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					                                                                                                                             Market Outlook
                                                                                                                                            India Research
                                                                                                                                                  April 24, 2012
 Dealer’s Diary
                                                                                                                  Domestic Indices      Chg (%)       (Pts)   (Close)
 The Indian markets are expected to edge higher tracing positive opening in most of
                                                                                                                  BSE Sensex              (1.6) (277.2) 17,097
 the Asian bourses and SGX nifty.
                                                                                                                  Nifty                   (1.7)     (90.3)    5,201
 Global markets remained negative throughout Monday on back of political                                          MID CAP                 (1.7) (107.4)       6,310
 uncertainty prevailing in Europe and negative data from Spain and China. The                                     SMALL CAP               (1.5) (106.0)       6,795
 Spanish economy slipped back into recession in the first quarter of 2012, fueling                                BSE HC                  (0.5)     (30.8)    6,785
 concerns that the country may fail to meet the deficit targets, which may force the                              BSE PSU                 (1.5) (112.5)       7,290
 government to seek an international bailout. US and European markets also                                        BANKEX                  (2.1) (251.0) 11,799
 weighed down as economic reports showed contraction in China’s manufacturing                                     AUTO                    (1.7) (177.8) 10,575
 activity for the sixth consecutive month in April and political turmoil in Netherlands                           METAL                   (2.9) (322.1) 10,956
 and France reignited worries on the Euro-zone front.
                                                                                                                  OIL & GAS               (0.1)      (6.3)    7,938
 Indian shares fell sharply on Monday extending Friday's losses, as weak global                                   BSE IT                  (2.9) (160.3)       5,301
 cues amid political worries about Europe and dismal manufacturing data from                                      Global Indices        Chg (%)       (Pts)   (Close)
 China and the Euro zone, casted doubts on the health of the global economy.                                      Dow Jones               (0.8) (102.1) 12,927
                                                                                                                  NASDAQ                  (1.0)     (30.0)    2,970
 Markets Today
                                                                                                                  FTSE                    (1.9) (106.6)       5,666
 The trend deciding level for the day is 17,199 / 5,233 levels. If NIFTY trades above                             Nikkei                  (0.2)     (19.2)    9,542
 this level during the first half-an-hour of trade then we may witness a further rally
                                                                                                                  Hang Seng               (1.8) (386.3) 20,624
 up to 17,342 – 17,587 / 5,278 – 5,356 levels. However, if NIFTY trades below
                                                                                                                  Straits Times           (1.1)     (32.1)    2,962
 17,199 / 5,233 levels for the first half-an-hour of trade then it may correct up to
 16,954 – 16,812 / 5,155 – 5,109 levels.                                                                          Shanghai Com            (0.8)     (18.3)    2,389

 Indices                 S2                  S1            PIVOT               R1                     R2
                                                                                                                  Indian ADRs           Chg (%)       (Pts)   (Close)
 SENSEX                16,812               16,954         17,199           17,342                17,587
                                                                                                                  INFY                    (2.1)      (1.0)    $45.7
 NIFTY                 5,109                5,155          5,233             5,278                5,356
                                                                                                                  WIT                     (0.5)      (0.1)    $10.1
 News Analysis                                                                                                    IBN                     (1.2)      (0.4)    $32.6
                                                                                                                  HDB                     (3.6)      (1.2)    $33.4
        Euro Zone Update: Political uncertainty reigniting worries
        2G license: Telecom regulator announces reserve price for auction
        4QFY2012 Result Reviews – TCS, UltraTech, Tata Sponge Iron, Rallis                                       Advances / Declines               BSE          NSE
        4QFY2012 Result Previews – Sesa Goa
                                                                                                                  Advances                         990          330
 Refer detailed news analysis on the following page
                                                                                                                  Declines                        1,800        1120
 Net Inflows (April 20, 2012)
                                                                                                                  Unchanged                        105            58
   ` cr                       Purch               Sales           Net               MTD                    YTD
   FII                        1709                1381           328                (421)          44,906
                                                                                                                  Volumes (` cr)
   MFs                          415                413                 2            (407)          (5,980)
                                                                                                                  BSE                                          2,033
 FII Derivatives (April 23, 2012)                                                                                 NSE                                          9,345
   ` cr                                           Purch        Sales         Net             Open Interest
   Index Futures                                  2,081       2,590         (508)                  11,425
   Stock Futures                                  4,044       4,221         (177)                  23,879

 Gainers / Losers
                                      Gainers                                                Losers
   Company                      Price (`)      chg (%)     Company                   Price (`)     chg (%)
   Asian Paints                   3,459              3.7   United Spirits                   696        (8.9)
   Max India                        198              1.9   Lanco Infra                       16        (8.7)
   Glenmark Pharma                  324              1.6   GVK Power                         17        (6.8)
   ACC                            1,244              1.5   Shree Renuka Sug                  31        (5.7)
   Ashok Leyland                      32             1.3   Idea Cellular                     83        (5.5)

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

                 Eurozone update: Political uncertainty reigniting worries
                 Austerity measures, which started across the Eurozone by most of the member
                 countries, have yielded the desired effect by lowering government deficits to 4.1%
                 of economic output in 2011 from 6.2% in 2010. However, despite these efforts,
                 overall debt of the Eurozone has risen from 85.3% of GDP to 87.2%, indicating
                 that the crisis is far from solved. Moreover, political developments in the
                 Eurozone, especially France and Netherlands, could affect the progress made
                 until now on resolving Eurozone crisis.

                 Updates on countries that are key to resolving Eurozone crisis

                 Spain: Spain's jobs-scarce economy plunged back into recession in the first
                 quarter of 2012, as employment slumped even further. Gross domestic product
                 fell by an estimated 0.4% in the first quarter of 2012 after a 0.3% decline in the
                 last three months of 2011. Spain’s unemployment rate at 22.85% is the highest in
                 the industrialized world and is expected to increase further this year as the
                 sagging economy struggles to absorb millions of jobs destroyed in the collapse of
                 a property boom in 2008.

                 France: A strong showing by Socialist candidate, Francois Hollande, in the first
                 round of France's presidential election on Sunday may affect the progress already
                 made on resolving Eurozone crisis. Hollande wants to renegotiate a European
                 treaty, agreed to just last year, intended to limit excessive government spending.
                 He has also promised to roll back some deficit-cutting reforms put in place by his
                 opponent, current President Nicolas Sarkozy. Many fear that if Hollande wins the
                 second-round election, to be held on May 6, those steps would upset the delicate
                 cooperation with Germany that has been the key to Europe's response to its
                 financial crisis.

                 Netherlands: Netherlands, a core Eurozone member, was drawn into
                 Europe's debt crisis over the last week when the government failed to agree
                 on budget cuts, making elections almost unavoidable and casting doubt on
                 its support for future Eurozone measures.

                 Germany: The manufacturing sector unexpectedly shrank at the fastest pace in
                 nearly three years in April, denting hopes that Germany can drive growth in the
                 Eurozone and casting a shadow over upbeat business sentiment surveys. Markit's
                 manufacturing Purchasing Mangers Index (PMI) fell sharply to 46.3 from March's
                 48.4, well below the 50 mark, which signals growth in activity.

                 Italy: Thousands have taken to the streets of Italian capital, Rome, to protest over
                 government’s plans to introduce legislation that will make it easier for companies
                 to sack employees. The dispute could well escalate after Italy’s biggest union,
                 the CGIL, threatened a general strike if the government does not back down.

                 Greece: Greece’s four biggest banks have posted huge losses for last year, as
                 they wrote down the value of Greek government bonds. The banks were hit hard
                 by last month’s bond swap to cut the country’s debts that were part of the rescue
                 package negotiated by Athens with the European Union and International
                 Monetary Fund. Alpha Bank lost €3.8bn, Eurobank lost €5.5bn, National lost a
                 whopping €12.3bn and Piraeus lost €6.6bn for a total of €28.3bn.

April 24, 2012                                                                                      2
                                                           Market Outlook | India Research

                 2G license: Telecom regulator announces reserve price for

                 The Telecom Regulatory Authority of India (TRAI), yesterday, fixed the reserve
                 prices for spectrum auction. The reserve price for 900MHz has been fixed at
                 `7,244cr, while that for 1,800MHz has been fixed at `3,622cr. TRAI, whose
                 recommendations are not binding on the government, valued 2G spectrum at
                 about `7lakh cr, nearly seven times more than `1.04lakh cr that the government
                 had received through the auction of 3G spectrum in 2010. A pan-India spectrum
                 in 1,800MHz band will cost `18,000cr. TRAI recommended that the auction
                 should be open to all companies except those having a more than prescribed
                 limit of the spectrum, potentially disqualifying incumbents like Airtel, Vodafone
                 and BSNL. India is divided into 22 telecom zones and the prescribed limit is
                 8MHz for GSM carriers and 5MHz for CDMA carriers in all zones except Delhi
                 and Mumbai.

                 Major recommendations made by TRAI are as follows:

                 All spectrums to be assigned through the auction process in future shall be
                 liberalized. In other words, spectrum in any band can be used for deploying any
                 services in any technology.

                 Excess spectrum of 2×2.4MHz should be immediately taken back from MTNL.

                 The spectrum available with the service providers in the 900MHz band should be
                 replaced by spectrum in the 1,800MHz band, which should be charged at the
                 price prevalent at the time of refarming.

                 Spectrum to be offered in blocks of 1.25MHz, and at least 5MHz to be offered in
                 the auctions.

                 The refarming of spectrum in the 800MHz and 900MHz bands should be carried
                 out progressively at an early date but not later than the due date of renewal of the

                 The auction of spectrum shall be conducted using Simultaneous Multiple Round
                 Auction (SMRA) format.

                 The auction of spectrum in 700MHz band may be carried out at a later date,
                 preferably in 2014, as and when the ecosystem for LTE in 700MHz band is
                 reasonably developed, so as to be able to realize the full market value of the

                 Though the reserve price set by TRAI is higher than the base price of 3G, the
                 actual price the government got from the auctioning of 3G spectrum was many
                 times higher than the reserve price. So, keeping that in mind, in our view 2G
                 reserve prices are moderately high. We maintain our Neutral view on the telecom

April 24, 2012                                                                                      3
                                                               Market Outlook | India Research

                 Result Reviews

                 TCS (CMP: `1,059 / TP: `1,360 / Upside: 28%)

                 For 4QFY2012, TCS reported a modest set of numbers. The company reported
                 revenue of US$2,648mn, up 2.4% qoq, on the back of volume growth of 3.2%
                 qoq, while pricing declined by 1.9% qoq. In INR terms, revenue came in at
                 `13,259cr, up 0.4% qoq. The company’s revenue from BFSI was largely flat qoq
                 due to delays in ramp-up in discretionary projects; but, going ahead,
                 management indicated that revenue from the BFSI industry will pick up. The
                 company signed three multi-year large deals in BFSI in 4QFY2012. EBIT margin
                 declined by 155bp qoq due to increased SG&A expenses and INR appreciation
                 against USD. PAT came in at `2,932cr, aided by other income of `108cr in
                 4QFY2012 as against `92cr loss in 3QFY2012.

                 Management sounded less cautious than other peers like Infosys and announced
                 wage hike of ~8% for offshore employees and 2-4% for onsite employees, which
                 is encouraging. During the quarter, the company added 42 new clients and
                 signed six large deals. Hiring remained robust with gross and net addition of
                 19,156 and 11,832 employees, respectively. TCS also saw an all-time high gross
                 addition of 70,400 employees in FY2012, taking its total employee base to
                 238,583 employees. Management indicated that it will hire 50,000 gross
                 employees in FY2013 and has given offers to 43,600 freshers, which is a healthy
                 number and gives confidence about the demand environment being witnessed by
                 the company. TCS remains our top pick amongst Tier-I IT companies because of
                 its diversified portfolio on all fronts – service wise, industry exposure wise as well
                 as geography wise. The stock is currently under review.

                 Y/E      Sales      OPM     PAT       EPS     ROE    P/E     P/BV   EV/EBITDA   EV/Sales
                 March    (` cr)     (%)     (` cr)    (`)     (%)    (x)     (x)    (x)         (x)
                 FY13E    57,294     29.5    12,241    62.5    32.6   16.9    5.5    11.5        3.4
                 FY14E    66,696     28.9    13,653    69.8    29.9   15.2    4.5    10.0        2.9
                 Note: Estimates are subject to change post conference call

                 UltraTech Cement (CMP: `1,467 TP: - Upside -)

                 For 4QFY2012, Ultra Tech Cement (Ultra Tech) registered 18.9% yoy growth in
                 its stand-alone net sales to `5,337cr. Growth in net sales was on account of 7.8%
                 growth in grey cement volumes coupled with better realizations. OPM rose by
                 61bp yoy to 24.5%, despite higher costs due to better realization. On the bottom-
                 line front, net profit rose by healthy 19.3% yoy to `867cr aided by strong
                 operational performance, higher other income and lower interest costs. We will
                 be releasing a detailed result update shortly. We maintain our Neutral view on
                 the stock.

                 Y/E        Sales     OPM     PAT      EPS     RoE    P/E     P/BV   EV/EBITDA   EV/sales
                 March      (` cr)    (%)     (` cr)   (`)     (%)    (x)     (x)    (x)         (x)
                 FY13E      19,889    21.3    2,249    82.1    16.8   17.9    2.8    9.1         1.9
                 FY14E      22,399    22.5    2,672    97.5    17.4   15.0    2.4    8.2         1.8

April 24, 2012                                                                                          4
                                                            Market Outlook | India Research

                 Tata Sponge Iron (CMP – `324, TP : `420, Upside: 29%)

                 For 4QFY2012, Tata Sponge Iron (TSIL) reported a 6% yoy decline in its revenue
                 to `184cr, 15.5% higher than our estimate of `159cr. The company’s EBITDA
                 margin came in at 13.9%, lower by 493bp qoq, from 18.8% in 3QFY2012 due to
                 increased raw-material costs as a percentage of net sales possibly because of
                 higher iron ore prices. Profit for the quarter stood at `15cr as compared to `17cr
                 in 3QFY2012. We expect ramp-up in capacity utilization and better sponge iron
                 volume sales going forward. We await clarity from the management on the status
                 of its coal block, which could be a key trigger for the stock. We maintain our Buy
                 recommendation on the stock with a target price of `420, based on a target P/B
                 of 0.9x for FY2014E.

                 Y/E      Sales    OPM     PAT     EPS    RoE    P/E    P/BV   EV/EBITDA   EV/sales
                 Mar      (` cr)    (%)   (` cr)    (`)    (%)   (x)     (x)       (x)        (x)
                 FY13E     705     19.2    88      56.8   59.6   5.7     0.8      1.4        0.3
                 FY14E     773     19.2    94      61.2   69.2   5.3     0.7      0.7        0.1

                 Rallis India (CMP - `129, TP: - Upside -)

                 Rallis reported disappointing performance during 4QFY2012. The Net sales
                 and Net profit for the quarter came in at Rs205.7cr and Rs9.9cr, a dip of
                 14% and 47% respectively. Standalone top line also de grew by 14% during
                 the quarter. Consolidated EBITDA margin shrunk to 5.7%, lowest in last 3
                 years. Overall the Adjusted Net Profit stood (adjusting for a Rs 4.4cr of Forex
                 gain & Rs7.1cr of cessation cost credit) came in at Rs3cr, a dip of 86% yoy.
                 We maintain a Neutral stance on the stock.

                 Y/E     Sales     OPM     PAT     EPS    RoE     P/E   P/BV   EV/EBITDA   EV/sales
                 Mar     (` cr)     (%)   (` cr)    (`)    (%)    (x)    (x)       (x)        (x)
                 FY13E   1,570     17.9    186      9.5   25.4   13.5    3.1      9.6        1.7
                 FY14E   1,884     11.9    225     11.6   25.1   11.1    2.5      7.4        1.3

                 Result Previews

                 Sesa Goa

                 Sesa Goa is slated to announce its 4QFY2012 result today. We expect the
                 company’s top-line to decrease by 17.0% yoy to `3,006cr mainly on account of
                 decline in sales volumes. On the operating front, EBITDA margin is expected to
                 contract 1,887bp to 39.6% due to lower volumes, decline in iron ore prices and
                 higher export duty. Further, the bottom-line is expected to decline by 15.0% yoy to
                 `1,247cr due to decline in operating profits, partially offset by contribution from
                 share of profits from its associate, Cairn India. We recommend Accumulate on
                 the stock with a target price of `206.

April 24, 2012                                                                                        5
                                                       Market Outlook | India Research

                 Quarterly Bloomberg Brokers’ Consensus Estimates

                 Sesa Goa - Consolidated (24/04/2012)
                 Particulars (` cr)   4Q FY12E    4Q FY11    y-o-y (%)    3Q FY12    q-o-q (%)
                 Net sales               2,626      3,607        (27)       2,604           1
                 EBITDA                   958       2,118        (55)       1,085         (12)
                 EBITDA margin (%)        36.5       58.7                    41.7
                 Net profit               987       1,462        (32)        692           43

                 LIC Housing Finance - (25/04/2012)
                 Particulars (` cr)    4Q FY12E    4Q FY11    y-o-y (%)    3Q FY12    q-o-q (%)
                 Net profit                 256        315         (19)        306         (16)

                 Nestle India - (25/04/2012)
                 Particulars (` cr)   1Q CY12E    1Q CY11    y-o-y (%)    4Q FY11    q-o-q (%)
                 Net sales               2,173      1,810          20       1,955          11
                 EBITDA                   467         383          22        410           14
                 EBITDA margin (%)        21.5       21.2                    21.0
                 Net profit               2,96        256          16        231           28

                 Sterlite Industries Ltd - Consolidated (25/04/2012)
                 Particulars (` cr)   4Q FY12E    4Q FY11    y-o-y (%)    3Q FY12    q-o-q (%)
                 Net sales              10,439     10,000           4      10,246           2
                 EBITDA                  2,545      3,059        (17)       2,318          10
                 EBITDA margin (%)        24.4       30.6                    22.6
                 Net profit              1,381      1,925        (28)        914           51

                 Wipro - Consolidated (25/04/2012)
                 Particulars (` cr)   4Q FY12E    4Q FY11    y-o-y (%)    3Q FY12    q-o-q (%)
                 Net sales              10,102      8,302          22       9,881           2
                 EBITDA                  1,909      1,861           3       1,868           2
                 EBITDA margin (%)        18.9       22.4                    18.9
                 Net profit              1,485      1,375           8       1,375           8

                 Yes Bank - (25/04/2012)
                 Particulars (` cr)    4Q FY12E    4Q FY11    y-o-y (%)    3Q FY12   q-o-q (%)
                 Net profit                 262        203          29         254          4

April 24, 2012                                                                               6
                                                                                                       Market Outlook | India Research

                                               Idea - Consolidated (26/04/2012)
                                               Particulars (` cr)           4Q FY12E           4Q FY11           y-o-y (%)         3Q FY12   q-o-q (%)
                                               Net sales                          5,302            4,199                26           5,020          6
                                               EBITDA                             1,429            1,075                33           1,345          6
                                               EBITDA margin (%)                   27.0             25.6                              26.8
                                               Net profit                           244              275              (11)            201          21

                                               Economic and Political News
                                                   Finance Ministry may cut capital gains tax on PE investments
                                                   Foodgrain output estimates for FY2012 increased to 252.5mn tn
                                                   Government is importing 14 mn tn of oil from Iran

                                               Corporate News
                                                   MoEF fast-tracks green clearance for coal-based projects
                                                   Government allows RIL-BP to survey only 5 gas fields in KG-D6 block
                                                   SBI may not cut lending rates soon: Chaudhuri
                                               Source: Economic Times, Business Standard, Business Line, Financial Express, Mint

Results Calendar
 24/04/2012      Sesa Goa, Petronet LNG
 25/04/2012      Wipro, Sterlite Inds, Nestle, LIC Housing Fin., Yes Bank, Alembic Pharma
 26/04/2012      Idea Cellular, Gujarat Gas
 27/04/2012      ICICI Bank, Jindal Steel, Axis Bank, Siemens, Indiabulls Fin., Hind. Const.
 28/04/2012      Maruti
                 Titan Inds., Dabur India, Godrej Consumer, Exide Industries, Oriental Bank, United Phosphorus, Punj Lloyd, KPIT
                 Cummins, Taj GVK

April 24, 2012                                                                                                                                       7
                                                                                                           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 24, 2012                                                                                                                                     8

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