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					                                                                                                                                                                                                              Market Outlook
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                            Angel Broking
                                                             Service Truly Personalized                                                                                                                                          India Research

December 18, 2008
                                                                                                                                                            Dealers Diary
Domestic Indices                                                  Chg%                                      (Pt)                       (Close)
BSE Sensex                                                             -2.6%                               (261.7)                        9,715             Concerns about lack of transparency and worries about absence of
                                                                                                                                                            strict corporate governance practices at Indian firms pulled the market
Nifty                                                                  -2.9%                                (87.4)                        2,954
                                                                                                                                                            sharply down after India's fourth largest software firm in terms of sales,
MID CAP                                                                -3.3%                               (108.0)                        3,136             Satyam Computer Services' aborted attempt to buy two related
Small Cap                                                              -2.6%                                (98.1)                        3,679             companies. Volatility was high as the market was caught between a
BSE HC                                                                 -1.6%                                (48.2)                        2,891             steep rate by the US Federal Reserve and concerns over corporate
                                                                                                                                                            governance standards at Indian firms. The BSE Sensex and Nifty lost
BSE PSU                                                                -0.8%                                (40.4)                        5,088
                                                                                                                                                            2.6% and 2.9%, respectively. The BSE Mid and Small-Cap indices were
BANKEX                                                                 -0.2%                                    (8.0)                     5,249             down by 3.3% and 2.6%, respectively. Among the frontliners ICICI
AUTO                                                                   -0.8%                                (19.9)                        2,442             Bank, HDFC Bank, Infosys, Wipro and HUL gained 1-2% whereas
                                                                                                                                                            Satyam, Reliance Infra, RCOM, Jaiprakash Associates and ACC lost 9-
METAL                                                                  -4.4%                               (242.6)                        5,323
                                                                                                                                                            30%.In the Midcap segment Lakshmi Energy, Future Capital, Shoppers’
OIL & GAS                                                              -2.9%                               (189.9)                        6,364             Stop, Max India and Panacea Biotech gained between 6-14% whereas
BSE IT                                                                 -4.0%                                (94.7)                        2,246             Maytas Infra, Thermax, Thomas Cook, GVK Power and Welspun
                                                                                                                                                            Gujarat lost 14-20%.
Global Indices
Dow Jones                                                              -1.1%                                (99.8)                        8,824             Markets Today
NASDAQ                                                                 -0.7%                                (10.6)                        1,579             The trend deciding level for the day is 9,824 / 2,991 NIFTY trades above
FTSE                                                                   0.4%                                      15.1                     4,324             this level during the first half-an-hour of trade then we may witness a
                                                                                                                                                            further rally upto 9,965 / 3,039. However, if NIFTY trades below 9,824 /
Nikkei                                                                 0.5%                                      44.5                     8,613             2,991 for the first half-an-hour of trade then it may correct up to 9,574 –
Hang Seng                                                              2.2%                                 330.3                       15,461              9,434 / 2,907 – 2,859.
Straits Times                                                          -0.2%                                    (2.8)                     1,779
Shanghai Com                                                           0.1%                                          1.8                  1,977                 Indices                  S2                   S1               R1                R2
Indian ADRs                                                                                                                                                     SENSEX                   9,434               9,574             9,965            10,214
Infosys                                                                3.5%                                          0.8                  $24.9
                                                                                                                                                                NIFTY                    2,859               2,907             3,039             3,124

Wipro                                                                  -2.2%                                    (0.2)                          $7.6
                                                                                                                                                            News Analysis
Satyam                                                                 50.0%                                         2.9                       $8.6
ICICI Bank                                                             -2.8%                                    (0.5)                     $18.7                    Satyam – Our confidence dented, but not destroyed
HDFC Bank                                                              -2.4%                                    (1.8)                     $72.3                    Patel Engineering bags order worth Rs3,859cr
Advances / Declines                                                                                                                                                Titan may spin off Engg Division into JV firm
                                                                                                              BSE                          NSE                     ACC shuts Himachal kiln unit for 15 days

Advances                                                                                                             941                       333          Refer detailed News Analysis in following page

Declines                                                                                                    1,593                              885
Unchanged                                                                                                             63                          25        Net Inflows (December 16, 2008)
Volumes (Rs cr)                                                                                                                                             Rs cr              Purch             Sales               Net          MTD                 YTD
                                                                                                                                                            FIIs               1,685             1,657                 28         1,790          (54,026)
BSE                                                                                                                                       4,894
NSE                                                                                                                                     12,872              MFs                  690              530                161          (312)            13,305
                                                                                                                                                            FII Derivatives (December 17, 2008)
       21,300                                                                                                                          6,225                Rs cr                            Purch             Sales             Net        Open Interest
       20,350                                       Sensex                                                                             5,970
                                                                                                                                       5,715                Index Futures                    1,588             1,049             539                9,213
       19,400                                       Nifty
       18,450                                                                                                                          5,460                Stock Futures                     649                653             (4)               11,325
       17,500                                                                                                                          5,205
                                                                                                                                       4,950
       16,550                                                                                                                                               Gainers / Losers
  Sensex




       15,600                                                                                                                          4,695
                                                                                                                                               Nifty




       14,650
                                                                                                                                       4,440
                                                                                                                                       4,185
                                                                                                                                                                             Gainers                                            Losers
       13,700
       12,750
                                                                                                                                       3,930                Company            Price (Rs)      % chg         Company              Price (Rs)      % chg
                                                                                                                                       3,675
       11,800                                                                                                                          3,420
       10,850                                                                                                                          3,165                MMTC                  15,841          20.0       Satyam Comp                  158         -30.2
        9,900                                                                                                                          2,910
        8,950                                                                                                                          2,655                United Phosp               110        11.3       RNRL                          48         -16.0
        8,000                                                                                                                          2,400
                                                                                                                                                            Max India                  118           8.3     Thermax                      181         -16.0
                                  Apr-07


                                                    Aug-07




                                                                                         Apr-08


                                                                                                            Aug-08
                Dec-06
                         Feb-07


                                           Jun-07


                                                              Oct-07
                                                                       Dec-07
                                                                                Feb-08


                                                                                                  Jun-08


                                                                                                                     Oct-08
                                                                                                                              Dec-08




                                                                                                                                                            United Breweries            89           4.3     GVK Power infra               19         -14.0
                                                                                                                                                            Container Corp             637           4.3     REL Infra                    549         -13.7
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          Angel Broking                                                                               Market Outlook
                    Service Truly Personalized                                                            India Research


                                Satyam – Our confidence dented, but not destroyed

                                Satyam Computer Services, as is now known, has called off its proposal to acquire
                                stakes in Maytas Properties and Maytas Infrastructure in an attempt to “diversify its
                                business into infrastructure and real estate” following stiff opposition from shareholders
                                in what can be termed as a major victory for shareholder activism. While the entire
                                episode has dented our confidence in the company, it has not destroyed it. We believe
                                that the stiff opposition to the deal from shareholders and the shareholder activism
                                resulting in the deal being called off is a positive development for Satyam. Post this
                                episode, the management is likely to be a lot more careful, considered and measured
                                in making such decisions of a transformational nature that have the ability to change
                                the business of the company dramatically and the company's shareholders are likely to
                                be taken into confidence before taking any such steps in future. We expect that over
                                the long-term, business fundamentals will dictate stock price movements as the
                                management gets its focus back to the core IT Services Business only. Satyam's
                                business, while facing challenges in the medium-term on account of the global
                                economic slowdown, is expected to start picking up once the economic cycle turns
                                around.

                                We have downgraded the target P/E multiple for the stock to 7x (12x earlier) to factor in
                                the deteriorating environment for IT companies in general and the additional discount
                                to Satyam on account of the Maytas episode. The stock has already reacted to events
                                of the past few hours and currently trades at around 4.8x FY2010E EPS. It must be
                                noted that we have downgraded our FY2010E Topline and Bottomline projections as
                                well by 11% and 13%, respectively, given reduced visibility for the company owing to
                                the worsened global economic situation, which has now affected other sectors of the
                                real economy like Automotive and Retail. Nonetheless, considering that Satyam's
                                business is characterized by strong cash flow generation, low capex intensity, high
                                return ratios and a good percentage of repeat business, combined with the attractive
                                valuations even after factoring in a reduction in our estimates, we believe that
                                downside risk is limited. Thus, we maintain a Buy on the stock with a reduced
                                Target Price of Rs231 (18 months). However, it must be noted that the stock
                                performance could remain muted in the near-term on account of the 'overhang
                                impact' of the concerns raised above.



                                Patel Engineering bags order worth Rs3,859cr

                                Patel Engineering (PE) is a mid size construction player having strong presence in the
                                high-Margin Hydro Power Construction segment. The company with its access to
                                cutting edge technology is well placed to benefit from the current investment boom in
                                the irrigation domain, especially in Andhra Pradesh. PE has bagged the single largest
                                irrigation project in India, the Pranahita-Chevella Lift irrigation from the Government of
                                Andhra Pradesh worth Rs3,859cr. The order bagged is in consortium with BHEL and
                                Navyuga Construction. The lift irrigation project would irrigate an area of 12,20,000
                                acres. The project scope includes the related investigation, designing, construction and
                                maintenance work. The project is expected to get commissioned within the next 48
                                months. We maintain a Buy on the stock, with a Target Price of Rs316.




                                                                                                                            2
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          Angel Broking                                                                                          Market Outlook
                    Service Truly Personalized                                                                     India Research


                                   Titan may spin off Engineering Division into JV firm

                                   Titan Industries may look at spinning off its Precision Engineering Division into a joint
                                   venture (JV) company. The Division has Topline of around Rs75cr. The company,
                                   jointly owned by the Tata Group and the Tamil Nadu Industrial Development
                                   Corporation (TIDC), had started the Precision Engineering Division in 2002 and has
                                   been growing its business steadily building up a wide array of clients in the Automotive
                                   and Aerospace industries. This Division is also starting to build its expertise in the
                                   medical equipment sector. Industry sources indicate that this possibility of looking at a
                                   JV will be driven by access to technology. The Precision Engineering Division has a
                                   clientele including the likes of Delphi and Bosch, among others. We remain Neutral on
                                   the stock.

                                   ACC shuts Himachal kiln unit for 15 days

                                   Following slowdown in cement demand and oversupply in the Northern markets, ACC
                                   has decided to shut down one of its kilns at Gagal (2.4mtpa) in Himachal Pradesh for
                                   15 days. Weak cement demand in both Himachal Pradesh and Punjab on account of
                                   the economic slowdown has resulted in increase of clinker stocks at the Gagal works in
                                   HP, necessitating a shutdown of manufacturing operations for balancing the clinker
                                   stocks. Also, duty-free cement imports from Pakistan to some extent has created
                                   unfavourable demand-supply environment in the Northern markets. ACC expects to
                                   lose around 72,000 tonnes of clinker production on account of this shutdown, which we
                                   believe is not significant. We remain Neutral on the stock.




                                   Economic/Political News

                                        OPEC to cut oil output by 2mn barrels a day
                                        More goodies on the cards to fire growth
                                        World Bank to lend additional $3bn to India: Bansal
                                        I-T exemption on home loans may be doubled



                                   Corporate News

                                        Satyam may buy back shares
                                        Reliance defaults in oil delivery to CPCL
                                        SBI to hire 500ATMs from external agencies
                                        Kingfisher Airlines to raise Rs7,500cr

                                   Source: Economic Times, Business Standard, Business Line, Financial Express




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                  Angel Broking                                                                                                                                                  Market Outlook
                                 Service Truly Personalized                                                                                                                             India Research




Events for the day
Diamond Cables                                                          General
K Sera Sera                                                             General




                                                                                                             TM



                                                                                                                           Angel Broking Limited
Research Team                 Tel: 4040 3800                               E-mail: research@angeltrade.com                                                 Website: www.angeltrade.com

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