report as on 31/12/2009

PATNI COMPUTER SYSTEMS LTD
PRICE: RS.489 RECOMMENDATION: BUY
TARGET PRICE: RS.560 CY10E PE: 11.2X
Growth rates likely to pick up as company specific initiatives start
contributing and macro for the sector improves gradually. Improving news
on major business segments to likely reflect on demand with a lag
Outlook on business is materially better; velocity of business though is still
to pick up.
Tweak price target and estimates upwards to account for higher volumes,
starting Q1CY10E. Maintain BUY with target price of Rs.560 (Rs.520
earlier).
Consistent revenue performance, scale up of accounts and margin gains
required to increase the scope for a sustained stock re-rating. Target
multiple works out to 13x CY10E EPS, a 35-40% discount to larger players.
High proportion of net cash on the balance sheet - cRs.130 per share will
likely provide downside support.
Company specific initiatives and an improving macro likely to
see volume growth picking up
n The Patni stock has remained sideways for the last 3m despite posting a strong
out- performance CYTD. Stock returns of 4x over the last 9m can be attributed
to (i) improving outlook for IT spends as major user economies show signs of
revival, and (ii) a revamped management team's efforts to secure sustainable
longer term growth.
n The Patni stock now trades at 11x CY10E, a c45% discount to a larger peer like
Infosys. The discount while narrower than earlier reflects Patni's lower than
sector growth rates over the last two years.
n The company has suffered from client-specific issues with its top client
remaining weak and also certain meaningful clients (c10% of revenues in CY05)
ramping down to negligible contributions currently- impacted negatively by the
M&A activity on the client side.
n A favorable base post the ramp down of key clients, focused approach to
account management, and likely bottoming of billing rates given the company's
belief that the price re-negotiation cycle has likely ended are likely to ensure
volume growth and profitability from the current levels in our opinion. Also a
series of management changes hold out promise of growth, given good
execution.
n Going forward Patni intends to focus on its five to six key verticals and aims to
specialize in some sub verticals (e.g., billing systems in the telecom vertical,
industrial automation in product engineering). It is also working on
geographical diversification with the setting up of focused regional set ups in
the US, EMEA, APAC and SAARC geographies.

The market opened at an unchanged level but it failed to move higher in the later part of the day. We may call it as
a sideways correction that generally happens after the massive run up, which we came across on Wednesday.
As per intraday pattern of Indices we can say that the market is set to move higher but due to lack of "volume
strength" we may see a sideways activity in the first half of the trading session. In that case, the market may even
correct to the level 5150/17280 or 5110/17140. However, from there onwards, we may expect gradual rise in the
market. In the second half, in case the market sustains above the level 5200/17440 then the next target for the
market should be in the range 5260/5270 (17640/17670).
Our advice is to trade long on recoveries especially in index stocks.

report as on 30/12/2009

The market remained neutral through out the day possbily because of over retracement in the short term. However,
it closed near to day's low on profit taking in IT, Pharma and banking stocks.
For the day the level 5175/16370 may act as a major support initially and on the breach of the same we may expect
further slide to the level 5155/17270. Our advice is to accumulate Index stocks around these levels with a medium term
view or with an upside target of minimum 5270/17640. In case, the market opens higher, then one can trade long to
ride the rally max up to 5270/17640. Around these levels we may expect heavy profit taking from positional traders. In
fact, intraday traders can even buy at the money Put option of the current month with a short term view in mind
around 5270/17640 levels.

report as on 29/12/2009

The week past and expected
Technically speaking: In the last week the market opened lower but failed to break the multi support level 4930/16600
in spite weakness in Indian rupee. It sustained at 4930 level and on Wednesday it recovered sharply that has helped bulls
to surpass the major level 5180/17350 on Thursday on the last week.
The formation of one and half month for the market suggests us that the market is in rectangle consolidation between
the levels 4930/16600 and 5180/17350, which is a bullish formation in terms of upward break out. On Thursday the
market has broken upward range and closed near to the same with an increase in volumes that has lifted the "medium
term trend of the market into positive territory". It seems that the market will sustain above the upward boundary level
5180/17350. If it happens then the minimum upward target for the market we may expect between the range 5300 and
5330 (17900) and maximum between 5400 and 5430 (18400). The level of 5090/17050 and 5050/16940 will act as a major
support for the week.
For the day on the higher side the level of 5235/17540 may act as a major hurdle for the market as the rally seems to be
over retraced in the short term it may invite profit taking around the same. In case the market lowers at the beginning
then the level 5140/5100 (17225/17100) may act as a major support for the market and positional traders can create fresh
long positions with a medium term view in mind.
In the last week there was sideways consolidation in pharmaceutical, cement, telecom and sugar stocks. There was
outperformance in steel and Infra stocks. The performance of the auto and IT was not satisfactory but still they have
managed to close into positive territory with a positive bias for the coming week. The trend was mixed in other metal
stocks and we have seen recovery in banking stocks from lower levels due to their oversold nature of the previous week.
In the current week or for next few days we may expect outperformance in Index stocks especially Reliance, ICICI Bank,
ONGC and HLL. Sector specific, we may see the positive activity in Infra, Capital goods, Power and Real estate stocks. The
positive activity in pharmaceutical and auto stocks depend on how fast they can come out of the sideways consolidation. IT
stocks may do well but we may expect outperformance in second line IT stocks. The mixed activity in metal stocks will keep
the trend volatile or stock specific.


Market wide open interest is seen at Rs 1,24,756 cr. Nifty futures have
seen significant fresh addition in the Jan series with positions in the Dec
series seen on the higher side.
n Nifty resumed its up-trend at 4950 odd levels. On the higher side resistance
is expected at 5180 after which we expect the index to test 5350.
Dec turnaround is seen at 5067 above which buyers remain strong.
n Real Estate major HDIL remains strong above 332 for 380 on the higher
side. Century textiles is expected to test 515/545 on the higher side. For
the medium term we remain positive on Biocon and GAIL.
n IDFC remains strong above 147 for 173/195 on the higher side; we advice
maintaining long positions with a stop loss placed at 147. Metal majors
continue to trade with a positive bias led by Tata Steel for an initial target
of 650.
n OI concentration is seen at 5200 call and 5000 put options. Call writing is
seen at 5300 while put buying is seen at 5200 strike. In the Jan series,
some call writing is seen at 5200-5250 levels; OI remains on the lower side
as of now.

LIC HOUSING FINANCE LTD
PRICE: RS.792 RECOMMENDATION: BUY
TARGET PRICE: RS.925 FY11E P/E: 9.0X; P/ABV: 1.9X
q Traction in mortgaged book likely to continue; we expect a 30% advances
growth in FY10 and 25% in FY11
q Net margins likely to improve following re-pricing of high of cost borrowings
due to replacement during Q3FY10
q Superior return ratio support valuation; risk-reward ratio has turned favorable,
with 15% upside from current market price levels.
q We upgrade our stock recommendation to BUY from Accumulate earlier
and maintain our price target of Rs.925 for the stock
Strong traction in mortgaged loan book
n Improving macroeconomic scenario and revival in retail demand will led to
strong traction in the mortgage finance business. India has relatively lower
mortgage penetration at ~6% of GDP, thus provides a broader landscape for
mortgage finance players.
n LICHF reported a strong growth of 32% yoy in its mortgage loans during
H1FY10 to Rs. 318.9bn, in the backdrop of whopping 75% growth in disbursement.
We expect the healthy growth trend to continue for the H2FY10 following
improving demand for real estate from the retail segment.
Net margins likely to improve following re-pricing of high of
cost borrowings due to replacement during Q3FY10
n In the wake of improved liquidity and easing of interest rates, we opine that
with replacement of high cost borrowings with relatively cheaper funds during
Q3FY10 will support net margins. We maintain our NIM estimates of 2.9% over
FY10 and FY11.
n We expect strong growth in earnings for LICHF on the back of robust mortgage
loan growth coupled with likely improvement in net margins. We expect a net
profit growth of 35% yoy for FY10 to Rs. 7.2bn and 14% yoy in FY11 to Rs.
8.2bn. Additionally, our earnings growth estimates factor in the recent equity
dilution and gains on sale of stake in LIC Mutual Fund for Rs. 1.38bn.
Higher recoveries and stringent credit monitoring aided material
improvement in asset quality
n Stringent provisioning policies and higher impetus on aggressive recoveries
aided significant improvement in asset quality, with improvement in coverage
ratio to 81% and a Gross NPA of 1.07% and net NPA of 0.21% in FY09. The
material turnaround in the asset quality has facilitated premium valuation for
the stock.
n In the wake of improvement in overall operating scenario, further significant
slippages in the mortgaged book are less likely. On the contrary, we expect
LICHF's asset quality to remain healthy, given its continuous efforts to check delinquencies
and enhanced recoveries

report as on 24/12/2009

The market opened at an unchanged level to previous closings but quickly established strong grip on frontline stocks
and has broken almost all the major barriers. It was difficult to surpass the level of 5090/17050 in a one successive
move but still the bull lobby has managed and closed the market into respected territory. However, the level of 5185
is still unconquered on closing basis and till the market remains below it we can not say that the market is out of
worries.
For the day we will focus on 5100/17100 and 5185/17365 levels. While looking at the recovery in the market on
Wednesday we can confidently say that the level of 5100 may act as a major support for the market and may invite
spectators to join the next move. However, on the higher side to break the level of 5185/17365 the market will require
some concrete reason. In case the market able to break the level 5185 then we may expect the level of 5230/17570 in
a short span of time. For the day our advice is to trade with levels and with patience.

report as on 23/12/2009

On Tuesday the market opened higher along with world's positive cues but failed to breach an important resistance
level at 5000. On Intraday basis the market has formed double bottom at 4965 levels that may act as an immediate
support for the market. In case the market trades below the same then we may see the retesting the levels 4940/4930
(16535). As the level has played crucial role in past two months we feel that unless the market closes below these
levels we can not turn further more bearish in the near term. Any recovery from these levels will be an opportunity to
create fresh trading long position with an upside target 5035/5065.
In case the market opens higher then again the level of 5000 and 5005 (16750) may act as a major hurdle for the
market and sustenance above it will lift the market to 5035 (16870) levels. Be cautious at 5035/16870 levels as it may
attract profit taking level in the first half of the trading session.

Market wide open interest is seen at Rest. 1, 19,422 cr. Volumes in nifty
futures remained significantly low as the index tested 5000 on the higher
side.
n Nifty Dec turnaround is seen at 5067 below which we remain in negative
territory. Put writing support is seen at 4900-5000 levels. We expect the
index to consolidate in the current range for some more time. Selling at
higher levels can be expected for target placed at 4920-4930 levels.
n Private Banks have bounced from recent lows. ICICI and AXIS Bank are expected
to continue with gains. From the medium term perspective, SBIN
remains positive above 2050.From the telecom space, Bart is expected to
test 332 in the near term.
n Real Estate major HDIL remains strong above 332 for 380 on the higher
side. For the medium term we remain positive on Ranbaxy, Biocon and
GAIL; accumulation on declines is advised.
n Nifty options OI concentration is seen at 5000 call and 4900 put options.
Put options have seen significant profit booking at lower levels. Put writing
support is seen in the range of 4900-5000. IV's remain significant low
at an average of 20. This indicates that market participants are not expecting
any significant movement in the current series.

report as on 22/12/2009

The market opened to an unchanged level but due to failure to breach psychological level 5000 it collapsed towards
the end.
Monday's closing was nearer to major support area 4935/4925 (16570/530). These levels have supported the market
several times in the month of October and November. From here, we can expect one bounceback on the back of
positive global cues and it may last up to maximum 5000/16750 level. In case the market sustains above it in the
second half of the trading session then we may even expect the level of 5035/16870.
However, due to medium term weakness we can not expect the market to trade beyond the same (5035/16750). Fresh
short sellers may emerge around these levels with a positional view in mind or old pending long positions may come
under liquidation.
Our advice is to trade cautiously if it opens up with a huge gap. In case the market starts trading below the level
4925/16530 and sustains below it in the second half of the trading session then the levels of 4860/16350 seems
achievable.


Market wide open interest is seen at Rs. 1,18,386 cr. Nifty futures have
seen marginal shed in open interest with volumes seen at recent lows.
n Nifty Dec turnaround is seen at 5067 below which we remain in negative
territory. 4950 remains a significant support for the index. A bounce back
can be expected from the mentioned levels for 5000-5050 on the higher
side. For traders unless nifty sustain 5070 remains extremely important
for the sentiment to change.
n Private Banks have bounced from recent lows. ICICI and AXIS Bank are expected
to continue with gains. From the medium term perspective, SBIN
remains positive above 2050.
n Real Estate major HDIL remains strong above 332 for 380 on the higher
side. Selling is expected to continue in Capital goods majors. For the medium
term we remain positive on Ranbaxy, Biocon and GAIL; accumulation
on declines is advised.
n Nifty options OI concentration is seen at 5000-5100-5200 call options. Put
options have seen significant profit booking at lower levels. Put writing
support is seen at 4950 levels. A bounce back from the mentioned levels
would indicate initiation of an up-tren

report as on 21/12/2009

The week past and expected
Technically speaking: In last week, the market remained in a consistent downtrend and has broken psychological
support 5000/17000 on Friday under the leadership of Reliance Industries. The market has even broken the strong rising
trend line at 16900/5030 on daily basis that may be the negative indication for the medium term trend of the market.
Now the next major support exists at 4930/16590 level, which is a 38.2% retracement level of the entire rally starting from
4540/15330. Since September, the level 4930/16590 has played excellent support for the market however, dismissal of the
same has also invited sharp sell off in the month of October and late November.
We feel that the current up-move may lose its momentum if it sustains below the level 4800/16200 for more than two
days. It does not mean that the level of 4930 is not important, it is also equally important and positional traders should be
cautious below the same on daily basis. If we go through the world markets, there also the trend is not strong and may
take time to reverse the current weakness.
On the higher side, the level 5030/16890 and 5090/17050 may act as a major hurdle for the market and to reverse the
current weakness the market has to chase these levels on daily closing basis.
In the last week, there was out performance in Pharmaceuticals, Technology, Auto and Steel stocks. There was substantial
under performance in Banks, Real Estate and Oil & Gas stocks. The trend was mixed in Infra, Cement and other
commodities (sugar, copper, aluminum and zinc).
In case the market survives at 4930 for the short pull back then we may expect first pull back in Bank stocks due to its
oversold activity on daily as well as on weekly charts. The cement and Auto may be the next best sector to improve the
sentiment. For the technology sector we can say that we have seen consistent out performance in last several months.
One should be cautious at least in frontline stocks while trading. Other than steel stocks the metal pack is looking weak
and may offer shorting opportunity at each resistance levels

report as on 18/12/2009

On Thursday the market remained range bound between the highs and lows of previous days. As it failed to recapture
the level of 5090/17050 we may confidently say that the market is still weak and may reach minimum level of 4976/
16660 or maximum 14925/16550 level in the near term. For the day our advice is to buy only on recoveries.
"Top Buy" with a medium term view - MONNET ISPAT: Cls: 372.00.
The said stock has spent nearly three months between the range of Rs.350 and Rs.410. However, as per current
formation along with volumes we can say that the stock is interpreting bullish consolidation and may break the range
on the higher side. Our advice is accumulate between the levels Rs.375 and Rs.365 with an upside target of Rs.410
and Rs.455. Positional traders can keep a stop loss at Rs.350 on a daily basis.


Market wide open interest is seen at Rs. 1,15,056 cr. Nifty witnessed significant
volatility within the range of 5000-5070.
n Nifty Dec turnaround is seen at 5070 below which we remain in negative
territory. Immediate support is seen at 5000. We advice low long aggression
below 5070 with stock specific focus. Breach of 5000 can push the
index to 4950 levels.
n Metal majors trade with a positive bias. Tata Steel remains positive above
540 for 600 on the higher side. JSW Steel remains positive above 960.
IDFC and IDBI remain positive above 150 and 124 respectively.
n Tech majors trade with a positive bias. TechM is expected to test 1050 as
it remains strong above 980 levels. Mphasis is expected to gain significantly
above 690.
n Nifty OI concentration is seen at 5000 put and 5100/5200 call options. Call
writing is seen at 5150-5200 levels while put writing is seen at 4950-5000

report as on 17/12/2009

On Wednesday stocks seesawed through out the day before closing to neutral (unchanged) levels at 5042/16912.
Generally the market closes to almost unchanged levels before the major event (Fed Meet) that we observed on
Wednesday. However, it brings huge move on either side on the next day and so we have to be prepared for the same
on Thursday.
For the day we will focus on 5070/16995 and 5000/16770 levels to design our trading strategy. In case the market
sustains above or below these given levels in the second half then we may come across the significant move in the
same direction. Above the level 5070/16995 the market may jump up to 5125/17200 with a major hurdle at 5090/
17050. However, if it opens lower and sustains below the level 5000/16770 then it may fall to the level 4935/16580
with a major support at 4975/16660. Around 4935/16580 levels investors can invest in select outperforming sectors like
Pharmaceutical, Tech and FMCG. For the day our advice is to trade as per levels.


Market wide open interest is seen at Rs. 1,14,998 cr. Nifty witnessed significant
volatility within the range of 5000-5070. Selling was seen at
higher levels.
n Nifty remains in negative territory below 5075. Below 5125 expect the
index to test 4950-4970. In the near term nifty is expected to bounce to
5080-5100 levels from where selling is expected. Termination of this corrective
down-move is expected at 4950 levels.
n Reliance has significant support at 1050 levels; expect some consolidation
at current levels before resumption of uptrend. Cairn remains in up trend
above 255; correction should be used to accumulate in the cash segment.
GAIL remains in medium term up trend.
n Metal majors trade above major support levels. Tata Steel remains positive
above 540 on closing basis. SAIL remains positive above 200. Weakness
expected in Real estate majors led by DLF and HDIL. Further weakness
expected in banking stocks. PNB trades weak below 925.
n Nifty OI concentration is seen at 5000 put and 5200 call options. Call writing
is seen at 5150-5200 levels while in case of put options writing is seen
at 4950-5000 levels. Put options have seen significant profit booking in
the previous two trading sessions.

report as on 15/12/2009

On Tuesday the market has broken an important support at 5080/17025 level that has triggered weakness in the
market and forced to close below the major support 5030/16920 level. This may lead one more round of weakness in
coming few days because it's a break down out of distribution zone, which was between 5080 and 5180 levels. The
next major support for the market exists at 4925/4935 (16580/16530) levels.
As per overall formation it seems that it will be tough for the market to recapture the levels of 5080/90 (17025/17060)
in the near term at least on the closing basis. If it happens then only we can say that the market has absorbed the
bearishness. Any pull back towards the level 5090/17060 will be an opportunity to sell short with a tight stop loss
above it. However, any steep sell off at the beginning to the levels 4935/4925 may offer short term traders an
opportunity to trade long with a tight stop loss below the level 4900 with a short term prospect. 
Market wide open interest is seen at Rs. 1,17,316 cr. Futures trade at a
marginal discount as compared to previous trading sessions premium.
Marginal addition is seen in stock futures.
n Nifty remains in negative territory below 5075. Below 5125 expect the
index to test 4950-4970.
n Metal majors trade above major support levels. Tata Steel remains positive
above 540 on closing basis. SAIL remains positive above 200.
n Tech majors trade with a positive bias. Infosys has seen significant addition
in open interest at 2480. Sustain above the same can push the stock
to 2565. Mphasis and TECHM are expected to consolidate at current levels.
n Weakness expected in Real estate majors led by DLF and HDIL. Further
weakness expected in banking stocks. PNB trades weak below 925.
n Nifty options concentration seen at 5200 call and 5000 put options. Call
writing at 5150-5200 levels led to selling. In case of put options writing
seen at 4950-5000 levels though positions remain low as compared to call
options. IV's remain on the lower side.

report as on 15/12/2009

Nifty opened the week on a positive note against global trends. It tested
the higher end of the range at 5150 levels but failed to sustain the same.
Selling pushed the index down to 5100 and finally closed around the same
levels.
n Market wide open interest is seen at Rs. 1,13,110 cr. Nifty futures have
seen marginal shed in open interest with volumes seen at recent average
levels.
n Nifty remains in corrective move below 5185 levels. On the downside support
is seen at 5100/5050 levels. Dec turnaround is seen at 5070 above
which the underlying sentiment remains positive. Caution is advised below
5070 levels.
n Selling is expected in select Banking stocks. ICICI has major resistance at
875 levels. SBIN remains weak below 2300-2325 levels and long positions
should be avoided in the same. Similarly PNB remains weak below 925.
n Real estate majors remain weak at current levels. IDFC has critical support
at 162 levels. A bounce from here is expected to push the stock to
fresh highs. Rel Infra remains positive above 1030 for 1130 on the higher
side.
n Nifty OI concentration is seen at 5200 call and 5000 put options. Call writing
is seen at 5150-5200 levels making it difficult for the index to sustain
above the same. In case of put options some support is seen at 4950-5000
levels.
OUTLOOK
n Nifty Dec turnaround is seen at 5075 above which it remains in positive
territory. We advice holding long positions above the same. Long aggression
should be avoided below the same. In the near term consolidation is
expected in the range of 5050-5200.
n GAIL traders with a positive bias above 407 for 425/250. We remain positive
on the pharma space in the medium term. Rel Infra and Rel Cap are
expected to trade with a positive bias in the near term. IDFC has critical
support around 162 levels; bounce from mentioned levels is expected to
initiate a fresh uptrend for the index

HDFC BANK
PRICE: RS.1757 RECOMMENDATION: ACCUMULATE
TARGET PRICE: RS.1840 FY11E P/E: 21.0X; P/ABV: 3.4X
We met with Mr. Paresh Sukhtankar (ED, HDFC Bank) to get an update on
the bank's strategy and future outlook.
CBoP retail is performing on the expected lines. Out of total CBoP retail
book, 2W (two wheelers) book has almost run off whereas personal loan
book would take another 10-12 months to completely run off.
Bank was able to maintain its margin even during Q3FY09 and Q4FY09,
when bulk deposit rate was hovering around 5-6% higher than the current
prevailing rate. So, we believe that it would be easier for the bank to
protect its margins.
We maintain the earning estimates for FY10E and FY11E and maintain
ACCUMULATE rating on the stock with a target price of Rs.1840 based on
P/ABV of 3.5x its FY11E adjusted book value and P/E of 22x its FY11E
earnings.
We like HDFC Bank, a leader among private sector banks with healthy
credit growth, one of the highest CASA, high and stable margins, high RoE,
cleaner asset quality and a large proporation of fees in total income.
Key Takeaways
We met with Mr. Paresh Sukhtankar (ED, HDFC Bank) to get an update on the
bank's strategy and future outlook. We returned positive to recognize its strategic
response to recent macro economic developments.
Loan growth is picking up
Management has been reiterating that the bank endeavors to grow 3-4% faster
than the system. In our view, banking system is likely to grow by 16-17% during
FY10. During the same period, we are factoring 20% growth for HDFC bank.
Management has also indicated that loan growth is picking-up. In retail segment,
mortgages and auto loans are driving the growth whereas bank is going slow on
credit cards and personal loans. During Q2FY10, when system grew by only 3.4%
(QoQ), HDFC bank managed to deliver 9.5% growth (QoQ) in its advances.
During Q2FY10, its retail book grew 7.3% YoY to Rs.626.5 bn, representing
~54.4% of gross advances. This has come mainly on the back of good traction in
the car loan segment (26.7%) despite decline visible during Q2FY10 in personal
loans and credit card segments. During Q2FY10, car loan book grew 6.2% (QoQ)
whereas personal loans and credit card loans declined by 1.2% and 1.3%.
Comfortable Capital Adequacy Ratio (CAR) after warrants conversion
by HDFC Ltd
HDFC Ltd has converted 26.2 mn warrants into equity shares @1530.13 by paying
Rs.36.1 bn (the balance 90% of the subscription amount) to HDFC Bank. HDFC Ltd
had subscribed to the preferential warrants issued by HDFC Bank in June 2008 to
ensure that post HDFC Bank and CBoP merger, its stake in HDFC Bank does not fall
below 20%.
Management has apprised us that this capital would be sufficient to fund the loan
growth for next 2-3 years.

The market is discounting all the positive news as it is clearly failing to surpass the level of 5185/17360 or to close
above 5150/17230 levels on a daily basis. This might lead to a sharp weakness if it starts trading below the level 5030/
16920.
For the day we will watch 5080/17025 level as an immediate support for the market. In case the market starts trading
below the same then we may expect gradual decline towards 5050/5030 (16945/16920) levels. The real weakness will
emerge if it starts trading below 5030/16920 level in the second half and if it closes below the same on a daily basis.
On a higher side, the level 5120/17160 may act as a major resistance initially and sustenance above it may help bulls to
move the market towards 5165/5185 (17290) levels without any extra efforts.

report as 14/12/2009

Nifty consolidated in the range of 5050-5150 for the entire week and finally
closed around 5100 levels. This expected consolidation is accompanied
by stock specific activity with focus in the cash segment.
n Market wide open interest is seen at Rs. 1,11,787 cr. Marginal shed in
seen in Nifty futures open interest with futures trading at a discount.
n Front line IT stocks are expected to witness action led by Infosys Tech and
TCS. Mid-cap IT space also trade with a positive bias. Profit booking is expected
in capital goods majors at higher levels; higher levels should be
used to initiated short positions in the same.
n We remain positive on the Pharma and Oil and Gas space from the medium
term. We advice accumulating Biocon at lower levels. GAIL remains
positive above 380 for 450 on the higher side.
n Nifty options OI concentration is seen at 5200 call and 5000 put options.
Call writing is seen at 5150-5200 levels while put writing is seen at 4900-
4950 levels. PCROI is seen at 1.36 with over all open interest in the options
segment at recent highs.
OUTLOOK
n Nifty Dec turnaround is seen at 5070 above which it remains in positive
territory. We advice holding long positions above the same. Long aggression
should be avoided below the same. In the near term consolidation is
expected in the range of 5050-5200.
n We remain positive in the IT space for the near term. Infosys is expected
to test 2500-2550 in the near term. Significant action is expected in the
mid-cap IT space. We remain positive on the pharma space for the medium
term and advice accumulating Biocon for higher levels.

REPORT AS ON 11/12/2009

Nifty continues to consolidate in the narrow range of 5050-5150. Volumes
remain on the lower side with stock specific action witnessed. Focus
has shifted to the cash segment.
n Market wide open interest is seen at Rs. 1,10,528 cr. Nifty futures trade
at a premium of 20 points with volumes seen on the lower side.
n Nifty Dec turnaround is seen at 5065 above which we remain in positive
territory. Range for the current series is seen at 4950-5250. Currently the
index remains in corrective movement hence the range bound movement.
Above 5070 we expect the index to test 5250 on the higher side.
n Pharma stocks are expected to do well in the near term led by Ranbaxy
and Biocon. GAIL remains in an uptrend for higher targets of 450.
n Nifty OI concentration is seen at 5000 put and 5200 call options. IV's remain
on the lower side as participants expect the range of 4950-5250 to
hold good for the near term.
OUTLOOK
n Nifty Dec turnaround is seen at 5065 levels; above the mentioned level
the index trades with a positive bias. On the higher side call writing at
5200 levels is indicative on limited upsides. We advice holding long positions
above 5060 for 5250.
n We remain positive on the IT and Pharma space in the near term. GAIL is
expected to test 450 levels in the near term. Mid-cap stocks are expected
to witness action with significant upsides

REPORT AS ON 11/12/2009

The market remained in a range through out the day with thin volumes on both the sides. For the day, again we will
watch the level of 5155 and sustenance above the same will lift the market up to 5185. To break the level 5185, the
market will require some concrete positive trigger otherwise it will be difficult to breach the same in a normal course
of trading.
On the lower side the level of 5110 and 5080 may act as a support area for the day. A close above 5150 level will
confirm the bottoming formation that will lead to further up move in the coming week may be up to 5350/5400
levels. For the day, trade with levels without pre-empting break out or break down.

REPORT AS ON 11/12/2009

The market remained in a range through out the day with thin volumes on both the sides. For the day, again we will
watch the level of 5155 and sustenance above the same will lift the market up to 5185. To break the level 5185, the
market will require some concrete positive trigger otherwise it will be difficult to breach the same in a normal course
of trading.
On the lower side the level of 5110 and 5080 may act as a support area for the day. A close above 5150 level will
confirm the bottoming formation that will lead to further up move in the coming week may be up to 5350/5400
levels. For the day, trade with levels without pre-empting break out or break down.

REPORT AS ON 10/12/2009

After the huge volatile movement in last three days on Wednesday the market remained in a tight range with a stock
specific action. However, the market volumes were above daily averages that will lead to significant moves on either
side on Thursday.
The level of 5155/17240 will play an important resistance for the market and sustenance of the market above it will
push market to newer levels (5225/17600) with a minor hurdle at 5185/17360. On the lower side the level 5080/17025
will act as a major support for the market. Dismissal of the same will invite fresh sell-off that will pull the market to
5035/16900 levels. Our advice is to trade on break outs or break downs for the day.
For positional traders our advice is to follow stop losses strictly and be cautious at higher levels (around 5300/5400) as
these levels may attract huge profit taking.
"Top Buy" with a medium term view - BILCARE LTD.: Cls: 461.00.
The above mentioned stock seems to be bottomed out in the month of March 2009 at Rs.279. The second supporting
factor for the same and which is convincing us to recommend is that the stock is currently into triangular bullish
consolidation. The stock is also attracting volumes at each regular interval. If somebody really wants to take a long
term investment view then they can add 30%-40% of the total investment to any particular "stock" at current levels
and the balance amount one can add on declines at 440 and at 400. On the higher side the stock is having potential
to rally minimum up to 630/650 with a minor hurdle at 550. However, with a perspective of 18 months we may even
expect the levels of 840/860. Avoid trading in it and keep a final stop loss at 350 on closing basis for all the
investments.

Nifty opened on a flat note and consolidated for the entire trading session.
Frontline stocks witnessed consolidation while most of the activity
was seen in the mid-cap space.
n Market wide open interest is seen at Rs. 1,09,290 cr. Nifty futures trade
at premium of near 10 points while volumes remain at average levels.
n IT majors trade with a positive bias led by Infosys and TCS. Infosys is expected
to test 2500 levels in the near term. Midcap IT space is also expected
to witness significant action. Select Pharma stocks are expected to
do well in the near term. BIOCON remains positive above 280 levels.
n Banking majors remain under pressure at current levels. ICICI Bank remains
under pressure below 875. Similarly SBIN remains weak below
2325. Real Estate majors are expected to continue consolidation with selling
at higher levels.
n Nifty OI concentration is seen at 5000 put and 5200 call options. Call
writing is seen at 5200 levels while put writing is seen at 4900 levels. This
is broadly indicative of range bound movement in the entire series. IV's
remain on the lower side indicative of possible consolidation throughout
the series.
OUTLOOK
n Nifty Dec turnaround is seen at 5060 levels; above the mentioned level
the index trades with a positive bias. On the higher side call writing at
5200 levels is indicative on limited upsides. We advice holding long positions
above 5060.
n We remain positive on the IT and Pharma space in the near term. Banking
stocks remain under pressure in the near term. Mid-cap stocks are expected
to witness action with significant upsides.

report as on 08/12/2009

INFOSYS TECHNOLOGIES LTD
PRICE: RS.2440 RECOMMENDATION: ACCUMULATE
TARGET PRICE: RS.2472 FY11E P/E: 20X
Infosys held its Analyst Day recently, where it articulated its long term
strategy of providing services through new engagement models. The
company plans to increasingly move to these models to maintain
positioning and conquer competitive pressures. On its near term outlook,
the company painted an improving environment but at the same time
cautioned against exuberance. The company has indicated higher velocity
in decision - making by clients. It is investing significantly in its demandgeneration
initiatives and has also embarked on a move to reorient its
delivery organization. We tweak our FY11 EPS estimates to Rs.118 (Rs.115
earlier) and our price target to Rs.2472 (v/s Rs.2363 earlier). We remain
optimistic on the company's future prospects, led by a strong management
team and continue to recommend an ACCUMULATE.
Key takeaways of the Analyst Day
Aspirations for the long term
The management gave a glimpse of its aspirations for the long term. The
aspirations integrate the emerging business dynamics with Infosys' pursuit of
maintaining its client positioning and conquering competitive pressures.
Clear cut targets towards achieving revenues from new engagement models and
reducing geographical imbalances reflect the internal preparedness of Infosys.
While most companies are looking at these initiatives, Infosys has internally reorganised
itself to meet up to the new challenges, we opine.
Most of these initiatives have been going on for the past few quarters and have
been adequately formalized within Infosys now. With the traditional business
models likely to witness significant pricing pressure on being commoditised, Infosys
has formalized targets to move to more value - added services and newer
engagement models.
A) Higher contribution from new engagement models and nonlinear
initiatives:
Infosys has set targets to achieve equal proportion of revenues (1/3rd each) from :
1. Transformational projects
Infosys has been focusing on transformational projects over the past few quarters
now and plans to take the contribution of these services to about one third of total
revenues over the next few years. The company has been winning several deals
with 8 new deals won in 1HFY10 itself. Currently, the contribution to revenues is to
the tune of about 25%, we believe.
2. Operations - ADM, BPO, IMS, etc (traditional services based on global
delivery model)
These services while increasingly facing competitive pressures, are expected to
contribute about one third of the revenues over the next few years as against a
much higher share today. We understand that, there will always be demand for
these services either from new verticals or geographies
On Tuesday the market remained highly volatile in the first half between the range of 5110 and 5080 levels. However,
in the second half it recovered quickly from day's lower levels and managed to close above the major level 5110/
17140. It was an indication that the market has squeezed bears and now the real test will come at 5185/17360 levels
around which, the market spent time of more than one month.
Sustenance of the market above the level 5185/17360 will lift the market to 5230/17500 level without any major
hurdle. In case the market opens lower then it should not sustain below the level of 5110/17140 in the second half, as
this will lead to steep sell off towards the end. For the day our advice is to trade cautiously at upper and lower
boundaries (5185/5110). Break out or break down buying is advisable only on sustenance of the market with average
huge volumes.

calls & report as on 02/12/2009

For the day we may expect higher opening on the back of strong global cues that may retest either 5140 or 5185 level.
However, due to overretracement in the short term, we may expect initial pullback for the same. Traders should be
cautious at higher levels but at the same time they should be aggressive buyers on declines with an upside target
5300/5350 (17900/18000). For the day we may expect support between 5095/5075 (17050)







GATI LTD
PRICE: RS.58 RECOMMENDATION: BUY
TARGET PRICE: RS.70 CONS. FY11E P/E: 16.5X
q Pick up in economy - positive for high margin SCM business of GATI
q GATI enjoys high operating leverage in the Express distribution business
q Issue of warrants to promoter at Rs.81 (40% premium to current market
price)
q Maintain FY10E EPS of Rs.1.9
q Introduce FY11 earning estimates with EPS of Rs.3.5
q Due to 21% upside potential we upgrade GATI to BUY with increased
price target of Rs.70 (Rs.62 earlier)
We recently spoke with the management of GATI and following are our key
takeaways:
Issue of warrants to promoter @ Rs.81 (40% premium to current
market price)
n The board of directors of GATI have approved issue of 4.8 mn warrants to promoter
group entity i.e. Mahendra Investment Advisors Pvt. Ltd. The warrants
would carry an option of conversion into equal number of equity shares with
face value to Rs.2 and premium of Rs.79 per share within a period of 18
months from the date of allotment of warrant.
n The issue of warrants would entail cash inflow of 25% of the value for the
company. This is positive as the money would be used for the capex plan of the
company which would ultimately result in increased revenues and profitability
for GATI going forward.
n Also the conversion price is Rs.81 per share which is at a premium of 40% to
the current market price of Rs.58. This is positive as it shows the optimism of
the management in the various businesses of GATI.
Further issue of 5.36 mn warrants to promoter @Rs.58
The board of directors of GATI have also approved issue of 5.36 mn warrants to its
promoter i.e. Mahendra Kumar Agarwal. The warrants would carry an option of
conversion into equal number of equity shares with face value to Rs.2 and premium
of Rs.56 per share within a period of 18 months from the date of allotment of
warrant. The issue of warrants would entail cash inflow of 25% of the value for the
company.
Growth in Coast-to-coast shipping business
n With a fleet strength of six vessels and tonnage of 43581 DWT, GATI operates
in the niche coast to coast shipping business. It operates on the Chennai - Port
Blair - Yangon - Chennai route and direct container service from Penang, Malaysia
and Thailand. Since this is niche segment it is operating at optimal capacities.
n Going forward the management is looking to acquiring vessels to expand its
tonnage and the fleet gets younger. The modern, expanded and betterequipped
vessels will result in reliable services to its customers. The fleet will operate
and serve the routes - Bay of Bengal, Andaman Seas and Malacca Straits