You are on page 1of 38

INDIA DAILY

®

India Daily Summary - April 08, 2009

EQUITY MARKETS

April 08, 2009

Change, %
India
Sensex

6-Apr 1-day

1-mo

3-mo

10,535

1.8

26.5

9.9

3,257

1.4

24.3

11.5

Nifty

Contents

Global/Regional indices
Dow Jones

7,790

(2.3)

17.5

(11.2)

New Release

FTSE

3,931

(1.6)

11.3

(12.8)

Nikkie

8,674

(1.8)

20.9

(2.3)

14,929

(0.5)

25.2

3.6

1,286

(1.1)

21.9

6.7

Energy: India Energy Monthly, April 2009

Hang Seng
KOSPI

Change in recommendations

Value traded - India

Sun TV Network, Zee News: Rich valuations, competitive pressures a concern
for Sun TV; Zee News a better bet
Updates
BHEL: Ordering activity for FY2009-12E may have peaked already
ICICI Bank: Asset quality to drive stock price performance; near-term operational
environment to remain challenging

Moving avg, Rs bn
6-Apr

1-mo

3-mo

Cash (NSE+BSE)

194.6

136.5

123.1

Derivatives (NSE)

484.5

487.4

394

Deri. open interest

700.8

582

493

Forex/money market
Change, basis points

Tata Chemicals: Soda ash situation remains fluid - meeting with management

6-Apr

1-day

1-mo

3-mo

50.1

5

(176)

129

7.0

8

72

88

6-Apr

1-day

1-mo

Gold (US$/OZ)

881.4

0.0

(6.2)

2.8

Silver (US$/OZ)

12.3

0.5

(7.8)

10.9

Crude (US$/BBL)

50.4

(0.2)

13.2

12.0

2-Apr

MTD

CYTD

173

-

(1,522)

3

-

(261)

Rs/US$
10yr govt bond, %

Commodity market
Change, %

News Roundup  

The country’s largest real estate developer DLF expects to raise around Rs900
crore in the next three months by selling at least eight hotel plots across the
country. (ET)
Fortis Healthcare said it was open to acquiring rivals, including Wockhardt
Hospitals, owned by Habil Khorakiwala. Fortis, owned by Shivinder Mohan
Singh, on April 2 had sought the Securities and Exchange Board of India’s
permission to raise Rs 1,000 crore from sale of rights. (BS)

Net investment (US$mn)

FIIs
MFs

Top movers -3mo basis
Change, %
Best performers  

Hindalco Industries Ltd, which has placed a Rs 2,010-crore order on BHEL for
the supply of boilers and turbine-generators for its 900 MW Mahan project, has
put it as a condition in the letter of intent that BHEL should not source
components from China. (BL)
The board of the Luxembourg-based European Investment Bank (EIB) has
approved a £340 million (Rs 2,500 crore) loan to the Tatas-owned Jaguar Land
Rover (JLR) to support efforts to make low-emission cars. (BS) 

Carritt Moran, the second-largest tea auctioneer in the world, has started
discussions with investors for selling a stake in the employee-managed
company. The move follows a default in payment obligations and a move by the
Tea Board of India to call in consultants AF Ferguson & Co to suggest reforms in
the system of tea auctions and settling payment obligations. (BS) 

State-run Oil and Natural Gas Corporation (ONGC) has deferred a decision
on hiring a drilling rig from Reliance Industries (RIL), even as Chinese and
European firms have emerged as suitors for the ultra deepsea drillship. (BS)

3-mo

6-Apr

1-day

1-mo

3-mo

799

0.6

23.0

41.4

Hero Honda Motors

1,064

3.3

14.6

37.4

Bharat Forge Limite

121

12.1

48.5

32.9

Essar Oil Ltd

119

47.6

91.6

43.5

Financial Techn (Ind

676

(0.7)

52.1

31.7

Maruti Suzuki India

Worst performers
Housing Developme

111

9.0

62.3

2.3

Satyam Computer S

45

13.3

7.2

12.3
(40.8)

Aban Offshore Limit

418

2.9

80.6

Glenmark Pharmac

178

11.8

38.8

(34.7)

Indiabulls Financial S

93

0.2

8.9

(32.8)

Source: ET = Economic Times, BS = Business Standard, FE = Financial Express, BL = Business Line.

Kotak Institutional Equities Research

Kotak Institutional Equities Research
kotak.research@kotak.com
Mumbai: +91-22-6634-1100

1

For Private Circulation Only. FOR IMPORTANT INFORMATION ABOUT KOTAK SECURITIES’ RATING SYSTEM AND OTHER DISCLOSURES, REFER TO THE END OF
THIS MATERIAL, GO TO HEDGES AT http://www.kotaksecurities.com.

India Daily Summary - April 08, 2009

India Energy Monthly, April 2009

Energy
Sector coverage view

Neutral

Gundeep Singh : gundeep.singh@kotak.com, +91-22-6634-1286

Price, Rs
Company
Reliance Inds
ONGC

Rating
REDUCE

Sanjeev Prasad : sanjeev.prasad@kotak.com, +91-22-6634-1229

6-Apr Target
1,672 1,625

ADD

887

950

IOC

REDUCE

406

525

BPCL

SELL

374

425
300

HPCL

SELL

260

GAIL

REDUCE

256

240

Castrol

BUY

335

390

Petronet LNG

ADD

46

52

Cairn

BUY

203

225

GSPL

REDUCE

42

45

Tarun Lakhotia : tarun.lakhotia@kotak.com, +91-22-6634-1188

Crude prices: Crude prices rallied in the later half of March

Global refining margins: Refining margins collapse led by sharp contraction in
gasoline cracks

India marketing margins: Margins on diesel continue to remain positive

Crude prices: Crude prices rallied in the later half of March
Crude prices remained stable in the beginning of the month as a downward revision of
world oil demand for CY2009 was offset by lower OPEC production in February 2009which showed high OPEC compliance (~80%) with the announced production cuts.
However, crude prices rallied from mid-March led by (1) announcement by Fed to buy
US$300 bn of long-dated treasuries, (2) subsequent weakening of dollar and (3) increasing
investor optimism. The light-heavy differential declined further with the differential
between Dated Brent and Dubai crude at US$1.3/bbl versus US$3.6/bbl in CY2008. LOBS
prices have declined further by US$50-105/ton (across various grades).
Global refining margins: Refining margins collapse led by sharp contraction in
gasoline cracks
Singapore complex refining margins collapsed in March 2009 led by a decline in product
cracks-(1) gasoline cracks declined to US$8.7/bbl (versus US$15.1/bbl in February 2009),
(2) fuel oil to -US$7/bbl (versus -US$2.9/bbl) and (3) naphtha cracks declined to US$0.1/
bbl (versus US$2.5/bbl). We compute Singapore complex gross refining margins at US$0.3/
bbl in March, down from US$4.0/bbl in February 2009. We expect refining margins to
remain subdued led by start of 600,000 b/d of refining capacity in China in 2QCY09E. We
estimate India refining margins for April 2009 at US$0.7/bbl, down from US$3.4/bbl in
March 2009.
India marketing margins: Margins on diesel continue to remain positive
Marketing margins on diesel declined moderately to Rs4.7/liter (versus Rs5.6/liter in March
and -Rs7.8/liter FY2009) led by rise in global price for diesel and unchanged domestic
retail prices. However, marketing margins for gasoline improved to Rs0.04/liter (versus Rs0.8/liter in March and -Rs4.4/liter FY2009) led by decline in global prices for gasoline.
We compute subsidy losses on LPG and kerosene at Rs115/cylinder and Rs10.8/liter for
April 2009 compared to Rs163/cylinder and Rs10.7/liter in March 2009.

2

Kotak Institutional Equities Research

India Daily Summary - April 08, 2009

Crude prices have recovered in the recent month
WTI and Dated Brent spot prices (US$/bbl)
(US$/bbl)
150
WTI spot price (US$/bbl)

Dated Brent spot price (US$/bbl)

120
90
60
30

8/5/2008

10/16/2007

12/29/2006

3/14/2006

5/25/2005

8/6/2004

10/15/2003

12/30/2002

3/13/2002

5/22/2001

8/3/2000

10/13/1999

12/28/1998

3/11/1998

5/23/1997

8/7/1996

10/20/1995

1/4/1995

0

Source: Bloomberg, Kotak Institutional Equities

Light-heavy differential has contracted significantly
Light-heavy differential (US$/bbl)
(US$/bbl)
20

Dated Brent (RHS)

Brent versus Arab Heavy

Brent versus Dubai

Brent versus Iran Heavy

(US$/bbl)
150

16

120

12

90

8

60

4

30

0
Jul-02

0
Jul-03

Jul-04

Jul-05

Jul-06

Jul-07

Jul-08

Source: Bloomberg, Kotak Institutional Equities

Kotak Institutional Equities Research

3

6 1.04 3.096 1.20 1.5) 957 822 136 18. 2009 Refining margins have collapsed in the recent month Singapore refining margins (US$/bbl) (US$/bbl) 16 Singapore simple refining margins Singapore complex refining margins 12 8 4 0 Feb-91 Feb-93 Feb-95 Feb-97 Feb-99 Feb-01 Feb-03 Feb-05 0.5 (1.13 2.42 0.01) (1.088 936 152 20.91 2.214 692 702 780 950 952 1.25 4Q Average 1.36 2.71 1.50 1.9 4.54 Singapore refining margins.94) Complex refining margins.8 7.5 795 708 87 11.236 1.086 1.14) 4.58 2.45 2009 2010 YTD 2.07 1.09 1.127 1.8 1.04 2.32 3Q 0.7 (0.52 (1.04 0.22 1.73) (2.6 1.45 1.45 Complex 1.3 -1.45 0.67 3.31 0.236 1.5 607 548 60 8.282 1.34 2.31 0.65 3.25 1Q 2.28 0.4 0.73 Source: Bloomberg.2 572 526 47 6.14) (1.96 0.29 0.60 0.4 16.34 2.4 15.7 Source: Kotak Institutional Equities estimates 4 Kotak Institutional Equities Research .77 4.8 829 725 104 14.18 2008 2009 2010 YTD 1.2 383 326 57 7.7 0.95 1.3 3.55 3.99 2Q 1.5 Net refining margin 6.3 361 314 47 6.094 1.50 1.43 0.57 4.21 (0.70) 0.1 2.160 1.30 1. March fiscal year-ends (US$/bbl) 2001 2002 2003 2004 2005 2006 2007 1.1 3.4 3.28 0.7 406 338 68 9.067 944 123 16.24 4.25) 2.015 880 135 18.9 5.08 1.43 0.11 2.3 Net refining margin (7% internal 5.79 1.0 6.070 Diesel 924 1.2 4.51 0.14) Weekly margins Current -1 Wk -2 Wk -3 Wk -4 Wk (1.80 6.4 2.73 1. Prices (US$/ton) Mar-08 Apr-08 May-08 Jun-08 Product prices LPG 804 804 Naphtha 848 894 Gasoline 908 975 Jet fuel 968 1.7 6.7 11.02 2.45 2008 6.115 964 150 20.91 3.221 611 621 907 1.44 1.049 959 642 652 782 809 873 926 926 850 567 577 565 460 640 680 680 589 378 388 357 253 384 564 564 478 219 229 348 257 311 450 450 415 207 217 461 359 396 473 473 424 241 251 430 393 452 404 404 352 246 256 365 396 431 406 406 374 234 244 404 308 353 461 461 420 224 234 568 507 632 723 723 639 388 398 413 336 386 442 442 397 231 241 365 396 431 406 406 374 234 244 905 868 955 939 977 958 831 826 723 701 532 501 389 375 304 299 326 326 316 315 342 333 315 312 548 526 315 313 342 333 1.3 0.09 0.05 1.52 2.1 387 325 62 8.24 4.2 1.98 3Q 1.20 3.7 933 847 86 11.02 2.1) 346 301 46 6.45 1.4 383 326 57 7.India Daily Summary .58 0.93 6.070 Kerosene 968 1.277 1.14 2.93 3.79 1.1 Tariff protected refining margins in India plus freight Weighted average product price 803 882 Crude oil--Brent & Dubai 50:50 Mix 713 770 Gross refining margin (US$/ton) 90 111 Gross refining margin (US$/bbl) 12.5 377 348 30 4.69 3.20 1.73 -3 Wk -4 Wk (0.5 7.65 1.8 11.22 (1.86 1.3 9.05 2.121 985 137 18.5) 365 313 51 7.0 1.7 897 828 69 9.3 3.8 (0.52 (1.8 377 348 30 4.11 4Q Average 2.23 9.56 3.78 4.40 (1.98 2.1 4.67 3.10 4.24 1Q 3.081 964 117 16.1 355 336 20 2.1 580 533 47 6.46 2.5 10.57 6.03) 2.66 1.9 4.7 (0.7 7. Kotak Institutional Equities Gross refining margins for a typical Indian refinery based on Arab Gulf fob prices (US$/bbl).4 1.46 2Q 2.45 Weekly margins Current -1 Wk -2 Wk 0.4 421 392 29 3.172 572 582 880 1.14) 1.34 0.5 9.86 1.09 0.35 5.74 1.017 Fuel oil 481 515 Bitumen 491 525 Crude oil prices Crude oil-Brent 756 804 Crude oil-Dubai 706 755 Refining margins on fob basis Weighted average product price 821 892 Crude oil--Brent & Dubai 33:67 mix 723 772 Gross refining margin (US$/ton) 98 120 Gross refining margin (US$/bbl) 13.70 5.05 2009 2010 YTD 4.1 546 511 35 4.April 08.7 Feb-09 Feb-07 (4) Simple refining margins.7 352 315 37 5.57 4.47) 0. March fiscal year-ends (US$/bbl) 2001 2002 2003 2004 2005 2006 2007 2008 1.25 0.73 0.01) (1.9 368 312 56 7.049 1.8 1.06 6.4 355 336 20 2.7 5.06 1. March fiscal year-ends (US$/bbl) 2001 2002 2003 2004 2005 2006 2007 Simple 1.88 2.9 consumption) Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Jun-05 Apr-09 Quarterly averages. fiscal year-end 4Q 2009 3Q 2009 4Q 2009 1Q 2010 871 998 1.277 1.4 1.94 0.47 0.1 10.34 0.3 374 327 47 6.44 5.78 (0.25 1.44 3.282 1.1) 398 380 19 2.

5) (30.0 26.8 8.1 46.277 1.5 18.8 44.7 40.3 580 34.9) (0.0 24.0 26.9 8.1) 3.9 24.1 25.7) (217) 1.221 907 1.1 (11.5 18.282 1.6 33.3 418 19.0 (10.1) (3.0 26.8 529 28.0 22.5 Kerosene (Rs/liter) 33.India Daily Summary .3 39.7 17.8) 4.0) (358) (11.9) (326) (7.6 46.0 22.6 28.7 268 24.214 780 952 1.4 8.7) (26.2 8.7) (9.7 280 26.0 21.3) (17.8) (32.6 256 18.8) (115) 0.4) (25.6) (17.9 25.3 19.5 46.4 8.6 8.6 256 18.8) 4.4 44.6 8.0) (262) (4.6 Marketing margin or (subsidy) (b) LPG (Rs/cylinder) (324) Gasoline (Rs/liter) (8.2 (64) 9.0) (356) (12.6) (270) (4.7 Source: Industry data.0 22.3 32.2 280 26.6 19.7 17.0 370 18.160 1.4 18.4 345 13. 2009 Marketing margins on diesel remain positive despite recent retail price cuts Calculation of marketing margins/subsidy of key products Apr-08 May-08 Jun-08 International price (US$/ton) LPG Gasoline Kerosene Diesel Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 Average (Fiscal years) 2007 2008 2009 2010 YTD 804 908 968 924 804 975 1.2 280 26.9 8.8) (10.5 38.4 256 18.0 25.236 1.6) 3.7 644 34.8 497 25.2 280 26.3) (7.6 8.5) (19.0 24.7) 5.2) Diesel (Rs/liter) (11.0 24.4 8.4 20.0 22.5 232 21.1 21.3 538 29.7 17.5 631 37.6 232 20.3 (168) 2.7) (38.6) (364) (7.8 267 23.9 8.5 273 26.6 8. Kotak Institutional Equities estimates Kotak Institutional Equities Research 5 .3 33.0 26.1 606 34.6) 5.5 (16.049 959 782 873 926 850 565 640 680 589 357 384 564 478 348 311 450 415 461 396 473 424 430 452 404 352 365 431 406 374 667 730 716 668 687 801 907 842 666 772 865 801 365 431 406 374 India IPP price (incl.2) (36.172 880 1.3 (20.4) (10.8 26.8) (19.7 8.9 8.7) Kerosene (Rs/liter) (25.7 280 22. transport) (a) LPG (Rs/cylinder) 556 Gasoline (Rs/liter) 30.127 1.9 8.0 22.1 655 38.4 370 18.6) (38.5 46.2 38.6 635 39.9) (375) (11.0) (70) 7.5) (12.9 424 16.6 256 18.9 8.6 (115) 0.1 38.1) (19.070 1.0 (10.017 871 1.7 18.0 24.1 34.2) (30.8) (349) (12.0 22.April 08.2 350 15.7 8.9 India retail price without taxes LPG (Rs/cylinder) Gasoline (Rs/liter) Kerosene (Rs/liter) Diesel (Rs/liter) 232 21.2 Diesel (Rs/liter) 34.4 36.7 (248) (4.3 (162) (0.0 26.086 1.9 480 24.2 (12.2 280 23.2 280 26.

2 Div yield (%) 1.7 (Rs3.2 1. reflecting the competitive pressures on the company.2) Media ZEEN.0 15.9 13. 2009 Sun TV Network.2 10. (2) continued disappointing performance of its FM radio business and (4) greater uncertainty in movie production business with the entry into ‘high-risk low-return’ blockbuster segment.7 (Rs13.3 EPS (Rs) 8.0 2.2 EV/EBITDA (x) P/E (x) 12.2 28. (2) pressure on ad rates and ad revenues in FY2010E-2011E given weak ratings performance and challenging ad revenue market. Rs174 Rating ADD Sector coverage view Attractive Target Price (Rs) 200 52W High -Low (Rs) 400 . near-term losses in new Zee Tamil channel).ckumar@kotak.5 0.24 Market Cap (Rs bn) 8.0 (Rs11. Kannada and Malayalam markets. We believe the rising competitive pressure on Sun TV channels in their respective markets (Telugu.7 Financials March y/e 2008 2009E 2010E Sales (Rs bn) 8.7 10.3 3.6 (Rs15.April 08.5). Rs12. Sun TV—Rich valuations and operational challenges may lead underperformance. Udaya and Surya) versus competition in their respective markets.7 10.India Daily Summary .4 2.4 12.6 4.8) Amit Kumar : amit. Rs12.4 0. weak ad revenue market (though regional and television ad spends are likely to be relatively robust) and continued weak operational performance of its FM radio business will likely result in weak financial performance in the near term (FY2010E-2011E).7 Net Profit (Rs bn) 0.2 P/E (x) 21. We have revised our FY2010E-2012E EPS estimates downwards to Rs11.1 9.0 19. +91-22-6749-3392 Sanjeev Prasad : sanjeev. We highlight the consistent decline in ratings of flagship Sun TV channels in the last few quarters though they continue to maintain their leadership position (except Malayalam).BO.2) and Rs14. competitive pressures a concern for Sun TV.3) (41.7 (Rs2.3 6.9 EV/EBITDA (x) 11. Our revised FY2010E-2012E EPS estimates are Rs2.com. This has resulted in pressure on ad and broadcast revenues as well as content costs of Sun TV. Rs2. Kannada and Malayalam).4 Pricing performance Perf-1m Perf-3m 12. We discuss the operational pressures being faced by the company in greater detail below.3 3.2).0X FY2010E consolidated and standalone (ex.4 previously).4X FY2010E EBITDA (ex.0 8.2) on account of (1) moderate reduction in FY2010E-2011E ad and broadcast revenues and (2) revised FM radio business financials.9 Perf-6m Perf-1y (1.5 EPS (Rs) 1. +91-22-6634-1229 • Rising intensity of competition in Telugu and Kannada markets a cause for concern • Continued pressure in FM radio business.3 Financials March y/e 2008 2009E 2010E Sales (Rs bn) 3. (2) strong ratings gains made by Zee Telugu and Zee Kannada and (3) positive impact of election spending on its news channel bouquet.2 1. doing well in their respective markets • Downgrade Sun TV to ADD with 12-month DCF-based TP of Rs200 (Rs215 previously). the stock is valued at 15. Rs35 Rating BUY Sector coverage view Attractive Target Price (Rs) 40 52W High -Low (Rs) 67 . Exhibits 1-4 present the ratings performance of Sun TV channels (Gemini.6 22 17.0 EPS gth 30. Kannada and Malayalam markets. FM radio) EPS estimates.3 Perf-6m (1.1 previously). notably Zee Telugu.2) and Rs14.0 (Rs11.7 5.5 Net Profit (Rs bn) 3.8) Perf-1y (29.3 Pricing performance 6 Perf-1m Perf-3m 19. Sun TV ad and broadcasts revenues increased 16% yoy in 3QFY09 (versus 28% yoy growth in FY2008) while content costs increased over 50% in 3QFY09 (versus flat yoy growth in FY2008).7 (Rs13. • Telugu.3 (Rs2.5 2. the stock is richly valued at 15.2X FY2010E consolidated EPS estimates but at 6.3 15.4 0.7 Div yield (%) 1.prasad@kotak.5) and Rs3. We believe ZEEN to be a better bet given the apparent buoyancy in the regional and television ad revenue markets demonstrated by (1) continued stellar performance of its Marathi and Bengali channels (flagship and flanking).6 (Rs15. Zee News: Rich valuations.122 Market Cap (Rs bn) 68.4 previously). Our revised FY2010E-2012E EPS estimates are Rs11.7 8. Kotak Institutional Equities Research .0 5.9X and 15.3 EPS gth 396. retain BUY on ZEEN with 12-month DCF-based TP of Rs40 (Rs38 previously) We have revised our earnings and 12-month DCF-based target price for Sun TV Network to Rs200 (Rs215 previously) to reflect (1) lackluster performance of Sun TV channels amidst rising competitive intensity in the Telugu.9 19. we believe losses due to the continued lackluster performance of Zee Tamil are already built into the price though it is a cause for concern.com. greater uncertainty in movie business • Zee News (ZEEN) channels. Zee News a better bet Media SUTV.BO.3 9.2 11.

modest number of multiplexes versus North and West) for even a successful big-budget movie to generate high returns. • Marathi and Bengali markets. we highlight that about 45-50% of Sun’s revenue is generated by the Tamil market.1 previously). group company) in the C&S distribution market in the state.April 08. ZEEN has captured about 40-50% share of these markets. Rs2. Kotak Institutional Equities Research 7 . ZEEN is trading at a large EV gap versus Sun TV despite strong and improving operational performance. Exhibits 6-7 present the GRPs of key channels in the Marathi and Bengali market.7 (Rs3. Together with its news channels.5).7 (Rs2. We have been modestly positive on Sun’s entry into the movie production business (Sun Pictures) with its focus on small-to-medium budget cinema given (1) the free marketing platform for the movie business and (2) monetization of ancillary revenue streams (C&S telecast and FM radio) through Sun TV’s strong broadcasting platforms in the South-Indian markets (see our note “Sun Pictures a credible experiment by Sun TV for entry into new verticals” dated November 24. the high cost of music royalty will likely hurt margins given that its radio stations are present in low revenue potential cities (33 out of 41 stations in B & C class cities).India Daily Summary . which will likely result in robust subscription revenue growth for Sun TV but from a low base. Moreover. However. We model radio losses in FY2010E and FY2011E at Rs481 mn (Rs195 mn previously) and Rs175 mn (Rs17 mn positive). which will result in strong ad and subscription revenue growth but with a lag. the recent investments that Zee News made in Zee Talkies (movie channel acquired from Zee Entertainment) and Akash Bangla (26% stake with operational control) are starting to bear fruit with improved ratings performance.0 bn). Sun TV continues to maintain its strong leadership position in the Tamil market despite entry of new competition (Kalaignar TV and Zee Tamizh). (2) robust rating gains in Telugu and Kannada markets. a weak ad revenue market has dashed any hopes of a turnaround in the radio business by FY2011E and we now expect it to achieve EBIT breakeven only in FY2012E. We have fine-tuned our FY2010E-2012E EPS estimates upwards to Rs2. Zee Marathi and Bengali continue to maintain their ratings performance despite the entry of new competition in the market (Star Pravah and Star Jalsha). Sun TV has now decided to enter the ‘high-risk’ blockbuster movie segment with the acquisition of ‘Kuselan’ from Eros International. however. We have revised our FY2010E-2011E revenue estimates for Sun’s FM radio business (Kal FM and South-Asia FM) to Rs291 mn (Rs539 mn previously) and Rs535 mn (Rs1. 2009 • Underperforming FM radio business. respectively. • Greater uncertainty in the movie production business. which is starting to bear fruit. 2008). ZEEN—strong operational performance likely to translate into financial results. ZEEN is reasonably valued at 6. Sun TV has been a laggard in its radio rollout with most of its stations becoming operational only in 3QFY09-1QFY10 and we expected the impact of new radio stations to be visible in FY2010E-2011E. we believe the South-Indian market is relatively small and constrained (regulated ticket prices. Moreover. Sun TV management has been very reluctant to talk about the acquisition. Exhibit 5 compares the operational and financial performance of Sun TV and ZEEN. which remains relatively insulated from competition given the strong position of Sumangli Cable Vision (SCV. We remain positive on the prospects of ZEEN given (1) its leadership position and continued strong ratings in key markets (Marathi and Bengali). (3) positive impact of election spending on its bouquet of national and regional news channels and (4) investment in new channels (Zee Talkies and Akash Bangla). Sun Direct (group company engaged in the DTH distribution) is also ramping up its presence in the South Indian market.4X FY2010E EBITDA excluding the near-term losses from its emerging Tamil channel.5) and Rs3.3 (Rs2.

Tata Sky. The channel was launched recently (November 2008) and we would not like to comment on the success or failure of a channel based solely on its initial performance. We model a conservative market share for Zee Tamil in the long run and expect EBITDA breakeven to take longer than 3-5 years guided by the management. has recently received feeds of Zee Telugu and Zee Kannada for carriage. which will likely support its ad revenues for 4QFY09-1QFY10 given the general ad revenue slowdown in the market. plans to close its loss making channel Zee Next after 15 months of operation). • News channels. the continued under-performance of its Tamil channel remains a key area of concern. The strong bouquet of national and regional news channels will benefit from higher viewership and election as spending (~Rs8-9 bn) during the Indian General Elections 2009 (April-May 2009). resulting in a Rs2 bn increase in ZEEN’s debt between FY2008-2010E. Zee Telugu attained the joint second position (with Eenadu TV) while Zee Kannada is placed in third position but has closed the gap with ETV Kannada. another group company. Zee News will be the beneficiary of likely consolidation in the Hindi News market with a large number of financially weak players that may not be able to survive the ad revenue slowdown in FY2010E. after a surprisingly protracted dispute with Zee News in TDSAT. 2009 • Telugu and Kannada markets. which we believe is the bear-case scenario for the channel.100 Eenadu TV Gemini TV Maa Telugu Zee Telugu 880 660 440 220 4QFY07 2QFY08 4QFY08 2QFY09 4QFY09 Source: TAM Media Research. the second largest DTH provider in India (~3. Exhibit 8 presents our expected growth in subscriber base and domestic subscription revenues of ZEEN. is already factored in the stock price/enterprise value. However. • Subscription revenues. In the long run. we model 25% CAGR in ZEEN’s domestic subscription revenues but believe the growth can surprise positively given (1) strongerthan-expected growth in DTH subscribers in India and (2) incremental contribution from Zee Telugu and Zee Kannada. Zee Telugu and Zee Kannada continue to make rapid strides in their respective markets (see Exhibits 1-2) with ratings and ranking gains in their respective markets.April 08. We believe the investment in Zee Tamil (along with other investments).India Daily Summary .0 mn subscribers). The alternate and likely scenarios could be (1) perceptive improvement in performance of the channel with its carriage deal with SCV or (2) closure of the channel if its performance does not pick up in the next 9-12 months (ZEEL. Trends in all-India GRPs for key Telugu language channels (%) 1. The strong rating gains made by these channels will reflect in financial performance (but with a lag that is typical in media buying) with (1) strong ad revenue growth (market share gains) and subscription revenues (cable and DTH operators will start making payments to Zee News for its channels given their popularity) in FY2010E2011E. compiled by Kotak Institutional Equities 8 Kotak Institutional Equities Research .

4 Amrita TV Asianet Asianet Plus Kairali Kiran TV Surya TV 0.0 1. 2009 Trends in all-India GRPs for key Kannada language channels (%) 1.April 08.3 0. compiled by Kotak Institutional Equities Kotak Institutional Equities Research 9 .1 Jan-05 Jul-05 Jan-06 Jul-06 Dec-06 Jul-07 Dec-07 Jun-08 Dec-08 Source: TAM Media Research.0 Jaya TV Kalaignar TV KTV Jul-06 Dec-06 Sun Music Sun TV Vijay TV 2. compiled by Kotak Institutional Equities Prime-time (7:30-11:30 PM) ratings of major Malayalam channels (%) (%) 0.0 Jan-05 Jul-05 Jan-06 Jul-07 Dec-07 Jun-08 Dec-08 Source: TAM Media Research. compiled by Kotak Institutional Equities Prime-time (7:30-11:30 PM) ratings of major Tamil channels (%) (%) 3.2 0.India Daily Summary .000 ETV Kannada Kasturi TV Udaya TV Zee Kannada 800 600 400 200 4QFY07 2QFY08 4QFY08 2QFY09 4QFY09 Source: TAM Media Research.

272 10.175 6.970 9.4 Notes: (a) Excluding the financials of recently launched Zee Tamil. FY2010E EV/EBITDA Position Sun TV ZEEN Leader Present Leader Runners-up NA Leader Leader 2nd runners-up NA Leader Runners-up NA Market size (Rs bn) 5. FY2010E EBITDA (Rs bn) (a) Adj.240 9.1 1. Source: TAM Media Research. Kotak Institutional Equities estimates Trends in all-India GRPs for key Marathi language channels (%) 400 ETV Marathi Star Pravah Zee Marathi Zee Talkies 320 240 160 80 4QFY07 2QFY08 4QFY08 2QFY09 4QFY09 Source: TAM Media Research.8 4.April 08.4 7.India Daily Summary .3 2.0 1.165 9.637 6. compiled by Kotak Institutional Equities 10 Kotak Institutional Equities Research . 2009 Operational and financial comparison of Sun TV Network and Zee News Market Tamil Telugu Bengali Kannada Marathi Malyalam Financial performance Market cap (Rs bn) FY2010E EV (Rs bn) FY2010E EBITDA (Rs bn) FY2010E EV/EBITDA Adj.747 65.8 68.0 8.7 2.3 2.461 1.

Source: Company. 2009 Trends in all-India GRPs for key Bengali language channels (%) 550 ETV Bangla Star Jalsha Zee Bangla Akash Bangla 440 330 220 110 4QFY07 2QFY08 4QFY08 2QFY09 4QFY09 Source: TAM Media Research. compiled by Kotak Institutional Equities Subscriber base and domestic subscription revenues of ZEEN.800 12 1.250 20 Subscriber base (mn) Subscription revenues (Rs mn) 16 1.350 8 900 4 450 - 2007 2008 2009E 2010E 2011E 2012E (a) Notes: (a) We model Zee Tamizh to turn pay starting FY2012E.April 08. March fiscal year-ends (Rs mn) (mn) 2.India Daily Summary . Kotak Institutional Equities estimates Kotak Institutional Equities Research 11 .

830 206 6.478 14.393 247 — 3.165 19.209 732 2.385 6.8 4.837) 523 1.3 6.091) (326) 80 (619) 3.0 14.932 (56) 867 1.653 17.221 3.0) 26.9 26.494 3.035 172 (65) (147) — 1.440 2.961) (24) (24) 5.0 52.537) (31) 44 5.478 6.3 — (21.010 (1.3) 23.871 (1.267 8.620 18.466) 455 5.001 23.311 16. 2006-2012E (Rs mn) 2006 2007 2008 2009E 2010E 2011E 2012E Profit model (Rs mn) Net sales EBITDA Other income Interest (expense)/income Depreciation Amortization Pretax profits Tax-cash Tax-deferred Minority interest Net profits after minority interests Earnings per share (Rs) 3.9) 24.586 19.876 22.699 5.485 11 695 2.947) (67) 148 3.220 14. excl.209 11.083) (1.362 5.239 (1.333 741 6.549 6.995 (709) 16 — 1.180) 498 3.071 32 2.200) (1.April 08.6 Balance sheet (Rs mn) Total equity Deferred Tax Total borrowings Currrent liabilities Total capital Cash Current assets Total fixed assets Intangible assets Total assets 3.133 (1.083 1.297 4.250) (929) 534 2. cash model of SunTV Network.676 20.542 5.757 21.573 7.130) (48) 120 4.2 12.041 (1.4 23. 2009 Consolidated profit model.378 (2.1 26.7 16.926 6.8) 28.516 18.302 5.311 4.011 6.676 4.992) (433) (849) 402 814 4.807 9.3 — (21.440 6.9 25.119 5.947 192 — 2.190) (650) (1.3 8.5 Ratios (%) Debt/equity Net debt/equity RoAE RoACE Source: Kotak Institutional Equities estimates 12 Kotak Institutional Equities Research .India Daily Summary .8 24.9 — (19.9) 24.219 2.6 7.048 2.8 (24.009 (1.753 (2.257 3.048 8.260 223 — 2. March fiscal year-ends.321 11.780 3.693 14.074) (132) 124 3.046 5.722 (251) (2.6 27.393 144 50 2.1 36.981 Free cash flow (Rs mn) Operating cash flow.3 (47.6 29.635 (2.441 10.970 498 (12) (864) (214) 6. working capital Working capital Capital expenditure Investments Other income Free cash flow 1. balance sheet.981 4.235) (1.642 23.816 22.274 1.461 6.744 14.653 3.257 19.005 534 (50) (641) (214) 5.617 6.874 411 (64) (294) (56) 3.261 556 (159) (377) (148) 5.069) (700) (1.134 455 (9) (840) (214) 7.091 (1.726 7.2) 32.509) 108 (9) 2.525 (2.3 10.2 — (20.811) (3.214 8.758) 490 6.990 21.976 1.272 76.750) (1.253 490 (9) (807) (174) 8.543 1.054 (1.645 8.938 2.624 9.001 12.

7 19.117 1.195 1.676 5.130 4.408 9.890 269 3. working capital Working capital Capital expenditure Investments Other income Free cash flow Ratios (%) Debt/equity Net debt/equity RoAE RoACE Source: Kotak Institutional Equities estimates Kotak Institutional Equities Research 13 .071 (18) 51 117 1.977 1.3 8.165 43 (226) (123) 859 (300) (12) (4) 543 2.708 1.628 2.251 931 34 (116) (91) 757 (256) (22) (2) 478 2.9 69.058 6.6 20.707 (632) 2 (8) 1.289 19 61 2.130 294 4.1 58.911 228 4.6 3.3 16.125 7.405 77 131 (51) (52) 104 (53) 7 16 75 0.813 1 36 13 973 2. 2009 Consolidated profit model.717 1.717 2.7 10.014 (499) (200) (329) 32 315 1.762 9.1 20.0 6.417 2.145 3.5 5.7 9.7 (1.2 1.501 808 484 2.6 21.717 2.547 1.9 14.678 18 75 2.009 1.048 2.3 3.220 (438) (225) (325) 33 557 0.153 7 (273) (300) 964 122 (566) 555 (306) (96) (279) — 154 559 (518) (250) (893) 34 (209) 639 (531) (200) (401) 43 (92) 765 (416) (150) (375) 31 199 1.5) 8.013 812 764 3.675 678 14 (5) (85) 601 (247) 15 2 371 1.664 10.038 (384) (4) (5) 645 2.9 24.8 17.862 6. 2007-2012E (Rs mn) 2007 2008 2009E 2010E 2011E 2012E 2013E Profit model (Rs mn) Net sales EBITDA Interest income Interest expense Depreciation Pretax profits Tax-cash Tax-deferred Minority interest Net profits after minority interests Earnings per share (Rs) 2.799 971 1. balance sheet and cash model of Zee News.516 1.2 18. excl.056 2. March fiscal year-ends.919 2.8 74.840 15 57 2.835 41 1.886 2.3 17.5 66.April 08.671 1.086 10.397 (509) (1) (6) 881 3.890 3.414 31 (265) (142) 1.1 52.5 73.657 5.628 39 2.886 459 2.4 51.5 Balance sheet (Rs mn) Total equity Deferred Tax Minority interest Total borrowings Currrent liabilities Total capital Cash Current assets Total fixed assets Investments Total assets 1.433 7.153 250 5.5 14.069 4.5 65.7 24.India Daily Summary .821 32 (298) (158) 1.407 3.167 33 (314) (178) 1.2 70.835 2.098 2.8 Free cash flow (Rs mn) Operating cash flow.3 61.918 20 67 2.5 5.911 3.437 3 53 1.

3 EV/EBITDA (x) 14. based on plant-wise order tracking.1 43. we believe it would ramp up with bulk tendering activity. (2) a deterioration in working capital.4 Div yield (%) 1. 2009 BHEL: Ordering activity for FY2009-12E may have peaked already Industrials BHEL.subramanian@kotak.9 5.BO. limiting upside from current levels.981 Market Cap (Rs bn) 749. Also.8 6.trades at high FY2010E P/E and EV/ EBITDA of 17.6X. +91-22-6634-1496 Supriya Subramanian : supriya.com. would be strong led by ramp up of the pace of execution to meet XIth plan targets. which has taken place despite strong customer advances and non-cash provisions.2 9. 95GW of XIIth plan over 80GW of XIth plan implies sedate growth in the medium term unless exports and industry ramp up significantly In keeping with our expectations. even though marginal. We highlight that both exports as well as industry are relatively smaller segments as (a) BHEL achieved physical exports order worth Rs32. but we may have seen the peak of ordering activity in FY2009.0 MFs 6.e.garg@kotak.0 4.5) LIC 2. however.4 1.6 30.4 61.4 88.7 - - FIIs 16.3 1. (b) emerging domestic competition.6 Lokesh Garg : lokesh. (3) a portion of the expanded capacity will become available from June. respectively.7 bn (about 5. Thus.com.7) Shareholding. only about 31 GW or so of further coal-based thermal power capacity may need to be ordered. Notably. however. particularly as 45% of the coal-based capacity in XIIth plan may have already been ordered.5 313.8 GW for XIIth plan has already been ordered versus likely total coal-based capacity of about 58 GW (Exhibits 2-4).2 4.5 0.0 2.475 52W High -Low (Rs) 1935 . we believe that a total coal-based capacity of 25.April 08.9 UTI - - (2.2 EPS (Rs) 58.3 EPS gth 22. We reiterate our REDUCE rating based on (a) high valuations . +91-22-6634-1383 • 95GW of XIIth plan over 80GW of XIth plan implies sedate growth in the medium term • Order inflows of Rs500 bn/yr possible – however. we believe Rs500 bn/year is possible.2 43. Near–term growth (i.3 Perf-1y (10.0 0. however.5 bn (about 17% of total order inflows for the year.India Daily Summary . Other key takeaways include (1) possible sharp margin expansion (though the company stopped short of a commitment).4 Net Profit (Rs bn) 28.4X and 11. 14 Kotak Institutional Equities Research .5% of total order booking in the year) and (b) BHEL achieved industry segment order inflows of Rs102.2 24. over next three years). (c) execution risk based on constrained capacity and (d) potential for underperformance as economic outlook improves.0 13.0 251. (4) competition is low currently. We highlight that this implies sedate yoy growth of below 5% in the domestic power segment over the medium term unless exports and the industry segment ramp up significantly.2) The XIIth plan of 95 GW over 80 GW of XIth plan implies modest growth opportunity over the medium-term unless exports and industry ramp up significantly.9 1. the company expects about 95 GW of execution in the XIIth plan (Exhibit 1) versus about 80 GW in the XIth plan. the full benefit would have to wait till January CY2010E. execution risk and potential for underperformance as economic outlook improves Financials March y/e 2008 2009E 2010E 193. emerging domestic competition.2 Sales (Rs bn) Pricing performance Perf-1m Perf-3m Perf-6m 16. Rs1531 Rating REDUCE Sector coverage view Attractive Target Price (Rs) 1.8 P/E (x) 26.3 (1. we may have already seen the peak • Company agrees there could be sharp margin expansion • Working capital deteriorates marginally despite advances and non-cash provisions • Retain REDUCE based on valuation.9 17. December 2008 % of Over/(under) Pattern Portfolio weight Promoters 67. A substantial ramp up in exports may also be limited by technology alliances which may limit export opportunity to relatively smaller countries.

7 GW at a rate of Rs15 mn/MW. but made no commitment. 2009 Order inflows of Rs500 bn each year possible – but the bulk of ordering for the medium term is complete We highlight that despite substantial progress made in XIIth plan ordering activity. We believe that there has been marginal deterioration despite support from (a) strong order booking during the year which led to strong customer advances . however. This estimated is based on (a) contribution from gas-based .70% market share in nuclear power capacity of 7. Kotak Institutional Equities Research 15 . which would also contribute to working capital efficiency measured at a net level in terms of number of days of sales. respectively. assuming (a) high 70% market share from balance 31 GW of ordering remaining for XIIth plan. Export orders may be worth about Rs50 bn each year (versus about Rs32. Order booking from gas-based. b) Spares business.71 bn) have remained relatively flat at 209 and 99 days of sales. we simultaneously believe that FY2009E may have seen the peak of ordering activity for the next several years unless exports ramp up significantly. The effect of lower provisions would be seen immediately visible from 1QFY10E.60% market share in hydro power capacity of 22 GW at a rate of Rs10 mn/MW (40% may already have been ordered) and (c) contribution from nuclear-based . We highlight that BHEL has reported working capital of about 10-12 days of sales versus -10 days of sales at the end of FY2008.2 GW at a rate of Rs10 mn/MW (30% may already have been ordered).April 08. so as to go materially beyond Rs50 bn assumed in the above analysis. Working capital deteriorates marginally despite being buoyed by order-book-led customer advances and non-cash provisions. The management stated that the entire wage provision requirement of Rs17. We estimate spares orders worth Rs31 bn in FY2010E.1 bn from Rs113. We highlight that we have built in 480 bps of margin expansion on a yoy basis and have arrived at EBITDA margin of 18. hydro and nuclear power plants—about Rs65 bn of order booking each year for next three years.1% reported by the company in FY2009E.60% market share in a gas-based capacity of 8. Advances from customers have increased slightly from 215 days to about 220 days of sales.BHEL customer advances have grown to Rs151.3 bn (comprised of (1) Rs6. (b) contribution from hydrobased . However. ramping to about Rs42 bn in FY2012E (Exhibit 5) c) Exports.7 bn) has been completed.9% in FY2010E versus about 14. we believe that BHEL’s guidance of Rs500 bn of ordering over next 2-3 years may be achievable based on following sector-wise contributions: a) Balance order for coal-based capacity. We believe that BHEL would have an annual order booking of Rs180 bn.6 bn gratuity related provisions and (2) total arrears based on turnover of Rs10.9 bn at the end of FY2008 and (b) BHEL has made non-cash provisions of Rs17.India Daily Summary .7 bn in FY2009E d) Industry segment. We highlight that a large part of our margin expansion is based on the absence of one-off employee provisions next year and commodities contribute only 60-75 bps to our margin expansion argument. Management seemed to agree with our view of sharp margin expansion next year. Management highlighted possibility of margin expansion but did not commit itself to a profit growth figure higher than 25% along with about 20-25% revenue growth. the impact of lower material prices (potential increase margins by about 200 bps yoy) is likely to be visible from 2QFY10E only. BHEL highlighted that debtor and inventory levels (Rs74. (b) rate of about Rs25 mn/MW and (c) likely spread of ordering over three years.28 bn in FY2009E. Industry orders of about Rs120 bn versus 102 bn in FY2009E (assuming 15% growth) e) Other segments of capacity addition.

sub-critical is more cost effective and hence emphasis is likely to shift back to sub-critical units where it has a higher market share. Such high valuation limit upside from current levels.07 bn during FY2009E. However. e) Potential for underperformance as economic outlook improves. 16 Kotak Institutional Equities Research . the full effect only from Jan’ 10.5 bn (Exhibits 6 and 7).9 bn. The management also highlighted that even though several utilities are planning for super-critical units.4X and 15X FY2010E and FY2011E respectively. We believe that competition is visible. 2009 Partial effects of capacity expansion to be seen from June. This is primarily led by employee provisioning of about Rs17. BHEL marginally missed our revenue and margins (adjusted for higher provisions) expectations in 4QFY09E. even domestic competition is ramping up for BHEL and would lead to pressure on margins and market share in the medium term. the full impact of the capacity expansion to 15 GW would come in only from January 2010. the focus is on ability to execute that backlog. however.April 08. and at EV/EBITDA of 11. BHEL may underperform peers for whom the improvement in environment implies an uptick in business fundamentals itself. We believe that BHEL may have achieved EBITDA of Rs14 bn in 4QFY09 on an unadjusted basis versus our expectation of Rs17. We believe that apart from imports-based competition. While BHEL has a very strong backlog. If the company is L1 they would win 6 of the orders else they would be awarded 5 of the 11 if they match the L1 bid. we believe that BHEL has reported net revenues of Rs92 bn (up 28% yoy) versus our expectation of Rs94.5 bn in FY2010E as well. the company faces practically no competition and does not expect any new competition for the next 2-3 years. We highlight that in the past.28 bn versus our estimate of employee provisioning of Rs13. Based on flash results for 4QFY09. However. The company highlighted that it expects bulk orders of 11 super-critical sets from NTPC and DVC in 2QFY2010E. Downgrade to REDUCE based on valuation. We reiterate REDUCE rating on the stock based on a) High valuations.475/share. BHEL has outperformed quite well in a crisis environment because of its public sector ecosystem. execution risk and potential for underperformance as economic outlook improves We maintain our earnings estimates and DCF-based target price of Rs1. BHEL faces risk of missing on execution expectations based on slow pace of capacity addition. The BHEL management highlighted that in the sub-critical segment. creeping domestic competition. Thus BHEL may lag in terms of stock performance. d) Execution risk based on constrained capacity. We believe that further competition would become visible with the bulk tendering activity of central utilities. The competition that the company faces is from the Chinese players in the super-critical segment for 660 MW. Low competition likely to intensify with bulk tendering activity. The management highlighted that partial effects of the capacity expansion program would be witnessed from June 2009. The company has incurred capital expenditure of Rs11 bn in FY2009 and expects to incur a capex of about Rs12. b) Trading above target price.6X and 9X FY2010E and FY2011E respectively. as evident from split of Krishnapatnam order as well as recent half-way split of order from NPCIL’s for eight 700 MW boilers. BHEL trades at high P/E valuations of 17.India Daily Summary . as the economic outlook improves. We highlight that the stock is currently trading above our 12-month fair valuation of Rs1.475/ share c) Emerging domestic competition.

Broad contours of the XIIth plan suggest execution of the order of 95 GW.600 500 2.400 1.000 1.950 1.624 19.800 5.950 3.174 4.320 BHEL 250 BHEL 250 BHEL 1.000 1. PH 2 BINA VINDHYACHAL STPP RIHAND RAIGARH JHAJJAR Subtotal Tilaiya Krishnapatnam ULTRA Mega Sasan Total State BIH NAG MAH TN BIH BIH RAJ TN RAJ MAH MP AP AP ORISSA CHG GUJ GUJ MAH MAH MP MP UP CHG HAR Agency NTPC Naga-ED NTPC NTPC NTPC NTPC NLC NLC RRVUNL IPP MPGENCO APGENCO APGENCO IPP IPP IPP IPP IPP IPP IPP NTPC NTPC IPP HPGCL JHAR AP MP Reliance Power Reliance Power Reliance Power Sector C S C C C C C C S P S S S P S P P P P P C C P S P P P Ultimate Capacity 1.084 Gas Total 13.000 3.344 520 3.320 1.281 8.667 Hydro Nuclear 13.0 93.000 BHEL 1.320 660 500 1.915 5.203 30.009 200.980 SEPCO III.320 SCMEC.April 08.400 1.017 18. China 500 BHEL 1.944 4.491 4.584 15.200 1.000 BHEL 1.344 7.400 BHEL 1.464 7.000 1.638 3.885 95.000 BHEL 1.189 22.960 37.800 SEPCO III.823 14.960 42.320 Chinese equipment player 25.000 4. China 500 BHEL 1.200 1.770 XII plan capacity Awarded to 660 Russia 23 BHEL 1.200 BHEL 1.000 250 1.000 1.India Daily Summary .000 1.885 57.463 15.000 BHEL 1.Likely to be taken up for commissioning (MW) Estimated generation capacity at the end of XIth plan (MW) Estimated GDP growth rate FY20013-17 (%) GDP growth/ Electricity elasticity (X) Required generation capacity.320 750 600 500 1.886 Thermal Coal Subcritical 5.000 1. PH 1 TIRORA TPP.000 BHEL 2. CAGR growth (%) Generation capacity requried to be set up (MW) Centre NTPC NHPC DVC Others State Private Ultra mega power projects Total Supercritical 7. Kotak Institutional Equities Exhibit 2.986 4.200 BGR Energy 1.000 1.309 Source: CEA.885 27.883 4.515 25.980 4.093 4.II NABINAGAR BARSINGSAR Ext TUTICORIN JV KALISINDH CHANDRAPUR MALWA KRISHNAPATNAM KAKATIYA STERLITE TPP ENERGY MARWA MUNDRA TPP PH 3 MUNDRA UMPP TIRORA TPP.932 8.400 7. BHEL has won almost won all recent public sector contracts and its track record in private sector has improved List of projects awarded so far which are likely to be taken up for commissioning during XIIth plan Equipment order placed Equipment order yet to be placed Plant Name BARH-I DIMAPUR MAUDA ENNORE-JV BARH . 2009 Exhibit 1.000 4.000 BHEL 1.200 Total 39.260 15.546 5.019 1. China 660 SCMEC.200 1. Kotak Institutional Equities Kotak Institutional Equities Research 17 .638 12.400 Doosan and Toshiba 1. China 2. tallying with demand side projection as well Total projects in the XIIth Plan (FY2012-13 to FY2016-17) .600 4.638 3.843 Source: CEA.980 23 1.600 BHEL 500 BHEL 1.613 XI plan capacity 1.624 20.000 3. News flows.937 675 1.000 8 1 8.000 2.185 2.550 4.349 7.550 1.320 4.

883 Total 6.7 60.0 60.400 8.900 3.520 Gas - 23 23 Gas - 23 23 Total 7.2 Source: CEA.Awarded to BHEL (MW) Thermal Coal Supercritical Subcritical Total 1.900 Total 2.250 3.800 Private 3.500 4.230 1.820 Centre NTPC 1.250 State 1.230 1.0 State 54.0 68.320 5.480 6.860 Total projects in the XIIth Plan (FY2012-13 to FY2016-17) .4 NHPC DVC Others 100.900 14.543 Total projects in the XIIth Plan (FY2012-13 to FY2016-17) .0 100.0 89.960 8.3 Private 48.570 1.7 91.060 25.250 1.820 5.4 89.100 17.India Daily Summary .000 Total 7.Already awarded (MW) Centre NTPC NHPC DVC Others State Private Total Supercritical 1.8 64. 2009 Exhibit 3.0 100.600 2.500 6.April 08.1 100.920 11.250 6.980 1.980 2.2 56.343 12.BHEL's market share of projects already awarded Thermal Total Coal Gas Supercritical Subcritical Total 100.860 Thermal Coal Subcritical 5.0 91.920 3. About 45% of coal-based thermal power capacity may already have been ordered Total projects in the XIIth Plan (FY2012-13 to FY2016-17) .250 1.320 12.570 NHPC DVC Others 1.7 100.200 3.3 32.250 3.600 14.2 66.3 Total 33.1 100.250 6.250 5.480 6.320 4.0 56. Kotak Institutional Equities 18 Kotak Institutional Equities Research .060 25.1 32.2 Centre NTPC 66.823 3.

3 5 2011 114.117 Gas 726 726 2.480 5.2 100.6 16.480 5.654 3.022 5.057 5.3 0.491 15.380 3.380 3.860 Thermal Coal Subcritical 16.559 8.482 3.2 80.870 726 1.781 10. Kotak Institutional Equities Exhibit 5.773 27.5 0.533 21.946 - Projects in the XIth plan .757 2.3 0.3 - 13.450 4.720 13.040 32.6 29.4 61.0 100.6 92.7 0.Under construction/ commissioned (MW) Centre NTPC NHPC DVC Others State Private Total Supercritical 3.390 34.648 0.476 19.2 53.400 1.741 1.223 2.056 10.8 Gas 100.450 750 20. March fiscal year-ends 2005-2012E (Rsmn) BHEL installed generation capacity (MW) BHEL estimated additional installation (MW) Spares and R&M order (Rs bn) Spares as proportion of installed capacity (Rs mn/MW) Assumed inflation rate (%) 2005 74.6 - Source: CEA. 2009 Exhibit 4.412 42.0 80.331 8.0 0.765 Nuclear - Total 20.6 23.300 750 16.117 80.520 5.1 97.828 15. We would expect the spares and R&M business to ramp upto Rs42 bn by FY2012E Estimation of ramp-up of spares business with cumulative installed capacity.2 51.627 3.520 5.698 Gas Hydro 726 4.380 Total 32.725 36.870 5. (MW) Centre NTPC NHPC DVC Others State Private Total Supercritical - - Thermal Coal Subcritical 15.0 49.130 Projects in the XIth plan .560 8.300 2.4 2008 85.3 5 2010 103.3 5 Source: Kotak Institutional Equities estimates.880 1.0 2006 76.773 31.2 0.3 36.270 1.006 Hydro Nuclear 8.828 10. with BHEL capturing a market share of 62% in coal-based thermal power projects Projects in the XIth plan .000 473 1.778 2.6 Hydro Nuclear 49.786 5.9 73.569 56.3 2009 94.0 80. XIth plan ordering activity is out of the way. Company data Kotak Institutional Equities Research 19 .0 79.0 71.725 41.480 13.8 97.3 0.300 5.856 26.5 97.530 9.530 9.BHEL's market share for under construction/ commissioned projects (%) Centre NTPC NHPC DVC Others State Private Total Supercritical - - Thermal Coal Subcritical 94.420 10.300 750 16.9 Total 63.2 100.390 34.009 47.450 750 20.781 4.220 5.005 23.6 0.April 08.8 70.483 1.961 18.780 3.008 3.526 10.Under construction/ commissioned with BHEL having the order.India Daily Summary .4 Total 78.2 2007 80.3 5 2012 124.698 Total 15.778 2.6 15.257 Total 19.300 3.

860) 13.764) (25.2 20.3 19.2 23.757 12.508) (5.962 11.593 6.7 9.9 18.2 42.226 45.8 18.920 193.7 248.242 4.3 16.8) (1.4 17.905) (2.2) (17. Kotak Institutional Equities estimates 20 Kotak Institutional Equities Research .932) (106.7 19.109 12.979 72.9) (10.3) (32.0 (213.737 22.3 9.794) (8.789 13.300 44.3 15.key numbers (Rs mn) yoy qoq yoy 4QFY09Flash 4QFY08 % change 4QFY09Flash 3QFY09 % change FY2009Flash FY2008 % change Net revenues 91.737 18.3 29.1 47.994 33.304 2.India Daily Summary .943 10.3 13.036) (58.8 16.680 (12) (911) 17. BHEL has missed our expectations essentially led by higher employee costs because of provisions BHEL 4QFY09 slash results versus our expectations (Rs mn) Net revenues Raw material consumption Staff cost Other items Total Expenditure Operating profit Other income EBIDTA Interest Depreciation PBT Tax PAT Key ratios (%) Raw Material to Sales Staff Cost to sales Other exp to sales Operating profit margin EBIDTA margin Effective tax rate PBT margin PAT margin 4QFY09Flash 91.9 Total Expenditure (78.1) PAT 12.9 36.2 5.680 13.1 16.006 4.711) (10.2 12.202) (44.6 52.4 4.680 17.459) 52.364) (15.6 35.6) 22.3 9.5 Raw material consumption (51.1 19.3 29.508) (78.9 14.9 Other income 4.7 % change (2.9 22.9 24.3 19.5 Other items (8.6 58.274) (5.780) (8.5 Interest (12) (42) (12) (179) (238) (354) (72.6 35.6 14.1 57.016) 56.634 2.0 35.3 13.2) 48.987) 33.972) 10.757 17.7 (22.554) (76.5 93.2 20.926 4.6 16.6 55.2 PBT 17.1) Source: Company.0 10.748) (17.714) (8.7 (78.3 19.7 54.784 47.020 27.737 3.4) (32. Kotak Institutional Equities estimates Exhibit 7.2 12.223 52.943 13.897) (5.2 Tax (5.737 4.979 60.036) 13.390 28.3 17. 2009 Exhibit 6.387) 33.063 13.3 13.April 08.483 yoy 4QFY09E 94.6 (1.3 20.4 9.7 23.4 12.926) (159.274) 12.875 18.7 19.833) (31.3 15.207 36.3 15.012) (51.3 13.638 (52.712) 17.668 3.906 57.6) (18.7 91.2 15.483 11.036) (50.4 56.979 (51.7 19.508) (8.739 (7.246) (2.630 EBIDTA 18.2 55.1 18.2 20.748) (35.8 Source: Company.6 34.1 (5.661) (17.321) (14.8 2.3 9.0 14.748) (38.0 14.3 29.8) Depreciation (911) (827) (911) (865) (3.2 11.6 15.3 9.8 34.9 30.4) 47.9 23.2) 12.910) (15.2 45.3 Key ratios (%) Raw Material to Sales Staff Cost to sales Other exp to sales Operating profit margin EBIDTA margin Effective tax rate PBT margin PAT margin 56. We believe BHEL may have underperformed marginally versus our estimates on revenues and margins (post adjustment for higher provisions) BHEL 4QFY09 flash results .6 (0.7 Operating profit 13.780) (9.880 56.5 22.780) (11.2) (93.662 (12) (911) 21.5) 1.050) (143.270 40.4 24.0 18.943 4.0 Staff cost (17.6 32.483 7.161) (21.622) 36.274) (4.655 28.757 (5.3 13.

It is our assessment that the gross NPL ratio of the retail segment for ICICI Bank is likely to rise due to the stagnation of the loan book rather than a worsening of the underlying asset quality. with the exception of personal loan and credit cards segments (even here we do not expect a worsening in trend from the current levels).3 2.9% by March 2010E.3 Pricing performance Perf-1m Perf-3m 39.7% in FY2010E and 2. but non-retail NPLs could rise. Rs375 Rating ADD Sector coverage view Attractive Target Price (Rs) 420 52W High -Low (Rs) 971 . thus far.4 P/B (x) 0.com.5% in FY2011E. due to lower fees and lower treasury gains.0) Shareholding. Our rationale: 1) Retail loans backed by collateral (especially mortgages and auto) do not have large asset quality issues.venkateswaran@kotak. Kotak Institutional Equities Research 21 . decline in fee income.com. growth.4) Perf-1y (54.0XPER FY2010E FIIs 63. Consequently.6 MFs 7. We assume delinquencies to be at 2.8 Div yield (%) 2. Our recent channel checks for the auto loan segment suggest that the behavior of the car loan portfolio has not seen a sharp deterioration in recent months. provision charges are likely to rise to about 180 bps of average loans over next two years.4 (18.India Daily Summary . we remain concerned about corporate (including international) delinquencies. the non-retail loan segment is likely to experience heightened stress. Earnings are likely to remain weak in the near term due to subdued NII growth. Asset quality would be the biggest driver for stock price performance • Fee income growth likely to be under stress • Margins to improve given the sharp reduction in wholesale rates. The trend of retail NPLs is likely to show moderation (addition to NPLs is likely to moderate).6 2. 2009 ICICI Bank: Asset quality to drive stock price performance. Trend in underlying asset quality for retail asset unlikely to get worse We expect the gross NPL ratio in the retail segment to rise to 8% by March 2010 from the 5.0 Net Profit (Rs bn) 41.5 UTI - - (1. focus on retail liabilities and slower asset growth.7 7.0 Manish Karwa : manish. +91-22-6749-3588 • Trend in retail NPLs unlikely to worsen significantly.3 Perf-6m (19.4 33.6 36. It is quite probable that some of these restructured corporate accounts could face genuine business risks and result in higher NPLs for the company over a period of time. Revise price target to Rs420 but retain ADD rating given inexpensive valuations of 0. This would result in gross NPL ratio rising to 7% (assuming ICICI Bank does not write off loans) and net NPL ratio rising to 2. The trend in retail NPLs is unlikely to worsen sharply from current levels (addition to NPLs to moderate). +91-22-6634-1240 Nischint Chawathe : nischint. The mortgage segment has not seen a sharp rise in delinquencies for the banking industry. mark-to-market losses for ICICI Bank to recede and investor focus to shift to asset quality over the next few months. December 2008 % of Over/(under) Pattern Portfolio weight Promoters - - - We believe that asset quality issues would be the key driver for ICICI Bank’s stock price performance over the next few quarters.8 3.9) (17.5 157.chawathe@kotak.9 32. We have reduced our earnings estimates by 5% for FY2009E and 8% in FY2010E.3 EPS gth Sales (Rs bn) 15.BO. Retain ADD rating with a target of Rs420 (earlier Rs465) Financials March y/e 2008 2009E 2010E 160.9 2.1) (7.April 08. Various news reports pertaining to restructuring of various corporate loans are likely indicators of stress on this portfolio.9) Asset quality issues would be the biggest driver of stock price performance LIC 8.7X PBR and 9.8 0.8 2. but benefit likely to be back-ended in FY2010 • Valuations remain attractive.9 163. but near-term operational environment to remain challenging. +91-22-6634-1350 Ramnath Venkateswaran : ramnath.9 0.4) P/E (x) 9.6% as of December 2008. where restructuring is likely to be the initial option.0 We expect the concerns on liquidity.com.9 4. lower treasury income and higher provisions.karwa@kotak.7 EPS (Rs) 39. near-term operational environment to remain challenging Banking ICBK.7 30.4 5.4 11.252 Market Cap (Rs bn) 417. However.5 12. The international loan book could also be exposed to similar risks.

thus far. Lending related fees are about 10%. Syndication and deal related fees. the fee income growth was largely driven by fees from a rapidly expanding international business (M&A and transaction based) and distribution business (especially insurance).e. International loans account for 36% of ICICI Bank’s consolidated loan book of US$49 bn as of December 2008.9% by March 2010E for ICICI Bank (inclusive of restructured assets). ICICI Bank already has Rs50 bn (2. We expect fees to decline by 28% yoy in 4QFY09E and by 1% yoy in FY2010E. However. It is quite likely that there could be some slippages in these exposures over the next few quarters. With the deal flow having almost stopped on the international side. We currently assume gross NPL ratio in the international book to rise to about 5% and gross NPL ratio on the non-India book rising closer to 10% by March 2010. However. The credit risk on these loans is fairly low as per the management. We estimate that out of total fee revenues. which will be impacted by the slower lending activity. However. the bank continues to accrue interest and thus. The regulatory relaxation provided by RBI is likely to enable ICICI Bank to restructure some of these stressed assets and defer the recognition of NPLs for a few quarters—similar as in the case of other banks. which are a large part of corporate fees. coupled with declining distribution revenues. International loans on ICICI Bank’s standalone book are about 62% of total consolidated international loan exposure while the subsidiaries account for the remainder 38%. 22 Kotak Institutional Equities Research . on the back of the higher risk of the international book. Corporate NPLs are likely to rise. The management has indicated that the 10% of the ICICI Bank (standalone) international book is to non-India entities while about 20% of the loans on the international subsidiaries are to non–India entities. we assume higher delinquencies in our assumptions. Asset quality rather than MTM losses to be key concern on international book ICICI Bank has been an active player in overseas acquisitions by Indian corporates or has been actively involved in the overseas funds raised (ECBs/FCCBs) by corporates. we believe fee income growth is likely to decline sharply over the next few quarters. the interest component also needs to be reversed and the impact on profitability would be much larger than actual loan amount. Distribution business contributes about 10% of total fees and is also likely to be under stress. restructuring is the initial option The asset quality of the non-retail segment of ICICI Bank has been fairly robust. in line with the trend observed at other Indian banks. Earnings trend to be weaker-than-expected earlier Fees to decline across the board Fee income has been the key revenue driver for ICICI Bank in the recent past. risks on this segment are likely higher in the current environment and the various newspaper reports of companies approaching banks to restructure the loans extended to them are reflective of this trend. Note that on restructured assets. from the current level of 3. are likely to remain subdued for ICICI Bank given the moderation in activity in the international segment.1%. credit cards and personal loans) continue to remain high and trend in this segment has taken a turn for the worse in the past few months. Since ICICI Bank has slowed down disbursement growth in the uncollateralized segment over the last 12-18 months. the pace of NPL addition is likely to get lower as the portfolio gets seasoned.India Daily Summary . split between the corporate and retail segments is 50:50. at the time of recognition (assuming that some accounts will eventually become NPLs).4% of parent loan book) of restructured assets (Dabhol exposure is included as part of restructured assets).April 08. We expect the gross non-retail NPLs to rise to 6. 2009 2) Slippages in the non-collateral segment (i.

320 1.064 246 63 3QFY08 1.274 1.7X FY2010E PBR. we reduce our FY2010E treasury earnings to Rs6 bn from Rs8 bn earlier. but likely to be back-ended in FY2010 We expect margins to start improving for ICICI Bank from 2QFY10E. March fiscal year-ends.010 577 3QFY09 980 553 12 12 16 18 21 21 25 26 26 Source: Company. The company has been increasing its focus on improving its liability profile by increasing its reliance on retail deposits and slowing down overall credit growth.145 927 218 54 Source: Company. In line with the higher NPL trend.044 276 59 2QFY09 1. ICICI Bank has not been growing its retail loan book over last few 6 quarters Movement in retail loans.317 1. Kotak Institutional Equities Research 23 .49% in FY2010E and 2. 2009 Treasury revenues are also likely to be muted We reduce our earning estimates for treasury on back of a sharp rise in Gsec yields since January 2009. As provisioning trend is expected to remain high.323 1. Adjusted for valuation of subsidiaries. Margins to improve.068 208 65 1QFY08 1. March fiscal year-ends.179 959 220 68 4QFY07 1. Corporate and international loan book is growing over last few quarters from the parent book Movement in non retail and international loans.046 228 64 2QFY08 1.063 254 58 1QFY09 1. we are building in NPL provisions of 180 bps of average loans for ICICI Bank in FY2010E and FY2011E. Earnings reduced by 8% in FY2010E to factor in lower fees and treasury gains We are reducing our earnings estimates for ICICI Bank by 5% for FY2009E and 8% in FY2010E to order to factor in lower fees and lower treasury gains. we maintain ADD on ICICI Bank as valuations are compelling.India Daily Summary . In line with our view of higher yields in the Gsec market.3% it is likely to report in FY2009E. we believe that it is likely to be neutralized by the MTM losses on its AFS portfolio (ICICI Bank recognizes MTM losses in the treasury line). the impact of high cost funding made in 3QFY09 and priority loans acquisitions (made in 4QFY09) are likely to have a negative impact on NIM for ICICI Bank. 3QFY07-3QFY09 (Rs bn) Non Retail Loans of which International International % of total parent loans 3QFY07 548 208 4QFY07 682 244 1QFY08 709 325 2QFY08 761 370 3QFY08 832 453 4QFY08 940 477 1QFY09 921 566 2QFY09 1. the stock trades at 0. 3QFY07-3QFY09 (Rs bn) Retail Loans Secured Loans Unsecured Loans Retail % of total loans 3QFY07 1.277 1. we reduce our FY2011E estimates by 11%. While ICICI Bank would have booked some gains in 4QFY09. These efforts are likely to bear fruition over the next 4-6 quarters and result in better margins. as the impact of wholesale deposit repricing starts benefiting ICICI Bank. We are reducing our target price by 10%. Valuations remain attractive Even as we highlight the muted growth in core operational income of ICICI Bank over the next few years. We have also reduced our valuations of subsidiaries as we cut target price of ICICI Prudential Life by 8% to account for the sharper-than-expected slowdown in new business premium in FY2010E.210 972 238 55 3QFY09 1.053 270 61 4QFY08 1.310 1. In the interim.April 08.68% in FY2011E from the 2. We expect the NIM of the company to improve to 2. on back of earnings reduction over the next couple of years.

5 2.7 0. 2004-2011E (%) 2.8 4.5 0.5 2004 2005 2006 2007 2008 2009E 2010E 2011E Source: Company.5 1.0 5.0 2004 2005 2006 2007 2008 2009E 2010E 2011E Source: Company.7 1.2 2. Kotak Institutional Equities estimates.3 3.5 2004 2005 2006 2007 2008 2009E 2010E 2011E Source: Company.5 1. Kotak Institutional Equities estimates.0 1.5 1. 24 Kotak Institutional Equities Research .0 7.9 2. 2009 Incremental delinquencies continue to remain high Incremental slippage as proportion of opening advances. on back of high slippages Net NPLs as proportion of loans. March fiscal year-ends.0 0. 2004-2011E (%) 7. March fiscal year-ends. Kotak Institutional Equities estimates.5 2.5 8.April 08.0 7.0 6.India Daily Summary .9 4.7 2.0 4.0 2. March fiscal year-ends. Net NPLs to rise fast. Gross NPLs (assuming no write-offs) to rise sharply led by non-retail loans Gross NPLs as proportion of loans.0 3.1 1.0 3. 2004-2011E (%) 3.1 1.5 2.

1 Net NPLs in retail Net NPLs (unsecured) Net NPLs in non-retail 29 16 16 2.6 Gross NPLs Provisions and w/off Net NPLs Source: Company.4 1. Kotak Institutional Equities Research 25 .5 7.4 2. we expect corporate NPLs to rise fast NPL details as of December 2008 3QFY09 (Rs bn) 96 52 45 3QFY09E (%) 4. Kotak Institutional Equities estimates.India Daily Summary .1 Gross NPLs in retail Gross NPLs in non-retail 66 31 5.6 3. NPLs have been showing a steady increase since 3QFY07 Movement in NPLs and provisions.0% 36. Breakup of UK Asset Book .0% 6.0% Source: Company.April 08.6 bn UK Asset book breakup as of December 2008 (%) Loans to customers Asset backed securities India Linked Inv Bank Bonds Cash and Liquid securities Other assets and inv 5.0% 6. March fiscal year-ends.5 2. 1QFY07-3QFY09 (Rs bn) Gross NPLs Provisions and w/off Net NPLs 1QFY07 33 20 13 2QFY07 37 22 15 3QFY07 44 25 19 4QFY07 49 28 20 1QFY08 60 33 27 2QFY08 67 37 30 3QFY08 72 39 33 4QFY08 84 48 36 1QFY09 93 52 41 2QFY09 103 60 43 3QFY09 96 52 45 Source: Company.Total Assets of US$ 7. 2009 NPLs are high in retail currently.0% 16.0% 31.

5 2.4) 0.846 2011E 90.0% 55.000 71.0% 17.618 13.908 8.421 38.291 37.0 (4.000 100.8) (4.977 8.584 68.270 20.895 New estimates 2010E 84.894 15.000 84.487 80.500 71.0% Source: Company.521 87.972 89.866 % change in estimates 2009E 2010E 2011E 0.993 1.8) (9.523 86.3) (7.5 (8.455 Old estimates 2010E 87.318 46.3 2.780 36.India Daily Summary . 2009 Breakup of Canada asset book .836 80.6) (11.7 2.0) (16.063 76.3) 1.3 (3.5 2.3 2.3) (0.429 8.2) (5.982 13. 2009-2011E (Rs mn) Net interest income Spread NIM (%) Customer assets (Rs bn) Loan loss provisions Other income Fee income Treasury income Operating expenses Employee expenses PBT Tax Net profit PBT-treasury+provisions 2009E 81.554 59.171 20.5 bn Canada asset book breakup as of December 2008 (%) Loans to customers asset backed securities Federally Insured Mortgages Cash and Liquid securities India Linked Inv Other assets and inv 3.110 20.417 38.355 44.April 08.8) 0.000 83.4) (7.7 2.183 78.257 59.733 2009E 81.326 26.5) (18.464 33.0% 20.712 39.8 2.241 75.163 12.0% 3.262 1.198 81.012 66.157 2.925 60.983 17.3 (56.476 1.6 (8.370 39.Total Assets of Canadian $ 6.8) (4.6) (7.504 6.216 39.500 76.258 51.410 2.6) (7.6) (2.4) (11.2) (14.1 2.110 54.9 2.7 (9.8) (16.3 2.145 3.314 36.699 78. ICICI Bank (Old and new estimates) March fiscal year-ends.1) (12.462 8.6) (8.258 49.532 61.1) (4.3) Source: Kotak Institutional Equities estimates.9 2.751 98.0% 2.4) (11.462 22.627 93.495 36.782 1.7 2.0) 0.7) (10.358 22.153 12.7) (11.503 2011E 105. 26 Kotak Institutional Equities Research .373 81.386 39.165 49.5) 1.

9 340 0. Bloomberg.5 12.7 28.8 0.5 1.5 361 0.6 27.7 24. Kotak Instititional Equities estimates.8 9.8 34.6 BVPS (Rs) 170 250 270 418 439 459 484 P/B (X) 2.7 30.8 EPS excl.8 8.4 7.9 0.9 7. Kotak Institutional Equities.5 7.0 13.5 EPS (Rs) 27.4 11.0 11.1 25.7 7.4 31.4 29.6 7. margin assumed is 13% 1X FY2008 PBR 3% of AUMs PER of 5X FY2008 EPS PBR of 1X FY2008 BVPS PBR of 1X FY2008 BVPS 10% of AUM of US$2 bn Source: Company.4 10.6 14.April 08.2 32.0 142 1.5 24.7 6.4 10.6 7.9 32.6 36.6 Source: Company.India Daily Summary .6 39.7 341 0.6 28. Forecasts and valuation for ICICI Bank March fiscal year-ends. P/E BVPS P/B dividend (standalone) (standalone) (standalone) RoE (%) (Rs) (X) (Rs) (X) 19.5 225 1. 2005-2011E 2005 2006 2007 2008 2009E 2010E 2011E PAT (Rs bn) 20.2 1.8 11.5 P/E (X) 13. Kotak Institutional Equities Research 27 .9 0.4 0.0 333 0.7 8.7 9.5 29. 2009 Value of ICICI standalone Subsidiaries ICICI Financial Services ICICI Prudential Life General Insurance Mutual Fund Other subsidiaries/associates ICICI Securities Ltd ICICI Securities Primary Dealer ICICI Homes Ltd ICICI Bank UK ICICI Bank Canada ICICI Bank Euroasia Venture capital/MF Value of subsidiaries Value of company ICICI Share (%) 100 FY2010 262 94 74* 74* 51* 129 106 9 14 100 100 100 100 100 100 100 7 1 8 0 0 0 9 154 416 Valuation methodoly adopted Based on Residual growth model 16X NBAP.7 39.4 33.3 35.8 217 1.1 41.

9 7.1 10.6 2.3 67.2 8.7 24.0 7.0 0.6) (58.8 9.1 2.1 (8.8 73.0 2.2 (1.4 1.0 12.9 28.1 7.3) 0.1 25.7) (4.2 7.% of average assets Net interest income Loan loss provisions Net other income Operating expenses Invt. March fiscal year-ends. 2009 ICICI Bank.8 29.9 1.1) 85.0 85.4 3.8 7.7 2.3 1.7 29.8 — 74.1 2.1 — 73.3 2.5 7.0 19.4 1.3 21.India Daily Summary .2 1.7 2.7 11.1) 17.4 8.7 7.3 34.2 7.1 2.0 10.5 44.5 Source: Company.0 14.6 69.8 28.8 72.5 63.4 2.3 0.4 7.5 26.2 7.3 9. key ratios and Du Pont analysis.4 62.5 1.1 9.1 10.5 6.9 16.0 25.0 10.6 30.3 2.0 15.6 6.1 9.3 — 72.2 6.7 8.7 3.0 11.4 6.6) (12.3 0.0 38.2 17.2 6.3) 0.0 2.8 3.April 08.6 6.8 28.7) (1.7 2.3 5.5 1.6 26.9 2.2) 7.2 — 82.5 19.1 2.3 1.3 (80.6 33.4 29.7 1.3 64.5 67.0 0.tax rate) ROA Average assets/average equity ROE 2007 2008 2009E 2010E 2011E 34.1 73.1 10.2 12.4 6. Kotak Institutional Equities estimates.0 1.4 9.3 1.9 7.3 22.8 39.3 2.2 (13.4 2.0 30.4 9.0 8. 28 Kotak Institutional Equities Research .3 8.6 43.3 7.9 8.7 2.8 6.1 28.5 9.6 6.2 7.0 10.6 1.1 0.2 12.7 6.5 (1.6) 6.2 71.8 8. Depreciation (1.0 5.5 14.4) 3.4 6.8 1.1 6.0 17.2) (3.9 6. growth rates.4 2.9 10.3 48.0 5.1 1.5 15.2 27.3 78.5 8.8 13.9 1.3 49.8) (2.0 0.5 11. 2007-2011E Growth rates (%) Net loan growth Customer assets growth Corporate loans Total retail loans Deposits growth Borrowings growth Net interest income Loan loss provisions Non-interest income Net fee income Net capital gains Total income Operating expenses Employee expenses DMA Asset management measures (%) Yield on average earning assets Interest on advances Interest on investments Average cost of funds Interest on deposits Other interest Difference Net interest income/earning assets New provisions/average net loans Loans-to-deposit ratio Share of deposits Current Fixed Savings Tax rate Dividend payout ratio ROA decomposition .8 (10.7 2.0 23.1 3.2) (13.8 18.3 9.8 172.0 34.0 28.2 0.6 (22.8 46.6 6.7 2.3 19.7 35.2 7.3 5.7) (6.7 2.2 1.

201 63.373 26.829 31.232 1.439 51.184 89.702 2.167 15.157 39.124.070 749.127 477.585 116.135.883 15.971 33.656 866. Kotak Institutional Equities estimates.951 270.741 66.110 20.239 36.842 182.097 2.767 209.239 927.577 33. Kotak Institutional Equities Research 29 .339 10.815 228.500 145.594 1.305.807 538.293 3.316 1.203.234 10.706 76.208.202 164.462 22.130 2. 2007-2011E Total interest income Interest on advances Interest on investments Total interest expense Deposits from customers Net interest income Loan loss provisions Net interest income (after prov.933 Source: Company.478 265.494 3.097 2.500 192. March fiscal year-ends.508 212.270 20.183 488.894 15.444.152 2.293 78.411 81.053 18.000 78.783 912.315 40.732 84.533.102 22.958.172 3.542 20.508 3.201 58.145.350.899 3.746 3.452 56.370 39.583 64.895 49.751 75.448 8.293 3.034.256.114.258 6.660 234.041 27.052 185.739 185.789 15.534 889.656 1.118 205.531 1.836 933.373 (12.183 45.983 29.514 6.990 234.846 1.228 196.449 3.399 20.140 243.682 19.883 226.297 12.476 39.154 Deposits Borrowings and bills payable Preference capital Other liabilities Total liabilities Paid-up capital Reserves & surplus Total shareholders' equity 2.759 73.000 82.290 135.500 1.383 18.780 36.810 54.630 203.581 380.500 1.089 7.0 371.860.249 11.218.258.127 527.587 1.4) 80.689 3.051.0 2009E 316.948 815.362 162.126.153 12.316 154.963 59.031 87.206.782 1.280 950.427 50.000 76.344 26.260 (3.699 866.997.363 24.145 3. income statement and balance sheet.351 130.984 41.512 196.121 656 81.073.137.371.049 74.321.164 753.811 5.970 2.102 752.504 6.054 3.097 2.000 83.129.578 867.393 234.446.885 163.309 11.628 1.011.411 28.045 54.843 510.7) 2011E 273.110 8.796 10.699 (7.897 3.4 46.616 55.993 36.872 2.444 3. and other securities Shares Subsidiaries Debentures and bonds Net loans and advances Corporate loans Total retail loans Fixed assets Net leased assets Net owned assets Other assets Total assets 2007 229.241 45.220 11.201 46.540 673.730 11.051.000 82.525 183.986 767.232 1.219 273.097 1.279 10.072 24.249 11.127 453.010 46.000 1.670 166.664.092.308 37.575 464.950 954.) Other income Net fee income Net capital gains Miscellaneous income Operating expenses Employee expense DMA Pretax income Tax provisions Net Profit % growth PBT+provision-treasury gains % growth Balance sheet (Rs mn) Cash and bank balance Cash Balance with RBI Balance with banks Outside India Net value of investments Investments in India Govt.584 68.906 16.032 29.127 499. 2009 ICICI Bank.172 3.777 29.5) 83.500 192.040 263.378 31.554 59.161 1.500 196.000 39.760 1.883 15.525 4.3 88.480 5.444 3.822 168.305.410 24.000 71.655 90.0 2010E 280.972 50.010 74.780 46.561 8.765 68.358 21.909 146.213 20.6 2008 307.318 6.732 1.899 29.022.311 896.477 66.775 33.India Daily Summary .543 1.593 44.201 63.860.523 17.126 43.446 49.464 33.309 2.7 60.April 08.943 160.355 45.759 40.630 41.883 15.163 12.429 8.755 157.220 29.925 60.222 10.153.

Soda ash segment margins are expected to remain steady due to: 1) Increase in contracted prices. December 2008 % of Over/(under) Pattern Portfolio weight Promoters 29. South Africa as “home markets” and will defend its sales in these markets aggressively in light of any destabilization in prices. We will wait for some time to see that these prices hold.India Daily Summary . TCL has taken an average price increase of US$20 for long term contracts in soda ash starting CY2009. TCL did not pre-announce earnings or unveil any new deal.1 (0. We factor in a 12% decline in total soda ash volumes in FY2010E.4 0. TCL has categorized the markets of India.53 Market Cap (Rs bn) 36.4 Div yield (%) 0.com.3 - (0.8) Shareholding.0 5.1 6. TCL is still to formulate its policy towards accounting treatment of forex losses post the recent change in accounting norms AS11.3 0. We have not factored this into our estimates and believe this will provide an upside to our numbers.1 Net Profit (Rs bn) 9. has now receded as a result of production cuts by China driven by a decline in domestic demand. TCL maintains that any irrational behavior by Chinese players could destabilize the current situation. exposure to detergents segment comprises 60% of sales where volumes have not seen any slowdown. Maintain BUY rating with a price target of Rs190. Mukundan and CFO Mr. however.3 EV/EBITDA (x) 5.3 EPS gth 89.arora@kotak. we expect EPS of Rs40 in FY2009E declining to Rs25 in FY2010E. Soda ash situation remains fluid. US.7) (4. Adjusted for forex losses.1 3.9 29.7 0. TCL has resumed production of DAP at its Haldia plant and believes the situation has normalized for now with stabilization in DAP prices and decline in feedstock costs of phosphoric acid.7) P/E (x) 3. We have not factored this into our estimates and believe this will provide an upside to our numbers. Ghose.3 Financials March y/e 2008 2009E 2010E Sales (Rs bn) 59. TCL mentioned that there was a significant interest from the sell-side in meeting the management and hosting a group meeting was better use of their time instead of 1*1 meetings. +91-22-6749-3596 • Soda ash situation remains fluid.com. Approximately 100% of BMGL’s volumes and 60% of GCIP volumes are contracted. However. margins expected to remain steady • Production of DAP resumes.2 Perf-1y (8. (1) TCL believes that the specter of significant volume shrinkage for them in developing markets of Africa and Asia. +91-22-6634-1127 Priti Arora : priti.April 08.2 6.8 (35. The stock is trading at 7X FY2010 earnings estimate. Rs154 Rating BUY Sector coverage view N/A Target Price (Rs) 190 52W High -Low (Rs) 126 .8 1.3 40. UK.8 120.4 74. Europe (2) increase in idle Chinese capacities remaining an imminent threat to prices.1) MFs 10. steady-state margins expected to remain between 58% • Maintain BUY rating with price target unchanged at Rs190 TCL management believes the soda ash market remains fluid with (1) volume contraction being seen in USA. 2009 Tata Chemicals: Soda ash situation remains fluid . Canada. Consumers are downgrading from liquid to powder detergents in developed markets. however.1) 0. there are certain mitigating factors which may lend stability to the situation. In India. (2) The slowdown in the auto and float glass segments is being countered to some extent by increased demand from container glass and powder detergents.8 4. TCL mentioned that the industry is witnessing volume decline of 10-15% globally.BO.5 UTI LIC 11. TCL management hosted a meeting with sell-side analysts that we attended.5 Pricing performance Perf-1m Perf-3m Perf-6m 20.4 0.vaishampayan@kotak.meeting with management Others TTCH.6 6. Europe (2) increase in idle Chinese capacities remaining an imminent threat to prices. TCL has taken an average price increase of US$20 for long term contracts in soda ash starting CY2009.7 EPS (Rs) 39. Margins in soda ash are expected to remain steady due to (1) an increase in contracted prices (2) lower energy costs. We leave our estimates unchanged.2 - - FIIs 10. China is currently operating at 70% capacity utilization and at near-cash cost levels of production (US$170-190 mt).5 24.3 Prashant Vaishampayan : prashant. margins expected to remain steady.9 6. 30 Kotak Institutional Equities Research . TCL mentioned that the soda ash situation is fluid with (1) volume contraction being seen in USA. The meeting was addressed by CEO Mr.6 25. Timing of the meeting was a bit surprising since FY2009 results are to be announced in May.

With major fertilizer companies now having cut back on DAP production. (forex losses of Rs3 bn reported YTD) 2) There will be a small amount of inventory write-off on account of DAP business likely in 4QFY09E 3) Goodwill on GCIP acquisition (Rs46 bn) will be tested for impairment. steady-state margins expected to remain between 58% With DAP prices normalizing and rapidly declining phosphoric acid prices. (80% of volumes exported). due to lower sales volumes on the back of credit tightening for its customers. plant closure in 3QFY09 was a viable option.5 mt. profitability declined in 9MFY09. We retain our BUY rating and price target of Rs190. 1) TCL is still to formulate its policy towards accounting treatment of forex losses post the recent change in accounting norms.April 08. Even if prices were to collapse. Valuation and target price unchanged. Since fixed cost is 30% of total cost.2 mt is natural soda ash for which the cash cost of production is near US$60-70 mt vs synthetic cost of US$170-190 mt. we believe margins will expand further. TCL has cut back on its capex programmed to Rs4bn for three years starting FY2009E out of which Rs2. 3. TCL’s exposure to low cost soda ash capacity (owns 35% of global natural soda ash capacity) makes it the most capable of withstanding a slowdown 5) Domestic soda ash pricing have declined by 6% in late FY2009 although demand is stable. However. We think TCL’s management meeting will help address some of the investor concerns relating to soda ash business which is critical to sentiments and share price movement in the short term.term investments made by TCL in various listed and unlisted Tata group companies. Due to delays in DAP ordering in the US and South America. The share price has moved from Rs119 since we launched coverage on 23rd March to Rs154. DAP prices declined with excess supply.2 bn has been spent on urea plant at Babrala. Kotak Institutional Equities Research 31 . prices are normalizing. TCL has long-term contracts for energy requirements. In UK. It plans to spend Rs500mn on its Haldia plant in FY2010E. TCL has resumed DAP production at Haldia plant. TCL confirmed that Magadi is now contributing positively at EBITDA level driven by decline in energy costs and freight costs as faster decline in freight rates vis-à-vis energy cost makes it possible to route material to other geographies. We believe an impairment charge is unlikely since cash flows of GCIP remain strong. We use PE multiple of 5X for chemicals and 8x for fertilizers for earnings 12 months forward. Although prices are fixed for production out of Magadi. Production of DAP resumes. We add 70% value of long. TCL is better equipped to handle any further decline in prices. 2009 2) Lower energy costs.India Daily Summary . it can pass on an increase in energy costs to customers based on a certain predefined formula. 5) Biofuel plant to be commissioned in 2H2009. 3) Improvement in margins in Magadi. In the US. Other takeaways. With the recently taken price hike and decline in energy costs. We arrive at price target of Rs190 for TCL based on an SOTP calculation for its two businesses – chemicals and crop nutrition.2 mt has been put on hold. 4) Out of TCL’s total soda ash capacity of 5. 4) Planned capex of Rs1 bn in FY2010E. Financial impact will be minimal since it’s a small plant. Increase in capacity at its Mithapur soda ash plant to 1. since Mithapur facility has access to its own limestone quarries and salt pans.

998 17.114 18.300 10.4 (3.115 — 9.500 4.726 3.750 3.204 2. March fiscal year-ends.114 17.277 22.787 56.526 46.757 9.2 59.5 14.6 ROCE (%) 15. 2009 TCL—Forecasts and valuation.5 17.141 2.538 9.490 76.718 18.4 3.511 46.289 11.6 5.994 71.712 46.798 13. balance sheet.7 130.759 2. March fiscal year-ends.000 9.138 1.6 30.837 88.545 46.5 6.3 148 4.9) 3.April 08.767 88.174 15.255 46.9 27.493 24.518 3.0 80. Kotak Institutional Equities estimates.7 12.050) 6.8) 5.4 1.India Daily Summary .4 25.561 7.3 14.9 39.080 18.438 9.492 4.719 50.871 37.051 2.757 3.9 120.0 6.653 107.547 7.492 4.204 2.4) 6.842 107.7) 138.458 17.2) 76.7 23.3 13.8 5.739 944 7.422 6.000 108.8 13.526 33.2 30.481 2.787 32.174 10. 2007-2011E (Rs mn) 2007 2008 2009E 2010E 2011E Net sales (Rs mn) Growth (%) 57.505 46.492 4.493 18.8 9.1 (Rs mn) 9.025 EBITDA Growth (%) 38.492 4.719 35.300 18.401 — 5.6 9.438 16.260 45.5 Net Profit (Rs mn) Growth (%) 5.909 3.2 124.174 7.5 71. Kotak Institutional Equities estimates. TCL—abridged profit model.429 101.2 13.874 20.7 17.9 21.185 48.025 23.644 89.871 30.6 25.6 751 4.204) 5. 2007-2011E (Rs mn) 2007 2008 2009E 2010E 2011E Profit model Net revenues EBITDA EBITDA margin (%) Other income Depreciation Net finance cost PBT Tax (Profit)/loss in minority interest Reported net profit 57.642 — 2.3 93.490 (8.254 2.9 6.301 3.816 10.946) 4.753 (619) 1.429 22.218 (1.505 — 2.317 103.632 7.422 18.000) 5.994 (37.915 47.277 15.6 Source: Company.5 39.589 58.174 (2.842 103.4 18.458 Balance sheet Total equity Total debt Minority interests Net Deferred tax liabilities Total liabiilities and equity Net fixed assets incl CWIP Goodwill on consolidation Investments Net current assets Cash Total assets 25.853 (1.2 ROE (%) 21.644 120.998 (40.842 108.538 45.080 59.651 (1.4 (20. 32 Kotak Institutional Equities Research .8 (1.0 EPS (Rs) 20.2 72.726 2.620) 6.3 27.5 23.0 P/E (X) 7.874 28.825 2.9 Ratios Diluted EPS (Rs) ROE (%) Debt/equity (%) Source: Company.084 1.005 46.

699 4.311 400 912 4QFY09E 16.987 19.912 478 1.102 (242) 1.703 20.710 5.434 250 1.200) 1.472 5. costs EBITDA Interest(net) Depreciation Other income PBT Tax PAT Minority interest Reported PAT 4QFY08 14.639 450 13.790 5.910 0 4.089 2.616 5.667 1.April 08. March fiscal year-ends (Rs mn) Net sales Op. Kotak Institutional Equities Research 33 .277 0 5.302 1.184 Fertilizer business India IMACID Chemical business (Global) Brunner Mond Group (UK) GCIP (USA) India Adjustments Total 5.879 11.068 4.636 4.818 (92) 14. qoq) (52) (63) 28 1 4 NM 7 1 9 (37) 30 (85) (87) (66) (5) 3 (0) (18) NM (52) Source: Company data.784 472 1.879 Growth (%. Kotak Institutional Equities.641 364 5.500 3.627 441 9.401 (139) 35.262 1.460 3.423 0 16.150 (1.984 4.047 315 793 5.348 13. yoy) 18 (13) 403 217 45 NM (66) 31 (73) NM (78) (39) (43) 2 43 15 NM (8) NM 15 Growth (%.000 1.668 3.320 14.100 30. 2009 Interim results.277 3QFY09 35.116 988 1.703 5.TCL .India Daily Summary .

6 3.8 37.9 (8.2) (6.7 11.2 19.5 16.7 1.9 Price/BV (X) 2008 2009E 2010E 2.5 7.9 5.7 5.4 76.7 5.1 1.2 61.6 1.6 68.4 0.5 6.7 1.3) 7.5 5.3 4.786 75.3 21.0 17.7 7.6 19.3 0.4 10.0 12.5) 67.2 26.0 2.6 4.9 3.9 1.7 53.7 8.7 4.0 33.0 (11.8 3.5 74.6 1.3 0.6 27.3 3.5 0.0 — 1.4 15.3 14.2 8.1 4.2 16.2 0.1 2.5 3.5 23.2) (49.1 25.7 9.441 417.6 6.8 22.1 4.5 323.5) (16.1 26.7) (2.0 26.8 56.9 11.562 93.7 51.8 7.0 12.7 71.6 4.8 39.8 21.8 — 16.9 6.9 124.8) (15.4 (18.5 6.1 6.1 (19.8 5.5 4.5 26.9 1.0 18.0 12.5 3.3 29.891 13.0 5.3 8.2 46.0 10.1 19.1 67.0 3.5 9.9 8.3 9.9 3.6 27.522 92 282 35 125 485 358 366 526 410 143 171 63 287 423 1.1 37.9 3.0 32.0 90.2) (9.2 3.9 2.9 17.879 773.2 2.8 3.1 0.9 2.8 10.0 15.4 36.9 2.0 53.8 15.4 5.1) 3.815 33.865 2.333 15.2 8.249 1.0 27.1 41.4 1.8 33.9 20.3 38.1 0.4 0.912 16.8 3.0 42.4 7.9 20.3 17.8 0.6 43.4 4.6) 31.990 8.451 109.2 0.4 14.1 145.4 109.9 16.9 1.7 4.9 22.7 2.1 3.5 1.1 14.5 (13.3 3.8 12.8 76.6 24.6 3.9 11.2 28.5 1.298 134 482 1.7 21.7 0.0 1.1 25.2 2.679 741 72 14.7 3.0 28.153 60.323 1.7 0.8 4.0 2.9 1.5 0.8 17.5 90.4 7.471 118.5 0.3 4.5 9.6 1.9 11.6) 21.175 1.0 9.7 3.3 8.7 21.6 135.568.7 10.3 31.2 1.3 0.0 36.0 10.1 15.5 3.8 22.109 7.7 17. 2009 Kotak Institutional Equities Research .833 1.0 1.1 1.3 17.8 23.4 3.8 15.9 15.712 18.5 6.9 3.6 9.3 6.3 61.0) (3.2 2.3 37.9 71.0 1.0 0.5 (19.0 5.0 6.740 940 65 85 900 550 60 1.7 12.2 5.3 35.7 3.4) (2.7 25.3 18.6 15.5 22.1 1.8 3.2 7.5 62.9 17.0 7.4 3.5 2.284 487.4 44.9 5.1 36.198 6.2 0.1 1.5) 19.8 90.5) 12.719 31.3 4.9 33.7 4.7 2.9 12.2 4.4 53.1 4.5 3.5 0.4 8.5 4.8 20.2 0.398 1.9 2.9 24.1 7.6 1.6 16.8 13.0 0.5 85.6 10.7 4.1 17.8 72.3 140.7 17.8 5.2 4.6 2.3 18.6) 43.7 3.1 1.9 20.0 2.4) (4.1 1.6 4.7 15.0 2.6 4.8 22.241 2.0 5.6 0.6) (5.0 1.0) 116.7) 0.7 7.4 (8.3 14.9 26.0 46.9 34.064 460 799 210 6-Apr-09 Price (Rs) 4.6 30.0 2.0 6.8 2.8 4.4 12.1 9. (Rs mn) (US$ mn) 37 135 229 323 13 96 136 42 258 2.1 1.9 0.5 0.6 13.2 12.1 14.6 1.215 19.6 12.1 5.7 58.8 1.5 6.5) 13.4 0.4 1.8 10.7 4.3 5.6 7.2 2.3 2.7 10.1 9.5 39.4 0.5) (12.5 9.0 21.3 19.4 15.3 14.1 134.693 87.1 10.600 220 615 950 450 780 120 (Rs) 69.5 18.4 27.5 EPS growth (%) 2008 2009E 2010E Kotak Institutional Equities: Valuation Summary of Key Indian Companies 4.9 5.3 26.2 1.5 44.0 16.1 0.5 12.5 6.9) 30.9 23.7 12.5 1.5 5.2 18.0 14.2 4.763 120.9 72.8 34.8 46.250 465 75 60 195 120 480 330 190 200 145 650 125 215 50 1.6 28.9 6.9 0.8 6.0 2.0 4.0 15.9 2.4 2.4 27.3 16.5 0.4 13.5 2.8 (2.6 11.0 3.6 24.0 14.7 1.281 24.3 5.1 1.6 61.3 44.7 1.5 58.4 3.183 2.0 3.4 0.0 16.3 8.3 3.0 3.9 0.8 38.0) 2.4 60.2 (10.6 9.5 2.5 2.9 23.0 0.5 18.7 56.3 4.6 (7.0 6.7 59.294 287 430 545 48 85 95 251 1.8 39.3 10.5 16.2 44.6 11.2 0.6 31.4 6.5 2.2 14.8 (US$ mn) India Daily Summary .5 13.8 16.133 3.7 4.0 19.2 48.8 27.5 2.716 24.9 64.2 50.2) (52.8 17.8 45.1 14.3 14.3 4.3 1.2 (20.2 3.9 2.347.495 1.3 0.1 8.1 34.171 68.0 EPS (Rs) 2008 2009E 2010E Source: Company.2) (22.105 34.9 0.5 5.3 2.0 3.7 2.2 0.6 5.2 16.3 5.9 0.3 4.4 11.8 10.6 59.5 11.3 4.4 3.1 5.6 5.8 — 1.236 30.6 8.8 5.7 3.4 4.5 — 13.500 1.8 0.2 4.3 1.7 3.940 116.0 6.4) (14.2 2.9 9.3 135.4 3.3 3.7) 27.5 38.567 110 716 538 66 101 664 784 447 709 129 227 180 72 1.9 1.2 11.4) 33.3 15.7 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 11.1 17.0 100.173 62.3 8.3 0.2 5.9 15.4 9.2 2.0 34.5 24.4 4.7 0.2 60.3 17.5 0.500 130 850 550 75 750 330 330 220 310 280 440 1.2 17.8 16.4 12.8 21.1 16.9 18.1 2.4 51.9 5.6 4.3 7.9 22.3 4.4 15.3 0.5 2.4 2.4 12.4) (9.3 23.2 56.3) 44.3 29.345 9.8 9.4 (12.769 73 96 62 102 240 94 188 1.5 12.2 2.5 11.7 45.6) 35.1 2.2 55.6 6.1 19.4 7.9 12.9 45.443 Mkt cap.5 0.5 28.9 — — — — — — — — — — — — — — — — — — — — — — — — — — — 6.7 2.2 27.8 1.5 0.3 25.0 3.6 8.0 6.9 4.8 7.5 85.9 4.1 27.7 20.3 50.3 9.0 5.3 1.9 21.5 0.1 1.3 8.3 1.2 2.4 6.5 68.9 3.6 37.7 10.8 26.7 1.7 42.2 59.5 11.5 10.2 4.270 36.4 7.0 21.4 6.2 10.2 18.2 13.258 154.2 15.3 4.7 5.7 2.7 15.8 85.6 5.2 15.8 11.512 4.5 2.1 0.3 3.6 29.5 81.375 536 541 145 9.3 11.1 14.9 12.6 13.6 1.4 16.148 315 859 203 116 631 505 145 200 258 289 556 (mn) O/S shares 50.5 0.6 (10.8 — — 0.4 32.2 (1.5 36.7 1.8 6.8 12.0 27.965 84.7 6.8 1.3 13.4 21.7 15.5 45.5 0.1 11.6 — 1.5 34.3 41.4 17.7 4.6 0.8 20.0 26.2 1.5 5.1 19.7 18.3 1.4 19.1 (41.4 22.5 38.214 2.0 40.2 3.880 27.0 6.4 6.0 0.6 19.7 9.5 (6.105 155.7 3.7 1.0 1.0 2.649 230.6 1.5 0.7 20.4) 5.3 39.8 17.6 2.0) 16.0 12.611 710.2 17.0 57.6 284.7 30.156 20.4 0.1 3.9 3.7 2.2) 19.8 10.6 225.592 1.0 2.8 4.7 40.9 7.6 18.5 19.5 10.5 94.1 7.5 1.9 6.2 12.0 8.5 19.3 0.4) 3.5) 28.7 4.0 (19.5 16.1 9.3 13.2 4.8 16.1 13.6 0.1 1.9 2.0 1.0 (11.9 36.7 15.1 8.9 23.7 21.2 14.1 5.7 2.2 40.3 2.0 3.368 4.2 2.6 12.7 52.7 11.5 27.4 10.1 2.0 4.6 14.8 19.3 44.6 0.2 17.7 15.4 9.3 7.6 2.0 3.6 29.524 105 3.6 5.8 11.2 1.600 590 112 155 70 107 328 Rating 655 1.1 86.9 9.8) (20.5 2.868 621 498 1.6 13.9 10.4 1.7 22.9) 66.3 (58.8 3.3 7.8 35.8 6.0 1.8 85.3 1.8 4.6) 38.0) 8.0 0.7 14.1 1.8 1.1 1.6 43.3 (0.9 0.7 63.5 4.8 1.6 — 1.0 6.2 24.596 5.6 4.7 4.9 2.8 2.143 37.213 595 663 9.102 79.2 82.5 1.8 (22.4 54.8 1.7 2.4 31.9 0.3 34.1) (2.0 0.34 REDUCE REDUCE ADD REDUCE SELL Cautious ADD ADD ADD ADD REDUCE BUY BUY BUY REDUCE BUY ADD ADD ADD BUY BUY ADD BUY SELL ADD ADD BUY BUY REDUCE ADD BUY BUY Attractive REDUCE REDUCE REDUCE ADD BUY ADD Cautious REDUCE REDUCE BUY Neutral REDUCE ADD ADD ADD REDUCE ADD ADD ADD BUY Cautious ADD BUY BUY REDUCE ADD Attractive 50 435 240 229 168 187 159 115 1.9 0.6 45.9 1.2 47.9 1.3 106.833 212.3 4.0 22.0 9.1 10.5 7.9 7.3 6.115 21.0 4.5 2.5 PER (X) 2009E 2010E 13.3 16.0 0.705 481 3.2 19.3 3.796 29.4) (2.7 129.0 2.9 0.2 64.8 (5.8 8.2 10.1 9.0 45.5 11.4 14.5 19.2 6.6 15. Punj Lloyd Sadbhav Engineering Construction (2.8 1.5 1.3) 24.3 16.4 10.2) (9.3 0.0 5.0 2008 5.956 67.7 10.0 13.7 34.1 3.7 4.744 27.3 22.2 2.3 9.4 RoE (%) 2008 2009E 2010E 190 175 100 105 550 800 490 700 160 245 200 127 1. Kotak Institutional Equities estimates Company Automobiles Bajaj Auto Hero Honda Mahindra & Mahindra Maruti Suzuki Tata Motors Automobiles Banks/Financial Institutions Andhra Bank Axis Bank Bank of Baroda Bank of India Canara Bank Corporation Bank Federal Bank Future Capital Holdings HDFC HDFC Bank ICICI Bank IDFC India Infoline Indian Bank Indian Overseas Bank J&K Bank LIC Housing Finance Mahindra & Mahindra Financial Oriental Bank of Commerce PFC Punjab National Bank Rural Electrification Corp.3 25.8 23.2 (2.2 15.3 0.5 5.2) (23.9 1.0 4.2 16.7 23.4 2.9 15.107 1.2 2.758 3.1 8.1 1.8 15.4 29.9 — 14.April 08.3) 17.1 12.3 20.2 4.8 76.0 28.2 3.0 4.4 3.3 15.5 63.3 8.8 23.3 29.246 79.0 17.1 11.206 495.3 4.6 20.1 8.0 24.4 2.5 39.2) (12.5 53.2 28.1 38.0 4.880 26.2 4.1 11.8) (198.7 0.3 2.5 (4.1 3.4 10.6 2.8 2.6 1.7 2.0 19.8 7.8 18.7 9.2 13.9 14.3 1.7 1.7 20.7) 17.0 4.2 0.1 25.5 2.9 — 0.3 42.0 9.6 7.8 72.5 18.0 25.0 21.2 13.1 1.7 25.8 25.4 16.9 31.0 4. Bloomberg.8) (44.7 8.0 65.6 27.9 40.8 1.6 11.7) (4.5 24.7 9.482 94.6 3.1) 6.698 1.2 2.9 2.1 8.4 1.6 1.3 5.5) 4.9) (%) Target price Upside ADVT3mo 0.2 26.9) (1.1 31.0 91.5 8.3 32.2 8.1 12.4 (18.3 23.9 3.0 2.7 11.7 5.179 3.6 0.5 11.1 85.477 450.5 4.9 1.4 44.9 3.6 10.9 1.550 1.2 1.8 11.4) (14.2 11.1 28.6 9.7 13.537 38.0 1.7 (0.5 5.7 18.9 4.3 11.592 66.5 (5.8 2.1 1.3 39.0) 10.6) 13.6 36.3 16.7 27.9 3.9 1.4 2.9 0.0 65.4 1.3 2.2 14.3 9.2 9.7 10.7) (16.0 (4.6 (6.9 32.3 22.8 36.8 0.8 (5.186 17.5 0.6 0.5 50.6 0.6 9.3) (12.5 6.9) (689.4) (42.8 4.6 14.1 — — 0.2) 0.1 (43.8 10.4 5.6 (6.752 2.9 9.6 17.0 13.3 (6.5) 31.0 (12.2) 32.5 — 1.9 1.5 17.1 17.7 29.7 6.5 4.3 3.8 22.0 1.5 1.8 20.8 5.9 1.3 20.6) 67.064 375 65 65 90 50 353 250 202 120 140 450 98 183 31 1.8 26.0 1.7 281.2 7.9 1.4 36.2 9.8 12.1 6.7 1.2 75.8 47.2 4.691 370 773 543 342 423 384 599 3.1 1.2 3.5 0.5 (8.9 39.5 10.1 0.7 9.2 1.9 15.4 17.1 5.3 8.7) (7.2 2.5 26.2) (10.2 18.2 12.1 1.3 2.1 59.3 2.6 1.5 7.4 15.4 9.2 200.4 58.2 14.2 38.0 7.9 4.893 4.9 15.7 3.4 2.5 16.8 1.7 11.2 28.0 7.6 4.4 1.9) 12.4 16.4) 22.2 94.8 188.0 5.6 85.0) (23. IVRCL Nagarjuna Construction Co.7 5.609 2.9 2.4 4.7 8.6 33.5 10.2) 23.6 46.6 3.2 1.4 0.2 (5.5 8.1 17.9 1.032 141.6 20.2 81.8 4.8 1.032 84.809 1.8 1.2 0.1 3.0 22.5 4.5) (27.3 31.8 1.8 2.3 15.3 24.7 16.8 4.1 3.4 5.8 1.2 16.2 1.8 1.125 158 582 72 1.9 6.6 0.4 Dividend yield (%) 2008 2009E 2010E 27.3 21. Shriram Transport SREI State Bank of India Union Bank Banks/Financial Institutions Cement ACC Ambuja Cements Grasim Industries India Cements Shree Cement UltraTech Cement Cement Consumer (Discretionary) Radico Khaitan United Breweries United Spirits Consumer (Discretionary) Consumer products Asian Paints Colgate-Palmolive (India) GlaxoSmithkline Consumer (a) Godrej Consumer Products Hindustan Unilever ITC Jyothy Laboratories Nestle India (a) Tata Tea Consumer products Constructions Consolidated Construction Co.0 4.0 39.5 1.1 16.4 48.687 143.5 27.8 30.7 24.3 2.0 3.9 32.403 109.8 12.8 16.1 21.4 1.5 36.6 n/a 99.5 4.2 8.3 6.4 0.8 19.6 33.4 4.4 0.9 EV/EBITDA (X) 2008 2009E 2010E 0.7) (8.3 7.4 11.8 12.4 (36.8 2.7 39.7 4.3 32.5 12.7 7.5 23.3 (7.8 16.1 1.9 1.9 8.6 13.2 11.6 11.2 14.0 4.5 54.729 8.7 21.3 9.1 9.189 2.384 486.9 8.8 6.1 50.4 13.1 12.5 9.3 2.5 7.8 65.9 20.2 17.0 11.7 49.8 1.7 2.132 24.2 157.1 13.4 10.2 1.0 6.3 1.7 19.9 9.6 (25.4 1.0 19.7 21.0 4.4 546.5 7.610 677.4 5.4) 13.5 2.5 27.3 6.1 0.1 8.0 32.8 11.015 161.079 728 31.3 3.113 1.6 (1.5 13.772 83 417 321 689 82 1.8 13.

2 9.9 5.7 2.7 1.3 1.7 2.8 23.6) (25.8 21.6 20.0) (33.3 5.1 11.623 200 777 81 65 169 266 179 89 209 419 207 1.8 9.0 14.3 8.8 NA 48 15.6 19.0 7.5) (386.538 2.8 1.4 27.3 20.2 1.9 32.075 479.5 187.3 13.3 35.3 19.5 3.0 1.7 3.6 17.1 (21.1 4.3 3.4 26.1) 86.1 11.6 11.871 124 1.6 14.7 4.4 20.2 9.8 (23.3 6.6 4.7 5.6 24.1 9.1 9.2 4.7) 36.0 0.0) (40.7 3.9 17.6 10.0 58.8 3.2 146.4 7.0 14.3) 17.1 27.9 105.5 0.5 10.3 97.5 — 0.8 24.5 2.4 10.2 1.2 6.8 9.6 EPS growth (%) 2008 2009E 2010E Kotak Institutional Equities: Valuation Summary of Key Indian Companies 4.0 42.8) 80.8 0.8 17.7 3.3 40.420 149.2 16.5 4.1 22.2 (3.2 118.3 2.3 7.8 30.8 (16.482 31.5 4.7 8.2) (47.9 (17.6 15.4 0.7 48.8 26.4 (24.4 (0.3 12.2 5.1 11.3 2.1 3.9 1.5 10.8) 28.1 4.9 11.3 42.2 2.9 0.3 1.8 7.1 12.2 2.6 2.1 1.4 5.5 6.4 21.8 3.6 29.2 5.0 0.7 3.1 3.2) 6.3 86.3 4.2 5.9 10.2 PER (X) 2008 2009E 2010E 8.6 2.4 6.3) 17.3 1.7 1.3 5.2 7.6) 12.5 12.3 18.6) 10.2 14.4 0.1 7.3 10.3 9.5 (67.9 n/a 14.9 0.5 7.6 14.8 10.7 39.7 6.9 3.3 1.1 10.191 606 3.6 0.0 17.9 15.8 0.5 (8.8 11.5 1.2 (15.490 474 1.0 1.2 7.5 6.2 30.4) 10.015 7.8 38.9 n/a 6.3 1.7 0.5 0.9 12.9 9.6 2.8 10.1 1.8 21.5 0.2 2.7 86.7 1.0 8.2 1.3 7.2) 0.1 2.659 30.4 11.702 1.7 24.9 4.1 46.2 118.0 10.9 15.9) 14.7 20.9 7.8 2.9 (7.770 7.9 6.7 4.2 21.3 0.2) (24.3 4.9 0.0 14.8 1.7 5.6 21.373 4.7 14.0 2.6 2.2 31.6 23.6 7. Bloomberg.5 64.8) 35.1 98.6) 0.Kotak Institutional Equities Research ADD REDUCE BUY BUY ADD BUY BUY Attractive ADD SELL BUY SELL BUY BUY BUY BUY Attractive BUY ADD BUY BUY BUY BUY BUY BUY BUY ADD BUY Attractive REDUCE REDUCE ADD BUY BUY REDUCE REDUCE SELL 94 60 231 1.4 0.2 36.174 23.8 0. (Rs mn) (US$ mn) 1.400 185 490 115 400 290 22 100 75 200 145 40 110 325 165 950 1.8 92.1 6.2 7.7 72.5 2.2 10.7 1.7 43.6 7.7 4.4 1.0 51.2 8.100 13.736 946 368 1.7) (492) 30.6 4.7 17.9 3.8 72.0 19.3 2.9 0.9 307.4 19.5 Dividend yield (%) 2008 2009E 2010E 66.8 2.3 18.8 11.8 (5.5 10.3 13.407 83.2 51.0 1.3 21.7 15.6 1.856 689 45.8 31.5) 16.9 n/a 12.0 5.420 56.2 6.9 2.9 23.499 14.9 3.1 14.162 4.5 26.1 41.2 — 4.8 (8.5 5.9 7.0 7.8 6.2 6.3 15.9 11.6 10.7 2.0 NA 10.840 12.6 18.0 17.7 (2.2 12.0 1.3) 7.5 15.8 5.350 6.2 33.6 1.7 15.3 1.1 46.5 RoE (%) 2008 2009E 2010E 190 120 180 410 210 55 90 24 235 260 280 1.6 3.7 2.217 1.5 (16.6 24.2 50.6 1.0 64.7 4.1) 4.7 2.5 60.0) 5.3 26.0 3.4 (2.2 9.092 749.5) 50.7) 44.132 867 1.9 7.3 15.1) (99.0 19.8 8.2) n/a 4.724 90.8 6.8 3.8 8.5 1.9 43.8 17.7 19.4 2.9 4.0 6.5 16.8) 31.2 5.0 — 14.2 4.1 1.6 1.3 24.0 16.4 0.070 209 111 115 163 85 44 88 37 SELL REDUCE REDUCE REDUCE ADD REDUCE BUY REDUCE REDUCE Cautious 446 156 939 1.9 10.756 32.0 1.6 0.5 66.6 5.9 16.7) 68.4 1.2 19.0 1.5 1.0 0.3 8.0 2.5 4.3 10.2 20.567 328 1.3 18.1 30.984 1.1) 4.0 6.3 8.3 4.1 13.8) (20.0 3.107 469.7 179.3 23.4 7.6 30.6 67.3 2.4) 39.3 9.5 5.0 2.1 8.3 0.2 26.3 (124.9 4.1 1.7 8.3) 2.7 4.8 0.5) 60.3 75.3 46.3 21.3 8.9 8.9 1.9 (7.7 8.936 1.4 0.6) 41.3 12.6 25.0 85.8 22.3 1.8 14.7 12.5 1.8 3.981 47.5 1.1 2.9 18.6 0.0 10.6 21.7 53.9 2.7 63.0 3.3 12.4 23.9 4.4 7.4 3.9) 43.6 3.5 36.6 1.7 7.8 (76.9 2.1 0.6 62.3 2.8 75.6 25.6) 6.5 15.2 14.4) (131.0 0.8 25.4 0.7 4.7 1.1) 187.4 1.1 7.1) (81.2 (4.2 9.3 10.0 0.8 22.9) 423.9 3.3 (6.7 2.4) 6.1 0.6 10.104 2.7 63.3 3.1 7.0 1.7 29.4 (18.1) 15.7) 54.528 4.4 18.2 4.815 1.7 9.8 5.8 21.4) (2.6 — 1.6 23.0 1.576 827 6.2 13.910 59.4 1.1 33.1 0.5 14.0 12.7) 118.2 10.9 9.9 0.3 10.4 8.4 2.6 1.2 13.564 37.0 7.4 n/a n/a n/a 12.2 1.1 51.2 8.1 3.5 30.7 10.1 11.4 9.1 27.3 — 5.0 32.5) 9.4 49.5 10.6 1.3 10.0 2.6 5.3 59.9 4.0 22.1 (89.2) 70.3 0.5 0.6 25.6 7.5 0.5 19.9 8.4 70.433 158 1.8 14.1 68.4 1.4) 11.2 2.7 5.8 150.6 34.0 — 5.2 26.7 65.0 3.7 66.5 — 0.2 7.9 16.0 EPS (Rs) 2008 2009E 2010E Source: Company.7 19.2 44.0 1.3 7.4 14.9 5.9 17.5 23.1 22.0 4.8 1.100 340 340 1.4 4.8 12.6 12.8 61.0 9.6 21.1 7.6 8.0 (27.372 1.857 Mkt cap.705 275 258 42 145 213 73 1.4 9.8 11.4 1.6 1.2) 5.2 18.399 2.9 16.8 7.0 (32.747 50.2 17.3 57.5) (22.8 9.8 7.8 0.3 5.7 104.7 0.960 931 9.1 1.0 26.9 17.7 (7.179 2.7 48.1 15.4 23.5 1.6 396.1 — — 4.4 2.6 0.2 21.402 18.7 1.7 33.9 15.6 — 4.9 25.5 (111.4 4.3 10.1 (13.4 2.762 193.2 12.1 1.7 0.0 37.8 4.1 1.4) (69.8 (0.4) (24.3 4.6 0.1 0.6 37.5 1.4 0.1 (33.5 (57.7 2.1 8.9 1.9 1.8 9.2 1.6 1.0 30.6) 6.4 6.2 22.3 38.1 23.1 35.4 65.2 (34.4) 27.8 3.7 19.9 103.9 13.7 23.8 (17.7 1.7 20.8 7.672 104 356.009 165 3.5) 126.3 13.5 4.7 13.April 08.7) 67.9 5.899 30. Jindal Steel and Power JSW Steel Hindustan Zinc Sesa Goa Sterlite Industries Tata Steel Metals Pharmaceutical Biocon Cipla Dishman Pharma & chemicals Divi's Laboratories Dr Reddy's Laboratories Glenmark Pharmaceuticals Jubilant Organosys Lupin Piramal Healthcare Ranbaxy Laboratories Sun Pharmaceuticals Pharmaceuticals Property DLF Housing Development & Infrastruct Indiabulls Real Estate Mahindra Life Space Developer Phoenix Mills Puravankara Projects Sobha Unitech 6-Apr-09 Price (Rs) (23.9 5.5 25.3 3.316 6.0 0.4 11.5 1.9 9.5 5.5 8.9 1.4 7.2 10.1 11.2 — 2.6 11.9 12.7 1.8) 31.5 3.5 8.6 32.0 1.1 (4.3 2.0 (15.450 700 390 300 1.6 4.7 15.6 1.0) (38.139 750 1.5 2.295.6 4.6) 9.201 58.5 7.4 3.9 2.765 34.155.0) 9.0 10.9 1.3 24.5 10.7) 10.4 NA NA 78.4 5.7 34.1) 52.6 14.551 6.5 0.1 8.4 4.8 9.7 3.6 38.4 10.5 18.5 1.0 2.7 62.3 1.6 56.8 167.2 11.7 6.3 8.8 — 0.8 3.3 7.575 11.5 12.5 11.9) NA (105) (3.0 6.7 18.6 10.383.0) (22.8 14.8) 20.0 4.7 54.4 2.2 24.2 17.753 644 154 187 423 787 708 822 644 234 301 394 434 240 332 212 72 80 490 367 593 71 337 1.456 325.758 9.9 8.7 1.6 9.1 9.5 0.112 214 1.423 59.557 10.3 21.6 — 0.4 17.5 3.1 2.7 7.9 4.3 9.5 3.866 25.4 56.3 0.4 0.5 10.7 (51.1 0.367 122.1 8.3 19.7 10.6 (6.4 13.1 11.9 1.2 2.7 9.9 1.0 12.0 5.3 (18.9 44.8 14.1 13.7 0.250 75.5 (22.268 563 339 1.9 1.9 43.2 5.2 1.5 85.7 — 1.3 (21.0 14.6 1.3 2.4 4.9 12.8 0.9 4.8 0.2 19.3 (1.4 12.5 1.1 39.2 17.8 0.2 - 5.9 0.7) 23.5) 30.2 (57.4 3.7 13.5 Price/BV (X) 2008 2009E 2010E 1.1 3.6 1.6 9.1 1.6 6.8 0.4 2.2) 8.3 40.9 15.4 4.8 1.4 2.2 1.1 102.7 3.3 22.7 1.5 7.7 29.1) 12.6 2.3 33.8 (2.4 14.0 1.9 57.0 9.1 0.2 2.6 — 0.4 37.6 88.0 21.0 3.0 7.9 15.2 37.4 0.0 8.7 3.2 11.3 7.2 10.3 27.5 1.7 8.2 6.0 14.2 9.0 14.5 1.7 4.1 0.8 1.2 7.2 6.266.7 7.172 273.3 (1.3 3.1 (4.6 26.6 3.9 18.3 5.6 20.2 18.6 1.975 3.5 (35.4 5.6 7.5 1.380 172.7 86.3 0.0 30.896.7 (9.8 7.3 82.5 3.2 8.9 48.3 27.0) (44.475 140 650 215 220 60 425 225 390 240 45 300 525 950 52 1.9 16.6 1.9 13.272 177.5 3.0 9.1 5.0 7.3 7.905 68.5 2.0 20.4 19.0 48.420 76.0 (20.0) 1.1 148.2 0.0 0.5) 0.542 624 1.5 6.9) 1.4 9.6 7.8 2.7 0.8 2.6 5.8 15.3 0.5 9.0 11.0 (60.1 4.1 104.464 3.3 1.9 (2.2 20.2 1.8) 1.281 311 489 106 386 236 152 221 97 920 514 178 103 641 208 183 1.4 5.422 16.9 5.5 8.6 0.1 27.7) 14.9 1.4 16.9 5.0 24.1 1.9 9.6) 16.6 (10.3 17.603 41.5 8.5 22.5 3.3 4.9) 6.9 2.1 4.8 2.4 7.6 15.2 6.3) (11.1 25.4 23.2 2.7 24.5 9.7 19.6 1.1 (1.2 2.186 1.3 0.623.4 0.2 25.2 26.8 0.2 4.9 8.3 8.3) 92.583 820.6 7.7 9.7 0.6 20.3 17.6 11.0 22.1 40.0 17.7 5.4 1.5 2.6 17.5 19.3 1.2 7.8 (8.8 — 0.500 (mn) O/S shares 46.7 2.0 2.7 2.0 22.285 361 278 357 1.6 4.1 4.926 17.2 15.0 1.5 4.3 (44.8 7.7 103.9 3.4 30.0 13.5 24.1 0.5 0.9 1.625 - (Rs) (9.1 16.6 17.200 206.6 52.4 0.2 4.9 9.450 7.4 10.4 7.6 9.242 94.7 1.5 25.0 1.9 13.7 18. Kotak Institutional Equities estimates Company Energy Bharat Petroleum Cairn india Castrol India (a) GAIL (India) GSPL Hindustan Petroleum Indian Oil Corporation Oil & Natural Gas Corporation Petronet LNG Reliance Industries Reliance Petroleum Energy Industrials ABB BGR Energy Systems Bharat Electronics Bharat Heavy Electricals Crompton Greaves Larsen & Toubro Maharashtra Seamless Siemens Suzlon Energy Industrials Infrastructure IRB Infrastructure Media DishTV HT Media Jagran Prakashan Sun TV Network Zee Entertainment Enterprises Zee News Media Metals Hindalco Industries National Aluminium Co.1 9.0 4.5 3.3 34.8 25.1 3.2 26.8 17.8) 38.9 152.9 2.9 29.4 8.1 5.2 1.3 8.9 5.9 12.6 8.4 2.666 456.9 45.6 0.888 225 1. 2009 35 .3 7.4 188.1 NA 12.5 20.9 6.4 3.3 0.3 171.1 8.9 19.4 10.5 11.0 2.7 20.8 5.1 3.4 n/a 6.9 29.4 20.5 11.3) 34.9 28.8 0.5 (10.6 1.8 10.2 11.6 6.1 21.2 12.7 4.660 5.9 (8.9 0.1 (4.4 2.2 14.3 — 5.2 9.6 10.2 0.8 7.5 18.800 55 135 1.0 19.5 8.7 5.9 1.3 8.412 86.2 15.3 21.6 3.7 5.2 31.9 24.7 64.0 1.0 14.828 105.5 14.6) (41.4 21.3 19.1 12.2 1.333 122.9 1.4 2.4 — 1.7 0.382 2.2) (31.0 0.9) (32.2 46.6 (22.3 74.8 0.4 5.5 — 6.1 0.061 197.3 24.1 4.8 3.1) (50.1 3.2 — 4.925 18.2 27.553 46.2 18.2 37.9 3.2 61.0 0.6 28.5 1.628) 5.0 1.4 14.5 29.4 1.5 117.6 4.497 29.0 3.2 (8.4 15.0 6.5 28.1 5.1 5.5 8.1 16.6 3.2 25.3 0.239 9.531 127 770 152 270 56 28 59 59 174 117 35 SELL BUY BUY REDUCE REDUCE SELL REDUCE ADD ADD REDUCE NR Neutral Rating 374 203 335 256 42 260 406 887 46 1.0 20.5 33.2 1.6 6.0) 11.5 15.8 4.5 — 0.5 10.5 13.5 — 0.9 136.8 7.0 1.2 16.3 45.8 15.4 2.2 1.5 1.7 7.7 0.2 — — 3.4 7.9) 13.2 4.1 1.6 46.3 8.7 0.1 7.0 19.6 23.9 5.0 EV/EBITDA (X) 2008 2009E 2010E 1.7 0.8 0.4 2.4 (847.7 191.0 (0.8 4.0) (%) Target price Upside 69.9 1.5 9.564 221.3 (40.2 (10.2 1.0 4.8 49.0 71.5 2.3 16.3 20.750 88.7 1.1 17.4) 6.0 11.9 1.2 1.8 5.0 7.1 (27.0 (76.5 0.532 8.9 6.3 0.5 10.3) 57.0 4.9 0.7 6.7 26.9 85.119 1.5 (13.1 19.1 16.3 13.4 (38.8 — 1.4 19.5 6.6) 63.7 3.9 — (0.3 8.5 (8.1 11.9 30.0 1.9) (39.1 9.5 1.6) 4.4) (35.702) 19.737 379.6 1.932 87.1 9.6 2.6 (US$ mn) ADVT3mo India Daily Summary .7 11.8 2.0 98.2 3.6 6.4 18.1) 9.806 9.8 12.0 1.9 30.2 11.1 (3.6 12.1 19.3 25.123 609 590 137 244 186 128 1.7 9.0 130.9 263.9 1.1 26.0 — (12.8) (100.2 14.4 5.1 2.8 0.5 1.5 (5.4 20.2 (2.3 6.0 28.742 43.6 45.

3 10. Bloomberg.5 16.2 49.5 (87.0 26.5 7.8 0.3 4.3 (6.0 3.9 (34.8 8.4 19.2 15.5 7.858 1.7 6.9 — 1.8 RoE (%) 11.8 9.1 18.9 0.7 35.8 14.0 1.500 190 400 130 50 550 320 280 70 100 36 165 830 75 (Rs) (28.4 (44) 4.2 11.3 2.2 8.2 (19.6 56.0) 8.4 3.8 2008 2009E 2010E 32.1 2.1 0.5 10.1 26.2 24.3 43.4 42.0 10.1 6.8 48.5 4.607 9.4 44.2 48.1 1.3 6.9 7.9 2.8 21.2 2.9 13.8 1.2 17.7 13.6 26.6 3.3 1.8 2.8 1.2) 6.1 0.1 26.8 7.8 5.954 37.7 5.8 — 0.7 15.0 8.5 12.6 2.7 0.4 18.525 394.8 25.4 0.9 17.4 0.7 33.3 2.1 4.1 10.4 2.6 11.6 3.3 2.4 1.8 2.9 37.7 51.8 NA 38.9) 4 15.4) (28.2 2.5 3.4 0.864 39.4 7.6 0.1 67.3 3.8 14.4 — 252.8 1.6 1.0 4.9 5.3 2.4 12.968.8 14.0 9.5 39.3 1.0 7.827 49.7 1.0 1.766 77.7 4.2 86.3 11.5 5.2) 82.6 37.9 12.2 1.726.9 2.7 30.2 2.1 0.2 2.8 10.654 15.7 2.472 155.1) 3.3 65.9 2.1 12.1 0.2 3.7 15.8) 10.6 39.8 (21.2 0.9 0.8 10.2 37.3 2.736 3.6 24.7 20.5 58.9 26.3 0.9 64.6 1.3 2.3 40 (103.7 4.5 7.6 (24.0 2.3 (154.1 1.7 13.5 0.7 3.7 3.5 3.7 1.6 39.9 3.0 11.7 34.1 2008 2009E 2010E 1.7 27.1 2.9 11.5 3.3) 14.207 (Rs mn) Mkt cap.821 44.9 0.2 2.7 16.245 231 2.3 59.1 36.3 4.199 851 190 352 105 11.6 3.6 21.9 8.814 43.2 11.7 55.8 11.3 8.5 1.5 2.5 64.6 12.3 2.8 (272.5 33.7 79.5 7.3 7.8 67.2 1.0) 9.5 7.5) 58.4 3.4 44.7 2.4 10.6 33.0 12.6 19.0 2.2 — 1.2 3.4 7.6 0.4 7.2 2.7 13.9 2.3 19.2 67.3 0.0 (%) Target price Upside 21.200.7 3.3 14.6) 7.135) 7 8.3 0.3 9.9 16.1 7.6 6.5 13.7 10.1 — 9.0 8.1 4.4 5.9 1.2 8.9 10.2 20.6 1.7) (31.0 4.9 0.0 6.7) (7.9 5.236 630 2.3 96.265 136.0 10.5 15.0 21.6 9.0 7.7 13.7 23.9 27.5 11.5 1.0 4.5 13.6 3.252.5 0.5) (1.2 (4.3 2.0 5.2 18.5 7.6 25. Kotak Institutional Equities estimates Company Price (Rs) Rating Retail Pantaloon Retail 169 REDUCE Titan Industries 843 REDUCE Vishal Retail 40 ADD Retail Sugar Balrampur Chini Mills 58 BUY Shree Renuka Sugars 97 BUY Bajaj Hindustan 55 SELL Sugar Technology HCL Technologies 112 REDUCE Hexaware Technologies 27 SELL Infosys Technologies 1.3 2.6 17.7 68.2 12.8 82.2 2.036 1.3 10.3 35.8 11.0 0.4 1.2 0.7 33.8 0.3 3.0 9.3 11.3) 18.2 12 11.0 2.7 7.2 1.2 2.7 22.9 23.7 7.9) 13.8 0.3 3.7 0.3 5.5 10.0 2.4 1.755 473.3 9.0 7.0 30.4 11.7) (1.675 315.9 2008 2009E 2010E EPS growth (%) 187.302 295 542 156 993 1.463 23.4 11.2 0.5 7.6 14.9 2.8 1.5 16.263 15.0 32.5 0.7 21.6 4.5 4.1 20.9 1.7 1.8 1.3 20.2 526.4 10.5 6.7 7.0 21.7 24.409 898 65.449 882 8.0 0.9 1.1 1.0 4.9 6.8 11.2 20.3 25.3 7.0 3.3) (27.5 3.9 — 8.6 11.2 15.0 1.1 2.0 0.339 2.8 8.6 0.1 7.1 0.5 24.5 3.7 6.632 5.4 0.1 1.2 7.753 48.2 11.0 70.8 63.4 16.1 0.7 1.7 2.9 2.9 13.8 1.7 1.9 0.1 (33.5 20.3 1.5 4.9 56.3 3.9) 106.4 24.6 — 8.2 0.1 1.2 2.8 (13.0 2.0 1.2 12.9 5.3 4.1 16.4 0.066) 97.4 7.9 30.2 83.9 14.2 20.4 (0.3 13.7 11.3 (21.3 59.3 7.6 13.7 0.6 6.4 0.0 0.8) (18.3 9.1 18.5 12.8 2.2 37.2 13.1 2.8 1.2 2.9 2.2 (6.3 8.8 1.732 210 73 319 724 314 971 6.0 52.6 0.6 — 1.4 1.2 2009E 2010E PER (X) 8.5 (7.2 20.0 2.2 13.2 11.7 — 1.1 0.3 14.7) (46.5 1.910 29.1 1.0 0.2 1.6 4.6 1.5 9.823 5.4 1.7 1.9 0.7) 94 1.1 6.7 0.9 3.4 0.6 16.9 2.4 7.2 8.3 16.6 4.8 7.6 2008 2009E 2010E EPS (Rs) Source: Company.8 142.6 15.8 25.5 104.2 5.6) 7.7 18.910 92.5 0.2 1.8 1.9 15.2 — 2.4 1.9 5.1 101.6 8.3 0.4 51.4 16.5 2.7 15.6 (21.4 72.7 1.4 1.7 5.1 19.8 15.3 14.3 15.398 BUY Havells India 153 REDUCE Jaiprakash Associates 98 BUY Jindal Saw 192 BUY PSL 84 BUY Sintex 117 BUY Tata Chemicals 154 BUY Welspun Gujarat Stahl Rohren 83 BUY United Phosphorus 105 BUY Others KS universe (b) KS universe (b) ex-Energy KS universe (d) ex-Energy & ex-Commodities Property (36.5 9.5 17.525 3.9 16.8 1.9 19.5 8.9 21.8 2.8 8.8 1.3 8.0) (5.5 7.5 24.1 14.3 10.4 6.2 11.1 11.8 10.7 4.113 141.8 4.4 2.0 16.570.5 10.532 350.4 15.0 1.6 7.0 2.9 2.8 57.6 3.261 14.2 2.4 19.3 8.8 33.4 10.0 2.2 5.7 30 21.2 (1.8 48.1 3.1 2.9 2.6 18.8 16.3 8.3 31.3 2.0 2.4 10.8 11.1 13.8 0.195 450.1 1.1 1.550 120 105 300 145 125 190 100 140 385 265 180 970 120 1.4 8.3 7.9 1.4 5.9 21.4 31.2 67.8) 36.3 3.0 18.156 7.8 16.5 14.0) 86.3 2.7 38.7) (14.5 5.1 4.2 37.7 14.3 23.0 1.854 590 756 30.9 (6.6 1.3 2008 7.0 78.5 2.5 1.319 769 7.414 BUY Mphasis BFL 205 REDUCE Mindtree 241 BUY Patni Computer Systems 137 SELL Polaris Software Lab 54 SELL TCS 580 REDUCE Tech Mahindra 309 BUY Wipro 270 ADD Technology Neutral Telecom Bharti Airtel 660 ADD IDEA 53 REDUCE MTNL 70 SELL Reliance Communications 218 SELL Tata Communications 545 REDUCE Telecom Cautious Transportation Container Corporation 715 REDUCE Transportation Cautious Utilities CESC 237 BUY Lanco Infratech 170 BUY NTPC 185 REDUCE Reliance Infrastructure 613 BUY Reliance Power 116 REDUCE Tata Power 859 BUY Utilities Attractive Others Aban Offshore 418 REDUCE Educomp Solutions 2.9 17.4 4.8 5.2 26.8 12.278 24.9 11.6 36.3 30.3 114 82.4 1.0 62.7 1.9 47.2 9.4 12.7 9.4 3.7 2.4 16.5 16.3 8.0 2.9 5.8 1.5 (11.0 26.0 11.1 12.8 8.8 65.0 2.9 10.6 4.6 6.378 2.5 11. 2009 Kotak Institutional Equities Research .7 8.4 37.2 19.1 5.3 22.4 24.7 8.3 27.3) 6.946 15.8 30.7 58.7) (23.April 08.0 10.1 1.5 1.3 8.1 23.7) (4.6 1.3) (7.7 90 (35.9 2.5 19.153 38.553 15.8 14.7 10.551 77 16.9 9.5 68.3 0.1 7.7 6.2 0.6 1.0 17.8 5.6 0.3) 7.8 9.9 4.074.2 2.9 1.1) 65.7 (19.0) 8.7 10.3 0.4 5.4 6.6 16.8 4.5 6.2) (44.2 21.648 338.7 20.6 19.1 13.9 8.5 1.2 7.4 1.9 (1.284 567.3 2.6 (41.3 2.1 1.2 14.6 1.6) (1.3 4.4 9.1 1.7 10.6 23.9 7.1 12.0 9.6 (28.2 6.1 3.9 1.4 5.5 2.4 1.4 (36.9 35.5 1.0 8.3 1.6) (27.5 7.1 (US$ mn) ADVT3mo India Daily Summary .9 1.566 3.7 16.432 278.3 6.7 16.8 7.1 1.6 0.4 2.1 1.7 10.0 12.849 45.6 2.6) 29.8 6.5 0.2 3.9) 10.4 7.3 1.2 1.0 13.347 10.7 11.9 1.0 36.8 7.9 15.7 2009E 2010E EV/EBITDA (X) 5.0 10.5 6.0 7.4 3.5 0.3 4.2 3.657 9.1 17.4 2.3 79.9 59.1 1.560 37.2 17.9 3.862 191.2 10.3 2008 4.0 3.7 3.0 3.8 2.0 0.8 25.8 13.7 1.8 2.6 21.8 — — 5.397 223 130 1.121 2.1 3.6 28.2) 6.4 12.4 185.064 285 695 142 574 208 40 128 98 979 125 1.9 2.1 Price/BV (X) 1.3) 65.8 3.9 11.5 25.5 19.0 6.3 7.6 (23.3 22.4 11.8) 5.9 0.8 7.4 — 1.0 1.6 1.9 38.898 3.5 6.5 3.2 26.5 0.1 (1.1 2.6 10.9 11.0 112.7 18.8 14.4 18.6 60 8.7 9.6 21.0 2.2 — 2.8 14.6 11.9 (9.6 0.3 0.9 0.8 1.3 3.2 0.0 0.7 13.4 8.140 172.9 126.5 4.4 1.4 4.1 2.2 1.8 3.9 17.5 2.7 47.7 0.7 2.4) 18.8 14.5 17.5 13.1 300 2.000 735 675 50 50 150 400 110 25 1.907 10.9 16.1 22.5 25.1 20.6 11.4 5.3 6.412 1.5 0.1 1.5 7.0 — 1.967 92.7) 3.854 1.9 — 0.9 (5.7 11.1 (7.8 31.9 4.2 108.403 55 44 136 235 189 462 125 222 8.2 40.0 3.1 2.4 53.0 — 1.6 9.0 7.0 (13.3) (26.8 1.4 19.5 23.6 13.6 4.6 20.8 68.8 1.9 75.4 10.7 1.3 20.4 12.9 15.3 37.7 1.7 14.6 0.8 0.0 28.7 13.462 256 280 141 159 44 22 (mn) O/S shares 72.009 1.9 — 12.8 10.8 1.7 5.0 2008 2009E 2010E Dividend yield (%) 16.1 36.6) 100.1 36.0 129.3) 15.684 26.2 13.7 1.2 1.9 (2.0 16.3 4.0 30.7 5.9 6.6 13.9 4.6 15.9 53.1 0.7 4.522.9 19.3 6.7 6.5 90.3 (21.0 20.5 Kotak Institutional Equities: Valuation Summary of Key Indian Companies 5.1 — 0.3 — 1.0 10.9 47.0 0.8 0.4 8.4 0.5 3.3 10.1 2.1 13.7 12.6 0.2 31.0) 2.4 1.3 3.665 42.1 12.5 14.5 1.5 4.5 8.6 17.7 3.1 — 9.0 15.8 4.1 9.990 3.6 10.6 10.2 19.1 0.6 8.0 33.6 9.1 2.5 21.9 1.8 25.817.4 0.4) 4.4 2.9 15.6 (2.6 9.6 4.5 7.8 23.4 14.3) 0.7 11.5 5.4 1.8 10.8 4.100 41.4 14.852 811.1 3.7 1.8 3.9 12.9 14.3 5.9 0.1 8.7 1.9 0.8 19.7) 6.7 27.523 17.8 5.0) 10.0 1.4 7.5 1.7 6.0 4.7 12.7 26.8 1.5 1.8 1.8 5.1 3.7 0.8 (0.9 16.1 20.0) 29.7 17.9 17.36 6-Apr-09 Cautious (US$ mn) 538 747 18 1.7 31.9 20.1 12.7 31.8 19.6 9.2 6.0 55.5) 87.5 17.3 41.6 6.0) (2.8 76.2 63.3 12.991 3.3 4.9 10.990 36.4 0. 511.323 17.927 316 910 185 2.9 15.7 (6.1 (35.5 10.9 1.783 27.6 0.6 10.8 13.7 13.4 1.3 0.1 37.9 21.7 1.9 9.8 4.1 90.5 2.424 38 19 61 1.3) 107.3 305.0 6.7 375.

India Daily Summary . CS = Coverage Suspended. if any. 70% 60% 50% Percentage of companies within each category for which Kotak Institutional Equities and or its affiliates has provided investment banking services within the previous 12 months. Other definitions Coverage view. Kotak Securities does not cover this company. is. Kotak Securities Research has suspended the investment rating and price target. with respect to each subject company and its securities for which the analyst is responsible in this report. ADD.6% 20% 7. Amit Kumar. or will be. 45. (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities. The information is not meaningful and is therefore excluded. Our target price are also on 12-month horizon basis. related to the specific recommendations or views expressed in this report: Sanjeev Prasad.5% BUY ADD 0. NA = Not Available or Not Applicable. Manish Karwa. The investment rating and target price." Kotak Institutional Equities Research coverage universe Distribution of ratings/investment banking relationships Percentage of companies covered by Kotak Institutional Equities. Kotak Institutional Equities Research 37 . Reduce = We expect this stock to underperform the BSE Sensex by 0-10% over the next 12 months.7% 0. The information is not available for display or is not applicable. RS = Rating Suspended. because there is not a sufficient fundamental basis for determining an investment rating or target. NC = Not Covered. Prashant Vaishampayan. SELL: We expect this stock to underperform the BSE Sensexby more than 10% over the next 12 months. for this stock. REDUCE: We expect this stock to underperform the BSE Sensex by 0-10% over the next 12 months. have been suspended temporarily. We expect this stock to outperform the BSE Sensex by 10% over the next 12 months. Source: Kotak Institutional Equities As of December 31. As of 31/12/2008 Kotak Institutional Equities Investment Research had investment ratings on 142 equity securities. Sell = We expect this stock to underperform the BSE Sensex by more then 10% over the next 12 months. Such suspension is in compliance with applicable regulation(s) and/or Kotak Securities policies in circumstances when Kotak Securities or its affiliates is acting in an advisory capacity in a merger or strategic transaction involving this company and in certain other circumstances. if any. The previous investment rating and price target.7% 10% 2. and (2) no part of his or her compensation was. Cautious (C).April 08. are no longer in effect for this stock and should not be relied upon.5% 24. We expect this stock to outperform the BSE Sensex by 0-10% over the next 12 months.1% 40% 30% 22. Lokesh Garg. if any. 2009 "Each of the analysts named below hereby certifies that. 2008 Ratings and other definitions/identifiers Rating system Definitions of ratings BUY. directly or indirectly. The coverage view represents each analyst’s overall fundamental outlook on the Sector.8% 3. Other ratings/identifiers NR = Not Rated. These ratings are used illustratively to comply with applicable regulations. Neutral (N).7% REDUCE SELL 0% * The above categories are defined as follows: Buy = We expect this stock to outperform the BSE Sensex by 10% over the next 12 months. Add = We expect this stock to outperform the BSE Sensex by 0-10% over the next 12 months. Kotak Securities has suspended coverage of this company. within the specified category. NM = Not Meaningful. The coverage view will consist of one of the following designations: Attractive (A).

compliance.310 Westchester Financial Centre White Plains. It is for the general information of clients of Kotak Securities Limited. may from time to time have “long” or “short” positions in. In addition options involve risks and are not suitable for all investors. This material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. Our research professionals provide important input into our investment banking and other business selection processes. persons reporting to analysts. It does not constitute a personal recommendation or take into account the particular investment objectives. Mumbai 400 021. This report has not been prepared by Kotak Mahindra Inc. options. Any reference to Kotak Securities Limited shall also be deemed to mean and include Kotak Mahindra Inc. and buy or sell the securities or derivatives thereof of companies mentioned herein. the holdings does not include accounts managed by Kotak Mahindra Mutual Fund. Kotak Securities Ltd. Past performance is not a guide for future performance. India Tel: +91-22-6634-1100 Overseas Offices Kotak Mahindra (UK) Ltd. Kotak Institutional Research Tel: +91-22-6634-1100 Fax:Equities +91-22-2288-6453 . Please ensure that you have read and understood the current derivatives risk disclosure document before entering into any derivative transactions. Before acting on any advice or recommendation in this material. Our research professionals are paid in part based on the profitability of Kotak Securities Limited. and employees. officers. However KMInc has reviewed the report and. future returns are not guaranteed and a loss of original capital may occur. in so far as it includes current or historical information. We endeavor to update on a reasonable basis the information discussed in this material. and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein. Portsoken House 155-157 The Minories London EC 3N 1 LS Tel: +44-20-7977-6900 / 6940 Kotak Mahindra Inc. and all investors are strongly advised to consult with their tax advisers regarding any potential investment. but we do not represent that it is accurate or complete. 1st Floor 229. clients should consider whether it is suitable for their particular circumstances and. Our salespeople.give rise to substantial risk and are not suitable for all investors. Additionally. Additionally. or advisory board member of any companies that the analysts cover. Bakhtawar. All rights reserved. We and our affiliates. brokerage and financing group. directors. to the extent permissible under applicable laws. 1% of more of the equity shares of the subject issuer of a research report. integrated investment banking. 2009 Corporate Office Kotak Securities Ltd. 1st floor.Kotak Securities Limited and its non US affiliates may. 50 Main Street. and it should not be relied on as such. In reviewing these materials. it is believed to be reliable. traders. Foreign currency denominated securities are subject to fluctuations in exchange rates that could have an adverse effect on the value or price of or income derived from the investment. financial situations. the value of which are influenced by foreign currencies affectively assume currency risk. We and our affiliates have investment banking and other business relationships with a significant percentage of the companies covered by our Investment Research Department.April 08. India. Kotak Securities Limited and its affiliates are a full-service. Investors should assume that Kotak Securities Limited and/or its affiliates are seeking or will seek investment banking or other business from the company or companies that are the subject of this material and that the research professionals who were involved in preparing this material may participate in the solicitation of such business. seek professional advice. In addition . and investors may realize losses on any investments. Certain transactions -including those involving futures.India Daily Summary . The price and value of the investments referred to in this material and the income from them may go down as well as up. Opinions expressed are our current opinions as of the date appearing on this material only. have acted on or used this research to the extent that it relates to non US issuers. Nariman Point Mumbai 400 021. prior to or immediately following its publication. investors in securities such as ADRs. 229 Nariman Point. For the purpose of calculating whether Kotak Securities Limited and its affiliates holds beneficially owns or controls. We along with our affiliates are leading underwriter of securities and participants in virtually all securities trading markets in India. 38 Bakhtawar. including persons involved in the preparation or issuance of this material. director. if necessary. and other derivatives as well as non-investment-grade securities . (KMInc). Kotak Securities Limited generally prohibits its analysts and persons reporting to analysts from serving as an officer. act as principal in. may give rise to real or potential conflicts of interest. you should be aware that any or all of the foregoing. among other things. but regulatory. although its accuracy and completeness cannot be guaranteed. Suite No. investment management. or needs of individual clients. and members of their households from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. Kotak Securities Limited generally prohibits its analysts. 6th Floor. including the right to vote for directors. and our proprietary trading and investing businesses may make investment decisions that are inconsistent with the recommendations expressed herein. The material is based on information that we consider reliable. Kotak Securities Limited does not provide tax advise to its clients. other important information regarding our relationships with the company or companies that are the subject of this material is provided herein. New York 10606 Tel: +1-914-997-6120 Copyright 2009 Kotak Institutional Equities (Kotak Securities Limited). or other reasons may prevent us from doing so. We are not soliciting any action based on this material. which include earnings from investment banking and other business.