MOSt Market OutlookDate: Friday, February 08, 2013

World Markets Market Outlook FLAT

Hangseng

SGX Nifty 5961 -3 Expect market to open on a flat note on account of global cues. US market declined marginally despite

US jobless data coming in above forecasts. Asian markets are a mixed bag. NTPC FPO has been

successfully over subscribed 1.7 times. ACC and Ambuja reported lower than expected quarterly

EBITDA margins. Hindalco, M&M and Canara Bank will announce results today.

Dow 13944.05 -42.47

Nasdaq 3165.134 -3.345

FTSE 6228.42 -66.92

Nikkei 11200.44 -156.63

23208.99 31.99

London Metal Exchange(LME) Rates

B.Crude$ 117.48$ 0.24

Copper 2,060.50$ 1.85

-43.25

Zinc 2,139.50$ -3.50

Aluminium 8,164.50$

Research Updates:

FY13 GDP growth slip to decadal low of 5%, slowdown across sectors; demand deficit dragging down

GDP, see FY14 GDP growth at 6.5% - FY13 advance estimate for GDP growth has been placed at

5.0% - the lowest in a decade and represent sharp slowdown from 9.3% of FY11 and 6.2% in FY12.

All three components of GDP, viz., agriculture, industry and services displayed YoY slowdown.

Industry in particular registered their third lowest growth rate in two decades while services growth

was the lowest in 12 years.

AMBUJA CEMENT 4QCY12: Below est. impacted by lower volumes, higher depreciation, tax and

Nifty Trend

Trend Reversal

Short Term Intermediate Term

10 DMA* 20 DMA*

6013 6023

AMBUJA CEMENT 4QCY12: Below est. impacted by lower volumes, higher depreciation, tax and

interest; Cutting EPS 7% - Net sales were flat (-0.7% YoY) at INR23.1b (+7% QoQ; est INR25.1b).

Volumes de-grew 5.6% YoY (+13% QoQ) to 5.4MT (v/s est. 5.9mt), while realization declined by 5%

QoQ (+5.2% YoY) in line with estimate at INR4,293/ton (-INR227/ton QoQ) v/s est of INR4,283. Adj

EBITDA de-grew by 1% YoY (-25% QoQ) to INR4.3b (v/s est INR4.9b), translating into margin

contraction of 7.7pp QoQ to 18.5% (flat YoY; est 19.4%). EBITDA/ton declined by ~INR390/ton QoQ

to INR795 in 4QCY12 (+INR40 YoY; est INR831). The stock trades at 7.9x CY14E EV/EBITDA and

US$164/ton.

ACC 4QCY12: EBIDTA below est at INR530/ton; higher other income & lower tax boosts PAT; Cutting

Down Down

ACC 4QCY12: EBIDTA below est at INR530/ton; higher other income & lower tax boosts PAT; Cutting

EPS 5-9% - ACC’s operating performance is below estimate with EBITDA of ~INR3.17b (v/s est

INR3.33b), impacted by lower than estimated realizations. Results are not comparable as merger for

RMC business subsidiary is fully done in 4QCY12 (for CY12). EBITDA de-grew by 18% YoY (-25%

QoQ) to INR3.17b (v/s est INR3.33b), translating into EBITDA margins of 10.2% (-520bp YoY, -710bp

QoQ v/s est 12.8%). The stock trades at 7.2x CY14E EV/EBITDA and USD110/ton. Maintain Neutral

with target price of INR1,601 (~9x CY14E EV/EBITDA).

Buy

Investment Idea (Investment With One Year Prospective)

Tech Mahindra Company description

Tech Mahindra (TECHM) is part of the USD12.5b Mahindra Group. It is one of India’s largest software

exporters and serves telecom service providers, equipment manufacturers, software vendors and

systems integrators. It has offices in over 13 countries, employs over 50,000 people, and its key

clients include British Telecom (BT) and AT&T.

Key investment arguments

Current Market Price 990

Maximum Buy Price 1,000

Target 1,225

Maruti

is the largest passenger vehicle manufacturer

in India, with 1.13m units.

Key investment arguments

TECHM’s 3QFY13 revenue at USD329m grew 10% QoQ, above our estimate of USD323m (+7.9%).

Organically, revenue was flat QoQ v/s our estimate of 2% sequential decline. EBITDA margin at 21%

(+30bp QoQ) was a key positive surprise, v/s our estimate of 19.7%. PAT before share of Satyam’s

profits was INR2.4b, above our estimate of INR2.08.

Valuation and view

The stock trades at 9.5x FY14E EPS and 8.4x FY15E EPS. We value TECHM at a 25% discount to our

target multiple for HCLT due to: [1] relatively smaller scale, [2] skew of revenues towards Telecom

vertical, and [3] Increasing proportion of BPO revenues. Our target price for TECHM is INR1,225,

Motilal Oswal Securities Ltd., Motilal Oswal Tower, Level 6, Sayani Road, Prabhadevi, Mumbai 400 025

in India, with 1.13m units. vertical, and [3] Increasing proportion of BPO revenues. Our target price for TECHM is INR1,225,

which discounts FY15E EPS by 10.5x.

Motilal Oswal Securities Ltd., Motilal Oswal Tower, Level 6, Sayani Road, Prabhadevi, Mumbai 400 025

MOSt Market OutlookDate: Friday, February 08, 2013

Nifty Technical View

:

:

:

Nifty Technical View

Nifty A trend line drawn from the low of June,2012 indicates that the Nifty is currently

trading above an important pivotal level of 5930. Any decisive breakdown below

5930 which is an important support could lead to further sell off towards 5810.

On the upside, resistance is likely to emerge at 6050 followed by its previous

high of 6120.

Support 1 5930

Support 2 5810

Resistance 1 6000:

:

:

Resistance 2 6050

Reversal Level 5900

Resistance 1 6000

:

:

: 12750

Support 1 12200

Support 2 12000

BANK NIFTY

Resistance 1

Bank Nifty appears weak at the current juncture. Any further weakness could

lead to the index falling towards 12200 which is an important support level. On

the upside resistance is placed at 12750 followed by 13000.

:

:

: 12200

12750

Resistance 2 13000

Reversal Level

Resistance 1

Motilal Oswal Securities Ltd., Motilal Oswal Tower, Level 6, Sayani Road, Prabhadevi, Mumbai 400 025Motilal Oswal Securities Ltd., Motilal Oswal Tower, Level 6, Sayani Road, Prabhadevi, Mumbai 400 025

MOSt Market OutlookDate:

FII Data Derivative Outlook

Friday, February 08, 2013

FII Data Derivative Outlook

BUY NET Nifty found support at its rising trendline support which is connecting from Jun’12 lows and has

settled marginally above those levels in a Doji pattern indicating uncertainty at these levels.

Support at trendline remains very crucial for Nifty to

continue with its uptrend.

In Feb series for Nifty, Highest Call OI is at 6100 strike with 7.4m shs up 1m shs and highest

Put OI is at 5700 strike with 6.1m shs up 0.2m shs. Nifty 5600 Feb PE OI increased by 0.8m

shs to 4.2m shs and 5900 Feb PE OI increased by 0.7m shs to 6.1m shs.

-9.9

FII Index Futures -1.1

18.2

14.5

FII Index Options

13.4

0.2

-1.2

101.7

FII Stock Options

7.3

13.8

FII Cash 31.2 8.3

SELL

22.9

Domestic Inst Cash 8.3

FII Stock Futures 14.0

9.1

109.0

10.3

Top Gainers (Price, Volume, Open Interest)

BANKBARODA

shs to 4.2m shs and 5900 Feb PE OI increased by 0.7m shs to 6.1m shs.

Stock Name

-1.2FII Stock Options

HEXAWARE

JUBLFOOD

668

112

% Chg

81 4.0%

1174

3241ACC

4633TITAN

% Chg

33.0%

189.4%

9.1

HAVELLS

POWERGRID

777

10.3

2.1%

3.3%

Price

238.8%

18.1%

238.3%

% Chg

NTPC

2126POWERGRID

Stock Name Volume

24105

4043

HEXAWARE

14.8%

JUBLFOOD 5710

119.2%

3657

NTPC 17866

Stock Name OI

91.9%

4351 13.4%CHAMBLFERT1.8%

TITAN

104.3%331

2.4%

BANKBARODA

Top Losers (Price, Volume, Open Interest)

26

BATAINDIA

Price

777

Stock Name % Chg

SUZLON

11031 -4.0%

9087 -7.1%

-7.2%

712 -8.1%

Stock Name OI

-68.5%

HAVELLS-78.3%

151 -56.2%

1534

% Chg

4351 13.4%

7677

-4.2%

76

267

IBREALEST -4.2%

-4.3% OPTOCIRCUI

TITAN

RELINFRA 501

% Chg

CHAMBLFERT1.8%

SUZLON

IDFC

-54.2%MARUTI

-4.8%

COLPAL

2458

2462

104.3%

Stock Name

331

Volume

SUZLON

CIPLA

-3.8%

11031 -4.0%

3131RCOM 76

76IBREALEST -4.2%

-53.2% IOC

SUZLON-54.2%

1651-4.0% BAJAJ-AUTO

MARUTI 2458

Motilal Oswal Securities Ltd., Motilal Oswal Tower, Level 6, Sayani Road, Prabhadevi, Mumbai 400 025Motilal Oswal Securities Ltd., Motilal Oswal Tower, Level 6, Sayani Road, Prabhadevi, Mumbai 400 025