Market Outlook by mnmgroup


									                                                                                                                             Market Outlook
                                                                                                                                            India Research
                                                                                                                                                  March 2, 2012

                                                                                                                  Domestic Indices      Chg (%)       (Pts)   (Close)
 Dealer’s Diary
 The Indian markets are expected to open flat with a positive bias taking cue from                                BSE Sensex              (1.0) (168.7) 17,584

 the SGX nifty which is trading marginally higher in the opening trade. Most of the                               Nifty                   (0.8)     (45.5)    5,340

 Asian markets too are trading higher and have posted gains of ~0.5-1% in the                                     MID CAP                 (0.5)     (33.7)    6,353

 morning trade.                                                                                                   SMALL CAP               (0.4)     (26.1)    6,834
                                                                                                                  BSE HC                    0.3      15.9     6,352
 The US markets ended in the green on Thursday buoyed by a drop in jobless
                                                                                                                  BSE PSU                 (0.7)     (56.5)    7,708
 claims for the week ending February 25th. The report released by US labour
                                                                                                                  BANKEX                  (1.2) (143.3) 11,831
 department showed that initial jobless claims edged down to 351,000 from the
                                                                                                                  AUTO                    (0.9)     (89.6)    9,905
 previous week's revised figure of 353,000. The positive news on the jobless claims
                                                                                                                  METAL                   (0.9) (102.2) 11,950
 front over shadowed the drop in manufacturing index for February. Meanwhile, the
                                                                                                                  OIL & GAS               (1.0)     (82.5)    8,629
 European markets posted a strong performance on Thursday a day after the ECB
                                                                                                                  BSE IT                  (0.7)     (44.4)    6,117
 announced the second tranche of LTRO with the major indices in Germany, France
                                                                                                                  Global Indices        Chg (%)       (Pts)   (Close)
 and UK gaining by more than 1%.
                                                                                                                  Dow Jones                 0.2      28.2 12,980
 On the domestic front, the Indian markets remained low since the beginning on
                                                                                                                  NASDAQ                    0.7      22.1     2,989
 Thursday weighed down by lower than estimated quarterly GDP growth for
                                                                                                                  FTSE                      1.0      59.7     5,931
                                                                                                                  Nikkei                  (0.2)     (15.9)    9,707
 Markets Today                                                                                                    Hang Seng               (1.4) (292.1) 21,388
 The trend deciding level for the day is 17,588 / 5,337 levels. If NIFTY trades above                             Straits Times           (0.5)     (15.2)    2,979
 this level during the first half-an-hour of trade then we may witness a further rally                            Shanghai Com            (0.1)      (2.4)    2,426
 up to 17,713 – 17,843 / 5,376 – 5,412 levels. However, if NIFTY trades below
 17,588 / 5,337 levels for the first half-an-hour of trade then it may correct up to                              Indian ADRs           Chg (%)       (Pts)   (Close)
 17,459 – 17,334 / 5,301 – 5,262 levels.
                                                                                                                  Infosys                   0.4       0.2     $57.9
 Indices                   S2                 S1              PIVOT              R1                   R2          Wipro                     1.2       0.1     $11.1
 SENSEX                 17,334               17,459           17,588          17,713              17,843          ICICI Bank                0.0       0.0     $36.3
 NIFTY                   5,262               5,301            5,337            5,376              5,412           HDFC Bank               (0.1)      (0.0)    $34.3

 News Analysis
                                                                                                                  Advances / Declines               BSE          NSE
        Auto sales numbers - February 2012
                                                                                                                  Advances                        1,230         562
        Cement Dispatches – February 2012
                                                                                                                  Declines                        1,623         877
        Result Review: Mphasis
 Refer detailed news analysis on the following page                                                               Unchanged                        114            66
 Net Inflows (February 29, 2012)
   ` cr                         Purch              Sales             Net              MTD                  YTD    Volumes (` cr)
   FII                          3,679            3,029               651         25,217            36,298
                                                                                                                  BSE                                          2,848
   MFs                           656                  722            (66)        (2,172)           (4,027)
                                                                                                                  NSE                                         13,240

 FII Derivatives (March 01, 2012)
   ` cr                                               Purch       Sales        Net           Open Interest
   Index Futures                                   1,501         1,852        (352)                12,972
   Stock Futures                                   1,694         2,213        (520)                28,570

 Gainers / Losers
                                        Gainers                                              Losers
   Company                       Price (`)      chg (%)       Company                 Price (`)    chg (%)
   Suzlon Energy                        30            11.5    United Phos                   142        (8.7)
   Wockhardt                          518              6.9    DLF                           215        (5.2)
   Reliance Cap                       426              5.5    Jet Air India                 294        (4.4)
   Dish TV India                        57             4.9    HDIL                          110        (4.1)
   Maruti Suzuki                    1,315              4.6    PTC India                      57        (4.0)

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

                Auto sales numbers - February 2012

                Tata Motors (TTMT)
                TTMT posted a strong 18.8% yoy (5.3% mom) increase in its total sales to 92,119
                units, driven by 24.8% (8.7% mom) and 10.4% yoy (flat mom) growth in the CV
                and PV segments, respectively. The CV segment's performance was led by healthy
                7.1% and 37.6% yoy growth in the medium and heavy commercial vehicle
                (MHCV) and light commercial vehicle (LCV) segments, respectively. In the PV
                segment, Nano and Indica volumes grew by 11.6% and 3.8% yoy, respectively.

                Mahindra & Mahindra (MM)
                MM registered an 11.4% yoy (down 8.8% mom) increase in its total volumes to
                58,403 units, led by strong performance by the automotive segment, which grew
                by 29.1% yoy (down 3.6% mom). However, the tractor segment posted a
                disappointing 19.6% yoy decline in volumes during the month. The automotive
                segment's performance was driven by continued buoyancy in the four-wheeler
                pick-up (up 36.5% yoy) and passenger UV (up 32.6% yoy) segments. CV and
                Verito sales also recorded strong volume performance, witnessing growth of
                39.4% and 41.8% yoy, respectively.

                Hero MotoCorp (HMCL)
                HMCL reported healthy 10.9% yoy (flat mom) growth in its volumes to 523,465
                units, led by continued momentum across all product segments. New product
                launches and refreshed product ranges continued to drive HMCL’s volume

                Maruti Suzuki (MSIL)
                MSIL reported better-than-expected volume growth of 6.5% yoy (3% mom) to
                118,949 units in February 2012, led by 6% (6.5% mom) and 11.8% yoy growth
                in the domestic and exports segments, respectively. The domestic segment's
                performance was driven by 31.1% (8.3% mom) and 58.8% (74.5% mom) yoy
                growth in sales in the compact (mainly led by Swift) and super compact segments,

                TVS Motor (TVSL)
                TVSL posted a disappointing 3% yoy decline in its total sales to 172,061 units,
                largely due to a decline in the motorcycles (down 11.8% yoy) and scooters (down
                9% yoy) segments. As a result, two-wheeler volumes declined by 2.4% yoy (1.2%
                mom). Three-wheeler volumes also reported a 27.2% yoy decline during the

March 2, 2012                                                                                  2
                                                                        Market Outlook | India Research

                Cement Dispatches – February 2012
                Ambuja Cements’ dispatches in February 2012 stood at 2.0mn tonnes, up by
                strong 12.7% yoy from 1.77mn tonne reported in February 2011. Even on mom
                basis, company reported a growth of 4.2%. All India Cement dispatches growth
                for past few months has been encouraging lead mainly by strong growth in
                western region. Ambuja which sells ~40% of its output in western region has
                benefitted from the healthy growth in the region. We continue to remain Neutral
                on Ambuja Cements as the stock trades at EV/tonne of US $155 on CY2012E

                Result Review: 1QFY2012


                Mphasis announced its 1QFY2012 numbers. The company underperformed our
                as well as street expectations on all the fronts. USD revenue came in at
                US$266mn, down 3.8% qoq. In INR terms revenue came in at `1,367cr, up just
                4.1% qoq despite steep INR depreciation against USD in 1QFY2012. Onsite
                billing rate of application services again declined during the quarter to US$67/hr
                from US$69/hr in 4QFY2011, while offshore billing rates of application services
                grew to US$21/hr from US$20/hr in 4QFY2011. Other than this, billing rates,
                onsite as well as offshore, of all the segments were flat on a qoq basis. Revenue
                from the direct channel grew by 14.4% qoq, however revenue from HP channel
                declined by 4.0% qoq. EBITDA margin of the company improved by 60bp qoq to
                18.4%, aided by INR depreciation. PAT came in at `185cr, almost flat qoq. We
                maintain our Accumulate rating on the stock; the target price is under review.

                Economic and Political News
                    Government approves subsidy cut on fertilisers for FY13
                    Government approves `3,412cr road projects
                    January exports up 10% to US$25 bn

                Corporate News
                    ONGC share auction scrapes through, despite low investor appetite
                    Glenmark gets USFDA nod for contraceptive, scalp gel
                    Tata Comm. may bid for British telecom giant CWW
                    Vedanta offers `16,000cr for govt's stake in HZL, Balco
                Source: Economic Times, Business Standard, Business Line, Financial Express, Mint

March 2, 2012                                                                                        3
                                                                                                 Market Outlook | India Research

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March 2, 2012                                                                                                                               4

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