10 August 2011

Reliance Industries – Finally, time to buy ::RBS

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RIL has faced a gradual derating over the last two years due to execution lapses and
recalibration of its growth prospects. The stock has now reached levels that we believe offer a fair
risk-reward, attributing zero value to new businesses. We upgrade RIL from Hold to Buy and
maintain our earnings forecasts and Rs925 TP.


Refining, petchem, best-in-class assets
Unless there is a double dip in global growth, we do not foresee significant downside risk to our
refining and petrochemical margin estimates. We believe RIL’s assets in these segments are best
in class. Both refineries are low-cost and highly complex, while petrochemical products offer
relatively stable margins due to full integration and exposure to different margin cycles (for
cracker, aromatics, polyester), which don’t all move in the same direction.
E&P downside risk factored in
We believe that our valuation for RIL’s E&P business is now very conservative, and 46% below
the valuation implied by the BP deal – See our note, Delays in E&P, dated 26 July 2011. The key

assumption here is that the deal with BP is consummated (government has already approved),
thereby reducing exposure to E&P and deleveraging the balance sheet.
Zero expectations from new businesses
The market has viewed with concern RIL’s investments in non-core businesses like retailing,
SEZs, telecom and possibly financial services. But since these businesses are yet to contribute to
the bottom line, we believe the current stock price implies zero value for investments already
made (US$5.3bn), which is clearly an extreme view.
Value at a price
Since the rally in Indian stock markets post the election results in May 2009, RIL has
underperformed the market by 59%. There have been lapses on execution (problems in KG-D6,
relative lack of success in new E&P discoveries, slower speed in new project execution) and
recalibration of growth prospects (fewer opportunities for organic growth in core business,
choices on inorganic growth not yet working out and zero progress on entry into power segment).
We believe the current price now offers a fair risk-reward and thus we upgrade the stock from
Hold to Buy, maintaining our target price at Rs925.


India Strategy – India's 'gold' lining :RBS

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India's private consumption expenditure should stay robust as the wealth effect from gold
holdings could more than offset declines in equity holdings.


Mutual fund and brokerage statements hardly tell the tale of India’s household wealth
We estimate India’s households’ equities exposure, excluding promoter stakes, at US$257bn
as at 5 August 2011. This is down US$33bn or 12% from end-2010. We derive this estimate
by summing direct retail ownership of Indian equities (se India ownership monitor, 5 August
2011) and domestic institutional ownership of Indian equities (assuming that the bulk of
domestic institutional equity holdings reflect indirect household ownership).
The World Gold Council estimates India’s gold ownership at 18,000 tonnes
Excluding the estimated 459 tonnes held by the RBI (US$22.5bn of gold reserves as at end-
2010), this implies non-government gold holdings of around 17,500 tonnes, or US$1,029bn
at 5 August 2011 prices. The value of this stock these holdings has increased US$150bn ytd,
or 17%.


Aggregate private consumption should keep trucking along
Higher interest rates have certainly affected passenger car sales. However, we think aggregate
private consumption should stay robust as the “gold” wealth affect could offset some of the
interest rate pressures and equity market sentiment. Historically, private final consumption
expenditure has been quite resilient in India, with yoy growth troughing at 6.6% in the March 2010
quarter.
India’s two listed pure-play gold loan financing companies
Muthoot Finance Ltd (MUTH IN, mkt cap: Rs70bn; NR, current price Rs189) is India’s largest gold
financing company in terms of loan portfolio, providing personal and business loans secured by
gold jewellery. Manappuram Finance (MGFL IN, mkt cap: Rs44bn, NR, current price Rs52) is its
smaller peer. These two are the only pure-play listed companies in India in this business,
although the big banks do also work in it. Lower net interest margins due to higher competition
and regulation are the key investor concerns for the two.


BSE, Bulk deals, 10/8/2011

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Deal DateScrip CodeCompanyClient NameDeal Type *QuantityPrice **
10/8/2011506027Bhoruka AlumVANRAJSINGH KAHORB14258426.35
10/8/2011506027Bhoruka AlumVANRAJSINGH KAHORS19908024.74
10/8/2011533469Birla Pacific MedspaV P PATELB149284718.92
10/8/2011533469Birla Pacific MedspaEPOCH SYNTHETICS PRIVATE LIMITEDB60000019.15
10/8/2011533469Birla Pacific MedspaSPS SHARE BROKERS PRIVATE LIMITEDB80000019.15
10/8/2011533469Birla Pacific MedspaSADHNA STOCKS & SECURITIEP LTDB157281518.98
10/8/2011533469Birla Pacific MedspaMAHAVIRSINGH BAHADURSINGH RANAB83711918.75
10/8/2011531337Channel GuideRESHMA NIMIT SHAHB1067369.43
10/8/2011531337Channel GuideRESHMA NIMIT SHAHS1378339.11
10/8/2011509011CHISELCOASTAL FERTILISERS LIMITEDB19000169.46
10/8/2011511672Clarus FinanceNORFIOX VINCOM PVT LTDB100000239.91
10/8/2011526443Datasoft ApplMAHAVIRSINGH N CHAUHANS426227.27
10/8/2011524590Dinesh AllorgaDINESH R SEETHAS5100015.95
10/8/2011530337Exelon InfraSHAISHIL TUSHARKUMAR JHAVERIB11387561.55
10/8/2011530337Exelon InfraSHAISHIL TUSHARKUMAR JHAVERIS17285360.43
10/8/2011530337Exelon InfraSHAISHIL TUSHARKUMAR JHAVERIS7382260.54
10/8/2011533333Fineotex ChemV P PATELB92286285.00
10/8/2011533333Fineotex ChemAARKEN ADVISORS PVT LTDB105000285.99
10/8/2011533333Fineotex ChemMAN MOHAN DAMANIS72500285.00
10/8/2011533333Fineotex ChemV P PATELS104382286.00
10/8/2011531055GFLFINSWARN PROJECTS LIMITEDB1500098.52
10/8/2011531055GFLFINHIGH VALUE TRADERS PVT LTDB1500098.53
10/8/2011531055GFLFINAJANTA FIBERS PRIVATE LIMITEDB1500098.95
10/8/2011531055GFLFINKANCHAN PREMJI SHAHS4505098.67
10/8/2011533506INVENTURER M SHARES TRADING PRIVATE LIMITEDB274205227.42
10/8/2011533506INVENTUREGKN SECURITIESB116165227.04
10/8/2011533506INVENTUREALFA FISCAL SERVICES PVT LTDB236480232.02
10/8/2011533506INVENTURENITIN BABAJI PALANDEB186940229.09
10/8/2011533506INVENTURECHANDARANA INTERMEDIARIES BROKERS PRIVATE LIMITEDB402255227.51
10/8/2011533506INVENTUREMARWADI SHARES AND FINANCE LIMITEDB137707228.76
10/8/2011533506INVENTUREGITABEN BHARATBHAI PAREKHB194798227.18
10/8/2011533506INVENTURECROSSEAS CAPITAL SERVICES PRIVATE LIMITEDB356824227.00
10/8/2011533506INVENTUREA K G SECURITIES AND CONSULTANCY LTDB254354228.81
10/8/2011533506INVENTUREALFA FISCAL SERVICES PVT LTDS236480229.55
10/8/2011533506INVENTUREA K G SECURITIES AND CONSULTANCY LTDS254354228.82
10/8/2011533506INVENTURECROSSEAS CAPITAL SERVICES PRIVATE LIMITEDS356824227.79
10/8/2011533506INVENTUREGITABEN BHARATBHAI PAREKHS194798224.60
10/8/2011533506INVENTUREGKN SECURITIESS116165228.41
10/8/2011533506INVENTUREMARWADI SHARES AND FINANCE LIMITEDS137707229.07
10/8/2011533506INVENTURECHANDARANA INTERMEDIARIES BROKERS PRIVATE LIMITEDS402255228.75
10/8/2011533506INVENTURER M SHARES TRADING PRIVATE LIMITEDS274205227.84
10/8/2011530165Kanchan IntlDHARMENDRA HARILAL BHOJAKB1746770.64
10/8/2011530165Kanchan IntlPANKAJ J DAVEB2776268.70
10/8/2011530165Kanchan IntlRUPESH D BHATTB1940768.05
10/8/2011506128Krishna DeepSHIVALIK DISTRIBUTORS PVT LTDB2500088.25
10/8/2011519279Madhur IndsGAURANG GHANDHAMSINGH CHUDASAMAB2444765.90
10/8/2011519279Madhur IndsGAURANG GHANDHAMSINGH CHUDASAMAS2444765.90
10/8/2011533399Paramount PrintGAUTAM N VANDARB15000027.36
10/8/2011500329Pentamedia GrapVESA HOLDINGSS1323441.12
10/8/2011531769PFL InfotechTRIPURARI PROPERTIES PRIVATE LIMITEDB45283411.81
10/8/2011513403PM TelelinnksSHAISHIL TUSHARKUMAR JHAVERIB6400042.00
10/8/2011513403PM TelelinnksBHAVINI VIJAYKUMAR SHAHS16700042.22
10/8/2011503162Reliance Chem-$RAMKRIPA SECURITIES PVT LTDB3000084.00
10/8/2011503162Reliance Chem-$RAJESH RAJKUMAR KHANNAB3319583.48
10/8/2011503162Reliance Chem-$RAJESH RAJKUMAR KHANNAS3466584.37
10/8/2011503162Reliance Chem-$RAMKRIPA SECURITIES PVTLTDS3000083.05
10/8/2011533470Rushil DecorAMBER ENCLAVE PRIVATE LIMITEDB93402105.26
10/8/2011533470Rushil DecorR M SHARES TRADING PRIVATE LIMITEDB99111108.76
10/8/2011533470Rushil DecorR M SHARES TRADING PRIVATE LIMITEDS99111108.60
10/8/2011531800Sheetal BioASHWINKUMAR LAGJIVAN BAGADIAS7100000.91
10/8/2011512299Sterling BioALBULA INVESTMENT FUND LTDB200000058.72
10/8/2011532311Tutis Tech-$SHRI BALAJI INVESTMENTSB8800019.13
10/8/2011532311Tutis Tech-$PRIME DYES & CHEMICALS CO.PVT. LTDS8694419.13
10/8/2011533427VMS IndsWINDSOR MERCHANTS PRIVATE LIMITEDB8300012.23
* B - Buy, S - Sell
** = Weighted Average Trade Price / Trade Price

NSE, Bulk deals, 10-Aug-2011

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DateSymbolSecurity NameClient NameBuy / SellQuantity TradedTrade Price /
Wght. Avg.
Price
Remarks
10-Aug-2011AANJANEYAAanjaneya Lifecare LtdPANTHER FINVEST PVT. LTD.BUY91,669456.95-
10-Aug-2011AANJANEYAAanjaneya Lifecare LtdPANTHER FINVEST PVT. LTD.SELL91,669455.29-
10-Aug-2011APILAlstom Projects India LimALSTOM FINANCE BVSELL5,80,700540.00-
10-Aug-2011APILAlstom Projects India LimALSTOM HOLDINGS (INDIA) LIMITEDBUY5,80,700540.00-
10-Aug-2011INVENTUREInventure Gro & Sec LtdALFA FISCAL SERVICES PVT LTDBUY5,53,262227.54-
10-Aug-2011INVENTUREInventure Gro & Sec LtdALFA FISCAL SERVICES PVT LTDSELL5,53,262228.49-
10-Aug-2011INVENTUREInventure Gro & Sec LtdCHANDARANA INTERMEDIARIES BROKERS P. LTDBUY4,02,533228.42-
10-Aug-2011INVENTUREInventure Gro & Sec LtdCHANDARANA INTERMEDIARIES BROKERS P. LTDSELL4,02,533227.53-
10-Aug-2011INVENTUREInventure Gro & Sec LtdCROSSEAS CAPITAL SERVICES PVT. LTD.BUY3,57,377227.52-
10-Aug-2011INVENTUREInventure Gro & Sec LtdCROSSEAS CAPITAL SERVICES PVT. LTD.SELL3,57,377226.94-
10-Aug-2011INVENTUREInventure Gro & Sec LtdGITABEN B PAREKHBUY1,92,626227.38-
10-Aug-2011INVENTUREInventure Gro & Sec LtdGITABEN B PAREKHSELL1,92,626222.30-
10-Aug-2011INVENTUREInventure Gro & Sec LtdGKN SECURITIESBUY1,16,165228.03-
10-Aug-2011INVENTUREInventure Gro & Sec LtdGKN SECURITIESSELL1,16,165227.04-
10-Aug-2011INVENTUREInventure Gro & Sec LtdMARWADI SHARES AND FINANCE LIMITEDBUY1,60,886228.65-
10-Aug-2011INVENTUREInventure Gro & Sec LtdMARWADI SHARES AND FINANCE LIMITEDSELL1,60,886228.54-
10-Aug-2011INVENTUREInventure Gro & Sec LtdMEENA AGARWALBUY1,86,776230.11-
10-Aug-2011INVENTUREInventure Gro & Sec LtdMEENA AGARWALSELL1,86,776228.45-
10-Aug-2011INVENTUREInventure Gro & Sec LtdNITIN BABAJI PALANDEBUY1,35,928231.96-
10-Aug-2011INVENTUREInventure Gro & Sec LtdNITIN BABAJI PALANDESELL2,00,928226.96-
10-Aug-2011INVENTUREInventure Gro & Sec LtdR.M. SHARE TRADING PVT LTDBUY2,80,530227.55-
10-Aug-2011INVENTUREInventure Gro & Sec LtdR.M. SHARE TRADING PVT LTDSELL2,80,530227.30-
10-Aug-2011INVENTUREInventure Gro & Sec LtdSAAKSHI SHARES PVT.LTD.BUY2,91,152226.96-
10-Aug-2011INVENTUREInventure Gro & Sec LtdSAAKSHI SHARES PVT.LTD.SELL1,91,152229.15-
10-Aug-2011NAUKRIInfo Edge (India) LimitedMERRILL LYNCH CAPITAL MARKETS ESPANA S.A. SVBSELL3,00,000733.75-
10-Aug-2011NUTEKNu Tek India LimitedSYNDICATE NIRMAN PVT.LTD.BUY10,00,0003.90-
10-Aug-2011NUTEKNu Tek India LimitedVANRAJSINGH KAHORBUY13,57,3473.92-
10-Aug-2011NUTEKNu Tek India LimitedVANRAJSINGH KAHORSELL4,95,9963.63-
10-Aug-2011RUSHILRushil Decor LimitedAMBER ENCLAVE PRIVATE LIMITEDBUY98,950105.64-
10-Aug-2011RUSHILRushil Decor LimitedAMBER ENCLAVE PRIVATE LIMITEDSELL1,65,950105.18-
10-Aug-2011RUSHILRushil Decor LimitedMANSUKH SECURITIES & FINANCE LIMITEDBUY78,481108.81-
10-Aug-2011RUSHILRushil Decor LimitedMANSUKH SECURITIES & FINANCE LIMITEDSELL78,481109.23-
10-Aug-2011RUSHILRushil Decor LimitedR.M. SHARE TRADING PVT LTDBUY99,111108.56-
10-Aug-2011RUSHILRushil Decor LimitedR.M. SHARE TRADING PVT LTDSELL99,111108.80-
10-Aug-2011STERLINBIOSterling Biotech Ltd.ALBULA INVESTMENT FUND LTDBUY20,00,00058.52-