Market Outlook

November 5, 2012

Dealers Diary
Indian markets are expected to open flat to negative following negative opening trades in the SGX Nifty and most of the Asian indices. Asian Stocks fell amid concerns that Greece will struggle to secure a bailout. U.S markets moved sharply lower over the course of the trading day on Friday, as traders shrugged off a better than expected jobs report amid lingering concerns about the global economic outlook. The pullback in stocks came despite the release of a report from the Labor department showing that the U.S. economy added more jobs than anticipated in the month of October. Most of the European bourses ended the trading session on Friday in the green, following the better than expected U.S. jobs report for October. Meanwhile, Indian markets rose notably higher on Friday, as investor sentiments was boosted by positive global cues following the release of a slew of positive economic reports from China and the U.S. as well as better-than-expected 2QFY2013 results from IT major Wipro. US presidential elections, which are to take place on November 6, will be on the radar of investors worldwide.

Domestic Indices

Chg (%)

(Pts)

(Close)

BSE Sensex Nifty MID CAP SMALL CAP BSE HC BSE PSU BANKEX AUTO METAL OIL & GAS BSE IT
Global Indices

1.0 0.9 0.4 0.3 0.4 1.5 1.3 1.5 0.8 0.4 1.2
Chg (%)

193.8 18,755 52.7 23.7 22.9 27.4 108.1 5,698 6,645 7,064 7,715 7,232

168.9 13,163 157.0 10,691 83.3 10,315 36.6 66.1

(Pts)

8,368 5,799
(Close)

Dow Jones NASDAQ FTSE Nikkei Hang Seng Straits Times Shanghai Com
Indian ADRs

(1.1) (139.5) 13,093 (1.3) 0.1 1.2 1.3 0.5 0.6

Chg (%)

(37.9) 6.6 104.4 14.1 12.7

(Pts)

2,982 5,869 9,051 3,041 2,117

(Close)

Markets Today
The trend deciding level for the day is 18,746 / 5,697 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 18,803 18,852 / 5,712 5,726 levels. However, if NIFTY trades below 18,746 / 5,697 levels for the first half-an-hour of trade then it may correct up to 18,698 18,640 / 5,683 5,668 levels.
Indices SENSEX NIFTY S2 18,640 5,668 S1 18,698 5,683 PIVOT 18,746 5,697 R1 18,803 5,712 R2 18,852 5,726

289.5 22,111

INFY WIT IBN HDB

Advances / Declines

(0.3) (1.2) 0.4 (0.4)

(0.1) (0.1) 0.2 (0.1)

BSE

$43.8 $8.5 $40.3 $37.5

NSE

News Analysis
Auto sales numbers October 2012 Cement Dispatches October 2012 Odisha miners face penalty for illegal mining CBI searches IRB offices, questions executives 2QFY2013 Result Review: Wipro, GCPL, Marico, Union Bank, Crompton Greaves, Apollo Tyres, Dishman, Indico Remedies 2QFY2013 Result Preview: Cipla, Tech Mahindra, Allahabad Bank, Corporation Bank, Madras Cement, India Cement, Vijaya Bank
Refer detailed news analysis on the following page

Advances Declines Unchanged

Volumes (` cr)

1,541 1,320 139

886 623 74

Net Inflows (November 01, 2012)

` cr FII MFs Purch 2,137 410 Sales 1,720 346 Net 416 64 MTD 1,669 (738) YTD 56,200 (10,890)

BSE NSE

2,193 10,289

FII Derivatives (November 02, 2012)

` cr Index Futures Stock Futures Purch 1,617 1,178 Sales 914 925 Net 702 253 Open Interest 10,230 28,580

Gainers / Losers
Gainers Company
Union Bank MMTC Hindustan Copp Oriental Bank Canara Bank

Losers Company
Marico Indiabulls Fin ABB Apollo Tyres Bharat Elect

Price (`)
223 764 269 328 427

chg (%)
8.1 6.7 5.8 4.6 4.5

Price (`)
204 240 719 86 1,202

chg (%)
(4.5) (3.0) (2.6) (2.4) (2.3)

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Market Outlook
November 5, 2012

Auto sales numbers October 2012 Ashok Leyland (AL)

Ashok Leyland (AL) reported mixed numbers as commercial vehicle (CV) sales ex-Dost registered a steep decline of 12.5% yoy (34.6% mom) led by continued weakness in the medium and heavy commercial vehicle (MHCV) segment. However, Dost sales continue to witness strong traction and registered highest ever sales of 3,033 units (flat mom). As a result, total volumes grew by 27.9% yoy (down 24.7% mom) to 7,997 units. While, the outlook for MHCV sales going ahead remains subdued due to slowdown in industrial activity, we expect the sales momentum in Dost to continue with it getting introduced across India (currently available in seven states). At `24, the company is trading at an attractive valuation of 8.8x FY2014E earnings. We maintain our Buy rating on the stock with a target price of `30.

Bajaj Auto (BJAUT)

BJAUT reported an in-line volume growth of 4.1% yoy (14.3% mom) to 411,502 units led by strong growth in three-wheeler sales which increased 13.9% yoy (12.2% mom). The motorcycle sales however, grew by a modest 2.9% yoy to 361,186 units. On a sequential basis though, volumes improved 14.5% driven by festival demand and new launches, Pulsar 200NS and Discover 125ST. Of the total motorcycle volumes, Discover and Pulsar accounted for ~66% of the volumes during the month. Export volumes registered a decline of 4.4% yoy (5.4% mom) as Sri Lanka volumes recover gradually. The management indicated that November volumes will benefit from the festival demand and also sees a strong growth in December led by wedding season in the North. BJAUT is planning to launch a new 100cc motorcycle in January 2013. At `1,899, BJAUT is trading at 15.5x FY2014E earnings. We maintain our Neutral view on the stock.

October 2012 - Cement dispatches

October 2012 cement dispatches reported by some of the cement manufacturers indicate pick-up in demand. ACC posted a 3.6% yoy growth in its dispatches to 2.04mn tonnes. Dalmia Cements posted a strong 17% yoy growth in dispatches. OCL too posted a 8% yoy growth in dispatches. Cement prices too went up in most of the places in the country during October. We maintain a neutral view on ACC.

Odisha miners face penalty for illegal mining

Media reports suggest that the Odisha government has ordered leading steel and iron ore companies to pay approximately `50,000cr for alleged illegal and excess mining. Approximately 40 notices from the mining department of the state's Joda district have been issued to both captive and non-captive miners. The companies include Tata Steel, Essel Mining, Sarada Mines (which has a long-term arrangement with Jindal Steel & Power), Mideast (Mesco Steel) as well as firms belonging to KJS Ahluwalia, MC Rungta and the state's own Orissa Mining Corporation. Media reports also suggest that Tata Steel, (which is setting up a greenfield plant at Kalinganagar), has been asked to pay close to `9,000cr. We await further clarity on the matter. Until then, we maintain our Buy rating on Tata Steel with a target price of `481.

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Market Outlook
November 5, 2012

CBI searches IRB offices, questions executives

As per media report, the Central Bureau of Investigation (CBI) has conducted searches at offices belonging to IRB Infrastructure Ltd and its subsidiaries in Pune on Friday. As per the report, it had questioned few company executives in connection with the murder of right to information activist (RTI) activist Satish Shetty. We await further clarity on this matter and maintain Buy rating on the stock with a target price of `164.

Result Review
Wipro (CMP: `365 / TP: `421 / Upside: 15%)
For 2QFY2013, Wipros IT services revenue came largely in-line with expectations at US$1,541mn, up 1.7% qoq, primarily led by 1.4% and 1.1% qoq onsite and offshore pricing increase, respectively, in constant currency (CC) terms. Volume growth was again tepid at 0.2% qoq in global IT services. In INR terms, revenue of the IT services segment came in at `8,373cr, up 0.7% qoq. Revenue from the consumer care and lighting segment grew strongly by 25.9% yoy, while the IT products segment reported 10.2% yoy decline in revenues. On a consolidated level, Wipros revenue came in at `10,657cr, almost flat qoq. Wipros EBITDA and EBIT margins declined slightly by 5bp and 13bp qoq to 20.1% and 17.4%, respectively. Despite having wage hike impact during the quarter, the EBIT margin of IT services business came in at 20.7% (down 31bp qoq) vs our estimate of 19.3% which was a positive surprise. PAT came in at `1,617cr, up 2.3% qoq, aided by `270cr finance income. The company added one client in US$100mn+ revenue bracket. For 3QFY2013, management has given USD revenue guidance of US$1,560mn-1,590mn, which translates into qoq growth of 1.1-3.1%, (lower than our expectation of 1.5-3.5%) because of continued weakness in IT spend from investment banks, India region and seasonally weak 3Q. Wipro has chosen its growth strategy to revolve around focusing on selected few segments in terms of industry verticals and services. We expect Wipro's transition to take longer than anticipated earlier and the uncertain macro environment will further push the timeline. We expect USD and INR revenue CAGR for IT services to be at 8.9% and 13.3%, respectively over FY2012-14E. On a consolidated level, we expect Wipros revenue to post a CAGR of 12.8% over FY2012-14E. Wipro has been performing well on the operating margin front since past four quarters by rationalizing costs. At the operating front, Wipro has tailwinds of improving utilization level and headwinds of moderate volume growth. We expect a 12.8% and 11.1% CAGR in EBITDA and PAT over FY2012-14E. The stock is currently trading at 14.0x FY2013E and 13.0x FY2014E EPS. We value the stock at 15x FY2014E EPS of `28.1, which gives us a target price of `421. We maintain Buy rating on the stock.
Y/E March FY2013E FY2014E Sales OPM (` cr) 43,219 47,241 PAT EPS ROE (`) (%) P/E P/BV (x) (x) 2.7 2.3 EV/EBITDA (x) 8.7 7.4 EV/Sales (x) 1.7 1.5

(%) (` cr) 20.0 6,420 20.0 6,882

26.1 19.3 14.0 28.1 17.9 13.0

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Market Outlook
November 5, 2012

Godrej Consumer Products (CMP: `724/ TP: /Upside :)

Godrej Consumer Products (GCPL) posted a healthy 34.5% yoy growth in its consolidated topline with the organic business net sales growth coming strongly at 24%. Indian subcontinent net sales grew at 19%, while international business organic net sales grew by 32%. While the Indonesian subsidiary Megasari posted a sales growth of 37% yoy to `316cr. African Business (comprising of acquired companies Rapidol, Kinky, Tura and Darling group) posted sales of `163cr. GCPLs OPM stood at 14.8%. Bottomline rose by 24.8% yoy to `159cr. We maintain a neutral view on the stock.
Y/E March FY2013E FY2014E Sales (` cr) 6,097 7,233 OPM (%) 18.4 18.6 PAT (` cr) EPS (`) ROE (%) 25.5 25.4 P/E (x) 33.1 27.4 P/BV (x) 7.3 6.1 EV/EBITDA (x) 23.0 18.9 EV/Sales (x) 4.2 3.5

744 21.9 900 26.5

Marico (CMP: `204/TP:/Upside:-)

Marico posted a 18.6% yoy growth in its topline to `1,155cr, which was slightly below our estimates. Overall volume growth stood at 14%, with the organic volume growth (adjusted for sales of Paras personal care business, which was acquired by Marico) coming at 9% yoy. The Indian consumer products business posted a growth of 19% yoy, with volume growth coming at 17%. International business posted a growth of 16% yoy. OPM stood at 12.8% and was below our estimates of 13.5% yoy. While gross margin rose by 650bp yoy due to drop in copra prices, advertising expenses too rose by 402bp yoy resulting in the OPM expansion getting restricted to 80bp yoy. Bottom-line rose by 9.7% yoy to `86cr. We maintain a neutral view on the stock.
Y/E March FY2013E FY2014E Sales (` cr) 4,840 5,643 OPM (%) 13.1 13.1 PAT (` cr) 417 520 EPS (`) 6.8 8.5 ROE (%) 31.4 29.7 P/E (x) 31.5 25.3 P/BV (x) 8.7 6.6 EV/EBITDA (x) 21.6 18.2 EV/Sales (x) 2.8 2.4

Union Bank- (CMP: `223/ TP: `235/ Upside: 5.3%)

During 2QFY2013, Union Bank reported moderate operating profit growth of 5.6% yoy, which was in-line with our estimates. However, bottom-line grew by strong 57.3% yoy, which was due to 21.8% yoy decline in provisioning expenses (on account of lower slippages/restructuring and higher recoveries/upgrades). NIMs stable sequentially; NPA levels decline on lower Slippages and higher recoveries/upgrades: During 2QFY2013, the banks advance book contracted sequentially by 0.6%, while growth in deposits was subdued at 1.3% qoq. Reduction in lending rates and waiver of processing charges across various home and car loans products, aided its retail loan book to grow at relatively higher pace of 3.8% qoq. CASA deposits remained flat sequentially. Consequently, reported CASA ratio declined by 45bp qoq to 30.5%. Reported NIMs remained stable qoq at 3.02%, as 16bp sequential fall in cost of funds was offset by similar decline in yield on funds. Non-interest income (excl. treasury) grew by 17.5% yoy, largely

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Market Outlook
November 5, 2012

aided by robust performance on the fee income front. During 2QFY2013,

slippages came in at `792cr (annualized slippage rate of 1.8%) compared to `1,631cr in 1QFY2013 (annualized slippage rate of 3.7%). Incremental slippages were largely granular in nature except for 2 accounts worth `100cr or more. Going forward, the management expects to maintain the quarterly slippage run-rate at levels witnessed in 2QFY2013. Recoveries/upgrades came in higher at `627cr (lumpy to the extent of contribution of ~`200cr from four accounts), compared to `461cr in 1QFY2013. On an absolute basis, Gross and Net NPA levels declined sequentially by 2.6% and 5.0%, respectively. The bank restructured advances worth `849cr during 2QFY2013 (compared to `1,641 in 1QFY2013). The management expects additional provisioning of `70cr, on account of RBIs 75bp increase in provisioning requirement for standard restructured advances. The management has guided for fresh restructuring of around `3,000cr in the next two quarters.
In the last few days the stock has surged significantly and at CMP, it trades at 0.8x FY2014 ABV. We recommend an Accumulate rating on the stock with a target price of `235.
Y/E March FY2013E FY2014E Op. Inc (` cr) 9,912 11,536 NIM (%) 2.8 2.9 PAT (` cr) 2,237 2,580 EPS (`) ABV (%) ROA (x) 0.8 0.8 ROE (x) 16.1 16.4 P/E (x) 5.5 4.8 P/ABV (x) 0.9 0.8

40.4 246.0 46.7 285.2

Crompton Greaves (CMP: `123/TP: Under review)

For 2QFY2013, Crompton Greaves modest top-line performance was in line with our expectations growing at 8.1% yoy to `2,924cr. The company has an order book of `9400cr. However, on the EBITDA front, the company disappointed with 368bp yoy contraction in its margin to 4.7%. The sharp contraction in margins was due to loss of `80cr on account of restructuring at its Belgium plant. Consequently, the companys PAT fell by 64% yoy to `42cr. We maintain Buy rating on the stock with target price under review
Y/E March FY2013E FY2014E Sales OPM (` cr) 12,691 14,126 (%) 7.4 8.9 PAT (` cr) 448 623 EPS (`) 7.0 9.7 ROE (%) 11.9 15.0 P/E (x) 17.8 12.8 P/BV EV/EBITDA (x) 2.0 1.8 (x) 8.7 6.5 EV/Sales (x) 0.6 0.6

Apollo Tyres (CMP: `86/ TP: `103/ Upside: 19%)

For 2QFY2013, Apollo Tyres (APTY) registered a strong top-line performance led by a robust volume growth of ~20% yoy at the standalone level; however disappointment came on the operating margin front, as the expected benefits of lower natural rubber prices did not materialize due to higher cost rubber inventory. Consolidated top-line posted a better-than-expected growth of 17.5% yoy (6.6% qoq) to `3,375cr driven by extremely strong revenue growth of 23.7% (6.1% qoq) and 29.5% yoy (flat qoq) in India and South Africa operations. However, at the operating level, EBITDA margins contracted 24bp qoq and stood at 10.9%, which was lower than our expectations of 11.4%, led by 434bp increase in raw-material

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Market Outlook
November 5, 2012

cost as a percentage of sales. The increase in raw-material cost was a key surprise which according to the management was due to the presence of higher cost rubber inventory. Nonetheless, net profit reported 95.7% yoy (10.3% qoq) growth to `152cr, ahead of our estimates of `143cr, on account of high other income and marginally lower tax-rate. On the standalone front, the operations benefited from a strong volume growth of ~20% yoy (8.8% qoq) leading to a better-than-expected top-line growth of 23.7% yoy. However, EBITDA margins at 9.9% (down 259 bp yoy and 41bp qoq) were lower than expected due to higher cost rubber inventory. While Europe revenues increased 6.2% yoy (22.4% qoq) led by better product-mix (volumes down ~10% yoy), margins contracted 80bp qoq to 17.3%. The South Africa operations posted a margin contraction of 250bp qoq to 2.3%. The company has announced that it is in the process of seeking shareholders approval for a QIP of upto US$150mn and allotment of preferential convertible warrants of upto 27.5mn to the promoter group. The management has indicated that the funds would be primarily utilized to convert bias facilities for industrial usage, set up a new greenfield facility and possible inorganic opportunities. At `86, the stock is trading at 5.7x FY2014E earnings. We retain our Buy rating on the stock with a target price of `103.
Y/E March FY2013E FY2014E Sales (` cr) 13,755 15,389 OPM (%) 11.3 11.3 PAT (` cr) 644 763 EPS (`) 12.8 15.1 RoE (%) 20.6 20.3 P/E (x) 6.7 5.7 P/BV (x) 1.3 1.1 EV/EBITDA (x) 4.2 3.6 EV/Sales (x) 0.5 0.4

Dishman (CMP: `96/ TP: Under review)

For 2QFY2013, Dishman posted results which were below expectations. The topline registered a growth of 7.5% yoy to `289cr, mainly driven by CRAMS segment which grew by 11.6%, whereas the MM segment was flat with sales of `101cr. The companys EBITDA came in at 20.1%, up 300bp yoy, just in line with expectations. However, on account of the other Income which was at `9cr vs `0.5cr during the last corresponding period, the net profit front came in at `271cr vs a loss of `6.3cr.We are revising our numbers and on back of the sustained improvement on the operating front, we would be revising our numbers and rating on the stock from Neutral to Buy.
Y/E March FY2013E FY2014E Sales (` cr) 1,280 1,536 OPM (%) 17.8 17.8 PAT (` cr) 74 91 EPS (`) 9.2 11.3 RoE (%) 8.5 P/E (x) 8.8 P/BV (x) 0.8 0.7 EV/EBITDA (x) 6.9 5.8 EV/Sales (x) 1.2 1.0

7.7 10.8

Indoco Remedies (CMP: `63/ TP: `89/ Upside: 41%)

For 2QFY2013, Indoco Remedies (Indoco) declared lower-than-expected results, both on the revenue and the net profit fronts. On the sales front, the company posted a sales growth of 13.7% yoy, while on the net profit front; growth came in lower-than-expected, de-growing by 3.4% yoy. This was mainly on account of lower-than-expected sales and a lower-than-expected other income. The salient

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Market Outlook
November 5, 2012

feature of the quarter was the domestic formulation segment which grew by 17.6% yoy during the quarter. We maintain Buy with a target of `89.
Y/E March FY2013E FY2014E Sales (` cr) 685 837 OPM (%) 15.2 15.2 PAT (` cr) 68 82 EPS (`) 7.4 8.9 RoE (%) 16.4 17.0 P/E (x) 8.6 7.1 P/BV (x) 1.3 1.1 EV/EBITDA (x) 6.6 5.8 EV/Sales (x) 1.0 0.9

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Market Outlook
November 5, 2012

Result Preview
Cipla (CMP: `377/ TP: `399/ Upside: 5.8%)
Cipla is expected to post a net sales growth of 14.8% to `1,984cr, driven mainly by the domestic performance. On the operating front, the OPM (excluding technical know-how fees) is expected to come in at 22.6%, almost same as in the corresponding period of the previous year. Further, the net profit is expected to increase by 10.0% yoy to `339cr. We recommend an Accumulate on the stock with a target of `399.
Y/E March FY2013E FY2014E Sales (` cr) 8,031 9,130 OPM (%) 23.4 22.4 PAT (` cr) 1478 1603 EPS (`) 18.4 20.0 RoE (%) P/E (x) P/BV (x) 3.3 3.2 EV/EBITDA (x) 15.3 13.7 EV/Sales (x) 3.6 3.1

17.8 19.7 16.6 18.2

Tech Mahindra (CMP: `954/ TP: `1,046 / Upside: 10%)

Tech Mahindra is slated to announce its 2QFY2013 results today. The company is expected to clock 4.5% qoq USD revenue growth, leading the entire mid-cap IT pack, on the back of acquisition of Hutchison Global services (HGS). This company did 2 acquisitions in the past 1 month, out of which revenue will flow from one (aforesaid). In INR terms, revenues are expected to come in at `1,615cr, up 4.6% qoq. EBITDA margin is expected to decline by ~160bp qoq to 20% impacted by wage increments and lower margin profile of HGS acquisition. PAT is expected to come in at `308cr. Key things to watch out for: (1) outlook for business within top clients BT and AT&T, (2) Satyam acquisition timeline and (3) margin trajectory ahead. We maintain our Accumulate rating on the stock with a target price of `1,046cr.
Y/E March FY2013E FY2014E Sales (` cr) 6,603 7,196 OPM (%) 18.2 17.1 PAT (` cr) 1,224 1,314 EPS (`) 92.7 99.6 RoE (%) 20.5 P/E (x) 9.6 P/BV (x) 2.4 2.0 EV/EBITDA (x) 10.7 10.0 EV/Sales (x) 1.9 1.7

23.6 10.3

Allahabad Bank- (CMP: `138 / TP: - / Upside: -)

Allahabad Bank is scheduled to announce its 2QFY2013 results today. On the NII front, we expect the bank to report a subdued growth of 2.9% yoy to `1,357cr. Non-interest income is expected to decline by 1.3% yoy to `305. Operating expenses are expected to increase by 3.4% yoy, leading to flattish operating profit on a yoy basis to `960cr. Provisioning expenses are expected to be higher by 12.4% yoy, which would result in net profit decline of 18.4% on a yoy basis to `398cr. At the CMP, the stock is trading at 0.6x FY2014E ABV. We maintain our Neutral recommendation on the stock.
Y/E March FY2013E FY2014E Op. Inc (` cr) 6,944 7,884 NIM (%) 3.0 3.1 PAT (` cr) 1,777 1,851 EPS (`) ABV (%) ROA (x) 0.9 0.9 ROE (x) 17.2 15.7 P/E (x) 3.9 3.7 P/ABV (x) 0.6 0.6

35.5 219.0 37.0 249.8

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Market Outlook
November 5, 2012

Corporation Bank- (CMP: `400 / TP: `447 / Upside: 11.9%)

Corporation Bank is scheduled to announce its 2QFY2013 results today. We expect the bank to report a moderate NII growth of 14.8% yoy to `854cr. Noninterest income for the bank is expected to decline by 17.8% yoy to `328cr. Operating expenses are expected to increase by 10.4% yoy, leading to flattish operating profit on a yoy basis at `694cr. Tax expenses are expected to increase by 22.9% yoy to `116cr, which would lead to 3.3% yoy decline in net profit to `388cr. At the CMP, the stock is trading at 0.6x FY2014E ABV. We maintain our Accumulate recommendation on the stock with a target price of `447.
Y/E March FY2013E FY2014E Op. Inc (` cr) 4,886 5,669 NIM (%) 2.1 2.2 PAT (` cr) 1,501 1,507 EPS (`) ABV (%) ROA (x) 0.9 0.8 ROE (x) 17.0 15.1 P/E (x) 3.9 3.9 P/ABV (x) 0.7 0.6

101.3 603.9 101.7 688.4

Madras Cement (CMP: `205 /TP: /Upside :)

Madras Cement is expected to post a 8.4% yoy growth in its topline to `887cr OPM is expected to decline by 379bp yoy to 28.8%. Bottomline is expected to decline by 8.6% yoy to `101cr. We maintain a neutral view on the stock.
Y/E March FY2013E FY2014E Sales (` cr) 3,608 3,928 OPM (%) 27.6 27.0 PAT (` cr) EPS (`) ROE (%) 16.9 17.0 P/E (x) 13.0 11.2 P/BV (x) 2.1 1.8 EV/EBITDA EV/Tonne* (x) 7.4 6.4 (x) 75.0

375 15.7 434 18.3

Note:* Computed on TTM basis

India Cement (CMP: `98/TP: /Upside :)

India Cement is expected to post a 1.9% yoy growth in its topline to `1,113cr OPM is expected to decline by 150bp yoy to 19.9%. Bottomline is expected to decline by 12.9% yoy to `61cr. We maintain a neutral view on the stock.
Y/E March FY2013E FY2014E Sales (` cr) 4,354 4,929 OPM (%) 18.3 18.5 PAT (` cr) 303 EPS (`) 9.8 ROE (%) 8.6 10.2 P/E (x) 9.9 7.9 P/BV (x) 0.8 0.8 EV/EBITDA EV/Tonne* (x) 7.0 6.0 (x) 69

378 12.3

Note: *Computed on TTM basis

Vijaya Bank- (CMP: `56 / TP: - / Upside: -)

Vijaya Bank is scheduled to announce its 2QFY2013 results today. We expect the bank to report a NII decline of 7.4% yoy to `475cr. Non-interest income for the bank is expected to grow at a healthy pace of 19.6% to `126cr. Operating expenses are expected to increase by 14.3% yoy, which would result in operating profit de-growth of 16.9% on a yoy basis at `282cr. Even, provisioning expenses are expected to be higher by 24.1% yoy, and would result in net profit decline of 31.7% on a yoy basis to `139cr. At the CMP, the stock trades at relatively

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Market Outlook
November 5, 2012

expensive valuations of 0.7x FY2014E ABV. We maintain our Neutral recommendation on the stock.
Y/E March FY2013E FY2014E Op. Inc (` cr) 2,490 2,881 NIM (%) 2.1 2.2 PAT (` cr) 574 682 EPS (`) 9.2 11.4 ABV (%) 75.8 83.9 ROA (x) 0.5 0.5 ROE (x) 11.5 13.0 P/E (x) 6.1 4.9 P/ABV (x) 0.7 0.7

Quarterly Bloomberg Brokers Consensus Estimate

Cipla (05/11/2012)
Particulars (` cr) Net sales EBITDA EBITDA margin (%) Net profit 2QFY13E 2,026 515 25.4 371 2QFY12 1,732 475 27.4 309 20 y-o-y (%) 17 8 1QFY13 1,917 540 28.2 401 (7) q-o-q (%) 6 (5)

Reliance Power Consolidated (05/11/2012)

Particulars (` cr) Net sales EBITDA EBITDA margin (%) Net profit 2QFY13E 971 344 35.4 208 2QFY12 488 122 24.9 237 (12) y-o-y (%) 99 183 1QFY13 1,137 365 32.1 240 (13) q-o-q (%) (15) (6)

ABB (06/11/2012)
Particulars (` cr) Net sales EBITDA EBITDA margin (%) Net profit 2QFY13E 1,933 109 5.6 61 2QFY12 1,726 17 1.0 22 176 y-o-y (%) 12 554 1QFY13 1,858 106 5.7 52 18 q-o-q (%) 4 2

Canara Bank (06/11/2012)

Particulars (` cr) Net profit 2QFY13E 803 2QFY12 852 y-o-y (%) (6) 1QFY13 775 q-o-q (%) 4

Hindalco Industries (06/11/2012)

Particulars (` cr) Net sales EBITDA EBITDA margin (%) Net profit 2QFY13E 6,461 575 8.9 388 2QFY12 6,220 715 11.5 451 (14) y-o-y (%) 4 (20) 1QFY13 5,964 463 7.8 425 (9) q-o-q (%) 8 24

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Market Outlook
November 5, 2012

Reliance Infrastructure (06/11/2012)

Particulars (` cr) Net sales EBITDA EBITDA margin (%) Net profit 2QFY13E 3,602 488 13.5 300 2QFY12 3,771 690 18.3 496 (40) y-o-y (%) (4) (29) 1QFY13 3,413 460 13.5 327 (8) q-o-q (%) 6 6

Tata Power Consolidated (06/11/2012)

Particulars (` cr) Net sales EBITDA EBITDA margin (%) Net profit 2QFY13E 7,424 1,567 21.1 286 2QFY12 6,248 1,385 22.2 (1,179) (124) y-o-y (%) 19 13 1QFY13 7,198 1,413 19.6 196 46 q-o-q (%) 3 11

Economic and Political News

Finance Ministry to verify OMCs' losses before deciding on subsidy No case for lowering India's credit rating: C Rangarajan, PMEAC Government to take a view on bank holding co structure after RBI comments

Corporate News
ONGC prepares to award CBM stakes DLF may raise `2,500cr from Amanresorts, wind energy biz CCI may complete probe on Coal India by Dec
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint

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