709 3,374 11.8 4.1 Apr-09 11,403 4,624 10.5 3.4 May-09 14,625 5,235 13.3 3.5 Jun-09 14,494 6,380 9.8 3.4 Jul-09 15,670 5,049 11.5 3.8

Aug-09 15,667 4,759 10.3 3.5 Sep-09 16,217 4,979 8.5 2.9


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EARNINGS MOMENTUM

UPGRADES/DOWNGRADES IN EARNINGS IN PAST MONTH TOP CHANGES IN TARGET PRICES IN THE PAST MONTH CHANGES IN RATINGS IN THE PAST MONTH


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CHANGES IN EARNINGS ESTIMATES

Source:Kotak Institutional Equities estimates

Changes in earnings estimates in the past one month

FY2010 earnings upgrades (KIE) (1 month) FY2010 earnings downgrades (KIE) (1 month)

Company % Change Company % Change1 Bharat Petroleum 108.9 1 Tata Steel (6.0) 2 Hindustan Petroleum 76.6 2 Punj Lloyd (1.6) 3 HCL Technologies 27.3 3 Tata Power (0.3) 4 Tata Motors 22.5

5 Oil & Natural Gas Corporation 20.9 6 Canara Bank 11.2 7 Godrej Consumer Products 9.8 8 Asian Paints 6.9 9 Mphasis BFL 6.6

10 Mindtree 5.9

FY2011 earnings upgrades (KIE) (1 month) FY2011 earnings downgrades (KIE) (1 month)

Company % Change Company % Change1 Bharat Petroleum 55.6 1 Tata Steel (5.9) 2 Hindustan Petroleum 51.7 2 Punj Lloyd (1.1) 3 HCL Technologies 34.2 4 Mphasis BFL 26.1 5 DishTV 22.7 6 Tata Motors 21.1 7 Oil & Natural Gas Corporation 19.1 8 BGR Energy Systems 14.5 9 Mindtree 14.3

10 Godrej Consumer Products 9.7

CHANGES IN OUR TARGET PRICES


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CHANGES IN OUR TARGET PRICES


Changes in target prices in the past one monthUpgrades in target prices (1 month)

Company % Change New Old1 HCL Technologies 103.7 275 135 2 Bharat Petroleum 42.1 675 475 3 Hindustan Petroleum 40.0 525 375 4 Mphasis BFL 34.3 450 335 5 BGR Energy Systems 32.5 530 400 6 Infosys Technologies 31.6 2,500 1,900 7 Mindtree 30.0 650 500 8 Wipro 21.2 630 520 9 TCS 17.6 600 510

10 Oil & Natural Gas Corporation 16.7 1,400 1,200 11 Bharat Heavy Electricals 15.5 2,425 2,100 12 Asian Paints 14.3 1,600 1,400 13 Larsen & Toubro 13.1 1,725 1,525 14 Tata Power 12.0 1,400 1,250 15 Godrej Consumer Products 11.9 235 210 16 Canara Bank 10.2 325 295 17 Zee Entertainment Enterprises 9.4 175 160 18 GAIL (India) 7.6 355 330 19 CESC 5.8 365 345

20 Maruti Suzuki 5.5 1,160 1,100

CHANGES IN OUR RATINGS


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CHANGES IN OUR RATINGS


Changes in ratings over the past one month

Current Previous

Bharat Electronics Upgraded ADD REDUCEBharat Heavy Electricals Upgraded ADD REDUCEBharat Petroleum Upgraded BUY SELLHindustan Petroleum Upgraded BUY REDUCE

Company name RatingCurrent Previous

IRB Infrastructure Downgraded ADD BUY

RatingCompany name


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FLOWS

TREND IN EQUITY FLOWS FII FLOWS IN OTHER EMERGING MARKETS

IPO ANALYSIS BULK DEALS DELIVERY POSITION ANALYSIS NIFTY DELIVERY


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FII FLOWS IN OTHER EMERGING MARKETS


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FII FLOWS IN OTHER EMERGING MARKETS

Source: Bloomberg

FII flows in the various countries (US$ mn)Flows in the cash marketsDate Taiwan Indonesia Philippine Thailand India12-Aug-09 (143.0) (30.2) (6.6) - (22.9) 13-Aug-09 219.2 8.1 (4.5) 4.9 194.7 14-Aug-09 169.6 4.7 (2.8) (17.5) 213.5 17-Aug-09 (212.6) - (3.0) (62.8) (200.1)

18-Aug-09 (121.4) 4.7 (8.9) (44.6) 0.9 19-Aug-09 (52.6) (6.1) (7.5) (18.4) (178.9) 20-Aug-09 19.4 (10.4) 6.9 11.1 (61.9) 21-Aug-09 (182.6) 14.4 - 20.0 112.1 24-Aug-09 210.4 10.1 13.7 4.6 175.0 25-Aug-09 (17.0) 61.5 10.7 3.3 (11.0) 26-Aug-09 161.1 7.2 (9.1) 9.7 212.2 27-Aug-09 45.8 (65.5) (9.3) 2.1 274.2 28-Aug-09 402.5 (7.3) (0.7) 0.1 223.6 31-Aug-09 36.5 0.5 - (6.6) (17.6) 1-Sep-09 374.1 (22.9) (1.0) (18.7) (62.1) 2-Sep-09 74.8 (47.4) (8.7) (13.7) (117.0) 3-Sep-09 192.0 (10.7) (10.9) 4.1 12.1

4-Sep-09 46.2 (3.1) (0.5) 1.6 (11.6) 7-Sep-09 160.6 18.1 - 33.1 215.4 8-Sep-09 599.8 26.8 (6.7) 122.5 241.4 Total 1,983 (48) (49) 35 1,192

Net investments by FIIs in the cash market (US$ mn) over last 1 year

(2,000)

(1,000)

-

1,000

2,000

3,000

4,000

India Taiwan Indonesia Thailand Philippine


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BULK DEALS


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BULK DEALS

Source: BSE, NSE

Major bulk dealsValue

Date Compnay Action Quantity Price (Rs mn) Exchange8-Sep Mindtree SELL 1,518,068 540 820 BSE9-Sep Jindal Saw BUY 514,668 619 319 NSE8-Sep Mindtree BUY 555,000 540 300 BSE3-Sep Radico Khaitan BUY 1,500,000 104 156 NSE8-Sep Mindtree BUY 277,000 540 150 BSE4-Sep Lakshmi Energy And Foods BUY 870,000 128 111 NSE8-Sep Mindtree BUY 200,000 540 108 BSE8-Sep Mindtree BUY 200,000 540 108 BSE4-Sep Diamon Cable BUY 485,000 197 96 BSE7-Sep United Breweries (Holding SELL 500,000 191 96 NSE7-Sep United Brewr SELL 500,000 191 96 BSE7-Sep Lakshmi Energy And Foods BUY 600,000 130 78 NSE7-Sep Lakshmi Energy And Foods SELL 600,000 130 78 NSE

8-Sep Geodesic BUY 500,000 148 74 NSE4-Sep Rico Aut Ind SELL 2,200,000 26 58 BSE4-Sep Rico Aut Ind BUY 2,180,759 26 57 BSE3-Sep Psl BUY 322,857 164 53 BSE8-Sep Lakshmi Over SELL 336,000 133 45 BSE8-Sep Lakshmi Over BUY 330,271 133 44 BSE7-Sep Webel-Sl Energy Systems BUY 125,000 328 41 NSE

7-Sep Webel-Sl Energy Systems SELL 124,246 328 41 NSE8-Sep Om Met Infra BUY 800,000 30 24 BSE3-Sep Gwalior Chemical Industri SELL 237,000 97 23 NSE7-Sep Om Met Infra SELL 650,000 27 18 BSE2-Sep Gwalior Chem SELL 146,030 98 14 BSE8-Sep Uniphos Ente SELL 457,000 28 13 BSE

DELIVERY POSITIONS


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DELIVERY POSITIONS


Top increase/(decrease) in delivery percentage

Name Previous week Current weekPiramal Healthcare Limited 38 83 Corporation Bank 27 72

Cesc Limited 28 73 Wipro Ltd 16 59 Biocon Ltd 43 73 Ambuja Cements Limited 48 77 Ultratech Cement Ltd 62 89 Mindtree Limited 20 45 Hero Honda Motors Limited 31 54

Delivery %

Increase in delivery % (KIE universe)

Name Previous week Current weekAsian Paints Ltd 94 55 Container Corp Of India Ltd 99 61

Indian Oil Corporation Ltd 78 43 Tata Chemicals Limited 58 30 Colgate Palmolive (India) 90 63 Nestle India Limited 86 62 Hindustan Zinc Limited 54 29 Sun Pharmaceutical Indus 74 50 Hindustan Unilever Limited 81 58

Decrease in delivery % (KIE universe)

Delivery %

NIFTY DELIVERY


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NIFTY DELIVERY

Source:Bloomberg, Kotak Institutional Equities

Nifty delivery percentage

Nifty Del%

20.0

25.0

30.0

35.0

40.0

45.0

50.0

S e p - 0

8

O c t - 0

8

N o v - 0 8

D e c - 0 8

J a n - 0

9

F e b

- 0 9

M a r - 0 9

A p r - 0 9

M a y - 0 9

J u n - 0

9

J u l - 0 9

A u g - 0

9

S e p - 0

9


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ECONOMIC INDICATORS

ECONOMIC INDICATORS


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Key economic parameters

2

4

6

8

10

9 - S

e p - 0

8

9 - O

c t - 0

8

9 - N

o v - 0 8

9 - D

e c - 0 8

9 - J

a n - 0

9

9 - F

e b

- 0 9

9 - M

a r - 0 9

9 - A

p r - 0 9

9 - M

a y - 0 9

9 - J

u n - 0

9

9 - J

u l - 0 9

9 - A

u g - 0

9

9 - S

e p - 0

90

5

10

15

20

2510 year GOI yield (LHS) Call rates (RHS)

3.3%

7.4%

INR/US$

48.5

36

39

42

45

48

51

54

S e p - 0

7

N o v - 0 7

J a n - 0

8

M a r - 0 8

M a y - 0 8

J u l - 0 8

S e p - 0

8

N o v - 0 8

J a n - 0

9

M a r - 0 9

M a y - 0 9

J u l - 0 9

S e p - 0

9

(INR/US$)

Bloomberg European dated BFO (US$/barrel)

69.8

20

40

6080

100

120

140

160

S e p - 0

7

N o v - 0 7

J a n - 0

8

M a r - 0 8

M a y - 0 8

J u l - 0 8

S e p - 0

8

N o v - 0 8

J a n - 0

9

M a r - 0 9

M a y - 0 9

J u l - 0 9

S e p - 0

9

(US $)

WPI Index (%)

-4

-2

0

24

6

8

10

12

14

2 9

- A u g - 0

8

2 9

- S e p - 0

8

2 9

- O c t - 0

8

2 9

- N o v - 0 8

2 9

- D e c - 0 8

2 9

- J a n - 0

9

2 8

- F e b

- 0 9

2 9

- M a r - 0 9

2 9

- A p r - 0 9

2 9

- M a y - 0 9

2 9

- J u n - 0

9

2 9

- J u l - 0 9

2 9

- A u g - 0

9

(%)

-0.12

COMMODITIES


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Prices of key commodities

Gold (US$/OZ)

300

400

500

600

700

800

900

1000

1100

S e p - 0

5

J a n - 0

6

M a y - 0 6

S e p - 0

6

J a n - 0

7

M a y - 0 7

S e p - 0

7

J a n - 0

8

M a y - 0 8

S e p - 0

8

J a n - 0

9

M a y - 0 9

S e p - 0

9

Silver (US$/OZ)

3

6

9

12

15

18

21

24

S e p - 0

5

J a n - 0

6

M a y - 0 6

S e p - 0

6

J a n - 0

7

M a y - 0 7

S e p - 0

7

J a n - 0

8

M a y - 0 8

S e p - 0

8

J a n - 0

9

M a y - 0 9

S e p - 0

9

Steel (US$/ton)

0

100

200

300

400

500600

700

800

900

1000

S e p - 0

5

J a n - 0

6

M a y - 0

6

S e p - 0

6

J a n - 0

7

M a y - 0

7

S e p - 0

7

J a n - 0

8

M a y - 0

8

S e p - 0

8

J a n - 0

9

M a y - 0

9

S e p - 0

9

Richard Bay Coal (US$/ton)

10

40

70

100

130

160

190

S e p - 0

5

J a n - 0

6

M a y - 0

6

S e p - 0

6

J a n - 0

7

M a y - 0

7

S e p - 0

7

J a n - 0

8

M a y - 0

8

S e p - 0

8

J a n - 0

9

M a y - 0

9

S e p - 0

9

COMMODITIES


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LME Copper (US$/ton)

1000

2000

3000

4000

5000

6000

7000

8000

9000

S e p - 0

5

J a n - 0

6

M a y - 0 6

S e p - 0

6

J a n - 0

7

M a y - 0 7

S e p - 0

7

J a n - 0

8

M a y - 0 8

S e p - 0

8

J a n - 0

9

M a y - 0 9

S e p - 0

9

LME Lead (US$/ton)

0

500

1000

1500

2000

2500

3000

3500

4000

S e p - 0

5

J a n - 0

6

M a y - 0 6

S e p - 0

6

J a n - 0

7

M a y - 0 7

S e p - 0

7

J a n - 0

8

M a y - 0 8

S e p - 0

8

J a n - 0

9

M a y - 0 9

S e p - 0

9

LME Aluminium (US$/ton)

1200

1600

2000

2400

2800

3200

3600

S e p - 0

5

J a n - 0

6

M a y - 0 6

S e p - 0

6

J a n - 0

7

M a y - 0 7

S e p - 0

7

J a n - 0

8

M a y - 0 8

S e p - 0

8

J a n - 0

9

M a y - 0 9

S e p - 0

9

LME Zinc (US$/ton)

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

S e p - 0

5

J a n - 0

6

M a y - 0 6

S e p - 0

6

J a n - 0

7

M a y - 0 7

S e p - 0

7

J a n - 0

8

M a y - 0 8

S e p - 0

8

J a n - 0

9

M a y - 0 9

S e p - 0

9


Prices of key commodities


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KOTAK VALUATION SUMMARY


32/37


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DISCLOSURES


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Kotak Securities company-specific disclosures

Kotak Securities Limited and or its affiliates have received during the last 12 months compensation for investment banking services from the following companies,Mahindra & Mahindra Limited, Tata Motors Limited, Pantaloon Retail.

Kotak Institutional Equities Research coverage universe

Distribution of ra tings/investment banking re lationships

Source: Kotak Institutional Equities As of June 30, 2009

* The above categories are defined as follows: Buy = Weexpect this stock to outperform the BSE Sensex by 10%over the next 12 months; Add = We expect this stock tooutperform the BSE Sensex by 0-10% over the next 12months; Reduce = We expect this stock to underperformthe BSE Sensex by 0-10% over the next 12 months; Sell =We expect this stock to underperform the BSE Sensex bymore then 10% over the next 12 months. These ratings areused illustra tively to comply with applicable regulations. Asof 30/6/2009 Kotak Institutional Equities InvestmentResearch had investment ratings on 138 equity securities.

Percentage of companies covered by Kotak InstitutionalEquities, within the specified category.

Percentage of companies within each category for whichKotak Institutional Equities and or its affiliates has provided

investment banking services within the previous 12 months.

11.6%

31.9%26.8%

29.7%

0.7%2.9%

0.7% 0.7%0%

10%

20%

30%

40%

50%

60%

70%

BUY ADD REDUCE SELL

RATINGS AND OTHER DEFINITIONS/IDENTIFIERS


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New rating system

Definitions of ratingsBUY: We expect this stock to outperform the BSE Sensex by 10% over the next 12 months.ADD: We expect this stock to outperform the BSE Sensex by 0-10% over the next 12 months.REDUCE: We expect this stock to underperform the BSE Sensex by 0-10% over the next 12 months.SELL: We expect this stock to underperform the BSE Sensexby more than 10% over the next 12 months

Old rating systemOP = Outperform. We expect this stock to outperform the BSE Sensex over the next 12 months.IL= In-Line. We expect this stock to perform in line with the BSE Sensex over the next 12 months.U = Underperform. We expect this stock to underperform the BSE Sensex over the next 12 months.

Other definitionsCoverage view. The coverage view represents each analyst's overall fundamental outlook on the Sector. The coverage view will consist of one of the following designations: Attractive (A), Neutral (N), Cautious (C).

Other ratings/identifiersNR = Not Rated. The investment rating and target price, if any, have been suspended temporarily. Such suspension is in compliance with applicable regulation(s) and/or Kotak Securities policies in circumstances when Kotak Securities or itsaffiliates is acting in an advisory capacity in a merger or strategic transaction involving this company and in certain other circumstances.CS = Coverage Suspended. Kotak Securities has suspended coverage of this company.NC = Not Covered. Kotak Securities does not cover this company.RS = Rating Suspended. Kotak Securities Research has suspended the investment rating and price target, if any, for this stock, because there is not a sufficient fundamental basis for determining an investment rating or target. The previousinvestment rating and price target, if any, are no longer in effect for this stock and should not be relied upon.NA = Not Available or Not Applicable. The information is not available for display or is not applicable.NM = Not Meaningful. The information is not meaningful and is therefore excluded.


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Friday Flash September 11 2009

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