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Weekly Wrap

VIEWS: 4 PAGES: 8

									                                                                                                            Weekly Wrap

Investment idea                                                                                                                September 23, 2011


                                                                                                                                                 BUY
Mahindra Satyam                                                                                                                               CMP `71
Decent turnaround post clearing of financial and                     11
                                                                      Sector: Pharmaceuticals                         Shareholding pattern
legal hurdles                                                        BSE code:                           500376       June'11                       (%)
Post becoming current on their financials in late H1 FY11,
                                                                     NSE code:              SATYAMCOMP-N              Promoters                    42.7
Mahindra Satyam has experienced increased visibility in terms
RFP invitations as most of the client embargoes have been lifted.    52 Week h/l (`):                114 / 54         Institutions                 16.7
Company’s commentary on the deal pipeline is encouraging             Market cap (`cr):                    8,296       Non promoter corp             6.0
with increased participation and winning in deals of US$30mn-        FV (`):                                     2    Public & others              34.7
US$100mn (eg. Mastercard, Phillips etc). Clients lost due to the
fraud (by the erstwhile management) have also started coming
                                                                     Performance rel. to sensex                       Performance rel. to sensex
back (12 clients came back in H2 FY11). Strong 6.2% dollar
revenue growth CQGR over last 3 quarters, material additions         (%)                 1m       3m            1yr                  Mahindra Satyam
                                                                                                                        150
to US$10-20mn client buckets and robust growth in top-20             Mahindra            9.0     (5.6)    (16.4)                     Sensex
accounts(in Q1FY12). validates the revival                           Satyam                                             100
                                                                     Patni              12.2     (0.6)    (16.0)
Material margin levers available ahead                                                                                   50
                                                                     Mindtree            2.1      7.4     (12.1)
Mahindra Satyam’s margin improved significantly (6% to 14.5%
                                                                     Mphasis           (11.9)   (12.9)    (30.9)          0
qoq) over last 3 quarters on the back of multiple factors all                                                             Sep-10     Mar-11     Sep-11
indicating improving operational performance and revenue
traction. Decent volume growth, material SG&A leverage and
higher productivity from FP projects were the key reasons for
the same. We believe with expected improvement in volumes,           Strong integration synergies with Tech Mahindra;
sizeable headroom in SG&A leverage (currently ~21% for FY11),        Valuations attractive at 9.7x FY13E earnings
utilization and employee pyramid will support margin expansion       While we expect the integration with Tech Mahindra to take time,
going forward.                                                       strong synergies are being realized in the form of complementary
                                                                     verticals, newer enterprise offerings and integrated IMS offering.
                                                                     Domain expertise of the M&M group is an additional positive.
Operating margin expectation over FY11-13E
                                                                     Financially, improving receivables position and liberal provisions
                                                                     should strengthen the balance sheet. The company is currently
    18
         (%)                                                         trading at 9.7x our FY13E earning estimate, attractively priced in
                                                                     our view. The recent fall in rupee, if it persists, can imply material
    15                                                               upside risks to our estimates.

    12                                                               Valuation summary
                                                                      Y/e 31 Mar (` m)               FY10              FY11          FY12E       FY13E
     9
                                                                      Revenues                      54810             51450          62112       69191
                                                                      yoy growth (%)                        -          (6.1)          20.7         11.4
     6
                                                                      Operating profit               5548              4551          8863        10294
     3                                                                OPM (%)                            10.1            8.8          14.3         14.1
                                                                      Pre-exceptional PAT            2923              4938           7959        8416
     0                                                                Reported PAT                  (1246)            (1473)         7459         8516
            FY10           FY11            FY12E    FY13E             yoy growth (%)                        -          68.9           61.2          5.7

Source: Company, India Infoline Research
                                                                      EPS (`)                             2.5            4.2            6.8         7.2
Most legal issues are a past                                          P/E (x)                            28.4          16.9           10.4          9.9
Management commentary on the status of legal issues is highly         Price/Book (x)                      4.5            4.9            3.4         2.5
comforting. Most of the disputes viz. Upaid, class action law suit
                                                                      EV/EBITDA (x)                      10.1          11.5             6.1         4.4
and SEC proceedings have been settled. Management expects
maximum tenable claims to be around US$69mn in addition to            RoE (%)                            27.1          30.6           31.3         28.9
any income tax related claims (currently under dispute). The new     Source: Company, India Infoline Research
claim of `21bn by income tax authorities also seems excessive
and management believes it has a strong against the claim.
                                                                             India Infoline Weekly Wrap
    Market Outlook

    After three straight weeks of gradual pullback, the markets                                                                                                             Technical View
    tumbledagain as the USand eurozone teetered on the brink of
                                                                                                                                                                            Nifty has retreated back after a classic double top formation with
    another recession. Policymakers on eitherside of North Atlantic
                                                                                                                                                                            neckline persisting at 4830, so a move below 4830 would project
    failed to assuage worriesabout the worsening macroeconomic
                                                                                                                                                                            downside target of 4590.With Bullish Flag Breakout in India
    backdrop. Considerable concerns remain over Greece’s abilityto
                                                                                                                                                                            Vix above 32 the possibility of the breakdown in Nifty remains
    secure second tranche of international financial aid. Rumours
                                                                                                                                                                            very likely. Adding to it a negative crossover in RSI, affirms near
    flew thick andfast about a possible orderly default but the same
                                                                                                                                                                            weakness for the market and unless we do not see sustainable
    were rejected by Greece.
                                                                                                                                                                            close above 4930, any pullback could remain short lived.
    One has to see how the situation unfolds in the eurozone.
                                                                                                                                                                            So overall in coming week we would advise extreme caution.
    So,strictly avoid taking any risk and wait for the dust to settle on
    the eventstaking place abroad, especially in Europe.
                                                                                                                                                                            F&O View
    For India,the bad news is the sliding rupee and its fallout on FII                                                                                                      Last few trading session, huge amount of short position was seen
    flows. Again it is avery tricky situation and must be watched                                                                                                           in Nifty.Nifty added ~4mn shares in OI in last 2 days with total OI
    carefully.                                                                                                                                                              now stands ~30mn. Onoption side, short unwinding was seen in
                                                                                                                                                                            5000, 4900 & 4800 puts, whereas writingwas seen in 4600 put.
    US will also be in focus next week ahead of importanthousing                                                                                                            Some Banking stocks had seen long build-up in Friday’strade.
    and GDP data. Back home, the focus will be on F&O expiry and                                                                                                            We feel Nifty expiry may be inthe range of 4950-5000, with the
    theupcoming earnings season. Volatility is a given these days due                                                                                                       expectation that Banks could see some short covering.
    to heightenedglobal risks. So, be watchful and wait for more
    clarity.

    FIIs/MFs activity                                                                                                                                                       Advance/Decline
      1,500
                                                                       Net FIIs inflow                          Net MFs Inflows                                              2,500       (No of stocks)    Advance          Decline
                    (Rs cr)
      1,000
                                                                                                                                                                             2,000
        500

          0                                                                                                                                                                  1,500


       (500)                                                                                                                                                                 1,000

     (1,000)
                                                                                                                                                                               500
     (1,500)
                                                                                                                                                                                 0
                                                                                                                                                                                       26-Aug
                                                                                                                                                                                       29-Aug
                                                                                                                                                                                       30-Aug
                                                                                                                                                                                       29-Aug
                                                                                                                                                                                       30-Aug
                                                                                                                                                                                        2-Sep
                                                                                                                                                                                        5-Sep
                                                                                                                                                                                        6-Sep
                                                                                                                                                                                        7-Sep
                                                                                                                                                                                        8-Sep
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                                                                                                                                                                                       12-Sep
                                                                                                                                                                                       13-Sep
                                                                                                                                                                                       14-Sep
                                                                                                                                                                                       15-Sep
                                                                                                                                                                                       16-Sep
                                                                                                                                                                                       19-Sep
                                                                                                                                                                                       20-Sep
                                                                                                                                                                                       21-Sep
     (2,000)
                                                             2-Sep
                                                                     5-Sep
                                                                             6-Sep
                                                                                     7-Sep
                                                                                             8-Sep
                                                                                                     9-Sep
                26-Aug
                         29-Aug
                                  30-Aug
                                           29-Aug
                                                    30-Aug




                                                                                                             12-Sep
                                                                                                                      13-Sep
                                                                                                                               14-Sep
                                                                                                                                        15-Sep
                                                                                                                                                 16-Sep
                                                                                                                                                          19-Sep
                                                                                                                                                                   20-Sep




    Global performance                                                                                                                                                      Sectoral performance
                                                                                                                                                                                 BSE Pharma
          Shanghai                                                                                                      (2.0)                                                                                                       -2.0%
                                                                                                                                                                                        BSE IT                                     -2.0%

               Nikkei                                                                                                                                                         BSE Small-Cap                                        -2.3%
                                                                                                       (3.4)
                                                                                                                                                                                  BSE FMCG                                     -2.4%
                Nifty                                                                          (4.2)                                                                                  BSE Bank                             -3.3%
                                                                                                                                                                                     BSE Power                             -3.6%
              Sensex                                                                         (4.5)
                                                                                                                                                                                       BSE-200                        -3.8%

              Nasdaq                                                                                                                                                                 BSE Realty                     -4.4%
                                                                       (6.4)
                                                                                                                                                                                      BSE Auto                     -4.6%
        Dow Jones                                                    (6.7)                                                                                                     BSE Oil & Gas                -5.5%
                                                                                                                                                                                     BSE Metal             -6.0%
        Hangseng                       (9.2)
                                                                                                                                                                             BSE Cap Goods         -7.4%
                          -11.0                     -9.0                     -7.0               -5.0                   -3.0                      -1.0                                            -9% -8% -7% -6% -5% -4% -3% -2% -1% 0%




2
                                        India Infoline Weekly Wrap
Technical Check

Nifty 50 & CNX 500 top 10 gainers                                                          Nifty 50 & CNX 500 top 10 Losers
               NSE Nifty                                   CNX 500                                       NSE Nifty                                   CNX 500
                            CMP       %                                  CMP          %                         CMP             %                               CMP         %
Company                      (`)    Chg Company                           (`)       Chg    Company               (`)          Chg Company                        (`)      Chg
 Reliance Power               82     3.5    Inox Leisure                      52    14.3    L&T                1,451          (9.8)   IVRCL Infra                   37   (14.8)
 ACC                     1,070       3.1    Sunteck                          307    12.8    Sterlite Ind.        123          (9.0)   Aptech                     115     (13.8)
 Grasim Ind.             2,330       0.9    Alfa Laval                  2,202       11.8    Tata Motors          147          (9.0)   S Kumars                      45   (12.7)
 Ambuja Cements              145     0.9    Eicher Motors               1,612        9.6    Hero Motocorp      2,030          (7.7)   Jsw Energy                    56   (12.3)
 Cipla                       285     0.8    BOC India                        299     9.1    Reliance Infra       429          (7.6)   Uflex                      152     (11.6)
 HCL Tech                    389     0.8    Mirc Electronics                  20     8.5    Hindalco Ind         134          (7.1)   Pantaloon Ret.             231     (11.2)
 Wipro                       341     0.7    Koutons Retail                    22     7.7    Sesa Goa             208          (7.1)   Oswal Chem                    64   (10.5)
 Tata Power                  991     0.6    Kajaria Ceramics                 119     7.6    Reliance Ind.        772          (6.5)   NMDC                       224     (10.4)
 SBI                     1,948       0.1    Hcl Infosys                       65     7.4    Tata Steel           432          (6.3)   KS Oil                      11     (10.2)
-                               -       -   Amtek India                      121     7.4    HDFC Bank            455          (5.9)   Fortis Health              133      (9.9)


Technically strong                                                                         Technically weak
                                                                            10 days                                                                                  10 days
                                       10 days              Total           Average                                               10 days            Total           Average
                            CMP        Moving         Traded Qty         Traded Qty                                  CMP          Moving       Traded Qty         Traded Qty
Company                      (`)    Average (`)            (lacs)             (lacs)       Company                    (`)      Average (`)          (lacs)             (lacs)
 Bank of Baroda              775             765                 0.4                 0.4    NMDC                      227               239               1.3              0.5
 ACC                        1,070           1,052                0.8                 0.3    BHEL                     1,600            1,682               1.2              1.0
 Patni                       293             288                 0.3                 0.3    Neyveli Lignite            82                86               0.4              0.3
 SBI                        1,956           1,919               10.4                 8.0    SAIL                      105               110               4.7              3.0
 Reliance Power               82                 80             21.8                10.7    MTNL                       33                35               2.4              1.2


Bulk deals                                                                                 Book closure and record date
                                                                    Qty                    Company                           Date                     Purpose
Date       Institution           Scrip name               B/S     (lacs)           Price   Tanla Solutions                   26 Sep 2011              Final Dividend
19-Sep     Elder Venture L       Hexaware Tech             B       52.0             72.0
                                                                                           Tata Power                        26 Sep 2011              Stock Split
21-Sep     Fidelity Invst        Bata India Ltd.            S          3.4         706.8   Vivimed Labs                      26 Sep 2011              Final Dividend
21-Sep     Reliance MF           Venky's (India)           B           0.5         412.9   Surya Pharma                      27 Sep 2011              Final Dividend
22-Sep     Swiss Finance         Nitin Fire Prote           S          3.2          44.3   Tata Comm                         28 Sep 2011              Dividend
22-Sep     Morgan Stan           Prism Cements              S      43.9             43.0   Vaswani Ind                       29 Sep 2011              Bonus 1:4


Nifty Future VWAP                                                                          Bank Nifty Future VWAP
                              Nifty Futs Close             Nifty Vwap                                         Bank Nifty Futs Close                 Bank Nifty Vwap
    5200                                                                                   10000

    5100                                                                                     9800

                                                                                             9600
    5000
                                                                                             9400
    4900
                                                                                             9200
    4800                                                                                     9000

    4700                                                                                     8800

                                                                                             8600
    4600
                                                                                                     26-Aug
                                                                                                     29-Aug
                                                                                                     30-Aug
                                                                                                      2-Sep
                                                                                                      5-Sep
                                                                                                      6-Sep
                                                                                                      7-Sep
                                                                                                      8-Sep
                                                                                                      9-Sep
                                                                                                     12-Sep
                                                                                                     13-Sep
                                                                                                     14-Sep
                                                                                                     15-Sep
                                                                                                     16-Sep
                                                                                                     19-Sep
                                                                                                     20-Sep
                                                                                                     21-Sep
                                                                                                     22-Sep
                                                                                                     23-Sep
           26-Aug
           29-Aug
           30-Aug
            2-Sep
            5-Sep
            6-Sep
            7-Sep
            8-Sep
            9-Sep
           12-Sep
           13-Sep
           14-Sep
           15-Sep
           16-Sep
           19-Sep
           20-Sep
           21-Sep
           22-Sep
           23-Sep




                                                                                                                                                                                  3
                                             India Infoline Weekly Wrap
    Commodity Corner

    Base metals                                                                                              Precious metals
    Base metals witnessed massive liquidation this week, impacted by                                         Gold prices witnessed severe losses, as US Federal Reserve’s plan
    a stronger US dollar and discouraging outcome of the US Federal                                          to swap shorter-maturity government securities for longer-dated
    Reserve Policy meet. Fed stated that economic growth is slowing                                          ones has failed to encourage the markets, as it is not perceived
    and unemployment remains high. European debt concerns and                                                enough of a stimulus to revive the sagging US economy. The
    series of poor economic data on the global front also exerted                                            Fed has decided to twist the yield curve on government bonds
    lower pressure on the complex. Moreover, contraction in Chinese                                          to keep interest rates low. The Fed will buy US$400bn worth of
    manufacturing activity aggravated the slowdown woes. In this                                             6 to 30-year treasuries and sell the same amount of treasuries
    respect, HSBC's preliminary China Manufacturing Purchasing                                               maturing in less than three years. Moreover, a stronger US dollar
    Managers' index, fell to of 49.4 in September, as compared with                                          index also weighed on the precious metals complex. The US
    49.9 in August, HSBC's preliminary reading for the manufacturing                                         dollar index traded 78.15 at the end of this week, as compared
    output index declined to 49.2 in September, down from 50.2                                               with last week close of 76.59. However on the domestic front,
    in August. Copper prices suffered huge losses, weighed down                                              MCX Gold prices evaded massive liquidation this week, thanks to
    by easing supply issues in Peru and Indonesia and slowdown                                               drastic depreciation in the Indian rupee. Silver prices witnessed
    concerns in China. Copper prices failed to capitalise from the pick                                      a selling rout, as the white metal was adversely impacted by the
    up in Chinese refined copper import numbers for August. China                                            broad based sell-off in the entire commodity complex.
    imported 235,509 tons in August, 21% higher than the previous
    month, however 12% lower on a yoy basis. Nickel prices battered                                          In spite of the recent weakness in gold prices, we expect the
    the most, adversely impacted by poor growth in stainless steel                                           yellow metal to recover from these levels and move higher,
    output across the globe.                                                                                 as it would be persistently supported by looming European
                                                                                                             debt crisis and weaker economic growth projections across
    In light of the prevalent economic concerns on the both                                                  the globe.
    sides of the Atlantic and slowing manufacturing activity in
    China, we reiterate with our bearish view on the base metals
    complex.
    Note: This market commentary is written at 12:30 PM IST

    LME prices                                                                                               Weekly inventory update
     Base Metals (US$/ton)                     High                  Low            LTP*       Chg(%)                                                       Tons            Abs Chg.       Chg (%)
     Copper                                   8,656            7,116            7,430               (14.6)   Copper (LME)                            464,550                 (1,475)              (0.3)
     Nickel                                  21,600         16,800           18,325                 (14.8)   Nickel (LME)                             97,242                   (408)              (0.4)
     Zinc                                     2,168            1,894            1,968                (8.8)   Zinc (LME)                              830,975                 (6,325)              (0.8)
     Aluminium                                2,380            2,187            2,240                (5.9)   Aluminium (LME)                        4,588,275                  6,525               0.1
     Lead                                     2,360            2,001            2,067               (12.6)   Lead (LME)                              374,025                  46,275              14.1
                                                                                                             Tin (LME)                                21,315                     215               1.0
     Precious Metals (US$/ounce)               High                  Low            LTP*       Chg(%)        Shanghai Copper                         102,253                 (9,808)              (8.8)
     COMEX Gold                               1,833            1,722            1,733                (4.5)   Shanghai Zinc                           412,097                 (2,397)              (0.6)
     COMEX Silver                                      41             34             34             (16.2)   Shanghai Aluminium                       99,479                (10,537)              (9.6)
    * Last Traded Price

    LME Copper                                                                                               COMEX Gold
     10500                                                                                                    2000
                                                        Copper (LME)                                                          US$/ ounce
                       US$/ ton                                                                                                                                 Gold
     10000
       9500                                                                                                   1750
       9000
       8500
                                                                                                              1500
       8000
       7500
       7000                                                                                                   1250

       6500
       6000                                                                                                   1000
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4
                                   India Infoline Weekly Wrap
Mutual Fund Round-up

India Infoline picks
                                         Assets          NAV                      Absolute return (%) as on September 23, 2011
Mutual Funds                              (` Cr)          (`)         1wk     1mth        3mth       6mth           1yr      2yr       3yr         5yr
HDFC Top 200 Fund (G)                    11,065      187.50          (2.55)   (0.74)      (7.30)     (7.92)     (15.91)    12.23     52.38       88.41
ICICI Prudential Dynamic - (G)            3,814         95.90        (2.63)    0.14       (7.36)     (8.46)     (11.03)    18.25     43.02       74.56
IDFC Small & Midcap Fund (G)              1,155         17.84        (0.72)    2.50          1.30     4.30       (8.47)    36.15    108.60          NA
Fidelity Tax Advantage (G)                1,239         20.21        (2.12)    0.07       (3.97)     (5.65)     (13.25)    21.77     56.28       84.93
HDFC Prudence Fund (G)                    6,407      203.90          (1.22)   (0.48)      (2.77)     (0.48)      (6.51)    29.09     73.52      102.32
Reliance equity opportunities(G)          3,032         33.24        (1.77)   (0.65)      (4.17)     (0.49)     (13.44)    32.00     77.17       79.76
IDFC Premier Equity-A(G)                  2,411         32.14        (2.10)   (0.38)         3.98     6.26       (8.19)    39.06     82.19      188.49


                                                 Funds this week: HDFC Top 200 Fund
Fund snapshot                                                                 Asset allocation (%)
Fund Manager                                               Prashant Jain      Equity                                                               92.0
Latest NAV                                                       `187.50      Debt                                                                  2.5
NAV 52 high/low                                                 `236/187      Cash/call                                                             5.5
Latest AUM (cr)                                                  `11,065      Top 5 holdings (%)
Type                                                        Open-ended        State Bank Of India                                                   6.9
Class                                               Equity - Diversified      ICICI Bank Ltd.                                                       6.4
Options                                             Growth & dividend         Infosys Ltd.                                                          5.9
Min investment                                                      `5,000    ITC Ltd.                                                              4.6
Benchmark                                                        BSE 200      Reliance Industries Ltd.                                              4.1
No. of stocks                                                           66    Top 3 sectors (%)
No. of sectors                                                          30    Banks                                                                23.1
Expense ratio                                                        1.8%     Consumer Non Durables                                                11.1
Exit load                                               1% before 1 year      Software                                                             10.8

                                                   Reliance equity opportunity fund
Fund snapshot                                                                 Asset allocation (%)
Fund Manager                                              Viral Belawala      Equity                                                               93.3
Latest NAV                                                          `33.24    Debt                                                                  0.0
NAV 52 high/low                                            `39.86/31.80       Cash/call                                                             6.7
Latest AUM (cr)                                                     `3,032    Top 5 holdings (%)
Type                                                        Open-ended        Divi'S Laboratories Ltd.                                              5.1
Class                                               Equity - Diversified      Aventis Pharma Ltd.                                                   4.8
Options                                    Growth, Dividend & Bonus           Infosys Technologies Ltd.                                             6.7
Min investment                                                      `5,000    ICICI Bank Ltd.                                                       5.9
Benchmark                                                        BSE 100      HDFC Bank                                                             4.3
No. of stocks                                                           34    Top 3 sectors (%)
No. of sectors                                                          21    Banks                                                                22.1
Expense ratio                                                       1.85%     Consumer Non Durables                                                10.8
Exit load                                               1% before 1 year      Software                                                              9.9


NFO update                                                                    Dividend update
Fund Name                                Close     Type     Class             Mutual Fund                     Dividend % Record date    Class
SBI Capital Protection Oriented Fund -   29-Sep    CE       Hybrid-Debt       DSP BlackRock FMP-                   100% of 26-Sep       Debt – FMP
Series III - 60 Months Plan                                                   Series 2-3M                     distributable
Birla SL Capital Protection oriented     29-Sep    CE       Hybrid-debt                                             surplus
Fund series-7                                                                 Kotak Balance                        100% of 27-Sep       hybrid-
Axis Hybrid fund series 3                30-Sep    CE       Hybrid-Debt                                       distributable             equity
                                                                                                                    surplus             oriented



                                                                                                                                                          5
                                                                                    India Infoline Weekly Wrap
    Chartbook

    Weekly Inflation                                                                                                                                                                    Interest Rate

     25                                                                                                                                                                                 18              (%)                       10yr Gsec yield                                         5yr AAA bond yield
                    (%)                       Primary Article Inflation                                                    Food Inflation
                                                                                                                                                                                        16                                        3mth CP rate

     20
                                                                                                                                                                                        14

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     15
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     10                                                                                                                                                                                  8

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    IIP and Six core Industries                                                                                                                                                         Crude (Brent/ Nymex)

     16                                                                                                                                                                                  180
                        (%)                                   Six core Ind.                                                 IIP                                                                                                                       Nymex Crude                                    Brent Crude
     14                                                                                                                                                                                  160

     12                                                                                                                                                                                  140

     10                                                                                                                                                                                  120

      8                                                                                                                                                                                  100

      6                                                                                                                                                                                   80

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                                                                                                                                                                                                                                             Jan-09




                                                                                                                                                                                                                                                                                 Jan-10




                                                                                                                                                                                                                                                                                                                Jan-11




    Currency Movements                                                                                                                                                                  Dollar Index

     100                                        (EURO/USD)                                                                  (INR/USD)                                                    95
                                                (INR/GBP)                                                                   (INR/JPY)                                                                                                                                     Dollar Index
      90
                                                                                                                                                                                         90
      80

      70                                                                                                                                                                                 85

      60                                                                                                                                                                                 80
      50
                                                                                                                                                                                         75
      40

      30                                                                                                                                                                                 70
                                                                                                                                                                                                                  Jul-08




                                                                                                                                                                                                                                                          Jul-09




                                                                                                                                                                                                                                                                                              Jul-10




                                                                                                                                                                                                                                                                                                                           Jul-11
                                                                                                                                                                                                 Jan-08




                                                                                                                                                                                                                                      Jan-09




                                                                                                                                                                                                                                                                              Jan-10




                                                                                                                                                                                                                                                                                                             Jan-11
                                                                                                                                    Jul-10
               Jan-08


                                  Jun-08


                                                    Nov-08




                                                                                                                                                         Dec-10
                                                                                         Sep-09
                                                                       Apr-09




                                                                                                               Feb-10




                                                                                                                                                                            May-11




    Source: Bloomberg


6
                                                                                                                                                                                                                                                            45
                                                                                                                                                                                                                                                                   50
                                                                                                                                                                                                                                                                              55
                                                                                                                                                                                                                                                                                         60
                                                                                                                                                                                                                                                                                                    65
                                                                                                                                                                                                                                                                                                                                                   70




                                                                                                                                                                                                                     100




                                                                                                                                     0
                                                                                                                                                 10
                                                                                                                                                          20
                                                                                                                                                               30
                                                                                                                                                                       40
                                                                                                                                                                               50
                                                                                                                                                                                       60
                                                                                                                                                                                            70
                                                                                                                                                                                                    80
                                                                                                                                                                                                             90
                                                                                                                                                                                                                                                                                                                                                         PMI
                                                                                                                               Jan-08                                                                                                                 Dec-10




                                  0
                                                     10,000
                                                              15,000
                                                                       20,000
                                                                                      25,000
                                                                                                     30,000




                                        5,000
                                                                                                                                                                                                                                                                                                                                             (%)
                         Apr-99

                         Apr-00                                                                                                Jun-08                                                                                                                 Jan-11




    Source: Bloomberg
                                                                                                                                                                                                                                                                                                                                                                                     Chartbook...




                                                                                                                                                                                                                           Volatility Index
                         Apr-01




                                                                                                              Sensex PE Band
                                                                                                                               Nov-08




                                                                                                                                                                                                                                                                                                                    India
                        May-02                                                                                                                                                                                                                        Feb-11




                                                                                                                                                                                                                                                                                                         Germany
                        May-03                                                                                                 May-09
                        May-04                                                                                                                                                                                                                        Mar-11
                                                                                                                               Oct-09
                         Jun-05
                                                                                                                                                                                                                                                                                                         US




                                                                                                                                                                                                               VIX
                                                                                                                                                                                                                                                      Apr-11
                         Jun-06
                                                                                                                               Mar-10
                                                                                                                                                                                                                                                                                                                    Euro Zone




                         Jun-07
                                                                                                                                                                                                                                                      May-11
                         Jul-08                                                                                                Aug-10

                         Jul-09
                                                                                                                                                                                                                                                                                                                    China




                                                                                                                               Feb-11                                                                                                                 Jun-11
                         Jul-10




                                                                                               21x




                                                5x
                                                     9x
                                                                                17x




                                                              3
                                                              1
                         Jul-11                                                                                                 Jul-11
                                                                                                                                                                                                                                                       Jul-11




                                             10
                                             12
                                             14
                                             16
                                             18




                                              0
                                              2
                                              4
                                              6
                                              8
                                                                                                                                                                                                                                                            200
                                                                                                                                                                                                                                                                  300
                                                                                                                                                                                                                                                                        400
                                                                                                                                                                                                                                                                                   500
                                                                                                                                                                                                                                                                                              600
                                                                                                                                                                                                                                                                                                     700
                                                                                                                                                                                                                                                                                                                                                   800




                                                                                                                                         1,180
                                                                                                                                                      1,200
                                                                                                                                                               1,220
                                                                                                                                                                       1,240
                                                                                                                                                                                    1,260
                                                                                                                                                                                            1,280
                                                                                                                                                                                                     1,300
                                                                                                                                                                                                                  1,320
                            Dow Jones                                                                                                                                                                                                                 Jan-08
                                                                                                                                Apr-10




                                                                                                 PE (x)
                               Nasdaq
                                                                                                                                                                                                                                                      Jun-08



                                                                                                                                                                                                              (Rs)
                              S&P 500                                                                                          May-10




                                                                                                              PE Comparision
                                   FTSE                                                                                         Jul-10
                                                                                                                                                                                                                                                      Nov-08
                                      DAX                                                                                      Sep-10
                           Hang Seng*                                                                                                                                                                                                                 May-09
                                                                                                                                Oct-10
                                                                                                                                                                                                                                                                                                                                                         US Initial Jobless Claims




                                  Nikkei*
                                                                                                                                                                                                                           Sensex Earning Estimates
                                                                                                                                                                                                                                                                                                                                                                                                    India Infoline Weekly Wrap




                                                                                                                                                                       .
                                                                                                                               Dec-10                                                                                                                 Oct-09
                        Shanghai Comp




                                                                                                     FY12
                                                                                                                                Jan-11
                                                                                                                                                                                                                  FY12




                        Brazil Bovespa
                                                                                                                                                                                                                                                      Mar-10
                          Mexico Bolsa                                                                                          Mar-11
                                  Kospi*
                                                                                                                                                                                                                                                                                                                   Initial Jobless Claims ('000)




                                                                                                                               May-11                                                                                                                 Aug-10




                                                                                                     FY13
                              Taiwan*
                                                                                                                                Jun-11
                                  Straits*                                                                                                                                                                                                            Feb-11
                                                                                                                               Aug-11
                                  Sensex
                                                                                                                                                                                                                                                       Jul-11




7
                                                India Infoline Weekly Wrap
News Recap

 World markets in a tizzy on Fed warning and euro woes
 Risk trade once again came under the hammer this week, as investors dumped equities and commodities after the Federal Reserve's
 latest attempt at monetary easing left a lot to be desired. The fact that three FOMC members dissented and lack of hint of a QE3
 from the US central bank also hit the sentiment.

 European markets continued to be in a state of turmoil with banks particularly hit hard as Greece struggled to persuade its
 international lenders for a second aid package. The debt-strapped eurozone nation still managed to meet obligations on couple of
 coupon payments. A downgrade of Italy by S&P also weighed on investors' minds as did downgrades of US and Greek banks and
 downbeat PMI data from China and the eurozone. Meanwhile, the IMF slashed its GDP growth outlook for the world economy,
 dragged lower by the developed world. The Group of 20 (G20) nations tried to talk the markets up but didn't succeed.

 Rupee falls to 28-month low
 The rupee declined to touch its lowest levels in more than 28 months, as stocks plunged and Asian currencies weakened against the
 greenback amid concerns about the lingering sovereign debt crisis in the eurozone. The Indian currency fell to a 28-month low of
 49.89 on Sept. 23 before suspected RBI intervention lifted it to near 49.

 Chidambaram offered to resign on 2G scam: report
 Union Home Minister P. Chidambaram reportedly offered to resign when Prime Minister Dr. Manmohan Singh called him following
 reports of his alleged complicity in the 2G scam. The Prime Minister said he has complete faith in Chidambaram. He also refuted
 claims of any rift between Chidambaram and Finance Minister Pranab Mukherjee.

 Advance tax outgo from Top 100 Cos up 9.9% in Q2
 Advance tax payments from top 100 Indian companies grew by 9.9% to ` 317.07bn in the July-September quarter from the year ago
 period, a Finance Ministry official was quoted as saying. Advance tax receipts grew by 19% in the April-June quarter. Nearly 25% of
 India's top 100 companies paid lower advance tax for the July-September 2011 quarter than a year ago.


Event Calender

                         Period : 26th - 30th Sept                                                                                  Period : 03rd - 07th Oct
 US                                                                                                         US
       Sept Consumer Confidence (27 Sept)                                                                        Sept Total vehicle sales (4 Oct)
       Aug Durable Goods Orders (28 Sept)                                                                        Initial Jobless Claims (6 Oct)
       Q2 GDP QoQ annualized (29 Sept)                                                                           Sept Change in Nonfarm Payrolls (7 Oct)
       Aug Pending Home Sales YoY (29 Sept)                                                                      Sept Unemployment Rate (7 Oct)
 India                                                                                                      India
       Food Articles WPI yoy (29 Sept)                                                                           Aug Exports YoY% (3 Oct)
       Fuel & Power WPI yoy (29 Sept)                                                                            Aug Imports YoY% (3 Oct)
       Primary Articles WPI yoy (29 Sept)                                                                        Food Articles WPI yoy (6 Oct)
 China                                                                                                            Primary Articles WPI yoy (6 Oct)
       Aug Industrial Profits YTD YoY (27 Sept)                                                            China
 Euro Zone                                                                                                        Sept PMI Manufacturing (1 Oct)
       Sept Euro-Zone Economic Confidence (29 Sept)                                                              Sept Non-manufacturing PMI (1 Oct)
       Sept Euro-Zone CPI Estimate YoY (30 Sept)                                                           Euro Zone
       Aug Euro-Zone Unemployment Rate (30 Sept)                                                                 Sept PMI Manufacturing (3 Oct)
                                                                                                                  Aug Euro-Zone PPI YoY (4 Oct)
                                                                                                                  ECB Announces Interest Rates (6 Oct)




IIFL, IIFL Centre, Kamala City, Senapati Bapat Marg, Lower Parel (W), Mumbai 400 013
The information in this newsletter is generally provided from the press reports, electronic media, research, websites and other media. The information also includes information from interviews
conducted, analysis, views expressed by our research team. Investors should not rely solely on the information contained in this publication and must make their own investment decisions based on their
specific investment objectives and financial position and using such independent advisors as they believe necessary. The materials and information provided by this newsletter are not, and should not be
construed as an advice to buy or sell any of the securities named in this newsletter. India Infoline may or may not hold positions in any of the securities named in this newsletter as a part of its business.
Past performance is not necessarily an indication of future performance. India Infoline does not assure for accuracy or correctness of information or reports in the newsletter.


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