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									                                                                                                                          Market Outlook
                                                                                                                                         India Research
                                                                                                                                                April 4, 2012
 Dealer’s Diary
                                                                                                               Domestic Indices      Chg (%)       (Pts)   (Close)
 The Indian markets are expected to open marginally lower tracking cues from SGX                               BSE Sensex                0.7     119.3 17,597
 Nifty which is trading in the red. Further, most of the Asian indices too are trading                         Nifty                     0.8      40.6     5,359
 in the negative zone.
                                                                                                               MID CAP                   1.0      60.7     6,476
 The U.S markets fell on Tuesday following the release of the minutes of the Federal                           SMALL CAP                 1.1      76.7     6,818
 Reserve’s latest monetary policy meeting which seemed to indicate that the                                    BSE HC                  (0.5)     (29.6)    6,587
 members were not keen to initiate another round of quantitative easing amid signs                             BSE PSU                   1.2      89.5     7,469
 of improvement in the economy. Meanwhile another report by U.S commerce                                       BANKEX                    1.2     145.2 12,016
 department showed that growth in factory orders was less than expected in                                     AUTO                    (0.2)     (19.1) 10,110
 February. The major European markets too fell in the range of 0.6% – 1.6%.                                    METAL                     1.4     156.4 11,472

 Meanwhile the Indian markets rose on Tuesday for the third consecutive day                                    OIL & GAS                 1.6     126.1     8,191

 buoyed by FII buying. The markets also gained on hopes that the RBI would start                               BSE IT                  (0.1)      (3.8)    6,114
 cutting rates in the coming months.                                                                           Global Indices        Chg (%)       (Pts)   (Close)
                                                                                                               Dow Jones               (0.5)     (64.9) 13,200
 Markets Today
                                                                                                               NASDAQ                  (0.2)      (6.1)    3,114
 The trend deciding level for the day is 17,611 / 5,361 levels. If NIFTY trades above                          FTSE                    (0.6)     (36.6)    5,838
 this level during the first half-an-hour of trade then we may witness a further rally                         Nikkei                  (0.6)     (59.5) 10,050
 up to 17,651 – 17,707 / 5,377 – 5,395 levels. However, if NIFTY trades below
                                                                                                               Hang Seng                 1.3     268.7 20,791
 17,611 / 5,361 levels for the first half-an-hour of trade then it may correct up to
                                                                                                               Straits Times           (0.0)      (1.1)    3,015
 17,557 – 17,516 / 5,342 – 5,326 levels.
                                                                                                               Shanghai Com              0.5      10.6     2,263
 Indices                 S2                  S1            PIVOT             R1                    R2
 SENSEX                17,516               17,557         17,611           17,651             17,705          Indian ADRs           Chg (%)       (Pts)   (Close)
 NIFTY                 5,326                5,342          5,361            5,377              5,395           INFY                      0.4       0.2     $57.6

 News Analysis                                                                                                 WIT                     (0.5)      (0.1)    $10.9

        Coal India reports robust FY2012 production and offtake numbers                                       IBN                     (0.8)      (0.3)    $35.5

        Cairn India makes discovery in KG basin                                                               HDB                     (0.2)      (0.1)    $34.6

        BHEL’s FY2012E provisional results
        Nalco reports FY2012 production and offtake numbers                                                   Advances / Declines               BSE          NSE

        SpiceJet to import ATF directly                                                                       Advances                        1,760       1,005
 Refer detailed news analysis on the following page                                                            Declines                        1074          457
 Net Inflows (March 30, 2012)                                                                                  Unchanged                        113            63
   ` cr                       Purch               Sales            Net            MTD                   YTD
   FII                        7,061            5,763            1,298          9,028            45,326         Volumes (` cr)
   MFs                          334                421            (87)            (87)          (5,661)        BSE                                          2,239

 FII Derivatives (April 3, 2012)                                                                               NSE                                         10,574
   ` cr                                           Purch        Sales        Net           Open Interest
   Index Futures                                  1,586       1,045         541                    9,531
   Stock Futures                                  1,008         883         125                 22,630

 Gainers / Losers
                                      Gainers                                             Losers
   Company                      Price (`)      chg (%)     Company                Price (`)     chg (%)
   National Alum                      62            11.2   Pidilite Inds                 167        (3.4)
   Manappuram Finance                 35             9.9   Opto Circuits                 194        (2.7)
   Essar Oil                          60             9.6   Dr Reddys Lab             1,694          (2.6)
   Pantaloon Retl                   167              9.6   Bajaj Holdings                810        (2.3)
   Crisil                         1,054              6.2   Hero MotoCorp             2,010          (2.3)

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

                Coal India reports robust FY2012 production and offtake

                Coal India reported its production and sales volume numbers for FY2012.
                Production volumes grew by 1.0% yoy to 435.8mn tonnes, while sales volumes
                grew by 1.9% yoy to 432.5mn tonnes in FY2012 (in-line with our expectation).
                Despite reporting a 19.0% and 16.9% yoy decrease in production during August
                and September 2011 (on the back of heavy rains), Coal India reported modest
                growth in production volumes during FY2012. The company also raised its
                FY2013 production guidance to 470.0mn tonnes compared to 464.0mn tonnes

                Separately the government issued a presidential directive to Coal India to supply
                at least 80% of the quantity of coal committed to power companies. However, the
                directive gave the company freedom to relax the penalty payable in case of
                shortfall. We believe the freedom to relax the penalty is positive for Coal India
                given that it is struggling to raise the production and supply due to environmental
                and infrastructural issues. We maintain our Neutral view on the stock.

                Cairn India makes discovery in KG basin

                Cairn India’s 100% subsidiary, Cairn Energy India Ltd. (Cairn Energy) has notified
                the Management Committee of an oil discovery in the Nagayalanka-SE-1 well in
                the onshore block KG-ONN-2003/1 in the Krishna-Godavari Basin. Cairn Energy
                is the operator in the block with 24% stake, while Cairn India and ONGC hold
                25% and 51% stake, respectively, in the block. A gross 57m hydrocarbon column
                has been interpreted from log data, core and testing data to be the oil-bearing
                block. However, as per the company, further appraisal will be required to
                establish the commerciality of the Nagayalanka-SE discovery. We await further
                clarity on the commercial feasibility of the block. Until then, we maintain our
                estimates and recommend Neutral on the stock.

                BHEL’s FY2012E provisional results

                 BHEL announced its provisional results for FY2012. The company reported top
                line and bottom line of `49,301cr and `6,868cr, respectively. Revenue and net
                profit for FY2012 grew by 19.4% and 21.2% yoy, respectively. Results were in-line
                with our estimates, with revenue below expectation by 0.4% and net profit above
                expectation by 2.3%. We will come out with a detailed report after the company
                releases its results and the conference call. Currently, we remain Neutral on the

April 4, 2012                                                                                     2
                                                                        Market Outlook | India Research

                Nalco reports FY2012 production and offtake numbers

                Nalco’s aluminium production decreased by 6.9% yoy to 413,000 tonnes in
                FY2012 on the back of lower coal availability and declining aluminium prices.
                The company’s cast metal sales stood at 415,916 tonnes in FY2012, compared
                to 438,952 tonnes in FY2011. Nevertheless, the company reported growth in its
                bauxite and alumina production. Nalco’s bauxite production volumes stood at
                5mn tonnes (4.9mn tonnes in FY2011) and its hydrate alumina production stood
                at 1.7mn tonnes (1.6mn tonnes in FY2011) in FY2012. Production and sales
                numbers are broadly in-line with our expectations. We maintain our Neutral view
                on the stock.

                SpiceJet to import ATF directly

                SpiceJet has decided to start import of aviation turbine fuel (ATF) through a
                private oil marketing company at an airport in southern India on a pilot basis to
                check the economic viability of the process. Reliance Industries is expected to
                import ATF for SpiceJet and provide the necessary infrastructure according to a
                news report. The company will import ATF on a trial basis to see the cost
                advantage of importing directly, which it will start in the next six to eight weeks.
                SpiceJet is not sure of the exact percentage of saving from direct import; but from
                preliminary analysis, the company expects to save 5-7% on fuel cost. ATF
                accounts for nearly 50% of the total cost and a 5-7% saving on it will help it
                improve its margins significantly in the near future. Direct import will help aviation
                companies to save around `13,000 per tonne of ATF at current prices, which are
                ruling at `69,000-76,000 per tonne at the four metros. SpiceJet is the first airline
                to apply for the import approval of ATF. We have a Buy recommendation on
                SpiceJet; the target price is under review.

                Economic and Political News
                    Government may clear FDI cap in broadcasting services
                    India to exceed 100mn 3G connections by 2014: GSMA
                    Parliament may consider finance bill on May 7
                    Provide new interest rates on PPF: RBI orders banks
                    US-India goods trade deficit up 42% at US$14.5bn

                Corporate News
                    HDFC Bank to lend `150cr for Kingfisher Towers
                    BHEL open to collaborations with Chinese firms
                    Pfizer completes sale of animal health division for `440cr
                    Mahindra Lifespace plans to develop two more business cities
                Source: Economic Times, Business Standard, Business Line, Financial Express, Mint

April 4, 2012                                                                                        3
                                                                                                           Market Outlook | India Research

                                                   Source: Economic Times, Business Standard, Business Line, Financial Express, Mint
  Research Team Tel: 022 - 39357800                    E-mail:                                 Website:


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April 4, 2012                                                                                                                                       4

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