India Daily Ideas

PhillipCapital (India) Pvt. Ltd. INSTITUTIONAL USE ONLY 29 August 2013

Contents Super Sector Stock / Ideas 1 Consumer ITC, Hathway, Future Retail, Trader Comments 2 Cyclicals Iron ore, Oil & Gas 3 Defensives Bharti, Telecom Sector, Infosys

1D 1W 1M 3M 12M BEST 1D 1W 1M 3M 6M 12M PER WORST 1D 1W 1M 3M 6M 12MPER SENSEX 0.2 0.5 -8.2 -10.7 2.9 BSE100 NIFTY 0.0-2.3-9.4-13.4-0.1 Ranbaxy Labs 10.6 25.8 40.3 8.9 10.2 -24.4 23.7 Suzlon Energy -8.9 -11.1 -19.6 -56.2 -64.1 -61.5 -0.8 BANKEX -1.3 -5.5 -15.5 -32.0 -13.2 Cairn India 5.4 8.2 9.3 13.0 9.2 -4.0 5.7 HDIL -7.9 4.2 -10.3 -33.5 -47.2 -54.5 2.8 BSE AUTO 0.1 0.9 -6.5 -10.1 6.9 SAIL 5.2 11.4 9.2 -20.7 -33.4 -39.3 7.8 HPCL -7.8 -7.1 -26.9 -42.6 -43.5 -47.3 5.8 BSE METALS 1.9 8.6 13.3 -11.4 -21.2 Bharat Forge 4.5 6.5 15.1 -1.3 9.7 -17.1 16.1 Bharat Petroleum Corp -7.3 -5.4 -21.0 -28.9 -27.7 -24.2 9.3 BSE OIL -1.1 1.1 -10.2 -12.2 -5.3 Jaiprakash Associates 3.8 11.4 -15.1 -51.2 -51.5 -47.1 10.7 ONGC -6.0 -2.8 -18.1 -27.0 -22.2 -11.5 8.6 BSE POWER 0.5 0.1 -13.5 -23.3 -27.8 JSPL 3.7 8.1 19.7 -20.5 -31.6 -33.7 7.2 Union Bank of India -5.9 -7.1 -23.2 -55.6 -52.7 -33.9 2.1 BSE REALTY -1.4 -6.3 -16.3 -34.5 -21.9 TCS 3.7 10.9 7.0 27.2 25.7 41.9 N/A PNB -5.4 -9.3 -25.6 -45.9 -44.8 -34.8 N/A BSE IT 2.7 7.9 7.4 30.1 36.3 Wipro 3.6 6.7 15.4 38.7 26.9 45.0 16.7 UltraTech Cement -5.2 -9.0 -21.4 -25.1 -21.0 -13.8 14.2 BSE CONSUMER DU -3.0 -3.1 -13.0 -30.4 -12.7 JSW Steel 3.4 7.5 -3.4 -24.5 -27.6 -22.6 7.8 HDFC -4.8 -12.4 -18.9 -28.1 -14.0 -8.5 18.5 BSE CAPITAL GOOD -0.5 -0.3 -16.4 -27.9 -26.9 Tata Power Co. 3.3 4.5 -12.6 -14.4 -18.6 -22.3 18.6 Bank Of India -4.6 -10.0 -27.4 -55.8 -59.1 -49.5 N/A BSETECK 1.8 5.4 3.1 19.8 33.4 Adani Power Limited 3.3 4.2 -9.1 -33.6 -18.9 -4.1 -25.4 AXIS Bank -4.6 -14.2 -23.7 -42.5 -37.6 -17.7 6.1 BSE Healthcare 1.2 3.4 -5.1 -3.1 17.1 HCL Technologies 3.1 10.6 9.0 31.0 35.0 78.5 14.3 Asian Paints -4.5 -5.5 -23.4 -18.6 -8.7 5.9 31.0 BSE FMCG -0.4 -0.6 -13.8 -10.2 13.5 Hindalco Industries 2.9 9.4 12.7 -7.1 2.8 -1.5 8.1 Yes Bank -4.3 -11.6 -37.8 -55.1 -52.2 -31.7 5.5 BSE PSU -2.2 -2.2 -12.3 -27.8 -29.5 NMDC 2.9 6.0 12.4 -0.6 -15.4 -39.6 N/A Federal Bank Ltd -4.0 -10.3 -24.4 -43.0 -48.0 -37.0 N/A BSE 100 -0.1 -0.2 -9.1 -13.6 0.1 Tata Motors 2.7 5.2 0.7 -1.9 3.7 27.4 -156.9 Canara Bank Ltd. -3.6 -5.8 -27.9 -53.8 -53.2 -37.7 N/A BSE 500 -0.3 -0.3 -8.9 -14.5 -2.5 Tata Steel 2.6 12.7 29.5 -11.0 -18.4 -25.4 10.2 Glenmark Pharma -3.6 -0.2 -11.9 -8.4 2.5 23.3 18.4 Europe & US Hindustan Zinc Ltd 2.4 9.6 15.7 -0.4 2.3 -3.8 N/A Gail (India) -3.4 -5.5 -10.8 -12.0 -14.9 -22.4 8.0 Dow Jones 0.3 -0.5 -4.5 -3.1 13.1 Divi's Laboratories 2.3 1.1 -0.6 -3.9 -5.7 -17.1 17.1 ABB -3.4 -2.1 -12.9 -32.6 -20.1 -37.4 39.7 S&P 500 0.3 -0.5 -3.0 -0.8 15.9 Infosys Technologies 2.0 5.7 6.8 32.8 7.4 30.6 18.0 Unitech -3.3 -1.5 -7.0 -36.2 -41.4 -14.2 11.0 NASDAQ 0.4 -0.2 -0.2 3.6 16.6 BHEL 1.9 9.1 -27.2 -43.8 -43.2 -47.2 5.9 Tata Global Beverages -3.3 -3.5 -14.3 -4.4 9.1 8.9 17.6 S&P Europe -0.3 -0.4 -0.5 -3.1 6.2 Lupin 1.7 0.4 -10.1 1.0 31.6 33.1 21.5 Ashok Leyland -3.3 -1.0 -15.4 -49.4 -45.5 -41.1 34.9 Brazil Bovespa -0.4 -1.1 1.3 -8.7 -13.1 Sun Pharma 1.6 4.7 -11.3 -5.2 25.9 49.4 25.3 Bank of Baroda -3.1 -1.6 -21.3 -34.4 -36.6 -28.7 N/A Asia NTPC 1.6 -3.0 -10.9 -18.0 -16.1 -26.6 9.4 Exide Industries Ltd -3.0 -1.9 -7.3 -13.2 -3.5 -9.8 16.1 Nikkei 225 -1.5 -0.2 -2.4 -6.9 47.1 Shriram Transport 1.4 -11.2 -19.1 -38.2 -26.3 -17.4 7.1 United Breweries Ltd -3.0 11.0 5.0 -4.8 16.9 12.3 69.8 Hang Seng -1.6 -1.7 -1.5 -4.6 8.8 Reliance Capital 1.4 1.9 -15.8-11.0-15.7-4.3 12.3 Zee Entertainment -2.7 -6.1 -11.6 -5.6 1.7 34.5 25.1 S&P Asia 200 -1.1 0.2 0.8 2.3 16.8 DLF 1.2 -12.6 -22.0 -37.4 -52.3 -31.1 25.4 United Spirits -2.6 -2.2 -18.4 -16.1 12.2 110.9 44.6 Straits -1.0 -2.8 -7.2 -10.8 -1.2 Sesa Goa 1.2 23.4 35.1 6.9 9.7 -1.8 6.3 Crompton Greaves -2.5 -4.5 -11.5 -18.4 -13.6 -29.4 12.8 TWSE 0.0 0.1 -3.2 -6.2 5.9 IDFC 1.1 -20.2 -27.8 -48.4 -46.3 -40.7 6.0 Cummins India Ltd. -2.5 0.6 -9.1 -18.8 -21.6 -17.7 14.3 Kospi -0.1 1.9 -0.8 -5.8 -2.3 Reliance Infra 1.0 5.5 -7.8 -13.6 -20.3 -26.7 5.5 NHPC -2.4 -0.6 -8.3 -17.3 -40.7 -11.4 8.3 Baltic Dry Index -2.0 0.1 5.9 39.4 58.3 Reliance Industries 0.9 3.5 -8.4 -4.3 -0.4 3.7 11.3 Idea Cellular -2.3 -5.5 -5.0 12.3 29.2 103.4 27.3 VIX Index -1.7 3.5 23.2 11.2 -3.3 United Phosphorus 0.8 2.9 4.3 -6.0 23.5 23.2 7.0 Coal India Ltd -2.3 -2.5 -7.0 -22.3 -18.1 -29.3 9.2 Aluminium -0.1 -0.4 3.7 1.0 -3.0 Hero Honda Motors 0.7 2.3 2.1 7.0 14.7 3.4 N/A Bharti Airtel -2.2 -3.6 -13.8 -8.4 -11.1 18.8 26.2 Brent -0.1 5.9 8.7 15.7 4.2 Colgate Palmolive(Ind 0.6 -3.8 -13.4 -17.8 -4.4 2.9 29.7 Siemens -2.2 -2.8 -17.7 -26.1 -14.8 -36.2 45.1 Coal N/A 0.5 1.2 -11.1 -11.6 Dr Reddy's Laboratorie 0.5 6.2 -2.0 2.6 23.4 28.6 N/A PFC -2.1 -9.8 -13.0 -46.7 -48.2 -33.4 2.9 Copper -0.3 -0.3 6.1 -0.4 -4.3 Cipla 0.4 1.6 -3.2 -0.8 10.5 8.8 20.1 GCPL -1.9 -2.5 -5.7 -3.5 10.9 18.0 N/A Crude Oil (WTI) -0.5 4.3 5.4 17.6 14.4 GMR Infrastructure 0.4 8.9 -8.6 -36.1 -24.7 -26.5 -12.4 Maruti Suzuki India -1.8 -3.8 -8.5 -24.4 -8.9 5.8 12.7 Iron Ore 0.0 0.7 4.5 15.8 36.1 Bajaj Auto 0.2 -0.2 -13.3 -5.2 -12.2 6.3 14.2 Nestle India -1.7 -4.5 -13.9 -11.8 -2.5 -1.2 N/A Lead -0.2 -1.5 8.1 4.3 12.2 ITC 0.2 -0.7 -16.8 -12.9 1.0 10.6 26.4 LIC Housing -1.7 2.2 -10.9 -39.8 -29.9 -33.8 6.3 Nickel -1.7 -4.0 2.4 -4.7 -12.9 HDFC Bank 0.1 -5.4-11.3-21.5-10.2-4.7 15.8 M&M -1.6 -0.9 -13.5 -19.1 -10.8 0.6 10.3 Steel N/A N/A N/A N/A N/A ACC 0.1 -6.4 -21.1 -23.4 -25.6 -29.3 14.2 PGCIL -1.5 -3.5 -12.9 -16.9 -9.6 -21.1 8.6 Tin -0.8 -1.7 11.4 2.8 4.6 Tata Chemicals 0.0 1.4 -8.0 -18.3 -24.4 -19.0 8.1 SBI -1.4 -3.3 -14.1 -28.8 -28.2 -18.1 6.1 Zinc -1.3 -1.4 5.5 4.7 3.8 Ambuja Cements 0.0 2.5 -7.1 -13.3 -16.9 -14.9 15.1 Kotak Mahindra Bank -1.1 -2.6 -8.5 -22.1 -7.9 4.4 29.1 USD : INR 4.0 7.5 15.8 23.0 23.6 IDBI 0.0 2.3 -14.6 -32.6 -36.1 -32.2 N/A Indian Oil Corporation -0.9 -2.0 -3.1 -29.2 -29.5 -15.4 8.2 EUR : INR 4.0 7.1 16.4 26.8 31.5 Satyam Computer Ser 0.0 0.0 0.0 1.6 -2.7 20.4 10.0 Grasim Industries -0.8 -3.8 -18.1 -22.9 -24.9 -26.0 7.7 GBP : INR 3.6 5.9 16.4 25.7 21.0 Sterlite Industries 0.0 13.9 22.2 -2.4 -3.9 -9.4 5.2 ICICI Bank -0.8 -3.9 -14.3 -34.5 -23.4 -13.2 9.4 CHF : INR 4.1 7.4 16.8 29.2 28.5 Larsen & Toubro 0.0 -0.5 -16.2 -26.9 -22.6 -21.7 12.4 Adani Enterprises -0.8 -6.5 -18.9 -33.0 -32.1 -5.1 8.3 JPY : INR 2.2 8.0 16.3 26.8 -0.2 REC -0.1 -1.2 4.1 -27.0 -24.9 -9.8 4.0 Reliance Comm -0.7 -3.1 -15.6 0.8 81.8 130.4 20.5 Dollar index 0.0 -0.1 -0.3 -2.7 -0.2 Hindustan Unilever -0.2 0.9 -7.2 -0.2 33.6 15.1 35.7 Adani Ports and Speci -0.6 -3.2 -11.9 -19.9 -11.3 12.7 13.5 USD: AUD 0.3 -0.5 -2.6 -6.9 -13.4 Reliance Power -0.2 -0.3 -11.3 -9.6 -8.0 -16.3 19.0 Adani Ports and Speci -0.6 -3.2 -11.9 -19.9 -11.3 12.7 13.5 USD: CNY 0.0 0.0 -0.2 -0.1 -3.6 Dabur India Ltd. -0.3 4.8 -7.5 -0.3 23.8 25.5 29.4 IndusInd Bank Ltd -0.5 -4.0 -16.7 -33.3 -16.8 10.1 13.2 USD:EURO 0.0 -0.2 0.6 3.0 6.4 USD:YEN -0.1 -1.2 -0.4 -3.6 23.9 Source: Bloomberg

Super‐sector description: Consumer: FMCG, Media, Retail, Automobiles, Auto Ancillaries, Aviation, Hotels & Leisure Cyclicals: Metals, Oil & Gas, Fertilisers, Capital Goods, Engineering, Cement, Infrastructure Defensives: Pharmaceuticals, Telecom, IT Services Financials: Financial, Real Estate & Economy

Please refer to Disclosures and Disclaimers at the end of the Research Report.

Consumer Daily Ideas Stocks Featured: ITC, Hathway, Future Retail, Trader Comments PhillipCapital (India) Pvt. Ltd. INSTITUTIONAL USE ONLY 29 August 2013

Contents Stock/Sector Ticker Reco News/Analysis 1 ITC ITC IN SELL ITC board approves the demerger of Wimco subsidiary into the company. Do not estimate any material impact for ITC 2 Hathway HATH IN BUY Hathway to issue 3.5mn shares to FII’s on a preferential basis Pantaloon 3 Fashion & PFRL IN NR Pantaloon to wear a new look Retail Ltd. 4 Future Retail FRL IN NEUTRAL Kishor Biyani Interview with ET 5 Trader Comments

% CNG 1D 1W 1M 3M 12M BEST 1D 1W 1M 3M 6M 12M PER WORST 1D 1W 1M 3M 6M 12M PER SENSEX 0.2 0.5 -8.2 -10.7 2.9 CONSUMER/ MEDIA/ RETAIL NIFTY 0.0 - 2.3 -9.4 -13.4 - 0.1 Indian Hotels Co. 4.3 6.1 -8.3 -17.6 -20.0 -27.9 52.9 Cox & Kings -7.9 -11.5 -15.6 -23.5 - 29.8 -29.4 4.6 BSE FMCG -0.4 - 0.6 -13.8 -10.2 13.5 Radico Khai tan 1.8 17.6 24.2 -7.9 -14.0 9.3 N/A HMVL -7.1 -11.6 -4.8 -14.9 -20.3 4.3 N/A BSE AUTO 0.1 0.9 -6.5 -10.1 6.9 DCHL 1.4 2.4 -15.0 -32.2 -45.7 -83.8 N/A Jet Airways -6.3 -2.8 -29.6 -45.8 - 46.3 -14.5 -49.5 BSE 100 -0.1 -0.2 -9.1 -13.6 0.1 Info Edge 1.3 -2.3 -5.8 -13.3 -13.9 -11.2 27.1 VIP Ind. -5.6 -0.2 2.1 -27.3 - 30.0 -34.5 N/A BSE 500 -0.3 -0.3 -8.9 -14.5 -2.5 EIH 1.0 3.6 -0.8 -15.9 -22.9 -37.2 29.9 Network 18 Media & In -5.0 -3.9 -12.3 -28.0 - 10.8 -11.7 N/A Europe & US Navneet Pub. 1.0 -2.0 -12.3 -17.1 -16.2 -4.7 9.7 Spice Jet -4.8 -5.9 -26.0 -43.5 - 43.9 -35.5 1530.8 Dow Jones Ind 0.3 -0.5 -4.5 -3.1 13.1 Triveni Eng. 0.7 1.3 -12.1 -21.8 -30.2 -40.2 N/A Asian Paints -4.5 -5.5 -23.4 -18.6 -8.7 5.9 31.0 S&P 500 0.3 -0.5 -3.0 -0.8 15.9 Col gate India 0.6 -3.8 -13.4 -17.8 -4.4 2.9 29.7 Jag Pr akashan -4.4 -4.9 -11.9 -6.0 - 17.5 -12.4 11.8 NASDAQ 0.4 -0.2 -0.2 3.6 16.6 Dish TV 0.4 -1.3 -17.1 -37.5 -35.3 -34.9 -367.8 Ti tan Ind. -4.1 -4.6 -18.3 -29.1 -18.5 -3.9 22.5 S&P Europe -0.3 -0.4 -0.5 -3.1 6.2 Rel Broadcast 0.3 19.7 15.7 65.4 74.5 -1.5 N/A Sun TV -3.5 -4.7 -3.8 -15.1 - 12.0 27.5 17.4 Br azil Bovespa -0.4 -1.1 1.3 -8.7 -13.1 Britannia 0.3 0.7 -3.2 1.1 44.0 41.9 25.8 Tata Global Bev. -3.3 -3.5 -14.3 -4.4 9.1 8.9 17.6 Asia Jubl Foodworks 0.2 2.4 -5.5 -2.9 2.1 -7.2 41.5 Provogue -3.2 -7.2 -13.7 -39.1 - 50.3 -58.1 N/A Nikkei 225 -1.5 -0.2 -2.4 -6.9 47.1 Shoppers Stop 0.2 -4.2 -6.0 -6.8 -17.3 -2.1 110.6 Ber ger Paints -3.2 0.2 -1.6 -11.3 13.7 59.2 28.5 Hang Seng -1.6 -1.7 -1.5 -4.6 8.8 ITC 0.2 -0.7 -16.8 -12.9 1.0 10.6 26.4 United Breweries -3.0 11.0 5.0 -4.8 16.9 12.3 69.8 S&P Asia 200 -1.1 0.2 0.8 2.3 16.8 Hotel Leela Ventur e 0.0 -0.9 -10.6 -21.8 -33.1 -44.8 -1.9 ENIL -2.9 -2.1 6.2 -2.3 8.6 9.2 14.4 St rait s -1.0 -2.8 -7.2 -10.8 -1.2 Simbhaoli Sugar 0.0 11.1 4.6 - 2.4 -30.9 -45.7 N/A King Air -2.8 -7.3 -17.1 -42.9 - 64.4 -58.8 N/A TWSE 0.0 0.1 -3.2 -6.2 5.9 Balrampur Chini -0.1 -4.3 -12.9 -27.3 -25.0 -44.4 10.5 GSKConsumer -2.8 -3.0 -20.7 -24.7 -1.8 34.9 31.8 KOSPI -0.1 1.9 -0.8 -5.8 -2.3 DEN -0.2 7.5 -10.1 -25.4 -14.8 36.4 27.5 Emami -2.7 -5.8 -16.3 -22.1 1.8 22.7 24.6 Baltic Dry -2.0 0.1 5.9 39.4 58.3 HUL -0.2 0.9 -7.2 -0.2 33.6 15.1 35.7 Agr o Tech Foods -2.7 -7.4 -14.8 -13.6 -2.2 8.5 23.4 Coffee -0.4 0.7 -4.8 -12.2 -35.8 Dabur -0.3 4.8 -7.5 -0.3 23.8 25.5 29.4 Zee Ent. -2.7 -6.1 -11.6 -5.6 1.7 34.5 25.1 Cotton -0.6 -3.8 -3.7 -0.2 4.7 Rel Mediawaor ks -0.4 -1.4 -1.9 -10.5 -22.6 -26.3 N/A Raymond -2.6 -2.8 -10.3 -36.3 - 41.5 -44.8 10.3 Crude Oil, WTI -0.5 4.3 5.4 17.6 14.4 Bata India -0.4 -4.9 -14.4 -4.4 5.6 -9.5 22.7 United Spirits -2.6 -2.2 -18.4 -16.1 12.2 110.9 44.6 Go l d -0.6 2.4 6.2 1.2 -14.9 P&G Hyg.&H -0.5 -2.1 -10.4 -3.1 2.8 11.1 N/A Zydus Wellness -2.5 -6.9 -18.7 -12.4 6.4 28.5 17.7 Newspr int N/A 0.0 -0.3 -1.9 -5.0 Mah. Holidays -0.6 -4.4 -16.5 -13.5 -22.7 -22.6 15.6 Akzo Nobel India -2.4 -6.7 -28.8 -28.3 -17.3 -3.6 N/A Palm Oi l -0.3 3.3 10.1 5.5 -16.1 Eros Intnal. -0.6 -5.8 -14.7 -32.7 -37.4 -34.7 5.7 HT Media -2.3 -2.2 -9.4 -11.0 - 14.4 -4.4 10.6 Soyabean Oil 1.5 1.5 7.8 2.3 -12.6 Page Ind. -0.7 -4.7 -10.9 2.5 20.6 31.2 N/A DB Corp. -2.3 -1.6 -13.5 -11.0 -1.1 24.7 14.8 Sugar 0.0 0.0 -0.9 -4.2 -22.0 Pidil ite Ind. -0.8 -3.9 -17.4 -23.8 -7.0 21.0 22.4 Bajaj Cor p -2.2 4.8 -3.1 -9.4 10.0 44.4 18.3 Tea 0.0 0.0 0.0 20.5 66.7 Kansai Nerolac -1.0 0.4 -8.1 -9.7 -6.9 18.4 24.9 Kewal Kiran -2.2 -8.2 -10.0 -12.1 2.6 18.0 N/A Wool 0.5 0.4 0.5 -2.7 8.6 TV Today -1.1 -2.3 14.1 -7.7 2.4 18.2 9.4 Bajaj Hind. -2.2 -2.2 -12.6 -35.8 - 41.8 -58.3 N/A St eel N/A N/A N/A N/A N/A Jyothy Lab. -1.2 -5.7 -13.2 -17.9 -3.6 2.1 27.2 Hathway -2.1 -2.5 -1.1 -4.8 8.0 51.1 113.9 Aluminium -0.1 -0.4 3.7 1.0 -3.0 NDTV -1.3 -1.1 -7.4 -5.4 32.2 87.6 N/A Shr ee Renuka Sug -1.9 0.3 -14.9 -31.4 - 35.9 -49.6 5.3 Rubber 1.2 5.1 9.8 16.3 7.4 Gillette Indi a -1.5 -0.8 -6.5 -4.3 -3.3 -7.8 N/A GCPL -1.9 -2.5 -5.7 -3.5 10.9 18.0 N/A USD : INR 4.0 7.5 15.8 23.0 23.6 Mari co -1.6 -2.2 -5.9 -11.1 -4.6 4.2 25.1 Ti laknagar Ind -1.8 -1.9 13.8 -3.5 - 10.4 29.9 10.8 EUR : INR 4.0 7.5 15.8 23.0 23.6 Nestle India -1.7 -4.5 -13.9 -11.8 -2.5 -1.2 N/A GBP : INR 4.0 7.1 16.4 26.8 31.5 Future Retail -1.7 -1.7 -15.3 -50.3 -51.0 -37.0 38.6 CHF : INR 3.6 5.9 16.4 25.7 21.0 AUTOS JPY : INR 4.1 7.4 16.8 29.2 28.5 Bhar at Forge 4.5 6.5 15.1 -1.3 9.7 -17.1 16.1 Motherson Sumi -5.3 -8.3 -7.2 -12.7 -3.7 52.8 13.8 MYR : INR 2.2 8.0 16.3 26.8 -0.2 Tata Motors 2.7 5.2 0.7 -1.9 3.7 27.4 -156.9 Escorts -4.3 -4.3 -3.8 24.3 32.5 32.9 6.0 Amara Raja Batteries 0.8 -4.4 -1.5 -11.9 -10.1 30.8 N/A JK Tyre & Ind. -4.2 -6.6 -17.3 -33.3 - 20.8 -23.1 1.4 Hero Motocorp Ltd 0.72.32.17.014.73.4 N/A Amtek Auto -4.1 1.6 -4.4 -22.5 -9.4 -31.0 N/A Apol lo Tyr es 0.6 -1.4 -7.9 -31.3 -25.2 -31.4 4.6 Eicher Motors -3.6 3.3 -12.5 -16.0 14.9 48.8 20.8 Banco Products 0.4 2.2 16.9 - 6.7 -17.8 -34.2 N/A Ashok Leyland -3.3 -1.0 -15.4 -49.4 -45.5 -41.1 34.9 Bajaj Auto 0.2 -0.2 -13.3 -5.2 -12.2 6.3 14.2 Exide Ind. -3.0 -1.9 -7.3 -13.2 -3.5 -9.8 16.1 MRF 0.0 -0.7 -5.4 -14.8 12.4 29.6 7.3 Ceat -2.9 -11.7 -16.9 -7.3 12.3 -6.2 N/A Greaves Cotton -1.1 -2.5 -4.4 -19.5 -23.0 -13.4 8.5 TVS Motor -1.8 -5.0 -4.1 -19.6 - 24.1 -23.3 8.7 Mahindra & Mahindra -1.6 -0.9 -13.5 -19.1 -10.8 0.6 10.3 Maruti Suzuki -1.8 -3.8 -8.5 -24.4 -8.9 5.8 12.7 Sona Koyo Steeri ng -1.8 0.1 -18.7 -15.8 -12.6 -29.0 N/A

Please refer to Disclosures and Disclaimers at the end of the Research Report. 29 August 2013 / INDIA EQUITY RESEARCH / CONSUMER DAILY IDEAS

CONSUMER Naveen Kulkarni (+9122 6667 9947 / [email protected]) Ennette Fernandes (+9122 6667 9764 / [email protected])

ITC (ITC IN: SELL, TP: Rs. 300, CMP: Rs. 298) board approves the demerger of Wimco subsidiary into the company. Do not estimate any material impact for ITC ITC board has approved the demerger of its non – engineering subsidiary Wimco into the company. The demerger is to be effective from 1st April 2013, subject to requisite approvals. • Share arrangement: For every 77 share held in Wimco, 2 shares of ITC will be allotted. ITC has an ownership interest of 98.21% in Wimco (1.38% is held through Russell Credit Ltd, 100% subsidiary of ITC Ltd.) • Wimco business highlights: Wimco primarily operates in the manufacturing of safety matches. It also is engaged in the Agri (Forestry) business providing key raw materials of Wood for the Safety Match business and Packaging machinery. The subsidiary reported revenues of Rs. 166 cr. in FY13 (c. 0.56% of ITC’s net revenues) and profit of Rs. 1.9 cr. As per the management the margins in the Safety Match business remained under pressure on account of high input cost pressure • On account of the insignificant contribution to ITC’s standalone business we do not estimate any material impact for ITC. Part of the Safety Match business is currently included in ITC’s Other FMCG business segment, hence the consolidation of Wimco provides better scale to the existing Safety Match business.

MEDIA Naveen Kulkarni (+9122 6667 9947 / [email protected]) Vivekanand Subbaraman (+9122 6667 9766 / [email protected])

Hathway (HATH IN, BUY, CMP: Rs 260, TP: Rs 325) to issue 3.5mn shares to FII’s on a preferential basis Hathway Cable and Datacom Limited (Hathway) is issuing 3.5mn shares to FII’s on a preferential basis. Below are details of the same: Issue price of Rs 284/share – Hathway plans to make a preferential allotment of 3.5mn shares to three Foreign Institutional Investors (FIIs) at a price of Rs 284/share. The investors include Massachusetts Institute of Technology SCM (1.52mn shares), Steadview Capital Mauritius (1.2mn shares) and LTR focus fund (0.801mn shares). Entails a fund raising of Rs 1bn – This implies a fund raising of Rs 1bn at a price of Rs 284/share. Equity raising at the right time; given the monetisation delays – While the envisaged business model of Hathway in a Digital Addressable environment remains robust, we note that there are monetisation delays. This, along with weak activation income, since most set top box deployments in phases I & II are complete and rising pay costs, are putting a pressure on cash flows. In this context, we believe that the fund raising of the company is at an appropriate time. This follows the recent Rs 1.5bn fund raising that the company did from Providence Partners and the company’s promoters (at the same price of Rs 284/share).

RETAIL Abhishek Ranganathan (+9122 6667 9952 / [email protected]) Neha Garg (+9122 6667 9992 / [email protected])

Pantaloon Fashion and Retail Limited (PFRL IN: NR, CMP:Rs. 132) to wear a new look Pantaloon Fashion and Retail (Pantaloon) is set for a refreshed look and reshuffled portfolio as its new promoter, Kumar Mangalam Birla, plans to spend Rs 1500mn to expand and renovate the multi‐brand apparel retail chain in FY14E. Other than investment company plans to do following changes in the brand positioning. • Keep Pantaloon’s original positioning to cater to families with value‐for‐money products. • Augment merchandise by bringing in budget brands from Madura’s portfolio. • Expanding the loyalty customer base. • Cut time‐to‐market, similar to what it has done with Madura’s exclusive stores. Company plans to improves its business process by cutting down on its time‐to‐market from the stage of finalising design, placing an order for fabrics, making the garment to bringing it to the store. The company will have to work on a much elaborate distribution which is crucial for managing products from different suppliers for a multi‐brand outlet chain. • Pantaloon to complement Madura’s presence in menswear with womenswear, kidswear & ethnicwear.

– 3 of 11 – 29 August 2013 / INDIA EQUITY RESEARCH / CONSUMER DAILY IDEAS

• Financially Pantaloon business was stretched with the debt too high, so Future group could not invest in look and feel, and that has actually affected the business. We believe Madhura being the market leader in the apparel segment, had successfully in the past had placed all its strategies in the right direction. They are one of the few retailers who are able to manage the best working capital management.

Future Retail’s (FRL IN: NEUTRAL: CMP: Rs68: PT: Rs79) Biyani Interview with ET • Kishore Biyani, long‐time supporter of foreign direct investment in the sector, is no longer banking on foreign retail partners to expand his businesses; instead, the retail baron has initiated talks with private equity firms for foreign investments in three of his ventures. • He stated that” "World over PE firms are running companies and they will run our companies as well," This change of heart is a direct result of a recent Reserve Bank notification, through Press Notes 2, 3 and 4, allowing Indian controlled companies to have foreign capital in subsidiaries. • RBI last month clarified that companies having foreign investments of less than 50%, but owned and controlled by Indians, will be considered Indian firms, and such firms' investments in step‐down subsidiaries will not be considered foreign investment. The policy defined majority ownership as more than 50% stake and 'control' as the ability to appoint majority of directors. • Biyani's Future Group is now busy creating holding companies for neighbourhood grocery chain KB Fair Price, home improvement company Home Town and sports retail company Planet Sports where it will offer 49% stakes to private equity firms. He declined to name any PE firm but said his group expects to sign a deal every two‐three months and that the steep devaluation of the rupee has renewed PE interest in Indian firms. • He stated that “Talks are all in good stages." After these deals are done, Future Group will restrict itself to managing its bread‐ and butter Big Bazaar chain, Central fashion mall chain and Brand Factory outlets. • He stated that company plans to open 7‐8 Central in the next six months in Kochi, Pune, Mumbai, Delhi, Hyderabad, Amritsar and Bangalore. And 10‐12 Brand Factory outlets are coming in the next six to eight months. In the last 45 days, we have rolled out Big Bazaar in Patna, Chandigarh, Agartala, Thane and Kolkata. We currently run three Food Hall outlets and will open three more in the next one month. • Big Bazaar will be a fashion department store. Contribution from food is 35% and we don't want it to grow beyond that. Fashion is currently at 35% of Big Bazaar.

Trader Comments

• Titan Industries will be known as Titan Company Limited (Titan) and for the first time have a corporate logo ‐ Titan Star. The four‐pointed star, with a distinct embedded 'T', will denote the many businesses and strengths of the company as it enters a slew of new categories such as fragrances and helmets • “We will enter the helmet market in early 2014, with a superior quality product to ensure safety and comfort of two‐wheeler riders," as per Titan managing director Bhaskar Bhat. Titan is expected to foray into the fragrance market by September 2013. • Value retailer V‐Mart Retail Ltd said it will focus on the high margin categories — fashion and lifestyle and plans to exit the FMCG category going forward. “We plan to open 60 new stores in next two years. Most of our new stores will have only apparels and lifestyle fashion products as they fetch better revenue margins. Of late we have been opening stores without the food and grocery segment. Agarwal, who started V‐Mart in 2002, said almost 80 per cent of its revenue comes from the fashion business while FMCG accounted for a mere 16 per cent. The company’s turnover stood at Rs 390 crore for fiscal 2013. “This year we are looking at 35 per cent growth over last year,” he added. • Massimo Dutti, the upmarket fashion brand of Spain’s Inditex group, which also owns the Zara fashion brand , is second‐time lucky in its attempt to enter India. A year after rejecting its proposal, the Foreign Investment Promotion Board (FIPB) on Tuesday cleared the brand’s application. • General Motors India today said it will hike prices of its three models by up to Rs 10,000 from the first week of September due to a sharp depreciation in the rupee against the US dollar. The company will be increasing the prices of its compact car Beat, SAIL and multi‐purpose vehicle Enjoy by 1.5 per cent, which translates to a range of Rs 2,000 to Rs 10,000

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Cyclicals Daily Ideas Stocks Featured: Iron ore, Oil & Gas PhillipCapital (India) Pvt. Ltd. INSTITUTIONAL USE ONLY 29 August 2013

Contents Stock/Sector Ticker Reco News/Analysis 1 Iron ore Goa government has announced a policy to regulate dumps inventory lying in the state 2 Oil & Gas RBI opens forex swap window for OMC’s – a marginal positive as it could abate pressure on rupee

% CNG Close 1D 1W 1M 3M 12M BEST 1D 1W 1M 3M 6M 12M PER WORST 1D 1W 1M 3M 12M PER SENSEX 17996 0.2 0.5 -8.2 -10.7 2.9 Capital Goods NIFTY 5285 0.0 -2.3 -9.4 -13.4 -0.1 BHEL 1.9 9.1 -27.2 -43.8 -43.2 -47.2 5.9 Tecpro Systems -4.7 -21.7 -52.9 -76.7 -89.0 1.3 BSE Cap Goods 6944 -0.5 -0.3 -16.4 -27.9 -26.9 Emco 1.5 2.9 -7.9 -40.0 -48.5 -55.3 N/A McNally Bharat Eng -3.9 -1.3 3.9 -36.5 -51.0 2.6 BSE METAL 7763 1.9 8.6 13.3 -11.4 -21.2 Voltas 1.1 0.4 -16.3 -21.4 -15.4 -39.4 10.3 Voltamp Trans. -3.9 -1.2 -11.6 -13.8 -20.4 N/A BSE OIL 7870 -1.1 1.1 -10.2 -12.2 -5.3 KEC Intl. 0.8 0.6 -17.9 -42.1 -51.6 -56.9 4.6 TRF -3.7 -2.5 0.0 -28.8 -51.7 ##### BSE 100 5273 -0.1 -0.2 -9.1 -13.6 0.1 L&T 0.0 -0.5 -16.2 -26.9 -22.6 -21.7 12.4 ABB -3.4 -2.1 -12.9 -32.6 -37.4 39.7 BSE 500 6477 -0.3 -0.3 -8.9 -14.5 -2.5 BGR Energy -0.4 1.8 11.8 -48.2 -52.0 -60.8 4.5 Blue Star -3.3 -2.9 -14.9 -20.1 -23.6 13.6 Europe & US Elecon Eng -0.7 -2.2 -7.8 -33.4 -34.4 -44.0 4.7 Crompton Greaves -2.5 -4.5 -11.5 -18.4 -29.4 12.8 Dow Jones Ind 14825 0.3 -0.5 -4.5 -3.1 13.1 Alstom T&D India Ltd -0.7 -0.3 -6.3 -17.4 -2.5 -19.4 11.0 Jyoti Structures -2.3 0.0 -3.2 -39.2 -56.0 2.0 S&P 500 1635 0.3 -0.5 -3.0 -0.8 15.9 Thermax -1.8 -0.9 -7.4 -5.1 -5.4 12.2 18.8 Siemens India -2.2 -2.8 -17.7 -26.1 -36.2 45.1 NASDAQ 3593 0.4 -0.2 -0.2 3.6 16.6 TRIL -2.0 2.2 -13.7 -30.5 -28.4 -47.2 10.3 Bharat Bijlee -2.1 -4.1 -11.2 -36.0 -48.5 N/A S&P Europe 2678 -0.3 -0.4 -0.5 -3.1 6.2 Cement Brazil Bovespa 49867 -0.4 -1.1 1.3 -8.7 -13.1 Dalmia Bharat 2.5 0.4 -0.7 -2.5 -17.6 N/A N/A India Cements -5.7 -8.9 -14.9 -36.6 -47.4 7.1 Asia Kesoram Ind. 0.7 0.0 -4.5 -26.3 -31.8 -50.6 N/A Ultratech Cem -5.2 -9.0 -21.4 -25.1 -13.8 14.2 Nikkei 225 13338 -1.5 -0.2 -2.4 -6.9 47.1 Prism Cement 0.2 -2.7 -18.5 -43.9 -42.8 -51.6 N/A Mangalam Cem -3.7 -6.9 -9.4 -24.4 -29.1 N/A Hang Seng 21525 -1.6 -1.7 -1.5 -4.6 8.8 ACC 0.1 -6.4 -21.1 -23.4 -25.6 -29.3 14.2 Shree Cement -3.2 -6.2 -19.8 -29.6 0.2 N/A S&P Asia 200 5087 -1.1 0.2 0.8 2.3 16.8 Ambuja Cements 0.0 2.5 -7.1 -13.3 -16.9 -14.9 15.1 JK Lakshmi Cem -3.1 -9.0 -17.4 -46.5 -39.9 N/A Straits 3004 -1.0 -2.8 -7.2 -10.8 -1.2 OCL India 0.0 1.3 -8.7 -17.0 -16.9 2.6 N/A JK Cement -2.3 2.3 -2.4 -21.4 -12.1 5.9 TWSE 7825 0.0 0.1 -3.2 -6.2 5.9 Century Textile -0.7 0.1 -9.2 -30.2 -36.6 -33.7 43.6 Madras Cement -2.0 -7.5 -18.6 -43.7 -22.4 N/A KOSPI 1885 -0.1 1.9 -0.8 -5.8 -2.3 Birla Corp -1.4 -3.0 -6.3 -20.3 -22.5 -0.8 N/A Baltic Dry Index 1146 -2.0 0.1 5.9 39.4 58.3 Orient Paper & Ind. -1.9 0.7 -0.5 -22.2 -91.8 -91.8 0.7 Baltic dirty tanker 642 -0.5 -3.2 -1.2 N/A 3.2 Fertilizers VIX Index 16 -1.7 3.5 23.2 11.2 -3.3 Tata Chem 0.0 1.4 -8.0 -18.3 -24.4 -19.0 8.1 Rallis India -4.3 -0.6 -8.7 4.8 5.5 17.6 Aluminium 1826 -0.1 -0.4 3.7 1.0 -3.0 Dhanuka Agritech -0.4 -1.8 -4.6 3.4 9.1 48.0 N/A Zuari Ind. -2.3 -2.6 15.6 -21.4 -60.5 N/A Brent 118 -0.1 5.9 8.7 15.7 4.2 Coromandel Intl. -0.5 7.7 11.3 -5.5 -5.5 -33.7 10.7 GSFC -2.0 -4.6 -16.6 -21.2 -33.7 4.0 Coal 78 N/A 0.5 1.2 -11.1 -11.6 Chambal Fertilizers -0.6 -0.6 -8.3 -30.3 -42.6 -49.2 4.9 Deepak Fertilizers -1.4 -2.6 -3.8 -11.7 -34.7 3.9 Copper 7265 -0.3 -0.3 6.1 -0.4 -4.3 National Fertilizers -0.8 -2.3 -36.1 -57.1 -69.7 -72.1 N/A Rashtriya Chemicals -1.3 -0.2 -8.2 -32.4 -44.0 5.2 Crude Oil 110 -0.5 4.3 5.4 17.6 14.4 Nagarjuna Agri -1.2 -2.3 -13.4 -8.9 -3.4 -21.8 N/A Iron Ore 140 0.0 0.7 4.5 15.8 36.1 Metals Lead 2209 -0.2 -1.5 8.1 4.3 12.2 SAIL 5.2 11.4 9.2 -20.7 -33.4 -39.3 7.8 Man Ind. -4.8 -13.7 -26.2 -31.0 -34.8 N/A Nickel 14104 -1.7 -4.0 2.4 -4.7 -12.9 JSPL 3.7 8.1 19.7 -20.5 -31.6 -33.7 7.2 PSL/India -4.0 2.7 -15.2 -36.3 -66.0 N/A Tin 21654 -0.8 -1.7 11.4 2.8 4.6 JSW Steel 3.4 7.5 -3.4 -24.5 -27.6 -22.6 7.8 Adhunik Metaliks -3.5 0.0 -7.7 -16.7 -25.7 2.3 Zinc 1920 -1.3 -1.4 5.5 4.7 3.8 Hindalco 2.9 9.4 12.7 -7.1 2.8 -1.5 8.1 Jai Balaji Ind. -2.6 0.7 -22.7 -21.3 -44.0 N/A USD : INR 68.83 4.0 7.5 15.8 23.0 23.6 NMDC 2.9 6.0 12.4 -0.6 -15.4 -39.6 N/A Sandur Manganese -2.3 0.9 -4.8 26.0 4.1 N/A EUR : INR 91.81 4.0 7.1 16.4 26.8 31.5 Tata Steel 2.6 12.7 29.5 -11.0 -18.4 -25.4 10.2 Coal India -2.3 -2.5 -7.0 -22.3 -29.3 9.2 GBP : INR 106.39 3.6 5.9 16.4 25.7 21.0 Indian Metals & Ferro 2.5 4.6 12.4 -9.0 -28.3 -25.5 7.6 Sarda Energy -1.9 3.3 -8.1 -22.3 -29.8 2.1 CHF : INR 74.72 4.1 7.4 16.8 29.2 28.5 Hindustan Zinc 2.4 9.6 15.7 -0.4 2.3 -3.8 N/A Tata Sponge Iron -1.4 -0.4 1.5 -12.1 -14.2 N/A JPY : INR 0.71 2.2 8.0 16.3 26.8 -0.2 Jayaswal NECO 2.3 7.9 -3.5 -22.7 -36.2 -41.4 N/A Ratnamani Metals -1.3 -2.7 -8.5 -17.4 10.6 N/A Dollar index 81.40 0.0 -0.1 -0.3 -2.7 -0.2 Monnet Ispat 2.1 12.5 -3.2 -35.1 -54.6 -63.1 N/A Usha Martin -1.0 -3.3 -9.2 -12.1 -11.7 10.4 USD: CNY 6.12 0.0 0.0 -0.2 -0.1 -3.6 Sesa Goa 1.2 23.4 35.1 6.9 9.7 -1.8 6.3 MOIL -0.9 0.7 4.1 0.3 -12.8 N/A USD:EURO 1.33 0.0 -0.2 0.6 3.0 6.4 Hindustan Copper 1.0 -0.4 2.1 -44.6 -51.8 -77.8 N/A Uttam Galva Steels -0.9 5.1 1.1 -27.6 -15.2 N/A USD:YEN 97.52 -0.1 -1.2 -0.4 -3.6 23.9 Guj. NRE Coke 0.2 -1.7 -3.0 -18.1 -26.8 -16.6 11.2 NALCO -0.8 9.2 5.3 -15.1 -40.8 N/A Bhushan Steel 0.0 0.7 -1.3 -2.1 -1.6 -0.8 8.6 Godawari Power -0.8 4.3 3.7 -14.6 -36.9 2.1 Sterlite Ind. 0.0 13.9 22.2 -2.4 -3.9 -9.4 5.2 Orissa Minerals -0.5 4.6 -6.9 -29.9 -68.6 N/A GMDC -0.1 -1.5 -14.3 -42.4 -55.6 -56.3 4.8 Jindal Saw -0.4 10.6 11.3 -35.5 -59.0 6.2 Maha. Seamless -0.1 -0.4 -5.0 -17.6 -15.3 -42.2 N/A Oil & Gas Cairn India 5.4 8.2 9.3 13.0 9.2 -4.0 5.7 HPCL -7.8 -7.1 -26.9 -42.6 -47.3 5.8 RIL 0.9 3.5 -8.4 -4.3 -0.4 3.7 11.3 BPCL -7.3 -5.4 -21.0 -28.9 -24.2 9.3 IOC -0.9 -2.0 -3.1 -29.2 -29.5 -15.4 8.2 ONGC -6.0 -2.8 -18.1 -27.0 -11.5 8.6 GSPL -2.0 -1.2 -0.7 -12.8 -21.6 -36.3 6.2 Oil India -5.9 -4.8 -21.5 -30.9 -15.4 6.7 Indraprastha Gas -3.5 -0.9 -7.2 -8.5 1.2 6.4 N/A Petronet LNG -5.6 -5.4 -1.0 -17.7 -22.5 9.4 Source: Bloomberg

Please refer to Disclosures and Disclaimers at the end of the Research Report. 29 August 2013 / INDIA EQUITY RESEARCH / CYCLICALS DAILY IDEAS

METALS Dhawal Doshi (+9122 6667 9769 / [email protected]) Dharmesh Shah (+9122 6667 9974 / [email protected])

Iron ore: Goa government has announced a policy to regulate dumps inventory lying in the state

• The Goa government has announced a policy to regulate rejected iron ore dumps inventory lying in the state. They will levy a charge of Rs120 per square metre of private land occupied by the dumps and Rs220 per square metre of dumps lying in the revenue land. The miners will have to pay the said fee for last 20 years to government. They will be allowed to clear the dump inventory in next 5 years and will also have to restore the land to original situation. • The policy will ensure that iron ore dumps lying idle will be linked to mining lease and only eligible holders will be able to apply for conversion of land. • The government expects 10% of iron ore lying in these dumps to be exported. While the said move will help miners clear the dumps, we do not expect any movement on the same until SC allows export of existing iron ore inventory. We will also speak to the miners to understand the economics (revenue generation & additional costs) for clearing said dumps

OIL & GAS Gauri Anand (+9122 6667 9943 / [email protected]) Saurabh Rathi (+9122 6667 9951 / [email protected])

RBI opens forex swap window for OMC’s – a marginal positive as it could abate pressure on rupee • To reduce volatility in the rupee market, the RBI has allowed OMCs to swap rupee for dollars and after a definite time period return the dollars (perhaps through the ECB route) to the RBI • This is a marginal positive for OMC’s as this abates pressure on rupee and thus lowers crude oil costs. We expect this move to be finance cost neutral as relatively lower forex borrowing cost could be negated by higher hedging related expenses • With rising crude oil prices (Syrian crisis) and weakening INR, OMCs are losing money even on petrol retailing (about Rs 1.9/lt); thus a steep price hike of Rs 3~5/lt in Petrol/Diesel is critical to stem losses

– 6 of 11 –

Defensive Daily Ideas Stocks Featured: Bharti, Telecom Sector, Infosys PhillipCapital (India) Pvt. Ltd. INSTITUTIONAL USE ONLY 29 August 2013

Contents Stock/Sector Ticker Reco News/Analysis Bharti Airtel (BHARTI IN, BUY, CMP: Rs 288, TP: Rs 430) appoints Mr. Christian De Faria as head of 1 Bharti Airtel BHARTI IN BUY African operations 2 Telecom ‐ ‐ Aircel to restructure Rs 80bn of its debt 3 Infosys INFO IN UR Ashok Vemuri exits Infosys 4 Trader Comments

% CN G 1D 1W 1M 3 M 12 M B E S T 1D 1W 1M 3 M 6 M 12 M P E R W O R S T 1D 1W 1M 3 M 6 M 12 M P E R SENSEX 0.2 0.5 -8.2 -10.7 2.9 Pharma/ Healthcare NIFTY 0.0 -2.3 -9.4 -13.4 -0.1 Ranbaxy Labs 10.6 25.8 40.3 8.9 10.2 -24.4 23.7 Jubilant Life Science -7.9 -14.6 -20.9 -56.3 -58.6 -59.2 3.0 BSET Healthcare 1. 2 3 . 4 -5.1 -3.1 17 . 1 Strides Arcolab 7.1 12.0 27.7 0.5 -3.1 6.9 21.6 Elder Pharma -7.5 10 . 5 0.0 -1.6 0.0 5.6 7.2 BSETECK 1.8 5.4 3.1 19.8 33.4 Aurobindo Pharma 4.3 3.8 0.8 1.4 10.8 59.5 8.5 Ajanta Pharma -5.6 -6.8 -26.3 -22.7 24.0 78.4 11. 1 BSE IT 2.7 7.9 7.4 30.1 36.3 Twilight Litaka 4.1 -3.8 -32.3 -40.6 -73.9 -83.4 N/A Dishman Pharma -5.5 -11.5 -15.3 -45.5 -41.6 -59.6 2.7 BSE 100 -0.1 -0.2 -9.1 -13.6 0.1 Ankur Drugs 3.1 -1.5 -16.4 -31.7 -46.2 -64.7 N/A Pfizer/India -4.8 -3.8 -1.1 1. 9 -0.7 -16.7 N/A BSE 500 -0.3 -0.3 -8.9 -14.5 -2.5 Biocon 2.5 3.3 5.2 28.4 28.2 42.8 18 . 3 L o t u s E y e C a r e -4.0 10 . 5 4 . 3 -14.2 -16.8 -25.6 N/A Europe & US Natco Pharma 2.4 -2.8 -3.2 25.5 39.1 62.2 20.7 Glenmark Pharma -3.6 -0.2 -11.9 -8.4 2.5 23.3 18 . 4 Dow Jones 0.3 -0.5 -4.5 -3.1 13 . 1 Divi's Lab 2.3 1.1 -0.6 -3.9 -5.7 -17.1 17.1 Hiran Orgochem -3.5 -8.3 -20.3 -29.5 -35.3 -63.3 N/A S&P 500 0.3 -0.5 -3.0 -0.8 15 . 9 Fortis Healthcare 1.80.30.68.20.94.8N/A Wyeth -3.4 -3.6 -17.4 -27.5 -32.6 -37.0 N/A NASDAQ 0.4 -0.2 -0.2 3.6 16.6 Lupin 1. 7 0 . 4 -10.1 1. 0 3 1. 6 3 3 . 1 21.5 Vivimed Labs -3.3 -8.7 17 . 9 -49.2 -47.2 -60.1 N/A S&P Europe -0.3 -0.4 -0.5 -3.1 6.2 Sun Pharm 1. 6 4 . 7 -11.3 -5.2 25.9 49.4 25.3 M arksans Pharma -3.2 -8.7 -30.2 47.7 74.7 337.3 N/A Brazil Bovespa -0.4 -1.1 1. 3 -8.7 -13.1 Dr Reddy's Labs 0.5 6.2 -2.0 2.6 23.4 28.6 N/A Unichem Lab -3.0 -4.0 -13.8 -14.3 -15.2 -13.4 8.7 Asia Cipla/India 0.4 1.6 -3.2 -0.8 10 . 5 8 . 8 20.1 Aarti Drugs -3.0 -9.6 -15.7 -17.4 -8.0 33.1 N/A Nikkei 225 -1.5 -0.2 -2.4 -6.9 47.1 Opto Circuits India 0.4 0.6 -2.0 -50.7 -51.7 -79.9 1.1 Orchid Chem -2.9 -1.6 -6.4 -32.6 -34.9 -64.2 N/A Hang Seng -1.6 -1.7 -1.5 -4.6 8.8 Nectar Lifes 0.3 0.3 -17.2 -38.6 -33.5 -44.8 N/A Apollo Hospitals -2.7 -2.3 -10.4 -10.6 4.0 37.0 33.0 S&P Asia 200 -1.1 0.2 0.8 2.3 16.8 GlaxoSmithKline Pha 0.3 0.9 -7.0 -0.1 7.5 8.2 30.0 Bal Pharma -2.6 6.8 -8.0 -12.3 -22.1 -20.6 N/A Straits -1.0 -2.8 -7.2 -10.8 -1.2 Granules India 0.1 1.1 -8.4 -5.9 22.3 -19.0 N/A Sanofi India Ltd -2.4 -1.0 -1.8 -10.1 1. 5 8 . 4 N/A TWSE 0.0 0.1 -3.2 -6.2 5.9 Jupiter Bioscience 0.0 0.0 0.0 0.0 0.0 -32.6 N/A IND Swift -2.4 -3.7 -18.2 -43.4 -46.2 -70.7 N/A KOSPI -0.1 1. 9 -0.8 -5.8 -2.3 Abbott India -0.2 2.9 -2.9 -4.4 -0.2 -14.1 N/A Ipca Labs -2.0 -1.1 -4.9 4.1 23.7 47.5 16 . 9 Baltic Dry -2.0 0.1 5.9 39.4 58.3 Cadila Healthcare -0.5 -1.1 -10.8 -17.3 -14.2 -26.3 17.5 Shasun Pharma -1.7 -3.4 -5.1 -22.2 -22.8 -61.4 5.1 USD : INR 4.0 7.5 15.8 23.0 23.6 Torrent Pharma -1.0 0.5 -6.3 9.8 19.7 16.2 13.7 Indo co Remedies -1.4 1. 4 -1.6 -1.4 -4.8 -3.7 N/A EUR : INR 4.0 7.1 16.4 26.8 31.5 Vimta Labs -1.0 -1.0 -4.6 12.9 45.4 10.0 N/A Hikal Ltd -1.3 -1.6 -2.1 -0.6 2.2 24.1 N/A GBP : INR 3.6 5.9 16.4 25.7 21.0 Suven Life Science -1.2 4.1 36.9 33.5 47.0 44.1 N/A FDC/India -1.3 -2.4 -9.1 -9.1 -11.7 -5.7 N/A CHF : INR 4.1 7.4 16.8 29.2 28.5 AstraZeneca Pharma -1.3 1. 2 2 4 . 1 0 . 1 -16.0 -56.3 N/A JPY : INR 2.2 8.0 16.3 26.8 -0.2 Telecom Dollar 0.0 -0.1 -0.3 -2.7 -0.2 Bharti Infratel Ltd 2.4 -2.7 -8.2 -21.6 -30.6 N/A 18.3 Tulip Telecom -3.2 -6.1 -10.9 -46.4 -26.4 -92.2 N/A USD: A UD 0.3 -0.5 -2.6 -6.9 -13.4 Tata Comm 0.9 2.5 5.9 -23.9 -25.2 -27.0 -20.2 Idea Cellular -2.3 -5.5 -5.0 12.3 29.2 103.4 27.3 USD: CNY 0.0 0.0 -0.2 -0.1 -3.6 Reliance Comm -0.7 -3.1 -15.6 0.8 81.8 130.4 20.5 Bharti Airtel -2.2 -3.6 -13.8 -8.4 -11.1 18 . 8 26.2 USD:EURO 0.0 -0.2 0.6 3.0 6.4 MTNL -1.1 -6.4 -29.3 -50.2 -52.7 -76.5 N/A OnM obile Global -1.7 -2.8 -10.4 -34.8 -34.2 -33.1 4.9 USD:YEN -0.1 -1.2 -0.4 -3.6 23.9 GTL -1.4 -2.5 -18.9 -31.1 -42.0 -54.5 N/A IT Tata Consultancy 3.7 10.9 7.0 27.2 25.7 41.9 N/A Everonn Education L -4.5 -7.8 -17.8 -52.2 -63.5 -84.0 N/A Wipro 3.6 6.7 15.4 38.7 26.9 45.0 16.7 A llied Digital -3.2 -8.6 11. 9 2 6 . 2 -12.3 -41.4 N/A Mphasis 3.4 9.0 5.3 -8.7 9.2 10.6 11.4 Infinite Computer -2.4 -0.2 30.3 22.9 22.6 2.3 4.1 HCL Tech 3.1 10.6 9.0 31.0 35.0 78.5 14.3 Educomp Solutions L -2.2 -9.8 -37.6 -71.4 -78.4 -86.8 N/A MindTree 2.8 4.6 6.6 27.4 19.5 57.6 10.9 Sasken Co mmunicat -1.1 2.5 -0.2 0.6 -6.4 -13.5 9.7 Polaris Software Lab 2.8 7.8 0.3 4.6 -7.7 -6.0 4.8 3i Infotech -1.0 -4.3 -10.1 -23.6 -38.1 -48.7 N/A NIIT Tech 2.6 4.5 11.7 2.8 1.4 4.0 7.3 Firstsource Solutions -0.8 0.1 -3.2 12.4 19.2 34.2 4.2 Rolta India 2.3 4.1 5.4 0.0 -8.3 -10.2 3.6 Zensar Technologies -0.2 6.3 -3.7 -8.1 1. 8 -10.0 4.6 Infosys Technologies 2.0 5.7 6.8 32.8 7.4 30.6 18.0 Infotech Enterprises 0.0 0.6 -2.2 4.2 3.8 -2.8 N/A Persistent Systems 1.6 5.1 11.2 12.7 6.1 51.5 10.5 KP IT Cummins 0.2 2.3 -1.2 16.3 20.3 1.7 N/A Mastek 1. 5 6 . 7 2 . 2 -3.6 -8.2 -7.1 6.0 Hexaware Tech 0.5 10.2 10.5 55.0 48.6 3.9 10 . 5 Info Edge India 1. 3 -2.3 -5.8 -13.3 -13.9 -11.2 27.1 NIIT Ltd 0.5 9.3 23.1 -9.1 -13.4 -35.7 6.7 eClerx Services Ltd 1.2 5.1 9.8 16.3 31.9 7.4 N/A Tech M ahindra 0.7 10.9 9.8 39.4 30.9 64.0 12 . 2 Oracle Financial Sevi 1. 2 1. 0 -0.9 8.1 1.7 0.9 19 . 2 ADR Wipro 2.2 3.6 8.9 15.5 6.7 27.6 0.3 Infosys Tech 0.1 0.1 -6.7 12 . 1 -13.9 8.7 N/A Dr Reddy's Lab 0.0 0.8 -14.8 -14.7 -1.0 6.5 0.3 Source: Bloomberg

Please refer to Disclosures and Disclaimers at the end of the Research Report. 29 August 2013 / INDIA EQUITY RESEARCH / DEFENSIVE DAILY IDEAS

TELECOM Naveen Kulkarni (+9122 6667 9947 / [email protected]) Vivekanand Subbaraman (+9122 6667 9766 / [email protected])

Bharti Airtel (BHARTI IN, BUY, CMP: Rs 288, TP: Rs 430) appoints Mr. Christian De Faria as head of African operations Bharti Airtel has appointed Mr. Christian De Faria as the head of the African operations. Below are details of the same: • Appoints an MTN old hand – Mr. Faria is being appointed as CEO‐Airtel Africa, and will be responsible for the Anglo‐phone (English‐speaking) markets of Airtel Africa (9 of the 17 countries). Mr. Faria was earlier the Group Chief Commercial Officer at MTN; Bharti’s biggest rival in Africa, and has worked there for six years. • Will report to Mr. Manoj Kohli – Following Mr. Faria’s appointment, who will join Airtel on 16th September, Mr. Manoj Kohli will relocate to India. Mr. Kohli who was earlier running day to day operations in Africa, will now broadly oversee them, apart from overseeing key matters connected to the TowerCo, business development, acquisitions and global partnerships. • Mr. Faria will initially do a comprehensive reorientation of the group’s Africa operations; then assume a CEO role – Initially, Mr. Faria will take charge of the Anglophone operations, reorient the company’s operations, including the company’s African headquarter’s functions, Francophone and Nigeria regions. He will assume the role of CEO‐Airtel Africa from 1st Jan 2014. • Our view; positive for Airtel –We highlight that Bharti’s top management had sent Mr. Kohli with a view of replicating the low cost minute‐factory model in Africa; but the same hasn’t yielded great results. Now, as Airtel gets Mr. Faria, who has prior experience in running African telecom operations, we believe that the company will gain from his experience in dealing with local issues.

Aircel to restructure Rs 80bn of its debt Media reports mention that Aircel is restructuring Rs 80bn of its debt. Below are details of the same: • IDFC and Credit Suisse to give loans – Reports mention that IDFC and Credit Suisse are providing refinance loans to the company to the tune of Rs 45bn and Rs 34bn respectively. With this move, Aircel will be able to restructure Rs 80bn of its total Rs 240bn debt. • Profitability improving, but challenging roadmap – While specific details aren’t known, media reports mention that Aircel’s operating loss is now to the tune of Rs 2.5bn, halving in the past year. The company now has seven circles which make operating profits, up from five earlier. Aircel plans to have 9‐10 circles making operating profits by the end of FY14. The company’s strategy has been centered around cutting costs, shrinking its network footprint while relying on intra‐circle roaming arrangements with other operators.

IT SERVICES Vibhor Singhal (+9122 6667 9949 / [email protected]) Varun Vijayan (+9122 6667 9992 / [email protected])

Ashok Vemuri quits Infosys (INFO IN, CMP: Rs3121, UR) • Ashok Vemuri, Head of Infosys Americas, and Global head of Manufacturing & Engg Services has quit Infosys. • As per the media reports, Mr Vemuri would be joining as the next CEO of iGate, replacing Phaneesh Murthy. • North America forms 62% of Infy’s revenues (CAGR of 12% during FY09‐13), Manufacturing vertical forms 22% of revenues (CAGR of 15%) and Engineering Services forms 3.5% of revenues (CAGR of 24%). • This is the second exit in a week post Mr Sudhir Chaturvedi, Head of BFSI – US moved to become COO of NIIT Tech. • There has been 5 senior management exits from Infosys in the past 12 months. • As per media reports, the company has been trying to centralize all the operations under a team created which would directly report to the Chairman.

– 8 of 11 – 29 August 2013 / INDIA EQUITY RESEARCH / DEFENSIVE DAILY IDEAS

Trader Comments

• From media interviews, Infosys is said to have set a target to reduce its onsite effort to 20% of its overall efforts (manhours spent), from ~25% currently, increasing the chance of offshoring of phases in some of its existing projects. One part of this initiative is to deploy fewer people on the client site and deliver those services from development centres in the same time zone, or nearshore locations, inline with TCS Global network delivery model. • BPO service provider WNS Ltd’s CFO Mr Deepak Sogani has stepped down, citing personal reasons. The company has appointed Mr Sanjay Puria, Corporate Sr VP ‐ finance as its CFO, with immediate effect. • Collaborative customer interfaces and social TV are among the innovations which are on the rise in 2013 hype cycle for social software, research firm Gartner said. The hype cycle gives a view of how a technology or application will evolve over the time. According to the research firm, collaborative customer interfaces, social co‐browsing, mobile virtual worlds and social TV are just a few of the innovations on the rise on the cycle.

Upcoming results & Events calendar Sector Date Company Name Results/ Events IT Services 29th Aug 2013 Mphasis Ltd Q3FY13 results

– 9 of 11 – 29 August 2013 / INDIA EQUITY RESEARCH / FINANCIAL DAILY IDEAS

Management Vineet Bhatnagar (Managing Director) (91 22) 2300 2999 Sajid Khalid (Head – Institutional Equities) (91 22) 6667 9972 Jignesh Shah (Head – Equity Derivatives) (91 22) 6667 9735

Research Automobiles Engineering, Capital Goods Oil&Gas, Agri Inputs Deepak Jain (9122) 6667 9758 Ankur Sharma (9122) 6667 9759 Gauri Anand (9122) 6667 9943 Jishar Thoombath (9122) 6667 9986 Saurabh Rathi (9122) 6667 9951 Banking, NBFCs Manish Agarwalla (9122) 6667 9962 Infrastructure & IT Services Pharma Sachit Motwani, CFA, FRM (9122) 6667 9953 Vibhor Singhal (9122) 6667 9949 Surya Patra (9122) 6667 9768 Varun Vijayan (9122) 6667 9992 Consumer, Media, Telecom Raheel Arathodi (9122) 6667 9768 Retail, Real Estate Naveen Kulkarni, CFA, FRM (9122) 6667 9947 Abhishek Ranganathan, CFA (9122) 6667 9952 Ennette Fernandes (9122) 6667 9764 Metals Neha Garg (9122) 6667 9996 Vivekanand Subbaraman (9122) 6667 9766 Dhawal Doshi (9122) 6667 9769 Dharmesh Shah (9122) 6667 9974 Quant Cement Shikha Khurana (9122) 6667 9948 Vaibhav Agarwal (9122) 6667 9967 Mid‐caps Kapil Bagaria (9122) 6667 9965 Sr. Manager – Equities Support Economics Raheel Arathodi (9122) 6667 9768 Rosie Ferns (9122) 6667 9971 Anjali Verma (9122) 6667 9969

Sales & Distribution Kinshuk Tiwari (9122) 6667 9946 Dilesh Doshi (Sales Trader) (9122) 6667 9747 Mayur Shah (Execution) (9122) 6667 9945 Ashvin Patil (9122) 6667 9991 Rajesh Ashar (Sales Trader) (9122) 6667 9746 Shubhangi Agrawal (9122) 6667 9964 Kishor Binwal (9122) 6667 9989 Sidharth Agrawal (9122) 6667 9934 Dipesh Sohani (9122) 6667 9756

Contact Information (Regional Member Companies)

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– 10 of 11 – 29 August 2013 / INDIA EQUITY RESEARCH / CONSUMER DAILY IDEAS

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