Market Outlook

India Research
January 6, 2012

Dealers Diary
Indian markets are expected to open range-bound following mixed cues from the global markets. Asian stocks are currently trading down on concerns of European debt crisis which has outweighed forecasted gains in US employment. Indian shares erased early gains on Thursday, as weak Asian and European cues amid fresh concerns about the state of Europe's banks and lingering worries over potential euro-zone sovereign downgrades overshadowed rising expectations that the domestic central bank will cut interest rates at the upcoming policy review meet on January 24. The US markets traded lower early in the day but ended in the green following release of some upbeat U.S. employment data. The early weakness on Wall Street was due in large part to a negative reaction to the results of a French bond auction, with the sale of 7.96 billion Euros worth of long-term French bonds drawing a higher yield than a month ago. Investors worldwide would keenly watch out for the US nonfarm payroll data and monthly unemployment rate data due for release today.

Domestic Indices BSE Sensex Nifty MID CAP SMALL CAP BSE HC BSE PSU BANKEX AUTO METAL OIL & GAS BSE IT Global Indices Dow Jones NASDAQ FTSE Nikkei Hang Seng Straits Times Shanghai Com

Chg (%) (0.2) 0.0 (0.0) 0.2 (0.1) (0.4) 0.5 1.2 (0.7) (1.7) (0.4) Chg (%) (0.0) 0.8 (0.8) (0.8) 0.5 0.1 (1.0)

(Pts) (25.6) 0.3 (0.7) 11.9 (6.8) (23.7) 44.8 98.1 (73.3) (130.1) (24.9) (Pts) (2.7) 21.5 (44.2) (71.4) 86.1 2.0 (20.9)

(Close) 15,857 4,750 5,264 5,703 5,968 6,707 9,688 8,200 9,814 7,608 5,900 (Close) 12,416 2,670 5,624 8,489 18,813 2,713 2,148

Markets Today
The trend deciding level for the day is 15,882/4,753 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 15,955 16,053/4,776 4,803 levels. However, if NIFTY trades below 15,882/4,753 levels for the first half-an-hour of trade then it may correct up to 15,784 15,711/4,727 4,704 levels.
Indices SENSEX NIFTY S2 15,711 4,704 S1 15,784 4,727 Pivot 15,882 4,753 R1 15,955 4,776 R2 16,053 4,803

Indian ADRs Infosys Wipro ICICI Bank HDFC Bank

Chg (%) 1.5 (1.6) 1.2 (0.7)

(Pts) 0.8 (0.2) 0.3 (0.2)

(Close) $54.0 $10.1 $28.5 $27.1

News Analysis
Cement Dispatches December 2011 Maruti Suzuki to raise product prices next week
Refer detailed news analysis on the following page

Advances / Declines Advances Declines Unchanged

BSE 1,443 1,236 156

NSE 797 661 68

Net Inflows (January 04, 2012)

` cr FII MFs Purchases
1,840 395

Sales
1,583 527

Net
257 (132)

MTD
544 127

YTD
544 127 Volumes (` cr) BSE NSE 1,949 9,440

FII Derivatives (January 05, 2012)

` cr Index Futures Stock Futures Purchases
1,295 1,295

Sales
981 1,215

Net
314 79

Open Interest
11,060 23,616

Gainers / Losers
Gainers Company
United Breweries Shriram Transport MMTC Hindustan Copper Indiabulls Finance

Losers Company
United Spirits NCC GSPL DLF Adani Enterprises

Price (`)
428 488 779 267 149

chg (%)
9.3 9.2 6.8 5.3 5.1

Price (`)
529 34 76 180 267

chg (%)
(5.7) (4.6) (4.2) (4.1) (4.0)

Please refer to important disclosures at the end of this report

Sebi Registration No: INB 010996539

Market Outlook | India Research

Cement Dispatches December 2011

ACCs cement dispatches for December 2011 stood at 2.09mn tonnes, up by strong 8.9% yoy. For CY2011, the companys dispatches reported 11.4% growth to 23.58mn tonnes, though on a lower capacity base of the previous year. The company added ~3mtpa of capacity in CY2011, post which its overall capacity stands at ~30mtpa. Decent growth in dispatches reported by ACC and UltraTech in December 2011 hints at higher dispatches to the southern region, as both the companies have a decent exposure to the southern region. We continue to remain Neutral on ACC.

Maruti Suzuki to raise product prices next week

Maruti Suzuki (MSIL) has announced that it is planning to increase its product prices from next week to mitigate the impact of INR depreciation on input costs. While the company has not divulged any details on the quantum of the price increase, media reports indicate that the price hike will be in the range of 2-3%. The recent price hike comes on the back of price increase of `10,000 carried out in November 2011 on all its diesel models. MSIL, which has a substantial exposure to Yen (direct as well as indirect imports and royalty payment constitute ~27% of net sales), is likely to be severely impacted by the continued appreciation of Yen vs. INR (~12% qoq in 3QFY2012 and ~30% YTDFY2012). While the company has hedged its direct imports for 2HFY2012 for JPY/USD part of the leg at a rate of JPY79/USD, USD/INR part is still unhedged, which will have a negative impact on the companys profitability in 2HFY2012. Meanwhile, MSIL has unveiled a new vehicle XA Alpha, a concept for compact SUV at the 11th Auto Expo being held at New Delhi. With the launch of the new concept vehicle and unveiling of MPV Ertiga on January 6, MSIL plans to expand its presence in the utility vehicle segment (UV), which is currently dominated by Mahindra and Mahindra. At the current price of `933, MSIL stock is trading at 12.4x FY2013E earnings. We believe the recent correction in the stock price (~20% post 2QFY2012 results) factors in the impact of demand slowdown and labor problems on FY2012E volume growth and concerns regarding the adverse currency movement on margins. Thus, we continue to maintain our Accumulate rating on the stock with a target price of `1,051.

January 6, 2012

Market Outlook | India Research

Economic and Political News (edited)

Weekly food inflation plunges to negative 3.36% Inflation may fall below 7% by March 2012: PM advisory panel Interest rates have peaked as inflation slows: RBI No threat to cancel license of any airline: DGCA Government to reach out to consumer bodies for FDI in retail

Corporate News
RIL gas output dips below 39mmcmd in the week ended December 25, 2011 M&M to invest `800cr in Korean arm, SsangYong Motors, to develop products M&M to launch SUV Rexton in India in the next six months ONGC finds gas reserves off Daman
Economic Times, Business Standard, Business Line, Financial Express, Mint,

January 6, 2012

Market Outlook | India Research

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

January 6, 2012