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BroadIndicators Sensex 19348.34 Nifty 5755.05 Rs./$ 60.48 +1.44 NYMEXCrude($/bbl)* 103.43 +0.35 CallRate 10.00 10YearGSec 8.24 Technicals Sensex Spot Support1 Support2 Resistance1 Resistance2 Nifty Spot Support1 Support2 Resistance1 Resistance2 5755 5739 5701 5777 5815 19348 19294 19166 19422 19550 76.05 244.94



July 31, 2013

Russian potash producer Uralkali has decided to pull out of its sales partnership with Belarus. The two groups in a global cartel command twothirds of a nearly $22bn market for Potash whichisthefertilizeringredient.Thetwoentitieshadbeenpartnersforeightyears,ridingalong and profitable wave in which potash prices surged to close to $900 a ton just four years ago, beforesinkingtoaround$400thisyear.The move is expected to bring down potash prices by 25% to about $300 a metric ton by the end of year. The aim would be to increase market share, sending prices even lower. However, the prospect of cheaper fertilizer would help do mesticfertilizermanufacturesinIndiaastheyimportalmosttheentirerequirement. Hindalco has managed to refinance Rs. 47bn from SBI and Axis Bank for its Utkal alumina pro ject. At an interest rate of 10.15% payable over an 8yr period, this will imply a reduction of a whopping 300 basis points from the previous loan. Scheduled to be commissioned in the H2FY14, Utkal is a 1.5 mn ton refinery that will feed the companys Mahan and Aditya smelters inMPandOrissa,respectively.ThetotalprojectcostisRs.70bn,70%ofwhichhasbeenfunded throughdebt.TheprojectdebtofRs.49bnwastiedup3yrsyearsagofromaconsortiumof28 PSU Banks, including SBI, PNB, BOB and Canara Bank. Interestingly, the banks had agreed to allow Hindalco to draw down the amount over a 3yr period during the construction of the plant without any commitment fees. The company also retained the right to prepay the facil ity,withoutanypenalty,everyyear. The Delhi High Court, in two separate cases, has asked the govt not to take coercive measures against Sun Pharma and Cipla till the next hearing. The HC has also ordered the two companies tofurnishpricelistsofessentialdrugstheymanufactureasmandatedunderthenewDrugPrice Control Order (DPCO) to domestic drug distributors and state drug controllers. The two compa nieshadchallengedthegovtonthespecificprovisionunderthedrugpricecontrolorder2013, which mandated thepharmacompanies toensure that their essentialdrugs should sport new pricelabelswithinaperiodof45daysfromthedateofDPCO.Sincethecourthasnotspeltout explicitly that drug retailers would have to sell at new prices notified under DPCO 2013, com panies are interpreting it as a temporary relief till the matter is finally decided or the court takesadifferentview. As per media reports, the govt has halved to 5% the stake it plans to sell in Coal India, following an agreement with unions. The govts original plan was to sell 10% stake in Coal India to raise Rs.200bn,buttheproposalhadmetwithstiffresistancefromtradeunionswhothreatenedto goonstrike.Afterconsultationswithunions,thegovernmenthasnowdecidedtosellonly5% throughopenmarket,withtheremainingthroughotheroptionslikesharebuyback. NTPC Ltd has posted a marginal 1.1% growth in net profit for the quarter ended June. The com panyrecordedanetprofitofRs.25bnagainstRs.24bnintheyearagoperiodonlowerexpenses at Rs122bn during the quarter. Fuel cost, which accounts for a bulk of the expenditure, came down11%toRs.94bn.Totalincomeofthecompanydeclined2.8%toRs.163bnduringthequar teragainstRs.168bninthesamequarterlastfinancialyear.Incomefrompowersalesdipped2.1 percenttoRs.156bn.

GlobalMarkets Nikkei 13755.30 Kospi 1914.76 2.29 HangSeng 22004.20 +50.25 6570.95 15520.60 Nasdaq 3616.47 +17.33 *Bloomberg8.00am FTSE100 +10.70 1.38 114.56


RBI in its latest monetary policy has maintained the status quo on repo rate and cash reserve ratio ( CRR) leaving those unchanged at 7.25% and 4%, respectively. However, its unexpect edly dovish tone led to the rupees slide to 60.49 a dollar below the psychological 60 a dollar level for the first time since July 9. The central banks liquidity tightening measures had been able to halt the currencys depreciation over the past two weeks. On Tuesday, RBI kept its March end inflation forecast unchanged at 5%, while it lowered its estimate for FY14 economic growthto5.5%,from5.7%projectedinMay.(Sourceofallnewsfromleadingdailies)


EconomicCalendar: Country US US US Euro Euro Nifty Event GDPAnnualizedQoQ PersonalConsumption FOMCRateDecision UnemploymentRate CPICoreYoY Month 2QA 2QA Jul13 Jun JulA Survey 0.01 0.016 0.0025 0.122 0.012 Actual Prior 0.018 0.026 0.0025 0.121 0.012

Sensex TopLosers BPCL 310.10 8.90% RelInfra 336.60 7.09% DLF 157.20 7.09% Ranbaxy 279.10 6.44% ONGC 280.00 5.91% TopGainers Wipro 419.75 +2.75% JindalSteel 202.25 +1.45% Infosys 2955.70 +1.20% L&T 849.55 +0.97% SunPharma 574.75 +0.92% TopLosers ONGC 280.85 5.64% Hindalco 86.40 4.64% TataMotors 284.40 3.94% BhartiAirtel 321.45 3.76% BajajAuto 1927.90 3.40%

TopGainers IDFC 113.40 +2.53% JindalSteel 203.50 +1.95% HCLTech 911.00 +1.58% SunPharma 577.00 +1.36% L&T 850.00 +1.05%

INDSEC RESEARCH +91 22 61146114 1


JULY 31, 2013

INDSECRatingDistribution BUY:Expectedtotalreturnofover25%withinthenext12months. ACCUMULATE:Expectedtotalreturnbetween10to25%withinthenext12months. REDUCE:Expectedtotalreturnbelow10%withinthenext12months. SELL:Expectedtotalreturnisbelowthemarketreturnwithinthenext12months. NEUTRAL:Noinvestmentopiniononthestockunderreview. Disclaimer ThisreporthasbeenissuedbyIndsecSecuritiesandFinanceLimited(ISFL),whichisaSEBIregulatedentity. Thisdocumentisforinformationalpurposesonlyandisnotintendedasanofferorsolicitationforthepurchaseorsaleofsecurity. This document has been prepared and issued on the basis of publicly available information, internally developed data and other sources believed to be reliable. However, we do not guarantee its accuracy and the information may be incomplete and condensed. Note how everthat,wehavetakenmeticulouscaretoensurethatthefactsstatedareaccurateandopinionsgivenarefairandreasonable,neither the analyst nor any other employee of our company is in any way responsible for its contents. The Companys research department has received assistance from the subject company (ies) referred to in this document including, but not limited to, discussions with manage ment of the subject company (ies). All opinions, projections and estimates constitute the judgment of the author as of the date of this documentandthese,includinganyotherinformationcontainedinthisdocument,aresubjecttochangewithoutnotice.Pricesandavail ability of financial instruments also are subject to change without notice. While we would endeavor to update the information herein on reasonable basis, we are under no obligation to update or keep the information current. Also, there may be regulatory, compliance, or otherreasonsthatmaypreventusfromdoingso. Securities recommended in this document are subject to investment risks, including the possible loss of the principal amount invested. Any decision to purchase/salesecurities mentioned in this document must takeinto account existing public information on such security or any registered prospectus. The appropriateness of a particular investment, decision or strategy will depend on an investor's individual circumstances and objectives. The securities, instruments, or strategies discussed in this document may not be suitable for all investors, and certain investors may not be eligible to purchase or participate in some or all of them. Each recipient of this document should make suchinvestigationsasitdeemsnecessarytoarriveatanindependentevaluationofaninvestmentinthesecuritiesofcompaniesreferred tointhisdocument(includingthemeritsandrisksinvolved). This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation orwhichwouldsubjectthecompanytoanyregistrationorlicensingrequirementwithinsuchjurisdiction.Thesecuritiesdescribedherein mayormaynotbeeligibleforsaleinalljurisdictionsortocertaincategoryofinvestors.Personsinwhosepossessionthisdocumentmay comearerequiredtoinformthemselvesofandtoobservesuchrestriction The company may trade in securities, which are the subject of this document or in related instruments and mayhave actedupon, use or usedtheinformationcontainedinthisdocumentortheresearchortheanalysisonwhichitisbased,beforeitspublication.Thecompany oritsdirectorsmayhaveapositionorbeotherwiseinterestedintheinvestmentstrategyreferredtointhisdocument.Thecompanymay be involved in any other transaction involving such securities and earn brokerage or other compensation or act as advisor or lender/ borrowertosuchcompany(ies)orhaveotherpotentialconflicts.ofinterestwithrespecttoanyrecommendationandrelatedinformation and opinions. This is just a suggestion and the company will not be responsible for any profit or loss arising out of the decision taken by the reader of this document. Any comments or statements made herein are those of the analyst and do not necessarily reflect those of the company. No matter contained in this document may be reproduced or copied without the consent of the company. Any unauthor ized use, duplication, redistribution or disclosure is prohibited by law and will result in prosecution. The information contained in this documentisintendedsolelyfortherecipientandmaynotbefurtherdistributedbytherecipient.TheCompanyacceptsnoliabilitywhat soeverfortheactionsofthirdparties. Theresearchanalyst(s)ofthisreportcertifiesthatalloftheviewsexpressedinthisresearchreportaccuratelyreflecttheirpersonalviews aboutthoseissuer(s)orsecuritiesandthatnopartofhis/her/theircompensationwas,is,orwillbe,directlyorindirectly,relatedtothe specificrecommendation(s)orview(s)expressedbythatresearchanalystinthisresearchreport. AnalystsholdinginthestocksmentionedintheReport:NIL


ManagingDirector NandkishoreGupta ResearchTeam MilanWadkar ShaileshKumar RohitNatarajan DivyaSankaranarayanan InstitutionalSalesTeam NileshMistry PradnyaPotdar PritiSolanki SectorsCovered Cement,Auto&MidCaps BankingandMidCaps EPC,Infra,CapitalGoods&MidCaps ResearchAssociate ContactInformation ContactInformation 02261146101/02 02261146105 02261146139 ContactInformation 02261146118 02261146109 02261146125 02261146134 02261146133, IndsecSecurities&FinanceLtd,301/302,"215Atrium","A"Wing,AndheriKurlaRoad,Chakala,Andheri(East),Mumbai400093 Telephone:+912261146114/61146100,Fax:+912261146180/86