1. Market Outlook
India Research
May 11, 2010
Dealer’s Diary Domestic Indices Chg (%) (Pts) (Close)
The key benchmark indices recouped a large portion of the previous week’s BSE Sensex 3.4% 561.4 17,331
losses, after the EU announced a rescue package to aid Greece. The market Nifty 3.5% 175.6 5,194
opened the trade on strong sentiments, boosted by the Euro zone’s bailout plan, MID CAP 2.4% 163.9 6,998
and continued to trade in a narrow range for the first session. It hit a fresh SMALL CAP 2.8% 239.4 8,949
intraday high in mid-morning trade and extended its gains in afternoon trade. BSE HC -0.2% (12.8) 5,302
Metal, realty, auto and banking stocks led the rally. The Sensex and Nifty closed BSE PSU 1.6% 139.0 9,046
up by 3.4% and 3.5%, respectively. The BSE Mid-cap and the Small-cap indices BANKEX 4.0% 415.4 10,921
also closed up by 2.4% and 2.8%, respectively. Among the front-liners, Reliance AUTO 3.3% 249.4 7,764
Infra, Tata Steel, Hindalco, Tata Motors and DLF were up by 7-8%, while Cipla
METAL 6.1% 967.6 16,929
and Hero Honda were the only stocks down by 0-6%. In the Mid-cap segment,
OIL & GAS 3.2% 309.1 10,130
Bajaj Finserv, Dish TV, IVRCL Infra, IB Real Estate and Tulip Telecom were up by
BSE IT 2.7% 140.7 5,276
6-10%, while Dalmia Cement, REI Six Ten Retail, Gillette India, Chambal
Fertilizer and GCPL were down by 2-7%.
Global Indices Chg (%) (Pts) (Close)
Dow Jones 3.9% 404.7 10,785
Markets Today
NASDAQ 4.8% 109.0 2,375
The trend deciding level for the day is 17162/5141levels. If NIFTY trades above FTSE 5.2% 264.4 5,387
this level during the first half-an-hour of trade then we may witness a further Nikkei 1.6% 166.1 10,531
rally up to 17525–17719/5256 – 5318 levels. However, if NIFTY trades below Hang Seng 2.5% 506.4 20,427
17162/5141levels for the first half-an-hour of trade then it may correct up to
Straits Times 2.1% 59.4 2,880
16698 – 16605/5079 – 4964levels.
Shanghai Com 0.4% 10.4 2,699
Indices S2 S1 R1 R2
Indian ADRs Chg (%) (Pts) (Close)
SENSEX 16,605 16,968 17,525 17,719
Infosys 6.2% 3.5 $60.0
NIFTY 4,964 5,079 5,256 5,318 Wipro 9.4% 1.9 $22.2
Satyam 9.1% 0.4 $5.3
News Analysis ICICI Bank 10.6% 4.1 $42.4
Vedanta buys Anglo zinc assets for US $1.34bn HDFC Bank 7.8% 10.9 $149.6
RCom to launch IPTV service in Metro Cities
Results Previews: Hindalco, Jain Irrigation, Ranbaxy Advances / Declines BSE NSE
Results Reviews: HT Media Advances 2,283 1,162
Declines 623 169
Refer detailed news analysis on the following page.
Unchanged 71 21
Net Inflows (May 6, 2010)
Rs cr Purch Sales Net MTD YTD Volumes (Rs cr)
FII 1,649 2,112 (464) (1,984) 27,726 BSE 4,329
MFs 589 603 (14) (657) (7,886) NSE 14,006
FII Derivatives (May 10, 2010)
Open
Rs cr Purch Sales Net
Interest
Index Futures 4,562 2,116 2,446 12,742
Stock Futures 2,103 1,447 656 30,133
Gainers / Losers
Gainers Losers
Company Price (Rs) Chg (%) Company Price (Rs) Chg (%)
Bajaj Finserv 439 10.0 Cipla 320 (6.4)
Reliance Infra 1,063 8.5 Engineers India 466 (6.3)
JSW Steel 1,215 8.4 RNRL 50 (4.9)
IVRCL Infra 173 8.3 Bank of India 335 (3.7)
Unitech 79 8.0 Shriram Transport 564 (3.0)
1
Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539

2. Market Outlook | India Research
Vedanta buys Anglo zinc assets for US $1.34bn
Vedanta has bought the zinc assets of Anglo American, which includes the Skorpion mine
in Namibia, Lisheen in Ireland and Black Mountain in South Africa, for US $1.34bn. The
deal will take Vedanta’s share to 11% of the global zinc industry, and it will increase its
zinc-lead capacity by 37%. According to the management, the deal values the assets at an
EV/EBITDA of 3.0-3.5x forward earnings and it would be fully funded through cash.
Currently, Hindustan Zinc (HZL) has a cash balance of ~US $2.5bn. However, we have
not factored this in our HZL estimates, as the acquisition is currently in the books of
Vedanta and the management has indicated that it would be transferred to HZL once the
final approval of the Government is received. We maintain a Buy on HZL, with a Target
Price of Rs1,399.
RCom to launch IPTV service in Metro Cities
RCom is expected to launch its Internet Protocol Television (IPV) service in Delhi and
Mumbai region in the next three months to rev-up its non-mobile (voice) revenues. The
company has worked an aggressive 100-day strategy to achieve the targeted revenue
market share. The company has also launched new fixed price plans for local (Rs299) and
NLD (Rs599) services, with large free bundled minutes. The Local plans would include
3,000 Reliance to Reliance (R2R) free local minutes and 900 local minutes for any other
network. The plan is available for CDMA subscribers only and would help the Minutes
growth in the coming period. We believe that this strategy may rev-up the subscriber
growth, but may further intensify the pricing competition. We maintain our Buy
recommendation, with a Target price of Rs195.
Result Previews
Hindalco
Hindalco is slated to announce its 4QFY2010 results. The company is expected to register
a 54.1% yoy jump in top-line to Rs5,684cr, on the back of higher realisations. However,
on the operating front, EBITDA margins are expected to expand by 707bp to 15.6%.
Hence, the bottom-line is expected to grow by 81% yoy to Rs486.4cr. We maintain a Buy
on the stock with a Target Price of Rs207.
Jain Irrigation
Jain Irrigation is slated to announce its 4QFY2010 results. The company is expected to
register a 15% yoy growth in Top-line to Rs805cr (Rs699cr), on the back of a buoyancy in
the MIS and Agro Divisions. On the Operating front, Operating margins are expected to
remain at level of 21%, due to an increased contribution from MIS. PAT is likely to grow at
156%, due to a lower base in 4QFY2009 (exceptional item). We maintain our Neutral
rating on the stock, and would review it after the earnings’ call.
May 11, 2010 2

3. Market Outlook | India Research
Ranbaxy (1QCY2010)
Ranbaxy is slated to announce its 1QCY2010 results today. The company is expected to
post a 12.4% growth in Top-line to Rs1,748cr, driven by Valtrex exclusivity. We expect
Valtrex to contribute US $90mn to the Top-line and US $54mn to the Operating Profit. The
company is expected to report an OPM of 19.5%. We also expect the company to clock
higher Other Income, owing to the agreement entered into with Impax for the launch of
Flomax. Ranbaxy is expected to report Net Profit of Rs272.2cr, driven by the Top-line
growth and MTM gains on forex hedges. We recommend a Neutral rating on the stock.
Result Reviews
HT Media
HT Media declared its 4QFY2010 results. On a consolidated basis, the company reported
a Top-line growth of 10.7% yoy to Rs374.3cr (Rs338.1cr), largely aided by a 8% yoy jump
in advertisement revenue to Rs301.7cr (Rs 279.7cr) and 5% yoy jump in circulation
revenue (due to rise in circulation numbers), to Rs42.9cr (Rs41cr). Moreover, the Radio
business (merged in 4QFY2009) reported a robust Top-line growth of 77% yoy to Rs13.5cr
(Rs7.6cr), on account of increased Advertising.
In terms of Earnings, the company reported a Net Profit of Rs48cr (Rs7.6cr), owing to
significant Margin expansion, a 22.3% yoy fall in interest costs to Rs7.1cr (Rs9.1cr) and a
58.4% yoy increase in Other Income to Rs15.3cr (Rs9.7cr), despite an increase of 8.3% yoy
in the Depreciation cost to Rs18.1cr (Rs16.7cr). On the operating front, the company
posted significant Margin expansion of 1,578bp to 21.9% (6.1%), driving a whopping
294.9% yoy growth in EBITDA to Rs82.1cr (Rs20.8cr), largely aided by the increase in
revenue, lower cost of newsprint, lower advertisement expense, and increasing return on
new businesses like radio, Burda JV and Internet. We maintain a Buy on the stock, with a
Target Price of Rs170
May 11, 2010 3

4. Market Outlook | India Research
Economic and Political News
Eurozone leaders agree on US $1trn bailout for Greece
TRAI may waive 3-yr lock-in to ring in consolidation
FIPB rejects Jaipur IPL’s plan to attract foreign investment
RBI to sell 35-day cash mgmt bills to raise Rs6,000cr
Corporate News
Pratibha Industries bags Rs100cr order from Maha. Govt.
Usha Martin gets board approval for Rs1,200cr capex plans
Fortis Health sells 6.58% to Singapore’s GIC for Rs380cr
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint
Events for the day
Bajaj Auto Finance Dividend, Results
Bajaj Finserv Dividend, Results
Bajaj Hindusthan Results
Dhanalakshmi Bank Dividend, Results
Havells India Results
Hindalco Industries Results
Indian Metals & Ferro Alloys Dividend, Results
ITDC Results
Jain Irrigation Results
Jindal Drilling & Industries Results
Kotak Mahindra Bank Dividend, Results, Stock Split
Manappuram General Fin. Results
MVL Results
Ranbaxy Results
SREI Infrastructure Finance Dividend, Results
May 11, 2010 4

5. Market Outlook | India Research
Research Team Tel: 022-4040 3800 E-mail: research@angeltrade.com Website: www.angeltrade.com
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