Essence of the Week_18 Dec 2009 Visit us at money.umakant.info by icestar

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									EOW – 18 DECEMBER 2009

                                           ENAM Securities
                                           India Research
                                                                                                                                         Sensex: 16,720
                                                                                                                                            Nifty: 4,988

                             Essence of the Week
                              Advance tax payment                            WHAT'S IN IT FOR YOU?
                               (INR crores)            3rd Quarter
                               Company name         FY09 FY10 % Chg
                               Idea Cellular           8    48 500           1.    Market Outlook ............................................................ 2
                               Mahindra & Mahindra    45 195 333
                               Bajaj Auto            105 320 205
                                                                                   A.    ENAM rating & Changes in estimates................................4
                               Tata Power Co          29    81 181                 B.    Major Nifty stock moves this week ...................................5
                               Tata Steel            250 650 160
                               Hindalco               40 100 150
                               Lupin                  15    30 100
                                                                             2.    Macro Overview ........................................................... 6
                               Grasim Industries      75 150 100                   A.    Eco highlights.....................................................................6
                               RIL                   456 834        83             B.    Debt & Money market.......................................................7
                               Bank of Baroda        220 355        61
                               HDFC Bank             250 400        60
                               Ultratech              65    90      38       3.    Summaries of Reports released this week..................... 8
                               TCS                   129 177        37             A.    China Visit (Aluminium): Dragon awakened, demand
                               Hindustan Unilever    155 200        29                   growth of 15% ...................................................................8
                               HDFC                  280 320        14
                                                                                   B.    DLF: Paving the way for a REIT listing................................8
                               LIC                   871 981        13
                               Ambuja Cements        140 150          7            C.    Cadila: Play on structural transformation.........................9
                               SBI                 1,700 1,795        6
                               Siemens               127 120         (6)     4.    Ear to the ground ........................................................ 10
                               ACC                   125 110       (12)
                               L&T                   312 270       (13)
                               ICICI Bank            625 301       (52)      5.    Market snapshot......................................................... 11
                               Bank of India         370 102       (72)            A.    Indian markets.................................................................11
                               Tata Motors             0 100        NA
                                                                                   B.    Trading disclosures ..........................................................13
                              Source: Mint
                                                                                   C.    Deciphering Derivatives...................................................14
                                                                                   D.    Global Asset class performance ......................................17
                              Dollar index (DXY)
                                                                                   E.    Global equity performance..............................................18
                                                                                   F.    Global Equity Valuations..................................................19
                                90
                                                                                   G.    Commodity Snapshot ......................................................20
                                86
                                                                             6.    Events to watch out for .............................................. 22
                                82
                                                                             7.    ENAM Valuation & Recommendations........................ 23
                                78


                                74
                                 Jan‐09        Jun‐09       Nov‐09

                                               Indicates the general
                              Source: Bloomberg, #
                              international value of the USD by
                              averaging exchange rates between
                              USD and 6 major world currencies

                                                                           ENAM Research                ENAM Sales
                                                                           Tel: 9122 6754 7600          Tel: 9122 6754 7500




                         ENAM Research is available on Bloomberg (ENAM <Go>), Reuters.com and Firstcall.com                                         18 December 2009
                                                                               Essence of the Week


1. MARKET OUTLOOK
The Federal Reserve kept its interest rates unchanged (between 0 to 0.25%) even as it noted
that the economy is improving. However, it dropped a subtle hint towards tightening. As a
result, the dollar strengthened. The Fed repeated its pledge to keep interest rates
“exceptionally low” for an extended period and made it clear that most of the special liquidity
facilities will expire on Feb. 1, 2010.

Back home, an eleven year high in food price inflation that touched 20% will cause the RBI to
focus on inflation from growth. As food prices have been very high for over a year, the non‐core
inflation being temporary and volatile will not cut ice with the RBI anymore. We expect the RBI
to raise the CRR by 50 bps in a move to contain inflationary expectations.

ST Market Outlook and Reco: The reversal in the fortunes of the USD will keep EMs under
pressure in the ST and fears of a lurking CRR hike will keep the domestic markets on
tenterhooks. Moreover, most foreign institutional investors would be tempted to protect their
YTD performance as the year ends and given that the Christmas holiday season is upon us would
cause a perceptible fall in trading volumes. So savour your successes of the year gone by and
beware of the rising USD!

OW: IT, Pharma, FMCG

UW: Public Sector Banks, Metals




DECEMBER 2009                             ENAM Securities                                       2
                                                                                                                            Essence of the Week


Sensex valuation (Free float adjusted)                                   Sensex: 200 & 50DMA

ENAM                              FY09         FY10e         FY11e        22,000
EPS                               806            843         1,040
EPS gwth (%)                       1.7           4.5          23.4        18,000
PE (x)                            20.7          19.8          16.1
PB (x)                             3.4           3.0           2.6        14,000
ROE (%)                           16.0          15.0          16.1
Di vi dend yi el d (%)             1.1           1.1           1.2
                                                                          10,000
Consensus                                      FY10e         FY11e
EPS                                              830         1,038
                                                                              6,000
EPS gwth (%)                                     2.9          25.1
Note: Va l ua ti ons ba s ed on current pri ce a nd a djus ted for               Nov‐07         Ma y‐08    Nov‐08      Ma y‐09      Nov‐09
hi s tori c cons ti tuents                                                               Sens ex Index             200DMA        50DMA


Source: ENAM Research, Bloomberg.


Sensex: 12mth fwd P/E                                                    Sensex: 12mth fwd EV/EBITDA

 26                                                                      22
       (x)                                                                       (x)
 22
                                                                         18
 18
                                                                         14
 14
                                                                         10
 10

  6                                                                       6
                                                                          Apr‐04 Apr‐05 Apr‐06 Apr‐07 Apr‐08 Apr‐09
  Apr‐04 Apr‐05 Apr‐06 Apr‐07 Apr‐08 Apr‐09
         PER          Mea n           +1SD           ‐1SD                                    ‐1 STD        +1 STD           Mea n


Source: ENAM Research, Bloomberg


Sensex: PBR vs. ROE                                                      Sensex: Earnings yield vs. 10yr bond

 4.5                                                        22           12
        (x)                                         (%)                                (%)
 4.0
                                                                         10
 3.5                                                        20

 3.0                                                                      8
                                                            18
 2.5                                                                      6
 2.0                                                        16
                                                                          4
 1.5
 1.0                                                        14            2
   Apr‐04 Apr‐05 Apr‐06 Apr‐07 Apr‐08 Apr‐09                              Apr‐04 Apr‐05 Apr‐06 Apr‐07 Apr‐08 Apr‐09
          PBR (x)                  ‐1 STD
                                                                                         Ea rnings yi el d ‐ LHS            10yr bond
          +1 STD                   Mea n
          ROE (%) ‐ RHS

Source: ENAM Research, Bloomberg




DECEMBER 2009                                                    ENAM Securities                                                             3
                                                                                                                  Essence of the Week


A. ENAM rating & changes in estimates
One month sectoral relative views are based on near‐term macro & sectoral valuations. However, the other
columns are based on a 12 month view where for each sector, the market cap weighted average of upsides of
stocks in that sector, based on our target prices are provided. Stocks of market cap> $ 1 bn with upsides above/
below such sectoral range on a 12 m view, are noted as out/ underperformers relative to sector avg upside.


ENAM Rating: Only stocks of market cap $ 1 bn+ mentioned here
                          1 month view                                               12 month view
Sector                    rel to Sensex                     OP ‐ Stocks                                     UP ‐ Stocks
Autos                              N                Ba ja j Auto, Ta ta Motors                            As hok Leyl a nd
Ba nks & Fi n Serv                UW                       ICICI, Axi s , BoB                                    BoI
Cement                             N                             Gra s i m                              ACC, Ambuja Cem
Engi neeri ng                      N                       BHEL, Crompton                                 ABB, Si emens
FMCG                              OW                                 ‐                                         Nes tl e
Infra s tructure                   N                                 ‐                                            ‐
IT Servi ces                      OW                      Ora cl e, Mpha s i s                       Tech Ma hi ndra , HCL Tech
Logi s ti cs                       N                                 ‐                                     Jet Ai rwa ys
Medi a                             N                                 ‐                                            ‐
Meta l s                          UW                              Na l co                                Ta ta Steel , SAIL
Oil & Ga s                         N                           ONGC, IOC                                        Ca i rn
Pha rma ceuti ca l s              OW              Ca di l a , Pi ra ma l Hea l thca re                        Ra nba xy
Power Uti l i ti es                N                   Ada ni Ent, JP Hydro                                       ‐
Rea l Es ta te                    UW                               IBREL                                      Uni tech
Reta i l                          OW                           Pa nta l oon                                       ‐
Tel ecom                           N                                 ‐                                            ‐
Source: ENAM Research; Note: OW=Overweight, UW=Underweight, N=Neutral, UR=Under Review,


EPS & Target Price changes during the week
Shaded cells are where any changes in TP/ EPS have been made during the week.
                                                                                              EPS (Rs)
                          CMP            Tgt Price (Rs)                       FY10e                               FY11e
Company Name              (INR)        Previous Current        Previous        Current     % Chg      Previous     Current        % Chg
Metals
Hi nda l co Inds *           143           105      111              5.1            5.3       4           10.0         9.9          (1)
NALCO                        383           371      392             16.1           16.1        ‐          35.3        37.7           7
Pharmaceuticals
Ca di l a Hea l thca re      651           620      718             33.4           33.8       1           38.7        39.9           3
Source: ENAM Research, Bloomberg; * Sensex Cos


For ENAM Universe Rating/ valuation please refer Section 7




DECEMBER 2009                                               ENAM Securities                                                               4
                                                                                                                                        Essence of the Week


B. Major Nifty stock moves this week

Price & volume performance grid

                                  ^
  Up, but                                                                                                                                           Up, on
  on low                                                                                                                                            high
  volumes                                  HCL Tech                           Ra nba xy                                               ACC           volumes




                                 5

                                                                                              ABB, Hi nda l co,
                                                        Amb Cem, Sun         Ci pl a , TCS,                       Hero Honda ,     Gra s i m,
                                                                                               Infos ys , SAIL,
                                                          Pha rma            Ta ta Steel                          M&M, Wi pro      Si emens
           Price Change 5d (%)




                                                                                               Ta ta Motors

                                 0

                                                         BHEL, Idea
                                        BPCL, Bha rti
                                                       Cel l , NTPC, Rel
                                         Ai rtel , Rel                      Ca i rn, GAIL,
                                                           Ca pi ta l ,                        L&T, PNB, JP
                                           Power,                           ITC, ONGC,                               HDFC            HUL
                                                           Sterl i te,                         As s oci a tes
                                       Ma ruti , Power                       Rel Infra
                                                        Suzl on, Ta ta
                                             Gri d
                                                             Power
                                 (5)


 Down,                                                                                                                                              Down,
 but on                                                                    Rel i a nce Ind,   DLF, HDFC Bk,                                         on high
 low                                        RCOM              JSPL                                                               IDFC, Axi s Bk
                                                                             Uni tech          ICICI Bk, SBI                                        volumes
 volumes
                                  <




                                       <               (30)                (15)           0            25                   50                  >
                                                                            Average 5d Volume Change (%)

Source: ENAM Research, Bloomberg




DECEMBER 2009                                                                     ENAM Securities                                                        5
                                                                                                                                                                         Essence of the Week


2. MACRO OVERVIEW
A. Eco highlights
WPI: Rapid rise a cause of concern                                                                                    Food inflation shot up to 20% ‐ 11 yr high
                                                                                                                                                      W‐o‐W (%)                Y‐o‐Y (%)
 14
         (YoY %)                                                                                                      Particulars                     FY09       FY10         FY09         FY10
 12                                                                                                                   Primary Articles                (0.6)        0.4         11.5        15.0
 10                                                                                                                   ‐ Food Articles                 (0.4)        0.3         10.3        20.0
  8                                                                                                                   ‐ Non‐Food Articles             (1.7)        0.5          9.9         5.7
  6                                                                                                                   Fuel, Power,
                                                                                                                                                      (3.8)        0.0          0.5         3.4
  4                                                                                                                   Light & Lubricants
                                                                                                                      Source: EA‐Industry
  2
  0
 (2)
                Mar‐08

                         May‐08




                                                    Nov‐08



                                                                        Mar‐09

                                                                                 May‐09




                                                                                                             Nov‐09
       Jan‐08




                                  Jul‐08

                                           Sep‐08



                                                               Jan‐09




                                                                                          Jul‐09

                                                                                                    Sep‐09




Source: Bloomberg


10‐yr crossed 7.6% on expectations of rate hike                                                                       Exports in +ive territory due to base effect

 8.0                                                                                                                    30
                                                                                                                                                                                     (%)
         (%)
                                                                                                                        20
 7.5
                                                                                                                        10
 7.0
                                                                                                                         0
 6.5                                                                                                                   (10)

 6.0                                                                                                                   (20)

 5.5                                                                                                                   (30)

                                                                                                                       (40)
 5.0
                                                                                                                              Sep‐08        Ja n‐09           Ma y‐09       Sep‐09
   Ja n‐09        Ma r‐09 Ma y‐09                            Jul ‐09         Sep‐09                Nov‐09

Source: Bloomberg


WPI & food inflation: Food inflation has jumped to 20%, the highest in 11 years. Food price inflation has been in
double digits for almost a year despite a record food stock of 55 MT and hence there is a likelihood that it will
creep into wage inflation and more importantly into inflationary expectations.

With GDP growth being stronger than expected and liquidity continuing to be ample with foreign flows refusing
to abate, RBI’s focus will shift to inflation from growth. We expect the RBI to raise the CRR by 50 bps in a move to
contain inflationary expectations much before its policy in Jan.




DECEMBER 2009                                                                                                  ENAM Securities                                                                6
                                                                                                                                                                                       Essence of the Week


B. Debt & Money market
10yr bond yield                                                                                                                            G‐Sec yield curve

 8                                                                                                                                           9
               (%)                                                                                                                                  (%)
                                                                                                                                             8

 7                                                                                                                                           7

                                                                                                                                             6

 6                                                                                                                                           5
                                                                                                                                                                                          17‐Dec‐09
                                                                                                                                             4                                            week‐a go
                                                                                                                                                                                          month‐a go
 5                                                                                                                                           3
                                                                                                       Oct‐09
                                                                                                                Nov‐09
                                              Apr‐09
                                                       May‐09
                                  Mar‐09




                                                                                  Aug‐09
                                                                Jun‐09
     Dec‐08




                                                                                                                           Dec‐09
                Jan‐09
                         Feb‐09




                                                                         Jul‐09


                                                                                            Sep‐09




                                                                                                                                                     0    2    4      6 8 10 12 14 18 23 26 30
                                                                                                                                                                      Maturity (Years)


Source: RBI


Credit spread of AAA (5yr and 10yr)                                                                                                        CP / CD ‐ Primary Market
                                                                                                                                           CP                 Issuer                    Rating    Rate (%)
 500                                                                                                                                       3 Month            SIDBI                        P1+          3.68
                (bps )
                                                                                                                                           7 Month            Exim Bank                    P1+          4.50
 400
                                                                                                                                           1 Year             Chambal Fertilizers          P1+          5.80
 300
                                                                                                                                           CD                 Issuer                    Rating    Rate (%)
 200                                                                                                                                       3 Month            Karur Vysya Bank             P1+          4.47
                                                                                                                                           6 Month            Canara Bank                  P1+          5.10
 100
                                                                                                                                           1 Year             Andhra Bank                 PR1+          5.95
     0
                                                                                                                                           Note: The above table shows rates at which leading
               Oct‐08




                                                                                                        Oct‐09
                         Nov‐08




                                                                                                                         Nov‐09
                                                                Apr‐09
                                                                May‐09
                                                    Mar‐09




                                                                                              Aug‐09
                                                                Jun‐09
                         Dec‐08




                                                                                                                         Dec‐09
                                           Jan‐09




                                                                 Jul‐09
              Sep‐08




                                                    Feb‐09




                                                                                                       Sep‐09




                                                                                                                                           Companies and Banks are raising short‐term debt for
                                                                                                                                           different tenor.
                                                            5 Yr                           10 Yr

Source: RBI, Debtonnet



US Yields Data                                                                                                                             Interest Rate Indicator
 US Yield                                                                                                       16th Dec                    Money Market                               MIFOR           (%)
 2 Year                                                                                                                     0.81            Call Money                                1 Month          3.01
 5 Year                                                                                                                     2.31            Notice Money                              3 Month          2.87
 10 Year                                                                                                                    3.57            Term Money                                6 Month          3.44
 30 Year                                                                                                                    4.51            CBLOs                                      1 Year          3.95
                                                                                                                                            MIBOR                           (%)     Fwd Prem.          (%)
                                                                                                                                            Overnight                     3.30        1 Month          2.69
                                                                                                                                            14 Day                        3.29        3 Month          2.49
                                                                                                                                            1 Month                       3.58        6 Month          2.86
                                                                                                                                            3 Month                       4.33       12 Month          2.82
Source: RBI, NSE, Reuters, Bloomberg




DECEMBER 2009                                                                                                                       ENAM Securities                                                           7
                                                                                            Essence of the Week


3. SUMMARIES OF REPORTS RELEASED THIS WEEK:
 A. China Visit (Aluminium): Dragon awakened, demand growth of 15%
 B. DLF: Paving the way for a REIT listing
 C. Cadila: Play on structural transformation




A. China Visit (Aluminium): Dragon awakened, demand growth of 15%
                                                                    (jagdishwar@enam.com; 91 22 6754 7605)
   China’s aluminium demand is likely to grow at 15% in 2010 on the back of revival in construction and auto
   segments as China’s GDP is forecast to grow at 8% in 2009 and 9‐9.5% in 2010 on govt. stimulus. Long‐term
   prospect of aluminium is bright as China is still in the middle of completing urbanization.
   Oversupply concerns in the short term on overcapacity (current capacity utilization of 75%), plenty of
   inventory (~1.5 mn tonnes in China) and reopening of smelters as they return to profitability.
   Cost push likely to provide support to LME prices: The current average cost of Chinese aluminium smelters is
   USD 2,000/ tonne and is rising further due to the increase in bauxite/ alumina and coal/ power prices. We
   increase our FY11 estimate for alumina to USD 385 and maintain USD 2,200 for aluminium.
   Recommendations: Indian aluminium producers are best placed with captive bauxite, alumina and power.
   Nalco: Sector Outperformer with a TP of Rs 392; Hindalco: Sector Neutral with a TP of Rs 111.




B. DLF: Paving the way for a REIT listing                      (Chirag.negandhi@enam.com; 91 22 6754 7618)
   DLF’s Board has approved in‐principle integration of its 100% subsidiary, DLF Cyber City Developers Ltd.
   (DCCDL) with Caraf Builders & Constructions Pvt. Ltd. (Caraf), a promoter company which will own 96% of DLF
   Assets Pvt Ltd (DAL).
   DLF will own 60% of the integrated entity while the residual 40% economic interest will be held by the
   shareholders of Caraf.
   The merger shall result in the coming together of 2 entities:
       DCCDL – has 6.7 mn sq ft of commercial buildings in Gurgaon and 2 operational malls in Delhi. It also has
       land assets in Gurgaon and Mumbai (11.83 mn sq. ft.)
       Caraf – has 4 rent‐yielding properties (3.3 mn sq ft) and shall eventually own ~96% in DAL which owns 4
       SEZ properties (6.4 mn sq ft)
   We believe merger of these companies will eliminate the perceived conflict of interest between DLF and
   DAL and help achieve significant consolidation of the rental business. It also preserves the DAL REIT
   structure paving the way for DLF to list its office trust.
   At CMP of Rs 365, DLF trades at a 15% discount to our NAV of Rs 430. We have a sector Neutral rating on the
   stock with a price target of Rs 430.




DECEMBER 2009                                    ENAM Securities                                              8
                                                                                            Essence of the Week



C. Cadila: Play on structural transformation                       (rohita.sharma@enam.com; 91 22 6754 7603)
   We recently met the management of Cadila Healthcare who reiterated their vision of USD 1 bn sales in FY11.
   We expect 15% and 22% CAGR in sales and profit respectively from FY09‐FY12E despite profit contribution
   from Nycomed JV (pantoprazole, ~65% NPM) likely to come down to 5% in FY12E from 19% in FY09. This
   growth would be led by ramp up in sales from its JV with Hospira, continued growth momentum in the US
   and improving profitability across other geographies.
   Investment phase largely over – CDH’s investment of ~Rs 9 bn in FY07‐FY08 on acquisitions in Brazil, Japan,
   Spain and South Africa and Hospira JV to result in 23% CAGR in sales from FY09 – FY12E.
   Moving on from a me‐too portfolio to niche segments
       Zydus Hospira JV (manufacturing of oncology injectibles) – launched two products in H1FY10, with three
       more scheduled for launch in H2FY10 (commenced validation batches for two products).
       Focusing on Para IV filings and niche segments in the US – Cadila has made few Para IV filings and is
       focusing on transdermal, pulmonary, and derma segments.
   API sales to Nycomed (other than pantoprazole) likely to commence in late FY11 – CDH expects its plant
   (manufacturing of 18 APIs for Nycomed) to commission in H1FY11, following which sales to Nycomed JV
   would commence.
   We raise our FY10E and FY11E EPS by 1% and 3% to Rs 33.8 and Rs 39.9 respectively. At CMP of Rs 647, the
   stock trades at a P/E of 19x FY10E and 16x FY11E EPS. We retain sector Outperformer, raising our target price
   to Rs 718 (PER of 18x FY11E EPS, 16x earlier).




DECEMBER 2009                                    ENAM Securities                                              9
                                                                                               Essence of the Week


4. EAR TO THE GROUND
 A. Analyst buzz/ Important Developments & Articles
       Suzlon Energy : Acquisition debt of USD 780 mn repaid




A. Analyst buzz/ Important Developments & Articles

Suzlon Energy: Repaid acquisition debt of USD 780 mn                       (bhavin@enam.com; 91 22 6754 7634)
   Suzlon has repaid acquisition loan of ~ USD 780 mn, from proceeds of Hansen stake sale (USD 360 mn) and
   fresh loan facility from SBI (USD 465 mn). The overall debt stands lower by ~ USD 350 mn (~15% reduction).
   The new loan would have a two‐year principal moratorium & two‐year covenant holiday.
   Suzlon now plans to refinance its capex & working capital loans (~ USD 1.5 bn), which is likely to be concluded
   by end of Jan’10.
   Suzlon wants to reduce its net debt further through a) conversion of promoter loans (~USD 250 mn) into
   equity; b) partial conversion of FCCB (total ~USD 490 mn) to equity; and c) further dilution in Hansen.
   Impact on Suzlon: The acquisition loan had repayment cycle of USD 180‐200 mn p.a. The refinancing gives
   Suzlon 2 years of head room in cash flows. However, interest cost will go up by 180‐200 bps (currently Euribor
   + 300 bps). This event does not impact our target price of Rs 51 as gain from debt reduction is offset by cut in
   Hansen stake.




DECEMBER 2009                                     ENAM Securities                                               10
                                                                                                                                         Essence of the Week


5. MARKET SNAPSHOT
A. Indian markets
ADR/GDR prices*                                                                             Sensex 5 day movement
(USD)                                     CMP   5d chg           Prem /
                                                   (%)          (Disc) %                   17300
Dr Reddys La b                          25.1      4.8               (2.6)
HDFC Ba nk                             123.2     (8.6)             15.4                    17200
ICICI Ba nk                             34.2     (9.1)              (0.7)
                                                                                           17100
Infos ys                                54.3      3.1                0.5
ITC                                      5.3     (2.0)               0.7                   17000
L&T                                     35.1     (1.6)              (0.4)
MTNL                                     3.0     (3.2)              (1.9)                  16900
Rel ia nce Indus tri es                 43.3     (6.6)               0.5
Sa tya m Computer                        4.9     (4.7)             18.3                    16800
Sta te Ba nk of India                   91.7     (5.3)               0.5
                                                                                           16700
Sterl i te Indus tries                  17.6     (2.5)               0.6
Ta ta Communi ca ti ons                 14.4     (6.5)              (0.0)                  16600
Ta ta Motors                            15.6      0.3               (1.0)
                                                                                                  14‐Dec 15‐Dec 16‐Dec 17‐Dec 18‐Dec
Wi pro                                  22.1      9.1              53.1
Note: * Data as on Thursday


FII vs. Domestic (incl MF): Investment flow trend                                                          FII net flows in Asian equities
                   Monthly
                                                                               Daily
  6                                             150                                                        Country              Last     WTD     MTD        YTD
        (USD bn)                                           (USD mn)                                        (USD mn)          Update
  4                                             100                                                        India             17‐Dec      137    1,449   17,080
  2                                                50                                                      Indones i a       18‐Dec      106     276     1,254
                                                                                                           Phi l i ppi nes   18‐Dec        2      14       405
  0                                                0                                                       Korea             18‐Dec       15    1,337   23,810

                                                (50)                                                       Ta i wa n         18‐Dec      172     774    13,094
 (2)
                                                                                                           Tha i l a nd      18‐Dec      (46)   (119)    1,153
       Oct‐09




                                                            11‐Dec

                                                                      14‐Dec

                                                                                15‐Dec

                                                                                         16‐Dec

                                                                                                  17‐Dec
       Mar‐09
       Apr‐09
       May‐09


       Aug‐09


       Nov‐09
       Dec‐08
       Jan‐09
       Feb‐09



       Jun‐09
        Jul‐09

       Sep‐09


       Dec‐09




                                                                                                           Note: WTD/ MTD/ YTD repres ents the
                                                                                                           cumul a ti ve net flows s i nce the 1s t bus i nes s
                   FII       Domes ti c                              FII          Domes ti c               da y of the week, month & yea r




Volumes: 5 DMA                                      Market delivery: 5 DMA                                             NSE: Advance / Decline ratio

 10                                        24       55                                                                 2.0
        (USD bn)                                           (%)
  8                                        20       50
                                                                                                                       1.5
                                                    45
  6                                        16
                                                    40                                                                 1.0
  4                                        12
                                                    35
  2                                        8                                                                           0.5
                                                    30
  0                                        4        25                                                                 0.0
  Ja n‐08 Jul ‐08 Ja n‐09 Jul‐09                        Ja n‐08 Jul ‐08 Ja n‐09 Jul‐09                                       14‐   15‐    16‐    17‐     18‐
         Ca s h          Deri va ti ves (RHS)                                                                                Dec   Dec    Dec    Dec     Dec

Source: Bloomberg, SEBI, BSE, NSE, ENAM Research




DECEMBER 2009                                                              ENAM Securities                                                                     11
                                                                                                            Essence of the Week


ENAM stocks: Best/ Worst performing in each sector this week
                                    Avg 5d Best performing              Price     Avg 5d Worst performing      Price     Avg 5d
 Sector                   5d %    vol chg % stocks                      5d %    vol chg % stocks               5d %    vol chg %
 Sensex Index               (2)
 Autos                      (0)         5    Ta ta Motors                 3          10    As hok Ley            (5)       (16)
 Ba nks & Fi n Serv         (5)        24    BoB                          0           2    REC                   (8)        11
 Cement                      2         15    ACC                          6         140    Indi a Cem            (0)        41
 Engi neeri ng              (1)       (21)   ABB                          1           8    Areva T&D             (3)        (4)
 FMCG                       (2)         7    As i a n Pa i nts            6          78    Godrej Cons          (10)       128
 Infra s tructure           (4)       (27)   Na ga rjuna Cons             4         (18)   IVRCL Infra           (8)        20
 IT Servi ces                3         (8)   HCL Tech                     5         (30)   Redi ngton            (4)       (62)
 Logi s ti cs               (2)       (36)   Conta i ner Corp            (0)        (35)   Jet Ai rwa ys         (7)       (45)
 Medi a                     (2)       (11)   Sun TV                      (0)        (47)   HT Medi a             (4)       (45)
 Meta l s                   (0)        (6)   Ta ta Steel                  3          (4)   Sterl i te            (3)       (27)
 Oi l & Ga s                (4)       (23)   Indra pra s tha Ga s         3          42    Indi a n Oi l         (7)       (51)
 Pha rma ceuti ca l s        4        (22)   Dr Reddys                   10         (31)   Gl enma rk            (2)       (18)
 Power Uti l i ti es        (2)       (28)   Ada ni Enterpri s es        (0)        (77)   JSPL                  (5)       (16)
 Rea l Es ta te             (6)        (2)   HDIL                        (1)         (4)   Uni tech              (8)        (6)
 Reta i l                    0        192    Pa nta l oon                 2         429    Shopper's             (3)       (39)
 Tel ecom                   (5)       (33)   Bha rti                     (4)        (43)   RCOM                  (7)       (31)
Source: Bloomberg; Note: Avg 5d vol chg = curr 5d avg vs. prev 5d avg




DECEMBER 2009                                               ENAM Securities                                                   12
                                                                                                                          Essence of the Week


B. Trading disclosures

Bulk Deals (> Rs 100 mn traded value)
Date           Company Name                          Client Name                                            Traded Vol Traded Value Avg. Price
                                                                                                                ('000)      (INRm)      (INR)
BUY
11‐Dec‐09      Cox & Ki ngs (I) Ltd                  Ca pi ta l Group ‐ A/C Sma l l Ca p Worl d Fnd             1,499           611         407
11‐Dec‐09      Cox & Ki ngs (I) Ltd                  Ca pi ta l Interna ti ona l A/C Emergi ng Ma rkets           543           218         401
11‐Dec‐09      Cox & Ki ngs (I) Ltd                  Rel i a nce Equi ty Opportuni ti es Fund                     500           198         396
11‐Dec‐09      Cox & Ki ngs (I) Ltd                  Rel i a nce Ta x Sa ver(El s s ) Fund                        509           201         396
11‐Dec‐09      Cox & Ki ngs (I) Ltd                  Rel i a l nce Equi ty Opportuni ty Fund                      550           216         393
11‐Dec‐09      Cox & Ki ngs (I) Ltd                  Ca pi ta l Group A/C Sma l l Ca p Worl d Fund Inc            710           286         403
17‐Dec‐09      Mi ndtree Ltd                         Na l a nda Indi a Fund Li mi ted                             289           198         686
17‐Dec‐09      Pa nta l oon Reta i l (Indi a ) Ltd   Ca pi ta l Interna ti ona l A/C Emergi ng Ma rkets         1,091           408         374
17‐Dec‐09      Pol a ri s Softwa re La b Ltd         Sunda ra m Bnp Pa ri ba s Mutua l Fund A/C                   969           177         183
SELL
11‐Dec‐09      Indra pra s tha Ga s Ltd              Genes i s Indi a n Inves tment Compa ny Ltd                3,525           653         185
11‐Dec‐09      Indra pra s tha Ga s Ltd              Genes i s As s et Ma na gers Ltd.                            980           182         186
14‐Dec‐09      Indra pra s tha Ga s Ltd              Genes i s Indi a n Inves tment                             1,065           202         190
15‐Dec‐09      Bi ha r Tubes Ltd                     El a ra Ca pi ta l Pl c (Dr)                               1,776           127          72
17‐Dec‐09      Mi ndtree Ltd                         Wa l den Softwa re Inves tments                              302           207         686
17‐Dec‐09      Mi ndtree Ltd                         Wa l den Softwa re Inves tments                              214           147         686
17‐Dec‐09      Pol a ri s Softwa re La b Ltd         Orbi tech Li mi ted                                        1,031           188         182
Source: BSE, NSE




Buybacks (upto Thursday 17th Dec, of value> Rs 100 mn)
Scrip Name             Total Buyback      Bought Qty Incr bought qty over          Buyback         Value         CMP      Bal Qty     Bal Value
                          Value (Crs)          (Nos)      last week (Nos)          Avg Rate         (Crs)       10/12       (mn)           (Crs)
AEGIS LOG                         17       1,020,473                    0               138           14          184         0.1              3
APOLLO TYRES                     122               0                    0                 0             0          48        25.4           122
BHAGYANAGAR                       20       1,829,612             413,194                 26             5          27         5.6            15
DAI‐ICHI KARKAR                   21               0                    0                 0             0          43         4.9            21
DCHL                             180       2,654,761                    0                98           26          151        10.2           154
GITANJALI                        144         792,883               46,636               116             9         121        11.1           135
I B SECURITIES                    83           7,271                    0                29             0          33        25.2            83
ICI INDIA                        184       1,385,338                    0               545           76          625         1.7           108
JINDAL POLY                       73       1,840,250               35,944               318           58          322         0.5            15
MERCK LTD                         45         261,842                    0               396           10          552         0.6            35
PENNAR IND                        13               0                    0                 0             0          27         4.6            13
PODDAR PIG                        10               0                    0                 0             0          35         2.9            10
PROVOGUE *                        50       1,164,968             196,085                 64             7          55         7.7            43
Note: The balance quantity has been arrived at, by taking previous closing rate for the remaining buyback amount.




DECEMBER 2009                                                       ENAM Securities                                                           13
                                                                                                                                                               Essence of the Week


C. Deciphering Derivatives

Nifty Weekly Chart

             6000
                                          SMAVG on Close(50)
                                          SMAVG on Close(100)
             5000                                                                                                                                                         5,003
                                          SMAVG on Close(200)                                                                                                             4,864

                                                                                                                                                                          4,309
             4000


             3000


             2000
              100
                                                                        RSI on Close(14)


             1000
               50


                 0




                                                                                                                                         Oct‐09
                                                      Mar‐09


                                                               Apr‐09


                                                                           May‐09




                                                                                                                    Aug‐09




                                                                                                                                                     Nov‐09
                     Dec‐08




                                             Feb‐09
                                 Jan‐09




                                                                                          Jun‐09


                                                                                                    Jul‐09




                                                                                                                                Sep‐09




                                                                                                                                                                 Dec‐09
      Nifty has been moving in a broader range of 5000 – 5150 from past few weeks, the 5180—5200 range
      was acting as major resistance zone and 5065—5025 levels as support where as towards the weekend
      Nifty broke this crucial level and closed the week on a negative bias with an average of 5058.
      Nifty immediate support lies at 4960 , a break below which could take it to 4825 . RSI is also indicating
      Nifty losing its momentum.
      Nifty Open Interest remained flat (‐0.46mn shrs WoW) with Index falling by 2.4% with the spread trading
      volatile throughout the week with 7 pts negative to 7 pts premium.
      Nifty Rolls at 13%, indicating activity picking up early compared to previous expiries as Nifty holds a
      dividend of Rs. 2/4. Compared to last mths roll‐ a spread of Rs. 9 looks fair, and also rolls for this month
      likely to happen earlier as the expiry week is more of a holiday season.


Stock with highest open interest value wise
Co. Name                      Open Interet                 OI Chg %              % of              OI Value                   CMP        Price Chg            Trend
                                 (mn shrs)                                      Float               (Rs bn)                    (Rs)            (%)
RELIANCE                                     11                 1%                  1.2                        11            1,011                  ‐6%       Fres h Short
TATAMOTORS                                   14                ‐4%                  6.2                       11               730                   3%       Short Coveri ng
ICICIBANK                                    12                ‐2%                  1.1                       10               808                  ‐6%       Long Liqui da ti on
INFOSYSTCH                                    4                54%                  0.8                       10             2,530                   3%       Fres h Long
SBIN                                          4                17%                  2.1                        9             2,144                  ‐6%       Fres h Short
TATASTEEL                                    14                ‐2%                  2.2                        8               564                   3%       Short Coveri ng
LT                                            4                 1%                  0.8                        6             1,647                  ‐2%       ‐
HDFC                                          2                11%                  0.8                        6             2,578                  ‐4%       ‐
BHEL                                          3                ‐2%                  1.6                        6             2,325                  ‐2%       ‐
BHARTIARTL                                   18                 1%                  1.5                        6               317                  ‐4%       Fres h Short
NIFTY                                        28                ‐2%                                           140             4,987                ‐2.4%       Long Liquidation
Source: ENAM Research




DECEMBER 2009                                                                  ENAM Securities                                                                                      14
                                                                                                                                                                 Essence of the Week


Nifty FII Flow Vs Nifty OI                                                                                       FII flow
                     5111
                     0.9                                                             6                            (Rs.Bln)         17‐12       16‐12    15‐12      14‐12         Wkly
                                     5107
                     0.6                                                             4                            Index Futures
                                                                                                                  ‐ Buy            11.6         9.8       9.3       12.0         42.7
Nifty OI Shrs (mn)




                     0.3                                                             2




                                                                                            FII FLOW (INR bn)
                                                                                                                  ‐ Sel l          17.6        16.8       7.4        8.3         50.0
                     0.0                                                             0
                                                                                                                  Net               (6.0)       (7.0)     1.9        3.7          (7.4)
                                                   5041
                     (0.3)                                                           (2)                          Stock Futures
                                                                     5036
                     (0.6)             5031                                          (4)                          ‐ Buy            24.1        18.0      16.3        8.3         66.7
                     (0.9)                                                           (6)                          ‐ Sel l          25.2        20.2      17.0        7.6         70.0
                                                                                                                  Net               (1.1)       (2.3)    (0.6)       0.7          (3.3)
                     (1.2)                                                           (8)
                                                                                                                  Net Futures       (7.1)       (9.2)     1.3        4.3         (10.7)
                              14‐Dec          15‐Dec       16‐Dec         17‐Dec
                                                                                                                  Fut Open int    1,142       1,150     1,137      1,123              ‐
                        Nifty OI Shrs (LHS)              FII FLOW (RHS)            NIFTY




Increase in Open Interest Week on Week (wow)                                                                              Unitech : OI has increased by 9.5 mn shrs
                                     Current OI OI Change   Change (%)                                                    (+16% ) while the price declined by 8%
 Co Name                          CMP (mn shrs) (mn shrs) OI Value Price                                                  indicating fresh short creation.
 UNITECH                             80           67.5              9.5         8          (8)
                                                                                                                          GMRInfra : OI increased by 8.6mn shrs (+25%)
 GMRINFRA                            67           42.2              8.6        20          (4)
                                                                                                                          with price declined by 4.3% indicating fresh
 IDEA                                57           35.4              6.3        16          (4)
                                                                                                                          short creation.
 SUZLON                              82           62.1              6.3        10          (1)




Decrease in Open Interest (wow)                                                                                           Ambuja Cem: OI decreased by 2.7mn shrs (‐
                                     Current OI OI Change   Change (%)                                                    16%) with a marginal price rise of 1.49% on
 Co Name                          CMP (mn shrs) (mn shrs) OI Value Price                                                  back of short covering . Stock could see
 HINDALCO                          143            22.6           (3.1)        (12)         0                              pressure at these levels.
 AMBUJACEM                          98            14.2           (2.7)        (15)         1
                                                                                                                          Cipla : OI decreased by 0.9 mn shrs (‐15%) and
 CIPLA                             357             5.1           (0.9)        (12)         4                              price increased by 4.4% on back of short
 JPHYDRO                             73           10.9           (1.3)        (14)         (4)                            covering positive bias.

Sector Watch – Banking                                                                                          Sector Watch ‐ IT
 Script                                       Curr. OI        OI Chg        CMP       Price                     Script                      Curr. OI     OI Chg       CMP         Price
                                              mn shrs                                  Chg                                                  mn shrs                                Chg
 ALBK                                             4.60           8%          122       ‐8%                      HCLTECH                         1.79       ‐24%         365          5%
 ANDHRABANK                                       3.50          55%          103      ‐10%                      INFOSYSTCH                      3.82        54%        2530          3%
 AXISBANK                                         2.89            9%         935         ‐7%                    MPHASIS                         4.55        ‐4%         728          4%
 BANKINDIA                                        2.24           37%         360         ‐7%                    OFSS                            0.49         7%        2172          1%
 CANBK                                            1.79          ‐15%         384         ‐5%                    PATNI                           1.02       ‐15%         468          1%
 DENABANK                                       11.80             3%          83         ‐7%                    POLARIS                         2.66       ‐21%         177          0%
 IDBI                                           14.79            ‐3%         124         ‐7%                    TCS                             4.07       ‐11%            727       3%
 KOTAKBANK                                        3.46           73%         771         ‐4%                    WIPRO                           2.10         2%            676       5%
 ORIENTBANK                                       1.58          ‐12%         249         ‐6%
 SYNDIBANK                                        2.15          ‐12%          93         ‐3%                             Banks : Long Liquidation and fresh short
 UCOBANK                                         7.57             2%          54         ‐7%                             creation in Banks on back of Fears of rate hikes
 UNIONBANK                                       2.25             1%         256         ‐3%                             post announcement of inflation nos.
 VIJAYABANK                                     14.50             8%          51         ‐7%                             IT : Fresh long and delivery based buying
                                                                                                                         witnessed in Small and Large cap IT stocks ‐
                                                                                                                         positive bias.

DECEMBER 2009                                                                         ENAM Securities                                                                                   15
                                                                                                                                                                                                           Essence of the Week


Option Distribution

                            12

                            10

                               8
  (mn of shares)




                               6                                                                                                                                                                                     Data
                                                                                                                                                                                                                      Change OI
                               4                                                                                                                                                                                      OPEN_INT

                               2

                               0

                            (2)
                                               CE PE CE PE CE PE CE PE CE PE CE PE CE PE CE PE CE PE CE PE CE PE

                                               4300                 4500          4600              4700           4800       4900    5000          5100              5200           5300         5400




Nifty Fut Vs Smart Money (SMR= IV/PCR)                                                                                           Nifty Future Vs Implied Volatility

 200                                                                                                                   6000          100                                                                                      6000

 150                                                                                                                   5000          80                                                                                       5000

 100                                                                                                                   4000          60                                                                                       4000

  50                                                                                                                   3000          40                                                                                       3000

       0                                                                                                               2000          20                                                                                       2000
                                   Oct‐08




                                                                                                    Oct‐09
                   Aug‐08




                                                                      Apr‐09



                                                                                          Aug‐09




                                                                                                                                                    Oct‐08




                                                                                                                                                                                                            Oct‐09
                                                Dec‐08

                                                           Feb‐09



                                                                                Jun‐09




                                                                                                              Dec‐09




                                                                                                                                           Aug‐08




                                                                                                                                                                                Apr‐09



                                                                                                                                                                                                  Aug‐09
                                                                                                                                                             Dec‐08

                                                                                                                                                                       Feb‐09



                                                                                                                                                                                         Jun‐09




                                                                                                                                                                                                                     Dec‐09
                                               SMR                              Nifty Future (RHS)                                                     Implied Volatility                         Nifty Future (RHS)




Nifty Fut Vs Put call ratio

     2.0                                                                                                               6000                 4900 Put open interest stands at ~5.76mn
                                                                                                                                            shares up by 0.27mn shares and will serve as a
                                                                                                                       5000                 strong near term support, while 5100 Call open
     1.5
                                                                                                                                            interest stands at 9.83mn shares up by 4.09 mn
                                                                                                                       4000
                                                                                                                                            shares and will serve as a resistance.
     1.0
                                                                                                                       3000                 Nifty Implied volatility has declined to 23% and
                                                                                                                                            PCR has declined to 1.16 as Call writers became
     0.5                                                                                                               2000                 active at 5100 and 5200 calls. (see graph)
                                      Oct‐08




                                                                                                     Oct‐09
                      Aug‐08




                                                                       Apr‐09



                                                                                           Aug‐09
                                                  Dec‐08

                                                             Feb‐09



                                                                                 Jun‐09




                                                                                                              Dec‐09




                               Put call ratio (LHS)                                       Nifty Future (RHS)




DECEMBER 2009                                                                                                             ENAM Securities                                                                                            16
                                                                                                                                      Essence of the Week


D. Global Asset class performance*
Equity                                                          5 day performance (%)
                                      Performance (%)
                            Value   1m 12m 52w H 52w L
Developed                                                              Rus s ia                                               4
US (Dow Jones )            10,308    (1)    20     (2)    59       Germa ny                                            2
UK (FTSE 100)               5,218    (2)    21     (3)    51           Fra nce                                  1
Germa ny (DAX)              5,844     2     24     (0)    64            Ja pa n                                0
Fra nce (CAC)               3,831     0     19     (2)    56      Si nga pore                                 0
Ja pa n (Ni kkei 225)      10,142     5     17     (6)    44                UK             (1)
BRIC                                                                  Ta i wa n            (1)
Bra zi l (IBOV)            67,068     0     68     (5)    86            Korea              (1)
Rus s i a (Mi cex)          1,360     0    126     (2)   157                US            (1)
Indi a (Sens ex)           16,720    (2)    66     (4)   108             India        (2)
Chi na (HSCEI)             12,335   (10)    44    (11)    93                         (2)
                                                                        Bra zi l
Asian
                                                                            HK     (3)
HK (H S I)                 21,176    (7)    37     (8)    87
                                                                        Chi na (5)
Korea (Kos pi )             1,647     3     40     (4)    66
Si nga pore (Stra i ts )    2,803     2     56     (1)    93                        (6)     (3)           0            3          6
Ta i wa n (Ta i ex)         7,754    (0)    65     (2)    86

Commodity                                                       5 day performance (%)
                                      Performance (%)
                            Value   1m 12m 52w H 52w L                    Suga r                                               14
Metals                                                               Na t Ga s                                                13
Al umi ni um ($/ton)        2,182     8     48     (4)    43                Zi nc                                 5
Copper ($/ton)              6,826     0    129     (4)    59
                                                                           Lea d                              4
Zi nc ($/ton)               2,354     5    118     (5)    55
                                                                          Steel                               3
Lea d ($/ton)               2,327    (2)   138     (6)    62
Chi na HR Steel ($/ton)       563     5      4    (17)    12               Corn                           1
IronOre‐Qi ngda o ($/ton      119     5     29     (6)    51       Crude Oil                              1
Gol d ($/t oz)              1,099    (3)    30    (11)    27          Na ptha                             1
Pl a tinum ($/OZ)           1,423    (1)    67     (6)    41           Copper                             1
Energy                                                           Al umi ni um                             1
Coa l ($/ton)                  76    1      (4)    (9)    33          IronOre                            0
Crude Oi l ($/bbl )            72   (7)     78    (10)   110        Pl a tinum                 (0)
Na ptha ($/bbl )               75   (4)    131     (8)   160        Soybea n                  (1)
Na tura l Ga s ($/MMBtu)        6   62      (2)   (18)   167               Coa l             (1)
Food
                                                                           Gol d           (3)
Whea t ($/bu)                 519   (13)   (19)   (42)    11
                                                                        Whea t            (3)
Corn ($/bu)                   397    (5)   (11)   (22)    20
Soybea n ($/bu)             1,030    (1)    13     (7)    21                    (10)      (5)        0        5        10     15
Suga r ($/lb)                  26    13     89     (2)    50

Currency                                                        5 day performance (%)
                                       Performance (%)
                            Value   1m 12m 52w H 52w L              $ Index #                                                 2.2
Dol l a r Index#             77.7    3      (2)  (15)  5                China                                         (0.0)
Developed                                                                   HK                        (0.1)
Europe                        1.4    (4)     1    (5)     15             Indi a                     (0.5)
UK                            1.6    (3)     8    (5)     20                UK                    (0.8)
Ja pa n                      90.0    (1)    (1)   12      (6)
                                                                   Si nga pore                   (1.0)
BRIC
Bra zi l                      1.8    (4)    35    38      (5)           Korea                    (1.1)
Rus s ia                     30.8    (6)   (10)   19     (10)          Rus s i a                (1.3)
Indi a                       46.9    (1)     0    12      (2)           Bra zi l                (1.4)
Chi na                        6.8    (0)     0     0      (0)           Ja pa n               (2.0)
Asian
                                                                       Europe              (2.7)
HK                            7.8    (0)    (0)    0      (0)
Korea                       1,178    (2)    10    36      (2)                       (6)         (3)               0               3
Si nga pore                   1.4    (1)     3    11      (2)
                               Note: *Western mkt, Commodity & Currency data as on Thursday; # Indicates the general
Source: Bloomberg, ENAM Research;
international value of the USD by averaging exchange rates between USD and 6 major world currencies




DECEMBER 2009                                            ENAM Securities                                                                              17
                                                                                                                                                           Essence of the Week


E. Global equity performance
Best / Worst performing sectors*
                            Index     5d Best performing                             5d Worst performing                           5d
Index                       value    (%) sector                                     (%) sector                                    (%)
Developed
US (Dow Jones )            10,308     (1)   Reta i l i ng                            3    Semi conductors & Semi co               (5)
UK (FTSE 100)               5,218     (1)   Commerci a l & Profes s i ona l Se       2    Tra ns porta ti on                      (5)
Germa ny (DAX)              5,844      2    Di vers i fi ed Fi na nci a l s          5    Tel ecommuni ca ti on Servi             (1)
Fra nce (CAC)               3,831      1    Cons umer Dura bl es & Appa rel          5    Cons umer Servi ces                     (2)
Ja pa n (Ni kkei 225)      10,142      0    Energy                                   4    Food & Sta pl es Reta i l i ng          (5)
BRIC
Bra zi l (IBOV)            67,068     (2)   Ca pi ta l Goods                         7    Uti l i ti es                           (7)
Rus s i a (Mi cex)          1,360      4    Ba nks                                   8    Uti l i ti es                            0
Indi a (Sens ex)           16,720     (2)   Pha rma ceuti ca l s , Bi otechnol og    4    Rea l Es ta te                          (6)
Chi na (HSCEI)             12,335     (5)   Automobi l es & Components              (1)   Rea l Es ta te                          (8)
Asian
HK (H S I)                 21,176     (3)   Tel ecommuni ca ti on Servi ces          1    Ba nks                                  (5)
Korea (Kos pi )             1,647     (1)   Hea l th Ca re Equi pment & Servi        2    Ins ura nce                             (5)
Si nga pore (Stra i ts )    2,803      0    Cons umer Servi ces                      8    Food & Sta pl es Reta i l i ng          (3)
Ta i wa n (Ta i ex)         7,754     (1)   Commerci a l & Profes s i ona l Se       4    Hea l th Ca re Equi pment &             (4)


Nifty Index #                                                                                                 5d stock perf. distribution
Sectors               Weights       Absolute performance (%)           Contribution to index points (+/‐)
                                                                                                          30
                          (%)         5d     1m      3m    12m              5d      1m      3m      12m               (Nos )
Auto                       5          1       4       7    194              2       11      11      165                                                          22
BFSI                      22         (6)     (8)      1     68            (72)     (99)       7     415 20
Cement                     3         (0)      4      (9)    91             (0)       6     (10)      74                                                                                       15
Engi neeri ng             11         (2)      1      (1)    77            (10)       8       (2)    229                                     9
FMCG                       6         (3)     (5)      6     22             (9)     (15)     10       56 10
IT ‐ Servi ces            13          4       5      15    152             22       28      35      331                                                                                                        3
Meta l s                   7          0       4      12    166              2        6      15      191                 0
Oi l & Ga s               18         (3)     (1)      0     58            (42)     (21)      (5)    280    0             < (‐10) %
Pha rma                    3          5      13      35     76              6       16      18       51

                                                                                                                                             ‐5 to ‐10 %

                                                                                                                                                                       0 to ‐5 %

                                                                                                                                                                                              0 to 5 %

                                                                                                                                                                                                               5 to 10 %
Power                      6         (2)     (3)     (2)    42            (11)     (13)      (2)    128
Rea l ty                   2         (7)     (6)    (20)    42             (7)      (6)    (13)      27
Tel ecom                   4         (5)      5     (32)   (11)           (11)      11     (52)     (21)
Nifty Index              100         (3)     (1)      0     63           (130)     (67)     12 1,927


Nifty50 Midcap #                                                                                                 5d stock perf. distribution
Sectors           Weights           Absolute performance (%)   Contribution to index points (+/‐)              40
                      (%)             5d    1m      3m    12m       5d      1m      3m      12m                      (Nos )
                                                                                                                                                           30
Auto                   2             (5)     (9)    21    209      (3)      (5)       9      34
                                                                                                               30
BFSI                  10             (6)     (4)     7     68     (19)      (9)     16      106
Cement                 4              3     18       7     93       4       15        7      54
Chemica l & Fert       5              1     13       9     72       1       12      10       48                20
Engineering            9             (3)     (3)    (6)    93      (6)      (5)    (15)     111                                                                               13
FMCG                   3             (1)      1      6    108      (0)       0        4      38
Infra s tructure       7             (2)     (8)    (2)   133      (5)     (14)      (4)    102                10                    6
IT ‐ Services         17              0      (3)    11    196       2      (14)     42      291                       0                                                                            1             0
Meta l s               7             (1)     (1)    16    261      (1)      (2)     25      133                 0
Oi l & Ga s            3             (2)      1     (9)    94      (2)       0       (7)     32
                                                                                                                      < (‐10) %




                                                                                                                                                                                                                 > 10 %
                                                                                                                                     ‐5 to ‐10 %

                                                                                                                                                           0 to ‐5 %

                                                                                                                                                                                   0 to 5 %

                                                                                                                                                                                                   5 to 10 %




Pha rma               12              2     11      24     62       7       26      57      113
Power                  9             (5)     (5)    (5)    80     (13)     (10)    (13)     100
Reta il                2             (0)     (4)     5     40      (0)      (2)       2      13
Telecom                3             (5)     (4)   (23)      8     (4)      (3)    (22)       5
Texti l es             1             (0)      3      0     37      (0)       1        0       7
Logis ti cs            3             (2)     (5)    (2)    52      (1)      (4)      (2)     27
Mi s cel la neous      3             (3)      7     19    107      (2)       4      10       33
Nifty50 Midcap       100             (2)     (0)     5     95     (41)      (8)    121 1,249
Source: Bloomberg, ENAM Research,      Note:*Western mkt data as on Thursday; #Contribution to index pts based on current
constituents




DECEMBER 2009                                                        ENAM Securities                                                                                                                                       18
                                                                                                                                   Essence of the Week


F. Global Equity Valuations
Global indices *
                                                                  PER (x)                    PBR (x)                    ROE (%)            Div Yield (%)
                                Country           Index        CY09 /     CY10 /          CY09 /     CY10 /           CY09 /   CY10 /            CY09 /
Indices                      Mcap ($bn)           value        FY10E      FY11E           FY10E      FY11E            FY10E     FY11E             FY10E
Developed
US (Dow Jones )                     13,371    10,308              16         13             2.6           2.4            16         18               2.7
UK (FTSE 100)                        2,895     5,218              14         12             1.8           1.7            13         15               3.7
Germa ny (DAX)                       1,349     5,844              16         12             1.5           1.4             9         11               3.3
Fra nce (CAC)                        1,859     3,831              13         12             1.3           1.3            10         11               3.7
Ja pa n (Ni kkei 225)                3,494    10,142              42         23             1.3           1.3             3          6               1.6
BRIC
Bra zi l (IBOV)                      1,279    67,068              17         13             2.1           1.9            13         14               2.5
Rus s i a (Mi cex)                     483     1,360              13          9             1.2           1.1             9         12               1.6
India (Sensex)                       1,254    16,720              20         16             3.1           2.7            15         17               1.2
Chi na (HSCEI)                       3,124    12,335              16         13             2.3           2.0            15         16               2.6
Asian
HK (H S I)                           2,236    21,176              17         14             1.9           1.8            12         13               2.9
Korea (Kos pi )                        794     1,647              14         10             1.4           1.2            10         12               1.3
Si nga pore (Stra i ts )               437     2,803              17         15             1.7           1.6            10         11               3.0
Ta i wa n (Ta i ex)                    684     7,754              24         15             1.9           1.8             8         11               2.7
Source: Bloomberg; Note: *Western mkt data as on Thursday


Sensex: Sector valuation based on ENAM numbers
                                       Weights              PER (x)                  PBR (x)                       ROE (%)                Div Yield (%)
Sector                                     (%)            FY10E     FY11E          FY10E     FY11E               FY10E     FY11E          FY10E      FY11E
Auto                                       6.6               20        14            4.0       3.2                  20        23             0.9        0.9
Ba nks & Fi na nci a l s ervi ces         22.1               21        18            2.4       2.2                  11        12             1.2        1.3
Cement                                      3.3              12        13            2.1       1.8                  18        14             1.3        1.0
Power Uti l i ti es                        5.0               19        17            2.3       2.1                  12        12             1.5        1.6
Engineeri ng                              10.4               27        23            5.4       4.5                  20        20             0.8        0.9
FMCG                                       7.6               24        21            7.8       6.7                  32        33             2.2        2.5
IT ‐ Servi ces                            14.4               24        21            6.5       5.2                  28        24             0.8        0.9
Meta l s / Mini ng                         6.6               33        14            1.4       1.3                   4         9             0.6        0.6
Oi l & Ga s                               17.4               16        12            2.8       2.4                  18        20             1.4        1.6
Pha rma ceuti ca ls                         1.0              26        20            3.9       3.4                  15        17             1.0        1.2
Rea l Es ta te                             1.2               33        20            2.4       2.2                   7        11             0.0        0.0
Tel ecommuni ca ti ons                     4.4               11        11            1.9       1.6                  18        15             0.0        0.0
Sensex Index                             100.0               20        16            3.0       2.6                  15        16             1.1        1.2
Source: Bloomberg, ENAM Research; Note: 1) Valuations based on current prices                2) PE not adjusted for VOI

Global: 12m trailing PE (x)                                                               India: 12m trailing PE (x)

       35                                                                            30
               (x)                                                                          (x)
       30                                                                            25
       25                                                                            20
       20                                                                            15
       15                                                                            10

       10                                                                             5

         5                                                                            0
         Ja n‐08      Jul ‐08       Ja n‐09    Jul ‐09                                Ja n‐08          Jul ‐08       Ja n‐09    Jul ‐09
                     MSCI Indi a              MSCI US                                             Sens ex                      BSE Mi dca p
                     MSCI EM                                                                      BSE Sma l l ca p

Source: Bloomberg




DECEMBER 2009                                                          ENAM Securities                                                                  19
                                                                                                                                    Essence of the Week


G. Commodity Snapshot
Oil & Gas
      Crude oil prices moved up marginally on account of reduction in US crude inventory data
      Refining margins improved sharply on account of improvement in diesel and gasoline spreads
      Both polymer prices and polymers spread over naphtha remained stable




Dated Brent prices                             WTI: Futures                                                    Singapore Refining Margins

 80                                      3     82                                                              6
                                                      (USD/bbl )                                    79
                                                                                                         80         (USD/bbl )
                                                                                               79
                                                                                         78 78
 75                                      0                                          77                         4
                                               78                         76
                                                                               77
                                                                     76
                                                                75
                                                           74
 70                                      (3)   74     73                                                       2
            (USD/bbl )
 65                                      (6)   70                                                              0
                                                       Oct 10
                                                      Apr 10
                                                      May 10




                                                      Nov 10
                                                      Mar 10




                                                      Aug 10
                                                      Jun 10




                                                      Dec 10
   Oct‐09     Nov‐09     Dec‐09
                                                      Jan 10




                                                       Jul 10
                                                      Feb 10




                                                      Sep 10

                                                                                                                Oct‐09      Nov‐09       Dec‐09
       Da ted Brent ‐ Duba i fa teh (RHS)
       Da ted Brent                                                                                                      Compl ex       Si mpl e


Petrol & Diesel Cracks                         Henry Hub (Gas)                                                Henry Hub (Gas): Futures

 10                                            5.8                                                            7.0
         (USD/bbl )                                    ($/MMbtu)                                                    ($/MMbtu)
  8                                            4.8
                                                                                                              6.0
  6                                            3.8
                                                                                                              5.0
  4                                            2.8
  2                                            1.8                                                            4.0    Oct 10
                                                                                                                    Nov 10
                                                                                                                    Apr 10
                                                                                                                    May 10
                                                                                                                    Mar 10




                                                                                                                    Aug 10
                                                                                                                    Jun 10




                                                                                                                    Dec 10
                                                                                                                    Jan 10




                                                                                                                     Jul 10
                                                                                                                    Feb 10




                                                                                                                    Sep 10

   Oct‐09      Nov‐09       Dec‐09               Oct‐09              Nov‐09              Dec‐09
              Petrol ‐ Duba i Fa teh
              Di es el ‐ Duba i Fa teh


PE & PP                                          PE & PP Differential to Naphtha

 1,300                                               600
             (USD/t)                                             (USD/t)

 1,200                                               525


 1,100                                               450


 1,000                                               375
      Oct‐09          Nov‐09    Dec‐09                  Oct‐09                 Nov‐09           Dec‐09

                       PP        PE                              PP‐Na phtha                    PE‐Na phtha


Source: Bloomberg




DECEMBER 2009                                                        ENAM Securities                                                                20
                                                                                                                    Essence of the Week


Metals & Others

      Metals: Base metal, Gold prices declined as dollar strengthened.
      Palm Oil prices continue the uptrend due to shortage of workers, rebound in crude oil, higher rural demand
      from India and China and shortage of stocks due harsh weather




Copper                                             Aluminium                                  Zinc

 7,200                                             2,300                                     2,500
                                                              (USD/t)                                  (USD/t)
            (USD/t)                                2,200
                                                               3 mth future                  2,300
 6,700                                             2,100      premi um = 36
                                                   2,000                                     2,100
 6,200                                             1,900
                                                                                             1,900                  3 mth future
                          3 mth future             1,800                                                           premi um = 37
                         premi um = 44
 5,700                                             1,700                                     1,700
      Oct‐09          Nov‐09     Dec‐09                   Oct‐09      Nov‐09    Dec‐09            Oct‐09         Nov‐09    Dec‐09




Gold, Silver Spot price                           China HR Steel Prices*                 Iron Ore – CFR Qingdao Port, China

 1,300                                       20    490                                         120
            (USD/per troy ounce)                            (USD/t)                                      (USD/t)
 1,200                                       18    470
                                                                                               115
 1,100                                       16    450
                                                                                               110
 1,000                                       14    430

   900                                       12    410                                         105
      Oct‐09          Nov‐09    Dec‐09               Oct‐09         Nov‐09      Dec‐09               Oct‐09      Nov‐09   Dec‐09
              Gol d         Si l ver (RHS)


Cotton                                            Baltic Dry Index                           Palm Oil

 80                                                5000                                        750
         (USD/ l b)                                         (Index)                                    (USD/t)
 75
                                                   4000                                        700
 70
                                                                                               650
                                                   3000
 65
                                                                                               600
 60                                                2000
                                                                                                 Oct‐09       Nov‐09      Dec‐09
  Oct‐09       Nov‐09          Dec‐09                 Oct‐09        Nov‐09     Dec‐09


Source: Bloomberg, Business Beacon; Note: * Includes 17% VAT




DECEMBER 2009                                                      ENAM Securities                                                  21
                                                                            Essence of the Week


6. EVENTS TO WATCH OUT FOR
Dec’09 – Jan’10

 Mon              Tue            Wed         Thu             Fri             Sat
 21 Dec           22             23          24              25              26
                  US: Existing               IN: WPI‐ Prim   MERRY
                  home sales                                 CHRISTMAS!!



 28               29             30          31              1 Jan 2010      2
                  US: Consumer                               HAPPY NEW
                  confidence                                 YEAR!!



 4                5              6           7               8               9
                                                             US:
                                                             Unemployment
                                                             rate




DECEMBER 2009                          ENAM Securities                                      22
                                                                                                               Essence of the Week


7. ENAM VALUATION & RECOMMENDATIONS
RSR (Rating relative to Sector) based on CMP: N = neutral, OP = outperformer, UP = underperformer, U/R = under
review, N/R = not rated: All ratings 1 yr horizon. Sector average upside is the market cap weighted average of
upsides of all stocks in the sector. This sector average is provided against the sector heading row in the RSR
column. RSR is compared against this.
                              CMP Mcap       TP Upside Rating rel     FDEPS (INR)       PER (x)         PBR (x)         ROE (%)
Company Name                 (INR) ($m) (INR)      (%) to sector      FY10e FY11e     FY10e FY11e    FY10e FY11e      FY10e FY11e
Autos                                                    (5) to 5          ‐      ‐     19      13     4.1      3.3      23     25
As hok Leyla nd                 49 1,391     40   (18)       UP           2     3       30      17     1.8      1.7       6     10
Ba ja j Auto                 1,704 5,271 2,000     17        OP        116    138       15      12     8.3      5.4      72     53
Bha ra t Forge                 262 1,245                   U/R            4    13       64      21     3.3      2.9       6     16
Bos ch                       4,605 3,091 4,382      (5)       N        188    238       25      19     4.0      3.4      18     19
Hero Honda                   1,675 7,152 1,760       5       OP        104    113       15      15     6.2      4.6      45     35
Ma h & Mah ^                 1,054 6,306 1,037      (2)       N         58     61       13      13     4.1      3.4      27     22
Ma ruti Suzuki               1,549 9,564 1,560       1        N         81     93       17      15     3.9      3.2      22     21
Mothers on Sumi                127    964   140    10        OP           5     7       23      19     4.6      3.3      21     20
Tata Motors                    733 8,185    724     (1)       N         16     57       45      13     1.0      0.9      11     27
TVS Motor                       58    294    68    18        OP           4     6       13       9     1.7      1.4      13     17
Banks & Fin Serv                                          0 to 10          ‐      ‐     12      10     2.1      1.9      16     17
Axi s Ba nk                    934 8,050 1,105     18        OP         58     69       16      14     2.4      2.1      18     16
Ba nk of Ba roda               501 3,905    616    23        OP         74     90        7       6     1.4      1.1      21     22
Ba nk of Indi a                360 4,043    283   (21)       UP         44     54        8       7     1.5      1.3      18     19
Cana ra Bank                   385 3,371    425    10        OP         68     77        6       5     1.5      1.2      25     23
Corp Ba nk                     422 1,295    470    11        OP         79     90        5       5     1.1      0.9      21     20
HDFC Bank                    1,665 15,269 1,550     (7)      UP         60     74       28      22     3.8      3.3      16     15
HDFC                         2,575 15,725 2,845    10        OP         89    102       19      17     3.6      3.3      17     16
ICICI Ba nk                    809 19,261   972    20        OP         37     44       14      12     1.6      1.5       8      9
IDFC                           153 4,243    137   (11)       UP           7     8       17      15     3.3      2.9      14     14
ING Vys ya                     292    747   325    11        OP         20     27       14      11     1.7      1.4      13     14
LIC Hous ing                   772 1,567    795      3        N         73     79       10       9     2.0      1.8      21     20
Ori enta l Ba nk               249 1,336    300    20        OP         43     52        6       5     0.9      0.8      16     17
Power Fi n Corp                253 6,206    250     (1)      UP         19     21       13      12     2.2      1.9      18     17
PNB                            888 5,985    977    10        OP        116    138        8       6     1.8      1.5      25     24
Reli a nce Ca pita l           818 4,294    884      8        N         32     31       26      26     2.5      2.3      10      9
Rura l Electri fi ca ti on     230 4,229    204   (11)       UP         22     25       10       9     2.8      2.3      29     27
SBI                          2,145 29,110 2,215      3        N        156    184       10       9     1.9      1.6      16     17
Uni on Bank                    257 2,771    272      6        N         40     47        6       5     1.5      1.2      25     24
Yes Ba nk                      250 1,601    280    12        OP         14     19       17      14     3.7      2.9      23     24
Cement                                                  (10) to 0          ‐      ‐      9      11     1.9      1.7      23     16
ACC                            862 3,459    700   (19)       UP         84     57       10      15     2.7      2.4      29     17
Ambuja Cem                      98 3,198     80   (19)       UP           7     6       13      16     2.3      2.1      19     14
Gra s i m Inds               2,401 4,706 2,737     14        OP        301    261        7       8     1.4      1.2      19     14
Indi a Cement                  116    701   145    25        OP         16     13        7       9     1.0      0.9      15     11
Ma dra s Cements               113    577   128    13        OP         21     14        5       8     1.6      1.4      34     18
Shree Cement                 1,862 1,386 1,902       2       OP        245    219        8       9     3.2      2.4      53     33
Ul tra Tech Cem                900 2,394    819     (9)       N         90     62       10      14     2.4      2.1      27     15
Engineering                                             (20) to (5)        ‐      ‐     27      22     5.0      4.2      20     21
ABB                            762 3,453    565   (26)       UP         18     24       42      32     6.6      5.6      17     19
AIA Engg                       337    680   325     (4)      OP         19     23       18      14     3.3      2.8      21     21
Areva T&D                      271 1,385                   N/R            8    11       33      25     7.5      6.0      24     26
Bha ra t El ectronics        1,866 3,191 1,575    (16)        N        111    121       17      15     3.3      2.9      22     20
BHEL                         2,320 24,274 2,260     (3)      OP         92    113       25      21     7.8      6.0      35     33
Crompton Grea ves              406 3,179    400     (1)      OP         20     22       21      18     6.0      4.7      33     29
Cummins                        403 1,707    353   (12)        N         18     22       22      18     4.8      4.2      23     25
L&T                          1,649 21,155 1,454   (12)        N         57     69       27      22     4.7      4.1      20     19
Siemens                        553 3,984    435   (21)       UP         18     19       31      29     6.7      5.8      23     21
Suzl on Energy                  82 2,739     51   (38)       UP          (0)    1       NA      74     1.2      1.1       0      2
Therma x                       582 1,482    483   (17)        N         21     27       28      22     6.0      5.1      24     25
Volta s                        162 1,146    154     (5)      OP           9    10       17      16     5.1      4.1      34     29
Note: OP=Outperformer, UP=Underperformer, N=Neutral, UR=Under Review



DECEMBER 2009                                                 ENAM Securities                                                    23
                                                                                                            Essence of the Week


                             CMP Mcap       TP Upside Rating rel    FDEPS (INR)       PER (x)         PBR (x)          ROE (%)
Company Name                (INR) ($m) (INR)      (%) to sector     FY10e FY11e     FY10e FY11e    FY10e FY11e      FY10e FY11e
FMCG                                                     5 to 15         ‐      ‐     26      22    11.0      9.6       46      46
As i a n Pa i nts           1,800 3,688 1,850       3       UP         66     76      27      24    10.3      8.1       43      38
Bri ta nni a Indus tri es   1,631    833                  U/R          73     86      22      19     4.9      4.2       23      24
Col ga te Pa l mol i ve       664 1,929    675      2       UP         28     29      24      23    29.0    22.9       142    113
Da bur                        162 3,004    165      2       UP          6      7      28      24    12.9      9.9       52      47
Godrej Cons umer              250 1,659    277    11         N         10     12      24      21    10.3      9.3       51      49
Hi ndus ta n Uni l ever       263 12,279   290    10         N         11     12      25      22    26.0    24.0       108    113
Jyothy La b                   164    254   183    12         N         10     12      16      13     3.0      2.6       20      21
Ma ri co                      103 1,341    112      9        N          4      5      26      21     9.7      7.2       44      39
Nes tl e                    2,526 5,205 2,241    (11)       UP         73     83      35      30    40.5    33.6       131    121
Ta ta Tea                     921 1,217    978      6        N         65     75      14      12     1.2      1.1        8       9
Infrastructure                                           5 to 15         ‐      ‐     31      23     3.0      2.7        9      11
Ga mmon Indi a                237    542                  U/R          11     12      15      15     1.8      1.7        9       9
GMR Infra                      67 5,217     84    26        OP          1      1     120      84     3.6      3.5        2       3
GVK Power & Infra              46 1,553                   N/R           1      2      53      29     3.0      2.7        6      10
Hi ndus ta n Cons truct       138    897   110   (20)       UP          5      6      22      18     2.7      2.4       11      11
IVRCL Infra                   337    961   375    11         N         17     23      15      11     2.2      2.0       12      14
Mundra Port                   542 4,644    623    15         N         18     27      28      19     6.3      5.1       22      28
Na ga rjuna Cons tructi       156    857   153     (2)      UP          8      9      15      12     2.0      1.8       10      11
Pa tel Engg                   445    664   488    10         N         24     31      15      12     2.3      1.9       14      15
Punj Ll oyd                   197 1,395    225    14         N         13     15      16      13     1.8      1.6       14      13
IT Services                                             (5) to 0         ‐      ‐     22      20     5.9      4.7       30      27
HCL Tech                      365 5,249    281   (23)       UP         19     23      19      16     3.8      3.0       21      21
Infos ys Tech               2,527 30,963 2,650      5       OP        103    115      25      22     6.3      5.1       29      26
Mpha s i s                    726 3,254    819    13        OP         43     51      17      14     6.5      4.7       48      38
Ora cl e Fi na nci a l s    2,165 3,878 3,167     46        OP        109    138      20      16     4.1      3.2       23      23
Pa tni Computer               468 1,291    514    10        OP         39     39      12      12     1.8      1.6       16      14
Redi ngton                    296    498   336    13        OP         24     28      13      11     1.9      1.7       15      17
TCS                           728 30,438   750      3       OP         33     36      22      20     9.1      6.8       41      38
Tech Ma hi ndra               989 2,583    844   (15)       UP         50     53      20      19     4.6      3.7       28      23
Wi pro                        675 21,171   671     (1)       N         31     34      22      20     5.1      4.1       27      23
Logistics                                               (5) to 5         ‐      ‐     54      15     2.1      1.9        4      12
Al l ca rgo Gl oba l          198    527   196     (1)       N         10     12      17      14     2.5      2.2      15      13
Conta i ner Corp            1,228 3,412 1,266       3        N         65     75      17      14     3.7      3.2      21      21
Ga tewa y Di s tri pa rks     129    298   177    37        OP          7     10      17      13     1.9      1.8      11      14
G E Shi pping                 269    875   354    32        OP         37     63       7       4     0.7      0.6      10      15
Jet Ai rwa ys                 535    988   347   (35)       UP       (130)   (52)     NA      NA     3.3      3.6     (62)   (34)
Media                                                    5 to 10         ‐      ‐     30      23     4.2      3.8       15      17
HT Medi a                     137    687   140      2       UP          6      7      24      20     3.6      3.6       16      18
Ja gra n Pra ka s ha n        124    799   140    13        OP          6      7      22      18     5.7      4.7       27      29
Sun TV                        326 2,750    350      7        N         12     14      28      23     6.3      5.3       24      25
TV Ei ghteen                   85    328                  N/R          (5)    (3)     NA      NA     5.9      5.9      ‐29     ‐22
Zee Ent                       252 2,333    252      0       UP         10     12      26      21     2.9      2.6       12      13
Metals                                                 (40) to (20)      ‐      ‐     19      12     2.0      1.7       10      13
Hi nda l co Inds              143 5,845    111   (22)        N          5     10      24      13     1.3      1.2        5       9
Hi ndus ta n Zi nc          1,168 10,550   863   (26)        N         65     85      14      10     2.9      2.4       18      19
JSW Steel                     976 3,904                   U/R          18     26      53      37     2.3      2.2        5       6
Na l co                       383 5,271    392      2       OP         16     38      20       8     2.4      2.0       10      21
SAIL                          213 18,815   124   (42)       UP         11     10      18      22     2.8      2.6       16      13
Ses a Goa                     366 6,422    239   (35)        N         26     32      11       8     3.4      2.7       32      26
Steri te Indus tri es         818 14,695                  U/R          49   101       12       6     1.5      1.2       10      17
Ta ta Steel                   563 10,681   293   (48)       UP          2     20     315      28     1.5      1.4        0       5
Note: OP=Outperformer, UP=Underperformer, N=Neutral, UR=Under Review




DECEMBER 2009                                               ENAM Securities                                                     24
                                                                                                                         Essence of the Week


                            CMP Mcap          TP Upside Rating rel        FDEPS (INR)             PER (x)           PBR (x)           ROE (%)
Company Name               (INR) ($m) (INR)          (%) to sector        FY10e FY11e FY10e FY11e FY10e FY11e FY10e FY11e
Oil & Gas                                                 (15) to 5            ‐        ‐        13       11        2.5     2.1        20      22
Aba n Offs hore            1,167 1,083                       N/R            200     228            6       5        2.1     1.5        42      34
BPCL                         595 4,600       520    (13)        N            68      74            9       8        1.5     1.3        19      18
Ca i rn                      270 10,955      227    (16)       UP             7      24          39       11        6.1     4.6        17      47
Chenna i petro               212    675      291     37        OP            45      42            5       5        0.9     0.8        20      17
GAIL                         402 10,902      358    (11)        N            23      27          18       15        3.1     2.7        18      19
Guja ra t Ga s               226    620                      N/R             13      14          17       16        3.2     2.7        21      18
GSPL                          95 1,143                       N/R              6       5          17       19        3.4     2.9        22      16
HPCL                         378 2,736       349      (8)       N            69      64            6       6        1.0     0.9        20      16
Indi a n Oi l                300 15,589      347     16        OP            38      41            8       7        1.4     1.3        19      18
Indra pra s tha Ga s         193    577      205       6       OP            15      17          13       11        3.3     2.8        28      27
ONGC                       1,186 54,203 1,256          6       OP           115     121          10       10        2.5     2.2        26      24
Petronet LNG                  71 1,141        60    (16)       UP             7       7          10       10        2.0     1.8        22      20
Rel i a nce Inds           1,010 70,634      925      (8)       N            54      79          19       13        2.9     2.4        15      20
Pharmaceuticals                                           (20) to (10)         ‐        ‐        25       20        4.6     3.9        20      21
Bi ocon                      279 1,193       254      (9)      OP            14      16          21       18        3.2     2.8       17      17
Ca di l a Hea l thca re      651 1,899       718     10        OP            34      40          19       16        5.7     4.4       33      31
Ci pl a                      357 6,132       272    (24)       UP            13      15          27       23        4.8     4.1       21      19
Di s hma n Pha rma           229    395      245       7       OP            16      20          14       11        2.2     1.9       17      18
Di vi 's La bs               665 1,858       602      (9)      OP            28      33          24       20        5.8     4.6       27      26
Dr Reddys La b             1,205 4,347       914    (24)       UP            48      57          25       21        4.1     3.5       18      18
Gl a xoSmi thKl i ne Pha 1,606 2,908 1,418          (12)        N            59      64          27       25        7.6     6.8       30      29
Jubi l a nt Orga nos ys      338 1,067       345       2       OP            28      34          12       10        2.8     2.2       27      25
Lupi n                     1,524 2,895 1,491          (2)      OP            73      93          21       16        5.5     4.3       30      29
Pi ra ma l Hea l thca re     408 1,825       436       7       OP            22      27          19       15        5.2     4.2       31      31
Ra nba xy La b               529 4,755       260    (51)       UP             8      16          68       32        4.8     4.5        8      16
Sun Pha rm                 1,498 6,595 1,343        (10)        N            58      75          26       20        3.9     3.5       16      18
Power Utilities                                             0 to 15            ‐        ‐        20       17        2.8     2.5        14      15
Ada ni Enterpri s es         424 4,498       506     19        OP            14      39          30       11        5.0     3.2       19      37
Ja i pra ka s h Hydro Pow 73        765      100     37        OP             1       1          56       84        3.3     3.1        7       4
Ji nda l Steel & Power 708 14,084                            U/R             35      39          20       18        6.6     4.9       39      31
NTPC                         207 36,495      210       1        N            11      12          19       17        2.7     2.5       14      15
Power Gri d                  105 9,402       108       3        N             5       6          19       16        2.4     2.2       13      14
Rel i a nce Infra          1,029 4,956 1,244         21        OP            56      59            8       7        1.8     1.7       10      10
Rel i a nce Power            144 7,373       215     49        OP             3       4          46       35        2.4     2.2        5       7
Ta ta Power                1,318 6,684                       U/R             77      83          14       13        2.3     2.1       15      14
Real Estate                                                15 to 25            ‐        ‐        25       19        1.9     1.7         8       9
Bri ga de Enterpri s es      126    303      110    (13)       UP             2       6          58       20        1.4     1.3        2       7
Century Texti l e            478    950      630     32        OP            48      35            4       4        2.4     2.1       27      17
DLF                          358 12,994      430     20         N            11      18          33       20        2.4     2.2        8      11
HDIL                         340 2,516       364       7       UP            13      14          26       24        1.9     1.6        9       7
Indi a bul l Rea l Es ta te 207 1,779        309     49        OP             1       4        242        51        0.9     0.9        0       2
Sobha Devel opers            223    468      291     30        OP            11      15          20       15        1.3     1.2        8       8
Uni tech                      80 4,084        82       2       UP             4       5          19       16        1.7     1.5       12      10
Retail                                                     15 to 25            ‐        ‐        25       19        3.9     3.4        15      17
Pa nta l oon Reta i l        363 1,476       503     39        OP            12      17          25       18        2.8     2.5        9      12
Ti ta n Inds               1,334 1,266 1,280          (4)      UP            50      61          27       22        8.4     6.5       35      33
Telecom                                                    (5) to 0            ‐        ‐        14       15        2.5     2.1        20      16
Bha rti Ai rtel              317 25,737      318       0       OP            24      23          13       14        3.0     2.5       26      20
IDEA                          57 3,777        57       0        N             2       2          25       25        1.3     1.2        5       5
Others                                                         NA              ‐        ‐           ‐       ‐          ‐       ‐        ‐       ‐
Adi tya Bi rl a Nuvo         867 1,909 1,035         19        NA             2      15        362        58        1.4     1.3        0       2
Ta ta Chemi ca l s           319 1,604       326       2       NA            23      31          14       10        1.4     1.3       11      13
1) Tel ecom compa ny va l ua ti ons i ncl ude tower va l ua ti ons ; 2) SBI: BV, EPS & va l ua ti ons a re on s ta nda l one ba s i s
3) IT Cos : The extens i on of 10A/10B ta x benefi t by one yea r ha s been i ncorpora ted i n the FY11 es ti ma tes ; 4) PE i s a djus ted
for VOI wherever a ppl i ca bl e 5) # for s ectors we ha ve us ed Adj PAT growth; 6) ^ M&M FY10 numbers not compa ra bl e due to
merger wi th PTL 7) *For TechM, cons ol i da ted EPS i ncl udi ng Sa tya m i s Rs 66 for FY10E & Rs 77 for FY11E
Source: ENAM estimates, Bloomberg; Note: OP=Outperformer, UP=Underperformer, N=Neutral, UR=Under Review




DECEMBER 2009                                                    ENAM Securities                                                               25
                                                                                                                                                   Essence of the Week


ENAM DATABASE COMPENDIUM
THE WAY YOU WANT IT!!!                                                                          Implied growth play around sheet: Input a given
Our Sales & Analysts are so myopic. They are like                                               hurdle rate of stock return, &/ or the 2 years' hence
India's shopkeepers; we have these to sell and those                                            forward PE for individual stocks, to obtain the hurdle
to buy. Of course, so is the state of the rest of our                                           EPS CAGR required to obtain a given stock return.
broking industry. Now, control can be in YOUR                                                   The idea is for you to judge whether such a hurdle
hands: ENAM Database is your playground of what                                                 rate looks possible, & hence is that stock worth
YOU want to look for stock screen filters, relative                                             investing in.
valuation & movers, et al.
                                                                                                ENAM Screener play‐around sheet: Has 24
The ENAM Database Compendium is released every                                                  parameters e.g. Sales, PAT, various growth & margin
Friday evening to help you use your weekend                                                     criteria, return & other ratios, price performance,
profitably (ENAM ensures our clients never sleep)                                               etc. Choose any 4 of these, & set ranges, compare &
with an unmatched host of functionalities. Some                                                 hence, customize it as your own Screen for
commonly used functionalities are:                                                              identifying sets of stocks to research further in.

The Valuation guide provides for all ENAM covered                                               As you can see from the following master‐screen,
stocks, not only the target price upsides, but also                                             there is almost limitless market data you can mine,
intra‐sectoral relative weight ratings, price‐                                                  both global & domestic, across various asset classes,
performance, etc. This is overlaid by the strategist's                                          in various sheets
short term 1 month sectoral weights relative to the
Sensex.



DATABASE COMPENDIUM ILLUSTRATION
Company Screen: Relative to sector: For ENAM covered stocks, scores based on growth & valuations
Score: No of parameters where compa ny is better than s ector growth/ valuati ons (15 bei ng the maximum)
                                                             Historical: CAGR FY06‐FY09          Growth YoY: FY10e                      Valuation: FY10e                       FY08
                                                                               Avg                                                               N.debt/     Div            N.Cash/
                           Mcap    Price    2yr                         Adj Ebitda    Avg             Adj Ebitda            PE    PB       EV/E Equity      Yield    PEG      Mcap
Company                  (USDm)    (INR)   Beta    Score   Sales #     PAT mgn #      ROE Sales #    PAT mgn #       ROE   (x)    (x)        (x)      (x)    (%)      (x)        (%)
Autos                                                          29     (13)     11      21     20    171       11      23   19    4.1        12       0.5     1.0     0.1           2
Hero Honda                 7,152   1,675     0.6     11        12       10     13      37     24      62      17      45   15    6.2        11      (0.9)    1.1     0.2           8
Mah & Ma h ^               6,306   1,054     1.1     10        16       13     12      25     31      85      15      27   13    4.1        13       0.4     0.9     0.2           8
Baja j Auto                5,271   1,704N/A N/A       9        NA       NA     13      80     29      94      20      72   15    8.3        11      (0.2)    1.3     0.2           2
Maruti Suzuki              9,564   1,549     0.8      9        19        6     14      21     35      67      13      22   17    3.9        11      (0.5)    0.2     0.3         10
Bos ch                     3,091   4,605     0.6      8        15       24     18      24      6      (7)     18      18   25    4.0        14      (0.6)    0.5    (4.7)        10
Mothers on Sumi              964     127     0.7      7        37       10     14      37   144       45       8      21   23    4.6        11       1.0     1.0     0.5          (9)
TVS Motor                    294      58     1.0      6         4     (36)       3      5     15    238        5      13   13    1.7          9      0.9     1.2     0.1        (24)
Bha rat Forge              1,245     262     1.0      5        17       (9)    14      17    (21)    (49)     12       6   64    3.3        16       0.6     0.8    (1.3)       (18)
Tata Motors                8,185     733     1.2      4        44       NA       9      9     12      NA       8      11   45    1.0        11       2.8     1.4                (13)
As hok Leyland             1,391      49     1.1      3         4     (16)       9     19     11      19       8       6   30    1.8        15       0.5     2.0     1.5           3
Banks & Fin Serv                                               22       27      NA     17     12      14      NA      16   12    2.1                         1.4     0.9
PNB                        5,985     888     1.0      9        19       29       3     20     15      19       3      25    8    1.8                         2.5     0.4
Union Ba nk                2,771     257     0.9      9        21       37       3     24     13      16       2      25    6    1.5                         1.9     0.4
LIC Hous i ng Fin          1,567     772     1.1      9        29       37       3     23      9      30       3      21   10    2.0                         1.7     0.6
Bank of Indi a             4,043     360     1.1      8        31       62       3     26      1     (22)      3      18    8    1.5                         2.2    (0.4)
Rura l Electri fica tion   4,229     230     1.0      8        23       17       4     20     24      49       4      29   10    2.8                         2.0     0.2
Canara Ba nk               3,371     385     1.0      8        13       16       2     20     14      35       2      25    6    1.5                         2.3     0.2
Corp Ba nk                 1,295     422     0.8      8        18       26       3     18     21      26       2      21    5    1.1                         3.0     0.2
Bank of Baroda             3,905     501     1.0      7        22       39       3     17     11      21       3      21    7    1.4                         1.8     0.3
Yes Ba nk                  1,601     250     1.4      7        72       76       3     18     34      41       3      23   17    3.7                                 0.4
Axis Ba nk                 8,050     934     1.2      6        54       55       3     19     28      28       3      18   16    2.4                         1.1     1.1
Orienta l Bank             1,336     249     1.0      6        12        4       2     15     18      20       2      16    6    0.9                         3.0     0.3
HDFC                      15,725   2,575     1.1      5        26       22             23     22      17              17   19    3.6                         1.2     1.5
Power Fin Corp             6,206     253     0.9      4        25       26       4     15     42      12       4      18   13    2.2                         1.6     1.1
ING Vys ya                   747     292     1.0      4        21     175        2     12     19      29       2      13   14    1.7                         0.7     1.3
HDFC Bank                 15,269   1,665     1.0      4        43       25       4     18     16      21       4      16   28    3.8                         0.7     2.0
SBI                       29,110   2,145     1.0      4        13       27       3     17     12       9       2      16   10    1.9                         1.4     1.2
IDFC                       4,243     153     1.3      2        35       25       3     15     12      19       3      14   17    3.3                         0.8     0.9
Reli ance Capita l         4,294     818     1.6      2        74       21             15    (26)    (22)             10   26    2.5                         0.6    (1.1)
ICICI Ba nk               19,261     809     1.5      1        22       14       2     11      3       8       2       8   14    1.6                         1.4     1.7




DECEMBER 2009                                                                    ENAM Securities                                                                                 26
                                  Essence of the Week


Notes




DECEMBER 2009   ENAM Securities                   27
                                                                                                                                                  Essence of the Week




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DECEMBER 2009                                                                 ENAM Securities                                                                               28

								
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