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					                                                                                                                              Market Outlook
                                                                                                                                             India Research
                                                                                                                                            February 21, 2012

 Dealer’s Diary                                                                                                    Domestic Indices      Chg (%)       (Pts)   (Close)
 The domestic markets are expected to open flat or marginally in green following                                   BSE Sensex               0.8      135.4 18,289
 higher closing across most of the western markets. Asian stock markets are trading                                Nifty                    0.8       42.4     5,564
 flat as investors remain cautions and wait for European finance ministers in                                      MID CAP                 (0.1)      (3.5)    6,545
 Brussels to approve a crucial second bailout for Greece.                                                          SMALL CAP               (0.2)     (15.2)    7,116
 The US markets traded choppily on Friday (closed on Monday) as the economic                                       BSE HC                  (0.1)      (6.1)    6,375
 data releases painted a mixed picture with a report from the Conference Board                                     BSE PSU                  0.9       69.2     7,909
 showing that its index of leading economic indicators increased for the fourth                                    BANKEX                   1.4      176.7 12,736
 consecutive month in January, while another report from the Labor Department                                      AUTO                    (0.5)     (54.5) 10,319
 showing only a modest increase in consumer prices in the month of January.                                        METAL                   (0.1)     (13.3) 12,572
 Although investors seemed reluctant to make any significant moves going into the                                  OIL & GAS                0.4       31.2     8,645
 long weekend, optimism that European finance ministers will approve a new
                                                                                                                   BSE IT                   1.4       87.8     6,267
 bailout package for Greece helped to keep traders from doing much profit taking.
                                                                                                                   Global Indices        Chg (%)       (Pts)   (Close)
 Meanwhile Indian shares rebounded on Friday after some consolidation the day                                      Dow Jones                0.4       45.8 12,950
 before, with firm global cues supporting the liquidity-driven rally.
                                                                                                                   NASDAQ                  (0.3)      (8.1)    2,952
 Markets Today                                                                                                     FTSE                     0.7       40.2     5,945
 The trend deciding level for the day is 18,315/5,572 levels. If NIFTY trades above                                Nikkei                    1.1     100.9      9,485
 this level during the first half-an-hour of trade then we may witness a further rally                             Hang Seng               (0.3)     (66.8) 21,425
 up to 18,397 – 18,504/5,599 – 5,634 levels. However, if NIFTY trades below                                        Straits Times             0.7      20.8      3,021
 18,315/5,572 levels for the first half-an-hour of trade then it may correct up to
                                                                                                                   Shanghai Com              0.3       6.4      2,364
 18,208 – 18,126/5,537 – 5,511 levels.
 Indices                     S2                 S1            PIVOT               R1                   R2
                                                                                                                   Indian ADRs           Chg (%)       (Pts)   (Close)
 SENSEX                   18,126               18,208         18,315          18,397               18,504
                                                                                                                   Infosys                  0.3        0.2     $59.6
 NIFTY                     5,511               5,537          5,572           5,599                5,634
                                                                                                                   Wipro                    0.2        0.0     $11.3
 News Analysis                                                                                                     ICICI Bank               1.6        0.6     $39.7
         Cement companies raise prices                                                                             HDFC Bank                2.1        0.7     $35.6
         NMDC cuts ore prices; lowers volume guidance
         Result Review : CRISIL – 4QCY2011
         Refer detailed news analysis on the following page
                                                                                                                   Advances / Declines               BSE          NSE
                                                                                                                   Advances                        1,394         693
 Net Inflows (February 16, 2012)
                                                                                                                   Declines                        1,583         816
   ` cr                           Purch              Sales             Net             MTD                  YTD
                                                                                                                   Unchanged                        119            58
   FII                            2,972            1,825          1,147           11,037            22,117
   MFs                             536                484               52        (1,113)           (2,968)
                                                                                                                   Volumes (` cr)
 FII Derivatives (February 17, 2012)                                                                               BSE                                          4,432
   ` cr                                              Purch       Sales        Net             Open Interest        NSE                                         20,704
   Index Futures                                     3,532      2,732         800                   17,252
   Stock Futures                                     6,293      5,847         446                   32,911

 Gainers / Losers
                                          Gainers                                             Losers
   Company                         Price (`)      chg (%)     Company                  Price (`)    chg (%)
   Lanco Infratech                        23           11.6   Dish TV                         67        (4.9)
   JSW Energy                             73            8.3   United Phosphorus              159        (4.9)
   Titan Industries                     233             7.9   Jet Airways                    329        (4.6)
   Thermax                              538             7.0   CRISIL                         945        (4.0)
   BHEL                                 303             6.5   Hero MotoCorp              2,110          (3.6)

Please refer to important disclosures at the end of this report                                                   Sebi Registration No: INB 010996539              1
                                                              Market Outlook | India Research

                    Cement companies raise prices
                    Cement companies have raised prices in the northern and western regions in the
                    range of `7 to `10 per bag with effect from February 17, 2011. The price hike
                    follows the correction in the region during January due to the severe winter
                    season, which affected construction activities. We believe the recent price hike is
                    an effort by cement manufacturers to pass on the hike in operating costs. We are
                    currently Neutral on the cement sector, as we believe valuations are significantly
                    ahead of the cycle, but we maintain our Buy recommendation on JK Lakshmi
                    Cement due to its attractive valuations, with a target price of `79.

                    NMDC cuts ore prices; lowers volume guidance
                    NMDC has cut prices of iron ore fines and lumps by 20% and        3%, respectively,
                    for 4QFY2012 on the back of the decline in global iron prices,    the recent rupee
                    appreciation and increased export duty on iron ore. The price     cut by NMDC is
                    higher than our expectations given the shortage of iron ore       in the domestic

                    NMDC has also lowered its sales volume guidance for FY2012 and FY2013. The
                    company now expects sales volumes of 27mn tonnes and 30mn tonnes (earlier
                    30 mn tonnes and 33mn tonnes) for FY2012 and FY2013, respectively. Although
                    the company has ~5mn tonnes of iron ore inventory at its mine pit-heads,
                    however it faces logistical constraints to increase off take due to breakdown in
                    slurry pipeline, lower availability of railway rakes and stricter regulations in
                    transportation of iron ore in Karnataka. Considering the company’s revised sales
                    volumes guidance, we lower our 4QFY2012 and FY2013 realization and sales
                    volume estimates.

                    Although NMDC has a strong balance sheet, presence in sellers market (iron
                    ore), low cost of production, high-grade mines and long mine life, we now expect
                    sales volumes to witness a CAGR of only 5.2% over FY2011-2013.
                    On account of lower volume growth and lower realization, NMDC’s bottom line is
                    expected to grow by only 4.0% yoy during FY2013. Further, given the 23% rise in
                    the stock price since January 1, 2012, we recommend Neutral on the stock.

                    Result Review – 4QCY2011
                    CRISIL announced its 4QCY2011 numbers. Net sales increased by 26.6% yoy to
                    `225cr (`177cr) led by strong growth in the research segment. Research
                    segments revenue increased by 34.0% yoy while the rating segment and advisory
                    segments revenue increased by 14.1% and 7.0% respectively. EBITDA increased
                    by 15.2% yoy to `80cr (`69cr) due to higher revenue. EBITDA margin declined by
                    352bps yoy to 35.6% (39.1%). PAT increased by 10.4% yoy to `56cr (`51cr) while
                    margin declined by 366bps yoy to 24.8% (28.5%) almost in line with EBITDA
                    margin contraction. We will be coming out with a detailed report post
                    management interaction. We continue to maintain an Neutral rating on the stock.

February 21, 2012                                                                                     2
                                                                                                          Market Outlook | India Research

                                                  Economic and Political News
                                                         Government may let foreign individuals directly buy corporate debt
                                                         Railways stares at a `2lakh cr crunch
                                                         Bankers agree to subscribe to Air India’s `7,400cr bond issue

                                                  Corporate News
                                                         Ashok Leyland's Optare eyes small bus market
                                                         Frozen bank accounts led to disruptions: Kingfisher
                                                         Essar Oil plans to raise `3,000cr in next 15 months
                                                  Source: Economic Times, Business Standard, Business Line, Financial Express, Mint

Results Calendar
 23/02/2012         Ranbaxy, ABB, Gujarat Gas, Aventis

February 21, 2012                                                                                                                      3
                                                                                                 Market Outlook | India Research

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February 21, 2012                                                                                                                           4

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