Antique’s Morning Presentation

August 11, 2010

Market Snapshot From the Research Desk

Global, Sector & Corporate News „ GAIL - Confident on transmission volume growth

Block Deals & Corporate Events „ Hindalco Industries Ltd.: Novelis 1QFY11 results review - Reiterate BUY

Derivatives Update „ Britannia Industries Ltd.: Limited upside - Downgrade to HOLD

Economy, Money & Banking „ Great Offshore Ltd. - Mild turbulence

Commodities Update

Valuation Guide

Strictly confidential
Antique’s Morning Presentation (AMP) August 11, 2010

Market Snapshot

Global Indices Closing % Chg % YTD Provisional flows (USDm)

Global News
Dow Jones 10,644 (0.5) 2.1 FIIs 130
NASDAQ 2,277 (1.2) 0.4 Locals (117) „ Treasuries surged, sending yields on 10-year notes to an 18-month low, after the Federal
FTSE 5,376 (0.6) (0.7) Reserve said it plans to buy government debt in an effort to buoy the economy. Stocks
CAC 3,731 (1.2) (5.2) Volumes USDbn % Chg
pared losses and the dollar trimmed its rally.
DAX 6,286 (1.0) 5.5 Cash (NSE + BSE) 4.5 16.1
Russia 1,497 0.3 3.7 F&O (net) 16.6 30.6 „ Federal Reserve officials made their first attempt to bolster the economy in more than a
Bovespa 67,223 (0.9) (2.0) year, saying they will maintain their holdings of securities to stop money from draining
Nikkei 9,320 (2.3) (11.1) FII F&O Stock Fut Index Fut
out of the financial system.
Hang Seng 21,474 (1.5) (1.8) Net ($m) 10 (71)
Shanghai Composite 2,595 (2.9) (20.8) Open Int (%) 0.1 1.9 „ Productivity in the U.S. unexpectedly decreased in the second quarter after employers
expanded the workweek by the most in four years even as the world’s largest economy
Indian Indices Closing % Chg % YTD ADR/GDR Gainers Last % Chg
cooled.
Sensex 18,220 (0.4) 4.3 Tata Motors 20.7 3.0
Nifty 5,461 (0.5) 5.0 TCL 12.8 0.2
MSCI India 488 (1.1) 4.1 HDFC 161.8 0.0
Sector & Corporate News
CNX Midcap 8,613 (0.5) 15.9
ADR/GDR Losers Last % Chg „ Tata Teleservices: Japan’s NTT DoCoMo may invest USD1bn in Tata Teleservices for
BSE Smallcap 9,687 (0.3) 15.9
Patni 20.3 (3.3) an additional stake of 10-15%. The Japanese company owns 26% in the Tata Group’s
Flows (USDm) Last MTD Sterlite 15.1 (2.8) unlisted telecom arm.
FII (13) 4,472
„ Telecom: The Intelligence Bureau (IB) wants all mobile phone companies to demonstrate
Locals – (1,021)
that third generation (3G) services can be monitored, intercepted and blocked before
they begin offering high-end service on this platform. This demand is likely to delay the
Sensex Sensex PE rollout of 3G, which involves services such as video conferencing on mobiles, high
21000 28 speed internet and interactive gaming.
18000 24
„ Oil and Gas: A consortium led by the state-owned Oil & Natural gas Corporation could
15000 20 invest about INR120bn to build a six million tonne refinery in Rajasthan, as the Congress
12000 16 government in the state is willing to provide adequate fiscal incentives to the refinery.
9000 12
„ Banking: International Finance Corporation (IFC), the private sector lending arm of
6000 8
the World Bank, is in talks with banks and financial institutions to invest in clean technology
Feb-06

Feb-07

Feb-08

Feb-09

Feb-10

Feb-06

Feb-07

Feb-08

Feb-09

Feb-10
Aug-05

Aug-06

Aug-07

Aug-08

Aug-09

Aug-10

Aug-05

Aug-06

Aug-07

Aug-08

Aug-09

Aug-10

projects. To begin with, it has disbursed USD75m to IDFC, the local infrastructure
financing firm, which in turn will lend to projects promoting clean technology.
Source: Bloomberg

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Antique’s Morning Presentation (AMP) August 11, 2010

Sector & Corporate News

Sectoral indices Closing % Chg % MTD % YTD „ Economy: The government is now looking to add MMTC and Shipping Corporation
BSE Auto 8,640 0.1 2.6 16.2 of India to its disinvestment list, raising the possibility of the proceeds crossing the budgeted
BSE Bank 11,943 (0.0) 3.5 19.1 INR400bn mark for the current fiscal.
BSE Cap Goods 14,793 0.1 1.4 4.8
BSE Cons dur 5,551 (0.8) 4.8 46.6 „ GMR Infra: According to news reports, Ontario Teachers’ Pension Plan (OTPP),
BSE FMCG 3,284 (0.3) 1.7 17.6 Canada’s largest single-profession pension fund, with USD96.4bn in net assets, has
BSE IT 5,592 (1.4) 2.1 7.8 offered to buy GMR Infrastructure out of InterGen for about USD1bn.
BSE Health 5,548 (0.8) (0.9) 10.6
BSE Metal 15,594 (0.7) 1.3 (10.4) „ Educomp Solutions: According to news reports, Education services provider Educomp
BSE Oil 10,056 (0.2) (1.1) (4.0) Solutions has picked up a majority stake in Delhi-based engineering test preparation
BSE Power 3,137 (0.3) 0.9 (1.6) company Vidya Mandir Classes for about INR340m.
BSE PSU 9,574 (0.8) (0.0) 0.4
BSE Realty 3,621 0.5 7.4 (6.1)
„ Capital Goods: Leading manufacturers of railway rolling stock like GE, Siemens,
BSE TECK 3,486 (1.3) 2.5 6.4 Alstom and Bombardier have been shortlisted for setting up an INR19.6bn electric
locomotive manufacturing unit at Madhepura in Bihar.

Nifty Outperformers Price % Chg % MTD % YTD

Tata Motors Ltd 957 4.1 13.1 20.9
Jaiprakash Associates Ltd 122 3.3 3.6 (16.7)
Suzlon Energy Ltd 58 2.5 2.8 (35.7)
Hindustan Unilever Ltd 260 1.6 3.5 (1.7)
Gail India Ltd 443 1.2 1.0 7.2
ICICI Bank Ltd 989 0.9 9.3 12.8
Larsen & Toubro Ltd 1,827 0.8 1.8 8.9

Nifty Underperformers Price % Chg % MTD % YTD

Sterlite Industries India Lt 176 (2.3) 0.4 (18.7)
Wipro Ltd 428 (2.1) 3.8 4.9
Hindalco Industries Ltd 164 (2.1) 2.0 1.7
ABB Ltd 784 (2.0) (3.3) 2.2
Tata Consultancy Svcs Ltd 865 (1.7) 2.9 16.7
Kotak Mahindra Bank Ltd 810 (1.7) 5.0 0.3
Infosys Technologies Ltd 2,829 (1.6) 1.5 8.8

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Antique’s Morning Presentation (AMP) August 11, 2010

Bulk Deals Derivatives Update

Date Security Name Client Name Buy/Sell Qty Price Long buildup
10-Aug-10 Autolite India Standard Chartered Bank SELL 26,647 31.02 Company Last % Chg % Chg OI OI (in 000)
10-Aug-10 Avon Corp India Focus Cardinal Fund Dr SELL 400,000 5.74 TATAMOTORS 960 5.7 19.8 14,247
10-Aug-10 Gayatri Proj Citigroup Global Markets SELL 80,200 387.59 SUZLON 59 2.6 0.9 86,712
HINDUNILVR 260 1.9 5.7 12,282
10-Aug-10 Lancor Hold Sundaram BNP Paribas Mutual Fund BUY 226,155 103.00
ESSAROIL 133 1.8 2.4 20,182
10-Aug-10 Lancor Hold Sundaram BNP Paribas Mutual Fund SELL 226,155 102.97
10-Aug-10 TVS Motor TVS Motor Harita Emp Welfare Foundation SELL 1,200,000 140.75 Short buildup
10-Aug-10 Aban Offshore Morgan Stanley SELL 320,000 899.83 Company Last % Chg % Chg OI OI (in 000)
10-Aug-10 Sanghi Ind Spinnaker GS SELL 6,599,370 31.00 HCC 72 (50.2) 91.3 20,944
PIRHEALTH 482 (3.1) 1.8 8,028
STER 176 (2.6) 0.7 26,700
NAGARFERT 31 (2.2) 2.0 33,576
Short covering
Company Last % Chg % Chg OI OI (in 000)
IBREALEST 186 5.8 (19.3) 13,356
„ Nifty ended down 0.46%, OI down 1.85%. EDUCOMP 683 4.4 (14.6) 2,889
JPASSOCIAT 123 3.2 (5.5) 35,406
„ Nifty ATM IV’s traded @ 15 vols.
GMRINFRA 61 2.7 (5.8) 39,244
Profit booking
Company Last % Chg % Chg OI OI (in 000)
ABAN 881 (4.0) (18.0) 2,890
IFCI 58 (3.3) (7.9) 87,816
RENUKA 66 (2.5) (0.3) 39,822

Delivery Spike Nifty Premium / Discount NSE Volatility Index (%)

Company Volume % Spike % Chg
GMR Infra 6,891,328 538 2.64 15 21
10.4
IB Real 6,631,629 503 5.81 10
IVRCL 3,710,354 397 (2.85) 20
3.2
India Bulls 3,592,305 346 (1.82) 5
0.3 19
Tata Steel 2,718,363 333 (0.69)
0
Bajaj Auto 208,185 304 (2.03)
18
HDFC Bank 619,413 230 0.63 -5
-4.1
Hindalco 4,076,736 212 (2.07)
-10 -7.7 17
JP Associate 7,193,188 209 3.34
04-Aug 05-Aug 06-Aug 09-Aug 10-Aug 12-Jul 19-Jul 26-Jul 2-Aug 9-Aug
Aban 1,234,661 192 (3.51)

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Antique’s Morning Presentation (AMP) August 11, 2010

Economy, Money & Banking Commodities Update

Forex Rate Last % Chg % MTD % YTD Commodities Last % Chg % MTD % YTD
INR~USD 46.4 (0.6) 0.0 0.3 Gold ($/Ounce) 1,203 (0.1) 1.9 9.7

INR~EUR 61.0 0.2 (0.7) 9.3 Crude Oil ($/Bl) 80 (0.4) 1.2 (3.6)

INR~GBP 73.4 0.1 (0.8) 2.5 Aluminium ($/t) 2,161 (0.6) (0.1) (1.7)

Copper ($/t) 7,274 (1.7) - (0.9)

Bond Market Last Chg (bps) MTD (bps) YTD (bps) Zinc ($/t) 2,054 (3.1) 2.8 (18.8)

10 Year Bond 7.8 2 2 25 Lead ($/t) 2,099 (3.4) 2.1 (12.6)

Interbank call 5.5 - 60 215 Nickel ($/t) 22,130 (2.6) 5.0 19.9

Inflation vs. 10 yr yield INR/USD Gold and crude prices Metal prices

12 50 1300 130 4,500 8,500

10 1200 7,500
8 48 105 3,500
1100 6,500
6 1000
46 80 2,500 5,500
4 900
2 4,500
44 800 55 1,500
0 3,500
700
-2 42
600 30 500 2,500
Mar-09

May-09
Jun-09
Jul-09

Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10

May-10
Jun-10
Sep-09

Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10

May-10
Jun-10
Jul-10
Apr-09

Aug-09

Apr-10

Sep-09
Aug-09

Apr-10

Aug-10
Aug-09 Nov-09 Feb-10 May-10 Aug-10 Aug-09 Nov-09 Feb-10 May-10 Aug-10
Gold ($/ounce) (LHS) Alum ($/t) Zinc ($/t)
Inflation (%) 10 Yr Yield (%) USD~INR Crude oil ($/bl) (RHS) Copper ($/t)(RHS)

„ Gold prices were down by 0.1% to end at USD1,203/ounce.

„ The rupee depreciated by 0.6% to end at INR46.4/USD.
„ Crude oil prices were down by 0.4% to end at USD80/bl.
„ Bond yields were up by 2bps to end at 7.8%.
„ Aluminium, Copper and Zinc prices were down by 0.6%, 1.7% and 3.1%
„ Call rates remained flat at 5.5%.
respectively.

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Antique’s Morning Presentation (AMP) August 11, 2010
Amit Rustagi, +91 22 4031 3434, amitr@antiquelimited.com

GAIL - Confident on transmission volume growth

BUY CMP: INR444 Target Price: INR492 Potential Upside: 11%

Key highlights GAIL - Major pipeline projects under execution (as per EIL project summary report)
„ GAIL played down fears over availability of gas volumes and re-assured that gas Anticipated Approved Anticipated
availability is not a problem. Management sounded confident of replacing the shortfall Compln. Date cost (INRm) cost (INRm)
from Reliance’s KG-D6 output from LNG imports. Though they mentioned RIL volume Capacity Augmentation of Agra and Ferozabad region Jan-11 1,996 1,996
Jagdishpur - Haldia Pipeline Jan-13 75,962 75,962
ramp-up to 80mmcmd may happen in 2011.
Dabhol-Bangalore Pipeline, phase-I Mar-12 45,084 45,084
„ They will be targeting spot, short term and long term volumes. They mentioned that Dahej - Vijaipur Pipeline, phase-II Apr-11 44,033 28,000
Indian consumers would be made receptive to higher and variability in pricing of gas, Vijaipur - Dadri - Bawana Pipeline Jul-10 43,166 37,600
which impacts the gas availability. Bawana - Nangal Pipeline Apr-11 18,161 14,100
Compressor stations at Jhabua & Vijaipur (phase I & II) Dec-10 14,340 11,600
„ GAIL expects to import 2-3 spot LNG cargoes every month translating to a 10% rise in
Compressor stations at Kailaras & Chainsa Jun-11 11,668 11,668
gas volumes in 2HFY11 from 116MMscmd currently. They also see further supply coming
Chainsa - Jhajjar Pipeline Jul-10 5,716 5,650
from Dabhol RLNG, ONGC (C-series) and other marginal fields.
Spur lines to Chainsa - Jhajjar Aug-10 3,960 3,960
„ GAIL reiterated its plans to increase gas transmission capacity from 150MMscmd currently Jhajjar-Hissar Pipeline Oct-10 2,811 2,811
to 300MMscmd by 2013-14. Kochi - Kanjirkod - Bangalore -Mangalore Pipeline, phase-I Mar-12 3,480 3,480
Karanpur-Moradabad - Kashipur - Rudrapur Pipeline, phase-I Jan-11 2,387 2,387
„ The Compressor stations at Jhabua & Vijaipur (Phase I & II) would start getting commenced
VKPL upgradation and laying of spurlines May-11 4,633 4,633
beginning October 2010. This would create additional capacity of 10-12mmcmd in
BNPL spurlines (Uttranchal & Punjab) May-11 5,409 5,409
DVPL and VDPL. Total 282,804 254,339
„ This was supported by management reiteration that most of its pipeline projects Source: Company
remaining on track. Though we expect some delay in compressor commencement by
two-three months. New pipeline capacity built-up (as per GAIL)
„ GAIL expects to earn about INR3bn from marketing margins annually. GAIL started getting Pipeline projects Approved Capacity Length Completion schedule
marketing margins on sale of APM gas by INR200/mcm, effective June 01, 2010. cost (INRm) (mmscmd) (km)
„ GAIL expects to incur at least 40% lower subsidy burden this year to INR7-8bn from DVPL pipelines - Phase II 51,590 24-78 610 April 2011
Vijaipur Dadri Pipelines 56,710 20-80 505 April 2011
INR13bn incurred last year. Subsidy burden for 1QFY11 alone stood at INR4.5bn.
Dadri-Bawana-Nangal pipeline 23,490 31 646 April 2011
„ GAIL expects Petchem margins to remain good as prices are favorable now and volumes Chainsa-Jhajjar- Hissar pipeline 12,590 35 349 April 2011
to pick up in next few quarters due to capacity expansion at Pata petchem complex. Jagdishpur-Haldia Pipeline 75,960 32 2,050 Phase I - March 2012
Phase II - Jan 2013
„ Valuations: We maintain our transmission volume assumption for FY11e and FY12e
Dhabol-Bangalore pipeline 50,140 16 1,389 Phase I - March 2012
at 119mmcmd and 127mmcmd, respectively, and we expect FY11e and FY12e Phase II - Dec 2012
earnings at INR29.8 and INR32. We reiterate BUY on GAIL with a target price of Kochi-Koottanadmangalore/ Banglore 32,630 16 1,114 Phase I - March 2012
INR492 based on SOTP valuation. We value the core business at INR415/share, Phase II - Dec 2012
applying a 13x multiple on FY12e EPS of INR32/share. We value listed investments Total 303,110 6,663
at INR50/share and E&P business at INR27/share. Source: Company

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Antique’s Morning Presentation (AMP) August 11, 2010

GAIL - Pipeline network in India, led by GAIL

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Antique’s Morning Presentation (AMP)
GAIL - Analyst meet highlights
Natural gas transmission
„ GAIL played down fears over availability of gas volumes and re-assured that gas
availability is not a problem. Management sounded confident of replacing the shortfall
from Reliance’s KG-D6 output from spot and long term LNG imports.
„ GAIL expects to import 2-3 spot LNG cargoes every month translating to a 10% rise in
gas volumes in 2QFY11 from 116MMscmd currently. They also see further supply coming
from Dabhol RLNG, ONGC (C-series) and other marginal fields.
„ GAIL reiterated its plans to increase gas transmission capacity from 150MMscmd currently
to 300MMscmd by 2013-14. This was supported by most of its pipeline projects
remaining on track Details of its project schedule is as follows:
– DVPL Phase II - April 2011 (as planned)
– Dadri-Bawana-Nangal - April 2011 (as planned)
– Vijaipur-Dadri - April 2011
– Chainsa-Jhajjar-Hissar by April 2011 (Oct-Nov 2010 previously)
– Jagdishpur-Haldia - January 2013 (as planned)
– Dhabol-Bangalore - December 2012 (as planned)
– Kochi-Koottanad Mangalore - December 2012 (as planned)
„ GAIL estimates a net loss of INR0.4bn on renegotiated tariffs for HVJ, DVPL and GREP.
„ GAIL was confident that Indian customers would be made receptive to higher and
variability in pricing of gas going forward based on merchant pricing.
Petrochemicals
„ GAIL has got the board approval for Pata expansion with capex of INR81.4bn. The
Pata expansion will lead to doubling of capacity from 420kta to 900kta by 2014-
2015. In the short term, by 4QFY11, the capacity will expand to 500kta due to
debottlenecking and new furnance at Pata.
Antique Stock Broking Limited
August 11, 2010
„ The company expects margins to remain good as prices are favourable right now.
„ GAIL expects to complete the BCPL project by April-2012 with a capacity of 0.28mmtpa
(GAIL’s share).
„ The company is also participation in OPaL, Dahej Project with ONGC for 1.1mmtpa
ethylene capacity.
City gas distribution (CGD)
„ GAIL has currently 8 JVs operational for CGD.
„ The company has identified more that 230 cities for CGD foray.
„ GAIL Gas Ltd is a 100% subsidiary of GAIL which has been authorised by PNGRB for
4 CGD projects.
„ The company plans to spread wherever it has a pipeline network as it will act as a
competitive advantage. It is currently present in 15 cities and expects to expand to
around 50 cities by FY14e.
Power
„ The company has currently stake in 1,600MW Ratnagiri Power Plant.
„ Also, the company has a stake in a power plant with GSPC.
„ GAIL has forayed into wind energy with a 4.5MW power generation plant in Bhuj with
a capex of INR250m.
„ Also, the company plans to lay power plants where spur lines are present with 200MW
capacity which is expandable to 700MW in Dhabol.
8
Antique’s Morning Presentation (AMP) August 11, 2010

GAIL - Focus on transmission

Projected capex (INRbn) Percentage share in capex

140 138

25 Others
18%
115
12
8
90 86 Petchem
15 9%
67
65 8 92
12 5 E& P
6 6% Pipeline
4 57
45 67%
40
2010-11 2011-12 2012-13
Pipeline E & P Petchem Others

Source: Company Source: Company

Projected borrowing (INRbn) Projected means of financing

90 85
FC Loan
23% Bonds
70
31%

50 45

ECA
30 24 10%

OIDB
10 5%
2010-11 2011-12 2012-13 Term loan
Projected borrow ings (INR bn) 31%

Source: Company Source: Company

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Antique’s Morning Presentation (AMP) August 11, 2010

GAIL - Valuations

Valuations Schedule of investments

„ We reiterate a BUY on GAIL with a target price of INR492 based on SOTP valuation. Investment Shares (m) Price Value

We value the core business at INR415/share, applying a 13x multiple on FY12e EPS ONGC 51 960 49,344
Indraprastha Gas 32 224 7,056
of INR32/share. We value listed investments at INR50/share and E&P business at
Petronet LNG 94 68 6,375
INR27/share.
Guj. Inds. Power 1 88 50
Key financials Total 62,825
Year ended March 2008 2009 2010 2011e 2012e No. of shares (m) 1,268
Net revenue (INRm) 180,420 237,897 249,514 277,585 294,298 Value per share 50
EBITDA (INRm) 39,492 40,510 47,760 62,252 69,553 Note: Investments valued at CMP less 20% discount

EBITDA growth (%) 32 3 18 30 12

PAT (INRm) 26,015 28,037 31,398 37,774 40,536 SOTP valuation
PAT growth (%) 9 8 12 20 7 Particulars Earnings Multiple Value per share
EPS (INR/share) 20.5 22.1 24.8 29.8 32.0 Core business on FY11 earnings 32.0 13 415
EPS growth (%) 9 8 12 20 7 E&P valuation 27
PE (x) 21.2 19.6 17.5 14.6 13.6 Investments 50
PB (x) 4.2 3.7 3.3 2.8 2.4
Value per share 492
EV/EBITDA (x) 13.1 13.0 11.7 9.4 9.8
Source: Antique
RoE (%) 20 19 19 19 18
Source: Company, Antique

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Antique’s Morning Presentation (AMP) August 11, 2010
Rajesh Zawar, +91 22 4031 3450, rajesh.zawar@antiquelimited.com

Hindalco Industries Limited: Novelis 1QFY11 results review - Reiterate BUY

BUY CMP: INR165 Target Price: INR201 Potential Upside: 21%

Key highlights Financial snapshot

„ Strong demand recovery: Novelis witnessed strong demand recovery in the regions USDm 1QFY11 1QFY10 4QFY10 Chg YoY (%) Chg QoQ (%)
Sales 2,533 1,960 2,420 29 5
with shipment volumes growth of 4% QoQ reaching pre-recession levels. With 13% YoY
EBITDA 213 413 164 (48) 30
growth in realisations, revenues increased 29% YoY to USD2.5bn. The shipments reached
Adjusted EBITDA 263 124 231 112 14
746kt in 1QFY11 with 15% YoY growth. The premium for realisation was USD1,303
Adjusted EBITDA margin (%) 10.4 6.3 9.5 406 (322)
per tn.
Reported PAT 50 143 (1) (65) 5,100
„ Adjusted EBITDA at its highest level: Adjusted EBITDA per tonne has stabilised at Source: Company

USD353 with high volumes resulting in USD263m in adjusted EBITDA recording

Particulars 1QFY11 1QFY10 4QFY10 Chg YoY (%) Chg QoQ (%)
historically the highest EBITDA for the company. The resported EBITDA was USD213m. Shipments (kt) 746 650 716 15 4

„ Working capital consumes cash flow: Reported PAT increased QoQ to USD50m, Average realisation (USD/t) 3,395 3,015 3,380 13 0
Average LME Spot (USD/t) 2,092 1,496 2,167 40 (3)
but higher revenues consumed cash for working capital and FCF for the quarter was at
Premium (USD/t) 1,303 1,519 1,213 (14) 7
USD34m.
EBITDA/t (USD) 353 191 323 85 9
Source: Company

Shipments jumped with strong demand recovery Average realisation stabilising with pricing
900 4,500
777 759
800 746 4,000
716
687
700 633 650 649
601 3,500
600
USD/t 3,000
500
kt

2,500
400
2,000
300

200 1,500

100 1,000
1QFY09 2QFY09 3QFY09 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11
-
1QFY09 2QFY09 3QFY09 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 LME Aluminium - USD/t Novelis realisation - USD/t

Source: Company Source: Company

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Antique’s Morning Presentation (AMP) August 11, 2010

Hindalco Industries Limited: Novelis 1QFY11 results review - Reiterate BUY

Free cash flow impacted due to working capital Liquidity remains strong
250 1200
213 1026 1051

200 1000

150 124 800

634

USDm
USDm

100 600 555

446

50 34 400
20
-2
0 200

-50 0
1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11

Source: Company Source: Company

Cost savings and restructuring benefits drove adjusted EBITDA per tonne Modest capex easing pressure on cash flow
400 40 37 38
356 37
353
350 323 35 33
290 28
300 30 27
24 23
250 25 22
USD/tn

USDm
191
200 20

150 15

100 10

50 5

0 0
1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 1QFY09 2QFY09 3QFY09 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11

Source: Company Source: Company

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Antique’s Morning Presentation (AMP) August 11, 2010

Hindalco Industries Limited: Novelis 1QFY11 results review - Reiterate BUY

Rationale Earnings estimate

• The stock is currently trading at 11.7x FY11e EPS and 5.4x FY11 EV/EBITDA. We Year ended Mar (INRbn) 2009 2010 2011e 2012e
Revenues 698 607 624 669
reiterate a BUY on this stock with a target price of INR201 per share on SOTP on
EBITDA 30 97 87 95
FY12e basis giving an upside of 20% from CMP. We believe the turnaround of Novelis,
EBITDA growth (%) (59) 227 (11) 10
robust domestic operations with rising volumes and operational efficiency would insulate
PAT 14 39 30 37
the company in these volatile macro environment.
PAT growth (%) (11) 188 (23) 23
• The company has achieved fairly stable business operating metrics with structural stability EPS (INR) 3 21 14 19

in aluminium pricing by year end, the company would achieve significant growth traction. EPS growth (%) (81) 537 (31) 37
P/E 51.4 8.1 11.7 8.5
SOTP valuation P/BV 2.1 1.9 1.8 1.7

Particulars FY12 EBITDA Multiple Amount EV/EBITDA 15.8 4.8 5.4 5.0

Hindalco - parent 48,418 6.0 290,505 RoE (%) 9 18 13 14

Source: Company, Antique
Novelis 43,615 6.0 261,691
ABML 5,623 4.0 22,492
Total EV 574,688
Net debt 219,020
Implied Mcap 355,668
Value per share 186
Value of investments Discount:20% 15
SOTP value per share 201
Source: Antique

Antique Stock Broking Limited 13

Antique’s Morning Presentation (AMP) August 11, 2010
Abhijeet Kundu, +91 22 4031 3430, abhijeet@antiquelimited.com

Britannia Industries Ltd.: Limited upside - Downgrade to HOLD

HOLD CMP: INR2,052 Target Price: INR2,083 Potential Upside: 2%

Key highlights „ Current valuations provide limited upside, Downgrade to HOLD: At the
„ Sales revival continues, but profit disappoints: Britannia Industries posted a CMP of INR2,052, the stock is trading at a PE of 24.3x FY11e and at 17.7x FY12e
better than expected growth of 25% in sales to INR9,128m. However, profitability earnings. At the current levels, the stock is trading at our target PE valuations of 18x.
continued to be impacted by higher raw material cost leading to a drop in EBITDA and Further, at the current levels, we do not see any case for re-rating in the stock valuations
PAT by 32% and 40%, respectively, to INR407m and INR328m. The growth in sales as we see growing competition for the company in the coming years from higher
was backed by about 20% growth in volumes during the quarter. competition in the premium and mid priced segment. The other two key players in the
Indian biscuits industry, Parle Products and ITC, have ramped up their efforts in the
„ Sales revival in line with expectations: We had stated in our last update that premium biscuits segment in order to gain strength in the segment. Further, the entry of
our industry interactions suggested continued healthy growth in biscuit volumes in the global player like Kraft would only increase the competition in the category leading to
coming quarters. This trend was visible in the 1QFY11 results of both ITC and Britannia. lower pricing power and requiring higher ad-spends by the company. We therefore
ITC during the quarter recorded a growth in biscuit sales of about 43%. downgrade the stock to HOLD at the current levels.
„ EBITDA margin impacted by higher sugar cost: EBITDA margin during the Quarterly financials
quarter dropped by 374bps to 4.5% due to 458bps increase in raw material cost to
INRm 1QFY11 1QFY10 Chg (%)
65.4% of net sales. The rise in raw material cost has been primarily due to the higher
Revenues 9,128 7,312 25
prices of sugar and milk. Sugar has been the key culprit for the increase in input cost Cost of RM 5,967 4,445 34
during FY10. The raw material cost during FY10 increased by 268bps to 9.3% of net % of net sales 65.4 60.8 458
sales leading to a 238bps increase in overall cost of raw material to 63.8% of net Staff cost 259 241 7
sales. The commodity witnessed a steep increase in realisation of 58% during the year. % of net sales 2.8 3.3 (46)
Advertisement exp 684 515 33
„ Input cost inflation would only moderate by 2HFY11: The input cost inflation % of net sales 7.5 7.0 44
is expected to moderate during 2HFY11 on a YoY basis with the softening of prices in Other expenditure 1,813 1,512 20
its key raw material, Sugar. On a sequential basis, Sugar prices have softened leading % of net sales 19.9 20.7 (82)
to lower input cost and better EBITDA margins over 4QFY10. However, the YoY softening EBITDA 407 599 (32)
in sugar prices is expected to be witnessed from 3QFY11 with the fresh output of the EBITDA margin (%) 4.5 8.2 (374)
commodity by Oct 2010. We now expect EBITDA margins during FY11 to be at 6.6% Other income 229 153 50
Depreciation 100 91 9
against our earlier expectations of about 4.7%.
Interest expenses 94 8 -
„ Cut EPS estimates by 17-4% during FY11-12: In view of the impact of lower Tax 114 109 4
prices of sugar to be only reflected by 2HFY11, we are reducing our EPS estimates for Recurring PAT 328 544 (40)
FY11 by 17% to INR84.3. For FY12, we are reducing EPS estimates by only about 4% PAT margin (%) 3.6 7.4 (384)
Reported PAT 328 474 -31
to INR116 as we believe that the impact of the lower raw material prices was effective
Source: Company
in FY12 for a larger period of 9 months.
Antique Stock Broking Limited 14
Antique’s Morning Presentation (AMP) August 11, 2010

Britannia Industries Ltd.: Limited upside - Downgrade to HOLD

Margins primarily impacted by higher sugar prices Sugar price index witnessing a sequential drop, YoY drop to follow in 2HFY11
20% 63.7% 63.8% 70% 60% 68.8% 70%
60.2% 61.4%
18% 58.8% 58.7% 54.6%
60% 50% 52.0% 68%
16%
40% 65.4% 66%
14% 50% 39.3%
64.2% 64.2%
12% 12.4% 31.8%
11.1% 11.2% 40% 30% 64%
10.8% 10.5%
10% 24.3%
8.8% 9.3% 20% 21.3% 62%
8% 7.9% 8.6% 30% 60.6% 60.6% 60.4% 60.3% 60.8% 60.4%
14.1%
6% 6.4% 6.4% 6.6% 10% 11.0% 60%
20%
15.5% 16.8% 15.9% 3.2%
4% 12.2% 13.5% 0% 58%
10.6% 10%
2% -4.9%
-10% 56%
0% 0%
4QFY08 1QFY09 2QFY09 3QFY09 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11
FY05 FY06 FY07 FY08 FY09 FY10
RM as % of net sales (RHS) Wheat index change (yoy %) (LHS)
Cost of RM Flour Hydrogenated Vegetable Oil Sugar Others
Sugar index change (yoy %) (LHS)
Source: Company Source: Company, Office of Economic Advisor

Realisation change YoY % of key raw materials Sugar and wheat price index
70% 350
60%
300
50%
40% 250
30% 200
20%
10% 150

0% 100
-10%
50
-20%
-30% -
FY05 FY06 FY07 FY08 FY09 FY10 4QFY07 2QFY08 4QFY08 2QFY09 4QFY09 2QFY10 4QFY10

Flour w heat Hydrogenated Vegetable Oil Sugar Sugar index Wheat index

Source: Company Source: Office of Economic Advisor

Antique Stock Broking Limited 15

Antique’s Morning Presentation (AMP) August 11, 2010

Britannia Industries Ltd.: Limited upside - Downgrade to HOLD

Financials
Year ended March 2009 2010 2011e 2012e
Revenue 31,122 34,014 40,402 46,031
EBITDA 2,589 1,601 2,684 3,691
EBITDA margin (%) 8.3 4.7 6.6 8.0
EBITDA growth (%) 12 (38) 68 38
PAT 1,940 1,694 2,014 2,764
PAT growth (%) 5 (13) 19 37
EPS (INR/share) 81.2 70.9 84.3 115.7
EPS growth (%) 5 (13) 19 37
PE (x) 25.3 28.9 24.3 17.7
PB (x) 5.9 12.4 9.3 7.0
EV/EBITDA (x) 19.8 32.1 19.1 13.9
RoE (%) 24 43 38 39
Source: Company, Antique

Antique Stock Broking Limited 16

Antique’s Morning Presentation (AMP) August 11, 2010
Vikram Suryavanshi, +91 22 4031 3428; vikram.suryavanshi@antiquelimited.com

Great Offshore Ltd - Mild turbulence

BUY CMP: INR410 Target Price: INR565 Potential Upside: 38%

Key highlights Financial trend

„ Standalone revenues declined by 3.1% YoY (12.6% QoQ) to INR2.39bn in 1QFY11 on 3,000 52
account of dry docking and vessels in the spot market which witnessed the depressed 50
2,500
charter rate.
48
2,000
„ The special survey and refurbishment of two drilling rigs and 4% YoY decline in Offshore
46
Support vessels utilisation to 68% impacted 1QFY11 results. 1,500
44
„ EBIDTA declined by 13.4% YoY, from INR1.2bn in 1QFY10 to INR1bn in 1QFY11, on 1,000
42
the back of 498bpd decline in margins to 43.1% in 1QFY11.
500 40
„ Margin decline was mainly due to increase in staff cost by 22% YoY to INR507m and
0 38
32.4% YoY increase in engineering project cost to INR429m.
1QFY11 4QFY10 3QFY10 2QFY10 1QFY10
„ The acquisition of 6 vessels during 2HFY10 increased interest cost by 23.8% YoY to Revenue PAT EBIDTA (%)
INR311m and depreciation by 47.4% YoY to INR440m. Source: Company,

„ Net profit declined by 53% YoY, from INR590m to INR276m in 1QFY11, translating
Project segment
into EPS of INR7.4
The revenue from project segment increased by 15.7% from INR380m to INR440m, while
„ On a consolidated basis, GOL reported a revenue increase of 8% YoY to INR2.9bn expenditure expanded by 32.4% from INR324m in 1QFY10 to INR429m in 1QFY11.
and PAT of INR284m compared to INR306m in 1QFY10.

Quarterly financials (Standalone)

Extraordinary items
INRm 1QFY11 1QFY10 Chg (%) 4QFY10 Chg (%) The company has realised exchange loss of INR10.6m debited to P&L in 1QFY11 compared
Net sales 2,393 2,470 (3.1) 2739 (12.6) to INR95.5m in 1QFY10. It had one time charge of INR190.5m relating to the invocation of
Operating profit 1,008 1,164 (13.4) 1357 (25.7) performance bank guarantee for non delivery of new build Jack Up rig as per terms of the
OPM (%) 42.1 47.1 (10.6) 49.5 (15.0) contract in 1QFY10.
Interest 311 251 23.9 261 19.3
Depreciation 440 298 47.4 363 21.1 Revenue visibility
Tax 75 28 169.2 51 46.4 GOL has a revenue visibility of ~INR4.3bn on existing contracts for owned vessels for a
PAT 277 590 (53.1) 731 (62.1) balanced period of FY11. Offshore support vessels and harbor tugs are covered to the
EPS (INR) 7.5 15.9 (53.1) 19.6 (62.0)
extent of 55% and 90% of their operating days, respectively.
Source: Company, Antique ; Note:Does not include non-recurring items

Antique Stock Broking Limited 17

Antique’s Morning Presentation (AMP) August 11, 2010

Great Offshore Ltd - Mild turbulence

Capitalisation of special surveys' expenditure Valuations and recommendation

GOL has changed its accounting policy w.e.f. April 2009 in respect of expenses incurred at At the CMP of INR410, the stock is trading at earnings multiples of 8.6x and 6.2x, discounting
the time of five yearly special survey and/or life enhancement programmes instead of its FY11 and FY12 earnings respectively. We have valued the company on earnings multiple
charging the same to Profit and Loss Account. It has capitalised ~INR414m in 1QFY11 mindful of the strong revenue visibility due to long-term contracts. Historically, it has traded
compared to INR195m towards expenditure incurred on major overhauls during five yearly in wide range of 12x to 20x. The stock has moved into lower band of 5x to 10x since April
special surveys. 2009. We expect that the current state of depressed valuations will correct on back of lower
volatility and significant growth (~40%) in FY12 earnings. We have not factored the upside
Recent developments from possible acquisition of vessels from the secondhand market. GOL is planning to raise
„ CRISIL rating for bank facilities has been revised from A/Negative to A/Stable for long capital to purchase assets, which could provide further upside to our estimates. We maintain
term loans of INR7bn. our valuation based on P/E multiple of ~8.5x discounting its FY12 earnings (35% discount
to average P/E in last four years). We reiterate our BUY recommendation with a target price
„ GOL had issued FCCBs of USD42m on Oct 05, 2007, convertible into equity shares at
of INR565, which represents an upside potential of 38%.
a price of INR875/share with conversion option till Sep 28, 2012 with a fixed rate of
exchange on conversion of INR39.82 = USD1. In case of redemption, the principal Financials
amount would be paid on Oct 12, 2012 with yield of 7.25% compounded semi-annually. Year ended 31st March 2008 2009 2010 2011e 2012e
In event of non-conversion, it would have to repay ~INR2.9bn in October 2012. GOL Revenues (INRm) 7,459 10,811 11,656 12,064 15,456
proposes to revise the conversion price, the floor price and/or the fixed exchange rate EBITDA(INRm) 3,124 4,830 4,977 5,263 7,358

taking into account for translating the principal amount of the FCCBs from USD into INR PAT (INRm) 2,017 2,751 2,010 1,766 2,475

of one/all of the FCCB holders. PAT growth (%) 38.9 36.4 (26.9) (12.2) 40.2
EPS (INR) 36.6 59.8 53.1 47.4 66.5
New building contracts EPS growth(%) (1.3) 63.2 (11.2) (10.6) 40.2
P/E (x) 11.2 6.9 7.7 8.6 6.2
The order book for new vessel includes a multi support vessel (MSV) and a Jack up rig. The
P/BV (x) 1.8 2.2 1.5 1.0 1.1
rig, as per the revised schedule, is expected by 4QFY11 and the delivery of MSV is expected EV/EBITDA (x) 6.8 8.4 8.5 7.7 5.7
to be during Mar 2012. RoE (%) 15.8 29.7 17.5 13.8 16.5
Source: Company, Antique

Antique Stock Broking Limited 18

Antique’s Morning Presentation (AMP) August 11, 2010

Valuation Guide
Company Reco Price Target price Return Market Cap Net Profit (Ibn) EPS (I) PE (x) EV/EBITDA (x) P/BV (x) Div Yield (%) RoE (%) RoCE (%) Absolute (%) Relative (%)
(I) (I) (%) (Ibn) FY10 FY11 FY10 FY11 FY10 FY11 FY10 FY11 FY10 FY10 FY10 FY10 1m 3m 12m 1m 3m 12m
AUTOMOBILES
Ashok Leyland BUY 71 87 23 94 4.2 6.7 3.2 5.0 22.2 14.1 15.1 10.0 2.6 2.3 11.6 7.2 2 10 116 (1) 5 78
Bajaj Auto BUY 2,651 2,930 11 383 18.7 25.6 117.5 177.2 22.6 15.0 15.3 11.4 13.1 1.5 35.0 23.3 9 25 147 7 19 104
Bosch Limited BUY 5,830 5,665 (3) 183 5.9 7.6 188.1 241.5 31.0 24.1 30.7 17.3 5.4 0.5 17.4 6.0 2 15 53 (1) 9 26
Container Corp. of India HOLD 1,408 1,393 (1) 183 7.8 8.7 59.9 67.1 23.5 21.0 16.6 14.6 4.2 1.1 18.0 15.4 2 7 26 (0) 2 4
Exide Industries Limited BUY 143 152 6 122 5.4 6.9 6.3 8.2 22.6 17.5 13.8 11.2 5.5 0.7 24.2 26.9 7 20 75 4 14 44
Hero Honda Motors Limited HOLD 1,867 1,937 4 373 22.3 24.3 111.8 121.8 16.7 15.3 13.9 13.2 9.0 4.3 53.6 41.7 (7) (1) 36 (9) (6) 12
Mahindra & Mahindra BUY 641 780 22 371 20.4 25.7 35.9 44.1 17.9 14.5 12.8 11.1 4.8 1.5 16.5 10.2 0 16 69 (2) 10 39
Maruti Suzuki Limited HOLD 1,227 1,331 8 355 25.0 24.2 86.4 81.6 14.2 15.0 9.7 10.2 3.0 0.5 21.5 16.1 (14) (5) (2) (16) (10) (19)
Tata Motors Limited BUY 957 928 (3) 529 5.6 23.0 39.3 40.3 24.4 23.7 16.6 13.2 3.6 1.6 14.6 8.3 24 18 137 22 12 95
DIVERSIFIED
Aditya Birla Nuvo Limited BUY 806 922 14 83 2.8 2.3 27.6 20.2 29.2 39.9 15.1 15.3 1.7 0.5 5.3 6.5 3 2 (8) 1 (3) (24)
FMCG & RETAIL
Asian Paints BUY 2,667 2,900 9 256 7.5 9.6 78.3 100.3 34.1 26.6 20.9 16.8 15.0 1.1 43.9 59.0 12 26 100 9 20 65
Britannia Industries Limited (India) BUY 2,050 2,161 5 49 1.7 2.4 70.9 101.7 28.9 20.2 30.1 14.2 5.2 1.2 23.5 26.5 8 24 21 6 18 (0)
Colgate Palmolive India Limited BUY 842 941 12 115 4.0 4.7 29.6 34.3 28.5 24.6 26.1 21.2 35.1 2.8 123.4 117.4 (1) 14 45 (3) 8 20
Dabur India Limited HOLD 202 222 10 176 5.0 6.3 5.8 7.2 35.0 28.0 27.8 22.0 13.7 1.2 39.3 39.6 (5) 12 55 (7) 6 28
Godrej Consumer Products Limited BUY 358 420 17 116 3.4 4.9 11.0 15.3 32.5 23.4 29.0 16.9 1.2 3.3 51.7 41.1 3 20 69 0 14 39
Hindustan Unilever Limited SELL 260 212 (18) 568 21.0 21.6 9.6 9.9 27.1 26.3 21.4 21.6 19.3 2.7 91.1 72.4 (1) 10 (0) (3) 4 (18)
ITC Limited BUY 157 169 8 1,203 40.6 48.3 5.3 6.3 29.6 24.9 19.3 16.4 9.0 3.2 23.3 31.0 5 23 43 2 17 18
Jyothy Laboratories Ltd. HOLD 287 294 2 21 0.8 1.0 10.5 13.2 27.4 21.7 20.9 16.3 5.2 1.4 19.1 20.9 7 63 152 4 55 108
Kansai Nerolac Limited HOLD 839 815 (3) 45 1.7 2.1 30.7 38.8 27.3 21.6 16.4 12.7 5.8 2.4 14.4 15.8 10 12 131 8 7 90
Marico Limited BUY 119 142 19 73 2.6 3.2 4.3 5.2 27.4 22.8 19.4 17.0 10.9 0.6 39.8 30.9 (9) 10 48 (11) 5 22
Nestle India Limited BUY 2,819 3,380 20 272 7.0 8.7 72.4 89.8 39.0 31.4 26.1 21.3 46.8 1.7 119.3 162.6 (6) 1 30 (8) (4) 7
Pantaloon Retail (India) Limited HOLD 466 456 (2) 94 2.0 2.9 9.7 13.8 48.2 33.8 13.1 10.1 3.0 0.1 6.3 10.4 1 15 73 (2) 9 42
Titan Industries BUY 2,813 2,929 4 125 2.6 3.9 58.3 88.0 48.2 32.0 32.4 23.0 17.2 0.5 35.7 43.3 12 29 143 10 23 100
United Breweries BUY 314 324 3 75 0.9 1.8 3.6 7.5 86.9 42.0 35.9 20.4 6.6 0.2 7.5 6.7 44 54 118 40 47 80
United Spirits SELL 1,445 1,177 (19) 182 3.5 4.5 29.9 38.7 48.4 37.4 19.9 18.3 3.4 0.0 7.1 10.0 12 17 64 10 11 35
IT & MEDIA
Infosys Technologies Ltd. BUY 2,829 3,024 7 1,624 62.7 72.0 108.9 126.0 26.0 22.4 19.3 16.4 7.0 0.9 27.2 38.0 (2) 6 36 (4) 1 12
Patni Computers Systems Ltd BUY 450 801 78 59 5.8 6.5 43.9 48.7 10.3 9.3 6.4 5.7 1.5 0.7 14.3 17.5 (11) (20) 19 (13) (24) (2)
Financial Technologies India Ltd BUY 1,211 1,708 41 56 3.7 2.0 80.4 44.4 15.1 27.3 39.7 31.8 2.6 1.7 17.2 18.1 (11) (15) (18) (13) (19) (32)
IBN 18 BUY 98 128 30 23 (0.5) (0.3) (2.6) (1.4) (38.3) (70.9) 3,272.9 59.1 5.5 - (0.1) (1.6) (1) 12 (3) (3) 6 (20)
Sun TV Network Ltd BUY 471 567 20 186 5.2 7.4 13.2 18.7 35.7 25.2 16.6 12.7 9.8 1.3 27.6 40.8 10 11 78 7 6 47
UTV Software Communications Ltd. BUY 487 579 19 20 0.4 0.9 8.9 23.2 54.9 21.0 178.0 13.6 1.9 - 3.5 0.4 19 9 10 17 4 (10)
Zee Entertainment Enterprises Ltd BUY 312 361 16 151 5.0 5.9 10.3 12.0 30.3 26.0 23.9 19.1 3.9 0.6 12.8 21.8 4 9 66 1 4 37
Zee News HOLD 14 16 11 3 0.5 0.1 2.0 0.5 7.3 26.6 4.8 13.9 1.2 2.7 17.1 28.7 5 (2) (64) 3 (6) (70)
METALS
Adhunik Metaliks Limited BUY 116 190 64 14 1.2 2.7 11.6 26.0 10.1 4.5 8.3 5.0 2.3 - 26.7 5.7 (2) 0 27 (4) (4) 4
Godawari Power and Ispat BUY 229 351 53 6 0.3 1.6 12.3 56.1 18.6 4.1 9.8 4.0 1.3 2.0 7.4 8.5 2 (11) 117 (0) (15) 79
Graphite India Ltd BUY 100 151 50 18 2.4 2.6 12.4 13.1 8.1 7.6 5.3 4.9 1.3 2.5 16.5 7.6 (6) (8) 104 (8) (12) 68
Hindalco Industries Limited BUY 164 157 (4) 313 39.3 20.2 20.5 9.5 8.0 17.3 5.4 7.3 1.9 1.6 18.2 7.6 10 (7) 61 7 (11) 32
Hindustan Zinc Limited BUY 1,149 1,701 48 486 39.9 62.0 94.5 146.7 12.2 7.8 10.3 6.0 2.7 0.4 18.9 18.0 19 3 60 17 (2) 31
Jindal Steel & Power Ltd. BUY 633 701 11 591 32.6 40.6 35.3 43.9 17.9 14.4 12.4 10.3 5.7 0.5 32.0 22.6 0 (8) 41 (2) (13) 16
JSW Steel Limited BUY 1,133 1,352 19 212 16.0 21.3 83.9 112.5 13.5 10.1 9.2 6.4 2.3 0.8 9.4 9.2 5 (6) 68 3 (11) 39
NALCO SELL 425 321 (24) 274 9.7 14.6 15.0 22.7 28.3 18.7 15.4 9.6 2.5 1.2 8.9 11.7 (0) 5 37 (2) (1) 13
Sarda Energy Limited BUY 267 350 31 9 0.9 1.4 27.2 41.5 9.8 6.4 6.2 4.7 1.6 1.5 31.7 26.6 (0) (9) 139 (2) (13) 97
Sesa Goa Limited BUY 377 386 2 324 26.3 30.2 31.6 34.0 11.9 11.1 12.6 10.2 4.0 0.9 41.6 47.3 7 (8) 53 5 (13) 26
Steel Authority of India BUY 197 271 38 813 62.8 108.0 15.2 26.2 12.9 7.5 9.7 5.7 1.9 1.3 14.6 10.7 1 (10) 20 (1) (14) (2)
Sterlite Industries India Limited BUY 176 213 21 590 37.4 35.4 45.8 50.0 3.8 3.5 9.7 7.1 0.9 1.7 17.0 5 (7) 11 2 (12) (9)
TATA Steel BUY 536 651 21 476 (25.2) 50.3 (27.8) 59.0 (19.3) 9.1 15.7 6.6 5.3 1.9 (10.4) 2.4 8 (11) 18 6 (15) (3)
Visa Steel Limited HOLD 37 55 48 4 0.7 2.3 6.8 21.1 5.5 1.8 7.0 3.5 0.8 - 13.8 3.9 (3) (12) 28 (5) (17) 6

Antique Stock Broking Limited 19

Antique’s Morning Presentation (AMP) August 11, 2010

Valuation Guide
Company Reco Price Target price Return Market Cap Net Profit (Ibn) EPS (I) PE (x) EV/EBITDA (x) P/BV (x) Div Yield (%) RoE (%) RoCE (%) Absolute (%) Relative (%)
(I) (I) (%) (Ibn) FY10 FY11 FY10 FY11 FY10 FY11 FY10 FY11 FY10 FY10 FY10 FY10 1m 3m 12m 1m 3m 12m
OIL & GAS
Bharat Petroleum Corp. Ltd. BUY 647 744 15 234 26.6 12.5 85.2 41.8 7.6 15.5 16.7 15.6 2.0 6.7 19.8 3.3 (9) 20 30 (11) 14 7
Cairn India Limited SELL 336 171 (49) 638 49.7 63.8 26.0 33.0 13.0 10.2 9.4 7.6 1.7 1.5 12.8 13.2 12 12 40 9 7 15
GAIL India Limited BUY 443 492 11 562 31.4 37.8 24.8 31.0 17.9 14.3 11.9 9.1 3.3 1.7 18.6 21.7 (6) 4 41 (8) (1) 16
Hindustan Petroluem Corp. Ltd. BUY 452 501 11 153 13.6 9.9 40.0 29.2 11.3 15.5 10.1 13.5 1.3 2.7 11.7 6.7 (8) 37 30 (10) 30 7
Indian Oil Company Ltd. BUY 372 596 60 904 106.7 83.1 45.0 35.1 8.3 10.6 9.0 8.0 1.7 2.3 20.4 10.9 (7) 23 38 (9) 17 14
Oil India ltd. BUY 1,367 1,553 14 329 26.1 34.0 108.6 141.2 12.6 9.7 6.0 4.5 2.4 1.1 19.0 22.2 (1) 21 N.A (4) 15 N.A
Oil & Natural Gas Corp. Limited BUY 1,235 1,525 23 2,642 167.7 249.6 88.3 129.1 14.0 9.6 7.3 5.7 3.0 2.7 20.4 20.1 (5) 18 6 (7) 12 (12)
Petronet LNG Ltd. BUY 104 112 8 78 4.0 4.5 5.4 6.0 19.2 17.2 12.4 9.9 3.5 1.7 16.0 13.5 26 28 59 24 21 31
Reliance Industries Limited HOLD 988 960 (3) 3,231 154.4 215.9 47.0 65.7 21.0 15.0 12.1 10.0 2.3 0.7 10.9 9.7 (7) (8) (1) (9) (13) (18)
REAL ESTATE
D B Realty BUY 415 518 25 101 2.7 7.1 10.4 29.2 40.1 14.2 26.4 10.7 3.7 - 9.1 10.8 10 (1) NA 8 (6) NA
DLF BUY 320 368 15 544 18.2 20.8 10.7 12.3 29.9 26.1 21.7 17.7 1.8 - 5.9 6.0 8 5 (12) 6 0 (27)
HDIL BUY 277 335 21 102 5.7 7.3 15.9 19.7 17.4 14.1 18.1 13.0 1.4 - 8.1 6.4 11 8 10 9 3 (9)
Indiabulls Real Estate BUY 186 250 34 75 (0.2) 0.3 (0.6) 0.6 (310.1) 288.9 (82.4) (463.0) 0.8 - (0.2) (0.9) 12 13 (17) 10 7 (31)
Phoenix Mills BUY 243 251 3 35 0.6 1.0 4.1 6.8 59.9 35.6 55.0 26.3 2.3 0.5 3.8 2.4 11 16 108 9 10 71
Sobha Developers BUY 375 378 1 37 1.3 1.6 13.7 16.5 27.5 22.7 19.2 15.6 2.2 0.8 7.9 7.2 17 29 88 15 22 55
Unitech BUY 89 111 25 222 6.9 10.3 2.8 3.9 31.4 22.7 26.9 19.1 1.9 - 6.2 5.8 18 12 5 15 7 (13)
TELECOM
Bharti Airtel SELL 326 254 (22) 1,236 91.0 81.7 24.0 21.5 13.6 15.1 7.6 8.0 3.0 - 22.0 20.9 5 11 (13) 3 5 (28)
Idea Cellular SELL 71 48 (32) 233 9.5 5.9 2.9 1.8 24.4 39.4 6.9 6.5 (22.0) - 8.0 7.0 6 12 (4) 4 7 (21)
Reliance Communication HOLD 175 137 (22) 361 46.5 28.3 22.6 13.7 7.8 12.7 7.3 8.2 0.9 - 9.9 6.1 (10) 13 (31) (11) 8 (43)
UTILITIES AND INDUSTRIALS
ABB Limited SELL 784 591 (25) 166 3.9 4.5 18.3 21.4 42.8 36.6 86.0 73.3 6.0 0.2 13.9 19.2 (9) 12 19 (11) 7 (2)
Adani Power SELL 141 82 (42) 307 8.9 10.6 4.1 4.9 34.6 28.9 40.5 26.4 4.9 - 14.1 4.3 10 N.A N.A 8 N.A N.A
Bharat Heavy Electricals Limited BUY 2,500 2,719 9 1,224 56.3 67.1 88.8 115.1 28.2 21.7 14.5 12.3 6.2 1.1 28.7 33.5 4 2 16 2 (3) (4)
CESC BUY 392 465 19 49 1.7 3.6 13.7 28.7 28.7 13.6 15.8 10.0 1.0 0.8 5.6 2.3 (3) 0 33 (5) (5) 10
GMR Infrastrusture BUY 60 82 36 234 1.4 2.9 0.4 0.8 162.1 75.5 27.2 20.1 3.0 3.3 1.9 3.0 2 (4) (6) (0) (8) (23)
Lanco Infrastructure BUY 68 70 3 163 4.5 12.9 1.9 5.4 35.8 12.5 15.7 7.6 4.9 - 16.7 10.9 0 8 67 (2) 3 38
Larsen & Toubro BUY 1,827 2,100 15 1,102 33.9 44.5 56.8 74.5 32.2 24.5 19.8 17.8 5.9 0.6 18.4 14.5 0 18 27 (2) 12 5
NTPC HOLD 196 212 8 1,619 88.4 94.2 10.7 11.4 18.3 17.2 14.5 11.9 2.6 2.0 14.7 9.5 (1) (4) (7) (3) (9) (23)
Power Grid HOLD 102 115 14 427 19.9 23.4 4.7 5.6 21.5 18.3 11.9 10.2 2.7 1.2 12.4 10.1 (0) (6) (8) (3) (11) (24)
PTC India Limited BUY 117 132 12 35 0.9 1.3 3.2 4.5 36.8 26.0 53.3 34.3 1.6 1.1 5.1 2.8 10 5 33 8 0 9
Reliance Infrastructure HOLD 1,113 1,065 (4) 273 12.8 15.0 56.1 65.6 19.8 17.0 27.8 25.0 1.3 1.8 7.3 2.5 (5) 5 (3) (7) (1) (20)
Siemens Limited BUY 698 748 7 235 7.4 9.2 21.9 27.2 31.8 25.6 24.2 19.4 28.5 0.5 20.9 28.4 (3) (0) 57 (5) (5) 29
Suzlon Energy Limited HOLD 58 49 (15) 101 (11.9) 0.1 (7.4) 0.0 (7.8) 1,456.0 29.3 15.5 1.2 - (15.7) 0.5 (1) (17) (28) (3) (21) (41)
Tata Power SELL 1,330 1,112 (16) 316 16.2 19.4 68.1 78.6 19.5 16.9 10.1 7.6 2.8 1.1 14.5 9.4 1 (0) 6 (1) (5) (13)

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Antique’s Morning Presentation (AMP) August 11, 2010

Valuation Guide
Company Reco Price Target price Return Market Cap Net Profit (Ibn) EPS (I) PE (x) EV/EBITDA (x) P/BV (x) Div Yield (%) RoE (%) RoCE (%) Absolute (%) Relative (%)
(I) (I) (%) (Ibn) FY10 FY11 FY10 FY11 FY10 FY11 FY10 FY11 FY10 FY10 FY10 FY10 1m 3m 12m 1m 3m 12m
FINANCIALS
Axis Bank BUY 1,295 1,425 10 528 24 30 60.1 75.2 21.6 17.2 0.4 0.4 3.4 1.1 18.5 1.5 2 4 54 (0) (1) 26
Bajaj Auto Finance BUY 603 632 5 22 0.89 2.03 24.4 55.5 53.0 10.9 2.2 2.0 1.9 1.0 8.1 1.9 18 38 201 16 32 148
HDFC BUY 3,073 3,442 12 894 27 33 96.1 116.3 32.0 26.4 0.4 0.4 5.9 0.9 19.5 2.4 4 10 32 1 5 8
HDFC Bank BUY 2,095 2,150 3 964 29 37 67.0 83.0 31.3 25.2 0.6 0.6 4.7 0.7 16.3 1.5 5 8 52 2 3 25
ICICI Bank BUY 989 998 1 1103 40 48 35.7 43.3 27.7 22.9 2.1 1.5 2.3 1.3 7.8 1.0 13 7 38 11 2 13
LIC Housing Finance HOLD 1,204 1,014 (16) 114 7 9 69.7 95.0 17.3 12.7 0.3 0.2 3.5 1.4 23.6 1.9 21 26 100 18 20 65
Punjab National Bank BUY 1,103 1,100 (0) 348 38 44 120.2 138.8 9.2 8.0 0.5 0.4 2.5 2.2 23.4 1.5 4 9 67 2 3 38
Shriram Transprt finance BUY 705 638 (9) 159 8 11 37.8 52.5 18.6 13.4 0.70 0.50 4.6 2.3 29.5 2.9 19 25 104 16 19 68
State Bank Of India HOLD 2,630 2,426 (8) 1670 101 114 159.6 178.8 16.5 14.7 2.6 2.2 3.5 1.1 16.9 1.0 11 14 54 9 8 27
YES Bank BUY 303 330 9 104 5 6 14.9 17.5 20.3 17.3 0.4 0.3 3.3 - 0.0 1.9 6 9 97 4 4 63

Company Reco Price Target price Return Market Cap Net Profit (Ibn) EPS (I) PE (x) EV/EBITDA (x) P/BV (x) Div Yield (%) RoE (%) RoCE (%) Absolute (%) Relative (%)
(I) (I) (%) (Ibn) FY10 FY11 FY10 FY11 FY10 FY11 FY10 FY11 FY10 FY10 FY10 FY10 1m 3m 12m 1m 3m 12m
MIDCAP
Balrampur Chini Mills Ltd HOLD 84 86 3 22 0.9 1.8 3.4 7.1 24.6 11.8 10.0 7.7 1.7 0.8 7.2 8.5 (4) 15 (30) (6) 10 (42)
Essar Shipping Ports & Logistics Ltd. HOLD 123 111 (10) 76 0.4 1.5 0.6 2.4 213.2 50.3 17.1 12.6 1.0 - 0.5 6.0 44 46 117 41 39 79
Ess Dee Aluminium Ltd. BUY 513 540 5 15 1.0 1.4 36.6 51.1 14.0 10.0 11.4 8.2 3.3 0.4 27.2 20.4 0 3 87 (2) (2) 54
Gayatri Projects Ltd BUY 389 494 27 4 0.5 0.7 35.1 47.9 11.1 8.1 5.7 4.5 1.5 1.0 20.5 18.3 (6) (6) 58 (8) (10) 30
Great Eastern Shipping Company Ltd. BUY 314 393 26 48 5.4 8.1 35.4 53.0 8.9 5.9 8.4 5.7 0.9 - 9.6 7.7 4 4 26 2 (1) 4
Great Offshore Ltd BUY 409 565 38 15 2.0 1.8 53.1 47.4 7.7 8.6 7.5 7.1 1.4 1.0 17.6 11.4 (7) (11) (23) (9) (15) (37)
HeidelbergCement India Ltd. BUY 51 64 26 12 1.0 1.1 4.5 5.1 11.4 10.0 6.2 5.7 1.4 - 12.9 27.1 4 (4) 24 1 (9) 2
JK Lakshmi Cement BUY 60 85 42 7 2.4 1.4 19.7 11.5 3.0 5.2 3.4 4.5 0.7 3.3 26.0 21.3 (8) (9) (5) (10) (13) (22)
Mercator Lines Ltd. BUY 52 73 40 12 0.4 1.2 1.8 4.9 29.8 10.7 6.7 5.4 0.6 0.4 1.8 5.1 10 (3) (3) 7 (8) (20)
Maharashtra Seamless Ltd BUY 418 475 13 29 2.8 3.0 40.2 43.1 10.4 9.7 5.5 5.1 1.9 1.2 30.1 0.0 8 11 55 5 6 27
Mahindra Holidays BUY 479 540 13 40 1.2 1.1 14.1 12.8 33.9 37.5 26.3 29.1 9.1 0.3 36.9 17.7 (9) (3) 43 (11) (8) 18
Nava Bharat Ventures Ltd. BUY 378 523 39 29 5.4 5.7 70.6 64.5 5.3 5.8 4.4 3.8 1.7 5.4 32.5 26.9 (7) (10) 15 (9) (15) (5)
Opto Circuits BUY 277 276 (0) 51 2.6 3.9 14.2 21.3 19.5 13.0 14.1 10.7 4.6 21.8 32.1 29.5 14 26 64 11 20 35
Polyplex Limited BUY 383 250 (35) 6 1.3 0.6 83.5 101.7 4.6 3.8 3.6 3.2 0.9 2.1 20.3 18.8 41 77 117 38 69 79
Prakash Industries BUY 175 348 99 22 2.4 2.5 17.2 18.1 10.2 9.6 6.6 5.7 1.6 - 19.8 21.8 (4) (13) 50 (6) (17) 23
S Kumars Nationwide Ltd BUY 81 104 29 19 2.3 2.8 8.5 10.5 9.5 7.7 6.0 4.5 1.1 - 15.2 15.2 7 8 90 4 3 56
Shiv Vani Oil & Gas HOLD 441 449 2 20 2.2 2.8 49.8 64.2 8.8 6.9 6.8 6.1 1.7 0.2 21.7 22.5 (4) 4 31 (6) (1) 8
Shree Renuka Sugars Ltd HOLD 66 69 5 44 7.0 3.7 10.5 5.6 6.3 11.8 4.3 6.5 1.9 1.5 36.2 37.2 (7) 16 (27) (9) 10 (39)
Sterlite Technologies Ltd. HOLD 103 116 13 37 2.5 3.0 6.6 8.1 15.6 12.6 8.8 7.4 1.6 0.2 32.0 30.4 (11) 5 129 (13) (0) 88
Triveni Engineering & Industries Ltd HOLD 105 121 15 27 2.0 2.7 8.4 10.5 12.5 10.0 8.0 6.6 2.4 1.0 21.0 18.7 (2) (3) (5) (4) (8) (21)
Ultratech Cements ltd BUY 885 1,028 16 110 10.9 8.0 87.8 64.1 10.1 13.8 6.4 7.7 2.4 0.7 26.6 25.2 3 (7) 23 1 (11) 2

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Antique’s Morning Presentation (AMP) August 11, 2010

Events Calendar
August 2010
Monday Tuesday Wednesday Thursday Friday Saturday Sunday

11 August 12 August 13 August 14 August 15 Aug

Financial Technologies, Bharti State Bank of India, Tata Power, Shiv Vani Oil & Gas Expl Lanco Infratech, Unitech,
Airtel, Bosch, Parsvnath Dev Tata Steel, Shree Renuka Serv, Ess Dee Aluminium, NALCO
Sugars, Indiabulls Real Estate, Patel Engineering, Reliance
PTC India Communications

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Antique’s Morning Presentation (AMP) August 11, 2010

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