First Call January 6, 2011-EDEL - The Smart Investor

India Equity Research 

First Call 

Contents 

Latest Research 

- IRB Infrastructure - addressing key investor concerns; Buy 

- IT - resurgence of offshore growth story 

- hEDGE - The alternative insights monthly 

- Bond Vector - LAF borrowing drops significantly; short term rates ease 

on improved liquidity 

Regular Features 

- Sales Trader’s Commentary 

- Insider Trades & Bulk Deals 

- Technical Updates 

- Eye Catchers 

Sectoral Movements % Change 

Ticker 5-Jan-11 1 D 1 M 3 M 1 Y 

Banking 12,834 

IT 7,508 

Pharmaceuticals 6,813 

Oil 10,688 

Power 2,991 

Auto 9,964 

Metals 17,782 

Real Estate 2,781 

FMCG 3,783 

Capital Goods 15,199 

(2.2) 

(0.1) 

(0.1) 

(0.4) 

(0.6) 

(1.9) 

(0.6) 

(2.0) 

0.7 

(1.6) 

(8.8) 

9.5 

1.6 

3.5 

2.5 

(3.2) 

9.8 

(5.8) 

5.2 

(1.5) 

January 6, 2011 

, 2010 

(10.4) 

11.5 

9.4 

(0.3) 

(10.4) 

0.7 

1.2 

(28.9) 

2.9 

(7.2) 

Edelweiss Research is also available on www.edelresearch.com ,Bloomberg EDEL , Thomson First Call, Reuters and Factset.Edelweiss Securities Limited 

25.9 

27.0 

34.6 

1.9 

(7.5) 

31.9 

(3.3) 

(29.0) 

32.9 

6.5 

Daily 

India Change in % 

Nifty 6,080 

Sensex 20,301 

CNX 500 4,903 

Global Indices 

DJIA 11,723 

NASDAQ 2,702 

Hang Seng 23,775 

Nikkei 225 10,502 

Net Inv (INR Bn) 

Open Interest (INR mn) 

Volume 5-Jan-11 4-Jan-11 % Change 

Futures 540,718 544,266 (0.7) 

Call 312,503 290,097 7.7 

Put 376,528 367,353 2.5 

Total 1,229,748 1,201,717 2.3 

Put Call Ratios 

Volume 5-Jan-11 4-Jan-11 % Change 

PCR 1.05 1.03 1.7 

WPCR 0.98 0.75 29.8 

OI PCR 1.20 1.26 (4.9) 

Total OI/ Volume 1.28 1.20 6.7 

Nifty IVs at 16 - 18% levels. 

FII Activity* (INR Mn) (4-Jan) 

5-Jan-11 1-d 1-mo 3-mo 

(1.1) 

(1.0) 

(0.5) 

1.5 

1.7 

0.6 

(1.1) 

(0.5) 

(2.8) 

5-Jan-11 1-d 1-mo 3-mo 

0.3 

0.8 

0.1 

1.2 

3.0 

4.3 

2.3 

3.3 

7.1 

12.6 

3.9 

8.4 

3-Jan-11 Buy Sell Net 

FII Cash 33.8 

FII F&O 73.4 

MF Cash 5.9 

26.0 

78.1 

8.8 

Value Traded - India (INR Bn) Change in % 

BSE Cash 40.8 

NSE Cash 130.9 

NSE F&O 959.3 

7.8 

(4.7) 

(2.9) 

5-Jan-11 1-d 1-mo 3-mo 

(6.1) 

(9.0) 

(30.5) 

2.5 

(11.0) 

Forex/Money Market Change in % 

INR/USD 45.3 

USD/EUR 1.3 

USD/YEN 0.0 

10 Yr G-Sec 8.1 

(44.4) 

(26.3) 

5-Jan-11 1-d 1-mo 3-mo 

(0.8) 

(0.0) 

(0.0) 

- 

(0.8) 

(1.2) 

0.7 

(1.6) 

Commodities (USD/Mt ton)Change in % 

Copper 9,587.0 

Aluminium 2,452.8 

*Gold 1,375.8 

*Silver 29.4 

**NYMEX 90 

(1.4) 

(5.6) 

0.3 

1.5 

5-Jan-11 1-d 1-mo 3-mo 

(0.4) 

(0.8) 

(0.2) 

0.4 

1.0 

*USD/Troy Ounce **USD/bbl 

9.4 

6.6 

(3.4) 

(2.6) 

1.2 

Agri Commodities (INR/QT)Change in % 

Sugar 3,156.0 

Cotton^ 4,399.5 

17.5 

4.5 

2.0 

26.7 

9.0 

5-Jan-11 1-d 1-mo 3-mo 

(0.3) 

(1.0) 

^INR/Maund ^^INR/KG 

4.3 

5.0 

11.0 

19.4 

1

STOCKS IN NEWS 

Govt defers Urea decontrol decision(Dna) 

RIL draws a balnk in D9, second well junked(Dna ) 

IOC follow-on delayed to next fiscal on crude(Dna) 

BOC India delisting floor price ar Rs225.29 (Dna) 

Omnitech to buy Dutch co(Dna) 

KRBL basmati exports to treble on Pakistan floods(Dna) 

Lupin lines up $50mn for acquisitions in Latin America(DET) 

TCS to set up Rs1500cr learning centre in Kerala(ET) 

Edelweiss Securities Limited 

2

SALES TRADERS COMMENTARY 

On Wednesday, equity benchmarks saw profit taking on higher level. Financials, auto, 

metal, realty, telecom, and capital goods stocks witnessed sell offs. The Nifty slipped below 

the 6100 mark in second half of trade, especially after a fall in global markets. 

The Sensex closed at 20301, down 197 points, while the Nifty dipped 66 points to 6079. 

Major gainers were Hindustan Unilever (1.43%), I T C (1.38%), Hindalco Industries 

(1.36%), Tata Consultancy Services (1.25%), Tata Power Company (1.17%), and Wipro 

(0.53%). 

Major losers were Bajaj Auto (3.69%), Hero Honda Motors (3.60%), D L F (3.28%), I C I C 

I Bank (3.08%), Reliance Communications (2.81%), and Housing Development Finance 

Corporation (2.75%). 

The FMCG index was up 0.72%. Major gainers were Hindustan Unilever (1.43%), I T C 

(1.38%), Marico (0.81%), Dabur India (0.29%), and Nestle India (0.07%). 

The Bankex dipped 2.19%. Major losers were Canara Bank (4.63%), I C I C I Bank 

(3.08%), Federal Bank (2.8%), H D F C Bank (1.58%), and Bank of Baroda (0.31%). 

The Realty index was down 2.03%. Major losers were Anant Raj Industries (5%), D L F 

(3.28%), D B Realty (2.45%), Ackruti City (1.06%), and Indiabulls Real Estate (0.97%). 

The Auto index dipped 1.95%. Major losers were Apollo Tyres (4.75%), Bajaj Auto 

(3.69%), Amtek Auto (3.65%), Ashok Leyland (2.97%), and Bharat Forge (1.16%). 

Major losers in mid cap were Allahabad Bank (3.86%), Aban Offshore (3.81%), Core 

Projects and Technologies (1.98%), Ackruti City (1.06%), and Allcargo Global Logistics 

(0.98%). 

Major losers in small caps were Aarti Industries (3.68%), A B G Shipyard (3.1%), Abhishek 

Industries (2.56%), A B G Infralogistics (0.89%) and INEOS ABS (India) (0.16%). 

Globally, Asian indices ended mixed, while European indices were trading lower. 

3 


3

India Equity Research | Construction Company Update 

• 

IRB INFRASTRUCTURE 

Addressing key investor concerns 

� Stress testing IRB’s SOTP value 

Key investor concern on IRB Infrastructure (IRB) has been regarding the 

valuation assigned to its EPC business, given: 1) Predominantly in-house road 

projects; and 2) significantly higher EBIDTA margin, at ~20% against 10% for 

other construction companies. We attempt to incorporate these concerns in our 

valuation through various scenarios, as below, and conclude that even our worst 

case SOTP value of INR 236/share offers 5% upside on the current market price. 

� Scenario–I: EPC business earns normalized margins / nil profits 

Here, we assume EPC business earns EBIDTA margin of 10% instead of 20% and 

pass on this benefit to BOT projects through lower project cost. We use target 

P/E of 11x FY12 for valuing EPC business. This is higher than base case target 

multiple, but is still at 10-15% discount to the target multiple used to value 

other construction companies. In this case, EPC value nearly halves to INR 

44/share, but value of BOT projects goes up 8% as project costs reduce to the 

extent of lower profits earned by EPC business. Our SOTP value in this case 

comes to INR 264/share. Further, if we assume that EPC does not earn any 

profits and pass on the entire benefit to BOT projects, we arrive at SOTP of INR 

239 /share (with zero value for EPC). 

� Scenario–II: No new project win; EPC executes only current order book 

Here, we assume that the EPC executes only current order book of INR 95 bn by 

FY14 and then shuts down. We use DCF for valuing EPC business in this case and 

arrive at a value of INR 30/share (versus INR 86/share in our base case). Value 

for BOT projects remains unchanged and our SOTP value comes to INR 

236/share. 

� Outlook and valuations: Top construction pick; maintain ‘BUY’ 

We expect award of road projects to pick up pace in Q4FY11 and believe IRB is 

well-positioned to win a few. Also, we expect Q3FY11 to be a strong quarter for 

construction as contribution from new road projects will start to kick-in. We 

maintain ‘BUY’ on the stock with target price of INR 292 and rate it ‘Sector 

Outperformer’ on relative returns (refer rating page for details). 

Financials 

Year to March FY09 FY10 FY11E FY12E 

Revenue (INR mn) 9,919 17,049 22,204 36,268 

Rev. growth (%) 35.4 71.9 30.2 63.3 

EBITDA (INR mn) 4,388 7,990 10,336 13,707 

Net profit 1,758 3,854 4,577 5,238 

Shares outstanding (mn) 332 332 332 332 

EPS (INR) 5.3 11.6 13.8 15.8 

EPS growth (%) 54.4 119.2 18.8 14.4 

P/E (x) 42.9 19.6 16.5 14.4 

EV/ EBITDA (x) 21.7 12.4 10.8 9.2 

ROAE (%) 10.5 20.4 20.4 19.6 

ROACE (%) 8.5 13.4 14.2 12.6 


Reuters: IRBI.BO Bloomberg: IRB IN 

EDELWEISS 4D RATINGS 

Absolute Rating 

Rating Relative to Sector 

Edelweiss Research is also available on www.edelresearch.com, Bloomberg EDEL , Thomson First Call, Reuters and Factset. Edelweiss Securities Limited 

BUY 

Risk Rating Relative to Sector Low 

Sector Relative to Market 

Outperformer 

Overweight 

Note: 

Please refer last page of the report for rating explanation 

MARKET DATA 

CMP : INR 227 

52-week range (INR) : 315 / 186 

Share in issue (mn) : 332.4 

M cap (INR bn/USD mn) : 75 /1,667 

Avg. Daily Vol. BSE/NSE (‘000) : 1,405.1 

SHARE HOLDING PATTERN (%) 

Promoters* : 74.9 

MFs, FIs & Banks : 4.3 

FIIs : 12.7 

Others : 8.1 

* Promoters pledged shares 

(% of share in issue) 

: 15.3 

PRICE PERFORMANCE (%) 

Stock Nifty EW 

Construction 

Index 

1 month 1.2 2.6 (1.5) 

3 months (11.7) (0.2) (6.5) 

12 months (2.9) 17.5 5.8 

Manish Sarawagi 

+91 22 4040 7575 

manish.sarawagi@edelcap.com 

Parvez Akthar Qazi 

+91 22 4063 5405 

parvez.qazi@edelcap.com 

Rohit Patni 

+91 22 6623 3392 

rohit.patni@edelcap.com

India Equity Research | IT Sector Update 

INFORMATION TECHNOLOGY 

Resurgence of offshore growth story 

• 

We believe FY12 is likely to be another 26-30% growth year for tier I 

vendors as was the case in FY11. Interactions with industry players and 

channel partners suggest that FY11 growth being driven by cost-outs along 

with gradual spending towards revenue productivity is a sustained and 

structural increase in demand for offshore services. Growth in FY12 will be 

driven by: (a) greater offshoring by existing client base; (b) market share 

increase for Indian IT players in the renewal deal market; and (c) sustained 

improvement in IT spending i.e., revival and embracing off shore market. 

� Upfront discretionary commitments in CY11 budgets 

CY11 IT budgets are likely to see greater offshore spending with significant 

commitment on discretionary spending. Conventional cost take out continues to 

drive growth for services like IS, BPO, ADM while revenue enhancement is 

driving spend in Enterprise Solutions (ES), consulting and Package 

Implementations (PI). We anticipate discretionary spend commitments from 

large clients to drive visibility for tier 1 companies (TCS, Infosys, Wipro and 

Cognizant) going into CY11/FY12. 

� What to expect from December quarter? 

Barring the impact of fewer working days during the December quarter, 

performance is expected to be similar to Q2FY11. The trend of stable pricing 

and high attrition will remain unchanged. While broadening of the employee 

pyramid will be favourable, INR appreciation against USD and GBP will be a 

margin headwind. 

� Revising up FY12 forecast and introducing FY13 estimates 

We are revising up our FY12 USD revenue growth forecast from 21-23% to 26- 

30% for TCS, Infosys and HCLT, and from 20% to 22% for Wipro. The resultant 

increase in EPS varies from 1.5% to 6.5% across companies. For tier II 

companies, our FY12 revenue forecast is unchanged while tweaking the margin 

assumption leads to 2-4% downward revision for Patni and Infotech. 

We also introduce FY13 forecast for our coverage universe. We factor in a 17- 

21% USD growth for top 4 companies (from TCS to HCLT) and 15-20% growth 

for mid-tier players (refer table 4 on page 6). 

� Outlook and valuations 

The IT index has outperformed the benchmark index (BSE Sensex) by 14% in 

the past six months. With continued traction in business and upgrades in 

earnings, we expect the outperformance to continue. We continue to prefer TCS 

(BUY) over Infosys and upgrade HCLT to ‘BUY’. We believe better client 

mining, aggressive sales approach in renewal deal market and improving 

margins will lead to narrowing of HCLT’s valuation discount to TCS and Infosys. 

We maintain ‘HOLD’ recommendation on Infosys and Wipro (refer table 5 for 

detailed recommendations). 

Re-rating in mid-caps is imminent and will continue to be selective (like in 

Hexaware, our erstwhile top pick) and not broad based. 

� Top picks: TCS and HCLT in large caps and Infotech in mid caps 


Kunal Sangoi 

+91-22-6623 3370 

kunal.sangoi@edelcap.com 

Ganesh Duvvuri 

+91-22-2286 7586 

ganesh.duvvuri@edelcap.com 

Edelweiss Research is also available on www.edelresearch.com,, Bloomberg EDEL , Thomson First Call, Reuters and Factset. Edelweiss Securities Limited

India Alternative Research 

HEDGE 

The alternative insights monthly 

January view: New year new hope; concerns still old 

� Bye bye 2010; selective buy 2011 

� Its silver all the way 

� Growth and inflation: A tight rope walk going forward 

� Metals, commodities in play post QE2 

� Oil & gas: Higher crude prices to benefit players 

� IT: Global recovery coming its way 

Bye bye 2010; selective buy 2011 

CY10 is over and along with it has ended an eventful decade in equities. During this 

period, Indian markets have been party to several events that we believe have 

made it more mature. Be it the technology boom and bust, K-10 scam, the fallout 

of the global credit crisis, the Satyam scam or the recent loan–for-bribe scam, 

barring the initial knee jerk reaction, Indian markets have emerged much stronger. 

With strong regulators, Indian equity markets have become multifold safe place for 

investors against the senerio a decade ago. 

Among emerging markets (EMs), India still remains a hot destination for funds 

chasing quick bucks. CY10 saw a record influx of foreign portfolio flows of ~USD 29 

bn. The disinvestment process initiated by the government resurrected fortunes of 

the primary market. IPOs worth ~USD 9.5 bn hit the market last year. Retail 

participation gained traction (average retail subscriptions was ~6.8x in CY10 

versus ~2.0x in CY09). For an economy poised to grow at ~8.3% in CY11, 

maintaining the momentum going forward should not be an issue. 

In this background, while we welcome the new year with fresh enthusiasm and zeal, 

we also carry previous year’s baggage of micro (domestic) as well as macro 

(global) economic concerns. Domestic markets received stupendous foreign flows 

of USD 29 bn (primary + secondary), the highest ever in Indian equity markets in 

CY10. The flows were majorly driven by primary market activity which accounted 

for ~USD 16 bn and the balance ~USD 13 bn came via secondary market. The 

muted equity returns of ~18% relative to the huge foreign flows are well justified 

by a few facts. Throughout CY10, domestic institutional investors were net sellers. 

Also, one has to remember that the surge of ~75% in CY09 was from the abyss 

when stimulating monetary policies world over ignited a chase for high-yielding 

risky asset classes. CY10 started on a higher base as compared to CY09 which 

started with an oversold market. 

In short, the point that we are driving home is, flows should continue in CY11 but 

the possibility of upside being capped is strong on the back of supply at higher 

levels. Economic issues like quantitative easing, inflation, deflation, flight to quality 

etc., have been the buzz words for quite some time. 


Yogesh Radke 

+91‐22‐6620 3199 

yogesh.radke@edelcap.com 

Sriram Velayudhan 

+91‐22‐6620 3100 

sriram.velayudhan @edelcap.com 

December Retrospect 

India vs. Global Markets 

Under In line Out 

perform perform 

Fund Flows 

� FII 

� MF 

Dec - Sector performance 

� Outperformers –Metals and IT 

� Underperformers – Bank, 

consumer durables and auto 

Jan – Sectors to watch 

� Outperformers 

o Metals 

o Oil & Gas 

� Underperformers 

o Banks 

o Auto

hEDGE 

Will these issues continue to be preferred topics of talk in CY11 seems to be seen? The struggle for growth (deflation) 

and structural issues (sovereign debt concerns) in the western part of the world should ensure that these economies 

continue to loosen their purse strings in CY11 as well (possibility of quantitative easing 3 (QE3) is high). This coupled 

with the government’s disinvestment programme should keep inflows intact. At the same time, concerns like inflation 

(supply side concerns on the domestic front and spillover effect of rising commodity prices globally), rate hikes, rising 

raw material costs, and widening current account deficit (negative for INR) may dent earnings prospects of corporate 

India in the new year. One thing that’s sure is that CY11 is not going to be an easy year. We hold a moderately bullish 

view on the Indian market with rise in volatility as uncertainty over global factors still persists along with steady 

domestic growth. We place Nifty target for the year at 7015 with a double bottom formation at 5734. The recent up 

move is likely to extend towards 6450. 

For January 2011 we place the Nifty target at around 6300 with crucial resistances and support levels placed at 

6240/6300 and 6100/6055, respectively. 

Themes to play in CY11: Overweight on commodities; caution recommended on rate-sensitive sectors 

The global economic recovery is poised to gain further momentum in CY11. On one hand developed economies are 

facing a growth crisis while on the other though EMs have growth on their plate they also have to contend with 

inflationary pressures. We believe India too will have to counter this scenario (growth + inflation) in most part of CY11. 

We are overweight on sectors with a global interface (IT, metals and energy) and cautious on rate-sensitive cyclical 

sectors (BFSI, auto and real estate). As interest rates rise, companies/sectors with higher capital requirements may 

find it difficult to expand, thereby handing over the edge to companies with lower capital requirements. Sectors which 

we like within this space are consumption, pharma, utilities, and media. Global recovery is expected to gather pace as 

we move into CY11. We like sectors that will benefit from the likely combination of global growth and easy monetary 

conditions, such as energy and metals. Similarly, a strong global inter linkage (improving corporate spend in the US) 

augurs well for the IT sector. Banks, real estate and auto are likely to be crippled by margin concerns due to rising 

interest rates, commodity and resource costs, resource crunch and competition. 

Quality mid caps should stay on investor radar 

The valuation disparity between large 

caps and mid caps should narrow down 

in CY11. In CY10, the BSE mid-cap 

140.0 

Sensex vs. BSE Mid-cap 

index had consistently outperformed 

130.0 

the Sensex, barring the last two 120.0 

months of under performance owing to 

sell offs. 

110.0 

We believe the quest for scalable and 

100.0 

quality business models should keep 90.0 

investors interested in this space. 80.0 

There are quite a few quality stocks 

(proxy plays on India consumption 

story) still available at reasonable 

Source: Edelweiss research 

Sensex BSE Mid-cap 

valuations. In our latest strategy update Bulls to hibernate, dated January 4, 2011, we have stated our top picks in the 


2 

Base to 100 (31-Dec-09) 

Dec-09 

Jan-10 

Feb-10 

Mar-10 

Apr-10 

May-10 

Jun-10 

Jul-10 

Aug-10 

Sep-10 

Oct-10 

Nov-10 

Dec-10

hEDGE 

mid-cap space. To mention a few are Pantaloon (PE of ~18.6x FY12E), United Phosphorous (PE of ~9x FY12E), Federal 

Bank (PB of ~1.2x FY12E), and Jindal Saw (PE of ~9.2x FY12E). 

Metals: Commodities in play post QE2 (Our metals analyst Prasad Baji) 

Famously known as late cycle leaders, commodities especially metals stand firm for an upside. Metals’ relative strength 

peaked after the market did; this is expected because commodities in general lag equities and peak well after them. 

Industrial activity such as manufacturing has led the momentum, with strongest pace of expansion observed in metal 

products. However, the momentum has moderated for some time now, as observed in the sequential seasonally 

adjusted data. The recovery in global economy, in our view, will be supportive of higher metal prices in the near term. 

Global PMI indices, which had softened in H1CY10, have revived somewhat of late. This uptick in demand will feed into 

higher metal prices as well. Demand for aluminum has increased more than anticipated and is expected to be 13% in 

CY11. Though incremental supply is coming in, mostly from China and rest of Asia, we expect global market to be in a 

deficit in CY11 due to strong demand. Our top pick in the metal space is Tata Steel in ferrous and Hindalco in the nonferrous 

space on the back of continuous global recovery and demand for both steel and non-ferrous metals moving up. 

Oil & Gas: Higher crude prices to benefit players (Our oil & gas analyst Niraj Mansingka) 

Crude prices are expected to remain high in CY11 and CY12 on the back of continued demand growth, leading to spare 

capacity dipping below 5% of total global demand CY12 onwards. Global crude demand is expected to expand to 87.3 

mbpd, much above the earlier peak of 86.7 mbpd (CY07), on the back of faster-than-expected global recovery. Going 

forward, overall crude demand is expected to rise at 1.3% CAGR (CY10-15E) or average 1.2 mbpd per year. Meanwhile, 

increased demand of crude is expected to lead to higher demand of refined products benefiting complex refiners like 

Reliance Industries (RIL) as the company is able to garner larger discounts for purchase of crude. RIL remains one of 

our key sector overweight, given its high sensitivity to rising crude prices. In the near term, GRMs should trend 

upwards due to impact of severe winter in Europe and North America. Higher cotton prices and increased textile 

domestic consumption in China has led to increase in polyester prices, which, in turn, has pushed polyester margins to 

the highest in the past 20 years. 

IT: Global recovery coming its way (Our IT analyst Kunal Sangoi) 

Global recovery and QE2 will benefit sectors like IT which have global interface. We expect management commentary 

to remain positive during results season. We believe demand continues to remain strong and, hence, revenue growth is 

less of a concern for tier-1 companies. But, given the continued high levels of attrition and competition precluding 

increase in billing rates, the challenge for the sector is to defend margins. Companies believe that growth in FY11 was 

not driven by pent up demand and, hence, was not a one-off, implying that growth could sustain in FY12. We believe 

consensus is factoring 22% revenue growth in FY12 for tier 1 IT companies and if FY11 growth is repeated in FY12, 

upgrades will lead to continued stock outperformance. Among large caps our top pick is Tata Consultancy Services 

(TCS) which is witnessing strong long-term demand momentum and also closing large multi-year deals. EBITDA 

margins have risen from 25.8% in FY09 to 30.0% in Q2FY11 due to impressive cost management. The company is 

guiding for continued cost efficiency improvement, which, combined with pricing uptick (likely in H2FY11), could 

expand margins further. Among mid caps, Hexaware remains our top pick. The company has focused on improving 

operational efficiencies and in that process has realigned itself vertically from the earlier horizontal sales-based 

approach. With this vertical alignment, the company will be able to focus on select areas of strength and create 

opportunities through better client mining. 


3

hEDGE 

Growth and inflation: A tight rope walk going ahead 

The world economy is now facing a perplexing situation. Developed economies are fighting to stay fit (anemic economic 

growth) but EMs are on the growth path even though rising prices threaten to derail this recovery. Overall, we believe 

recovery is underway and extension of tax benefits will boost it further. Accordingly, forecasts for US GDP growth in 

2011 have been revised higher by 50-70bps; ergo, the economy is now expected to grow ~3% in CY11E. 


4 

65 

58 

51 

44 

37 

30 

Jan-98 

Aug-98 

Mar-99 

Oct-99 

US ISM Manufacturing & Non-manufacturing Index 

May-00 

Dec-00 


Jul-01 

Feb-02 

Sep-02 

Apr-03 

Nov-03 

Jun-04 

Jan-05 

Aug-05 

Mar-06 

Oct-06 

May-07 

Dec-07 

Jul-08 

Feb-09 

Sep-09 

US ISM Non-Manufacturing Index 

US ISM Manufacturing Index 

India and China, the two major economies that pulled the global economy out of recession, are now battling 

inflationary concerns. China hard landing now appears to be one of the key concerns thwarting the world economy. 

Y-o-Y(%) 

16.0 

12.0 

8.0 

4.0 

0.0 

(4.0) 

Sep-05 

Dec-05 

Mar-06 

Jun-06 

Sep-06 


Dec-06 

Mar-07 

Home prices growth 

Jun-07 

Sep-07 

Dec-07 

Mar-08 

Jun-08 

Sep-08 

Dec-08 

Mar-09 

Jun-09 

Sep-09 

Dec-09 

Mar-10 

Jun-10 

Apr-10 

Sep-10 

China Shanghai Beijing 

To curb an asset bubble and rising prices, China has increased reserve requirements for banks from ~16% to ~18.5% 

in CY10. 

Nov-10 

Dec-10

hEDGE 

China’s policymakers have to play a fine balancing act in terms of managing multiple challenges of moderating 

economic growth, rising inflation, and a cooling of the property market. Any over-tightening by policymakers could lead 

to sharper-than-expected slowdown in the economy, while slower-than-required response could lead to inflation 

becoming generalised in the economy. Since China remains the major driver of the EM economic momentum, any 

unfavourable event in the country could hurt global business and market sentiments. 

Y-o-Y (%) 

25 

20 

15 

10 

5 

0 

-5 

Aug-06 

Nov-06 

Feb-07 

May-07 

Aug-07 


India: Valuations still pricey 

Nov-07 

Recipe for tigthening 

Feb-08 

May-08 

Aug-08 

Nov-08 

Feb-09 

May-09 

Aug-09 

Nov-09 

Feb-10 

May-10 

Aug-10 

China CPI 

China Non-food CPI, YoY 

China Food CPI, YoY 

Among EMs, India’s valuations appear pricey. The country commands a forward P/E premium of 1.46x, which is above 

its long-term average of 1.38x. On P/B as well, India is trading at a premium of 1.63x over MSCI EM, although it is a 

shade below its long-term average of 1.7x. Historically, also the country has enjoyed a premium in valuations over 

other EMs. 

While valuations are a concern, India’s earnings growth profile offers some comfort; it is estimated at ~22% for 

FY12/CY11 against ~16% expected for the EM universe. Although growth appears robust, macro headwinds may drag 

down the actual earnings growth rate for FY12 to 18-20%. 

Premium (MSCI India vs MSCI EM 

2.5 

2.2 

1.9 

1.6 

1.3 

1.0 

Jul-03 

Nov-03 

Mar-04 

Jul-04 

Nov-04 

Mar-05 

Jul-05 

Nov-05 

Mar-06 

Jul-06 

Fwd P/E Avg fwd P/E premium P/B Avg P/B premium 


Nov-06 

Mar-07 

Jul-07 

Nov-07 

Mar-08 

Jul-08 

Nov-08 

Mar-09 

Jul-09 

Nov-09 

Mar-10 

Jul-10 

Nov-10 

Nov-10 


5

hEDGE 

The year that was… 

The performance of Indian equity markets has been in line with global counter parts. Nifty and Sensex returned ~18% 

in CY10. It has been a rollercoaster ride for global equities, marred by concerns of debt default in European economies 

(PIGS), China hard landing, tussle on currency revaluation (US and China), inflation concerns in EMs and growth issues 

in developed markets. 

India (Cash+Fut ~USD 24 bn) and Taiwan (~USD 9.70 bn) have cornered major part of FII flows in EMs in CY10. 


6 

% 

FII flows in EMs: 

50.0 

40.0 

30.0 

20.0 

10.0 

- 

(10.0) 

(20.0) 

18 17 

Nifty 

Sensex 

11 

DJIA 

17 

NASDAQ 


Till Dec '10 (fig 

in USD Mn) 

Global equity indices -CY'10 

India Developed markets Other emerging markets 

13 

S&P 500 

India 

(Cash + Fut)* 

CY-00 1,383 

CY-01 2,728 

CY-02 739 

CY-03 6,415 

CY-04 7,437 

CY-05 9,527 

CY-06 4,489 

CY-07 5,586 

CY-08 (7,931) 

CY-09 13,773 

CY-10 24,008 

(3) 

CAC 40 

Note: *India FII flows is cash + futures 

9 

FTSE 100 

(4) 

Nikkei 225 

23 

Kospi 

5 

Hang Seng 

(14) 

Shanghai Comp 

Indonesia Taiwan Thailand Philippine 

99 

431 

864 

1,168 

2,125 

(1,733) 

1,945 

3,179 

1,721 

1,313 

2,332 

4,906 

9,146 

705 

16,014 

9,366 

22,153 

18,122 

2,066 

(14,847) 

14,313 

9,668 

10 

STI 

1 

Bovespa 

(857) 

(156) 

280 

(639) 

104 

2,949 

2,068 

1,548 

(4,752) 

1,017 

2,035 

10 

TAIEX 

19 

KLCI Index 

39 

SET 

(123) 

88 

(50) 

(80) 

278 

354 

720 

1,354 

(1,132) 

442 

1,238

Asset class performance; its silver all the way 

hEDGE 

Among asset classes, commodities had a good run compared to equities. Silver was the outperformer followed by 

copper and gold. As global recovery gains strength, the need for metals and energy will rebound the world over. Silver 

out performed gold post August 2010 by a stunning margin of ~53%. 

Base to 100 (31-Dec-09) 

200 

180 

160 

140 

120 

100 

80 

Index movers CY10: 

Dec-09 

Jan-10 

Feb-10 

Mar-10 


Equity* - MSCI Emerging Mkt 

Asset class performance CY 10 

Apr-10 

May-10 

Jun-10 

Jul-10 

Aug-10 

Sep-10 

Oct-10 

Nov-10 

Silver, 182 

Copper, 130 

Gold, 129 

Brent, 123 

Equity*, 118 

Equity* Copper Gold Silver Brent 

Banking has contributed the maximum points towards index movement in CY10. Buoyed by uptick in credit growth, 

improvement in margins and asset quality banks were hot cakes for a major part of CY10. IT comes in at the second 

position. Led by stalwarts like TCS, Infosys, HCL Technology and Wipro (triggers being revenue as well as margin 

improvement) the sector proved its detractors wrong in CY10 and highlighted that the sun never sets on the Indian IT 

industry. Auto and FMCG once again reiterated the India consumption story. 

5,200 

5,000 

4,800 

4,600 

4,400 

4,200 

4,000 

3,800 

3,600 

3,400 

4,329 

- 

CNX500 

(31-Dec-09) 

227 

Banking 


Index movers - CY '10 

136 

IT 

89 

Auto 

Dec-10 

78 68 14 

FMCG 

Pharma 

Indian 

Other 

4,941 

CNX500 

(31-Dec-10) 


7

hEDGE 

(Our technical analyst Tejas Shah) 

2010 was a tale of two halves. The first half 

was spent consolidating in a broad range and 

the second saw the market break out with a 

strong 18% rally. After the November carnage, 

confidence returned in December and 

stabilised the market. Commodities and IT 

were at the forefront of the market rally. 2010 

has provided the platform from where the 

index can extend the structural uptrend it 

continues to be in. Technical structure of the 

market still remains in a good and healthy 

uptrend which is likely to lead to the Nifty 

surpassing previous highs. The broader index 

view will remain bullishly skewed till the crucial 

support of 200 DMA (5600) remains inviolate. 

Sectors that could be leaders in the new year 

are resources, healthcare, oil & gas, IT and 

capital goods. Sectors with concerns are 

banking, realty and auto. 

December recovery saw the market retrace nearly 61.8% of the November fall and with that the daily oscillators have 

moved comfortably in the buy mode. Weekly oscillators, however, are trading sideways indicative of a broad trading 

range still for the index. Additionally, on a break above 6069, the Nifty has confirmed the ‘double bottom’ reversal at 

5700 that has a target of 6300 (conservative) and 6450 (aggressive). On the larger perspective, the Nifty is riding the 

current bull trend in an ascending trend channel from July 2009. Key feature of the bull market is the classical higher 

peaks and troughs on the Nifty. 


8 

Technical View

Global context 

Indian benchmarks bounce back into green; Kospi leads from the front 

hEDGE 

� Fresh interest rate increase by China combined with a speech by Premier Wen Jiabao has confirmed what was 

known already—China remains in a tightening cycle. The benchmark one-year lending rate and one-year deposit 

rate were both raised by 25bp to 5.81% and 2.75%, respectively. 

� The FTSE 100 finally came back strongly, posting resounding gains of ~6.7% during the month. It was among the 

biggest laggard last month among the developed markets losing around ~2.6%. 

� Mixed data flow came in from US markets, reflecting both positive and negative sentiments. Initial jobless claim 

numbers decreased from ~420k to ~388k in the last week of December. Consumer confidence came in at 52.5 

against 54.1, a weak recovery signal. 

� After a negative November, Indian benchmark indices took flight in December. Among tepid volumes and little 

activity, directionless markets consolidated and then moved up. 

� Emerging markets were strong with the Taiex leading from the front with ~7.2% gain. 

� Among EM benchmarks, the Shanghai Comp was the only underperforming index, down ~0.4%. 

� Among developed markets, the Hang Seng was the lowest gainer (returns of ~0.1% in December). On the other 

hand, biggest gainers were Kospi and FTSE 100, gaining ~7.7% and 6.7%, respectively. 

9% 

8% 

7% 

6% 

5% 

4% 

3% 

2% 

1% 

0% 

-1% 

5.1% 5.2% 

4.6% 

Global equity indices -Dec '10 

6.2% 6.5% 

India Developed markets 

7.7% 

Other emerging markets 

7.2% 

6.7% 

Nifty 

Sensex 

DJIA 


NASDAQ 

S&P 500 

5.4% 

CAC 40 

FTSE 100 

2.9% 

Nikkei 225 

Kospi 

0.1% 

Hang Seng 

-0.4% 

Shanghai Comp 

1.4% 

STI 

2.4% 

Bovespa 

TAIEX 

2.7% 

2.3% 

KLCI Index 

SET 


9

Fund flows 

hEDGE 

FII flows continue in EMs 

� FIIs remained net buyers in India for the 

seventh month in a row. Taiwan, among EMs, 

witnessed maximum FII inflows of ~USD 2.9 bn. 

� In India, FIIs were net buyers of ~USD 1.66 bn 

(cash + futures). In the cash segment, FIIs 

bought ~USD 0.33 bn, while in futures they 

were net buyers of ~USD 1.33 bn in December. 

In CY10, FIIs have been net buyers (cash + 

futures) of ~USD 24 bn. 

Domestic funds net buyers 

� Contrary to earlier months, domestic mutual 

funds were net buyers in December. 

� They were net buyers of ~USD 303.9 mn of 

Indian equities. In CY10, till date, domestic 

mutual funds have sold ~USD 6 bn of equities. 

Metals and IT among top performers; banking lacklustre 

� Metals (up ~12.6%) and IT (up ~12%) were 

leaders in December. 

� Banks (down 1.8%) and consumer durables 14% 

(down ~1.2%) led the laggards. 

12% 


10 

(in USD mn) 

4,000 

3,000 

2,000 

1,000 

- 

(1,000) 

1,663 

India 

Note: India figs include Equity + Futures 

(in USD mn) 

500 

450 

400 

350 

300 

250 

200 

150 

100 

50 

0 

-50 

1-Dec 

3-Dec 

Foreign institutional investor (FII) inflows -Dec '10 

5-Dec 

292 

Indonesia 

2,910 

Taiwan 

260 

Thailand 

Cumulative domestic funds' inflow - Dec '10 

7-Dec 

9-Dec 

11-Dec 

Source: Securities Exchange Board of India (SEBI) 

Returns 

10% 

8% 

6% 

4% 

2% 

0% 

-2% 

-4% 

Broader 

Indices 

0.5% 

BSE Mid Cap 

3.3% 

CNX 500 


12.6% 12.0% 

Metal 

IT 

13-Dec 

15-Dec 

17-Dec 

Sector Returns for Dec '10 

Out-performing sectors 

8.6% 

Teck 

5.4% 

Oil & Gas 

19-Dec 

(33) 

Philippine 

Source:Edelweiss research 

21-Dec 

23-Dec 

2.8% 

2.4% 2.3% 

1.8% 

1.3% 

. 

FMCG 

Capital 

Goods 

Healthcare 

PSU 

Auto 

25-Dec 

27-Dec 

Under-performing 

sectors 

-1.2% -1.8% 

Consumer 

Dur 

Bank 

Sector Returns 

29-Dec 

31-Dec

Macro-environment 

Inflation cooling down Crude oil at ~USD 91.5 per barrel 

(in %) 

12% 

10% 

8% 

6% 

4% 

2% 

0% 

-2% 

(in USD bn) 

300 

290 

280 

270 

260 

250 

6.00 

5.00 

4.00 

3.00 

2.00 

1.00 

0.00 

May-08 

Oct-09 

Nov-04 

Feb-05 

Nov-09 

Aug-08 

May-05 

Dec-09 

Aug-05 

Nov-08 

Nov-05 

Jan-10 

Feb-06 

Feb-10 

May-06 

Feb-09 

Aug-06 

Mar-10 

Nov-06 

May-09 

WPI Inflation 

Apr-10 

Aug-09 

Nov-09 

Forex Reserves 

May-10 

Jun-10 

US Fed Fund Rate 

Feb-07 

May-07 

Aug-07 

Nov-07 

Jul-10 

Feb-08 

May-08 

Feb-10 

Aug-10 

Aug-08 

Sep-10 

Nov-08 

May-10 

Feb-09 

Oct-10 

May-09 

Aug-10 

Nov-10 

Aug-09 

Nov-09 

Dec-10 

Nov-10 

Feb-10 

(in %) 

(in USD/bbl) 

95 

90 

85 

80 

75 

70 

65 

60 

44.00 

44.50 

45.00 

45.50 

46.00 

46.50 

47.00 

47.50 

48.00 

7.50 

7.00 

6.50 

6.00 

5.50 

5.00 

4.50 

4.00 

3.50 

3.00 

13-Apr 

Mar-10 

Apr-10 

Apr-10 

13-May 

Apr-10 

May-10 

May-10 

12-Jun 

May-10 

Jun-10 

Jun-10 

Jun-10 

12-Jul 

NYMEX Crude Futures 

Forex reserves at USD 295.1 bn Rupee ends December at ~44.7 

Fed target rate remains at 0.25% 

Jul-10 

11-Aug 

Aug-10 

10-Sep 

Sep-10 

10-Oct 

USD / INR Exchange Rate 

Indian short-term yields at ~7.19% 

91- day T-Bill Yield in India 

Sensex gained ~5.06 % M-o-M Some recovery in commodities during the month 

22,000 

21,000 

20,000 

19,000 

18,000 

17,000 

16,000 

15,000 

14,000 

13,000 

12,000 

Aug-09 

Oct-09 

Dec-09 

Feb-10 

BSE Sensex 

Apr-10 

Jun-10 

Aug-10 

Oct-10 

Dec-10 

Commodities Price 

Steel USD/ton 515 

Tin USD/ton 26,900 

Zinc USD/ton 2,454 

Copper USD/ton 9,600 

Aluminium USD/ton 2,255 

Nickel USD/ton 24,750 

Lead USD/ton 2,550 

Gold USD/T.Oz. 1,417 

Silver USD/T.Oz. 30.85 

Jul-10 

Jul-10 

Aug-10 

Aug-10 

Aug-10 

Sep-10 

Sep-10 

Oct-10 

Oct-10 

Oct-10 

9-Nov 

Nov-10 

Nov-10 

Nov-10 

9-Dec 

Dec-10 

hEDGE 

Dec-10 

Dec-10 

1Mth % 3Mth 1 Year 

Chg 

- 

% Chg 

(3.74) 

% Chg 

1.98 

5.28 8.03 58.70 

10.57 10.09 (4.14) 

10.03 18.52 30.17 

1.35 1.12 15.35 

5.32 3.80 33.60 

8.97 11.11 4.85 

0.18 7.70 26.34 

4.92 40.54 75.54 


11

S 000 

India Fixed Income Research Daily 

BOND VECTOR 

LAF borrowing drops significantly; short term rates ease on improved liquidity 

Government securities 

� RBI bought back securities worth INR 100bn against a planned buyback of INR 

120bn. It repurchased INR 88bn of the 7.17% 2015 bond and INR 10bn of the 

7.99% 2017 bond while the response in the 2019 and 2021 gilts remained muted. 

Yields remained range bond today with some value buying emerging in the 7.80% 

2020 bond which closed 1 basis lower at 8.06%. 

Non-SLR market 

� Short term rates tumbled 20-35bps across maturity due the improved liquidity in 

the banking system. Banks mopped up INR 50bn through the CD market. State 

Bank of India placed INR 9bn of June maturity CD at 9.05% while State Bank of 

Travancore placed INR 1bn of April maturity CD at 8.70%. Punjab National Bank 

placed one year amounting to INR 5bn at 9.40% and INR 9.25bn of April maturity 

CD at between 8.75% -8.80%. Bank of India placed one year CD at 9.43% for a 

quantum of INR 8.70bn. National Housing Bank placed end March maturity CP of 

INR 5bn at 7.90% while HPCL placed INR 3bn of Feb maturity CD at 7.39%. 

Money markets 

� Improved liquidity outlook lead to a sharp decline in the overnight rates. Since 

November, the central bank has injected INR 500bn through a series of buyback, 

in order to ease the liquidity. LAF borrowing dropped to INR 621bn compared to 

over INR 1trn in the previous fortnight. Swap rates moved in tandem with the LAF 

borrowing pattern since the past two days. The one year swap closed 10 bps lower 

at 7.01% while the five year swap closed 4bps lower at 7.71%. 

� Call rates eased 20bps to 6.37% while the CBLO rates closed below the central 

bank lending rate at 6.20%. Volumes at the CBLO window continued to be robust 

at INR 723bn compared to INR 687bn on Tuesday. Although the central bank is 

scheduled to conduct another OMO of INR 120bn in the next week, the system 

liquidity will continue to remain in the negative mode(1% of NDTL), consistent 

with its monetary stance to tackle the soaring inflation. 

Yield Curve – India & US 

Yield Curve – Domestic Markets 


Edelweiss Fixed Income Research 

+91-22-6623 3405 

Edelweiss Fixed Income research is also available on Bloomberg EDEL , Thomson First Call, Reuters and Fact set Edelweiss Securities Limited 

1 

s sv


2

PLEDGED SHARES 

Reporting 

Date 

Company Name 

Name of the 

Entity 

5-Jan-11 Marg G Ramakrishna 

Reddy 

Pledged 

Quantity 

Pledged % 

of the total 

captial 

3,198,093 9.69% 

5-Jan-11 JSW Energy JSW Investments 105,979,415 6.46% 

5-Jan-11 Onward Technologies Onward Computer 

Technologies 

5-Jan-11 Shree Ashtavinayak 

Cine Vision 

5-Jan-11 Shree Ashtavinayak 

Cine Vision 

5-Jan-11 Crew B.O.S. 

Products 

172,840 1.30% 

Dahila Traders 108,000,000 13.10% 

Dhilin H Mehta 49,055,000 5.95% 

Fable Concepts & 

Technology . 

Revoked 0.00% 

5-Jan-11 Sadbhav Engineering Sadbhav Finstock 3,620,000 2.76% 

5-Jan-11 Resurgere Mines & 

Minerals India 

Eminent Steel 25,000,000 1.26% 


4

INSIDER TRADES & BULK DEALS 

Insider Trades 

Company Name Acquirer/Seller B/S Qty Traded 

Zee Learn Reliance Long Term 

Equity Fund 

Buy 5475000 

P.M. Strips Limited Suresh Venkatachari Buy 3561645 preferential 

allotment 

EMCO Rajesh S Jain Buy 3210000 preferential 

allotment 

Akanksha Finvest Omkam Global Capital Buy 3100000 allotment 

Shree Ashtavinayak 

Cine Vision 

UTV Software 

Communications 

Dahila Traders Buy 1600000 

Unilazer Exports & 

Management 

Consultants 

Buy 445000 inter se 

transfer 

HBL Power Systems A Kavita Prasad Buy 414300 

LIC Housing Finance FMR LLC & PACs Buy 383881 

HBL Power Systems M S S Srinath Buy 290700 

P.M. Strips Limited M V Bhaskar Buy 37077 preferential 

allotment 

RPP INFRA PROJECTS A Nithya Buy 30000 

Oriental Hotels D Varada Reddy Buy 29642 

SVC Superchem Sunidhi Securities & 

Finance 

Resurgere Mines & 

Minerals India 

UTV Software 

Communications 

Marvel Capital & Finance 

(India) 

Eminent Steel Private 

Limited 

Sell 4300000 

Sell 3750000 

Rohinton Screwvala Sell 445000 inter se 

transfer 

Rahi Fintrade & 

Investment 

Sell 300000 

Banswara Syntex Mefcom Capital Markets Sell 67280 

BMB Music & Magnetics 

Limited 

Maharaja Shree Umaid 

Mills 

K C Bokadia Sell 50000 off market 

Sheetal Bangur Sell 50000 

ITC K Vaidyanath Sell 50000 

Andhra Cements ISG Traders Sell 38050 

Maharaja Shree Umaid 

Mills 

Lakshmi Niwas Bangur Sell 35000 

Cipla Geeta Lulla Sell 25,000 

5 


5

Bulk Deals 

Date Company Name Acquirer/Seller B/S Qty Traded Price 

5-Jan-11 Alchemist Realty Singh Singh Archana Sell 760,000 13.0 

5-Jan-11 Alchemist Realty Varinder Pal Singh Buy 760,000 13.0 

5-Jan-11 Bajaj Auto Finance Reliance Capital 

Trustee Co. -A/C 

Reliance Regular 

Saving 

Buy 195,500 697.5 

5-Jan-11 BAMPSL Securities Prakash Chand Gupta Buy 614,007 2.6 

5-Jan-11 Bellary Steels & 

Alloys 

Jmp Securities Sell 1,772,033 3.7 

5-Jan-11 Century Extrusions Dinesh Hirji Kenia Sell 275,000 4.7 

5-Jan-11 Century Extrusions Sarla Dinesh Kenia Buy 275,000 4.7 

5-Jan-11 Chhattisgarh 

Industries 

5-Jan-11 Chhattisgarh 

Industries 

Prism Impex Buy 200,000 7.5 

Tripurari Properties Sell 187,444 7.5 

5-Jan-11 DMC Education R B K Securities Sell 152,838 15.3 

5-Jan-11 IFL Promoters Wealth Managers Buy 139,000 8.6 

5-Jan-11 Incap Financial 

Services 


Services 


Services 


Services 

Abhay Dattatray 

Javlekar 

Chandra Shekhar 

Sunil Bhatt 

5-Jan-11 Kaleidoscope Films Clarus Finance & 

Securities 

5-Jan-11 Kohinoor 

Broadcasting 

Corporation 

Sell 142,049 24.8 

Sell 71,544 24.5 

Elizabeth Lobo Buy 100,000 25.0 

Yatin Vasantrai Parekh Sell 58,000 24.7 

Indravarun Trade 

Impex 

Sell 277,294 21.6 

Sell 563,007 2.8 

5-Jan-11 Lanco Infratech Norges Bank On 

Account Of 

Government 

Petroleum Fund 

Buy 14,000,000 64.0 

5-Jan-11 Marvel Web 

Solutions 

Girish Kumar Ganwani Sell 37,000 31.5 

5-Jan-11 NCL Research and 

Financial Services 

5-Jan-11 Parichay 

Investments 


Investments 


Investments 


Investments 


Investments 

5-Jan-11 Punjab National 

Bank 

Chello Commotrade Buy 31,000 40.3 

Amul Gagabhai Desai Buy 11,350 126.6 

Desai Mahesh Sell 8,900 127.0 

Dhirenkumar 

Dharamdas Agarwal 

Buy 10,200 126.7 

Krunal Gopaldas Rana Buy 10,150 126.7 

Pradeep Narendra 

Bhatt 

Buy 20,000 127.0 

Cinnamon Capital Sell 3,121,156 1,330.0 


6

Date Company Name Acquirer/Seller B/S Qty Traded Price 

5-Jan-11 Punjab National 

Bank 

5-Jan-11 Ravikumar 

Distilleries 


Distilleries 


Distilleries 


Distilleries 


Distilleries 


Distilleries 


Distilleries 


Distilleries 


Distilleries 


Distilleries 


Distilleries 


Distilleries 

Lam Llc A/C Cimco Inc Buy 3,410,501 1,329.9 

Bhanumati Dharamraj 

Giri 

Buy 403,336 53.5 

Gokul Securities Buy 200,000 53.5 

Govindarajan 

Natarajan Pandian 

Buy 57,372 54.1 

Kanha Marketing Sell 117,000 53.2 

Kedia Consultants Sell 150,000 53.0 

Mangalmayee Hirise Sell 150,000 53.0 

Panther Finvest Buy 105,000 59.4 

Prefer Absan Sell 800,002 53.2 

Rajanbabu 

Venkatamallu Gaddam 

Shri Siddheshwar 

Sweet 

Sell 128,000 53.2 

Sell 235,000 53.2 

Suvidha Securities Buy 500,000 53.5 

Udaykumar Prabhudas 

Shah 

Sell 252,848 53.0 

5-Jan-11 Religare Enterprises Rhc Finance Buy 2,691,453 456.0 

5-Jan-11 Sacheta Metals Madhukant Sheth Ketu Sell 48,000 37.4 

5-Jan-11 Sanraa Media Jmp Securities Sell 7,236,701 0.2 

5-Jan-11 Shasun 

Pharmaceuticals 

5-Jan-11 Shree Nath 

Commercial & 

Finance 

5-Jan-11 Shree Nath 

Commercial & 

Finance 

Chander Kanta Sell 35,796 77.2 

Kumar Choudhary 

Bimal 

Sell 31,000 71.8 

Pratham Investments Buy 70,000 72.0 

5-Jan-11 Vivimed Labs Niraj Rajnikant Shah Buy 58,144 315.6 

7 


7

TECHNICAL UPDATES 

Following the previous day’s selling activity, Nifty cracked sharply in yesterday’s 

session with a loss of 1%. The selling activity was consistent throughout the day as 

the key hourly moving averages were breached on good volume activity. Nifty has 

closed below the 6100 mark, shaking out the bullish traders. The index has reacted 

down from the upper trend line of the ascending trend channel (light grey / refer 

chart) and is most likely to test the short-term moving averages. Daily oscillators 

are showing mixed signals. Hourly oscillators had triggered a sell signal and are now 

approaching the oversold territory. Market breadth drooped sharply in favor of 

declining stocks. Nifty 50 stocks A/D ratio was weak at 1:3. The reaction from the 

6160-6180 resistance cluster was much expected, but the magnitude of the decline 

has been surprising. Taking a lead from the oscillator behavior the decline looks like 

a corrective move of the rally from 5721 to 6181, with key trading supports at 6045- 

6020. The ‘double bottom’ reversal would remain valid as long as 6015 remains 

inviolate on a daily closing basis. 

Once again the interest rate sensitive’s Banking, Realty and Autos shed the chunk of 

weight. Cap Goods and Metals shares too joined the bear feast. IT and FMCG 

continued to show resilience in a shaky market indicating underline strength. Bullish 

Setups: HCLT, DIVI, JSP, HNDL, ITC, TPWR, GAIL Bearish Setups: KMBH, ONGC, 

BJAUT, HH, BPCL 

India VIX has moved above the 10-DEMA at 18, and on a close above 18.35 would 

confirm a pick up in vols. Commodities have entered a difficult phase for traders with 

extreme intraday moves. Gold continues to trade above $1353, holding on to the 

uptrend, despite a triple top pattern at $1425. European and US indices have 

improved on the early loss displaying resilience in the uptrend. 

Interesting chart setups: HCLT, DIVI, ITC, BJAUT 

Nifty Index 

Bloomberg Code NIFTY Index 

Spot Price 6,080 

Resistance 1 6,115 

Resistance 2 6,150 

Support 1 6,035 

Support 2 5,995 

Nifty 20 SDMA 5,990 



Adv : Dec [NSE] 319 : 1113 

Turnover ` Crs. 17163 

BSE+NSE cash 

Indicator Outlook Points* 

Candlestick Positive 1 

Stochastic Positive 1 

Moving Avg Negative (1) 

RSI Neutral 0 

ADX Neutral 0 

MACD Neutral 0 

Aggregate Positive 1 


8

EYE CATCHERS 

Futures Snapshot 

Top OI Rises Top OI Falls 

Scrip 

Allahabad Bank 18 

Opto Circuits (I) Ltd. 17 

Yes Bank 16 

Canara Bank 16 

REC 15 

Oriental Bank 14 

Mini NIFTY 14 

Chambal Fertilizers 13 

% OI 

Chg OI 

1,156 

1,502 

5,371 

1,518 

7,261 

1,619 

918 

15,864 

% 

Price 

Chg 

(4.1) 

(3.2) 

(4.9) 

(4.5) 

(3.2) 

(4.1) 

(0.1) 

(3.7) 

% 

Future 

Vol Chg 

24 

4 

104 

112 

39 

20 

2 

38 

Scrip 

Jain Irrigation System (29) 

Jindal Saw Ltd (11) 

Ranbaxy (7) 

CESC Ltd (7) 

Welspun Guj (6) 

Bank of Baroda (6) 

Asian Paints Limited (6) 

Voltas (6) 

% OI 

Chg OI 

738 

3,125 

2,398 

993 

10,335 

944 

87 

1,441 

% Price 

Chg 

2.8 

7.2 

(0.9) 

0.3 

(0.0) 

(0.3) 

1.6 

(1.0) 

% 

Future 

Vol Chg 

9 

47 

173 

(44) 

(46) 

(16) 

17 

40 

(24) 


9

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First Call January 6, 2011-EDEL - The Smart Investor

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