Market Outlook

India Research
April 4, 2012

Dealers Diary
Domestic Indices Chg (%) (Pts) (Close)

The Indian markets are expected to open marginally lower tracking cues from SGX Nifty which is trading in the red. Further, most of the Asian indices too are trading in the negative zone. The U.S markets fell on Tuesday following the release of the minutes of the Federal Reserves latest monetary policy meeting which seemed to indicate that the members were not keen to initiate another round of quantitative easing amid signs of improvement in the economy. Meanwhile another report by U.S commerce department showed that growth in factory orders was less than expected in February. The major European markets too fell in the range of 0.6% 1.6%. Meanwhile the Indian markets rose on Tuesday for the third consecutive day buoyed by FII buying. The markets also gained on hopes that the RBI would start cutting rates in the coming months.

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

0.7 0.8 1.0 1.1 (0.5) 1.2 1.2 (0.2) 1.4 1.6 (0.1)
Chg (%)

119.3 17,597 40.6 60.7 76.7 (29.6) 89.5 5,359 6,476 6,818 6,587 7,469

145.2 12,016 (19.1) 10,110 156.4 11,472 126.1 (3.8)

(Pts)

8,191 6,114
(Close)

Markets Today
The trend deciding level for the day is 17,611 / 5,361 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 17,651 17,707 / 5,377 5,395 levels. However, if NIFTY trades below 17,611 / 5,361 levels for the first half-an-hour of trade then it may correct up to 17,557 17,516 / 5,342 5,326 levels.
Indices SENSEX NIFTY S2 17,516 5,326 S1 17,557 5,342 PIVOT 17,611 5,361 R1 17,651 5,377 R2 17,705 5,395

(0.5) (0.2) (0.6) (0.6) 1.3 (0.0) 0.5

(64.9) 13,200 (6.1) (36.6) 3,114 5,838

(59.5) 10,050 268.7 20,791 (1.1) 10.6 3,015 2,263

Indian ADRs

Chg (%)

(Pts)

(Close)

INFY WIT IBN HDB

0.4 (0.5) (0.8) (0.2)

0.2 (0.1) (0.3) (0.1)

$57.6 $10.9 $35.5 $34.6

News Analysis

Coal India reports robust FY2012 production and offtake numbers Cairn India makes discovery in KG basin BHELs FY2012E provisional results Nalco reports FY2012 production and offtake numbers SpiceJet to import ATF directly

Advances / Declines Advances Declines Unchanged

BSE

NSE

1,760 1074 113

1,005 457 63

Refer detailed news analysis on the following page

Net Inflows (March 30, 2012)

` cr FII MFs Purch 7,061 334 Sales 5,763 421 Net 1,298 (87) MTD 9,028 (87) YTD 45,326 (5,661)

Volumes (` cr) BSE NSE

2,239 10,574

FII Derivatives (April 3, 2012)

` cr
Index Futures Stock Futures

Purch 1,586 1,008

Sales 1,045 883

Net 541 125

Open Interest 9,531 22,630

Gainers / Losers
Gainers Company
National Alum Manappuram Finance Essar Oil Pantaloon Retl Crisil

Losers Company
Pidilite Inds Opto Circuits Dr Reddys Lab Bajaj Holdings Hero MotoCorp

Price (`)
62 35 60 167 1,054

chg (%)
11.2 9.9 9.6 9.6 6.2

Price (`)
167 194 1,694 810 2,010

chg (%)
(3.4) (2.7) (2.6) (2.3) (2.3)

Please refer to important disclosures at the end of this report

Sebi Registration No: INB 010996539

Market Outlook | India Research

Coal India reports robust FY2012 production and offtake numbers

Coal India reported its production and sales volume numbers for FY2012. Production volumes grew by 1.0% yoy to 435.8mn tonnes, while sales volumes grew by 1.9% yoy to 432.5mn tonnes in FY2012 (in-line with our expectation). Despite reporting a 19.0% and 16.9% yoy decrease in production during August and September 2011 (on the back of heavy rains), Coal India reported modest growth in production volumes during FY2012. The company also raised its FY2013 production guidance to 470.0mn tonnes compared to 464.0mn tonnes earlier. Separately the government issued a presidential directive to Coal India to supply at least 80% of the quantity of coal committed to power companies. However, the directive gave the company freedom to relax the penalty payable in case of shortfall. We believe the freedom to relax the penalty is positive for Coal India given that it is struggling to raise the production and supply due to environmental and infrastructural issues. We maintain our Neutral view on the stock.

Cairn India makes discovery in KG basin

Cairn Indias 100% subsidiary, Cairn Energy India Ltd. (Cairn Energy) has notified the Management Committee of an oil discovery in the Nagayalanka-SE-1 well in the onshore block KG-ONN-2003/1 in the Krishna-Godavari Basin. Cairn Energy is the operator in the block with 24% stake, while Cairn India and ONGC hold 25% and 51% stake, respectively, in the block. A gross 57m hydrocarbon column has been interpreted from log data, core and testing data to be the oil-bearing block. However, as per the company, further appraisal will be required to establish the commerciality of the Nagayalanka-SE discovery. We await further clarity on the commercial feasibility of the block. Until then, we maintain our estimates and recommend Neutral on the stock.

BHELs FY2012E provisional results

BHEL announced its provisional results for FY2012. The company reported top line and bottom line of `49,301cr and `6,868cr, respectively. Revenue and net profit for FY2012 grew by 19.4% and 21.2% yoy, respectively. Results were in-line with our estimates, with revenue below expectation by 0.4% and net profit above expectation by 2.3%. We will come out with a detailed report after the company releases its results and the conference call. Currently, we remain Neutral on the stock.

April 4, 2012

Market Outlook | India Research

Nalco reports FY2012 production and offtake numbers

Nalcos aluminium production decreased by 6.9% yoy to 413,000 tonnes in FY2012 on the back of lower coal availability and declining aluminium prices. The companys cast metal sales stood at 415,916 tonnes in FY2012, compared to 438,952 tonnes in FY2011. Nevertheless, the company reported growth in its bauxite and alumina production. Nalcos bauxite production volumes stood at 5mn tonnes (4.9mn tonnes in FY2011) and its hydrate alumina production stood at 1.7mn tonnes (1.6mn tonnes in FY2011) in FY2012. Production and sales numbers are broadly in-line with our expectations. We maintain our Neutral view on the stock.

SpiceJet to import ATF directly

SpiceJet has decided to start import of aviation turbine fuel (ATF) through a private oil marketing company at an airport in southern India on a pilot basis to check the economic viability of the process. Reliance Industries is expected to import ATF for SpiceJet and provide the necessary infrastructure according to a news report. The company will import ATF on a trial basis to see the cost advantage of importing directly, which it will start in the next six to eight weeks. SpiceJet is not sure of the exact percentage of saving from direct import; but from preliminary analysis, the company expects to save 5-7% on fuel cost. ATF accounts for nearly 50% of the total cost and a 5-7% saving on it will help it improve its margins significantly in the near future. Direct import will help aviation companies to save around `13,000 per tonne of ATF at current prices, which are ruling at `69,000-76,000 per tonne at the four metros. SpiceJet is the first airline to apply for the import approval of ATF. We have a Buy recommendation on SpiceJet; the target price is under review.

Economic and Political News

Government may clear FDI cap in broadcasting services India to exceed 100mn 3G connections by 2014: GSMA Parliament may consider finance bill on May 7 Provide new interest rates on PPF: RBI orders banks US-India goods trade deficit up 42% at US$14.5bn

Corporate News

HDFC Bank to lend `150cr for Kingfisher Towers BHEL open to collaborations with Chinese firms Pfizer completes sale of animal health division for `440cr Mahindra Lifespace plans to develop two more business cities

Source: Economic Times, Business Standard, Business Line, Financial Express, Mint

April 4, 2012

Market Outlook | India Research

Research Team Tel: 022 - 39357800

Source: Economic Times, Business Standard, Business Line, Financial Express, Mint

E-mail: research@angelbroking.com

Website: www.angelbroking.com

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April 4, 2012