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Daily Morning Brief

VIEWS: 14 PAGES: 39

  • pg 1
									                                                      ®
                                                                                                                               Daily Morning Brief

January 22, 2008                                                                                                                     FOR PRIVATE CIRCULATION



Equity                                                                    ECONOMY NEWS
                                                 % Chg
               21 Jan 08            1 Day 1 Mth 3 Mths                    q The RBI is likely to keep its monetary policy tight in view of the uncertainties
Indian Indices                                                              in global financial markets and high prices of crude oil and food items, RBI
Sensex              17,605            (7.4)       (8.1)          (0.0)      Governor YV Reddy has said. (ET)
Nifty                5,209            (8.7)       (9.7)            0.5
                                                                          q The Commerce Minister has said that high global food prices posed a
Banking             10,582            (7.0)       (1.5)           17.2
                                                                            challenge to economies around the world, and nations needed to work
IT                      3,215         (7.6) (14.9)              (16.7)
                                                                            together to tackle the problem. (ET)
Healthcare              3,702         (8.0) (12.8)               (0.8)
FMCG                    2,173         (5.6) (1.1)                 6.3     q The existing 10% surcharge on personal and corporation income tax may be
PSU                     8,629       (10.7) (9.3)                   5.5      halved or scrapped entirely in the coming Budget. (ET)
CNX Midcap              7,374       (11.9) (13.3)                 10.6
World indices                                                             q Trai has recommended abolishing the existing practice of levying access deficit
Nasdaq               2,340            (0.3) (13.1)              (14.1)      charge from private operators. (BS)
Nikkei              13,326            (3.9) (16.4)              (22.4)
                                                                          q The RBI has decided to put on hold approvals for about 30 foreign venture
Hangseng            23,819            (5.5) (18.5)              (20.6)
                                                                            capital funds wanting to invest in the real estate sector. (BS)

Value traded (Rs cr)
                          21 Jan 08              % Chg - 1 Day            CORPORATE            NEWS
Cash BSE                           9,019                          8.9
Cash NSE                          24,526                         23.3     q ONGC has reported a 6.46% decline in net profit at Rs.43.66 bn for Q3FY08
Derivatives                       82,242                         12.9       when compared with Rs.46.68 bn in Q3FY07. Total income during the period
                                                                            declined to Rs.159.84 bn from Rs.162.69 bn in Q3FY07. (BS)
Net inflows (Rs cr)                                                       q Satyam Computer Services will list its existing American depository shares
               18 Jan 08           % Chg              MTD         YTD       on NYSE Euronext. (BS)
FII                (1,356)             (38) (3,702) (3,702)
Mutual Fund          (272)            (175)    (21)    (21)
                                                                          q NRI industrialist Swraj Paul-owned Caparo Group, a key vendor for Tata
                                                                            Motors' Nano project, is setting up a Rs.1.2-bn facility at Singur to supply
FII open interest (Rs cr)                                                   sheet metal and vehicle frames for the Nano. (BL)
                                   18 Jan 08                    % chg     q Bharat Forge has reported an 8% decline in consolidated net profit at
FII Index Futures                       25,548                   (7.2)      Rs.709.6 mn for Q3FY08 when compared with Rs.769.6 mn in Q3FY07. Total
FII Index Options                       10,607                   (6.8)      income increased to Rs.10.99 bn from Rs.10.37 bn in Q3FY07. (BS)
FII Stock Futures                       45,489                  (18.3)
FII Stock Options                          230                   (8.8)
                                                                          q L&T has said it has received an order for reactors worth Rs.16.95 bn ($430
                                                                            mn) from Kuwait National Petroleum Co. (BL)
Advances/Declines (BSE)                                                   q Dr Reddy's Laboratories has said it has settled with Novartis on litigation
21 Jan 08           A        B1             B2   Total % Total              related to a generic version of the Swiss firm's Exelon drug. (BL)
Advances           3          4         45          52                3
                                                                          q Subex has bagged a contract from Umniah, a subsidiary of Bateleco Bahrain,
Declines         214        658        580       1,452               96
                                                                            to provide fraud management and revenue assurance solutions. (BS)
Unchanged          -          -          5           5                0
                                                                          q Aurobindo Pharma has received approval from the USFDA to market its 300
Commodity                                                                   mg Cefdinir capsules in the US market. (BL)
                                                 % Chg                    q Saudi Arabian Airlines has announced that it has awarded a long-term IT
                 21 Jan 08           1 Day 1 Mth 3 Mths                     infrastructure transformation contract to Wipro Arabia (a JV between Wipro
Crude (NYMEX) (US$/BBL) 90.6             0.5          (2.9)        2.2      and Dar Al Riyadh Group, which provides IT solutions and services in Saudi
Gold (US$/OZ) 865.0                     (2.1)          6.3        14.4      Arabia). (BS)
Silver (US$/OZ) 15.6                    (3.6)          8.3        15.5
                                                                          q Neyveli Lignite has reported a 33.94% increase in net profit at Rs.2.04 bn
Debt/forex market                                                           for Q3FY08 as compared to Rs.1.53 bn during Q3FY07. Total income rose
                                                                            26.94% to Rs.8.16 bn for Q3FY08 from Rs.6.43 bn in Q3FY07. (BL)
                 21 Jan 08           1 Day 1 Mth 3 Mths
10 yr G-Sec yield % 7.58               7.58        7.83           7.90    q Spice Communications has said its board will meet on January 30 to
Re/US$             39.56              39.30       39.55          39.90      consider a proposal to buy back equity shares. (BL)

Sensex                                                                    q Nucleus Software Exports has registered an 11.41% growth in its net profit
20,900
                                                                            at Rs.155.3 mn for Q3FY08. (BL)

18,600                                                                    q MRPL and Shell Aviation have entered into an exclusive joint venture to
                                                                            market and supply aviation fuel at the Bangalore and Hyderabad airports. (BS)
16,300

14,000

 11,700
      Jan-07   Mar-07    May-07    Jul-07    Sep-07    Nov-07    Jan-08


Source: Bloomberg                                                         Source: ET = Economic Times, BS = Business Standard, FE = Financial Express,
                                                                          BL = Business Line, ToI: Times of India, BSE = Bombay Stock Exchange



                                    Registered Office: Kotak S ecurities Limited, B akhtaw ar, 1st floor, 229 Nariman P oint, Mumbai 400021 India.
                                                                                                                               Please see the disclaimer on the last page
January 22, 2008                                                                              Kotak Securities - Private Client Research




FROM OUR RESEARCH TEAM

RESULT UPDATE                     SATYAM COMPUTER SYSTEMS LTD
Dipen Shah                        PRICE : RS.390                                                        RECOMMENDATION : BUY
dipen.shah@kotak.com
+91 22 66341376                   T ARGET PRICE : RS.560                                                     FY09E PE : 13X

Saurabh Gurnurkar                 Highlights
saurabh.gurnurkar@kotak.com
+91 22 66341273                   n A strong volume growth of 9.4% lead to an 8.1% QoQ rise in revenues for the
                                    quarter. Q3FY08 has been the fourth consecutive quarter of 9%-plus volume
                                    growth. This reflects positive business momentum and Satyam's client-account
                                    management abilities.
                                  n Q3FY08 has also seen Satyam registering the highest volume growth among
                                    comparable peers. The company also saw the most significant increases for
                                    Satyam in client pricing ever - 2.4% for onsite and 2.3% for offshore projects.
                                  n The management sees no perceptible impact on outsourcing and offshoring due
                                    to US the sub-prime issue, yet.
                                  n Satyam's revised guidance of 45.2% revenue growth (42% earlier) and 39.6%
                                    EPS growth in US dollar terms indicates high visibility in volumes. Growth in
                                    INR terms for FY08 was guided at 29% and 19%, respectively.
                                  n We estimate Satyam's EPS at Rs.25.8 (Rs.25.7 earlier) in FY08 and Rs.30.7
                                    (Rs.30) in FY09E.

     We recommend a BUY on        n We re-iterate a BUY recommendation on the stock with a price target of Rs.560,
     Satyam Computers with a        a 44% upside from current levels. We have assigned a target multiple of 18.2x
         price target of Rs.560     FY09E earnings. This is a discount to our target valuations for a larger peer like
                                    Infosys.
                                  n An accelerated slowdown/recession in major user economies and a sharper-
                                    than-expected appreciation in the rupee v/s major currencies are key risks to
                                    our call.


                                  Q3FY08 results
                                  (Rs mn)                              Q3FY08       Q2FY08    QoQ (%)          Q3FY07            YoY (%)
                                  Income                               21,956       20,317         8.1         16,611                32.2
                                  Expenditure                              17,244    16,284                       12,511
                                  Operating profit                         4,712      4,033          16.8          4,100             14.9
                                  Depreciation                               423       391                            394
                                  Gross profit                             4,289      3,643          17.7          3,706             15.7
                                  Interest                                    81         41                            32
                                  Other income                               705      1,105                           102
                                  PBT                                      4,913     4,706           4.4          3,776              30.1
                                  Tax                                        576       609                            403
                                  PAT                                      4,336     4,097           5.8          3,372              28.6
                                  PAT after E.O. items                     4,336      4,097           5.8          3,372             28.6
                                  Shares (mn)                                669       669                            667
                                  EPS (Rs)                                   6.5        6.1                           5.1
                                  OPM (%)                                    21.5      19.9                          24.7
                                  GPM (%)                                    19.5      17.9                          22.3
                                  NPM (%)                                    19.8      20.2                          20.3

                                  Source : Company




Daily Morning Brief           Please see the disclaimer on the last page                               For Private Circulation          2
January 22, 2008                                                           Kotak Securities - Private Client Research




                          Volume growth at 9.4% QoQ; fourth consecutive quarter of 9%-
                          plus growth, higher than larger peers
                          n Volumes continued to show high growth of 9.4% in Q2FY08. We also note that
                            the 9.4% volume growth is higher than the growth reported for the quarter by
                            larger peers.
                          n In our opinion, Satyam's relationship management initiatives and broadening
                            of the service profile have allowed it to further penetrate its existing clients.
                          n The company continued to reduce its client concentration risk with the largest
                            client forming less than 6% of its revenues during the quarter v/s 6.6% in FY07.
                          n The retail and transportation as well as the healthcare and pharma verticals
                            grew faster than others during the quarter, indicating Satyam's penetration
                            within these new verticals.
                          n Within verticals, BFSI posted 2% QoQ growth. The management has stated that
                            it is not seeing any impact on business from this vertical on account of sub-
                            prime and credit crisis related issues in the US, yet. BFSI contributes to 22.4%
                            (lower than comparable peers) of overall revenues and the US geography 60%
                            to overall revenues for Satyam.


                          Vertical-wise revenue break-up (% of revenues)
                                                                             Q3FY08                           Q2FY08
                          BFSI                                                 22.40                            23.81
                          Manufacturing                                          23.22                          23.73
                          Times                                                  23.07                          23.52
                          Healthcare / Pharma                                     8.02                           7.94
                          Retail / Trans / Logi                                   9.13                           7.48
                          Others                                                 14.16                          13.52

                          Source : Company

                          Geographical break up of revenues (% of revenues)
                                                                             Q3FY08                           Q2FY08
                          USA                                                  60.02                            58.43
                          Europe                                                 20.52                          20.95
                          ROW                                                    19.46                          20.62

                          Source :Company

                          n Europe continued to grow at a healthy clip (6% QoQ), US revenues in Q3 grew
                            at higher than company average of 11% QoQ.
                          n We opine that this growth from US accounts, 60% of revenues, reflect Satyam's
                            account management abilities and the positive momentum it is witnessing on
                            account of an extended breadth of offerings.
                          n Average realizations were higher by 240 bps and 230 bps for on-site and
                            offshore projects respectively. This reflects the billing rate productivity Satyam
                            is able to drive in its business.
                          n According to the management, it has been able to get higher than average
                            realizations from new clients and has also been able to successfully re-negotiate
                            contracts from several new clients.

                          Margins up 150 bps QoQ - higher offshore, better offshore
                          utilization & beneficial pricing
                          n Satyam's EBIDTA margins at 21.5% were higher by about 150 bps QoQ. Margins
                            increased due to the higher offshore proportion (52.1% from the 50.4% in
                            Q2FY08 and 49% in Q3FY07), better utilization offshore (78.21% v/s 76% in
                            Q2FY08) and the better average realizations registered by the company.
                          n In our opinion, the company has utilized these levers to control the impact on
                            margins. Margin headwinds for Satyam were the adverse rupee, on-going
                            investments in its subsidiaries and wage costs.



Daily Morning Brief   Please see the disclaimer on the last page                    For Private Circulation         3
January 22, 2008                                                                     Kotak Securities - Private Client Research




                          Other income, positive for PAT
                          n Satyam reported other income of Rs.704 mn as its translation losses were lower
                            than the hedging and MTM gains.
                          n The company continues to adopt a policy of hedging about 75% of its next 12
                            months' receivables. As on Q3FY08 end, the company had $1 bn of outstanding
                            hedges.

                          Macro trends intact… as of now; customer additions, employee
                          additions and low attrition are positives
                          n The management has indicated that it has not witnessed any slowdown in
                            demand from its clients due to the macroeconomic changes in user economies.
                            However, we believe a sharp deceleration or a recession in major economies
                            can impact revenue growth for Indian vendors.
                          n Satyam has in the recent past won a large deal from Nestle. The company is
                            pursuing several such large deals at present and enjoys a healthy pipeline that
                            is reflected in the new client wins registered in Q3. In Q3, Satyam added 32
                            new customers including eight Fortune Global and US 500 corporations.
                          n Satyam also added 3424 associates in Q3 and reported a decreased attrition
                            number of 13.1%. This was the sixth quarter in a row where Satyam has
                            decreased its attrition number.

                          Satyam acquires Bridge Strategy - a US management consulting
                          company
                          n Satyam will pay $35 mn to acquire the firm, which generated $17 mn in annual
                            revenues last fiscal.
                          n The company has 36 management consultants on its rolls. Satyam hopes this
                            acquisition will strengthen its consulting capabilities.
                          Satyam uses multiple levers to protect, and grow margins
                          n Improvement in realizations, higher operational efficiency, and scale benefits in
                            terms of SG&A, better profitability in subsidiaries and higher productivity in FP
                            projects are the margin levers the company plans to utilize.
                          n While the levers for improvement do exist, we will closely watch the
                            implementing of these initiatives as achieving cost improvement is crucial
                            especially in the backdrop of the rupee appreciation and salary pressures.


                          Future prospects
                          (Rs mn)                                    FY07    FY08E      % chg           FY09E           % chg
                          Income                                   64,851   83,698       29.1         103,028            23.1
                          Expenditure                              49,474   65,416                       80,666
                          Operating profit                         15,377   18,282         18.9        22,362            22.3
                          Depreciation                              1,484    1,641                        1,930
                          Gross profit                             13,893   16,641          19.8         20,432           22.8
                          Interest                                    159      185                           120
                          Other income                              1,833    3,191                        3,400
                          PBT                                      15,566   19,647         26.2        23,712            20.7
                          Tax                                       1,520    2,403                        3,201
                          PAT                                      14,046   17,245         22.8        20,511            18.9
                          Sh of Pft/(loss) / Min int                    1        -                              -
                          PAT after E.O. items                     14,047   17,245          22.8         20,511           18.9
                          Shares (mn)                                 669      669                           669
                          EPS (Rs)                                   21.0     25.8                         30.7
                          OPM (%)                                    23.7     21.8                          21.7
                          GPM (%)                                    21.4     19.9                          19.8
                          NPM (%)                                    21.7     20.6                          19.9

                          Source : Company, Kotak Securities - Private Client Research



Daily Morning Brief   Please see the disclaimer on the last page                              For Private Circulation        4
January 22, 2008                                                         Kotak Securities - Private Client Research




                          n We have made changes to our earnings estimates in view of the Q3FY08
                            numbers and the appreciation in the rupee.
                          n We have assumed a 200 bps fall in margins in FY08 v/s FY07 to 21.8%. We
                            expect margins to further settle at 21.7% in FY09E
                          n Based on these, we arrive at an EPS of Rs.25.8 and Rs.30.7 for FY08E and
                            FY09E, respectively.

                          Valuations
                          n We value Satyam based on the P/E method. We have accorded a valuation of
                            about 18.2x FY09E earnings, a 20% discount to the valuations accorded by us
                            to Infosys.
                          n We believe this discount is fair, based on the revenue and earnings visibility
                            and the growth expected in FY08-09E on a larger base.
                          n At those valuations, the price target works out to Rs.560, implying an upside of
                            44% from current levels. We maintain BUY on Satyam.

                          Concerns
                          n An accelerated slowdown/recession in major user economies may impact our
                            projections.
                          n Appreciation of the rupee v/s the US dollar above our assumed levels of Rs.38.5
                            by FY09 end will impact our projected financials negatively.




Daily Morning Brief   Please see the disclaimer on the last page                  For Private Circulation        5
January 22, 2008                                                                               Kotak Securities - Private Client Research




RESULT UPDATE                     ALLSEC TECHNOLOGIES
Dipen Shah                        PRICE : RS.108                                                   RECOMMENDATION : REDUCE
dipen.shah@kotak.com
+91 22 66341376                   T ARGET PRICE : RS.108                                                    FY09E PE : 27X

Saurabh Gurnurkar                 Highlights
saurabh.gurnurkar@kotak.com
+91 22 66341273                   n Allsec's Q3FY08 results were significantly below OUR estimates. Revenues de-
                                    grew 18% QoQ to Rs.230 mn and PAT de-grew multi-fold to a loss of Rs.68 mn
                                    in the quarter. Q2FY08 revenues and PAT stood at Rs.282 mn and Rs.17 mn,
                                    respectively.
                                  n Continuing scale up issues with a couple of clients including one in the student
                                    loan consolidation segment led to the below par performance. Seasonality on
                                    account of lower working days in Q3FY08 was also an additional headwind for
                                    Allsec.
                                  n Revenue visibility for Allsec has also depreciated significantly, in our opinion,
                                    given the reduction of 650-odd employees during Q3.
                                  n We have revised our earnings post the Q3 numbers and recommend a REDUCE
                                    on the stock with a DCF-based target price of Rs.108. We opine that depreciated
                                    revenue visibility, continuing client scale up issues, an appreciated rupee and
                                    an uncertain macro environment will be significant headwinds for the stock in
                                    the medium-term.
                                  n Our previous notes have consistently highlighted the headwinds, which Allsec
                                    was facing. In light of this we have had a cautious approach to the stock post
                                    the Q2 results. We have also preferred the larger IT services players and back
                                    them to cope with the sector headwinds more effectively than smaller
                                    companies.
                                  n In financials, we estimate a loss of Rs.48 mn in FY08 and a PAT of Rs.63 mn in
                                    FY09. We expect an EPS of Rs.4 in FY09E. We recommend a REDUCE with a
                                    DCF-based price target of Rs.108.
                                  n An accelerated slowdown/recession in major user economies and a sharper-
                                    than-expected appreciation in the rupee v/s major currencies are key risks to
                                    our call. Consistent client scale-ups, if they materialize, may make us more
                                    optimistic on the company's prospects.

                                  Q3FY08 results
                                  (Rs mn)                           Q2FY08 *       Q3FY08 *    QoQ (%)          Q3FY07            YoY (%)
                                  Income                               281.5          230.1       -18.2           272.3              -15.5
                                  Expenditure                              289.0      261.8                          192.4
                                  EBDITA                                    -7.5      -31.7              -           79.9                -
                                  Depreciation                              22.0       21.0                           19.9
                                  EBIT                                     -29.5      -52.7                          60.0
                                  Interest                                   0.0        1.6                            1.3
                                  Other income                              11.8       12.2                           11.2
                                  PBT                                      -17.7      -42.1              -           69.8                -
                                  Tax                                       -0.4       25.5                            0.3
                                  PAT                                      -17.4      -67.6              -           69.5                -
                                  Shares (mn)                               15.7       15.7                           15.7
                                  EPS (Rs.)                                 -1.1       -4.3                            4.4
                                  Margins (%)
                                  EBDITA                                    -2.7       -13.8                          29.3
                                  EBIT                                     -10.5       -22.9                          22.0
                                  PAT                                       -6.2       -29.4                          25.5

                                  Source : Company * - Consolidated with B2K




Daily Morning Brief           Please see the disclaimer on the last page                                For Private Circulation          6
January 22, 2008                                                            Kotak Securities - Private Client Research




                          Revenues - down due to client issues and rupee appreciation
                          n Revenues during the quarter de-grew 18% QoQ. While the rupee appreciation
                            and seasonal factors did impact the company, revenue growth slowed down
                            more because of scale up issues with a couple of clients, in our opinion.

                          Student loan consolidation business - impacted negatively by
                          regulatory changes
                          n The company is present in the student loan consolidation business. We believe
                            this business contributed about 10% of FY07 revenues.
                          n Student loans have been guaranteed by the US Government, thus, facilitating
                            the consolidation and selling of portfolios. According to the management, the
                            US Government has recently increased the fees, which have to be paid to the
                            Government by the consolidators. The fees were charged by the Government
                            for facilitating consolidation of loans by making necessary changes in records.
                          n We understand that the increase in fees has made consolidation and sale of
                            student loan portfolios unviable for private companies.
                          n This has forced them to curtail business activities, in turn, impacting Allsec.
                            While the new fees came into effect from end of September 2007, companies
                            had already curtailed operations. This has impacted Allsec's Q3FY08 revenues,
                            significantly, in our opinion.

                          Credit squeeze likely impacts CCRT revenue stream
                          n On the other hand, the overall credit squeeze may impact the scale up of CCRT
                            revenues.
                          n CCRT revenues likely fell by about 29% QoQ and contributed about 34% to
                            Allsec's Q3FY08 results v/s 39% in the previous quarter.
                          n We expect revenues from CCRT to remain under pressure in the near term,
                            impacting our visibility for the company negatively.

                          New initiatives - still to scale up
                          n Allsec had entered into an agreement to acquire 100% stake in M/s Kingdom
                            Builders Inc, a company in Philippines engaged in BPO operations. This is in
                            line with its intention of setting up an alternative delivery base in that country.
                          n The total cost of acquisition would be around US$1.5 mn of which, 50% is to
                            be paid upfront. The balance will be paid on achievement of mile-stones. This
                            acquisition is expected to scale up towards FY09 with a contribution of $5 mn
                            from a Q2 run rate of $0.25 mn per month.
                          n While the relationship with another client - SalesForce in Australia is progressing,
                            it has not been able to scale-up to the desired extent. With the progress in this
                            geography being slower than estimated, Allsec is looking for an acquisition to
                            scale up the business.

                          EBIDTA margins plummet - low revenue growth, rupee
                          appreciation and falling utilization levels. Employee retrenchment
                          - a negative surprise for us
                          n The company incurred a loss at the EBIDTA levels because of de-growth in
                            revenues and also rupee appreciation.
                          n Allsec also retrenched close to 670 employees due to continuing issues with
                            client scale up- in the business segments.
                          n This came as a major surprise for us as it came on the back of significant
                            additions in the first two quarters of the fiscal.
                          n The management had indicated in Q2FY08 that the additions reflect the revenue
                            visibility. We believe this reduction does not bode well for the company's
                            revenue visibility going ahead.
                          n The company believes this reduction in employee base will help it to curtail
                            employee costs. This is vital, more so in a scenario where visibility has dropped
                            on account of client issues.



Daily Morning Brief   Please see the disclaimer on the last page                     For Private Circulation        7
January 22, 2008                                                                       Kotak Securities - Private Client Research




                          Future prospects
                          (Rs mn)                                   FY07     FY08E      YoY (%)           FY09E           YoY (%)
                          Income                                   1132.8    1014.5        -10.4          1131.1              11.5
                          Expenditure                               807.4    1000.4                        1040.0
                          EBDITA                                    325.4      14.1         -95.7            91.1           546.2
                          Depreciation                               79.4      85.1                           97.0
                          EBIT                                      246.0     -71.0                           -5.9
                          Interest                                    3.9       1.9                            0.0
                          Other income                               38.5      47.9                           70.2
                          PBT                                       280.6     -25.0              -           64.3                -
                          Tax                                         -0.6     23.1                            1.3
                          PAT                                       281.2     -48.1              -           63.1                -
                          Shares (mn)                                15.7      15.7                           15.7
                          EPS (Rs) *                                 17.9      -3.1                            4.0
                          Margins (%)
                          EBDITA                                     28.7       1.4                            8.1
                          EBIT                                       21.7       -7.0                           -0.5
                          PAT                                        24.8       -4.7                           5.6

                          Source: Company, Kotak PCG estimates * - On fully diluted equity

                          n Post the Q3 numbers we expect consolidated revenues to de-grow 10% YoY to
                            Rs.1 bn in FY08 and then grow 11.5% to Rs.1.13 bn in FY09.
                          n The company is expected to post a positive EBITDA in FY09 as gains from better
                            resource utilization, a pick up in revenues and savings on employee front are
                            expected to alleviate the performance.
                          n Margins are expected to come down significantly from FY07 levels because of
                            relatively lower revenue growth, rupee appreciation and salary increases.
                          n Consequently, PAT is expected to stand at Rs.63 mn in FY09, an EPS of Rs.4 on
                            the enhanced equity capital.

                          Valuations
                          n Based on our DCF analysis, we arrive at a price target of Rs.108. We
                            recommend a REDUCE due to the likely reduced revenue visibility, aggravated
                            by uncertain economic conditions in the US.

                          Concerns
                          n Rupee appreciation beyond our assumed levels of Rs.38.5 per US dollar by
                            FY09-end could provide a downward bias to our earnings estimates.
                          n A steep deceleration in major global economies could impact revenue growth
                            of Indian vendors, including Allsec.




Daily Morning Brief   Please see the disclaimer on the last page                                For Private Circulation          8
January 22, 2008                                                                                Kotak Securities - Private Client Research




RESULT UPDATE                        NIIT L TD.
Dipen Shah                           PRICE : RS.121                                                    RECOMMENDATION : HOLD
dipen.shah@kotak.com
+91 22 66341376                      T ARGET PRICE : RS.137                                                   FY09E PE : 14X

                                     The Q3FY08 results of NIIT Ltd were below our expectations.
                                     Revenues disappointed while margins also came in lower-than-
                                     expected. The corporate learning business continues to be impacted.
                                     We have made marginal changes to our earnings estimates. We
                                     continue to recommend HOLD. Upsides are possible from potential
                                     divestment of NIITT's stake.
                                     n NIIT's results for Q3FY08 were below our expectations
                                     n The performance was impacted by the rupee appreciation (corporate learning)
                                       and discontinuance of one BOT project from the Andhra Pradesh Government
                                       in school learning solutions business.
                                     n EBIDTA margins were lower in most cases except the schools learning business.
                                     n Enrolments were up 28% YoY. India enrolments were up 29% YoY.
                                     n We have made changes to our earnings estimates. EPS is expected to be Rs.4.7
                                       in FY08E and Rs.8.7 in FY09E.
                                     n Our DCF-based fair price works out to Rs.137.
                                     n We believe the current price adequately discounts our earnings estimates and
                                       recommend a HOLD. Divestment of NIITT's stake, if any, may provide upsides.

      We recommend HOLD on           n The key risk to our call stems from better-than-expected margins in the
         NIIT Ltd with a price         individual learning business. On the other hand, lower-than-expected margins
             target of Rs.137          in this business may impact the company's performance adversely. Also, the
                                       rupee appreciation and any slowdown in major user economies may impact
                                       growth adversely.


                                     Q3FY08 results
                                     (Rs. mn)                             Q3FY08      Q3FY07     YoY (%)         Q2FY08            QoQ (%)
                                     Income                                  2388        2250         6.1           2702               -11.6
                                     Expenditure                              2160       2072                         2343
                                     EBIDTA                                    228        178          28.1             359            -36.5
                                     Depreciation                              127        125                           142
                                     EBIT                                      101         53          90.5             217            -53.5
                                     Interest                                   42         42                            47
                                     Other Income                               10         -4                             -2
                                     PBT                                        69         7          881.3             168            -58.9
                                     Tax                                        15         -9                            41
                                     PAT                                        54         16                           127
                                     Share of profit                            85         92                            84
                                     Adjusted PAT                              139        108          28.7             211            -34.1
                                     Shares (mn)                              164.6     164.6                         164.6
                                     EPS (Rs)                                   7.0       5.6                          10.7


                                     EBIDTA (%)                                 9.5       7.9                          13.3
                                     EBIT (%)                                   4.2       2.4                           8.0
                                     Net Profit (%)                             2.3       0.7                            4.7

                                     Source : Company




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January 22, 2008                                                             Kotak Securities - Private Client Research




                          Revenues
                          n On a YoY basis, revenues grew 6%.
                          n The individual learning business recorded 30% rise in revenues on a YoY basis.
                          n However, the schools business and the corporate learning business reported
                            lower-than-expected growth rates.

                          Revenue break up
                          Rs mn                                Q2FY08          Q3FY08                           Q3FY07
                          Individual                            975.00          728.00                           560.03
                          Institution                               242.00       213.00                          226.00
                          Corporate                                1409.00      1371.01                         1439.00
                          New initiatives                            76.00         76.00                          25.00

                          Source : Company


                          Individual learning business
                          n The individual business saw revenues grow 30% on the back of strong demand
                            from India and China.
                          n The company has been witnessing improved demand for its career courses. It
                            increased the capacity by 22% YoY and 4% QoQ. The utilization levels were at
                            46%.
                          n Overall, the enrollments grew 28% with those in India growing 29%.The
                            company has been enrolling engineering students and the same grew by 30%
                            on a YoY basis to 36385 in Q2FY08, in India.

                          Corporate business and Element K
                          n Overall, the corporate business saw a 5% dip YoY and a 3% dip QoQ.
                          n We believe it was because of the rupee appreciation and also delays in
                            technology integration and implementation of the technology platform.
                          n The technology platform/delivery engine of EK is being integrated with CLICKS.
                            The company will now provide integrated services including content
                            development, library sharing and content delivery.
                          n Post SkillSoft's acquisition of NETg, Element K has become the second largest
                            content library provider. It had added 963 courses to its library in H1FY08, to
                            take the total to nearly 4500.
                          n On a normalized basis (excluding exchange rate impact), Element K revenues
                            grew about 7% YoY in US dollar terms (5% margins). Similarly, organic revenues
                            grew by about 8% YoY (8% margins).

                          New initiatives
                          n IFBI and Imperia continued to scale up the business.
                          n The division reported sequentially flat revenues of Rs.76 mn and had an order
                            intake of Rs.91 mn during the quarter.
                          n The business achieved break-even at the EBIDTA level in Q3FY08.

                          Schools businesses
                          n The non Government schools business contributed about 28% of the quarter's
                            revenues and grew 22% YoY.
                          n Revenues were impacted to the extent of Rs.37 mn a quarter as the BOT project
                            from Andhra Pradesh scaled down from a quarterly run-rate of Rs.75 mn to
                            Rs.38 mn (now providing only services).




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January 22, 2008                                                                        Kotak Securities - Private Client Research




                          EBIDTA margins rose on a YoY basis and QoQ basis

                          EBIDTA margins (%)
                                                               Q2FY08                     Q3FY08                           Q3FY07
                          Individual                             23.90                      17.86                            16.61
                          Institution                                14.46                    14.08                            11.95
                          Corporate                                   6.39                     4.74                            13.57
                          New initiatives                             1.32                     2.63                         -192.00

                          Source : Company

                          n EBIDTA margins rose YoY mainly due to the improved profitability in the
                            individual learning business and new businesses. This came about on the back
                            of higher capacity utilization in individual business and higher volumes in the
                            new businesses.
                          n The corporate learning business had lower margins YoY. We believe that margins
                            in the corporate business were impacted mainly because of the rupee
                            appreciation.
                          n The company paid relatively higher tax because of a higher proportion of profits
                            coming from the domestic business.

                          Future prospects
                          We have made changes to our FY08E and FY09E earnings.

                          Revenue break up
                          Rs mn                               FY06             FY07              FY08E                 FY09E
                          Individual                        1670.00          2473.03            3246.17               4227.18
                          Institution                       1175.00           846.00             882.80                974.62
                          Corporate                         1661.00          4560.00            5756.03               6680.98
                          New initiatives                          0.00        71.00             286.00                630.00
                          Total                             4506.00          7950.03           10171.00             12512.78

                          Source : Company, Kotak Securities - Private Client Research

                          n We expect the individual learning business to continue to show robust growth
                            on the back of higher enrolments and increase in realizations.
                          n New initiatives are expected to gather steam over the quarters with higher
                            acceptance of the courses, launch of new courses and increased geographic
                            coverage by the company
                          n We expect Element K revenues to grow at a steady clip as NIIT leverages on
                            its expertise, offering an integrated suite of services and increases the offshore
                            content.
                          n We have assumed margins to improve in most businesses on the back of better
                            capacity utilization, higher volumes and better leverage on costs.


                          EBIDTA margins (%)
                                                                    FY06        FY07             FY08E               FY09E
                          Individual                                 7.66       17.47             20.61               22.60
                          Institution                                18.21      11.58              13.55               14.00
                          Corporate                                  15.65       7.81                 6.05             10.24
                          New initiatives                             0.00    -154.93                 -5.94            16.60
                          Total                                      13.41       9.72              11.02               15.03

                          Source : Company, Kotak Securities - Private Client Research

                          n We have assumed tax at lower levels because of the deferred tax benefits
                            available to the company in its US business and also EK.
                          n After accounting for its 25% share in NIIT Technologies' profits, we expect the
                            net profit to go up to Rs.1.43 bn in FY09, translating into an EPS of Rs.8.7.



Daily Morning Brief   Please see the disclaimer on the last page                                 For Private Circulation          11
January 22, 2008                                                                     Kotak Securities - Private Client Research




                          Financials
                          (Rs. mn)                                 FY07^    FY08E     YoY (%)            FY09E          YoY (%)
                          Income                                    7949    10171         28.0           12513              23.0
                          Expenditure                               7176     9050                         10632
                          EBIDTA                                     773     1121          45.0           1880              67.7
                          Depreciation                               474      542                            680
                          EBIT                                       299      579          93.6           1200            107.3
                          Interest                                   125      130                            166
                          Other Income                                71       -36                            42
                          PBT                                        245      412          68.3           1076            161.0
                          Tax                                          4       -17                            41
                          PAT                                        241      430                         1035
                          Share of profit                            331      345                            392
                          Adjusted PAT                               572      774           35.3           1427             84.3
                          Shares (mn)                                19.3    164.6                         164.6
                          EPS (Rs)                                  29.0      4.7                            8.7


                          EBIDTA (%)                                  9.7     11.0                          15.0
                          EBIT (%)                                   3.8       5.7                           9.6
                          Net Profit (%)                             3.0       4.2                           8.3

                          Source : Company, Kotak Securities - Private Client Research ^ - Element K consolidated WEF
                          August 06


                          Concerns
                          n A steep deceleration/recession in major global economies could impact the
                            revenue growth of NIIT.
                          n Steep rupee appreciation v/s major global currencies may impact the financials
                            of NIIT.




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January 22, 2008                                                                                               Kotak Securities - Private Client Research




RESULT UPDATE                                     IPCA LABORATORIES LTD
Awadhesh Garg                                     PRICE : RS.700                                                      RECOMMENDATION : HOLD
awadhesh.garg@kotak.com
+91 22 6634 1406                                  T ARGET PRICE : RS.800                                                   FY09E PE : 10.5X

                                                  Key result highlights
                                                  n Ipca Laboratories has announced its results for Q3FY08, which are in line with
                                                    our estimates. Net sales grew 20% to Rs.2.8 bn as compared to Rs.2.3 bn in
                                                    the corresponding quarter of last year. This was led by strong growth in
                                                    domestic and export formulation sales.
                                                  n Domestic formulation sales grew around 31% to Rs.1.2 bn while exports
                                                    formulation grew around 19% to Rs.864 mn. Total domestic and exports sales
                                                    for the quarter grew 32% and 14% to Rs.1.4 bn and Rs.1.41 bn, respectively.
                                                  n Net profit for the quarter grew 10% to Rs.383 mn as compared to Rs.348 mn
                                                    in the corresponding quarter of last year, implying an EPS of Rs.15.3.
                                                  n For 9MFY08, revenues grew 18.7% to Rs.8.29 bn as compared to Rs.6.98 bn.
                                                    Net profit for the period grew 25.3% to Rs.1.18 bn as compared to Rs.946 mn
                                                    during the corresponding period of last year. EBITDA margins for the nine
                                                    months period is up 30 bps at 22.9%.
                                                  n The company posted EPS of Rs.47.4 for 9MFY08, achieving 82% of our FY08
                                                    EPS estimate. We maintain our EPS estimates of Rs.57.2 and Rs.66.4 for FY08
                                                    and FY09, respectively. We maintain HOLD with a one-year target price of
                                                    Rs.800.


Summary table                                     Financial Performance - Q3 FY08
(Rs mn)               FY07 FY08E FY09E            (Rs mn)                        Q3FY08         Q3FY07    YoY (%)    Q2FY08 QoQ (%)                FY07
Revenues              9,366 10,749 12,222
                                                  Net Sales                        2,818          2,344       20.2     3,001    -6.1              9,180
Growth (%)             23.6    14.8    13.7       Expenditure                       2,202         1,757                 2,275                      7,201
EBITDA                2,038   2,277   2,586       Operating Profit                     616          587        4.9         726          -15.2     1,980
EBITDA margin (%)      22.0    21.2    21.2       Depreciation                             81        74                     80                      292
Net profit            1,258   1,433   1,662
                                                  EBIT                                534          513         4.2        646          -17.3      1,688
Net Margin (%)         13.5    13.4    13.6
                                                  Interest                                 55        53                     52                      217
EPS (Rs)               50.2    57.2    66.4
Growth (%)            109.2    13.9    15.9       Other Income                             6          4                      3                        33
DPS (Rs)                5.5    10.0    10.0       PBT                                 485          464         4.5        598          -18.9      1,504
RoE (%)                29.8    27.0    25.3       Tax                                  102          124                    144                      290
RoCE (%)               25.8    24.6    24.1       Reported PAT                        383          340       12.8         454          -15.6      1,214
EV/Sales (x)            1.2     1.7     1.4
                                                  Extra-Ordinary Items                      -         8                       -                        8
EV/EBITDA (x)           5.4     8.2     6.7
P/E (x)                13.9    12.2    10.5
                                                  Adjusted PAT                         383          348       10.0         454          -15.6     1,222
P/BV (x)                1.8     3.0     2.4       Equity Shares (Mn)                       25        25                     25                        25
Source: Company & Kotak Securities -              EPS (Rs)                           15.3          13.9      10.0        18.2          -15.6       48.9
Private Client Research                           EBIDTA Margin (%)                   21.8         25.0                   24.2                      21.6
                                                  PAT Margin (%)                      13.6         14.5                   15.1                      13.2

                                                  Source: Company


                                                  Branded formulation business to drive growth
                                                  We believe Ipca's focus on the branded formulations business and emerging
                                                  economies (mainly India, Africa, South Asia and CIS, which constitute about 55%
                                                  of sales) should drive growth. On a high base, we expect net profit growth of 15%
                                                  over the next two years. We expect sales to grow at 15% CAGR over the next two
                                                  years.




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January 22, 2008                                                                    Kotak Securities - Private Client Research




                          Detailed Sales Break-up
                                                               Q3FY08      Q3FY07    YoY (%)             FY07          YoY (%)
                          Domestic Sales
                          Formulations                             1,184      898          31.8          3,540            21.5
                          APIs                                       220      165          33.2             707           26.4
                          Total                                    1,404    1,063         32.0          4,247             22.3
                            % Sales                                 49.8     46.1                          46.7
                          Exports Sales
                          Formulations                               864      725          19.3          2,732            30.1
                          APIs                                       550      516           6.5          2,113            10.1
                          Total                                    1,414    1,241         14.0          4,845             20.6
                            % Sales                                 50.2     53.9                          53.3
                          Net Sales                                2,818    2,304         22.3          9,091             21.4

                          Source: Company Press Release


                          Domestic formulation business doing very well
                          Domestic formulation sales (38% of net sales) have grown 19% to Rs.3.54 bn for
                          the year. We expect domestic formulation sales to grow 16% in FY08E, mainly
                          driven by therapeutic expansion through new product introduction, especially in
                          the fast growing lifestyle segment, and increased focus on marketing of mature
                          brands. The company plans to introduce eight to 10 new products (including line
                          extensions) in various therapeutic areas. New products launched in the last three
                          years now constitute nearly 25% of the domestic formulation sales. While the
                          company is still a leader in anti-malarial, therapy mix has changed significantly and
                          chronic categories are close to achieving half of segment sales. During the last two
                          years, the company expanded its sales force. Product flow has also improved, and
                          focused marketing divisions are resulting into brand building.

                          Diverse geographic portfolio, emerging economies likely to
                          remain key growth drivers
                          We expect about 25% growth in the international formulation business during the
                          next two years on the back of new products launches, increased sales from branded
                          formulation business in Africa, Asia and CIS countries. The company is also
                          preparing to enter the US market and expects to launch five to six generic products
                          in FY08E. So far, it has filed eight ANDA applications with the USFDA and has got
                          the approval for two ANDAs. It is planning to file 20 ANDAs by March 2008.
                          Revenues from US generics are likely to begin next year, on the back of own ANDAs
                          (including APIs) and distribution agreement with Ranbaxy. The company is focusing
                          on products with its own APIs. The product development team is also beginning to
                          deliver new generics early. All this, we believe, should result in sustained growth
                          in the medium-term. However, emerging economies are likely to remain growth
                          drivers for some time.

                          APIs continue to be steady business; likely to grow at 8-10%
                          APIs, which constitute around 31% of total sales, have grown 14% in FY07 (8% in
                          FY06). For FY08E, we expect growth of 9% in APIs. The management has been
                          indicating traction in the APIs business, which could potentially help beat estimates
                          from next year. Visibility of shipments to generic companies is high for some old
                          APIs. We highlight that Ipca is a very competitive manufacturer and has dominant
                          shares in several products. Some of its APIs (off-patent) are even sold to innovator
                          companies. Now, shipment for the Japanese market too has been made. The list
                          of APIs has doubled to 55 in the last two years. The target is to add about 10
                          products each year.




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January 22, 2008                                                          Kotak Securities - Private Client Research




                          Expansion on way to meet growing demand
                          Ipca has started commercial production from it's newly set up formulation plant in
                          Dehradun from May 2006 to meet the growing demand. It is also setting up a
                          greenfield facility at Indore in the SEZ area, to manufacture various APIs,
                          intermediates and formulations at an investment of approximately Rs.600-700 mn
                          over the next two years, funded through internal accruals. We expect this plant to
                          start commercial production by the end of FY08E. This plant will be approved by
                          USFDA and will meet all demands of regulated markets of the US and European
                          countries.

                          Valuation & recommendation
                          We believe the company is doing very well in branded generics and promotional
                          markets and valuations are reasonable with high earnings visibility. We believe Ipca
                          continues to offer a mix of both growth and value. The company has achieved 82%
                          of our FY08 EPS estimates in the nine months period. We maintain our EPS estimate
                          of Rs.57.2 and Rs.66.4 for FY08 and FY09, respectively.
                          At the current market price of Rs.700, the stock is trading at 12.2x FY08 and 10.5x
                          FY09 expected earnings. The stock has run up significantly from our previous
                          recommendation. We recommend HOLD on the stock with a target price of Rs.800,
                          which provides 14% potential upside from current levels.

                          Key risks & concerns
                          n Greater than anticipated pricing pressure in generic APIs/formulation business
                            and/or lower market share would impact profitability adversely.
                          n Delay in DMF filings and/or supply of APIs.
                          n Delay in ANDA filing and/or approval and any delay in new product launch in
                            domestic or promotional markets.
                          n Risk arising from expanding the coverage of drug price control order. At present,
                            16% of sales come from price-controlled products.
                          n Foreign currency fluctuation.




Daily Morning Brief   Please see the disclaimer on the last page                   For Private Circulation      15
January 22, 2008                                                                                           Kotak Securities - Private Client Research




RESULT UPDATE                                      GLENMARK PHARMACEUTICALS LTD
Awadhesh Garg                                      PRICE : RS.485                                                    RECOMMENDATION : BUY
awadhesh.garg@kotak.com
+91 22 6634 1406                                   T ARGET PRICE : RS.610                                                FY09E PE : 18.2X

                                                   Key result highlights
                                                   n Glenmark has announced its results for Q3FY08, which are above our estimates.
                                                     Consolidated net sales grew sharply by 55% to Rs.6.79 bn as compared to
                                                     Rs.4.4 bn in the corresponding quarter of last year, driven by strong growth in
                                                     APIs and exports formulation.
                                                   n Domestic formulation sales grew 8% to Rs.1.2 bn against Rs.1.1 bn in Q3FY07.
                                                     However, major growth came from the international markets of US and Latin
                                                     America. The US and Latin America market grew 144% and 109% to Rs.2.0 bn
                                                     and Rs.610 mn, respectively. This was driven by ramping up existing products
                                                     and new products launches (including one Para-IV product). The company now
                                                     has a portfolio of 23 generic products in the US market.
                                                   n During the quarter, Glenmark out-licensed its GRC-6211 molecule to Eli Lilly.
                                                     The company received an upfront fee of US$45 mn in Q3FY08. Glenmark could
                                                     receive up to an additional US$215 mn in potential development and sales
                                                     milestones for the initial indication, as well as royalties on sales if the molecule
                                                     is successfully commercialized.
                                                   n EBIDTA grew impressively by 54% to Rs.3.6 bn from Rs.2.3 bn led by strong
                                                     sales growth and NCE milestone payment. Net profit after tax grew 48% to
                                                     Rs.2.8 bn as compared to Rs.1.9 bn. EBITDA and net margins for the quarter
                                                     were 52.8% and 41.2%, respectively.
                                                   n Overall, the result reflects Glenmark's efforts to grow its business internationally.
                                                     The company's progress in NCE research has also yielded encouraging results
                                                     with the progress demonstrated by GRC-8200 (diabetes), GRC-3886 (Oglemilast
                                                     - Asthma/COPD), and GRC-6211 (TRPV1 antagonist).


Summary table                                      Consolidated financial performance - Q3FY08
(Rs mn)               FY07 FY08E FY09E             (Rs mn)                      Q3FY08       Q3FY07   YoY (%)    Q2FY08         QoQ (%)         FY07
Revenues              11,892 18,536 23,096         Net Sales                     6,794        4,380       55.1    3,749             81.2      12,070
Growth (%)             75.9    55.9    24.6        Expenditure                     3,205      2,052                 2,565                      7,790
EBITDA                4,263    7,661   9,166       EBIDTA                          3,589      2,328       54.2      1,184            203.1     4,280
EBITDA margin (%)      35.8     41.3    39.7
                                                   Depreciation                       169       118                    162                       426
Net profit            3,101    5,480   6,815
                                                   EBIT                            3,420      2,209       54.8      1,022            234.7     3,854
Net Margin (%)         26.1     29.6    29.5
EPS diluted (Rs)       12.9     21.7    26.7       Interest                           175       100                    158                       404
Growth (%)            248.6    68.3    22.9        Other Income                         27       31                     53                       161
DPS (Rs)                0.4      0.5     0.6       PBT                             3,272      2,140       52.9        916            257.1     3,611
RoE (%)                57.4     49.9    35.7
                                                   Tax                                472       250                    165                       500
RoCE (%)               27.9     37.0    33.9
                                                   Profit After Tax                2,800      1,890       48.2         751            272.7    3,111
EV/Sales (x)            6.8      6.5     5.1
EV/EBITDA (x)          19.1     15.8    12.7
                                                   Equity Shares (Mn)                 247       239                    242                       240
P/E (x)                 37.6   22.3    18.1        EPS (Rs)                          11.3       7.9       43.7         3.1           265.6      13.0
P/BV (x)               10.7      8.1     5.3       EBIDTA Margin (%)                 52.8      53.1                   31.6                      35.5
Source: Company & Kotak Securities -               PAT Margin (%)                    41.2      43.1                   20.0                      25.8
Private Client Research
                                                   Source: Company Press Release




Daily Morning Brief                            Please see the disclaimer on the last page                           For Private Circulation      16
January 22, 2008                                                                      Kotak Securities - Private Client Research




                          Strong revenue growth driven by APIs and international
                          formulations
                          Consolidated net sales grew sharply by 55% to Rs.6.79 bn as compared to Rs.4.4
                          bn in the corresponding quarter of last year, driven by strong growth in APIs and
                          international formulations. The total formulation business during the quarter was
                          at Rs.4.5 bn, an increase of 69%, and accounted for 89% of total sales. The APIs
                          business registered a growth of 40% to Rs.548 mn as compared to Rs.390 mn in
                          the corresponding quarter of last year.
                          Domestic formulations sales grew 8% to Rs.1.2 bn against Rs.1.1 bn in Q3FY07.
                          The company registered a value growth of 19.7% vis-à-vis industry growth of
                          13.7% (IMS ORG November 2007). It has launched eight new products during the
                          quarter. However, major growth came from the international markets of US and
                          Latin America, which grew 144% and 109% to Rs.2.0 bn and Rs.610 mn,
                          respectively, driven by ramping up existing products and new products launches
                          (including one Para-IV product). The company now has a portfolio of 23 generic
                          products in the US market.
                          Revenues from the generics business (that the company intends to spin off into a
                          100% subsidiary and subsequent listing in Q1FY09) were Rs.2.7 bn as compared
                          to Rs.1.3 bn in Q3FY07, registering a growth of 105%. The specialty business
                          (including out licensing revenues) will continue to be a part of Glenmark Pharma.
                          This grew 32% and posted revenues of Rs.4.2 bn as against Rs.3.2 bn for the
                          quarter of the previous year.

                          Net profit grew 48% to Rs.2.8 bn
                          Consolidated profits for the quarter increased 48.2% to Rs.2.8 bn from Rs.1.9 bn.
                          The company estimates profit from the generics business at Rs.893mn and from
                          specialty business (including out licensing revenues) at Rs.1.9 bn for the quarter.

                          US formulations remain key growth driver
                          Glenmark has received two ANDA approvals during the quarter. In this, one was
                          180 day shared exclusivity to market product for the first generic version of Trileptal
                          (Oxcarbazepine), and the second was Pravastatin 80 mg. In addition, the company
                          filed five ANDAs during the quarter, which makes total filings to 19 (14 internal
                          and five external). Glenmark is well on track to file over 30 ANDAs in FY08 with
                          over 25 being done internally. The company now has a portfolio of over 23 generic
                          products for the US market and has over 40 ANDAs in the USFDA approval process.
                          The company anticipates launching at least an additional five products in Q4FY08
                          bringing it's total to over 28 products on the US generic market.

                          Consolidated Revenue Break-Up
                          (Rs mn)                                  Q3FY08 Q3FY07     YoY (%) Q2FY08 QoQ (%)                     FY07
                          Formulations
                           - USA                                     2,041     835        144         811             152       2,207
                           - Latin America                            610      292        109         572                  7    1,421
                           - Semi Regulated Markets (SRM)             522      425         23         545                 -4    1,789
                           - Europe                                   124        -                      68                82        -
                           - India                                   1,214   1,123          8       1,418                 -14   4,290
                          Total Formulations (A)                    4,510    2,676         69      3,414                  32    9,706
                            % of Sales                                 89       87                      89                         88
                          APIs (B)                                    548     390          40         426                 29    1,318
                            % of Sales                                 11       13                      11                         12
                          Revenue from Business (A+B) 5,058                  3,066         65      3,839                  32 11,025
                          Out-licensing Revenues (C)                 1,793   1,395                       0                      1,395
                          Cons Revenues (A+B+C)                     6,851    4,461         54      3,839                  78 12,420

                          Source: Company Press Release




Daily Morning Brief   Please see the disclaimer on the last page                                For Private Circulation           17
January 22, 2008                                                           Kotak Securities - Private Client Research




                          Glenmark confirms ANDA filing with a Para-IV certification for
                          Tarka ® tablets
                          Glenmark has filed an ANDA with the USFDA seeking regulatory approval to market
                          a generic version of Trandolapril-Verapamil Hydrochloride, which included a
                          paragraph-IV certification with respect to patent listed by Abbott in the FDA "Orange
                          Book." The company believes it is the only applicant to have filed an ANDA for this
                          product with a paragraph IV certification. In the event that Glenmark successfully
                          challenges Abbott's patent, Glenmark will be entitled to a 180 day exclusivity period.
                          Tarka®, Extended Release Oral tablets are indicated for the treatment of
                          hypertension. This had sales of approximately US$100 mn in the US market.
                          Further, potential first to file Para-IV challenges filed by Glenmark includes
                          Ezetimibe, Trandolapril +Verapamil Hydrochloride, Atomoxetine Hydrochloride,
                          Desloratadine and Rosuvastatin Calcium. If successful, Glenmark could be the only
                          company to have the 180 day exclusivity on Ezetimibe and Trandolapril and
                          Verapamil combination.

                          NCE pipeline getting bigger and valuable
                          Glenmark's NCE pipeline is getting bigger and valuable with the recent out-licensing
                          of GRC-6211 (pain management) to Eli Lilly for upfront license fees of US$45 mn
                          and total potential milestone payments of US$350 mn. This licensing deal has
                          reduced Glenmark's dependence on GRC 3886 (asthma/COPD) and GRC 8200
                          (diabetes) to drive its R&D value and re-enforce confidence in its R&D capabilities.

                          Demerger of generics business into separate company
                          Glenmark has announced plans to separate its specialty and generics business in a
                          bid to improve focus on different parts of the business. According to the plan, the
                          company will demerge its generics business (generic formulations and APIs) into a
                          separate subsidiary company called - Glenmark Generics Ltd (GGL). This will be
                          listed on Indian bourses by Q1FY09. The residual core business will consist of
                          branded generics and NCE portfolio. Glenmark would hold at least 70% of Glenmark
                          Generics Ltd.
                          The new company will handle the development, manufacture and marketing of
                          generic formulations and API business in the US, EU and Argentina while Glenmark
                          Pharma will continue to manage the novel R&D and branded formulations business
                          in India, Latin America, Europe and other emerging markets. The generics business
                          will inherit Glenmark's Goa plant for formulations, three API plants in India, sales
                          units in the US and UK and the Argentina oncology operations. The branded
                          business will remain with Glenmark Pharma and retain all remaining R&D operations
                          related to NCEs, biologics and formulations development for brands.
                          We believe the reorganization will hold its benefits over the long-term as the
                          management will be able to focus better on both areas given the growing traction
                          across geographies and diverse nature of the two businesses. We, however, do not
                          accord any value to the restructuring, as we believe it will not have any material
                          impact on business and valuations.




Daily Morning Brief   Please see the disclaimer on the last page                    For Private Circulation      18
January 22, 2008                                                                 Kotak Securities - Private Client Research




                                Valuation attractive; many catalysts exist, maintain BUY
                                We expect 39% and 48% compounded annual growth in base business and
                                earnings over FY07-09E, respectively. We expect fully diluted EPS of Rs.21.7 and
                                Rs.26.7 for FY08 and FY09, respectively. This is assuming US$75 mn and US$69
                                mn income from NCE out-licensed in FY08 and FY09, respectively. EPS from the
                                core business is expected to be Rs.13.4 in FY08 and Rs.19.1 in FY09. At the current
                                market price of Rs.485, the stock is trading at 22.3x FY08 and 18.1x FY09 fully
                                diluted earning estimates.
                                We use sum-of-the-parts method (SOTP) to value the stock, valuing the R&D deals
                                and the core generic business separately. We believe probability-adjusted DCF is
                                appropriate to calculate the option value from NCE compound as it captures the
                                reducing probability of success as the molecules progress on the clinical path. We
                                have valued the core business (excluding R&D income) at Rs.326 attaching 17x P/
                                E multiple to FY09 fully diluted earning and an option value IP Assets at Rs.284
                                (Rs.124 for GRC 3886, Rs.51 for GRC 8200 and Rs.109 for GRC 6211). Hence, we
                                have arrived at a target price of Rs.610.

     We recommend a BUY on      We believe valuations are attractive and many potential catalysts exist in the stock,
       Glenmark with a price    namely, expected milestone payments, potential out-licensing deal for GRC-3886
             target of Rs.610   to European region, and potential acquisition in EU/US countries. We recommend
                                BUY.

                                Key risks
                                n Greater than anticipated pricing pressure or lower market share in generic or
                                  API business
                                n Any delay in ANDA filings and/or approval and any delay in launch by its global
                                  partners would impact the growth and profitability of the company
                                n Suspension of key molecules GRC-3886/8200/6211 from phase II clinical trials
                                  due to toxicity or in-efficacy
                                n Regulatory delays to conduct advance clinical studies
                                n Reduction in drug prices in domestic market could affect profitability negatively.




Daily Morning Brief         Please see the disclaimer on the last page                    For Private Circulation      19
January 22, 2008                                                                                    Kotak Securities - Private Client Research




EVENT UPDATE                                       RANBAXY LABORATORIES LTD
Awadhesh Garg                                      PRICE : RS.363                                             RECOMMENDATION : BUY
awadhesh.garg@kotak.com
+91 22 6634 1406                                   T ARGET PRICE : RS.490                                         CY09E PE : 13.7X

                                                   Ranbaxy, GlaxoSmithKline reach settlement over Imitrex

                                                   Ranbaxy likely to launch Imitrex in US in December 2008
                                                   Ranbaxy Laboratories has settled all matters relating to possible patent litigation
                                                   with GlaxoSmithKline Inc. relating to Sumatriptan Succinate tablets, used for
                                                   treating migraine. Sumatriptan Succinate tablets are the generic version of
                                                   GlaxoSmithKline's Imitrex® tablets. As per the terms of the settlement, Ranbaxy
                                                   will distribute a generic version of Sumatriptan Succinate Tablets in multiple
                                                   strengths of 25mg, 50mg and 100mg in the US markets. The company likely to
                                                   launch Imitrex in US markets in December 2008. The company, however, has not
                                                   disclosed additional terms of the settlement agreement like monetary compensation
                                                   etc. The annual market sales for Imitrex were US$985 million, as per IMS MAT
                                                   September 2007 data.
                                                   Earlier, Ranbaxy had entered into a similar out-of-court settlement with
Summary table
                                                   GlaxoSmithKline over Valacyclovir hydrochloride, the active ingredient of anti-viral
(Rs mn)               CY07 CY08E CY09E             drug Valtrex, which has annual market sales of US$1.3 billion.
Sales                 69,427 76,944 86,655
                                                   We estimate that Ranbaxy may clock revenues of around US$90-100mn from
Growth (%)             13.0    10.8    12.6
                                                   Imitrex launch during the exclusivity period, the financial impact of which will come
EBITDA                9,981 13,242 15,545
                                                   in CY09. In our estimate, we have assumed 50% price erosion during the exclusivity
EBITDA margin (%)      15.1     17.7    18.4
                                                   period and a 40% market share. Dr Reddy’s will also sell the drug during the same
Net profit            7,901    8,534   9,923
                                                   period as an authorised generic as per the agreement with GlaxoSmithKline.
Net Margin (%)         11.4     11.1    11.5
EPS (Rs)               21.1     22.8    26.5       We expect 13.3% and 12.1% compounded growth in revenues and earnings over
Growth (%)             53.3      8.0   16.3        the next two years. For CY08, we expect revenue growth of 10.8% to Rs.74.9bn
DPS (Rs)                8.5      8.5     8.5       and net profit growth of 8% to Rs.8.53bn. For CY09, we expect revenue growth of
RoE (%)                28.2     26.2    26.0       12.6% to Rs.84.65bn and net profit growth of 16.3% to Rs.9.92bn. EBIDTA margins
RoCE (%)               16.7     16.4    18.0       are likely to improve by 100 bps to 17.5% in CY08 v/s 16.5% in CY07 led by
EV/Sales (x)            2.7      2.2     1.9       improved product flow (exclusivity products) and saving in R&D and SG&A
EV/EBITDA (x)          18.6     12.6    10.3       expenses. We have not taken any upside from Imitrex launch in our CY08 earning
P/E (x)                 17.2   15.9    13.7        estimates. However, CY09 revenue and earnings will be better that our estimates.
P/BV (x)                5.0      3.9     3.3
Source: Company & Kotak Securities -               Ranbaxy to emphasize on monetizing Para-IV ANDAs
Private Client Research
                                                   Ranbaxy's Para-IV pipeline comprises 18-20 first-to-file products representing a
                                                   market size of ~ US$26 bn valued at innovator prices. We believe the company
                                                   will continue to monetize its Para-IV (first-to-file) abbreviate new drug applications
                                                   (ANDAs) in the US market. The company plans to launch at least one exclusivity
                                                   product in the US market each year for the next three to four years.

                                                   New therapies/alliances likely to fuel growth in the next two
                                                   years
                                                   In the next two years, the company is expected to benefit from the launch of
                                                   complex injectables in the area of Penems and Limuses, which has a market
                                                   potential of over US$3 bn. Ranbaxy has also made strategic investments into
                                                   smaller Indian companies that give it access to new products/ technology, mainly
                                                   in the area of oncology and bio-similars. Such investments are likely to broaden
                                                   the portfolio with the limited use of corporate resources.

                                                   Acquisitions to help maintain growth momentum in respective
                                                   geographies
                                                   Ranbaxy has been very active in inorganic growth in the last two years where it
                                                   acquired nine businesses in European, CIS and African region valued close to
                                                   US$450 mn. These acquisitions have significantly expanded Ranbaxy's presence in
                                                   emerging and profitable markets such as Romania and South Africa. We believe
                                                   these acquisitions will help Ranbaxy to maintain its growth momentum in the
                                                   respective regions. We expect these geographies to grow at 15-20% for the next
                                                   few years.


Daily Morning Brief                            Please see the disclaimer on the last page                    For Private Circulation      20
January 22, 2008                                                                Kotak Securities - Private Client Research




                                Demerging drug discovery research
                                The company is demerging its drug discovery research operation into a separate
                                company in a bid to de-risk its core business and infuse outside funding in R&D.
                                We believe this is a positive step in creating an independent pathway for drug
                                discovery research with dedicated resources and enhanced focus for long-term
                                value building. The revenue R&D expenditure in CY06 and CY07 was at Rs.3.95 bn
                                (6.6% of sales) and Rs.4.24 bn (6.4% of sales), respectively. The move may allow
                                the company to decrease its annual R&D spent by 30%. Therefore, after the spin-
                                off happens, it would be earnings accretive for the parent company.

                                Valuation & recommendation
                                We expect net profits of Rs.8.53 bn in CY08 and Rs.9.92 bn in CY09. This implies
                                an EPS of Rs.22.8 and Rs.26.5, respectively. At the current market price of Rs.363,
                                the stock is trading at 15.9x CY08 and 13.7x CY09 earning estimates. We believe
     We recommend a BUY on      the potential advantage arising out of a strong Para-IV pipeline (20 first-to-file
        Ranbaxy with a price    products) and strong growth from domestic and semi-regulated markets will be key
             target of Rs.490   growth drivers. We maintain BUY with a target price of Rs.490 over a one-year
                                time horizon.

                                Key risks & concerns
                                n If the company is unable to resolve the issues raised by the USFDA, at its Paonta
                                  facility, then its US business may come under risk (28% of revenues)
                                n Any unfavorable outcome from the search of its US facilities in February 2007
                                  may impact the company's future business
                                n Other risks include unfavorable pricing in key markets by competition and
                                  inability to improve cost efficiency




Daily Morning Brief         Please see the disclaimer on the last page                   For Private Circulation      21
January 22, 2008                                                                                    Kotak Securities - Private Client Research




RESULT UPDATE                                    ULTRA TECH CEMENTS
Teena Virmani                                    PRICE : RS.820                                         RECOMMENDATION : REDUCE
teena.virmani@kotak.com
+91 22 6634 1237                                 T ARGET PRICE : RS.937                                          FY09E PE : 9.2X

                                                 Result highlights
                                                 n Revenues for Q3FY08 grew 10% YoY, which was lower than our estimates.
                                                   Revenue growth was primarily led by 13% YoY growth in net realizations. This
                                                   stood at Rs.3163 per ton as compared to Rs.2803 per ton in Q3FY07. The lower-
                                                   than-expected dispatch growth was impacted by elections in Gujarat.
                                                 n Operating margins for Q3FY08 stood at 33.9%, ahead of our estimates of 30.1%
                                                   due to higher realizations.
                                                 n Net profit for the current quarter grew 32% YoY due to higher realizations, lower
                                                   than expected interest outgo and depreciation.
                                                 n We have fine-tuned our estimates based on higher operating margins as well
                                                   as lower-than-expected interest cost. We recommend REDUCE on the stock with
                                                   a price target of Rs.937. At our target price, the stock would be trading at 10.5x
                                                   FY09 estimates and 6x on EV/EBITDA on FY09 estimates.

Summary table                                    Result highlights for Q3FY08
(Rs mn)               FY07 FY08E FY09E           (Rs mn)                                  Q3FY08              Q3FY07                   YoY (%)
Sales                 49,108 56,197 65,513       Net Sales                                13,821               12,605                       10
Growth (%)             49.0    14.0   17.0
                                                 Expenditure                               9,137                8,802
EBITDA                14,179 17,489 19,637
                                                 Inc/Dec in trade                           -308                     40
EBITDA margin (%)      28.9    31.1   30.0
Net profit            7,824 10,098 11,110
                                                 RM                                         1,357                1,044
EPS (Rs)               62.8    81.1   89.2          As a % of net sales                       9.8                   8.3
Growth (%)            247.0    29.0   10.0       Purchase of finished goods                    0                    490
ROE (%)                55.8    44.5   33.4          As a % of net sales                       0.0                   3.9
ROCE (%)               43.0    41.2   37.5
                                                 Staff cost                                  436                    315
EV/Sales (x)            2.3     2.0    1.6
                                                    As a % of net sales                       3.2                   2.5
EV/EBITDA (x)            7.9    6.4    5.3
P/E (x)                13.0    10.1    9.2       Power and fuel                             3,239                2,893
P/BV (x)                5.8     3.7    2.6          As a % of net sales                      23.4                  23.0
Source: Company & Kotak Securities -             Transportation & Handling                  2,367                2,509
Private Client Research                             As a % of net sales                      17.1                  19.9
                                                 Other expenditure                          2,045                1,511
                                                    As a % of net sales                      14.8                  12.0
                                                 Operating Profit                           4,685                3,802                      23
                                                 Operating Profit Margin                     33.9                  30.2
                                                 Depreciation                                583                    571
                                                 EBIT                                      4,102                3,231                       27
                                                 Interest                                    174                    202
                                                 EBT(exc other income)                      3,927                3,030
                                                 Other Income                                201                    167
                                                 EBT                                       4,129                3,196                       29
                                                 Tax                                        1,334                1,072
                                                 Tax Rate (%)                                32.3                  33.5
                                                 PAT                                       2,795                2,125
                                                 Net Profit                                 2,795                2,125                      32
                                                 NPM (%)                                     20.2                  16.9
                                                 Equity Capital                           1,244.9               1244.9
                                                 EPS (Rs)                                   22.5                  17.1

                                                 Source: Company




Daily Morning Brief                          Please see the disclaimer on the last page                      For Private Circulation       22
January 22, 2008                                                                     Kotak Securities - Private Client Research




                                  Revenue growth impacted by lower-than-expected dispatch
                                  growth
                                  n Revenues for the company grew 10% YoY in Q3FY08. This was driven by a
                                    13% increase in cement prices as compared to Q3FY07. However, the dispatch
                                    growth of UltraTech Cement was impacted by elections in Gujarat during the
                                    current quarter.
                                  n The company's capex plan of Rs.33 bn, which will be spent over the next three
                                    years, is well on track. The incremental capacity at the Andhra Pradesh plant is
                                    4.9 MT. The first phase of the captive power plant is expected to get operational
                                    by Q4FY08. The other projects related to split grinding unit are also on track.
                                    Thus, with additional capacities during the next fiscal, we expect volumes to
                                    grow 14% in FY09 as compared to FY08. We expect UltraTech to post revenues
                                    of Rs.56 bn and Rs.65.5bn in FY08 and FY09, respectively.

                                  Operating margins impacted by higher staff, power as well as
                                  other expenditure
                                  The operating margins of the company for Q3FY08 were better than our
                                  expectations on account of higher realizations. However, they were impacted by
                                  higher staff costs, higher power costs as well as higher other expenditure on
                                  account of improvement in production efficiencies. This has resulted in EBITDA/
                                  ton of Rs.1072 for Q3FY08 as compared to Rs.846 for Q3FY07.
                                  We are fine-tuning our estimates for operating margins of the company based on
                                  9MFY08 results. We expect operating margins of 31.1% and 30% in FY08 and FY09,
                                  respectively.

                                  Cost per tonne analysis
                                                                           Q3FY08             Q3FY07                    Q2FY08
                                  Dispatches (mn ton)                         4.37               4.50                      3.61
                                  Net Realization/ton                        3,163              2,803                     3,250
                                  YoY%                                          13
                                  QoQ%                                          -3
                                  Per ton analysis
                                  Raw material                                 240                  241                     250
                                  Finished goods                                 0                  109                       0
                                  Staff cost                                   100                   70                     125
                                  Power and fuel                               741                  644                     713
                                  Transportation &Handling                     542                  558                     552
                                  Other expenditure                            468                  336                     697
                                  EBITDA per ton                             1,072                  846                     913

                                  Source: Company

                                  Net profit grew 32% YoY
                                  Net profits for the company grew 32% YoY. Though we expect a flat volume growth
                                  in FY08, we expect volumes to grow 14% in FY09 on account of new capacities
                                  getting operational by Q4FY08. We are fine-tuning our estimates to factor in higher
                                  operating margins and lower interest cost. We expect the company to achieve net
                                  profits of Rs.10 bn and Rs.11.1 bn in FY08 and FY09, respectively.

                                  Valuation & Recommendation
       We recommend REDUCE        At the current market price of Rs.820, the stock is trading at 10.1x and 9.2x on
        on UltraTech Cements      FY08 and FY09 P/E multiples, respectively. On EV/EBITDA basis, it is trading at
         with a price target of   6.4x and 5.3x for FY08 and FY09 estimates, respectively. We believe the company
                        Rs.937    is expected to benefit from higher volumes in the next financial year. With pricing
                                  pressure expected by the second half of FY09, it would be difficult for companies
                                  to pass on the increased cost to end users. Hence, profitability is expected to be
                                  impacted with restricted price increases and higher expenditure.
                                  Based on fine-tuning of our estimates, we arrive at a target of Rs.937. At our target
                                  price, the stock would trade at 10.5x P/E multiple and 6x EV/EBITDA multiple for
                                  FY09. We recommend REDUCE.



Daily Morning Brief           Please see the disclaimer on the last page                      For Private Circulation        23
January 22, 2008                                                                                                 Kotak Securities - Private Client Research




RESULT UPDATE                                       GATI LTD
Apurva Doshi                                        PRICE : RS.142                                                       RECOMMENDATION : HOLD
doshi.apurva@kotak.com
+91 22 6634 1366                                    T ARGET PRICE : RS.168                                               C ONS. FY09E PE : 21.3X

                                                    The results of Gati were above our estimates on the profitability side
Consolidated summary table
                                                    due to extra ordinary income. We upgrade our recommendation to
(Rs mn)                FY07 FY08E FY09E             HOLD due to the sharp correction during the last few days.
Sales                  5,680   7,420    9,501
Growth (%)              23.5    30.6     28.0       n Net sales for Q2FY08 were at Rs.1.4 bn. This was down 3.2% YoY due to hiving
EBITDA                  434     773     1,103         off of the fuel stations business into a separate subsidiary. If we exclude this,
EBITDA margin (%)        7.6   10.4      11.6         then there was YoY growth of 18.8%. This is primarily due to robust 25.7%
Net profit              214     428       622         YoY and 17.2% sequential growth in revenues of the express distribution and
Net debt               1,420    773     1,164
                                                      supply chain division that included revenues of approximately Rs.150 mn out
EPS (Rs)                 3.0    4.6       6.7
                                                      of airfreight operations.
Growth (%)              11.7   99.8      45.3
DPS (Rs)                0.8     0.9       1.0       n EBIDTA margins during Q2FY08 were down 160 bps YoY and also down 420
ROE (%)                12.3    14.9      14.6
                                                      bps on a sequential basis due to significant rise in freight cost as a percentage
ROCE (%)               10.0    15.2      17.4
                                                      of net sales that went up form 43.4% in Q2FY07 to 56.6% in Q2FY08. This
EV/Sales (x)            2.6     1.9       1.5
EV/EBITDA (x)          33.8    18.1      13.1
                                                      was primarily due to the commencement of airfreight operations. The company
P/E (x)                48.0    30.9      21.3         had to incur some expenses for ramping up the airfreight business.
P/BV (x)                 7.6     3.3      2.9       n EBIDTA for Q2FY08 was at Rs.101.4 mn, down 19.5% YoY and down 26.0% on
Source: Company (FY07) & Kotak                        a sequential basis.
Securities - Private Client Research



Standalone Results GATI Ltd. - June end
(Rs mn)                          Q2FY08               Q2FY07          YoY (%)            Q1FY08      QoQ (%)         H1FY08           H1FY07 YoY (%)
Net Sales                         1,345                1,390             (3.2)            1,171          14.9         2,516            2,721    (7.5)
cost of goods sold                         -                254          (100.0)                 -           -               -              512      (100.0)
staff cost                              176                 134             31.2              164         6.8             340               277         23.0
Freight hire charges                    762                 603             26.3              613        24.2           1,375            1,205          14.1
operating exp.                          128                 129             (0.4)             124         2.9             252               216         17.0
Admin exp.                              153                 125             22.7              119        28.7             272               237         14.7
Repairs & Maintenance                     26                 20             26.9                13       99.2               38               34         13.3
Total Expenditure                      1,244             1,264              (1.6)            1,034       20.3           2,278            2,480         (8.2)
EBIDTA                                  101                126           (19.5)               137      (26.0)            238               241         (1.1)
Other income                              10                   5            88.2                4       146.2               14                 9        53.4
Depreciation                              31                 27             12.8                31       (0.6)              62               53         17.6
EBIT                                     80                104           (22.7)               110      (27.0)            190               197         (3.7)
Interest                                  16                 18           (12.5)                18      (12.5)              35               31         11.7
PBT                                      64                  85          (24.9)                91      (30.0)            155               166         (6.6)
Extraordinary (loss) / gain               79               (27)                  -               -           -              79             (30)            -
Tax & deferred tax                        18                 16               9.9               26      (31.9)              44               38         15.6
PAT                                     125                  43           193.2                65        91.0            190                 99        92.6
Equity share Capital                   151.1             141.7                               144.7                      151.1            141.7
Eqty shares o/s (mn) FV Rs.2            75.6               70.9                               72.4                       75.6              70.9
Diluted shares mn                       93.3               93.3                               93.3                       93.3              93.3
Ratios
Operting profit margin (%)               7.5                9.1       - 160 bps               11.7   - 420 bps            9.5               8.9     + 60 bps
Cost of goods / net sales (%)              -               18.2                                  -                          -              36.8
Staff cost / net sales (%)              13.1                9.6                               14.0                       25.3              19.9
Freight / net sales (%)                 56.6               43.4                               52.4                      102.2              86.7
Operating exp / net sales (%)            9.5                9.2                               10.6                       18.8              15.5
Admin / net sales (%)                   11.4                9.0                               10.2                       20.2              17.1
Tax / PBT (%)                           12.4               18.9                               28.4                       18.7              22.7
EPS Reported (Rs)                        1.7                0.6                                0.9                        2.5               1.4
Diluted EPS                              1.3                0.5                                0.7                        2.0               1.1
Diluted CEPS                             1.7                0.8                                1.0                        2.7               1.6
Source: Company



Daily Morning Brief                             Please see the disclaimer on the last page                                For Private Circulation        24
January 22, 2008                                                                                                    Kotak Securities - Private Client Research




                                                           n PBT for Q2FY08 was down 24.9% YoY to Rs.64 mn.
                                                           n The company recoded one time extraordinary income of Rs.78.6 mn on account
                                                             of re-instatement of FCCBs that are pending conversion as on December 31
                                                             2007.
                                                           n Thus, PAT for Q2FY08 was at Rs.124.9 mn, up 193.2% YoY and up 91.0% on
                                                             a sequential basis, thereby translating into quarterly diluted EPS of Rs.1.3 and
                                                             CEPS of Rs.1.7.
                                                           n PAT for H1FY08 was at Rs.190.3 mn, up 92.6% YoY, thereby translating into
                                                             half-yearly diluted EPS of Rs.2.0 and CEPS of Rs.2.7.


Segmental table
(Rs mn)                                                      Q2FY08        Q2FY07        YoY (%)        Q1FY08 QoQ (%)    H1FY08        H1FY07         YoY (%)
Segmental revenue
Express Distribution & Supply Chain                             1,244            990           25.7       1,062    17.2      2,306          1,903         21.2
Coast to Coast - shipping                                          103           143         (27.9)        111    (6.6)         214            301       (28.9)
Fuel Station*                                                         -          257                -         -       -            -           519            -
PBIT
Express Distribution & Supply Chain                                131           109           20.2        123      6.9         254            196        29.1
Coast to Coast - shipping                                           19             24        (22.1)         18      5.0          37             50       (25.4)
Fuel Station*                                                         -             3      (100.0)                    -            -              6           -
PBIT (%)
Express Distribution & Supply Chain                                 11             11         (4.4)         12    (8.8)          11             10         6.6
Coast to Coast - shipping                                           18             17           8.0         16     12.4          17             17         5.0
Fuel Station*                                                         -             1               -         -       -            -              -           -

* fuel station business hived off into subsidiary



Net sales (Rs bn)                                          Cold chain foray with Kausar acquisition
   10.0                                                    Gati has forayed into cold chain logistics with the acquisition of Delhi-based cold
                                                           chain logistics firm Kausar with a 73.7% stake. Kausar has become a subsidiary of
    8.0                                                    the company from December 14 2007. There is huge potential for cold chain
    6.0                                                    logistics in India. However, we would like to wait for Gati's strategy to integrate
                                                           the refrigerated logistics business into its core business. We feel there would not
    4.0                                                    be any immediate significant impact on the financials of Gati as it contributes
    2.0                                                    around 3% of its revenues.
                                       FY08E
                                               FY09E
           FY04
                  FY05
                         FY06
                                FY07




                                                           Two freighter aircrafts operational
                                                           n In May 2007, Gati entered into an agreement with state-owned airline Air-India
Source: Company, Kotak Securities -                          to operate freighter aircrafts, which would carry parcels, documents and cargo.
Private Client Research
                                                             Gati has commenced operations with two freighter aircraft in October 2007.
                                                           n The cargo freighters are being run on the Delhi-Mumbai-Bangalore route. In
EPS (Rs) - FV Rs.2                                           Q2FY08, the company recorded revenues of approximately Rs.150 mn out of
    8.0                                                      freighter operations. Another three freighter aircraft would be inducted by June
                                                             2008. We expect the company to end FY08 with air-freight revenues of Rs.800
    6.0                                                      mn.
    4.0                                                    n According to the management, the initial performance of the freighter operations
    2.0                                                      is in line with their business plans. They hope it will turn profitable by Q4FY08.

    -                                                      n We feel the foray into air cargo with its own freighters is very positive for the
                                                             overall growth prospect of the company as it can now offer complete end-to-
                                       FY08E
                                               FY09E
           FY04
                  FY05
                         FY06
                                FY07




                                                             end logistics services with quick and efficient deliveries.

Source: Company, Kotak Securities -
Private Client Research




Daily Morning Brief                                    Please see the disclaimer on the last page                            For Private Circulation        25
January 22, 2008                                                                  Kotak Securities - Private Client Research




                                  Valuation & Recommendation
                                  n Going forward, we expect strong growth in revenues due to ramping up of the
                                    airfreight business and addition of new vessel of 8150 DWT that is expected to
                                    be commissioned in February 2008.
                                  n We maintain our earnings estimates and expect the company to report EPS of
                                    Rs.4.6 in FY08E moving upto Rs.6.7 in FY09E.
                                  n At Rs.142, the stock is trading at 2.9x book value, 21.3x earnings and 16.4x
                                    cash earnings based on FY09E.

     We recommend HOLD on         n We remain positive on the growth prospects of Gati as we feel it is ideally poised
    Gati with a price target of     to take advantage of the booming logistics sector in India.
         Rs.168 (upside 18%)
                                  n Due to the recent sharp correction in stock price, we are upgrading the stock
                                    from BOOK PARTIAL PROFITS to HOLD with an unchanged price target of
                                    Rs.168 that provides an upside potential of 18%.




Daily Morning Brief           Please see the disclaimer on the last page                   For Private Circulation      26
January 22, 2008                                                                                             Kotak Securities - Private Client Research




RESULT UPDATE                                     RIDDHI SIDDHI GLUCO BIOLS
Apurva Doshi                                      PRICE : RS.265                                                         RECOMMENDATION : BUY
doshi.apurva@kotak.com
+91 22 6634 1366                                  T ARGET PRICE : RS.390                                                      FY09E PE : 5.5X

                                                  The Q3FY08 results of Riddhi Siddhi Gluco Biols were above our
                                                  expectations on the profitability side. We remain positive and
                                                  continue to recommend BUY on the stock with a price target of
                                                  Rs.390 (47% upside).
                                                  n Net sales for Q3FY08 were at Rs.883 mn as against Rs.1.03 bn in Q3FY07,
                                                    thereby registering a decline of 14.7% YoY. This is primarily because its Gokak
                                                    plant operated at only around 60% capacity in Q3FY08 due to a fire in its starch
                                                    drying section in May 2007.
Summary table                                     n The company recorded an EBIDTA margin of 17.9% for Q3FY08, which is up
(Rs mn)               FY07 FY08E FY09E              230 bps YoY and up 80 bps on a sequential basis. The higher EBIDTA margin
Sales                 3,326   3,496   5,408         was on account of higher proportion of sales of value added derivatives of
Growth (%)             36.8     5.1    54.7         cornstarch.
EBITDA                 540     556     969
                                                  n The EBIDTA stood at Rs.158 mn in Q3FY08, which is down 2.1% YoY and up
EBITDA margin (%)      16.2    15.9    17.9
                                                    54% on a sequential basis.
Net profit             268     254     538
Net debt              1,948   2,192   2,667       n Depreciation during Q3FY08 was higher by 7.0% YoY to Rs.34 mn. This was
EPS (Rs)               25.4    22.8    48.2         due to the increase in the provisioning of depreciation due to the expansion of
Growth (%)            135.9   (5.1)   111.7         the Viramgam unit from 100 TPD to 250 TPD.
DPS (Rs)                3.0     4.0     5.0
                                                  n The interest is down 20.0% YoY to Rs.29 mn on reduced working capital
ROE (%)                18.8    16.6    28.7
                                                    requirements as the Gokak plant operated at around 60% capacity utilization
ROCE (%)               12.7    11.2    18.2
                                                    levels in Q3FY08.
EV/Sales (x)            1.5     1.5     1.0
EV/EBITDA (x)           9.1     9.3     5.8       n PBT for Q3FY08 was at Rs.95 mn, up 1.7% YoY and up 107.7% on a sequential
P/E (x)                10.4    11.6     5.5         basis.
P/BV (x)                2.1     1.8     1.4
                                                  n PAT for Q3FY08 was up 1.8% YoY and up 108.2% on a sequential basis to Rs.85
Source: Company & Kotak Securities -
Private Client Research                             mn, translating into a quarterly EPS of Rs.7.6 and quarterly CEPS of Rs.10.6 on
                                                    a fully diluted basis.
                                                  n PAT for 9MFY08 was down 0.7% YoY to Rs.172 mn translating into 9MFY08
                                                    EPS of Rs.15.5 and CEPS of Rs.23.5 on a fully diluted basis.

Quarterly performance - RSGB
(Rs mn)                          Q3FY08             Q3FY07         YoY (%)           Q2FY08       QoQ (%)    9MFY08         9MFY07          YoY (%)
Net Sales                           883               1,035          (14.7)             600           47.1     2,166          2,285            (5.2)
Total exp.                             725                874          (17.0)              498        45.7      1,790           1,902             (5.9)
EBIDTA                                158                161            (2.1)              102        54.0        376             383             (1.9)
Depreciation                            34                 31              7.0              29        17.5          90              78             14.2
EBIT                                  124                130            (4.3)               74        68.0        287             305             (6.0)
Interest                                29                 36          (20.0)               28         3.1          93             110           (14.8)
PBT                                     95                 94             1.7               46       107.7        193             195             (1.0)
Tax & deferred tax                      11                 11              1.0               5       103.8          21              22            (3.2)
NPAT                                    85                 83             1.8               41       108.2        172             174             (0.7)
Equity sh o/s (mn)                    11.1               10.6                              10.6                   10.6            10.6
Equity sh o/s (mn) diluted            11.1               11.1                              11.1                   11.1            11.1
Ratios
Operting profit margin (%)            17.9               15.6      +230 bps                17.1    +80 bps        17.4            16.8          +60 bps
Tax / PBT (%)                         11.1               11.2                              11.3                   11.0            11.2
EPS Reported(Rs)                       7.6                7.9                               3.9                   16.3            16.4
EPS (Rs) - Fully Diluted               7.6                7.5                               3.6                   15.5            15.6
CEPS (Rs) - Fully Diluted             10.6               10.3                               6.2                   23.5            22.6

Source: Company




Daily Morning Brief                           Please see the disclaimer on the last page                              For Private Circulation         27
January 22, 2008                                                                                 Kotak Securities - Private Client Research




                                Combined maize crushing capacity of 0.5 mn TPA - largest in
                                India
                                n With the expected commencement of operations at Uttarakhand of 500 TPD
                                  very shortly and expansion at Viramgam to 250 TPD, the combined maize
                                  crushing capacity of the company would almost double from 0.28 mn TPA to
                                  0.5 mn TPA.
                                n In terms of TPD, the total capacity of the company would expand from 850
                                  TPD to 1500 TPD. Thus, it would retain its status as India's largest and fastest
                                  growing corn wet milling company.
                                n The financial performance of the company is poised for aggressive growth in
                                  the coming years in line with capacity addition and strong growth in demand
                                  for the products of RSGB.

                                Recommendation and Valuation
                                n The starch division of the Gokak plant, that had caught fire, has resumed
                                  operations from October 2007. The plant that operated around 40% capacity
                                  utilization levels in Q2FY08 has moved up to around 80% capacity utilization
                                  during December 2007. Going forward, it is expected to further ramp up to 90%
                                  levels in Q4FY08.
                                n Over the last six months, the stock had underperformed the markets due to
                                  fire at its Gokak plant and a couple of months delay at its Uttarakhand plant.
                                  With the Gokak plant back to normal and aggressive capacity expansion to 1500
                                  TPD that would become operational very shortly, the financial performance of
                                  the company is expected to improve significantly from now on.
                                n We maintain our earnings estimates and expect the company to report EPS of
                                  Rs.22.8 in FY08E and moving up to Rs.48.2 in FY09E.
    We recommend a BUY on       n At Rs.265, the stock trades at 1.4x book value, 5.5x earnings and 4.3x cash
  RSGB with a price target of     earnings based on FY09E.
       Rs.390 (47% upside)
                                n We remain positive and reiterate our BUY on RSGB with a price target of
                                  Rs.390. This provides an upside potential of 47% from current levels.


                                      Net sales (Rs bn)                                    EPS (Rs)

                                       5.0                                                  60
                                                                                            50
                                       4.0
                                                                                            40
                                       3.0
                                                                                            30
                                       2.0
                                                                                            20
                                       1.0                                                  10
                                       -                                                     0
                                                                           FY08E

                                                                                   FY09E
                                               FY04

                                                      FY05

                                                             FY06

                                                                    FY07




                                                                                                                               FY08E

                                                                                                                                       FY09E
                                                                                                   FY04

                                                                                                          FY05

                                                                                                                 FY06

                                                                                                                        FY07




                                      Source: Company, Kotak Securities -                  Source: Company, Kotak Securities -
                                      Private Client Research                              Private Client Research




Daily Morning Brief         Please see the disclaimer on the last page                                       For Private Circulation           28
January 22, 2008                                                                                                 Kotak Securities - Private Client Research




RESULT UPDATE                                       EVEREST KANTO CYLINDERS
Apurva Doshi                                        PRICE : RS.295                                                        RECOMMENDATION : BUY
doshi.apurva@kotak.com
+91 22 6634 1366                                    T ARGET PRICE : RS.450                                             C ONS. FY10E PER : 12.5X
                                                    The Q3FY08 results of EKC are above our estimate on the
                                                    profitability side. We maintain BUY with an unchanged price target
                                                    of Rs.450 (53% upside potential).
                                                    n On a consolidated basis, EKC reported net sales of Rs.1.3 bn in Q3FY08. This
Summary table: consolidated
                                                      was compared to Rs.1.1 bn in Q3FY07, thereby recording YoY revenue growth
(Rs mn)              FY08E FY09E FY10E                of 12.3%. This was primarily driven by a ramp up of its second unit at Dubai.
Sales                 5248     8676    12735
                                                      The revenue growth was negatively impacted by rupee appreciation of around
Growth %              23.5     65.3     46.8
EBITDA                1550     2474     3507          11% against the US dollar for consolidating purposes.
EBITDA margin %       29.5     28.5      27.5
Net profit            1062     1624     2492
                                                    n EBIDTA margin during Q3FY08 was up 810 bps YoY and up 560 bps on a
Net cash (debt)       -164       558      951         sequential basis to 36.6%. This was primarily due to lower raw materials to
EPS (Rs)              10.5     15.4     23.6          sales ratio at 45.3% in Q3FY08 as against 55.0% in Q3FY07. This was due to
Growth %              48.0     52.9     53.5          additional contribution from the ramping up of the second unit at Dubai as
CEPS                   12.7    18.4      27.0
DPS (Rs)                4.0      1.0      1.3
                                                      typically Dubai operations generate higher operating margins compared to
ROE %                 29.5     21.1     28.6          Indian operations. However, there were also some one time discounts that the
ROCE %                 24.7     27.9     34.6         company received on purchases. Hence we expect the operating margins to
EV/Sales (x)            5.7      3.5      2.4         remain around 28-30% levels in future.
EV/EBITDA (x)         19.3     12.4       8.6
P/E (x)               28.1     19.2     12.5        n Depreciation increased 72.7% YoY to Rs.83.4 mn in Q3FY08 due to expansions
P/Cash Earnings       23.3     16.0     10.9
                                                      at Gandhidham and ramping up of second unit at Dubai.
P/BV (x)                6.4      4.1      3.2
Source: Company & Kotak Securities -                n Interest cost increased significantly by 149.6% YoY to Rs.29.2 mn in Q3FY08
Private Client Research                               due to additional working capital requirements for the Gandhidham and second
                                                      unit at Dubai.


Consolidated quarterly performance - EKC
(Rs mn)                           Q3FY08              Q3FY07         YoY (%)           Q2FY08       QoQ (%)      9MFY08         9MFY07          YoY (%)
Net Sales                           1,255               1,118            12.3            1,277         (1.7)       3,646          2,914             25.1
Increase / decrease in stock           (308)              (260)            18.6               38       (902.1)       (261)           (439)          (40.5)
raw materials                           877                 874              0.3             613         43.0       2,097           2,038              2.9
staff cost                                58                 37            56.1               51         14.2          155             100           54.4
other exp.                              170                 148            14.8              179         (5.0)         491             414           18.7
total exp.                              796                 800            (0.4)             881         (9.6)      2,481           2,112             17.5
EBIDTA                                  459                318             44.3              397         15.8       1,165             802            45.2
Other income                              28                 12           133.9               32        (12.9)          68              24          181.1
Depreciation                              83                 48            72.7               49         69.5          176             135           30.5
EBIT                                    404                282             43.2              379          6.4       1,057             692            52.8
Interest                                  29                 12           149.6               26         11.9           71              38           89.4
PBT                                     374                270             38.6              353          6.0         986             654            50.7
Tax & deferred tax                        80                 66            21.0               69         15.9          185             200           (7.2)
PAT                                     294                204             44.4              284          3.6         801             455            76.1
Equity Rs. mn                           202                 195                              195                       202             195
Diluted sh. Mn FV Rs. 2                 106                 106                              106                       106             106
Ratios
Operting profit margin (%)             36.6                28.5    up 810 bps                31.0   up 560 bps        31.9            27.5          up bps
Raw Materials / Sales (%)              45.3                55.0                              51.0                     50.4            54.9
Other Exp / sales (%)                  13.5                13.2                              14.0                     13.5            14.2
Tax / PBT (%)                          21.4                24.5                              19.6                     18.8            30.5
EPS (Rs) - Reported                      3.0                2.2                               2.9
Diluted EPS (Rs.)                        2.8                1.9                               2.7                      7.6             4.3
CEPS (Rs)                                3.6                2.4                               3.2                      9.2             5.6

Source: Company




Daily Morning Brief                             Please see the disclaimer on the last page                                For Private Circulation        29
January 22, 2008                                                                                           Kotak Securities - Private Client Research




Net sales (Rs bn)                                         Segmental table
15.0                                                      (Rs mn)                              Q3FY08       9MFY08                             FY07
                                                          Revenue
12.0                                                      India                                    815.7      2,255.5                         2,422.0

 9.0                                                      Dubai                                    706.0      1,753.9                         2,127.4
                                                          China                                        -             -                              -
 6.0                                                      PBIT
 3.0                                                      India                                    237.6        555.9                          379.3
                                                          Dubai                                    145.0        462.6                          611.4
 -
                                                          China                                        -             -                              -
                              FY08E

                                      FY09E

                                              FY10E
         FY05

                FY06

                       FY07




                                                          PBIT %
                                                          India                                     29.1         24.6                           15.7
Source: Company, Kotak Securities -                       Dubai                                     20.5          26.4                          28.7
Private Client Research
                                                          China                                        -             -                              -

                                                          Source: Company
EPS (Rs)
                                                          n PBT for Q3FY08 stood at Rs.374.3 mn, up 38.6% YoY and 6.0% on a sequential
25.0                                                        basis.
20.0                                                      n For Q3FY08, the company reported PAT of Rs.294.2 mn, up 44.4% YoY and
                                                            3.6% on a sequential basis, thereby translating into quarterly EPS of Rs.2.8 and
15.0
                                                            CEPS of Rs.3.6 on a diluted basis.
10.0
                                                          n For 9MFY08, the company reported PAT of Rs.800.6 mn, up 76.1% YoY, thereby
 5.0                                                        translating into 9MFY08 EPS of Rs.7.6 and CEPS of Rs.9.2 on a diluted basis.

 -
                                                          Expansion on track
                              FY08E

                                      FY09E

                                              FY10E
         FY05

                FY06

                       FY07




                                                          n The company has an annual consolidated capacity of 700,000 cylinders as of
                                                            March 2007. The second unit of Dubai has commenced commercial production
Source: Company, Kotak Securities -                         in Q2FY08 while the China unit is expected to commence commercial production
Private Client Research                                     in March 2008.
                                                          n With expansions in Dubai, China and India, the capacity would expand to 1 mn
                                                            cylinders by March 2008. It would further rise to 1.7 mn cylinders by March
                                                            2009 and 1.9 mn cylinders by March 2010.
                                                          n Such aggressive capacity expansion is expected to lead to a CAGR of 44.2% in
                                                            revenues and 51.4% in net profits over the next three years, that is, from FY07
                                                            to FY10E.

                                                          Valuation & Recommendation
                                                          n We remain positive on the growth prospects of the company. We maintain our
                                                            earnings estimates and expect the company to report EPS of Rs.10.5 in FY08E
                                                            moving upto Rs.15.4 in FY09E and Rs.23.6 in FY10E.

       We maintain BUY on EKC                             n The current price of Rs.295, discounts 3.2x book value, 12.5x earnings and
          with a price target of                            10.9x cash earnings based on FY10E. We believe this is attractive considering
          Rs.450 (53% upside)                               the clear growth prospects of the company, going forward, on the back of
                                                            expanded capacities both in India and overseas.
                                                          n We maintain BUY on EKC with an unchanged price target of Rs.450 that
                                                            provides 53% upside potential from current levels.




Daily Morning Brief                                   Please see the disclaimer on the last page                    For Private Circulation       30
January 22, 2008                                                                                                       Kotak Securities - Private Client Research




RESULT UPDATE                                                      HDFC BANK
Saday Sinha                                                        PRICE : RS.1507                                        RECOMMENDATION : BUY
saday.sinha@kotak.com
+91 22 66341440                                                    T ARGET PRICE : RS.1722                        FY10E P/E: 18.1X, P/ABV: 4.0X

                                                                   HDFC Bank continued the stellar performances it had recorded
                                                                   during the past 23 consecutive quarters. The bank delivered Q3FY08
                                                                   results ahead of our expectations.
                                                                   Net interest income (NII) and net profits rose 65.6% and 45.2%,
                                                                   respectively. Mainly robust asset growth and improvement in core
                                                                   net interest margin have contributed to this.
                                                                   We are revising our earnings estimates slightly upward and
                                                                   incorporating FY10 numbers in our workings. We are upgrading the
                                                                   stock to BUY with a target price of Rs.1722 (revised upward from
                                                                   Rs.1480) mainly due to shifting the basis to FY10 and recent
                                                                   correction in its stock price.

                                                                   Key highlghts
                                                                   Quarterly Performance, Rs mn             Q3FY08              Q3FY07                    YoY (%)
                                                                   Interest on advances                      18672.5             11372.9                       64.2
                                                                   Interest on Investment                    7701.9               5244.3                       46.9
                                                                   Int on RBI/ other assets                    880.6               358.8                      145.4
                                                                   Other interests                              14.0                 13.1                       6.9
                                                                   Total interest earned                    27269.0              16989.1                       60.5
                                                                   Interest expended                        12893.2               8306.8                       55.2
                                                                   Net interest income                      14375.8              8682.3                       65.6
                                                                   Other income                              6788.9               3733.0                       81.9
                                                                   Fee Income                                4601.0               3314.0                       38.8
                                                                   Foreign exchange Income                     742.0               630.0                       17.8
                                                                   Profit on sale of Investments             1315.0                -212.0                       NM
                                                                   Net Revenue                              21164.7             12415.3                       70.5
                                                                   Operating Expenses                       10501.2               6050.2                       73.6
                                                                   Employee expenses                         3528.3               2138.4                       65.0
                                                                   Other operating expenses                  6972.9               3911.8                       78.3
                                                                   Operating profit                         10663.5               6365.1                       67.5
                                                                   Prov. & contingencies                     4231.3               2059.9                      105.4
                                                                   Taxes                                     2138.6               1348.8                       58.6
                                                                   Net profit                                4293.6              2956.4                       45.2
                                                                   EPS (Rs.)                                  12.10                 9.40                      28.7

                                                                   Source: Company


                                                                   Asset growth, core net interest margin drive robust net interest
Net Interest Income (Rs bn)                                        income
    16                                                             Net interest income rose 65.6% YoY to Rs.14.38 bn in Q3FY08 from Rs.8.68 bn in
    14                                                             Q3FY07. This was mainly driven by strong growth of 48.1% in net advances and
    12                                                             improvement in core net interest margin to around 4.3% (adjusted for the HTM
    10                                                             premia amortization) as against around 3.9% (adjusted for the HTM premia
     8
     6                                                             amortization) for the corresponding quarter of last year.
     4                                                             Net revenue (NII and other income) rose 70.5% in Q3FY08 to Rs.21.16 bn from
     2
     0                                                             Rs.12.42 bn in the corresponding quarter last year.
         Jun_05


                           Jun-06



                                             Jun-07
                  Dec-05


                                    Dec-06



                                                      Dec-07




Source: Company



Daily Morning Brief                                            Please see the disclaimer on the last page                       For Private Circulation          31
January 22, 2008                                                                                      Kotak Securities - Private Client Research




                                         Continued traction in fee Income
                                         Other income rose 81.9% to Rs.6.79 bn in Q3FY08 from Rs.3.73 bn in the
                                         corresponding quarter last year. This increase is largely due to an increase in fee-
                                         based income and profit on sale on investments.
                                         Fees and commissions contributed Rs.4.6 bn as against Rs.3.31 bn for the
                                         corresponding quarter of last year.
                                         Other two components are foreign exchange/derivatives revenues of Rs.742 mn
                                         (YoY increase of 17.8%) and profit on sale of investments of Rs.1.32 bn (against a
                                         loss of Rs.212 mn last year), respectively.

                                         Car, personal loans drive strong asset growth
                                         Total customer assets (including advances, corporate debentures, investments in
                                         securitized paper, etc) at the end of Q3FY08 were Rs.749.79 bn, an increase of
                                         39.1% YoY, with gross retail loans now forming 52.6% of gross advances. The
                                         growth in car loans, business banking and personal loans in Q3FY08 was robust as
                                         compared to that of last year. During the same period, businesses like two-wheelers
Breakup of retail loans (Q3FY08)
                                         and loan against securities saw some decline. Overall retail loans grew 45% YoY.
                      Car Loans
                      Personal           Trends in Retail loans
                      Loan against Sec Retail Loans (Rs bn)                       Dec-06    Sep-07       Dec-07         Growth           Growth
                                                                                                                         (YoY)            (QoQ)
                      2 Wheelers
                                         Car Loans                                  61.50     98.00       103.50           68.3              5.6
                      Business banking
                                         Personal                                   40.00     57.00         61.00            52.5            7.0
                      CV                 Loan against Securities                    13.00     11.50         12.50             -3.8           8.7
                      Credit Cards       2 Wheelers                                 20.00     17.00         17.50           -12.5            2.9
                      Others             Business banking                           44.00     67.50         77.00            75.0           14.1
                      Total              CV                                         47.00     52.50         55.50            18.1            5.7
                                         Credit Cards                               19.00     23.50         28.00            47.4           19.1
Source: Company
                                         Others                                     16.40     18.50         23.40            42.7           26.5
                                         Total                                     260.90    345.50       378.40             45.0            9.5

                                         Source: Company

                                         Total deposits were up 48.9% to Rs.993.87 bn at the end of this quarter. Out of
                                         this, savings account deposits and current account deposits stand at Rs.249.61 bn
                                         and Rs.256.02 bn, respectively. Its current account and saving account (CASA)
                                         stands at 50.9% of total deposits at the end of Q3FY08.


                                         Trends in deposits (Rs bn)
                                                                                  Dec-06    Sep-07       Dec-07         Growth           Growth
                                                                                                                         (YoY)            (QoQ)
                                         Demand                                    366.71    478.29       505.63         37.9%             5.7%
                                            Current                                192.38    254.56       249.61          29.7%           -1.9%
                                            Saving                                 174.33    223.73       256.02          46.9%           14.4%
                                         Term                                      300.78    432.40       488.24          62.3%           12.9%
                                         Total                                     667.49    910.69       993.87          48.9%            9.1%

                                         Source: Company


                                         NIMs improve, set to stabilize
                                         The core NIM rose to 4.3% for Q3FY08 (adjusted for the HTM premia amortization)
                                         as against around 3.9% (adjusted for the HTM premia amortization) for the
                                         corresponding quarter of last year. We believe, going forward, margins would
                                         stabilize around 4.0% levels, as banks will not compromise on growth to maintain
                                         such high margins.




Daily Morning Brief                  Please see the disclaimer on the last page                                For Private Circulation        32
January 22, 2008                                                                            Kotak Securities - Private Client Research




                          Prudent NPA management
                          Asset quality at the end of Q3FY08 remained healthy with gross NPA at 1.2% as
                          against 1.3% at the corresponding quarter of the last year and net NPA at 0.4% at
                          the end of Q3FY08 at the of customer assets.

                          Capital adequacy ratio remains healthy
                          Capital adequacy ratio stood at 13.8% as against the regulatory requirement of
                          9%. Out of this, Tier I capital is healthy at 10.5%.
                          The bank's business momentum remained healthy in both its retail and wholesale
                          customer franchises. At the end of the Q3FY08, its distribution network had 754
                          branch outlets and 1906 ATMs.

                          Valuation & recommendation
                          At the current market price of Rs.1507, the stock is trading at 18.1x its FY10E
                          earnings and 4.0x its FY10E ABV. We have slightly revised our FY08E and FY09E
                          earnings forecast upward and are incorporating FY10 numbers in our workings. We
                          now expect net profit for FY08E, FY09E and FY10E to be Rs.16.59 bn, Rs.21.61 bn
                          and Rs.29.47 bn, respectively. This will result into an EPS of Rs.46.85, Rs.61.03
                          and Rs.83.23 for FY08E, FY09E and FY10E, respectively. The adjusted book value
                          for FY08E, FY09E and FY10E is forecast at Rs.305.92, Rs.336.18 and Rs.378.75,
                          respectively.

                          Rolling 1-year forward P/ABV band

                                           CMP        2.0x         2.5x      3.0x    3.5x        4.0x         4.5x        5.0x       5.5x
                             2000


                             1500


                             1000


                              500


                                0
                               1-Apr-03       1-Dec-03       1-Aug-04     1-Apr-05   1-Dec-05      1-Aug-06          1-Apr-07     1-Dec-07



                          Source: Company, Kotak Securities - Private Client Research

                          We upgrade the stock to BUY with a target price of Rs.1722 (revising upward from
                          earlier price target Rs.1480) based on a P/ABV of 4.5x its FY10E adjusted book
                          value for the bank (assigning some premium with respect to Axis bank, where we
                          have assigned 4.0x multiple of FY10 ABV). We are giving some premium to HDFC
                          Bank as it has consistently delivered a growth of around 30% (YoY) in net profit
                          for the past 23 quarters and continues to maintain its leadership among domestic
                          banks with its robust credit growth, high CASA, high NIM, clean asset quality, a
                          large component of fee income in its total income.
                          The bank is one of the leading players in the new generation private sector banks,
                          which is going to benefit from the robust economic growth. This has enabled the
                          stock to get a premium over its competitors, which we believe will continue in the
                          future as well. So, we recommend a BUY on the stock with a price target of
                          Rs.1722, which could provide upside of 14.3% from current levels.




Daily Morning Brief   Please see the disclaimer on the last page                                        For Private Circulation         33
January 22, 2008                                                                   Kotak Securities - Private Client Research




                          Key data
                          (Rs bn)                                  FY06    FY07        FY08E           FY09E          FY10E
                          Interest income                          44.75   66.46        95.85          125.88         158.26
                          Interest expense                         19.30   31.79         46.65           62.36         78.63
                          Net interest income                      25.46   34.67         49.20           63.52         79.63
                          Other income                             11.24   15.16         21.39           27.67         35.68
                          Gross profit                             19.79   25.62         38.55           50.39         66.18
                          Net profit                                8.71   11.36         16.59           21.61         29.47


                          Gross NPA (%)                              1.7     1.6           1.3             1.3           1.3
                          Net NPA (%)                                0.5     0.5           0.5             0.4           0.2
                          Net interest margin (%)                    3.5     3.9           4.0             3.9           4.0
                          RoE (%)                                   10.8    19.3          18.9            18.5          22.8
                          RoAA (%)                                   0.8     1.4           1.5             1.5           1.6
                          Dividend Yield (%)                         0.4     0.4           0.4             0.4           0.4


                          EPS (Rs)                                  16.9    35.6          46.8            61.0          83.2
                          Adjusted BVPS (Rs)                       164.5   195.3         305.9           336.2         378.8


                          P/E (x)                                   89.1    42.4          32.2            24.7          18.1
                          P/ABV (x)                                  9.2     7.7           4.9              4.5          4.0

                          Source: Company, Kotak Securities - Private Client Research




Daily Morning Brief   Please see the disclaimer on the last page                            For Private Circulation       34
January 22, 2008                                                                                             Kotak Securities - Private Client Research




EVENT UPDATE                                    POWER FINANCE CORPORATION (PFC)
Sarika Lohra                                    PRICE : RS.208                                                          RECOMMENDATION : BUY
sarika.lohra@kotak.com
+91 22 6634 1480                                T ARGET PRICE : RS.245                                                   FY09E P/ABV : 2.4X

                                                PFC reported 37% growth in net profit to Rs.3.2 bn for Q3FY08,
                                                following strong NIMs of 3.74%. Business growth of the company
                                                remained moderate at 16% YoY growth in the loan book at Rs.471.3
                                                bn following de-growth of 10% in the disbursement during the
                                                quarter. Business growth will be lumpy, being of larger size in
                                                nature, involving significantly larger capex. However, we opine that
                                                business growth will accelerate, going forward, as loan sanctions
                                                start adding up to disbursements.
                                                However, for FY08 and FY09, we have marginally lowered our
                                                business growth estimates from 24% to 23% over FY08-09. We
                                                believe the company is likely to witness stronger growth in its loan
                                                book towards the later half of the Tenth Five Year Plan as the power
                                                generation and distribution capacities would be nearing completion.
                                                Based on this, we have lowered our target price to Rs.245, from
                                                Rs.252 previously. Given the recent correction, the stock at our
                                                target price of Rs.245 offers a decent upside of 17.8%. Hence, we
                                                recommend BUY on the stock with a 12-month price target of
                                                Rs.245.

                                                Result Review Q3FY08
                                                n Revenue growth of PFC for Q3FY08 remained strong. Interest income of the
                                                  company grew 36% to Rs.12.63 bn from Rs.9.28 bn. On the other hand, interest
                                                  expenses of the company rose 33% to Rs.8.00 bn. The net interest income (NII)
                                                  of the company grew significantly by 42% to Rs.4.63 bn.
                                                n The strong growth in earnings was seen mainly on the back of strong margins
                                                  during the quarter and a decent growth in the loan book.
                                                n For 9MFY08, interest income grew 37% to Rs.35.75 bn from Rs.26.16 bn. NII
                                                  of PFC during the period under review has gone up 39% to Rs.13.25 bn as
                                                  against Rs.9.52 bn in the previous year.


Summary table                                   Quarterly performance
(Rs bn)               FY07 FY08E FY09E          (Rs mn)                          Q2FY08         Q2FY07     % chg     H1FY08        H1FY07       % chg
Income from operation 37.4    48.8   60.7       Interest Income                  12,630.0        9,280.0     36.1    35,750.0      26,159.0       36.7
Interest expenses     23.1    30.7   39.3       Interest Expenses                 8,000.0        6,020.0     32.9    22,503.0      16,644.0       35.2
Net interest income    14.3   18.2   21.4       Net Interest Income               4,630.0        3,260.0     42.0    13,247.0        9,515.0      39.2
Other Income            0.4    0.5    0.7
                                                Other Income                        120.0          60.0     100.0       377.0          185.0     103.8
Total Income           14.7   18.7   22.1
                                                Total Income                      4,750.0        3,320.0     43.1    13,624.0        9,700.0      40.5
Operating Profit       14.1   17.9   21.2
PAT                     9.9   11.9   14.1       Operating Expenses                  220.0         110.0     100.0       496.0          352.0      40.9
Gross NPA (%)           0.1    0.1    0.1       Operating Profit                  4,530.0        3,210.0     41.1    13,128.0        9,348.0      40.4
Net NPA (%)             0.1    0.1    0.1       Provisions                        (140.0)         (10.0)        -       (99.0)           55.0   -280.0
NIMs (%)                3.6    3.7    3.6
                                                Extra-ordinary items                     30.0     180.0     -83.3       209.0            45.0    364.4
RoA (%)                 2.3    2.3    2.2
                                                PBT                               4,700.0        3,400.0     38.2    13,436.0        9,338.0      43.9
RoE (%)               13.1    13.3   14.5
Div Payout Ratio (%) 30.4     35.0   35.0       Provision for Tax                 1,500.0        1,060.0     41.5     4,330.0        3,178.0      36.2
EPS (Rs)                8.6   10.4   12.3       PAT                               3,200.0        2,340.0     36.8     9,106.0        6,160.0      47.8
BV (Rs)                74.9   81.1   88.5       PAT+ DTL*                         3,220.0        2,740.0     17.5     9,902.0        7,259.0      36.4
Adj Book Value (Rs)    74.5   80.6   87.8
P/E (x)                24.2   20.0   16.9
                                                *DTL- Deferred Tax Liability; Source: Company
P/ABV (x)               2.8    2.6    2.4
Source: Company & Kotak Securities -
Private Client Research




Daily Morning Brief                         Please see the disclaimer on the last page                                For Private Circulation      35
January 22, 2008                                                                   Kotak Securities - Private Client Research




                                  Firm NIMs following asset re-pricing
                                  n PFC's NIMs remained firm during the period under review following the re-
                                    pricing of the assets. Yield on assets remained firm at 10.21% up by 85 bps
                                    YoY and 16 bps QoQ. Cost of funds rose 45 bps YoY and 18 bps QoQ to 8.19%.
                                  n Following the re-pricing of loans, the spreads of the company remained firm on
                                    a sequential basis at 2.02%, while improving by 40 bps YoY.
                                  n Going forward, NIMs of the company are likely to remain firm. However, it is
                                    likely to witness marginal pressure, which we have already factored in our
                                    working. This is because the company may have to raise long dated liabilities
                                    to meet its business growth requirements.

                                  Asset quality remains strong
                                  n Gross NPAs ratio decreased to 0.03% from 0.21% in Q3FY08 and 0.06% in
                                    Q2FY08.
                                  n Net NPA ratio of the company declined to 0.02% from 0.14% in the previous
                                    year.
                                  n The company has also written back provisions amounting to Rs 140mn during
                                    the period. Rs 140mn during the period.

                                  Slower business growth: likely to accelerate going forward
                                  n Growth in disbursement during the quarter witnessed de-growth of around 10%
                                    YoY at Rs 31.7bn as against Rs 35.3bn. While PFC's sanctions grew by 11.4%
                                    YoY to Rs 84.7bn.
                                  n For 9MFY08, disbursements have gone up by 2% YoY to Rs 97.36bn from
                                    Rs95.32bn in the corresponding period last year. Growth in the sanctions during
                                    the 9MFY08 remained significantly strong, clocking a growth of 58% YoY to Rs
                                    436.07bn against Rs 275.75bn
                                  n The overall loan book of the company showed a moderate 16%YoY growth,
                                    amount to Rs 471.29bn, from Rs 405.73bn.
                                  n Management at PFC is of the view that the growth in Disbursement of the
                                    company is likely to pick up in the Q4FY08. However we have marginally
                                    lowered our business growth estimates from 24% previously to 23% over FY08-
                                    FY09.
                                  n Considering the strong sanction book of the company, we opine that the growth
                                    in loan book will accelerate as and when the sanctions add up to the loan book.
                                    Therefore we maintain our view that PFC's loan book will witness strong growth
                                    in the coming quarter following strong demand from the power sector.

                                  Recommendation:
                                  n We believe that the business growth of the company will be lumpy in nature.
                                    However, given the de-growth in the disbursement, we have marginally reduced
                                    our earning estimates with a 23% growth in loan book over FY08-09.
                                  n Outlook for the company remains positive given its proficiency in the power
                                    sector financing and the strong capex requirement in the space. Given PFC's
                                    20% market share, we expect that PFC's loan book would witness a CAGR of
                                    24% over FY07-12 i.e. during the 10th Five year plan. While the loan book
                                    growth will be higher towards the mid and closure of the 10th Plan as the
                                    capacity addition would be near to its closures.

     We recommend a BUY on        n We continue to value the company on dividend discount model and P/BV
     PFC with a price target of     multiple. Based on which we value the company at Rs 245 per share. With the
                        Rs.245      recent correction in the stock price, at Rs 208 the stock currently trades at 2.4x
                                    its FY09E ABV of Rs 88 and 16.9 x its FY09 EPS of Rs 12.3 and offers a decent
                                    upside of 17.8%. We upgrade the stock to a BUY from HOLD.




Daily Morning Brief           Please see the disclaimer on the last page                    For Private Circulation      36
January 22, 2008                                                                              Kotak Securities - Private Client Research




EVENT UPDATE                                  LIC H OUSING FINANCE
Sarika Lohra                                  PRICE : RS.283                                            RECOMMENDATION : BUY
sarika.lohra@kotak.com
+91 22 6634 1480                              T ARGET PRICE : RS.455                                     FY09E P/ABV : 1.2X

                                              LIC Housing Finance has made a preferential placement of 8.4 mn
                                              shares to First Gulf Bank (5 mn) and LIC of India (3.4 mn) at Rs.410
                                              per share for a total consideration of Rs.3.44 bn. On a post diluted
                                              equity capital of Rs.934 mn, the allotment of shares has lead to a
                                              9% equity dilution. Post allotment of shares, the Tier I capital
                                              adequacy of LICHF would improve to 14% from 12% previously. We
                                              opine that with the fresh capital infusion, the strong growth in
                                              business is likely to continue. We continue to maintain our estimates
                                              for the company, as we had incorporated the dilution in our working.
                                              At the current price of Rs.283, the stock is trading at 6.3x FY09 P/E
                                              (EPS of Rs 44.8), and 1.2x its FY09E ABV of Rs.243. We reiterate BUY
                                              on the stock with a price target of Rs.455.

                                              n The Boards of Directors of LIC Housing Finance has approved plans to make a
Summary table
                                                preferential allotment of 8.4 mn shares at Rs.410 to First Gulf Bank (5 mn
(Rs bn)               FY07 FY08E FY09E          shares) and LIC of India (3.4 mn shares) at a premium of Rs.400 per share.
Interest Income        15.0    20.3    24.8     The preferential issue was made for a total consideration of Rs.3.44 bn, leading
Interest expenses      11.0    15.0    18.3     to a post equity dilution of 9%.
NII                     4.0     5.3     6.5
Non-Int Income          0.8     1.0     1.2
                                              n The equity capital of the company post equity dilution would amount to Rs.934
Total Income            4.8     6.4     7.7
Optg Profit             3.7     5.1     6.1     mn (93.4 mn shares) from Rs.850 mn shares previously.
PAT                     2.8     3.5     4.2
Gross NPA (%)           2.6     2.2     1.8   n The company has issued shares to LIC of India to maintain its shareholding at
Net NPA (%)             1.3     1.0     0.7     40.5%, in LIC Housing Finance.
NIMs (%)                2.5     2.7     2.7
RoA (%)                 1.7     1.7     1.7
                                              n With this preferential placement, LIC Housing Finance's Tier I capital adequacy
RoE (%)                19.3    18.8    18.2
Divi. Payout Ratio (%) 26.1    27.3    27.1
                                                will improve to 14% from 12% previously. The capital adequacy ratio of the
EPS (Rs)               32.9    37.1    44.8     company will improve to 17% from 15% as on December 31 2007.
BV (Rs)              181.6    229.2   261.9
Adj. BV (Rs)         154.5    207.0   243.1   n Since we had factored in the growth in business following the augmentation of
P/E (x)                 8.6     7.6     6.3     the capital in the business, and robust performance demonstrated by the
P/ABV (x)               1.8     1.4     1.2
                                                company in 9MFY08, we continue to maintain our earning estimates for FY08
Source: Company & Kotak Securities -            and FY09.
Private Client Research

                                              n We maintain our net profit estimates for the company for FY08E at Rs.3.47 bn
                                                and for FY09E at Rs.4.18 bn. Only the estimated EPS has changed marginally
                                                following the issuance of shares at a significant premium.

     We recommend a BUY on                    n We maintain positive outlook on the stock, given the strong business growth
     LIC Housing Finance with                   improving asset quality and firm NIMs. We maintain a BUY on the stock with a
       a price target of Rs.455                 price target of Rs 455. At the current market price, the stock is trading at 1.2x
                                                its FY09E ABV of Rs 243 and 6.3x its FY09 EPS of Rs 44.8.




Daily Morning Brief                       Please see the disclaimer on the last page                   For Private Circulation      37
January 22, 2008                                                                         Kotak Securities - Private Client Research




         Bulk deals       Trade details of bulk deals
                          Date        Scrip name           Name of client                        Buy/ Quantity                 Avg. Price
                                                                                                 Sell of shares                      (Rs)
                          21-Jan      Axon Infotec         Avinash Arvind Jagushte               S                5,324            65.09
                          21-Jan      Choksi Imag          Nirmal Invesments                     S               20,000             27.64
                          21-Jan      Cmm Broadcas         Manmohan Damani HUF                   S               36,751              7.23
                          21-Jan      Diamon Cable         Reliance Amc Account PMS              S               85,543           501.21
                          21-Jan      Flap Prod Eq         Photon Infotech Private Ltd           B               33,601           450.17
                          21-Jan      Flap Prod Eq         Mingel Zav Tuscano                    S               26,000           464.44
                          21-Jan      Garnet Intl          Nickunj G Shah                        B             101,701             91.29
                          21-Jan      Genus Power          Talma Chemicals Inds. Pvt. Ltd.       B             300,000            727.00
                          21-Jan      Genus Power          Prism Impex Pvt Ltd                   S             100,000            752.00
                          21-Jan      Glory Poly           Mavi Impex Ltd                        B             313,200             96.99
                          21-Jan      Glory Poly           Axiom Impex Int Limited               S             300,000             96.82
                          21-Jan      KEW Industr          Sudip A Patel                         B               70,250            46.64
                          21-Jan      KEW Industr          Bliss Investment Consultancy          S               70,000            46.56
                          21-Jan      MCD Holding          Ruanne Cunniff and Gold Farb Inc
                                                           Acacia Parterslp                      B               84,638           335.38
                          21-Jan      Rajesh Expot         JM Financial MF                       B             331,520            711.06
                          21-Jan      Rama Paper           Susamma Mathew                        S               71,850             27.14
                          21-Jan      Southern Isp         North Delhi Construction and
                                                           Investment Pvt Ltd                    B               40,000            39.09
                          21-Jan      Usher Agro           Mavi Investment Fund Ltd              B             200,000            218.49

                          Source: BSE




Daily Morning Brief   Please see the disclaimer on the last page                                     For Private Circulation          38
January 22, 2008                                                                                                                            Kotak Securities - Private Client Research




    Gainers & Losers                                        Nifty Gainers & Losers
                                                                                             Price (Rs)                   % change                  Index points              Volume (mn)
                                                            Gainers
                                                            Satyam Comp                                367                         (2.0)                         (0.9)                         4.9
                                                            GlaxoSmithkline                            946                         (6.4)                         (0.9)                       0.05
                                                            Sun Pharma                               1,060                         (2.6)                         (1.0)                        0.2
                                                            Losers
                                                            Reliance Ind                             2,541                         (9.2)                        (65.5)                         8.3
                                                            NTPC                                       206                        (14.0)                        (48.0)                       25.8
                                                            ONGC                                     1,117                          (7.9)                       (35.5)                         2.2

                                                            Source: Bloomberg



          Forthcoming                                       COMPANY/MARKET
             events                                         Date            Event
                                                            22-Jan          Balaji Telefilms, Tech Mahindra, Pidilite Industries, Zandu Pharmaceutical, Tamil Nadu
                                                                            Newsprint & Papers, Bank of India, Lupin, Corporation Bank, Tata Elxsi, United Spirits,
                                                                            Grasim Ind, Punjab Tractors, Asahi India Glass, I-flex Solutions, Sesa Goa, Amara Raja
                                                                            Batteries, GSFC, India Infoline, Pantaloon Retail, Tata Teleservices, Vijaya Bank earnings
                                                                            expected; IRB Infrastructure holds press conference to discuss on IPO
                                                            23-Jan          Polaris Software, Ballarpur Industries, BRPL, Fortis Healthcare, Sonata Software, Mirc
                                                                            Electronics, Chennai Petroleum Corpn, Bajaj Hindustan, Union Bank of India, D-Link India,
                                                                            Dena Bank, Canara Bank earnings expected
                                                            24-Jan          3i Infotech, Wyeth, GTL, Apollo Hospitals, GMR Infrastructure, Central Bank of India,
                                                                            Punjab National Bank, HDIL, SBI, Engineers India, ICI India earnings expected

                                                            Source: Bloomberg




  Research Team
Name                                           Sector                                                                  Tel No                     E-mail id
Dipen Shah                                     IT, Media, Telecom                                                      +91   22   6634   1376     dipen.shah@kotak.com
Sanjeev Zarbade                                Capital Goods, Engineering                                              +91   22   6634   1258     sanjeev.zarbade@kotak.com
Teena Virmani                                  Construction, Cement, Mid Cap                                           +91   22   6634   1237     teena.virmani@kotak.com
Awadhesh Garg                                  Pharmaceuticals, Hotels                                                 +91   22   6634   1406     awadhesh.garg@kotak.com
Apurva Doshi                                   Logistics, Textiles, Mid Cap                                            +91   22   6634   1366     doshi.apurva@kotak.com
Saurabh Gurnurkar                              IT, Media, Telecom                                                      +91   22   6634   1273     saurabh.gurnurkar@kotak.com
Saurabh Agrawal                                Metals, Mining                                                          +91   22   6634   1291     agrawal.saurabh@kotak.com
Saday Sinha                                    Banking, Economy                                                        +91   22   6634   1440     saday.sinha@kotak.com
Rohit Ledwani                                  Retail                                                                  +91   22   6634   1507     rohit.ledwani@kotak.com
Sarika Lohra                                   NBFCs                                                                   +91   22   6634   1480     sarika.lohra@kotak.com
Chetan Shet                                    FMCG, Power                                                             +91   22   6634   1382     chetan.shet@kotak.com
Shrikant Chouhan                               Technical analyst                                                       +91   22   6634   1439     shrikant.chouhan@kotak.com
Kaustav Ray                                    Editor                                                                  +91   22   6634   1223     kaustav.ray@kotak.com
K. Kathirvelu                                  Production                                                              +91   22   6634   1557     k.kathirvelu@kotak.com


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