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The portfolio has been constructed considering various factors that drive broader markets and affect investment
The portfolio has been constructed considering various factors that drive broader markets and affect investment

The portfolio has been constructed considering various factors that drive broader markets and affect investment philosophies (Value Investing, Growth Investing, GARP Investing etc) of different set of investors.

These factors are – (a) Different background of investors (b) Risk Appetite (c) Investment Horizon.

We have classified the model portfolio for three kind of investors- Conservative, Mild Aggressive, Aggressive.

Conservative portfolio is designed for the investors who would like to limit the risk and in turn have lower but steady return expectations. For such investors, value investing is more important than momentum. Churning portfolio too often or overweight in one sector/scrips are uncommon in such kind of portfolio. Typically their returns would be benchmarked to the Sensex / Nifty.

Mild Aggressive Portfolio - A Mild Aggressive Portfolio comprises of stocks which can give good returns to the investors with average risk appetite without compromising on occasional opportunities thrown open by a mid-cap rally.

Aggressive Portfolio - investors with higher risk in anticipation of higher profit, at times by having a short-term horizon and frequently churning their portfolios based on momentum, flavour etc. This aggressive portfolio may not necessarily follow any particular sectoral balance and at times maybe overweight on any sector or stock.

  Conservative Mild Aggressive Aggressive Investment Horizon 9-12 months 9-12 months 9-12 months
 

Conservative

Mild Aggressive

Aggressive

Investment Horizon

9-12 months

9-12 months

9-12 months

Return

15%-20%

20% - 25%

>25%

Risk Retrun

Low Risk Low Return

Medium Rrisk - Medium Return

High Risk - High Return

Benchmark

Sensex/Nifty

CNX 100

BSE 200

Review Intervals

Quarterly

Quarterly

Monthly

  MODEL PORTFOLIO   TYPE CONSERVATIVE MILD AGGRESSIVE AGGRESSIVE   SBI AUROBINDO PHARMA
  MODEL PORTFOLIO   TYPE CONSERVATIVE MILD AGGRESSIVE AGGRESSIVE   SBI AUROBINDO PHARMA
 

MODEL PORTFOLIO

 

TYPE

CONSERVATIVE

MILD AGGRESSIVE

AGGRESSIVE

 

SBI

AUROBINDO PHARMA

JINDAL STEEL

NTPC

IRB

BATA INDIA

POWER GRID

CENTRAL BANK DCB

GMR INFRA

HUL

IVRCL LTD

ITC

TATA STEEL

REDINGTON INDIA

GODREJ CONSUMER

HINDALCO

AXIS BANK

STOCKS COVERED

HCL TECH

IDEA

TATA MOTORS

COAL INDIA

BHARTI

ESCORTS

INFOSYS

UCO BANK

COROMANDEL INT.

VOLTAS

BAJAJ ELECTRICALS

IDFC

CIPLA

M& M FINANCE

ICICI BANK

M&M

KPIT CUMMINS

SHASUN PHARMA

MARUTI SUZUKI

ADHUNIK METALIKS

SELECTED STOCKS SBI NTPC POWER GRID HUL ITC GODREJ CONSUMER HCL TECH COAL INDIA INFOSYS

SELECTED STOCKS

SBI

NTPC

POWER GRID

HUL

ITC

GODREJ CONSUMER

HCL TECH

COAL INDIA

INFOSYS

VOLTAS

CIPLA

M&M

MARUTI SUZUKI

Market Cap > Rs. 500cr 5 Y ear CAGR Net Sal es >= 15%* 5
Market Cap > Rs. 500cr 5 Y ear CAGR Net Sal es >= 15%* 5

Market Cap > Rs. 500cr

5 Year CAGR Net Sales >= 15%*

5 Year CAGR Net Profits >= 10%*

Average Beta=0.85

Average Dividend Yield=1.5%

* HUL does not fit into this criteria

Dividend Yield=1.5% * HUL does not fit into this criteria CONSERVATIVE PORTFOLIO ‐ SECTOR ALLOCATION %
CONSERVATIVE PORTFOLIO ‐ SECTOR ALLOCATION % BANKS & NBFC, 8 AUTO, 15 POWER 1 ,

CONSERVATIVE PORTFOLIO SECTOR ALLOCATION %

BANKS &

NBFC, 8

AUTO, 15

POWER 1 , 5 FMCG, 23 MINING, 8 IT, 15
POWER 1
,
5
FMCG, 23
MINING, 8
IT, 15

PHARMA,

8

DIVERSIFI

ED, 8

SELECTED STOCKS AUROBINDO PHARMA IRB INFRA CENTRAL BANK DCB TATA STEEL HINDALCO IDEA BHARTI UCO

SELECTED STOCKS

AUROBINDO PHARMA

IRB INFRA

CENTRAL BANK DCB

TATA STEEL

HINDALCO

IDEA

BHARTI

UCO BANK

BAJAJ ELECTRICALS

M& M FINANCE

KPIT CUMMINS

ADHUNIK METALIKS

Market Cap > Rs. 500cr Average Beta=0 .97 Average Dividend Yield=1.4%
Market Cap > Rs. 500cr Average Beta=0 .97 Average Dividend Yield=1.4%

Market Cap > Rs. 500cr

Average Beta=0.97

Average Dividend Yield=1.4%

500cr Average Beta=0 .97 Average Dividend Yield=1.4% BANKS & CONSUME INFRA , 8 NBFC, 31 R
BANKS & CONSUME INFRA , 8 NBFC, 31 R DURABLES, PHARMA, 8 8 STEEL, 8
BANKS &
CONSUME
INFRA , 8
NBFC, 31
R
DURABLES,
PHARMA,
8
8
STEEL, 8
METALS, 1
5 IT, 8
TELECOM,
15
SELECTED STOCKS JINDAL STEEL BATA INDIA GMR INFRA IVRCL REDINGTON INDIA AXIS BANK TATA MOTORS

SELECTED STOCKS

JINDAL STEEL

BATA INDIA

GMR INFRA

IVRCL

REDINGTON INDIA

AXIS BANK

TATA MOTORS

ESCORTS

COROMANDEL INT

IDFC

ICICI BANK

SHASUN PHARMA

Market Ca p > Rs. 500cr * Average Beta=1.04 Average Dividend Yield=1.3% * Mkt C
Market Ca p > Rs. 500cr * Average Beta=1.04 Average Dividend Yield=1.3% * Mkt C

Market Cap > Rs. 500cr *

Average Beta=1.04

Average Dividend Yield=1.3%

* Mkt Cap of Shasun Pharma Rs. 318cr

Yield=1.3% * Mkt C ap o f Sh asun Ph arma Rs. 318cr INFRA, 17 BANKS
INFRA, 17 BANKS & NBFC, 25 PHARMA, 8 STEEL, 8 AUTO 17 , FMCG ,
INFRA, 17 BANKS & NBFC, 25 PHARMA, 8 STEEL, 8 AUTO 17 , FMCG ,
INFRA, 17
BANKS &
NBFC, 25
PHARMA,
8
STEEL, 8
AUTO 17
,
FMCG , 8
IT, 8
FERTILIZER

S, 8

  Market Cap C o m p a n y (Rs. Cr) Beta (6M) Div
  Market Cap C o m p a n y (Rs. Cr) Beta (6M) Div
 

Market Cap

Company

(Rs. Cr)

Beta (6M)

Div Yield %

CMP (Rs)

Target Price (Rs)

Potential Upside

STATE BANK IND

119,380

1.1

3.0

1880.0

2480.0

32%

NTPC LTD

134,401

0.9

2.3

163.0

195.0

20%

POWER GRID CORP

44,097

0.7

1.8

95.3

115

21%

HINDUSTAN UNILEV

74,659

0.6

2.0

345.5

360.0

4%

ITC LTD

153,088

0.8

1.4

197.5

230.0

16%

GODREJ CONSUMER

13,751

0.5

1.1

424.8

530.0

25%

HCL TECH LTD

26,342

1.2

1.7

380.0

480.0

26%

COAL INDIA LTD

240,402

0.7

1.0

378.6

430.0

14%

INFOSYS LTD

128,793

1.1

1.3

2226.0

2760.0

24%

VOLTAS LTD

3,921

0.9

1.6

119.0

165.0

39%

CIPLA LTD

23,661

0.8

0.7

293.0

340.0

16%

M&M

48,561

1.1

1.3

785.0

840.0

7%

MARUTI SUZUKI

31,056

0.8

0.7

1075.0

1280.0

19%

Average

0.85

1.7

STATE BANK OF INDIA COMPANY PROFILE ► SBI is the largest Indian banking and financial

STATE BANK OF INDIA

COMPANY PROFILE

SBI is the largest Indian banking and financial services company (by turnover and total

assets) with its head uarters in Mumbai India

q

,

.

With an asset base of $352 billion and $285 billion in deposits, SBI is a regional banking behemoth and is one of the largest financial institution in the world. It has a market share of about 20% in deposits and loansamong Indian commercial banks.The State Bank of India is

the 29th most reputed company in the world according to Forbes

INVESTMENT RATIONALE Benefiting from its scale on the borrowing cost side, SBI generates NIM of ~3% on a sustainable basis. We believe strong net interest income growth over the next few years will boost operating profits. SBI with its return ratios of 0.8-1% RoA and 14-16% RoE is expected to trade at a premium to other public sector banks due to its scale. All major subsidiaries including SBI Life are profitable. Associate banks expected to be merged over the next 12-24 months have also generated RoA of 0.8- 1%, which will keep consolidated return ratios healthy.

VALUATIONS With strong economic growth, the financial services sector should outperform and SBI will be a significant contributor in the same. The stock is currently trading at 15.6x FY11P/E and 2.2xFY11 P/B. We think the current price largely factors in most of the bad news on asset quality and with return ratios likely to improve from H2FY11 onwards, we think this constitutes a good entry point with a target price of Rs.2480.

a good entry point with a target price of Rs.2480. Rating CMP (Rs.) Target (Rs.) U

Rating

CMP (Rs.)

Target (Rs.)

Upside %

Buy

1880

2480

32

Rating CMP (Rs.) Target (Rs.) U ps id e % Buy 1880 2480 32 Shareholding Pattern
Shareholding Pattern % (as on 30th June, 2011) 12.27 Promoters 17.45 FIIs DIIs 59.4 10.88
Shareholding Pattern % (as on
30th June, 2011)
12.27
Promoters
17.45
FIIs
DIIs
59.4
10.88
Others
NTPC COMPANY PROFILE ►NTPC is a diversified power major with presence in the entire value

NTPC

COMPANY PROFILE ►NTPC is a diversified power major with presence in the entire value chain
COMPANY PROFILE
►NTPC is a diversified power major with presence in the entire value chain of the power
generation business. Apart from power generation, NTPC has already ventured into
n
►NTPC ranked 341 st in the ‘2010, Forbes Global 2000’ ranking of the World’s biggest
companies and received ‘Maharatna’ status in May, 2010, one of the only four companies to be
awarded this status.
co
n
su
lt
a
cy, powe
r tr
a
din
g, as
h
u
tili
sa
ti
o
n
a
nd
coa
l minin
g.
INVESTMENT RATIONALE
►NTPC is India’s largest power company with total installed capacity of 34854 MW generating
~28% of total power generation in the country due to its focus on high efficiency. NTPC's
capacity addition shall accelerate as 14.7GW of projects under construction are expected to be
commissioned over FY12-14.
►Company has complete fuel supply arrangement for all its plants including under construction
ones. By 2017, company targets to procure 20% of its coal requirement from own mines, 70%
through linkages and balance through imported coal.
►Also, in a weak sector outlook, the company stands to gain on pre-emptive steps taken by
securing regulated PPAs for the 40GW capacity under various stages of expansion. This is a
key positive in a competitive bidding regime, which will ensure secured returns with pass
through of increased fuel prices.
VALUATIONS
We believe that ideal imported coal blending to optimize production cost and timely execution of
capacity addition will be the key for NTPC. We assign a BUY rating on the stock with a target
price of Rs.195. The stock is currently available at 2.0xFY11P/BV and 14.7x FY11P/E.
is currently available at 2.0xFY11P/BV and 14.7x FY11P/E. Rating CMP (Rs.) Target (Rs.) Up side %

Rating

CMP (Rs.)

Target (Rs.)

Upside %

Buy

163

195

20

(Rs.) Target (Rs.) Up side % B u y 1 6 3 1 9 5 2
3.66 Shareholding Pattern % (as on 30th June, 2011) 3.54 8.3 Promoters FIIs DIIs Others
3.66 Shareholding Pattern % (as
on 30th June, 2011)
3.54
8.3
Promoters
FIIs
DIIs
Others
84.5
POWER GRID CORPORATION OF INDIA LTD (PGCIL) COMPANY PROFILE ► POWERGRID, the Central Transmission Utility

POWER GRID CORPORATION OF INDIA LTD (PGCIL)

COMPANY PROFILE POWERGRID, the Central Transmission Utility (CTU) of the country, is engaged in

power transmission business with the mandate for planning, co-ordination, supervision and control over complete Inter-State transmission system. POWERGRID, as on July 2009, owns and operates about 71,600 ckt kms of transmission lines at 800/765 kV, 400 kV, 220 kV & 132 kV EHVAC & +500 kV HVDC levels and 122 sub-stations with transformation capacity of about 81,200 MVA. Recognizing the role of POWERGRID in the overall development of transmission and power sector, Govt. of India has conferred Navratna upon status to POWERGRID in May`

08.

INVESTMENT RATIONALE PGCIL (61.42%owned by the Government of India) is India's Central Transmission Utility (CTU) mandated to establish and operate regional and national grids to facilitate transfer of power within and across regions. PGCIL plans Rs545bn of capex during the XIth Five Year Plan (FY08-12). Management expects that capex during the next plan (XIIth Plan) could be as high as

Rs1200bn.

In 2QFY11, PGCIL received in-principle approval for the Kudankulam nuclear plant where transmission capacity was declared commercial in April 2009, despite generation capacity not being operational. This precedent will enable PGCIL to approach the y

re ulator in other such instances and transmission returns bein

im acted due to dela s

, in generation projects will be minimized.

g

g

p

VALUATIONS PGCIL stock currently trades at 2.1xFY11P/BV and 17.3xFY11P/E. Our target price of Rs.115 is based on 2.1x P/BV multiple which is ~12% discount to the historic average of

2.5x.

which is ~12% discount to the historic average of 2.5x. Rating CMP (Rs.) Target (Rs.) Upside

Rating

CMP (Rs.)

Target (Rs.)

Upside %

Buy

95

115

21

2.5x. Rating CMP (Rs.) Target (Rs.) Upside % Buy 95 115 21 Shareholding Pattern % (as
Shareholding Pattern % (as on 30th June, 2011) 7.66 9.46 Promoters FIIs 13.46 DIIs 69
Shareholding Pattern % (as on
30th June, 2011)
7.66
9.46
Promoters
FIIs
13.46
DIIs
69 42
.
Oth ers
HINDUSTAN UNILEVER (HUL) COMPANY PROFILE ► With over 35 brands spanning 20 distinct categories such

HINDUSTAN UNILEVER (HUL)

COMPANY PROFILE With over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos, skincare, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water purifiers, HUL is a part of the everyday life of millions of consumers across India. HULs portfolio includes leading household brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall’s and Pureit. The Company has over 16,000 employees and has an annual turnover of around Rs.19,401 crores (financial year 2010 - 2011). HUL is a subsidiary of Unilever, one of the world’s leading suppliers of fast moving consumer goods.

INVESTMENT RATIONALE Sustainable volume growth and steady performance of personal products and foods business renders us confidence on the company’s growth prospects. Company is a market leader in most categories and has strong brands, wide product range across product categories, with presence at all price points. Decline in raw material prices would result in margin expansion.

VALUATIONS At the CMP, the stock is trading at 31.5xFY11P/E and 25.8xFY11P/BV which looks attractive. We recommend a BUY rating on the stock with a target price of Rs.360 for a potential upside of 4%from the CMP.

price of Rs.360 for a potential upside of 4%from the CMP. Rating Buy CMP (Rs.) 346

Rating

Buy

CMP (Rs.)

346

Target (Rs.)

360

Upside %

4

CMP (Rs.) 346 Target (Rs.) 360 Upside % 4 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) 17.34 Promoters FIIs 11.79 52.52 DIIs Others
Shareholding Pattern % (as on
30th June, 2011)
17.34
Promoters
FIIs
11.79
52.52
DIIs
Others
18.35
ITC COMPANY PROFILE ► ITC is one of India's foremost private sector companies with a

ITC

COMPANY PROFILE ► ITC is one of India's foremost private sector companies with a market
COMPANY PROFILE
► ITC is one of India's foremost private sector companies with a market capitalisation of
over US $ 33 billion and a turnover of US $ 7 billion.
► ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty
Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information
Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other
FMCG products While ITC is an outstanding market leader in its traditional businesses
.
of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining
market share even in its nascent businesses of Packaged Foods &
Confectionery, Branded Apparel, Personal Care and Stationery.
INVESTMENT RATIONALE
s
demand and flat excise duties.
►Non-cigarette businesses are also set to contribute to growth, with FMCG losses
declining, and paper, agri and hotels businesses on a healthy growth path.
►ITC'
c ga e
i
r
tt
e
vo u
l
m
es
a e
r
lik
e y
l
t
o
r
e
b
ou
nd
s
tr
o
n
g y
l
in FY12
ow
in
g
t
o
r
o
b
us
t
VALUATIONS
Given the limited capex requirements (INR10b-15b) and huge cash flow generation
(INR52b in FY11), dividend payout is likely to settle at a higher level. The stock trades at
31.3x FY11 EPS of Rs6.4. We recommend Buy with a target price of Rs.230, 16%
upside.
We recommend Buy with a target price of Rs.230, 16% upside. ITC Rating   Buy CMP

ITC

Rating

 

Buy

CMP (Rs.)

198

Target (Rs.)

230

U

ps

id

e

%

16

Target (Rs.) 230 U ps id e % 16 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) 0 14.56 Promoters FIIs 49.53 DIIs 35.91
Shareholding Pattern % (as on
30th June, 2011)
0
14.56
Promoters
FIIs
49.53
DIIs
35.91
Oth ers
GODREJ CONSUMER PROUCTS LTD (GCPIL) COMPANY PROFILE ► GCPL is a leader among India s

GODREJ CONSUMER PROUCTS LTD (GCPIL)

COMPANY PROFILE GCPL is a leader among India s FMCG companies, with leading Household and

Personal Care Products. Co brands, which include Good Knight, Cinthol, Godrej No. 1, Expert, Hit, Jet, Fairglow, Ezee, Protekt and Snuggy, among others, are household names across the country. It is one of the largest marketers of toilet soaps in the country and are also leaders in hair colours and household insecticides. Recent acquisitions include Keyline Brands in the UK, Rapidol and Kinky Group- South Africa and Godrej Global Mideast FZE, Tura - a leading medicated brand in West Africa, Megasari Group- a leading household care company in Indonesia and Issue Group and Argencos, two leading hair colorant companies in Argentina.

'

INVESTMENT RATIONALE With various innovations (dual dispenser, low smoke coil, jumbo coil), together with first-mover advantage, GCPL is clearly the market leader across formats in household insecticides (HI). GCPL’s international business is growing robustly, led by innovation, synergistic benefits and unmatched focus

VALUATIONS We believe the company is doing well, following its 3X3 strategy, and will benefit further from likely fall in oil prices. Currently, the stock is trading at 28.3x FY11 EPS of Rs.14.9. We recommend BUY on the stock with a 25% potential upside.

We recommend BUY on the stock with a 25% potential upside. Rating Buy CMP (Rs.) 425

Rating

Buy

CMP (Rs.)

425

Target (Rs.)

530

Upside %

25

CMP (Rs.) 425 Target (Rs.) 530 Upside % 25 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) 2.19 11.23 Promoters FIIs 19.3 DIIs 6
Shareholding Pattern % (as on
30th June, 2011)
2.19
11.23
Promoters
FIIs
19.3
DIIs
6 7.2 8
Oth ers
HCL TECHNOLOGIES COMPANY PROFILE ► HCL is a $6 billion leading global technology and IT

HCL TECHNOLOGIES

COMPANY PROFILE

HCL is a $6 billion leading global technology and IT enterprise comprising two

companies listed in India - HCL Technologies and HCL Infosystems. Its range of offerings includes product engineering, custom & package applications, BPO, IT infrastructure services, IT hardware, systems integration, and distribution of information and communications technology (ICT) products across a wide range of focused industry verticals.

INVESTMENT RATIONALE

Improvement in ratio of net profit conversion into cash flow from operations and

higher than expected improvement in EBITDA margin. Strong deal pipeline and guidance of stable EBIT margin in FY12E will support stock re-rating in coming quarter.

VALUATIONS Taking the same into account we recommend a ‘BUY’ on the stock with a price target of Rs. 480. The stock is currently trading at 15.4xFY11P/E which is attractive in comparison to its peers.

which is attractive in comparison to its peers. Rating Buy CMP (Rs.) 380 Target (Rs.) 480

Rating

Buy

CMP (Rs.)

380

Target (Rs.)

480

Upside %

26

CMP (Rs.) 380 Target (Rs.) 480 Upside % 26 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) 6 .13 8.15 Promoters FIIs 21.35 DIIs
Shareholding Pattern % (as on
30th June, 2011)
6 .13
8.15
Promoters
FIIs
21.35
DIIs
64.37
Oth ers
COAL INDIA COMPANY PROFILE ► With a modest production of 79 Million Tonnes (MTs) at

COAL INDIA

COMPANY PROFILE

With a modest production of 79 Million Tonnes (MTs) at the year of its inception CIL

today is the single largest coal producer in the world. Operating through 81 mining areas, CIL is an apex body with 7 wholly owned coal producing subsidiaries and 1 mine planning and consultancy company spread over 8 provincial states of India.

CIL also fully owns a mining company in Mozambique christened as 'Coal India Africana Limitada'. CIL also manages 200 other establishments like workshops, hospitals etc. CIL having fulfilled the financial and other prerequisites was granted the Maharatna recognition in April 2011.

INVESTMENT RATIONALE

Profit sharing” concept needs clarification, however we believe if the MMDR Bill were

to become operational, COAL would have the flexibility to pass on the costs to its customers

We expect CIL to meet its offtake target of 454MT for FY12E through liquidation of

inventory.

VALUATIONS We assign a BUY rating on the stock with a target price of Rs.430 on back of increased offtake and realization. The stock currently trades at 21.8xFY11P/E.

and realization. The stock currently trades at 21.8xFY11P/E. Rating Buy CMP (Rs.) 379 Target (Rs.) 430

Rating

Buy

CMP (Rs.)

379

Target (Rs.)

430

Upside %

14

CMP (Rs.) 379 Target (Rs.) 430 Upside % 14 2.08 Shareholding Pattern % (as on 30th
2.08 Shareholding Pattern % (as on 30th June, 2011) 1.55 6.37 Promoters FIIs DIIs Others
2.08
Shareholding Pattern % (as on
30th June, 2011)
1.55
6.37
Promoters
FIIs
DIIs
Others
90
INFOSYS COMPANY PROFILE ► Infosys is the second largest IT company in India with 133,560

INFOSYS

COMPANY PROFILE Infosys is the second largest IT company in India with 133,560 employees (including subsidiaries) as of March 2011. Infosys is ranked 28th globally in the list of IT services providing firms. It has offices in 33 countries and development centers in India, China, Australia, UK, Canada, Brazil and Japan. The company offers software products for the banking industry and business process management services also provides end-to-end business solutions.

INVESTMENT RATIONALE So far, no budget cuts have been announced, corporate health is better than in 2008 and discretionary spends are lower (unlike in 2006/07) which augurs well for the Indian IT space.

VALUATIONS The stock currently trades at 18.5x FY11P/E. Infosys has corrected 20% over the past two months and valuations are undemanding at 17.5x FY12 (guidance).We recommend a ‘BUY” rating on the stock with a target price of Rs.2760. Further, its valuation premium to more cyclical peers (Accenture) has collapsed to only 10% now.

cyclical peers (Accenture) has collapsed to only 10% now. Rating Buy CMP (Rs.) 2226 Target (Rs.)

Rating

Buy

CMP (Rs.)

2226

Target (Rs.)

2760

Upside %

24

(Rs.) 2226 Target (Rs.) 2760 Upside % 24 Shareholding Pattern % (as on 30th June, 2011)
Shareholding Pattern % (as on 30th June, 2011) 16.04 Promoters 37.24 FIIs DIIs 36 88
Shareholding Pattern % (as on
30th June, 2011)
16.04
Promoters
37.24
FIIs
DIIs
36 88
.
Oth ers
9.84
VOLTAS COMPANY PROFILE ► Voltas offers engineering solutions for a wide spectrum of industries in

VOLTAS

COMPANY PROFILE ► Voltas offers engineering solutions for a wide spectrum of industries in areas
COMPANY PROFILE
► Voltas offers engineering solutions for a wide spectrum of industries in areas such as
heating, ventilation and air conditioning, refrigeration, construction equipment, materials
handling, water management, building management systems, indoor air quality and
chemicals.
► Voltas, a part of the Tata Group provided the air-conditioning for the world's biggest
ocean liner, the RMS Queen Mary 2 and also the world's tallest building, the Buri
Khalifa.
INVESTMENT RATIONALE
s
ample funds to facilitate future inorganic growth through acquisitions.
r
esu e
Voltas’s low cost operations and asset light model with significant outsourcing have
e
lt
d in hi
g
h r
e u
t
rn r
a
ti
os (
R CE >33%
o
).
It
n
t
cas
h ri
c
h b
a a
l
n
ce s
h
ee
t
p ov
r
id
es
► Voltas remains the preferred player in the MEP and HVAC space and would continue
to be a key beneficiary of industrial capex.
VALUATIONS
At CMP of Rs.119, the stock is trading at 12.4x FY11P/E. We recommend a ‘Buy’ rating
and a price target of Rs.165 on relative return basis.
and a price target of Rs.165 on relative return basis. Rating Buy CMP (Rs.) 119 Target

Rating

Buy

CMP (Rs.)

119

Target (Rs.)

165

Upside %

39

CMP (Rs.) 119 Target (Rs.) 165 Upside % 39 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) 21.23 Promoters 30.55 FIIs DIIs 29 .8
Shareholding Pattern % (as on
30th June, 2011)
21.23
Promoters
30.55
FIIs
DIIs
29 .8
Oth ers
18.42
CIPLA COMPANY PROFILE ► Cipla is best-known for manufacturing low-cost anti-AIDS drugs for HIV-positive patients

CIPLA

COMPANY PROFILE

Cipla is best-known for manufacturing low-cost anti-AIDS drugs for HIV-positive

patients in developing countries. Cipla makes drugs to treat cardiovascular disease, arthritis, diabetes, weight control, depression and many other health conditions, and its products are distributed in more than 180 countries worldwide. Cipla offers services like consulting, commissioning, engineering, project appraisal, quality control, know-how transfer, support, and plant supply. Apart from its presence in the Indian market, Cipla also has an export market and regularly exports to more than 185 countries in all corners of the world.

INVESTMENT RATIONALE

We believe the expected turnaround in domestic business, sustainable licensing

income and ramp up in Indore SEZ should drive earnings over FY11- 13E.

Inhaler exports to European Union and Rest of the World markets will be long-term

growth drivers.

VALUATIONS We believe de-rating factors have now become re-rating triggers and, therefore recommend ‘BUY’ with a price target of Rs.340.At the CMP the stock is trading at 23.7x FY11P/E which seems quite attractive.

is trading at 23.7x FY11P/E which seems quite attractive. Rating Buy CMP (Rs.) 293 Target (Rs.)

Rating

Buy

CMP (Rs.)

293

Target (Rs.)

340

Upside %

16

CMP (Rs.) 293 Target (Rs.) 340 Upside % 16 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) Promoters 29.38 36.8 FIIs DIIs Oth ers
Shareholding Pattern % (as on
30th June, 2011)
Promoters
29.38 36.8
FIIs
DIIs
Oth ers
19.09
14.73
MAHINDRA & MAHINDRA (M&M) COMPANY PROFILE ►M&M is the leader in the utility vehicle segment

MAHINDRA & MAHINDRA (M&M)

COMPANY PROFILE ►M&M is the leader in the utility vehicle segment in India with its
COMPANY PROFILE
►M&M is the leader in the utility vehicle segment in India with its flagship UV Scorpio
and enjoys a growing global market presence in both the automotive and tractor
businesses.
►Over the past few years, M&M has expanded into new industries and geographies.
Company entered into the two-wheeler segment by taking over Kinetic Motors in India.
M&M also has controlling stake in REVA Electric Car Company and acquired South
Korea's SsangYong Motor Company in 2011.
INVESTMENT RATIONALE
► M&M's strategy of expanding its scope beyond tractors to farm mechanization gained
momentum in FY11.
s
prospects, driven by dominance in its core business of UVs and tractors, with favorable
competitive dynamics and strong volume growth momentum.
►It would be one of the biggest beneficiaries of a normal monsoon, given its high
dependence on the rural market.
►Sh rt t rm h d ind
o
- e
ea
w
n
o w
t
ith
s a
t
ndin
g
we
r
e
m
a
in
pos
iti
ve
o
n
M&M'
s
VALUATIONS
The stock currently trades at attractive valuations of 16.7x FY11P/E. We recommend
Buy with a target price of Rs.840.
FY11P/E. We recommend Buy with a target price of Rs.840. Rating Buy CMP (Rs.) 785 Target

Rating

Buy

CMP (Rs.)

785

Target (Rs.)

840

Upside %

7

CMP (Rs.) 785 Target (Rs.) 840 Upside % 7 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) Promoters 28.92 24.86 FIIs DIIs 23 59
Shareholding Pattern % (as on
30th June, 2011)
Promoters
28.92 24.86
FIIs
DIIs
23 59
.
Oth ers
22.63
MARUTI SUZUKI (MSIL) COMPANY PROFILE ► MSIL, a subsidiary of Suzuki Motor Corporation, Japan has

MARUTI SUZUKI (MSIL)

COMPANY PROFILE

MSIL, a subsidiary of Suzuki Motor Corporation, Japan has been the leader of the Indian car market for over two and a half decades. The company has two manufacturing facilities located at Gurgaon and Manesar, south of New Delhi, India. Both the facilities have a combined capability to produce over 1.2 million (1,200,000) vehicles annually.

The company plans to expand its manufacturing capacity to 1.75 million by 2013.

INVESTMENT RATIONALE

Series of monetary policy actions by RBI and higher interest rates led the automakers to

face headwinds in the form of lower sales and in-line with this MSI reported 18% de-growth in Q1FY12 to 281526 units. Short term outlook for MSI seems bleak on the back of mute demand, higher discounts and JPY appreciation putting pressure on profitability. However, these factors are already factored in the current price which tanked ~12% in last one month. Company is aggressively looking to expand its Diesel portfolio as the difference between petrol and diesel prices widens on account of petrol price deregulation. Currently the contribution of Diesel portfolio stood at 21% in domestic sales. Maruti recently unveiled new swift at an introductory price of Rs 17 lakh or the base diesel variant which is competing with Toyota’s Liva, Ford’s Figo and Hyundai’s Brio. In our view, MSI is placed on the best position in the form of brand loyalty, vast dealer and service network for which the customer is looking very closely.

VALUATIONS We estimate gradual improvement in EBITDA margins driven by moderating RM costs, higher operating leverage, a reduction in imports and forex stability. Currently the stock trades at 13x FY11P/E. We recommend Buy with a target price of Rs.1280 for a potential upside of 19% from current levels.

Rs.1280 for a potential upside of 19% from current levels. Rating Buy CMP (Rs.) 1075 Target

Rating

Buy

CMP (Rs.)

1075

Target (Rs.)

1280

Upside %

19

(Rs.) 1075 Target (Rs.) 1280 Upside % 19 Shareholding Pattern % (as on 30th June, 2011)
Shareholding Pattern % (as on 30th June, 2011) 9.08 Promoters 18 FIIs DIIs 54.21 18
Shareholding Pattern % (as on
30th June, 2011)
9.08
Promoters
18
FIIs
DIIs
54.21
18 .71
Oth ers
Company Market Cap (Rs. Cr) Beta (6M) Div Yield % CMP (Rs) Target Price (Rs)
Company Market Cap (Rs. Cr) Beta (6M) Div Yield % CMP (Rs) Target Price (Rs)

Company

Market Cap (Rs. Cr)

Beta (6M)

Div Yield %

CMP (Rs)

Target Price (Rs)

Potential Upside

AUROBINDO PHARMA

3,832

1.0

1.5

131.7

165.0

25%

IRB INFRA

5,305

1.0

0.9

156.4

190.0

22%

CENTRAL BANK

6,505

1.0

2.3

98.9

130.0

31%

DCB

937

1.4

0.0

45.8

65.0

42%

TATA STEEL LTD

44,257

1.2

2.4

460.0

560.0

22%

HINDALCO INDS

27,817

1.2

0.9

145.0

185.0

28%

IDEA CELLULAR

32,637

0.7

0.0

98.4

120.0

22%

BHARTI AIRTEL

147,646

0.8

0.2

390.0

480.0

23%

UCO BANK

4,405

1.1

4.2

69.4

95.0

37%

BAJAJ ELECTRICAL

1,768

0.6

1.6

176.0

240.0

36%

M&M FINANCE

6,812

0.9

1.5

649.0

720.0

11%

KPIT CUMMINS

1,312

0.9

0.5

146.5

195.0

33%

ADHUNIK METALS

684

0.8

2.7

55.3

105.0

90%

AVERAGE

0.97

1.4

AUROBINDO PHRAMA COMPANY PROFILE ► Over the years, Aurobindo Pharma has evolved into a knowledge

AUROBINDO PHRAMA

COMPANY PROFILE Over the years, Aurobindo Pharma has evolved into a knowledge driven company. Company is R&D focused, has a multi-product portfolio with multi-country manufacturing facilities, and is becoming a marketing conglomerate across the world. Aurobindo Pharma has created a name for itself in the manufacture of bulk actives, its area of core competence. The company has entered the high margin speciality generic formulations segment, with a global marketing network.

INVESTMENT RATIONALE APL’s top-line registered 20% CAGR over FY05-11 led by formulation CAGR of 55% in the same period. APL is among the top three Indian firms in ANDA/NDA filing with USFDA. Company has around Rs 250bn worth of product filings till FY11. Fueled by the rising growth opportunities led by strong US filings, acceleration by new product introduction and strong tie ups, we expect APL to post robust performance.

VALUATIONS APL is currently trading far below its historical PE multiple of 9x (5 Yrs avg). We expect valuations will remain subdued in short-term due to the import alert. However, APL’s long term fundamentals are intact and therefore recent correction provides a good buying opportunity. At CMP of Rs132, APL is trading at 6.9x FY11P/E. We recommend BUY with a target price of Rs.165.

FY11P/E. We recommend BUY with a target price of Rs.165. Rating Buy CMP (Rs.) 132 Target

Rating

Buy

CMP (Rs.)

132

Target (Rs.)

165

Upside %

25

CMP (Rs.) 132 Target (Rs.) 165 Upside % 25 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) 13.38 Promoters 13.05 FIIs DIIs 54.36 19.21
Shareholding Pattern % (as on
30th June, 2011)
13.38
Promoters
13.05
FIIs
DIIs
54.36
19.21
Others
IRB INFRA COMPANY PROFILE ►IRB Infrastructure which executed India’s first build-operate-transfer (BOT) road

IRB INFRA

COMPANY PROFILE ►IRB Infrastructure which executed India’s first build-operate-transfer (BOT) road project, is one
COMPANY PROFILE
►IRB Infrastructure which executed India’s first build-operate-transfer (BOT) road
project, is one of the largest operators of such ventures. Currently it has about 3404.40
lane KM under operational and about 2330.4 lane KM under development. One of most
notable project of the company is Mumbai Pune Expressway.
INVESTMENT RATIONALE
►IRB has a robust business, construction order book of Rs.91 bn, 17 road BOT
projects, strong operating cash flows, funding capabilities, and relatively lower risk to
rising interest rates.
e
portfolio has started generating good amount of cash flows, which is a distinguishing
factor now and can be used for funding of new projects.
►E rl m
a
y
ove
r
a
d
va
nt
age
in r
oa
d BOT
seg
m
nt i
s
b
e
n fittin
e
g
th
e co
m
pa
n
y as
it
s o
ld
VALUATIONS
At the CMP, the stock is trading at 11.5xFY11 earnings. As the valuations are nearing
historical lows and risk-reward seems favorable from a long term perspective we
recommend a BUY rating on the stock with a target price of RS.190
a BUY rating on the stock with a target price of RS.190 Rating Buy CMP (Rs.)

Rating

Buy

CMP (Rs.)

156

Target (Rs.)

190

Upside %

22

CMP (Rs.) 156 Target (Rs.) 190 Upside % 22 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) 3.98 7.79 Promoters 13.43 FIIs DIIs Others
Shareholding Pattern % (as on
30th June, 2011)
3.98
7.79
Promoters
13.43
FIIs
DIIs
Others
74.8
CENTRAL BANK COMPANY PROFILE A mon g the Public Sector Banks, Central Bank o f

CENTRAL BANK

COMPANY PROFILE

Among the Public Sector Banks, Central Bank of India(CBoI) can be truly described as

an All India Bank, due to distribution of its large network in 27 out of 29 States as also

in 3 out of 7 Union Territories in India. Central Bank of India holds a very prominent

place among the Public Sector Banks on account of its network of 3656 branches and 178 extension counters at various centres throughout the length and breadth of the country.

INVESTMENT RATIONALE

CBoI has opened 69 new branches in Q1FY12. Total presence increased to 3,797

branches with 62% of the branches servicing the rural & the semi-urban regions of the

country.

With CBoI effecting hikes in lending rates, we believe the Bank should be able to

m

a

int

a

in it

s

NIM

s a

t

cu

rr

e

nt l

l

eve s.

Going ahead, the impact of change in savings rate which has already been factored

in this quarter and leveraging of CD ratio can help the bank improve its margins.

VALUATIONS

At CMP, the stock is currently trading at P/BV of 0.7x its FY11 BV of Rs.136.7 We

recommend a BUY at current levels with a target price of Rs130 for a potential upside of

31%

with a target price of Rs130 for a potential upside of 31% Rating Buy CMP (Rs.)

Rating

Buy

CMP (Rs.)

99

Target (Rs.)

130

Upside %

31

CMP (Rs.) 99 Target (Rs.) 130 Upside % 31 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) 2.78 8.5 8.51 Promoters FIIs DIIs Oth
Shareholding Pattern % (as on
30th June, 2011)
2.78
8.5
8.51
Promoters
FIIs
DIIs
Oth ers
80.21
DCB COMPANY PROFILE ► DCB has deep roots in India since its inception in the

DCB

COMPANY PROFILE ► DCB has deep roots in India since its inception in the 1930’s.
COMPANY PROFILE
► DCB has deep roots in India since its inception in the 1930’s. Its promoter the Aga
Khan Fund for Economic Development (AKFED) holds over 23% stake. AKFED is an
international development agency dedicated to promoting entrepreneurship and building
economically sound enterprises in the developing world. It had co-promoted HDFC in
India in the late seventies.
►The Bank has recently launched several value added initiatives and intends to
become one of the country’s preferred and profitable private sector banks, providing a
comprehensive suite of “best in class” products for customers in Retail, SME and
Corporate Banking market segments in chosen geographies.
INVESTMENT RATIONALE
.
to outpace overall deposits growth over FY11-13E.
br
a
DCB’s near term focus is to ramp up its CASA franchise by increasing its CASA per
o
n
c
h
C ntin
u
in
g w
ith it
s
f
ocus o
n li
a
biliti
es s
tr
a egy,
t
DCB’
s
CASA d
epos
it
s a e
r
lik
e y
l
► The bank’s exit from unsecured retail lending and focuses on secured credit lines like
mortgages, MSME, etc. makes its loan portfolio less vulnerable to fresh slippages.
VALUATIONS
The stock, which was historically trading at higher than 4x its one year forward BV till
January 2008 crashed to below 1.5x towards the end of FY 09. With the bank returning
to profitability on the back of a revamped business mix, we believe the stock, should
command a higher multiple. At CMP of Rs. 46, the stock is trading at 1.6x of its
FY11BV.We recommend BUY on the stock with target price of Rs.65 indicating a
potential upside of 42%.
target price of Rs.65 indicating a potential upside of 42%. Rating Buy CMP (Rs.) 46 Target

Rating

Buy

CMP (Rs.)

46

Target (Rs.)

65

Upside %

42

CMP (Rs.) 46 Target (Rs.) 65 Upside % 42 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) 23.07 Promoters FIIs 11.67 DIIs 63.34 Oth
Shareholding Pattern % (as on
30th June, 2011)
23.07
Promoters
FIIs
11.67
DIIs
63.34
Oth ers
1.92
TATA STEEL COMPANY PROFILE ► Tata Steel is the world's seventh largest steel company, with

TATA STEEL

COMPANY PROFILE

Tata Steel is the world's seventh largest steel company, with an annual crude steel

capacity of 31 million tonnes. It is the largest private sector steel company in India in

terms of domestic production.

Tata Steel is the 8th most valuable brand according to an annual survey conducted

by Brand Finance and The Economic Times in 2010.

INVESTMENT RATIONALE

Tata Steel’s Indian operations have a robust business model, higher margin &

domestic demand advantage. The upcoming new capacity is expected to add to

revenue & profitability along with increasing the contribution from higher margin domestic business.

The group’s strategy to restructure long products business of European operations

& target high value markets is expected to yield benefits in long run.

Going forward this would help the company to have flexibility in its operations so

as to focus on segments having higher growth rate & keep the costs under check.

VALUATIONS We believe the stock could deliver decent absolute returns over the next 12 months and recommend BUY with a target price of Rs.560. The stock is currently trading at

5.6xFY11EV/EBIDTA.

The stock is currently trading at 5.6xFY11EV/EBIDTA. Rating Buy CMP (Rs.) 460 Target (Rs.) 560

Rating

Buy

CMP (Rs.)

460

Target (Rs.)

560

Upside %

22

CMP (Rs.) 460 Target (Rs.) 560 Upside % 22 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) Promoters 25.88 30.6 FIIs DIIs Oth ers
Shareholding Pattern % (as on
30th June, 2011)
Promoters
25.88
30.6
FIIs
DIIs
Oth ers
26.46 17.06
HINDALCO COMPANY PROFILE ►Flagship company of the Aditya Birla Group is the world's largest aluminium

HINDALCO

COMPANY PROFILE ►Flagship company of the Aditya Birla Group is the world's largest aluminium rolling
COMPANY PROFILE
►Flagship company of the Aditya Birla Group is the world's largest aluminium rolling
company and one of the biggest producers of primary aluminium in Asia. Its copper
smelter is the world’s largest custom smelter at a single location.
►The acquisition of Novelis Inc. in 2007 positioned it among the top five aluminium
majors worldwide and the largest vertically integrated aluminium company in India.
Today company is a metals powerhouse with high-end rolling capabilities and global
footprint in 12 countries.
INVESTMENT RATIONALE
► Hindalco’s growth in earnings in the next 4-5 years will be driven by low cost, fully
integrated aluminium capacity being set up in India and availability of captive coal for its
Mahan project in FY14.
g
domestically to 4.5mtpa and 1.65mtpa is relatively on track. The additional capacity
would result in higher profitability margins on a consolidated basis.
► We believe Hindalco is well placed to benefit from a) its aluminium expansion
plans, b) low production cost at its new capacities and c) steady capacity expansion at
Novelis.
► C m
o
pa
n
y s
h
uge expa s o
n
i
n
p a
l
n
s o
f tri
p
lin
it
s
r finin
e
g a
nd
s
m
e
ltin
g capac y
it
VALUATIONS
Considering the huge potential we maintain a positive stance on the company and
recommend BUY with a target price of Rs185. The stock is currently trading at 5.5xFY11
EV/EBITDA
Rs185. The stock is currently trading at 5.5xFY11 EV/EBITDA Rating Buy CMP (Rs.) 145 Target (Rs.)

Rating

Buy

CMP (Rs.)

145

Target (Rs.)

185

Upside %

28

CMP (Rs.) 145 Target (Rs.) 185 Upside % 28 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) Promoters 24.26 32.06 FIIs DIIs 12.85 Others
Shareholding Pattern % (as on
30th June, 2011)
Promoters
24.26 32.06
FIIs
DIIs
12.85
Others
30.83
IDEA COMPANY PROFILE Idea Cellular Limited (IDEA Cellular) is a global system for mobile communication

IDEA

COMPANY PROFILE Idea Cellular Limited (IDEA Cellular) is a global system for mobile communication w
COMPANY PROFILE
Idea Cellular Limited (IDEA Cellular) is a global system for mobile communication
w
IDEA,with total market cap of Rs.32951 cr & sales of Rs.15503 cr. With pan India
integrated GSM operator covering the entire telephony landscape of the country, and
has national long distance (NLD) and international long distance (ILD) operations. IDEA
Cellular offers basic voice and short message service (SMS) services to high-end value
added and general packet radio service (GPRS) services, such as
Blackberry, Datacard, Mobile TV and Games. The Company’s subsidiaries include
Swinder Singh Satara and Co. Limited, Aditya Birla Telecom Limited, Idea Cellular
Services Limited, Idea Cellular Infrastructure Services Limited, Idea Cellular Towers
Infrastructure Limited and Carlos Towers Limited.
(
GSM
)
m
o
bil
e
se v ces
r
i
ope a o
r
t
r
in
Indi
a
ith
67
milli
o
n
su
b
sc
rib
e s,
r
u
nd
e
r
br
a
nd
INVESTMENT RATIONALE
►Idea enjoys a strong incumbency advantage in eight established circles and spectrum
allocation in the 900MHz band in nine circles.
►Company is a key beneficiary of tower sharing initiatives including formation of Indus
Towers, a three way passive infrastructure JV between Bharti, Idea, and Vodafone.
►Idea won 3G Spectrum in 11 circles and has also increased its base tariffs in the most
popular promotion plans from 1p/s to 1.2p/s in its six leadership circles, which contribute
~60% of Idea's revenue.
VALUATIONS
Currently the stock is trading at 13.8x FY11EV/EBIDTA. We recommend ‘BUY’ on the
stock with a target price of Rs120.
‘BUY’ on the stock with a target price of Rs120. Rating Buy CMP (Rs.) 98 Target

Rating

Buy

CMP (Rs.)

98

Target (Rs.)

120

Upside %

22

CMP (Rs.) 98 Target (Rs.) 120 Upside % 22 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) Promoters 35.84 46.03 FIIs DIIs Oth ers
Shareholding Pattern % (as on
30th June, 2011)
Promoters
35.84
46.03
FIIs
DIIs
Oth ers
7.99
10.14
BHARTI AIRTEL COMPANY PROFILE ► Bharti Airtel is the fifth largest telecom operator in the

BHARTI AIRTEL

COMPANY PROFILE

Bharti Airtel is the fifth largest telecom operator in the world with over 207.8 million

subscribers across 19 countries at the end of 2010. It is the largest cellular service provider in India, with over 169.18 million subscribers as of June 2011. Airtel is the 3rd largest in-country mobile operator by subscriber base, behind China Mobil and China Unicom.

INVESTMENT RATIONALE

Bharti’s proactive move to initiate tariff hike would be visible in the coming quarters

leading to better profitability, leaving scope for telcos to expand their 3G network aggressively.

Increase in 3G penetration to ~15-20% to contribute to revenue and EBITDA growth;

most of the fixed cost is already factored in. Revenue is expected to grow fastest in the industry on back of African operations with penetration level of ~33% versus ~67% for India.

Company has secured a license to operate 2G and 3G services in Rwanda. With this

license, the company's footprint across the African continent will expand to 17 countries, Rwanda being one of its fastest growing markets. The company plans to invest over $100 million in its operations in Rwanda over the next three years.

VALUATIONS With stable competition and strong growth in India over the near term, coupled with improving visibility in Africa, we stay positive on the stock and recommend BUY with a target price of Rs.480. At CMP, stock trades at 10.2x EV/EBIDTA for FY11.

of Rs.480. At CMP, stock trades at 10.2x EV/EBIDTA for FY11. Rating Buy CMP (Rs.) 390

Rating

Buy

CMP (Rs.)

390

Target (Rs.)

480

Upside %

23

CMP (Rs.) 390 Target (Rs.) 480 Upside % 23 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) 5.63 8.48 Promoters FIIs 17.59 DIIs 68
Shareholding Pattern % (as on
30th June, 2011)
5.63
8.48
Promoters
FIIs
17.59
DIIs
68 . 3
Oth ers
UCO BANK COMPANY PROFILE ► UCO Bank Ltd is a Kolkata-headquartered Public Sector Bank (PSB)

UCO BANK

COMPANY PROFILE

UCO Bank Ltd is a Kolkata-headquartered Public Sector Bank (PSB) with asset size

of ~Rs1,373bn and network of 2,152 branches and 478 ATMs.

The Bank has a pan-Indian presence with a strong foothold in eastern and northern

India.

UCO Bank’s total business touched Rs2.06bn, with deposits in excess of Rs1,224bn

and advances of Rs834bn. Its credit-deposit ratio stood at 68.1%.

INVESTMENT RATIONALE

Structurally, the bank has had relatively higher exposure to large corporates, low

CASA of ~24% and low fee/assets.

Going forward, we expect the bank’s earnings to find support from increasing

exposure to the SME and retail segments, improving other income and moderating asset-quality pressures, aided by increasing recoveries.

VALUATIONS At the CMP, the stock is trading at 1.1x FY11 ABV, which we believe does not yet factor in the improvement expected in earnings quality. We recommend BUY with a target price of Rs.95.

quality. We recommend BUY with a target price of Rs.95. Rating Buy CMP (Rs.) 69 Target

Rating

Buy

CMP (Rs.)

69

Target (Rs.)

95

Upside %

37

CMP (Rs.) 69 Target (Rs.) 95 Upside % 37 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) 16.44 Promoters FIIs 10.33 DIIs 68 13
Shareholding Pattern % (as on
30th June, 2011)
16.44
Promoters
FIIs
10.33
DIIs
68 13
.
Oth ers
5.1
BAJAJ ELECTRICALS LIMITED (BEL) COMPANY PROFILE ► BEL with a turnover of Rs. 2763 cr

BAJAJ ELECTRICALS LIMITED (BEL)

COMPANY PROFILE

BEL with a turnover of Rs. 2763 cr, is a part of the US $ 7 bn (over Rs 38,000 crores)

"Bajaj Group". It has six strategic business units – Engineering & Projects, Appliances, Fans, Luminaires, Lighting and Morphy Richards.

Bajaj Electricals has distribution arrangements with Trilux Lenze of Germany (for

Luminaires), tie up with Delta Controls of Canada (for Building Management Systems) and Securiton of Switzerland (for security systems), Morphy Richards of UK and Nardi of Italy (for Appliances), Disney of USA & Midea of China (for Fans). The company has

also invested in Starlite Lighting for manufacture of energy saving lamps (CFL).

INVESTMENT RATIONALE

BEL is strongly placed in CD and Lighting segments. E & P business saw some .

h

The strong distribution networks, a powerful brand, wide product portfolio, large

service infrastructure and excellent vendor base continue to be the major areas of

strength for the Company.

The company has delivered good growth in the past. Their 5 year (FY2005-11) net

sales and PAT CAGR is 32% and 80% respectively. Next leg of revenue growth is expected to come from new products like water purifier, gas stoves, chimney, cooker etc.

ea

d

ind

w

Q1 i

s

n

o

ll

k

a y a wea

rt

r

hi

e ) w

c

h

in Q2FY12

s (

rm

qua

a e expec e

r

t

d t

o co

ntin

ue

VALUATIONS The stock is trading at attractive valuations of 11.5xFY11P/E. We recommend Buy with a target price of Rs240 which is a price appreciation of 36% from current levels.

which is a price appreciation of 36% from current levels. Rating Buy CMP (Rs.) 176 Target

Rating

Buy

CMP (Rs.)

176

Target (Rs.)

240

Upside %

36

CMP (Rs.) 176 Target (Rs.) 240 Upside % 36 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) 14.98 Promoters 11.2 FIIs DIIs 9.04 64.78
Shareholding Pattern % (as on
30th June, 2011)
14.98
Promoters
11.2
FIIs
DIIs
9.04
64.78
Others
MAHINDRA & MAHINDRA FINANCIAL SERVICES (MMFSL) COMPANY PROFILE ► MMFSL is one of India’s leading

MAHINDRA & MAHINDRA FINANCIAL SERVICES (MMFSL)

COMPANY PROFILE

MMFSL is one of India’s leading NBFC through a vast network of branches providing

personalised finance for the widest range of utility vehicles, tractors and cars, focusing

on the rural and semi-urban sector.

INVESTMENT RATIONALE We expect MMFS to benefit from confluence of four factors: (1) lower rural penetration of consumer durables (own just 10% all India’s car penetration), (2) lower market share (just 2-8% across various products) (3) rising rural income levels and (4) improving latent wealth.

MMFS is strategically positioned to take advantage of the financing gap between

banks and the local money lenders through competitive pricing, speedier loan approvals and doorstep lending services.

VALUATIONS We expect return ratios to sustain due to a strong growth outlook and improved fundamentals. The stock is currently trading at 2.7x FY11P/BV. Recommend Buy with a target price of Rs.720 for a potential upside of 11% from current levels.

of Rs.720 for a potential upside of 11% from current levels. Rating Buy CMP (Rs.) 649

Rating

Buy

CMP (Rs.)

649

Target (Rs.)

720

Upside %

11

CMP (Rs.) 649 Target (Rs.) 720 Upside % 11 Shareholding Pattern % (as on 4.52 30th
Shareholding Pattern % (as on 4.52 30th June, 2011) 3 . 55 Promoters FIIs 34.49
Shareholding Pattern % (as on
4.52 30th June, 2011)
3 . 55
Promoters
FIIs
34.49
DIIs
57.44
Oth ers
KPIT CUMMINS COMPANY PROFILE ► KPIT Cummins provides technology solutions partner for global Manufacturing

KPIT CUMMINS

COMPANY PROFILE

KPIT Cummins provides technology solutions partner for global Manufacturing

corporations with special focus on Automotive, Energy & Utilities, Industrial Equipments, and Semiconductor industries. Highly focused approach has helped company to pioneer innovative solutions and file 37 patents in the Automotive and Semiconductor domains.

INVESTMENT RATIONALE KPIT Cummins has been experiencing strong demand environment due to cyclical up-tick in its manufacturing vertical, positive structural changes in Automotive clients, emerging economies growth and ramp ups from newly acquired business (CPG, In2Soft and Sparta).

We expect the robust growth to continue going ahead with strong Automotive

engineering demand, sustained IT spending by manufacturing clients being the key growth drivers. KPIT has shown one of the strongest revenue growth performance within the mid-cap space with revenue growth of 46% (40% organically) due to strong demand up-tick in major verticals. KPIT acquired 50% stake in leading Oracle JDE enterprise service provider, Systime, for ~Rs1.03bn in Q1 FY12 thus strengthening its Oracle offering

p rovidin

g

access to mar uee clientele and un- enetrated

q

p

g

eo

g

ra hies

p

.

VALUATIONS The stock is currently trading at 13.4x FY11P/E. We assign BUY rating to the stock with a target price of Rs.195 indicating potential upside of 33% from current levels.

indicating potential upside of 33% from current levels. Rating Buy CMP (Rs.) 146 Target (Rs.) 195

Rating

Buy

CMP (Rs.)

146

Target (Rs.)

195

Upside %

33

CMP (Rs.) 146 Target (Rs.) 195 Upside % 33 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) Promoters 26.86 34.3 FIIs DIIs 21 .64
Shareholding Pattern % (as on
30th June, 2011)
Promoters
26.86
34.3
FIIs
DIIs
21 .64
Oth ers
17.2
ADHUNIK METALIKS COMPANY PROFILE ► Adhunik Metaliks Limited (AML) has emerged as one of the

ADHUNIK METALIKS

COMPANY PROFILE

Adhunik Metaliks Limited (AML) has emerged as one of the fastest growing

alloy, special and construction steel manufacturing companies in the country with significant presence in the mining and power sectors through its subsidiaries. It has completed almost all major capital expenditure for both backward and forward integration and emerged as an integrated manufacturer of special steel with downstream utilisation of products.

INVESTMENT RATIONALE The company's Rs4.6b capex, over the next two years, will increase sponge iron ore

capacity by 100ktpa, start a 45MW CPP and start captive iron ore mines, which will fuel earnings growth.

Orissa Managanese & Minerals (OMM) will ramp up production of iron and

manganese ore. Recently it opened manganese mines and the Suleipat iron ore mine t

(

1.2mtpa pellet plant by the 1HFY12 will expand margins. Commissioning of a 540MW

IPP is due to be completed by 1HCY12, which will drive earnings.

We believe that strong earnings in OMM would more than compensate for the

weakness in steel biz as well as drive the growth in earnings in FY12.

up a

80

t

m

o

f

i

reserves n a

JV

), w

hi

c

h

w

ill d i

r ve vo ume grow

l

th

.

A

n

R

4 4b

s

.

t

capex

o se

VALUATIONS Currently the Stock is trading at 3.8x FY11P/E. We recommend a ‘BUY’ rating with a target price of Rs105 on the stock owing to attractive valuations and rich investment pipeline in power and merchant mining.

and rich investment pipeline in power and merchant mining. Rating Buy CMP (Rs.) 55 Target (Rs.)

Rating

Buy

CMP (Rs.)

55

Target (Rs.)

105

Upside %

90

CMP (Rs.) 55 Target (Rs.) 105 Upside % 90 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) 21.54 Promoters FIIs 10.95 DIIs 55.52 Oth
Shareholding Pattern % (as on
30th June, 2011)
21.54
Promoters
FIIs
10.95
DIIs
55.52
Oth ers
11.99
C o m p a n y Market Cap Beta (6M) Div Yield % CMP
C o m p a n y Market Cap Beta (6M) Div Yield % CMP

Company

Market Cap

Beta (6M)

Div Yield %

CMP (Rs)

Target Price

Potential

(Rs. Cr)

(Rs)

Upside

JINDAL STEEL & P

46,565

1.1

0.3

523.1

640.0

22%

BATA INDIA LTD

4,359

0.8

0.6

677.7

830.0

22%

GMR INFRASTRUCTU

10,957

0.9

0.0

27.7

42.0

52%

IVRCL LTD

1,134

1.7

1.3

41.2

65.0

58%

REDINGTON INDIA

3,846

0.6

1.2

95.1

125.0

32%

AXIS BANK LTD

44,229

1.2

1.2

1057.4

1350.0

28%

TATA MOTORS LTD

46,418

1.3

2.6

147.5

181.0

23%

ESCORTS LTD

758

1.3

2.0

70.4

95.0

35%

COROMANDEL INT

8,378

0.5

2.4

294.7

350.0

19%

IDFC LTD

16,193

1.3

1.7

109.1

160.0

47%

ICICI BANK LTD

100,849

1.2

1.6

871.3

1140.0

31%

SHASUN PHARMA

318

0.7

0.4

65.7

90.0

37%

AVERAGE

1 04

.

.

1 3

JINDAL STEEL COMPANY PROFILE ► Jindal Steel and Power Limited (JSPL) is one of India’s

JINDAL STEEL

COMPANY PROFILE

Jindal Steel and Power Limited (JSPL) is one of India’s major steel producers with a

significant presence in sectors like Mining, Power Generation and Infrastructure.

an annual turnover of over US $2.9 billion, JSPL is a part of the about US $ 15 g

y increasing production capacity, diversifying investments, and leveraging its core

capabilities to venture into new businesses.

The company has committed investments exceeding US$ 30 billion in the future and

has several business initiatives running simultaneously across continents. With coal reserves in Indonesia, JSPL has mines strewn across Australia and Africa. The company is also engaged in the mining of diamonds in the Democratic Republic of Congo in addition to exploration of the precious stone in the states of Chhattisgarh & Jharkhand in India

billi

With

n di

o

r

ve s

ifi

e

d O

.

P

Jind

.

a

l Gr

oup a

nd i

n

s co

i

t

s s e

ntl

y

t

in

app

n

rt

ew oppo u

niti

es

b

INVESTMENT RATIONALE

JSPL has one of the best iron ore and coal resources in India, with assets spread

over various mineral-rich countries. Both its steel and merchant power businesses are

insulated from input prices.

JSPL plans to increase its steel capacity 4x over the next four years and power

capacity 10x in 10 years.

The stock has underperformed over the last 18-20 months, due to anticipation of

slower earnings growth over FY11-13. We expect the stock to get re-rated again, as the visibility of projects and earnings improves over the next 12 months.

VALUATIONS The sock is currently trading at very attractive valuations of 12.8xFY11P/E. We recommend BUY with a target price of Rs620 which is a price appreciation of 22% from CMP.

of Rs620 which is a price appreciation of 22% from CMP. Rating Buy CMP (Rs.) 523

Rating

Buy

CMP (Rs.)

523

Target (Rs.)

640

Upside %

22

CMP (Rs.) 523 Target (Rs.) 640 Upside % 22 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) 6.53 12.05 Promoters FIIs DIIs 23.03 58.39
Shareholding Pattern % (as on
30th June, 2011)
6.53
12.05
Promoters
FIIs
DIIs
23.03 58.39
Oth ers
BATA INDIA COMPANY PROFILE ► Bata India is the largest retailer and leading manufacturer of

BATA INDIA

COMPANY PROFILE

Bata India is the largest retailer and leading manufacturer of footwear in India and is o

 

rt

f th

B

t

Sh

Or

ni

ti

n

a pa

o

e

a a

oe

ga

za

.

Company also operates a large non retail distribution network through its urban

wholesale division and caters to millions of customers through over 30,000 dealers.

INVESTMENT RATIONALE

Bata with its instant brand recall value and strong position in the footwear market will be amongst the retail companies that will show growth in the current economic scenario.

Over the past five years, Bata India has completely repositioned its stores by opening

large format stores, renovating all its stores and closing down small & unviable stores.

The company has more than 1200 stores in India. The company has added 108 large

format stores in CY10 and has added 29 large format Bata stores. With zero debt on its balance sheet and net cash of more than 100 crores after the recent stake sale in the real estate J/V, Bata has a strong Balance sheet and doesn't need debt for its expansion.

VALUATIONS It has a strong brand recall and has its focus on profitable growth, with a historical ROCE in excess of 30% and a profit CAGR of more than 21% we recommend buying Bata with a long term perspective with a target price of Rs.830. The stock is currently trading at 46.3x of CY10 earnings.

The stock is currently trading at 46.3x of CY10 earnings. Rating Buy CMP (Rs.) 678 Target

Rating

Buy

CMP (Rs.)

678

Target (Rs.)

830

Upside %

22

CMP (Rs.) 678 Target (Rs.) 830 Upside % 22 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) 18.23 Promoters FIIs 15.07 52.01 DIIs Oth
Shareholding Pattern % (as on
30th June, 2011)
18.23
Promoters
FIIs
15.07
52.01
DIIs
Oth ers
14.69
GMR INFRA COMPANY PROFILE ► The GMR Group is a leading global infrastructure major. The

GMR INFRA

COMPANY PROFILE ► The GMR Group is a leading global infrastructure major. The core businesses
COMPANY PROFILE
► The GMR Group is a leading global infrastructure major. The core businesses of the
Group comprise of Airports, Energy, Highways and Urban Infrastructure (including SEZ).
Having established its credentials as a leading infrastructure conglomerate in India, the
Group has expanded its presence globally.
INVESTMENT RATIONALE
► Amongst the airports, Hyderabad and Male are already generating operating
cash, while management expects Sabiha to turn around in the next 3-4 quarters as
traffic growth continues. Delhi is the only sore spot and clarity on profitability should
emerge once regulatory clarity does.
A
s
o
f
M
a -
r 11
,
GMR’
s
D/E
s a
t
nd
s
a
t
1 9
.
x.
With f
ew
expa s o
n
i
n
p a
l
n
s
o
n
th
e
horizon, we expect leverage to be relatively in check.
VALUATIONS
We believe that GMRI’s strong execution (e.g., timely project commissioning, high rank
for Delhi airport on service quality), exit from Intergen (thus reducing debt), cash flow
turnaround of Hyderabad airport and regulatory clarity to act as a stock catalyst and
recommend BUY with a price target of Rs.42.The stock is currently trading at
20.7xFY11EV/EBIDTA.
Rs.42.The stock is currently trading at 20.7xFY11EV/EBIDTA. GMR Infra   Rating   Buy CMP (Rs.)

GMR Infra

 

Rating

 

Buy

CMP (Rs.)

28

Target (Rs.)

42

U

ps

id

e

%

52

28 Target (Rs.) 42 U ps id e % 52 Shareholding Pattern % (as on 30th
Shareholding Pattern % (as on 30th June, 2011) 8.18 8.08 Promoters FIIs 12.35 DIIs 71
Shareholding Pattern % (as on
30th June, 2011)
8.18
8.08
Promoters
FIIs
12.35
DIIs
71 39
.
Oth ers
IVRCL LTD COMPANY PROFILE ► IVRCL is a Hyderabad-based construction company and operates in niche

IVRCL LTD

COMPANY PROFILE

IVRCL is a Hyderabad-based construction company and operates in niche area such

as 'water' segment, under which it executes industrial projects, irrigation works,desalination projects and sewerage systems.

In FY10, the company restructured the infrastructure ownership portfolio and merged

it into IVRCL Assets (80.5% subsidiary). IVRCL also has 52.8% stake in Hindustan Dorr Oliver.

Order book as at end-1QFY12 stood at INR216b, while order intake during the

quarter was INR9b. L1 orders were INR24b, including an INR12b order for an

underground mining project.

INVESTMENT RATIONALE Reported order backlog at the end of June 2011 is Rs210b, book-to-bill ratio of 3.7x TTM revenue provides revenue visibility for FY11 / FY12. Company has one of the largest BOT portfolios, with diversified presence in roads and desalination projects.

VALUATIONS Going forward we believe fund infusion in BOTs and land sales could be some of the triggers for the stock and recommend BUY with a target price of Rs.65. The stock is currently trading at 6.3x of FY11EV/EBIDTA.

The stock is currently trading at 6.3x of FY11EV/EBIDTA. Rating Buy CMP (Rs.) 41 Target (Rs.)

Rating

Buy

CMP (Rs.)

41

Target (Rs.)

65

Upside %

58

CMP (Rs.) 41 Target (Rs.) 65 Upside % 58 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) 9.52 Promoters 38.17 FIIs DIIs 48 .
Shareholding Pattern % (as on
30th June, 2011)
9.52
Promoters
38.17
FIIs
DIIs
48 . 3
Oth ers
4.01
REDIGNTON INDIA COMPANY PROFILE ► Redington (India) Ltd along with its subsidiaries is in the

REDIGNTON INDIA

COMPANY PROFILE ► Redington (India) Ltd along with its subsidiaries is in the business of
COMPANY PROFILE
► Redington (India) Ltd along with its subsidiaries is in the business of end-to-end
supply chain management of IT and Non-IT products in various potential geographies of
a
countries, Redington is amongst the largest, supply chain solution providers to over 75
leading manufacturers of Information Technology, Telecom, Lifestyle and Consumer
Electronics Products, worldwide.
South Asia, Middle East and Africa.
u
With
a
l
a ge
r
di trib
s
ti
o
n
n
e wo
t
rk
a
nd
a
m
a
rk
e
t
pe
n
e
tr
ti
o
n
o
f
m
o e
r
th
a
n
18
► Commencing the Indian operations in 1993, Redington’s consolidated revenue for FY
2009-10 is Rs. 13,778.65 Crore and the consolidated net profit for the FY 2009-10 is Rs.
184.33 Crore.
INVESTMENT RATIONALE
► Redington's strong results reiterate our idea on its ability to negotiate challenges such
as the Middle East environment, rising interest rates and changes in HP's
competitiveness better than the market expected.
► From a business model perspective, Redington has managed the interest rate
environment admirably by increasing its LIBOR linked borrowing and the primary worry
would be a possible rise in LIBOR rates that would lead to greater increase in borrowing
costs.
► Outlook for FY12 is particularly strong. Growth drivers remain e-Governance
spending, benefits from the Dell (laptop & PC signups) and continuing corporate refresh
cycle in the IT business.
VALUATIONS
Redington remains one of our conviction BUY ideas as a quality play on domestic
consumption and IT/lifestyle product penetration themes. We recommend BUY with a
target price of Rs.125. Currently the stock is trading at 16.5x FY11P/E which is very
attractive.
stock is trading at 16.5x FY11P/E which is very attractive. Rating Buy CMP (Rs.) 95 Target

Rating

Buy

CMP (Rs.)

95

Target (Rs.)

125

Upside %

32

CMP (Rs.) 95 Target (Rs.) 125 Upside % 32 Shareholding Pattern % (as on 30th June,
Shareholding Pattern % (as on 30th June, 2011) 21.1 Promoters 32.82 FIIs DIIs Others 8.95
Shareholding Pattern % (as on
30th June, 2011)
21.1
Promoters
32.82
FIIs
DIIs
Others
8.95
37.13
AXIS BANK COMPANY PROFILE ► The Bank was promoted jointly by the Administrator of the

AXIS BANK

COMPANY PROFILE

The Bank was promoted jointly by the Administrator of the specified undertaking of

the Unit Trust of India (UTI - I), LIC and GIC and other four PSU insurance companies, i.e. National Insurance Company Ltd., The New India Assurance Company

Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd.

The Bank has a very wide network of more than 1281 branches (including 169

Service Branches/CPCs as on 31st March, 2011). The Bank has a network of over 6270

ATMs as on 31st March, 2011.

INVESTMENT RATIONALE

Axis Bank has witnessed strong growth in its deposits and advances despite large

base. Total deposits and advances have grown at a CAGR of 36% and 45% to Rs.

189238 cr and Rs 142408cr respectively in FY11.

The bank's efforts to reduce wholesale deposits and improve its low-cost deposit ratio

throu h retail

mana ed to reduce the

savin s

g

au

g

ur

well

for

its

mar ins

g

.

It

has

g

g

proportion of wholesale deposits from 41% in March 2011 to 39% in June 2011.

The credit-deposit ratio at 71.8% is also low which can further improve as the credit

off-take picks up. Additionally, recent hikes in lending rates are yet to reflect on the

bank's margins. All these factors would help the bank maintain the NIM at current levels if not improve it in the coming quarters.

VALUATIONS Axis is among our preferred picks in the banking sector due to its strong deposit franchise, healthy growth-return profile, and relative discount to peers We expect the relative valuation gap to narrow medium term as the macro (rates, inflation, and liquidity) turns easier. Currently the stock is trading at 2.3x FY11P/BV. We recommend BUY with a price target of Rs.1350

9/15/2011

We recommend BUY with a price target of Rs.1350 9/15/2011 Rating Buy CMP (Rs.) 1057 Target

Rating

Buy

CMP (Rs.)

1057

Target (Rs.)

1350

Upside %

28

(Rs.) 1057 Target (Rs.) 1350 Upside % 28 Shareholding Pattern % (as on 30th June, 2011)
Shareholding Pattern % (as on 30th June, 2011) 21.67 Promoters 37.15 FIIs 5.73 DIIs Oth
Shareholding Pattern % (as on
30th June, 2011)
21.67
Promoters
37.15
FIIs
5.73
DIIs
Oth ers
35.45

42

TATA MOTORS COMPANY PROFILE ► Tata Motors Limited is India’s largest automobile company, with consolidated

TATA MOTORS

COMPANY PROFILE Tata Motors Limited is India’s largest automobile company, with consolidated

revenues of Rs.1,23,133 crores (USD 27 billion) in 2010-11. It is the leader in commercial vehicles in each segment and among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments.

The Company is the world's fourth largest truck manufacturer, and the world's third

largest bus manufacturer.

,

INVESTMENT RATIONALE

TML remains a unique play in the auto segment, which has strong diversification

benefits as its global presence helps revenues to remain less affected by any

geographical/regional slowdown.

JLR witnessed a complete turnaround which has led consolidated profits spiralling

~29x post the acquisition in FY08. JLR is aggressively working on product development and would have the most refreshed portfolio in comparison to peers like BMW,Diamler with ~40 new product launches in next 3-4 years.

Domestically TML would gain from higher demand that would come through with the

pick-up of the much needed capex cycle

On the demand side we understand luxury market to be least sensitive to business

cycles in automobiles providing belief in long term volume growth with rising affluent households driven by BRIC nations.

VALUATIONS At CMP, the stock trades at PER of 5.5x and EV/EBIDTA of 4.1x for FY11.We assign a BUY rating on the stock with a target price of Rs.181 indicating a 23% potential upside.

a target price of Rs.181 indicating a 23% potential upside. Rating Buy CMP (Rs.) 148 Target

Rating

Buy

CMP (Rs.)

148

Target (Rs.)

181

Upside %

23