Accumulate Infotech Enterprises: Target Price: Rs.174:: Kotak Sec

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INFOTECH ENTERPRISES LTD (IEL)
RECOMMENDATION: ACCUMULATE
TARGET PRICE: RS.174
FY12E P/E: 10.4X
Infotech's results were disappointing. While revenues were marginally
below estimates, EBIDTA margins fell QoQ and were significantly below
what we had estimated (excluding impact of one-offs). This is in contrast to
the management's claims of an improvement in margins. We had also
assumed that margins would improve because of the 3% - 5% billing rates
hikes given by the Top 3 clients WEF 4QFY11. We understand that, the
billing rate increases have come in at different times during the quarter and
the full impact is expected to be felt in 1QFY12. The margin performance
reflects the continuing pressure of attrition and salaries on mid-tier
company, which also have to invest in demand generating initiatives.
Overall, we tweak our earnings estimates for FY12. FY12E earnings now
stand at Rs.14.9 per share (Rs.16.8). Consequently, our PT stands revised to
Rs.174 v/s Rs.197 earlier. At our target price FY12 estimates will be
discounted by about 12x. We believe this discount to larger peers is justified
due to the limited visibility on FY12 and pressure on margins. We maintain
ACCUMULATE. We believe that, Infotech will have to address the above
mentioned concerns before we turn more positive on the stock. We are also
concerned about the relatively high proportion of project-based revenues (in
N&CE), in addition to currency fluctuations.

Weekly US oil data Both sides of the s/d balance improving :: Macquarie Research

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Weekly US oil data
Both sides of the s/d balance improving
“The rumors of my death have been greatly exaggerated.”
Such was Mark Twain‟s infamous response to a premature obituary about his own
death. Similarly, it seems that this week‟s batch of gasoline data is sending the
same signal; early signs of the demise of the American driver appear to be greatly
exaggerated as well. We‟ve now thrice mentioned a reporting glitch in the rate of
demand growth, pegging it closer to positive +1.1%y/y than to the -1.8%y/y as
measured by the conventional method. On the supply side, this week‟s -1.6mbs
drop in inventories brings total levels -2% below average (and the entire surplus
resides west of the Mississippi), and comes despite three straight weeks of
increased production.

PPP and forex undervaluation- Slower growth in CY11:: Macquarie Research,

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Asian Macqro forecasts
PPP and forex undervaluation
Slower growth in CY11
This report contains detailed forecasts for the economies that we cover across
Asia, and the latter section sets out the prospects for individual economies. In
most cases growth should slow significantly in CY11–12 after the post-crisis
rebound of 2009–10, but it will need continued policy tightening to limit inflation
risks, with commodity prices adding to uncertainty.

Tata Consultancy Services 4Q: Another strong quarter:: Macquarie Research,

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Tata Consultancy Services
4Q: Another strong quarter
Event
 TCS delivered another quarter of solid growth with a positive surprise on
margins. After an in-line 4Q, we maintain our estimates and target price.
Impact
 Strong demand commentary for FY12. On its earnings conference call, TCS
management made some comments about the demand scenario that give us
confidence in our bullish outlook for FY12. TCS noted on the call that it is currently
pursuing 20+ large material deals; its deal pipeline (both the number and quality
of deals) is currently better than what it was seeing last year and has been
improving on a QoQ basis; it is still far from growth saturation in BFSI vertical.
Even so, the broad nature of the recovery has helped the company to reduce its
dependence on single vertical.

52-WEEK BLOCKBUSTER: LUMAX INDUSTRIES :: Business Line

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With over 60 per cent market share in the supply of head, tail, sundry and auxiliary lamps, Lumax Industries has been a beneficiary of the upswing in automobile sales after the slowdown of 2008-09. More so, because it caters not only to the passenger car segment but also to two-wheelers and the fast growing small LCV segment. During 2010-11, the company was roped in for new launches such as the Alto K10 (as the 100 per cent supplier) and the Toyota Etios.

Another promising development was the addition of both Audi and Jaguar Land Rover to its clientele for providing LED High Mount Stop Lamps. Besides, it is bringing in LEDs in front lighting for two-wheelers, and for interior and exterior lighting in four-wheelers shortly. The company also introduced a new technology for achieving different colours without joints in the tail-lamp lens during the year, and began supply of such lamps to the Honda Jazz. It will soon be delivering these to Maruti Suzuki as well.

With plastic powder and bulbs being the primary inputs, Lumax was also relatively shielded from the impact of rising price of commodities like rubber, lead, aluminium and steel during this time. However, at 22 times its trailing earnings, valuations look a bit stretched, considering that large-cap auto makers still trade at lower PE multiples. Further upside may hence be limited.

Stock Strategy: Infosys could move in a range :: Business Line

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Infosys: Post its Q4 results, Infosys witnessed a sharp fall. In spite of that, the outlook remains sideways for Infosys Technologies. The stock finds an immediate resistance at Rs 3,023 and a crucial one at Rs 3,242. The stock finds major support at Rs 2,758 and an immediate one at Rs 2,853. It may move in a narrow range of Rs 2,850 and Rs 3,050.

F&O pointers: The Infosys futures witnessed short rollovers as May futures price is quoting lower than the April futures price.

The rollover was also weak at 20 per cent. Option trading indicates a neutral view on Infosys as 3,000 strike saw unwinding of long open interest positions.

Muthoot Finance, IPO, Final over subscription 24.55x; retail 8.5x; HNI 61x; QIB 25x

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MUTHOOT FINANCE LIMITED

Total Issue Size	43775000
Total Bids Received	1074626600
Total Bids Received at Cut-off Price	130245080
No. of times issue is subscribed	24.55

Sr.No.	Category	No.of shares offered/reserved	No. of shares bid for	No. of times of total meant for the category
1	Qualified Institutional Buyers (QIBs)	18025000	450746560	25.01
1(a)	Foreign Institutional Investors (FIIs)		292012760
1(b)	Domestic Financial Institutions(Banks/ Financial Institutions(FIs)/ Insurance Companies)		100661120
1(c)	Mutual Funds		56870920
1(d)	Others		1201760
2	Non Institutional Investors	7725000	470739520	60.94
2(a)	Corporates		286715560
2(b)	Individuals (Other than RIIs)		183098760
2(c)	Others		925200
3	Retail Individual Investors (RIIs)	18025000	153140520	8.50
3(a)	Cut Off		130234640
3(b)	Price Bids		22905880

Updated as on 21 April 2011 at 1915 hrs

HCL Technologies- 3Q cements our positive view:: Macquarie Research,

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HCL Technologies
3Q cements our positive view
Event
 Better than expected results and sequential margin expansion lifted HCLT
stock price by 10% (vs. 2% for BSE Sensex) on Thursday. We retain our
street high estimates on the company and reiterate OP. Our unchanged target
price of Rs615 implies further 17% upside after today’s rally.

Yes Bank: Strong 4Q addresses margin concerns :: JP Morgan

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Yes Bank
Overweight
YESB.BO, YES IN
Strong 4Q addresses margin concerns


• Better-than-expected 4Q FY11: Yes bank reported 4Q FY11 PAT of
Rs2.03B, up 45% y/y, 6% above JPMe. The profit beat was mainly on
margins (~5bp surprise) and loan growth (4% ahead of JPMe). The fact
that margins held up sequentially was a positive surprise. Also, credit
costs remained low (~50bp) in spite of a significant PCR increase.

Brokerages divided on Future Ventures IPO:: Moneycontrol

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The Rs 750 crore IPO of Future Ventures, a subsidiary of the Future Group led by Kishore Biyani, will open for subscription on Monday, April 25. It is the second big IPO post the Muthoot Finance in FY12.

The price band is set at Rs 10-11 a share for the issue, which closes on April 27 for qualified institutional bidders and on April 28 for retail and non-institutional bidders.

In an interview with CNBC-Awaaz, Ashish Maheshwari of Globe Capital as well as Gaurav Jain, Director of Hem Securities advised subscribing the issue with long term perspective.

Company Visit Note:: Exide Industries: Charged Up :: JP Morgan

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• Exide benefits from structural growth in the automobile segment:
With rising automobile sales in India (sales of passenger cars at 2.2m
have doubled over the past four years; we expect growth to be sustained
at c.13-15% over FY11-13), the high-margin replacement market is
likely to drive sales for the industry. Exide is India’s largest
manufacturer of lead acid batteries, with a market share of over 70% in
the automotive segment, and hence would be a key beneficiary of this
growth. Further, demand for industrial batteries is likely to be driven by
the power back-up segment, given sustained power deficiencies and the
increasing usage of information-technology-related services in India.

JP Morgan: HCL-Technologies : Impressive revenue growth accompanied by good margin expansion; consensus upgrades likely

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HCL-Technologies Overweight
HCLT.BO, HCLT IN
Impressive revenue growth accompanied by good
margin expansion; consensus upgrades likely;
reiterate OW


• HCLT reported a strong 3QFY11 with 5.8% US$ revenue growth and 130 bps
increase in EBIT margins. We are impressed by the margin expansion without
compromising top-line growth, and we believe the company is on track to
achieve margin target of 15.3% in 4QFY11. EPS of Rs.6.4 was slightly above
our expectation of Rs. 6.2, but it was primarily driven by below the line items.
We expect mild consensus upgrades (FY12/FY13) on the back of this result.
• HCL Technologies reported 3QFY11 revenues of US$915 mn, slightly above
our expectation of $912 mn. Revenue growth of 5.8% Q/Q was impressive
given that CQGR for the last four quarters has been 7.5%, which exhibits
the revenue traction HCLT has witnessed.

Equities take a hit even as oil prices continue to rise:: Macquarie Research,

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Oil & Gas Atlas
Equities take a hit even as oil prices
continue to rise
Energy Market Indices WoW Changes
⇒ S&P/TSX Energy Index: +0.1%
⇒ S&P 500 E&P Index: -4.5%
⇒ Oil Service Sector Index: -3.1%
⇒ UK FTSE Oil & Gas Producers Index: -3.5%
⇒ Asia Pacific Oil & Gas Producers Index: +1.6%

Strides Arcolab- FDA approval for injectable facility :: Macquarie Research,

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Strides Arcolab
FDA approval for injectable facility
Event
 STR received a USFDA approval of its new Sterile injectable (Non-Onco)
facility in Bangalore. Earlier STR had announced approval of two products
from this facility and this current approval is for the entire facility (ex-Onco
Block). This approval expands the overall injectable capacity for the US
market by additional 140m units. (Current Sterile capacity was 64m Units.)

Tata Steel On the road -Tata Steel Europe :: Macquarie Research,

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Tata Steel
On the road -Tata Steel Europe Day 1
Event
 Day 1 at Tata Steel Europe: We visited Ijmuiden steel works of Tata Steel in
Netherlands. The highlight was the presentation by Dr Karl-Ulrich Kohler,
CEO of Tata Steel Europe. The business has laid out a good plan to improve
its operating margins to bring it on par with its European peers but may need
to incur capex. We maintain our Outperform recommendation but highlight the
risk due to slower de-leveraging.

HDFC Bank 4Q11 results: Hard to find a flaw:: Macquarie Research,

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HDFC Bank
4Q11 results: Hard to find a flaw
Event
 Nos marginally surprise due to higher than expected NIMs: HDFC Bank
reported 33% YoY growth in net profits of Rs11.15bn marginally ahead of our
estimate of Rs10.96bn mainly on account of higher than expected NIMs. Our
expectation was a 10bps QoQ decline in NIMs to 4.1% vs. the 4.2% NIMs
reported this quarter.

Maruti Suzuki India - Worst is not over yet:: Macquarie Research,

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Maruti Suzuki India
Worst is not over yet
Event
􀂃 We transfer coverage of Maruti Suzuki to Amit Mishra. We believe slowing
volume growth, rising raw material costs and high competitive pressures will
limit earnings growth for MSIL. Our earnings estimate for FY12 is 4-8% lower
than consensus. We maintain our contrarian Underperform rating on MSIL
and our target price of Rs1,080 suggests 16% downside from current levels.

Hero Honda -Tough solo ride ahead :: Macquarie Research,

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Hero Honda
Tough solo ride ahead
Event
􀂃 We transfer coverage of Hero Honda to Amit Mishra with an Underperform
rating and TP of Rs1,550 (previously Rs1,630). While we are positive on the
volume growth for two-wheelers, we see significant downside risks to Hero
Honda’s margins. Post Honda’s exit from the JV, we expect an increase in the
competition targeted at Hero Honda’s core segments. Higher branding and
product development costs will likely put further pressure on their margins.

Mahindra & Mahindra -Best play on rural consumption :: Macquarie Research,

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Mahindra & Mahindra
Best play on rural consumption
Event
􀂃 We transfer coverage of Mahindra & Mahindra (M&M) to Amit Mishra with an
Outperform rating and a target price of Rs860 (previously Rs820), providing
19% upside potential from current levels. We rate M&M our top pick in the
Indian auto space. With its leadership position in utility vehicles and tractor
segments, robust 15% CAGR in earnings that we expect over the next two
years and 11x core auto FY12E PER, we think M&M is one of the most
attractive stocks in the Indian auto sector.

Tata Motors- The JLR resurgence:: Macquarie Research,

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Tata Motors
The JLR resurgence
Event
􀂃 We transfer coverage of TTMT to Amit Mishra with an Outperform rating. We
are confident of strong growth at Jaguar Land Rover (80% of PAT) to continue
in FY12E on the back of successful recent launches and strong demand from
the key markets. We believe a potential slowdown in domestic sales will have
only a small impact as its contribution is <20%. TTMT stock has corrected
15% in the last three months and trades at an attractive 7.0x FY12E PER.

Ashok Leyland- Slow growth ahead:: Macquarie Research,

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Ashok Leyland
Slow growth ahead
Event
􀂃 We transfer coverage of Ashok Leyland to Amit Mishra. We downgrade AL to
Neutral from Outperform as we see a slower volume growth for the company
over the next two years. We are forecasting a sales volume growth of 10% for
AL in FY12E, significantly lower than the management guidance of 15%
growth. We recommend a switch from Ashok Leyland to Tata Motors.

Bajaj Auto -Multiple wheels of growth :: Macquarie Research,

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Bajaj Auto
Multiple wheels of growth
Event
􀂃 We transfer coverage of Bajaj Auto to Amit Mishra with an Outperform rating
(previously Underperform). Our TP of Rs1,650 (vs. Rs1,190) implies 15%
upside. We are positive on domestic two-wheeler sales growth and BJAUT is
our top pick in the segment. BJAUT has multiple growth engines: 2-wheelers,
3-wheelers and a large export business. Bajaj’s dominant market share in 3-
wheelers and focus on premium 2-wheeler segments lend resilience to its
best-in-class margins.

India auto sector -Ease off the throttle:: Macquarie Research,

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India auto sector
Ease off the throttle
Recent stock corrections offer stock-picking opportunities
We are cautious on Indian auto sector growth after our recent interactions with
company managements (both listed and unlisted) and our channel checks with
auto dealers and auto financiers. As we see it, auto sales growth is likely to slow
from the high rates seen over the last two years; however, the growth should still
remain healthy. We prefer stocks that have lower risk to margins and thus offer
better visibility on earnings growth. We prefer M&M, Tata Motors and Bajaj Auto
and reaffirm our contrarian Underperform rating on Maruti Suzuki and Hero Honda.

Buy IRB Infrastructure; First ultra mega project into its kitty .Target :Rs 237:: ICICI Sec

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IRB: First ultra mega project into its kitty …
IRB Infrastructure (IRB) has emerged as preferred bidder for the
Ahmedabad-Vadodara project worth | 4,920 crore (including IDC
charges & part of premium payable to NHAI during construction
phase). The project is to be funded with debt to equity of 74:26. IRB
has offered a premium of | 309.6 crore with 5% increase per annum to
NHAI to emerge as L-1 bidder, which is at ~60% premium to its closest
bidder indicating aggressive bidding. Hence, we believe the
management guidance for equity IRR for this project at 15-17% seems
to be on the optimistic side. Nonetheless, the project is expected to
improve its construction division visibility. We have maintained our
BUY recommendation with our SOTP based price target of | 237.

Infosys Technology:: Upgrading to Strong Buy on tempered expectation…Target : Rs3,350:: ICICI Securities

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Infosys Technology- Upgrading to Strong Buy on tempered expectation…
Infosys’ Q4FY11 numbers missed estimates but what surprised was the
“too” conservative FY12 EPS guidance. Though 18-20% US$ revenue
growth was ahead of our 16.5-18.5% initial guidance estimate, rupee
EPS guidance of | 126.1-128.2, missed our conservative | 135-137
estimate. Though it is customary for Infosys to guide low and
outperform, a 10% decline in the stock was led in part by heightened
street expectations (FY12E EPS of | 150) and weak guidance. However,
we believe FY12E guidance assumptions need detailed scrutiny (refer
first highlight). Consequently, though we have lowered our FY12E and
introduced FY13E estimates, we have changed our rating to STRONG
BUY (HOLD earlier) as a further decline in the stock provides attractive
entry points.

Buy IDBI Bank; Profitability leads to improving returns…Target :Rs 165:: ICICI Sec

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IDBI  Bank, Profitability leads to improving returns…
Consolidation continued with advances growing at 14% YoY (17% QoQ)
to | 157098 crore and deposits rising only 8% YoY (20% QoQ) to |
180486 crore. Profitability improved in FY11 with NII jumping 92% YoY,
margins maintained over 2% and fee income rising 23% YoY leading to
PAT surging 60% YoY to | 1650 crore. IDBI reported Q4FY11 profit of |
516 crore (up 62% YoY) which was ahead of Street and our estimate (|
447 crore). Even though NII declined sequentially in Q4FY11, 51% QoQ
spurt in fee based income and lower provisioning pushed up profits.
Sequential asset quality improvement and a 583 bps spike in CASA
remained the highlight of the quarter. As per the management guidance
of below industry growth, we expect calibrated business growth of 17%
YoY to lead to PAT growth of 21% YoY in FY12E.

Buy HDFC Bank; Going strong yet again….Target : Rs 2,560 :: ICICI Sec

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HDFC Bank- Going strong yet again…
HDFC Bank delivered another quarter of 30+% YoY growth in PAT in
Q4FY11. NII of | 2839 crore and PAT of | 1114 crore beat our and Street
estimates by a thin margin. Advances and deposits grew 27% and 25%
YoY, to | 159983 crore and | 208586 crore, respectively. For FY12E, we
expect the bank to grow its balance sheet by 19% and expect a YoY
jump of 31% in PAT to | 5152 crore. The board of directors have also
approved a stock split of 1:5 (resulting in nominal value of | 2 each),
subject to required approvals.

UBS:: Triveni Engineering & Industries --Demerger to drive value unlocking

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UBS Investment Research
Triveni Engineering & Industries
Demerger to drive value unlocking
􀂄 Event: High court approved demerger of turbine division
The high court approved demerger of Triveni Turbines from Triveni Engineering.
We had discussed this demerger in our initiation note. Once the demerger is
completed Triveni Turbines will be separately listed on the stock exchanges.

UBS: Power Finance - Earnings miss on NIM decline

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UBS Investment Research
Power Finance
Earnings miss on NIM decline
􀂄 Event: PFC Q4 numbers 10% below expectations
PFC reported PAT of Rs 6.06 bn 10% lower than our expectations. Net profit was
flat Y/Y (declined by 8% Q/Q); adjusting for forex gains clean profit growth was
3% Y/Y and a decline of 14% Q/Q. Total revenue grew 11% Y/Y (declined by
13% QoQ). We estimate NIMs to have declined by 70 bps QoQ due to higher cost
of funds and decline in lending yields. Cost to income ratio continued to remain
low at 4% due to reimbursement of costs related to APRDP. Loan book during Q4
grew by 25% Y/Y and 8% QoQ in line with expectation to Rs 1000 bn

Buy HCL Technologies; Keep the faith… Target : Rs 570 :: ICICI Securities,

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HCL Tech- Keep the faith…
HCL Tech continues to beat the Street and our estimates with a good
operational performance. The company reported strong volume growth
of 4.8% (our estimate: 3.5%) in a seasonally weak quarter. EBITDA
margins improved 98 bps vs. our 76 bps estimate. EBIT margin improved
~128 bps led by SG&A optimisation (45 bps) and currency benefit (36
bps) while utilisation improvements and high realisations gave 48 bps.
Noticeably, total receivables (including unbilled) increased 1.2% QoQ,
lower compared to US dollar revenue growth of 5.8%. HCL added 11
transformational deals on top of 17 added last quarter. Further, the
acquisition of Citi’s capital market platform for $26 million ($13 million
paid and the rest next year) should provide assured revenues of $135
million for the next 10 years. Finally, operating margins are likely to
improve another 100 bps QoQ led by SG&A benefits. We continue to
believe that consistent outperformance should yield multiple re-rating and
maintain our BUY rating on the stock with a | 570 price target.

BUY Tata Consultancy -Margin confidence, key highlight 􀂄 BofA Merrill Lynch

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Tata Consultancy
Margin confidence, key highlight

􀂄 4Q in line, Encouraging commentary on outlook & margins
TCS 4Q profit was in line with consensus but 6% ahead of our estimate led by a
100bps EBIT margin beat. 4Q volumes were a tad light growing at sub 3%
sequentially. However, management attributed this to seasonal delays in project
hand-outs at the start of a calendar year. The management sounded convincing
on a strong demand environment and ability to hold margins within a narrow band.
Hiring targets lend confidence. We raise FY12-13 EPSe by 2-3% on increased
margin estimate and raise our price target to Rs1,450. Maintain Buy

Grey market premium IPOs, Muthoot ,Paramount Print, Servalakshmi ,Future Ventures: April 23, 2011

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Company Name	Offer Price (Rs)	Premium (Rs)
Muthoot Finance	160-175	24 to 26
Paramount Print	32 - 35	1.5 to 2
Future Ventures	10-11	2 to 2.5
Servalakshmi	27-29	4

India to grow at 7.8% this fiscal: Goldman Sachs (in ET)

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Global investment banking giant Goldman Sachs has slashed India's growth forecast for this fiscal to 7.8% on account of rise in interest rates and a rising inflation, forecast at 7.5% during the period.

The estimate is way below the government's forecast of 9% growth in 2011-12.

"We reduce our GDP growth forecasts for FY12 to 7.8% from 8.7% due to the impact of higher rates...," Goldman Sachs said in its latest issue of 'Asia Economics Analysts'.

The bank had earlier forecast that the Indian economy would expand by 8.7%, while the inflation would hover around 6.7% in 2011-12.

Goldman Sachs says the environment remains challenging, with inflationary pressures persisting into the economy. According to its latest report, recent spike in core prices suggest that the food and fuel shocks have been passed through and inflation may remain elevated in 2011.

"We are raising our inflation forecast for FY12 to 7.5% from 6.7% due to the recent large upside surprise in core prices," Goldman Sachs said.

Headline inflation has remained above 8% since February 2010. Overall inflation in March stood at 8.98%, much above the government's projection of 8%.

Food inflation remained in double digits for greater part of last fiscal, though it has shown signs of moderation since March.

Prime Minister Manmohan Singh had yesterday admitted that inflation, specially of food items, is a matter of concern for the government.

Goldman Sachs expects RBI would continue with it tight monetary policy this year to staunch the inflationary pressures.

"With inflation remaining the dominant macro concern, we think that the RBI will keep liquidity tight in order to pass through the policy rate hikes to bank deposit and lending rates...

We now expect RBI to hike policy rates by another 125 bp in 2011, significantly higher than the market expectations," Goldman Sachs said.