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20th Apr ’09
Opening The Door
To Your Child’s
Future Page 07
Nestle Tastes Success
With The Right
Product Mix Page 18
If you did not have
a financial plan when you
started out, you
can still do it in
your mid-30s
‘Arbitrage Fund Is A Safe
Haven Investment’ Page 28

DB Corner - Page 4
For Secure Returns Invest in Public Provident Fund
PPF is the best way to save money and
also enjoy the benefits of tax exemption – Page 5
Opening The Door To Your Child’s Future
Start saving early to build a bigger corpus
for your child, say experts – Page 7
Unburden The Baggage Of Home Loans
Make prepayments and invest the surplus thus saved
in short-term deposits for maximum returns – Page 10
Heart Of The Matter
To stay in the pink of health it is important
to get a health insurance – Page 12
Mixed Signals
While the Indian telecom sector is expected to witness pressure on
operating margin, there is hope for revival of metal companies – Page 13
For A Picture-Perfect Family’s Financial Future
When you have worked hard to earn money,
let the money work for you through a good financial plan,
says an expert – Page 16
Volume 1 Issue: 7, 20th Apr ’09
Editor-in-Chief & Publisher: Rakesh Bhandari
Editor: Tushita Nigam
Senior Sub-Editor: Kiran V Uchil
Art Director: Sachin Kamble
Research Team:
Kunal Shah
Michael Pillai
Shivali Chipkar
HEAD OFFICE
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We, at Beyond Market
welcome your views, comments,
inputs and feedback.
Do help us to grow better
as per your liking. This is our
attempt to reach you better
while crossing horizons...
beyondmarket@nirmalbang.com
Tel no: 022 - 30278232
Nestle Tastes Success With The Right Product Mix
Health and wellness profile to be the key growth drivers for this FMCG
company – Page 18
The Multi-purpose Crop
From a polymer in industries to food products, Guar seed is an essential
commodity – Page 22
Fortnightly Outlook – Page 25
Turn Volatility Into An Opportunity
Low risk and positive returns make Arbitrage Funds a good
investment option in an unpredictable market – Page 26
‘Arbitrage Fund Is A Safe Haven Investment’
Biren Mehta speaks to Beyond Market on Capital Markets, JM Arbitrage
Advantage Fund and the kinds of funds people can opt for in the current
scenario – Page 28
Important Statistics For The Fortnight Gone By - Page 30
Cool Retreats To Beat The Heat
Visit the good old destinations this summer
without burning a hole in your pocket – Page 38
Making Sense Of Personal Financial Ratios
A person can evaluate his personal financial position
by using six different ratios - Page 41
2 Beyond Market 20th Apr ’09
It’s simplified...

Keeping pace with changing times
If you thought you could do without financial planning, think again. The rigmarole of planning your finances, although tedious, is inescapable,
if you want to have a secured future.
As you age, the desire to make money weighs more on you since you want to fulfill your dreams and aspirations. In the pursuit of earning
money, you get bogged down by mundane activities that leave you with no time for yourself. Hence it is important to have a financial plan
that gives you the opportunity to make the most of life.
It is, therefore, imperative to start early. But if you do not have a financial plan, you need not fret as it is never too late to start planning your
finances. The earlier issue was aimed at youngsters between 25 and 35 years while the current issue is targeted at middle-aged adults in the
age group of 35 to 55 years. During this period, when children are growing up, their education and marriage become priorities of this target
group. If you have other dependents like your parents, then taking care of their needs is also important and cannot be neglected.
In this edition, we have covered topics ranging from Public Provident Fund to children plans to health insurance. There is also a topic on
Arbitrage Funds and personal financial ratios that help you judge your financial standing. We have also reviewed the metal and telecom
sectors for the quarter ending March 2009. While flipping through the pages, you will come across a section called Beyond Analysis.
Through this section, we aim to explain the fundamentals and financial aspects of listed companies. We have endeavoured to help you take
the right decision while investing in stocks of a company since investing is easier if you rely on tips given by friends and acquaintances.
But studying a company’s profile can make you aware of the investment potential it holds. With the onset of summer vacations, we have
listed a handful of destinations in India, which you can visit to beat the heat.
Last but not the least, I request one and all above the age of 18 to go cast their vote and choose a leader who is worthy of the chair he wins.
Be the change you want to see in IndiA.
Tushita Nigam
Editor
Beyond Market 20th Apr ’09
It’s simplified... 3

I Advise Hedging
Or Intra-day Trading
For The Fortnight.
The markets are expected to remain
range-bound this fortnight, given the fact
that the general elections in India have
just commenced.
However, market conditions such as these are not
ideal for trading and traders should avoid keeping
overnight positions. I advise hedging or intra-day
trading for the fortnight.
The market saw a pre-election rally with the
Nifty ending at 3,484 points, up 3% on 15th
April, closing above its crucial 200-day moving
average, which is a positive thing. Higher amount
of volatility is expected in the next fortnight as
general elections are underway.
On the upper side, I am not very bullish and I
expect the Nifty to face resistance at 3,600 and
above that at 3,750. On the downside, I expect the
Nifty to face its first support at 3,200 and the
second support at 2,950.
The Bank Nifty is looking attractive and is likely
to find its first support level at 4,900 and below
that it has support at 4,600 and traders can take
long calls at current levels and also at support
levels.
I would advise traders to buy on declines in the
power and banking sectors.
Disclaimer
It is safe to assume that my clients and I may have an investment
interest in the stocks/sectors discussed. Investors are required to
take an independent decision before investing. Investment in equity
is subject to market risk. Our research should not be considered as
an advertisement or advice, professional or otherwise. The investor
is requested to take into consideration all the risk factors including
their financial condition, suitability to risk return profile and the
like and take professional advice before investing.
4
Beyond Market 20th Apr ’09
It’s simplified...

For Secure Returns
Invest in
Public Provident Fund
PPF is the best way to save money and also
enjoy the benefits of tax exemption
Everyone would be aware of a Public Provident
Fund or PPF as it is commonly called. A
PPF is a statutory scheme of the central
government. Individuals who are planning
for their kids’ higher education or who are in their 40s
A detailed explanation of PPF is mentioned below for easy understanding.
and planning for retirement should take this investment
avenue into consideration along with options. Why
Because PPF is a good long-term investment option with
the added advantage of tax benefits.
What is PPF
Tenure
Rate Of Interest
Minimum Deposit
PPF is a statutory scheme backed by the central government.
15 years. On maturity a person can further continue the
account for a block of 5 years. An extension of three blocks of
5 years is allowed. The tax benefit will be the same. The
account holder can extend the account and not invest anything
but continue to earn interest.
8 % pa. The interest is calculated on the lowest balance
between 5th and 31st March so a person must make deposits
before 5th March.
Rs 500 per financial year. (Compulsory to every year). In case
a person misses his deposit in a year, he will have to pay a fine
of Rs 50 for each defaulted year along with Rs 500 to renew
the account. A person cannot withdraw the amount before
maturity of the fund.
Beyond Market 20th Apr ’09 It’s simplified... 5

Maximum Deposit
Who Can Open An Account
Tax Benefit
Age Limit
Premature Closure
Withdrawals
Loan
Where Can The Account Be Opened
Rs 70,000 per financial year.
All individuals can open an account. Even minors can open
one through a guardian. Joint accounts aren’t allowed. NRIs,
holders of power of attorney and the ones who want to invest
for their grandchildren, cannot open and operate the account.
Under section 80C, PPF falls under the category of EEE
(Exempt Exempt Exempt), which means that the principal
amount invested, interest earned and the amount received on
maturity are all exempt from tax. The deposit in a minor’s
account is clubbed with the deposit in the guardian’s account
for a maximum limit of Rs 70,000.
No age limit.
It is not permitted except in case of death. A nominee or a
legal heir cannot continue investing in the account.
The first withdrawal can be done only in the seventh year
limited to 50% of the balance in the account at the end of
fourth year preceding the year in which the amount is to be
withdrawn or at the end of the year preceding, whichever is
lower. One withdrawal in each financial year is admissible.
One can take a loan but only from the third year of opening of
the account to the sixth year. The maximum loan amount can
be 25% of the balance in the account at the end of the first
financial year (if one opts for loan in third year); in the second
financial year, if opted for a loan in the fourth financial year
and so on. The loan must be repaid in 24 months. The second
loan can be taken only if the first loan is repaid. Interest is 2%
above the rate of interest earned on PPF.
In a post office or in a bank and can be shifted from post office
to a bank and vice versa and also from one branch to another.
To help a person understand the basics of PPF, it is important to look at the pros and cons of this scheme.
Pros:
Lowest Risk: As the scheme is backed by the central government, the money is safe and can earn for individuals, unless
the government goes bankrupt.
Good Tax Benefits: The principal amount invested (subject to limit), interest earned and maturity amount are exempt
from tax.
Good Returns: 1) No tax on interest earned 2) The compounding effect gives a return higher than 8%.
Minimum Investment And Flexibility: The minimum investment amount is Rs 500 per financial year and can be
invested at any time in the year. It is also exempt from wealth tax.
Cons:
Lock-in period: The tenure is long and withdrawals and loans are allowed only till a limit.
Liquidity: Due to the lock-in period, liquidity is a problem.
To sum it up, PPF is a good investment option. Hence, individuals looking for a safe and a long-term investment
option, which also gives decent returns with tax benefit, should opt for PPF.
6 Beyond Market 20th Apr ’09
It’s simplified...

Opening The
Door To Your
Child’s Future
Start saving early to build a bigger
corpus for your child, say experts
Becoming a parent may be called the single
most satisfying experience in the world.
Your child is what you will truly call an
extension of yourself, a human being who
you are responsible for. Your child is completely dependent
on you. To guide him through the path of life, you
are his guiding light and he looks up to you. The previous
generation may have told you that the child comes with
his own destiny, but you as a parent know that you will
have a very critical role to play in shaping it.
You are the child’s provider and must be able to see
beyond the immediate need of providing for your child.
If you do not plan well, you are bound to run into financial
roadblocks at critical junctures of his life.
As a parent, you’re willing to deprive yourself of luxuries
in order to provide a long-term financial security to your
child. In many cases, a happy by-product of this exercise
is that the child grows up to be aware of the virtues of
fiscal prudence.
Beyond Market 20th Apr ’09 It’s simplified...
7

One Generation Plants The
Trees; Another Gets The Shade.
— Chinese Proverb
The Building Blocks:
"Every couple must set specific milestones and resolve to
reach them through savings. It's easy to assess your
performance midway and make adjustments such as
revising the milestone, increasing your savings or
pushing your horizon further," says private wealth
management firm Client Associates’ founder-partner
Rohit Sarin.
The Consumer Attitudes to Savings Survey conducted by
Aviva Life Insurance shows that 32% of Indians are
motivated to save for the education of their children as
against the global average of 17%. Fund Houses and
insurance companies play heavily on this streak of parental
responsibility. They insist that it is only through their
targeted schemes that you can afford to take care of your
child’s future. Most of us buy this line of thought.
When the economy was buoyant and the markets were
booming, it didn’t really matter. But in these difficult
times, every percentage point of return matters. So you
must consider whether these plans will create wealth for
your child or a regular investment strategy will work
better for you.
Getting It Right With Insurance:
While beginning to save for your child’s future,
insurance is the most likely consideration you can make.
Today there are many children insurance plans that help
you save regularly for your child’s need. A common
misconception is that child plans insure the life of the
child. This, if you pause to think, doesn’t make sense.
A child plan insures your life but makes sure that the
benefits go to the child. Sure, you think that you are
going to be there with your child to hold his hand through
every trial in life but in case of unfortunate occurrences at
least financial security will see him through a rough
patch without much difficulty.
As a parent you want to be able to provide everything for
important milestones in your children’s lives. Expenses
for education are a critical component and are on a steep
rising path. Consider this, apart from entry into pre
school, admission to primary school will cost you Rs
5,000 to Rs 50,000. College education will cost Rs 3 lakh
to Rs 10 lakh. An MBA course, Rs 7.5 lakh, and if your
child wants to pursue higher studies abroad and an MBA
course that costs Rs 15 lakh today will amount to Rs 31
lakh after 15 years, considering that the inflation is 5%.
To accumulate this sum over a period of 15 years, you
would have to save Rs 7,500 per month assuming a
growth of 10%. But do not be intimidated by these
numbers. There is help at hand.
When Do You Start
In order to build a bigger corpus for the child, one needs
to start saving early. The best time to start is at the time
of the birth of the child. If you have missed that stage you
could begin when your child starts going to school.
While choosing a children plan, one must keep in mind
important milestones in the life of the child such as
graduation, post-graduation, career and marriage.
If your insurance is insufficient you could consider a
children plan. "A child plan gets you a head start to create
a financial corpus for your child," says Aviva India’s
director of marketing Vishal Gupta. Simplistically speaking,
these are tailor-made life insurance products that are
designed to meet the financial needs of your children, be
it higher education, marriage or helping them begin their
career. Children plans can be purchased against the life
of any parent with the child as a nominee. These plans are
designed to provide a lumpsum on maturity.
There Are Only Two Lasting
Bequests We Can Hope To Give
Our Children. One Is Roots;
The Other, Wings.
– Journalist Hodding Carter
All children plans come with two options. Under one
variant, the payment to your child is staggered over
various life stages. For example, 20% of the sum assured
to the child is paid on his 21st birthday, 20% on his 24th
birthday and the remaining 60% when the policy
matures. Under the second variant, one gets a lumpsum
at the desired age.
One feature that makes a children plan unique is that the
policy continues even after the policyholder’s death. The
insurer pays the sums assured immediately to the nominees.
Along with that the insurer also pays the premium
through the term of the policy. In some
8 Beyond Market 20th Apr ’09
It’s simplified...

policies, this feature is inbuilt and can be added as a rider.
It assumes significance in children plans as it ensures
double security at no extra cost for the child in case of the
death of a parent.
Children Plans - The Options Within:
From a plethora of children plans available today, you
can choose between an endowment plan and a Unit
Linked Insurance Plan (ULIP). An endowment plan is a
profits-based or a bonus-based plan, and is dependent
largely on the profits and surplus generated by the
insurer. An endowment plan’s modus operandi is similar
to a bank Fixed Deposit, because once the returns come
in the form of bonus, they get attached to the policy and
the policy is guaranteed.
When I Approach A Child, He
Inspires In Me Two Sentiments;
Tenderness For What He Is,
And Respect For What He May
Become.
– Scientist Louis Pasteur
ULIPs on the other hand, are products that combine a life
cover with an investment plan. However, the investment
does not guarantee returns like money back or an endowment
policy, but works like a Mutual Fund. With ULIPs,
it is difficult to estimate a final corpus as they are subject
to market volatility. According to your risk appetite,
choices in ULIPs can range from 0% exposure to equity
to 100% exposure to equity.
If your risk profile does not allow you to take risks
through equity exposure, bonus-based endowment plans
could be your best option. But if you are willing to take
the risk, choosing ULIPs would be the ideal thing to do
as it creates wealth for your child.
Alternate Routes To A Secure Future:
The other vehicle of investment can be Mutual Funds. At
the very basic level, a child plan offered by an asset
management company is very similar to a balanced fund,
which has a portfolio of both equity and debt instruments.
Therefore, one of the biggest benefits these funds
offer is that of automatic rebalancing of the equity and
debt components. So, if due to market appreciation, the
equity component begins to grow, the fund manager will
book profits at systematic levels to guarantee an
optimum balance.
However, one needs to make a distinction between a
child plan offered by an insurance company as against
one offered by an asset management company. In the
case of the former, there is a clear insurance cover on the
life of the policyholder, whereas in case of Mutual
Funds, the insurance cover offered can, at times, be
misleading. In most of the schemes, the insurance cover
offered is only a personal accident cover.
While child-oriented insurance plans have their merits,
financial experts do not attach much significance to
child-oriented Mutual Fund schemes. They say that a
diversified Equity Fund is a much better option than a
targeted fund. There are several reasons why such
targeted funds have not done well.
For one, these funds have a small asset base. Also, most
of them are heavily tilted towards debt instruments, and
hence, fail to gain from the power of equity compounding.
Most importantly, these funds do not come with
lock-ins. So, despite a long-term goal, investors can exit
whenever they want. While some investors are
disciplined, many others might decide to exit early, in
which case the fund will not be able to gain from its
long-term investments.
Customize Your Child’s Future Kitty:
For those of you who are not interested in insurance plans
or targeted schemes of Mutual Funds alone, financial
planners suggest a healthy mix of equity and debt to
secure the future of one’s child. In order to create wealth
for your child, your portfolio needs to be skewed towards
equities and large cap stocks and blue chips at that. Also
have a fair share of equity diversified funds and mix it
with some portion of debt. Investing in a PPF which
gives 8% tax-free return and is a long-term product could
be a good option. The PPF is a government sponsored
scheme with a 15-year lock-in period. So if you save Rs
70,000 a year in PPF, you'll get Rs 19 lakh in 15 yearsat
virtually no risk.
The Last Word:
Whether you buy targeted schemes or customize your
portfolio to secure your child’s future, financial planners
strongly recommend you to keep a constant eye on the
proceedings. In times of uncertainty, even if there is a
mental block on touching the child’s money, do not
hesitate to rejig the portfolio if need be, advise planners.
Also keep in mind the inflation adjusted returns when
you ascertain the value of your portfolio. Prudent early
decisions can help you achieve the parental pride that
will come from seeing the dreams of your children
turning into realitY!
Beyond Market 20th Apr ’09 It’s simplified...
9

Unburden
The Baggage
Of Home Loans
Make prepayments and invest
the surplus thus saved
in short-term deposits
for maximum returns
It is only after the completion of 10 years of the loan that you see
that the interest recovery is lesser than 50% of your annual repayment.
If you now think that the rate of interest is floating and hence
subject to increase or decrease, the picture would then appear even
more scary.
Just being smart in taking a home loan is not the end, you need
to be smart through the entire loan tenure – the shorter, the
better. Be it fixed, floating, or hybrid, home loans are simply
understood as the sum of money one borrows and repays with a
pre-decided rate of interest – which could be fixed or variable or
again the mix of both.
But, what one struggles to understand is the mathematics which
goes behind the exercise of paying the loan amount. An equated
monthly installment - conveniently called EMI - which services
the loan, has a component of interest and principal which gradually
go out of your bank to your lender.
But, do you actually know that a loan of Rs 10 lakh taken at a fixed
rate of 12% for say 15 years (180 months) would mean that you
end up paying over Rs 21,60,000 at the end of 15 years. That’s a
stunning 2.16 times the principal amount you borrowed from the
bank. And that is not all, the annual EMI of Rs 1,44,024 has a
break-up of interest and principal repayment which is all the more
heart-breaking. (See table Stacking It Up on the next page.)
In a nutshell, it would cost you a fortune to continue repaying the
loan through its entire tenure. So the way out of it is prepaying the
home loan. The home loan has tax breaks but prepaying a home
loan does not deprive you of the tax breaks. As you just realized
that the initial years have a greater outflow of interest, prepayment
would not disrupt your tax deductions unless you foreclose (pre
maturely close) the loan. Also, it is in the later years of the loan
tenure that the principal repayment shoots up and that’s when you
can claim your tax deduction on the principal repayment.
Experts advise that any pre-payment of the housing loan directly
reduces the liability and additionally serves as a protection against
future risk of increase in liability due to a rise in the interest rate.
In short, floating loan borrowers need to look at prepayment
opportunities as and when they have surplus disposable income.
For floating loans, where applicable interest rates go up or down
with changing market dynamics, banks and housing finance
companies (HFCs) generally alter the balance tenure of the loan.
This is mainly to avoid administrative hassles of changing the EMI
every time a rate change takes places. Also, having seen the
frequency at which rates shot up in the recent past, the process is
feasible too.
So, it is logical to find ways and means to trim the otherwise long
loan tenure. Having realized that prepaying is in a way a smart
financial medicine to your home loan worries it is now time to look
into the options at hand. Here, you must remember the home loan
agreement you have signed (at times, without reading also) at the
time of borrowing. That home loan agreement has a long list of
10 Beyond Market 20th Apr ’09
It’s simplified...

Stacking It Up:
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 11
Year 12
Year 13
Year 14
Year 15
Total
Monthly
Interest Repaid
Principal Repaid
Instalment
(12002 X 12)
(Rs)
A = (B + C)
Rupees
B
Percentage
of annual
repayment
B / A
Rupees Percentage
of annual
repayment
C / A
144024
144024
144024
144024
144024
144024
144024
144024
144024
144024
144024
144024
144024
144024
144024
2160360
118634
115414
111785
107696
103089
97897
92047
85456
78028
69658
60226
49598
37623
24129
8923
1160202
82%
80%
78%
75%
72%
68%
64%
59%
54%
48%
42%
34%
26%
17%
6%
25390
28610
32239
36328
40935
46127
51977
58568
65996
74366
83798
94426
106401
119895
134943
1000000
C 1,000,000
Beyond Market 20th Apr ’09 It’s simplified... 11
18%
20%
22%
25%
28%
32%
36%
41%
46%
52%
58%
66%
74%
83%
94%
Outstanding
principal at
the end
of each year (Rs)
974610
945999
913760
877432
836497
790371
738394
679826
613830
539463
455665
361240
254839
134943
0
Assumption: 15 year loan for Rs 10 lakhs carrying a fixed interest rate of 12%, with monthly interest
terms and conditions you have signed and agreed to abide by the
rules mentioned therein. Within the agreement there are also
clauses and provisions for various charges, including part and full
prepayment. So your lending institution - bank or HFC - is
determined not to let you go so easily.
Generally, part-payments are free up to a certain value or free for a
specific number of times during a year. Some banks permit their
borrowers to come down and make four part-prepayments during a
year. In that case, the fifth attempt to make part prepayment would
attract a fee (part-prepayment fee) of between 0.75–2% of the
amount being prepaid. In such cases it makes sense to accumulate
the savings and make the prepayment within the maximum
permissible allowances every year. Unless the prepayment amount
exceeds a minimum value (say Rs 1 lakh) and above, banks generally
do not let borrowers change their EMI. And you must also
note that such options carry a cost of their own. Hence, unless it is
absolutely necessary an EMI change does not make sense.
However, if the prepayment is a substantial 25% or more of the
outstanding amount, an EMI change would be of greater use. Since
a substantial portion of disposable income does not go towards
loan repayment, it could be invested elsewhere. For example, a tax
deductible Systematic Investment Plan (SIP) into Equity Linked
Saving Schemes (ELSS) could fetch returns as well as count up for
tax saving.
There is a common saying – the devil is in the fine print. The
reverse of this is also true. Some banks have an upper cap on the
part prepayment a customer can make, beyond the number of
times, during a year. For instance, a bank could allow you to
prepay up to 90% of the outstanding loan or the entire outstanding
except 12 EMIs. Such an option is a smart window for permanent
escape. In case you have an inclination and financial capacity to
foreclose the entire loan outstanding, you could end up paying
nothing as foreclosure fee, which ranges above 2%.
Such opportunities come up when you have sold some alternate
property, etc. At such times, after leaving back 12-13 EMIs you
must prepay the balance. However, you must note that after having
paid a considerable amount you must not opt to reduce the EMI. If
you do so, you are staggering the balance amount over a relatively
longer tenure by reducing the installment.
Finally, a very critical point to be kept in mind as and when you are
part-prepaying your loan. The EMI you pay, say in May 2009, on
a particular date, say May 7, is the payment for the month of April.
So, if you approach your bank immediately after May 7 for making
a part-prepayment you would get the effect of the same in June
2009 when you pay the EMI for May. So you need to check with
you bank or HFC the cut-off date in May 2009.
When you can make your prepayment on the cut-off date, you get
your due benefit in the next month. However, by delaying the
prepayment by two or three weeks you have the advantage of
parking that surplus money in a short-term deposit with your bank.
You ought to be a smart loan customer, and enjoy the float for
yourself rather then allowing your bank to make money in the
period which is idle for your loan accounT.

Heart Of
The Matter
To stay in the pink of health it is
important to get a health insurance
Medical expenses are never cheap. And it is worse these
days because they’ve rocketed even further. Even a five
minute appointment with the doctor can easily make
you poorer by Rs 500. Health insurance, therefore, is a must have
as it saves money and covers unexpected misfortunes. Health
insurance comes handy in meeting emergencies of severe ailments
or accidents. Sometimes it is associated with covering disability
and custodial needs.
Life is unpredictable. Hence insurance can make it safe and
prevent us from bearing huge losses. It is affordable and rids us of
insecurities that threaten life now and then. Most experts suggest
that one should invest young. Often youngsters feel they won’t
need health insurance. But this is not true. It is better to be safe
rather than be sorry. Therefore people must have a good health
insurance in place.
However, looking for a comprehensive low-cost health insurance
is almost similar to looking for a gold mine in a secret cave. Rising
health insurance costs are becoming a big problem today. Every
person has the right to be assured of proper medical attention. In
effect, everybody needs health insurance coverage. But then again,
providers are always faced with the constant battle of giving
quality coverage against the ever-increasing medical care, hospitalization
and health maintenance costs.
For example, if you choose your sum assured to be Rs 1,00,000,
you can pay a premium of as little as Rs 400 per year depending on
the policy you choose. While picking out an insurance policy,
make sure that you try and fit in as much expenses as possible, like
hospitalization, domiciliary hospitalization, pre and
post-hospitalization, pre-existing disease coverage, critical illness,
daily hospitalization allowance, nursing allowance, ambulance
service, free health check-up, organ donor, cumulative bonus and
day care treatment.
There are various Indian health insurance companies. So make
sure you compare them well before deciding which insurance
policy to buy. ICICI Lombard, Tata AIG, Star Health Insurance,
Royal Sundaram, United Insurance, Apollo-DKV Health Insurance,
IFFCO-TOKIO, Bajaj Allianz, Cholamandalam MS, HDFC
Ergo and many more provide good deals these days.
There are various family floater plans too, which one should
carefully look at. Here is an example. ICICI Lombard offers a
single premium health policy that covers hospitalization expenses
of entire family, cashless hospitalization at over 3,500 network
hospitals, income tax benefits on premiums, medical insurance for
sum assured of Rs 2 lakhs, Rs 3 lakhs or Rs 4 lakhs and no medical
check-up till the age of 55. It even covers hospitalization arising
out of terrorist activities.
Tata AIG’s Individual Accident, Sickness & Hospital Cash Plan
offers up to 180 days hospitalization cash benefit. In addition, you
can receive up to Rs 10,000 per day in case of accidental hospitalization,
Rs 5,000 per day in case of sickness hospitalization and up
to Rs 25,000 for accidental medical expenses reimbursement, even
without hospitalization.
All in all, there are a dozen policies you can choose from. All you
need to remember is that you and your family must benefit entirely
from the insurance and it should not go waste. Also, there are a
number of websites these days where one can check and compare
various policies. These are helpful in letting one decide what he or
she exactly wantS.
12 Beyond Market 20th Apr ’09
It’s simplified...

MIXED SIGNALS
While the Indian telecom sector is expected to witness pressure on
operating margin, there is hope for revival of metal companies
Metal Sector:
Indian metal companies have seen sharp volatility in
their earnings in recent months, thanks to overall
slowdown in the global economy. The December 2008
quarter was one of the worst quarters in the last eight
quarters. However, the scenario changed slightly during
the March 2009 quarter when steel companies managed
to sell more steel products. Stock clearing by end-users
like auto, completion of projects by infrastructure
companies (since their revenue flow is linked to the
percentage of the project completed and March quarter
coincides with the financial year-end) and revival in
domestic demand were some of the main demand drivers
for steel products.
In fact, if one compares the performance on a quarteron-quarter
basis, this revival in demand is clearly visible.
For instance, Tata Steel’s sales volume grew by 68%
sequentially. The sequential growth rates in volume for
other players like Steel Authority of India (SAIL) and
JSW Steel are also in similar range. Such higher demand
from domestic market and import barriers raised by
government had a positive impact on domestic steel
prices. Though international prices continued to decline,
although moderately, domestic prices almost stabilized,
during the March 2009 quarter. For instance, the wire rod
(6 mm, Mumbai) prices were at the level of Rs 37,500
during the quarter.
However, such good sequential growth did not translate
into proportionate year-on-year (y-o-y) growth. One of
the main reasons for this is that the March 2008 quarter
was excellent because of very high demand. Tata Steel,
which sold around 1.8 million tonnes of steel products
during the March 2009 quarter, is expected to report a
y-o-y growth of around 40% only. Similarly, JSW Steel
is also expected to have a y-o-y volume growth of around
20%. However, for SAIL, the year-on-year growth might
not be so high and is expected to be a single-digit figure.
Again, such higher sequential growth in sales volume did
not translate into higher y-o-y growth in revenues. This is
because, domestic steel prices during the March 2009
quarter are around 20-25% lower from their year-ago
levels. As a result, the y-o-y growth of revenues for these
companies might range from flat to negative. In fact,
barring Tata Steel, other primary steel producers are
expected to report a y-o-y decline in their net sales.
Even the operating profit margins of these steel companies
is expected to contract further due to lower sales
realization and higher raw material cost compared to
their levels a year ago. Most of the Indian companies are
dependent on external suppliers for their raw material
requirements. The degree of dependency varies from
company to company. Such companies usually enter into
long-term contracts (in terms of volume and price) with
their suppliers during the beginning of the financial year.
Last year, companies entered into such contracts for the
financial year 2008-09 when raw material prices were at
their peak. These contracted high raw material prices
continue to burn the operating profits during the March
2009 quarter.
Though Indian companies might have renegotiated the
contract prices with their suppliers for the March 2009
quarter on account of sharp fall in spot prices, the impact
of such negotiation would have been minimal. As a
result, companies are expected to report contraction in
their operating margins. Integrated players like Tata
Steel would be less hit than others like SAIL and JSW
Beyond Market 20th Apr ’09 It’s simplified...
13

Steel. The consensus estimate indicates that Tata Steel’s
operating profit would decline (y-o-y) only by 15%
whereas it would decline by around 47% and 68% in case
of JSW Steel and SAIL respectively. The higher decline
in case of SAIL is also partly because of higher employee
expenses incurred due to the Sixth Pay Commission
recommendation.
A large number of nonferrous companies in India are
integrated players and most of the raw material cost don‘t
change in line with the change in finished products’
prices. Within base metals, aluminium has fallen more
sharply than others like copper and zinc. It has come to
such a low level that its cost of production was very close
to aluminium ingot prices. Hence, Hindalco and Nalco,
which mostly produce aluminium products are expected
Heavy Metal:
March 2009 quarterly estimates of metal companies
*Tata Steel
Sail
JSW Steel
*Hindalco
Sterlite Industries
Nalco
*Standalone Results
Net Sales
(Rs in Cr)
5920
10672
3589
3335
3873
984
Y-o-Y
Change
(%)
3.2
-20.8
-26.9
-33.4
-42.8
-30.0
Net Profit
(Rs in Cr)
919
929
119
272
578
96
Y-o-Y
Change
(%)
-31.0
-60.9
-73.4
-74.8
-56.1
-76.5
Source: Bloomberg
The nonferrous companies are also expected to report
equally poor numbers mainly because of low sales
realization. The sales realization of nonferrous companies
is directly linked to the London Metal Exchange
(LME) base metal prices and movement of rupee against
the US dollar. Indian Rupee has depreciated almost 25%
on a y-o-y basis, whereas LME base metal prices are
around half of what they were a year ago. Also, unlike
steel companies, there is no significant improvement in
sales volume in case of nonferrous companies. The net
result is that these companies too are going to see a
decline in their net sales, which can even be higher than
the fall seen in the case of steel companies.
Telecom Sector:
The telecom sector continues to maintain its differential
position when it comes to quarterly earnings. During the
December 2008 quarter when most of the sectors were
badly hit, the telecom sector performed very well. Now,
during the March 2009 quarter, when some of these
sectors witnessed slight revival, the growth in profitability
numbers of telecom companies is expected to be
lower than the December 2008 quarter.
The telecom sector has seen strong subscribers’ addition
in recent months. The launch of GSM services by new
players like Reliance Communications (RCom) and Idea
Cellular has further added fuel to this growth. RCom and
Idea launched their GSM service in many circles either at
to take a bigger hit in their operating profits compared to
Sterlite Industries, which is more diversified into copper
and zinc. The consensus estimate is that the net profit of
Hindalco and Nalco is expected to decline by around
75% (y-o-y) compared to 56% (y-o-y) fall in case of
Sterlite Industries.
Overall, this quarter is not going to be very great for
metal companies at large. But one can’t even deny the
fact that there has been some kind of revival in demand in
the March 2009 quarter as compared to the December
2008 quarter.
the end of calendar year 2008 or at the beginning of 2009.
Telecom companies would witness the full impact of
these GSM launches in the March 2009 quarter.
Both these companies have spent huge sums of money to
garner their subscriber base. Idea took the route of brand
building exercise and thus spent huge amounts of money
in advertising and marketing. On the other hand, RCom
offered very low tariffs in its initial offering. For
instance, it offered Rs 5 and Rs 10 worth of free talk time
per day for initial 90 days time period. Initiatives by
these two companies helped drive up the subscriber
addition to 14-15 million per month during the March
2009 quarter compared to the average of 10 million in the
second half of calendar year 2008.
14 Beyond Market 20th Apr ’09
It’s simplified...

Getting Phoney:
Bharti
RCom
Idea
March 2009 quarterly estimates of telecom companies
Net Sales
(Rs in Cr)
10204
6012
2895
Y-o-Y
Change
(%)
30.5
13.2
45.8
Net Profit
(Rs in Cr)
2277
1357
229
Y-o-Y
Change
(%)
22.9
-1.2
-17.1
Source: Bloomberg
Telecom last year, might see an inorganic growth of little
more than 41%. Though RCom added a record number of
subscribers during the months of January and February,
the discounts and lower tariff rates would pull down its
topline growth to little less than 15%.
Unlike previous quarters, operating margin of the
telecom companies would be under pressure during the
March 2009 quarter. As a result, the growth in bottom
line is expected to slow down.
The lower ARPU, higher launch cost and more selling
and marketing expenses are some of the factors expected
to hurt the operating margins of the telecom operators.
However, the impact on operating margin would be
different for different companies.
For Bharti, which has relatively stable business operations,
the operating margin for the March 2009 quarter
might contract only by 40-100 basis points compared to
the same period last year.
As a result, the sector is expected to witness a doubledigit
growth in its revenue figures during the March 2009
quarter. Estimates indicate that the top three players -
Bharti Airtel, RCom and Idea - are expected to report an
aggregate year-on-year growth of 27% in their topline.
This kind of growth would come on the back of falling
average revenue per user (ARPU). The lower tariffs and
higher competition would result either in lower minutes
of use (mostly in case of established players like Bharti)
or lower revenue per minute (in case of RCom), resulting
in lower ARPU in either case.
However, for others like RCom and Idea which have
incurred higher network expansion costs and huge
marketing expenses, the impact could be even higher. As
per estimates, the operating margin of RCom and Idea is
expected to contract by around 400 and 1,000 basis
points respectively.
The positive factor during this quarter is the relatively
lower depreciation of INR against other currencies like
USD and JPY. Most of the telecom companies like
Bharti and RCom have outstanding foreign loans
denominated in these currencies.
The lower depreciation would definitely reduce the
Forex losses and hence would improve the bottom line.
Similarly, the lowering of services tax from 12% to 10%
has been another positive factor for this sectoR.
Bharti Airtel continues to be the market leader and is
expected to report a growth of around 31% in its organic
revenue. On the other hand, Idea, which acquired Spice
Beyond Market 20th Apr ’09 It’s simplified...
15

For A Picture-Perfect Family’s
Financial Future
When you have worked hard to earn money,
let the money work for you through a good financial plan, says an expert
very person thinks that he is a smart manager and is capable
of managing his finances well. But is he actually There are
very few who know that every financial decision affects
Eother areas of their finances.
As it is rightly quoted: “Money management is something everyone
talks about or thinks they talk about, but rarely implement.”
Same was the attitude of Rajeev Bajaj, 45, until he realized that
managing finances was not his cup of tea and that it was best to leave
it to the experts in the field. Earlier he used to take tips on stocks but
having lost a huge part of his capital in the stock market, where he
thought he would be able to multiply his money manifold, he decided
to seek advice of a financial planner.
With the introduction of complex financial products it becomes
difficult for individuals to cope with their personal financial
planning. Here is where a financial doctor comes into picture to take
care of the financial well-being of an individual. He assesses the
individual properly and gives a proper prescription. He studies the
investor and based on it he finds out if his client is allergic to any
particular asset class or not.
Bajaj and his wife Mansi are 45 and 43 years, respectively. They
have two kids Arti (18) and Aksh (15). Bajaj has a well-established
advertising business and earns an annual income of Rs 10 lakhs.
Goals:
To set aside money for Arti’s higher education when
she turns 21, i.e. 3 years from now. Today’s cost of
international studies would be around Rs 20 lakhs.
To keep money for Aksh’s higher education when he
would be 21 years, i.e. 6 years from now. Today’s cost of
international studies would be around Rs 20 lakhs.
To keep a lumpsum of Rs 20 lakhs in today’s value for
his daughter Arti’s marriage when she would be around
24 years old.
A lumpsum of Rs 15 lakhs in today’s value for his son
Aksh’s marriage when he would be 26 years old.
To accumulate enough money for his retirement
within the next 15-20 years, while taking inflation
into consideration.
Personal accident insurance policy for protection of
the family and also for income replacement protection in
case of any circumstances caused due to the accident.
Bajaj has a personal insurance cover of Rs 3 crores. His
other investments are Rs 8 lakhs in PPF, Rs 25 lakhs in
diversified equity Mutual Fund. His investments in RBI
Bonds will mature in 2014 and would fetch him Rs 40
lakhs. He had direct investment in equity worth Rs 29
lakhs, which is now worth Rs 5.5 lakhs.
Goals Of Mr Bajaj:
Needs
Year When
Need Arises
Current
Value
(Rs)
Future
Value
(Rs)
Years Of
Investment
Arti’s Education
Aksh’s Education
Arti’s Wedding
Aksh’s Wedding
Total
2012
2015
2015
2019
2000000
2000000
2500000
1500000
8000000
2315250
2680190
3350240
2443340
10789020
3
6
6
10
*Figures in Rs
16 Beyond Market 20th Apr ’09
It’s simplified...

Recommendations:
Before recommending anything to Bajaj, he should be lauded for
taking adequate insurance for his dependents.
Though Bajaj has faced a setback in his equity investments, he still
has other savings to achieve his goals. His investments like Mutual
Funds, RBI Bonds and direct equity would be utilized to fund these
goals. Taking this into consideration, a 12% return on Mutual Fund
and Equity would be reasonable as his goals are beyond 3 years. The
present value of these goals has increased at an annual rate of 5%.
Bajaj need not make any additional savings for these goals as he has
sufficient savings in various avenues to accomplish them.
His retirement planning investment in PPF would fetch
him an amount close to Rs 25.64 lakhs. So his retirement
planning as on today is short by Rs 109.74 lakhs. To meet
the shortfall he will have to save annually an approximate
amount of Rs 3,45,400 for the next 15 years, which
would grow at the rate of 10%. For this he can invest in
an asset allocation of equity and debt, which would fetch
him a return of 10%. Considering 8% on Debt and 12%
on Equity, he can have 50:50 asset allocation for this
particular goal.
The table mentioned below gives an idea of his existing savings at various stages:
Investments
Existing Mutual Fund Before Goals
After Goal
3512320
1197070
Year
2012 2015
2362804
652374
2019
1026523
291398
RBI Bonds Before Goals
After Goals
NA
NA
4320000
NIL
NA
NA
Equity before Goals
After Goal
*Figures in Rs
The above table shows values of various investments in the year of
the major goals. Arti’s education needs would be funded through the
existing Mutual Funds whereas RBI Bonds, which mature in 2014,
when reinvested in debt for another one year, would fetch 8% return.
This investment would be utilized to fund Arti’s wedding and Aksh’s
education needs arising in 2015. The shortfall would be adjusted
through Mutual Fund investment.
Investment in Equity would be required to fund Aksh’s wedding,
which is approximately 10 years from now. Here again the shortfall
would be adjusted by investment in Mutual Funds. Bajaj would still
have a surplus of around Rs 3 lakhs with him after his goals, which
we think can be utilized for his retirement.
Retirement Planning:
Retirement planning is very crucial considering increasing life
expectancy rate in India and rising cost of living due to inflation. It is
never too early to begin planning for your retirement. At the time of
retirement, Bajaj needs a corpus of Rs 135.39 lakhs to enjoy the same
lifestyle for another 20 years till 80 years, his expected life expectancy,
considering inflation at 5% p.a. on today’s estimated monthly
expense of Rs 35,000 per month.
772710
772710
1525192
1525192
1708217
NIL
Health Insurance:
Bajaj has a family floater of Rs 5 lakhs and has been
advised to do so to save the extra premium. As he is in his
mid-forties, it is recommended that he buy individual
Mediclaim policies to the full extent of Rs 5 lakhs for
himself and his wife. As the medical expenses are
increasing with every passing day, he is also advised to
buy a Family Floater Top-up from Star Health up to Rs
10 lakhs.
Estate Planning:
This is one of the most important parts of financial
planning. However, people usually forget to do it for lack
of knowledge or sheer ignorance. Bajaj does not have
any succession plan, so it would be ideal for him to make
a will. It hurts when you have worked hard to earn your
money and money doesn’t work back for you. So it is
never late to get up and give a call to a financial planner
and get yourself checked. So go and get yourself a financial
plan noW.
If you need a financial plan write to us at
beyondmarket@nirmalbang.com
Beyond Market 20th Apr ’09 It’s simplified... 17

Tastes Success With The Right Product Mix
Health and wellness profile to be the key growth drivers for this FMCG company
N
estle India (NESTLE) is the third largest fast moving consumer goods (FMCG) company after Hindustan Lever Ltd
(HLL) and ITC in the FMCG space in India. Nestle India, a 61.9% subsidiary of the international giant Nestle SA,
was founded by Henry Nestle in 1867. It generated sales of 106 billion Swiss Francs in 2007 from 500 factories in
approximately 100 countries and offers over 8,000 products to millions of consumers worldwide.
The Nestle brand is synonymous with food products like milk products and nutrition, beverages, prepared dishes and cooking aids,
chocolates and confectionery. Nestle India Ltd has spread its wings to significant areas within the food and beverage industry.
It has factories in Punjab, Tamil Nadu, Karnataka, Haryana, Goa and Uttarakhand. Nestle India Ltd initiated its workings in India
with the Moga unit in Punjab in 1961, which was succeeded by the Choladi unit in Tamil Nadu. The Moga unit dealt entirely with
dairy products whereas the Choladi unit diverted its interests to the tea industry. Nestle India Ltd also owns Nanjangud unit in
Karnataka, Samalkha unit in Haryana, Ponda and Bicholim units in Goa and Pant Nagar unit in Uttarakhand. Nestle products are
sold all over India and are also exported to Russia, Hungary, Japan, the US and several other countries.
Product Line:
18
Beyond Market 20th Apr ’09
It’s simplified...

New Product Pipeline With Innovations Or Renovations:
Nesvita Pro-Heart Milk: To battle rising cholesterol levels in India, Nestle India has introduced a new skimmed milk - Nesvita
Pro-Heart Milk with Omega 3. This product is aimed at the urban, health conscious market and is positioned as the “health &
wellness” product.
Nestle Cerevita: Nestle Cerevita, a multigrain cereal and a nutritious breakfast, is available in two delicious variants – wheat and
corn and mixed fruit. Cerevita is an alternative available against Kellogg’s Corn Flakes. Cerevita is test-marketed in select outlets
in Bangalore city.
Nestle Milkmaid Fun Shakes: Nestle offers the goodness of toned milk and real fruit/cocoa. Delicious Nestlé Milkmaid Fun
Shakes make it fun to drink milk.
Nestle Nido: Nestle offers Nestle Nido, the world’s No 1 children’s milk brand. Nestle Nido is a nutritious milk product, specially
formulated for growing children from the age of two years onwards. Nestle Nido has been launched in select cities and is available
in 500 gm tins.
Nestle Nesvita Dahi: Nestle India provides Nesvita Dahi with pro-biotic which is tasty and low in fat. This Nesvita Dahi can be
easily digested and has more than 100 crore probiotics. This dahi is 98% fat-free thus making it an ideal food choice for a fit and
healthy lifestyle.
Maggi Cuppa Mania: Tapping into the cup-o-noodle segment, Nestle India is now introducing Maggi in ready-to-eat packs in a
cup. The product is targeted at the whole family, but is betting specially on the customer base in the 18-24 age group, given its
tagline ‘Just add garam paani…Carry on jaani!’
Maggi Pichkoo: Maggi has also introduced a Rs 12 Maggi Pichkoo tomato ketchup. The brand claims a leadership position in
sauces and ketchups and believes that the Rs 12 price point will further aid the expansion of its consumer base through greater
affordability.
Nestle Polo Xtra Strong: Nestle India’s Polo Xtra Strong is an innovation on its existing brand, Polo. It comes with added menthol
crystals that provide real, long-lasting freshness. It comes in a pocket friendly singles format priced at 50 paise.
Maggi Healthy Soups-Sanjeevni: Nestle launched healthy soups named ‘Sanjeevni’ with traditional recipes for good health, which
are made with ingredients like amla, badam, spinach, dal and tomato.
Business Analysis:
Market Position (Value) Milk Products & Nutrition - 43.40%
Prepared Dishes & Cooking Aids - 23.53%
Category
Beverages - 17.91%
Chocolate & Confectionery - 15.20%
Baby Foods & Infant Formula
Dairy Whitener
Instant Noodles & Ketchups
Healthy Soups
Instant Coffee
Wafers & White Chocolates
Chocolate
Éclairs
Nestlé’s
Rank
1
1
1
2
1
1
2
2
Nestle India has a strong product profile and with the
continuous addition of products into its family basket, the
company has gained competitive advantage against its peers.
The company’s focus on the niche segment allows it to
command a premium pricing.
Revenue distribution
Source: Company reports
Raw Material Price Trend:
Nestle consumes milk, wheat, sugar, cocoa, etc, as raw materials. Prices of these products were very volatile last year. To combat
the volatility in commodity prices, Nestle has developed a long-term relationship with farmers and milk suppliers. Nestle has
set-up ‘milk districts’ around its milk plant for regular and efficient supply of milk. Nestle procures agricultural raw materials
either through trade channels or directly from farmers. This helps Nestle in maintaining the operating profit margin and remains
cost-efficient against its peers.
Beyond Market 20th Apr ’09
It’s simplified...
19

Playing On Price Point And Affordability:
Nestle has launched SKUs (Stock Keeping Units) to focus on the smaller market and increase the trial usage rate. With the
introduction of SKUs in various products like Maggi, Munch, Bar-one, Maggi Pichkoo, Polo, Dahi and Coffee, Nestle has been
able to increase the trial usage rate among consumers and converting one-time consumer to brand loyalists. With SKUs, Nestle
has been able to enter the lower socioeconomic strata resulting in better acceptability, visibility and affordability of products.
Nestle has launched SKUs from as low as 50 paise to Rs 10, which has helped in generating higher revenues for the company.
SWOT Analysis:
STRENGTH:
Well diversified product portfolio
Distribution channel
Brand equity
Brand positioning in the minds of the consumers
Strong fundamentals
Access to skill-sets, products and R&D of parent company – Nestle SA
Ongoing product innovation and renovation
Good management track record
WEAKNESS:
Export market not fully tapped
Complex supply chain configuration
OOPPORTUNITIES:
Expansion of product portfolio
Entry into the niche segment – less competition
Growing trend for ‘out-of-home’ consumption
Increasing the trial usage rate by launching SKUs
Increase in consumer awareness, per capita income & lifestyle
THREAT:
Prices of raw material and fuel
Entry of ITC in the processed food segments
Slowdown in the economy
Financial Analysis:
Net sales for the full year 2008 at Rs 4,324.24 crores have increased by 23.4% from Rs 3,504.35 crores in 2007, driven by
increased volumes as well as better realizations. Domestic and export sales increased by 25.6% and 2.6% respectively.
The raw material consumed in 2008 was Rs 2,088.44 crores, an increase of 21.6% from Rs 1,717.60 crores in 2007. With various
cost optimization initiatives, Nestle was able to offset steep increase in commodity prices like milk solids, green coffee, fuels and
vegetable fat.
The company reported an increase in operating profit by 23.1% to Rs 866.82 crores in 2008 from Rs 704.2 crores in 2007. The net
profit for the year increased by 29.1% over 2007, with the net profit margin improvement at 12.3% from 11.8%.
The company reported an EPS of Rs 55.39 in the year 2008 as against Rs 42.92 in the year 2007.
20 Beyond Market 20th Apr ’09
It’s simplified...

Financial Outlook:
Posting Strong Growth:
KEY FINANCIALS
Net Sales
EBIDTA
EBIDTA (%)
PAT
PAT (%)
EPS
P/E
P/BV
Dividend Per Share
Dividend yield
Performance Ratios:
KEY FINANCIALS
Debt/ Equity
ROCE
RONW
PE Band:
2007 2008
3,501
704
20%
427
12%
44.3
34.5
35.3
33
2.16%
4328
867
20%
551
12.3%
55.39
29.1
33.8
42.50
2.56%
2007 2008
0.01
152%
106%
0.01
173%
123%
2009E
5,299
1,095
21%
683
13%
70.8
23.5
24.9
53.11
3.20%
2009E
0
174%
122%
*E = Estimate figs.
The FMCG sector has been registering a
double-digit growth in sales since the last couple
of years. Currently estimated at US $17.44
billion, it is one of the most promising sectors in
India. FMCG business has a steady rate of
growth as it does not suffer from huge recession.
In this turbulent market condition and growing
concern about recession all over the world, the
FMCG sector has regained its safe haven
position. The FMCG sector enjoys the defensive
appeal and acts as recession resistant. The
demand scenario for FMCG companies is
relatively inelastic in nature. The reason is quite
simple - they sell first-necessities products, the
last ones which people tend to give up in their
consumption habits.
3000
PE Band of Nestle India
2500
2000
1500
1000
500
0
Jan’99 Jan’00 Jan’01 Jan’02 Jan’03 Jan’04 Jan’05 Jan’06 Jan’07 Jan’08 Jan’09
Close Price x20 x30 x40 x50
At CMP of INR 1665.45 (as on 16th April, 2009), the stock is trading at P/E of 23.6x for CY09E. Historically, the stock has never
traded below the PE of 20x, which insulates the stock against a huge downside risk.
Nestlé is expected to out-drive the FMCG sector by reporting higher earnings growth, which, added with the defensive nature of
its business, makes the stock attractive from a long-term perspectivE.
Beyond Market 20th Apr ’09
It’s simplified...
21

The Multi-purpose Crop
From a polymer
in industries
to food products,
Guar seed is an
essential commodity
History:
India accounts for 80% of the world production. Nearly
80-85% of Guar gum and its derivatives produced in
India are exported to the US, UK, China and other
countries. The value-added derivatives of Guar powder
are used by various industries in India.
Guar Plant:
The Guar plant flourishes in extremely drought-resistant
and semi-arid regions where most plants perish. It grows
best in sandy soils. The ideal areas for farming are west
and northwest India and parts of Pakistan. The major
processing centers of Guar gum are in the northwestern
states of India.
The Guar plant grows 3 feet to 9 feet high. The plant’s
flower buds start out white and change to light pink as the
flower opens. The flowers turn deep purple and are
followed by fleshy seedpods, which ripen and are
harvested in October-November.
Guar seed is grown mainly in India, Pakistan,
the United States, Sudan and also in some
parts of Africa and Australia. In olden times,
Guar was only used as rich protein to feed
cattle. It is also used as green vegetables in India. After
the Second World War there was a major shortage of
locust bean gum, which adversely affected the textile and
paper industries. At that time Guar gum was found as the
most suitable substitute for scarce locust bean gum. In
1953 the extraction technology of Guar gum was
commercialized in the US and followed by India a
decade later.
Properties Of Guar Gum Powder:
Guar gum is a white to yellowish white powder. It is
almost odourless. When dissolved in hot or cold water
Guar gum forms a paste of high viscosity. Guar’s viscosity
is a function of temperature, time and concentration.
Guar gum is used in a variety of applications due to its
properties like:
Easy solubility in cold and hot water
Binding agent
Resistance to oils, greases
Better thickening agent
High viscosity
Functioning at low temperatures
22 Beyond Market 20th Apr ’09
It’s simplified...

Guar Seed
Cross-section
Guar Protein
Guar Seed
germ
hull
endosperm
germ
Unrefined Guar Splits
hull
endosperm
Guar Gum Usages:
According to historical data, around 55% of the total guar
produced across the globe is used for industrial purposes
like textile printing and sizing, ceramics, printing inks,
mosquito mats, synthetic resins, paper industry, battery
electrolytes, water paint, oil well drilling and mining.
Similarly, around 35% of it is in food products. It is
mainly used in bakery, dairy, meat, dressing and sauces
and beverages.
hull
hull
endosperm
Major Growing Countries:
Guar Protein
Refined Guar Splits
India - 80%
Pakistan - 15%
Others - 05%
Guar Seed:
• First, the pods are dried in sunlight and manually
separated from the seeds.
• The seeds are supplied to the industry for processing.
• Guar by-products, namely churi and korma are used as
cattle feed.
Guar Splits:
• A mechanical process of roasting, differential attrition,
sieving and polishing, commercially extracts the gum
from the seeds.
• The seeds are broken and the germ is separated from
the endosperm.
• Two halves of the endosperm are obtained from each
seed and are known as undehusked Guar splits.
Refined Guar Splits:
Refined Guar splits are obtained when the fine layer of
fibrous material, which forms the husk, is removed and
separated from the endosperm halves by polishing.
Guar Powder:
The refined Guar splits are then treated and finished into
powders by a variety of routes and processing techniques
depending on the end product desired.
State-wise Production in India:
Rajasthan - 70%
Gujarat - 12%
Haryana - 11%
Punjab - 04%
Others - 03%
Source: NB Research
Statistics:
Source: NB Research
Year
2005-06
2006-07
2007-08 2008-09
Acreage (in mn hect)
2.2
2.27
3
3.45
Guar Production (in lakh tonnes)
6
7
10.1
7.8
Guar Gum (30% of guar seed)
1.8
2.1
3.03
2.19
Exports from Apeda (in million tonnes)
1.83
1.9
2.04
1.55(e)
Source: NB Research, Apeda
Beyond Market 20th Apr ’09
It’s simplified...
23

Global Scenario:
Besides India, Pakistan, Sudan and parts of the US are
the other major Guar growing countries. Nearly 55-60%
of Guar gums or their derivatives produced in India are
exported mainly to the US and European countries. The
value-added derivatives of Guar powder are used by
various industries in India as well as abroad. The world
market for Guar gum is estimated to be around 2,20,000
to 2,50,000 tones/year, 90-92% of which is produced by
India and Pakistan.
The Most Important Factor – Weather:
In India, the sowing season for guar seed is end of July
and it is harvested in October-November. It is usually a
90-day crop. Guar is a rain-fed monsoon crop, which
requires 3-4 spells of 8-15 inches of rain. For effective
Guar cultivation, the crop needs two rainfalls before
sowing, one rainfall when the crop buds out and another
when the crop comes up and begins blossoming. Then it
requires plenty of sunshine and dry weather to come up
really well. During harvesting period the guar crop needs
good sunshine in order to dry up and become usable for
the industries.
Abnormal weather with unseasonal rains and low
temperatures is hurting agriculture in India, affecting
wheat and pulse crop in particular. The wheat and pulse
crops have been adversely impacted because of the
unseasonal showers and hail in the northern plains, while
stone fruits such as plums and peaches have also taken a
hit in northern India because of hailstorms. Horticultural
crops in India-controlled Kashmir have been affected as
well. Recently as per the Indian Meteorological Department
(IMD), the maximum temperature is below normal
by 3 degrees Celsius in parts of Punjab, Haryana, south
Rajasthan, Gujarat and west Madhya Pradesh. This is bad
for the crops this time of the year as maturing wheat and
pulse crops essentially need warm weather to facilitate
grain formation.
On closely monitoring the chart, one can observe that
from April to October there has been a substantial
upward movement every year. Traders tend to bet on
weather and its aberrations that lead to sharp upside in
Guar seed prices.
2500
Weather
Weather
Guar Seed
Weather
2000
Weather
1500
1000
500
0
Closing Price
Apr’04
Jul’04
Oct’04
Jan’05
Apr’05
Jul’05
Oct’05
Jan’06
Apr’06
Jul’06
Oct’06
Jan’07
Apr’07
Jul’07
Oct’07
Jan’08
Apr’08
Jul’08
In Rs (Quintal)
Oct’08
Jan’09
Apr’09
In a nutshell:
Abnormal weather is creating anxiety among Guar seed traders who fear that any delay in monsoon may trigger an
upside in Guar seed prices as carry forward stock of the commodity has dropped drastically over the last two years.
Pakistan’s production went down last year due to flooding in the Guar producing region. Hence the carry forward stock
of the commodity is depleting and any delay in monsoon may aggravate the recent bull run in Guar seed. Carry forward
stock, which was around 30-35 lakh bags (100 kg each) a few years back, is expected to be at 20 to 22 lakh bags this
year. Due to the global slowdown, the demand for Guar derivates have declined and that resulted in sharp downside in
prices few months back. However, with some signs of recovery in the US and China, the demand for this product may
move up in the coming months. Guar seed is one agro commodity, in which we haven’t seen any significant bull run.
We expect guar seed prices to move up and May contract may touch Rs 1,950/quintal levels in the next fortnighT.
24 Beyond Market 20th Apr ’09
It’s simplified...

Fortnightly Outlook
Commodities rally was led by base metals and oilseeds in agro
commodities. Both complexes made handsome percentage gains
in the last fortnight. Commodity prices are the vanguard of the
global economy. If we are looking for a real recovery then the
commodity prices should rally. Prices of base metals and crude oil
started moving up even before we saw the financial markets recovering.
The bull run in the commodities market is far from over and
this rally could just be the beginning.
BASE METALS:
Base metals saw a rally in the last fortnight. During this period,
copper prices shot up by more than 15%, zinc by 14%, lead by
18% and nickel by more than 20%. This sharp upside in base
metals can be attributed to strategic buying by the Chinese State
Reserve, production cuts and the lag effect of stimulus packages.
We believe the market requires more triggers for copper. Our
picks for the next fortnight are nickel and lead.
Market News:
• Preliminary global stainless steel production for the fourth
quarter of 2008 fell by 30% year-on-year to 4.84 million tonnes,
according to International Stainless Steel Forum (ISSF). This led
to a fall in demand for nickel by about 20% since the end of last
year and nickel production has been cut by 20-30%.
• China’s manufacturing sector was the major bright spot for the
copper market. China’s official Purchasing Managers’ Index for
March rose to 52.4 from 49.0 in February, as per the China Federation
of Logistics and Purchasing (CFLP).
• Glencore said it had suspended operations at its Iscaycruz
lead-zinc mine in Peru. Production cuts in zinc too helped prices to
edge higher recently.
• China’s imports of unwrought and semi-finished copper rose
to 374,957 tonnes in March, 14% higher than the previous record
of 329,311 tonnes set in February, China’s customs office said.
Imports have risen as spot supply has been tight. However,
imports of scrap copper were pretty low.
• Chinese Premier Wen Jiabao recently said China’s annual
industrial output growth accelerated to 8.3% in March, from a
record low of 3.8% in the first two months of 2009.
• Xstrata is putting its Sinclair nickel mine in Western Australia
on care and maintenance due to decline in nickel prices. This may
trigger some upside in nickel prices once production cuts intensify.
• Vale Inco is shutting down its nickel mining and processing
operations in Sudbury, Ontario, for eight weeks starting June 1 due
to weak demand for the metal, which is mainly used to make
stainless steel. Sudbury is one of the largest nickel producing sites
in the world and last year provided feedstock for the production of
85,300 tonnes of finished nickel, 31% of which was from Vale.
• China Association of Automobile Manufacturers (CAAM)
data, released on 9th April, 2009 shows first quarter domestic car
sales reaching 2.6788 million units, up 3.88% over the same period
last year, a rebound that looks primarily to be the result of market
stimulation policies. In the first quarter, the sale of Chinese
vehicles exceeded that of the United States by over 4,00,000 units.
It is quite possible that China will overtake the United States this
year to become the world’s largest automobile market. This may
drive the demand for lead, a major raw material in manufacturing
car batteries.
Fortnightly Outlook:
We might see copper testing Rs 242 to Rs 245 levels. But we
recommend to book profits and a correction of 3-5% can be used
again as a buying opportunity as some Chinese provinces have
shown interest in buying these metals. If they live up to their word
we might see this rally intensifying. Nickel will continue to remain
bullish and prices are expected to trade up and may touch Rs
685-690/kg in the next fortnight. Lead also looks very strong due
to expectations of improvement in demand from the auto sector.
PRECIOUS METALS:
Precious metals lost some sheen in the last fortnight. Prices of gold
corrected from Rs 15,100/10gm to Rs 14,000/10gm. We saw
stability in the financial markets, which had victimized gold prices
recently. Euro strengthened against the US dollar, which triggered
more selling in precious metals. The recent results of financial
institutions in the US have exceeded expectations and have offered
something to cheer about.
Finally the largest gold ETF holding went down by 8 tonnes.
Precious metals have been on a downslide after the G20 Summit,
which aimed at moderating the crisis and IMF’s gold sales report
softened the price of the yellow metal. We believe gold prices are
likely to touch Rs 13,600 (MCX) and $850/oz (COMEX) in the
coming fortnighT.
Beyond Market 20th Apr ’09
It’s simplified...
25

Turn Volatility
Into An
Opportunity
Low risk and positive returns
make Arbitrage Funds a good
investment option in an
unpredictable market
To achieve your needs, goals and dreams, it is
important to prioritize them. Financial
planning does exactly this by routing the
current finances to various investment
options for a secured future. As a person ages, his priorities
change and so do the viable investment options.
While in the previous issue, we recommended Systematic
Investment Plan for the younger generation in the
age group of 25 to 35 years, in this issue we are laying
emphasis on Arbitrage Funds for individuals between 35
and 55 years. With added responsibilities, these people
always try to maximize returns by pumping money into
right investment avenues.
Arbitrage Funds offered to investors by the Fund Houses:
Looking at the current volatility in the stock market,
people don’t expect positive returns. However, Arbitrage
Funds offered by Fund Houses, are giving positive
returns with minimal risk. Hence this can be a good
investment option going by the unpredictability in the
stock market.
Arbitrage Funds:
Arbitrage Funds aim to capitalize on the opportunities
arising from price differences between the spot and the
future markets. These can be broadly classified into four
categories: cash future, cash to cash, index arbitrage and
call put parity.
It is a risk-free transaction as the long and short legs of
the transaction exactly offset each other and are less
volatile compared to other equity funds. There is a rare
chance of Arbitrage Funds giving negative returns.
Arbitrage Strategy:
• Entering into simultaneous transactions of a long
position in cash and a short position in futures for the
same underlying.
• Equity position is completely hedged from the very
inception of the trade.
• Arbitrage returns are generated by:
• Squaring up on expiry.
• Early square ups.
• Rollovers into next month.
Compounded Annualised %
(Point to Point)
Scheme Name
NAV
(15 Apr ’09)
Corpus
(Rs in Cr)
(31 Mar ’09)
Min
Investment
1 Year
2 Years
Since
Inception
(P2P)-C
UTI Spread Fund
HDFC Arbitrage Fund
ICICI Prudential Blended Plan - Option A
JM Arbitrage Advantage Fund
Kotak Equity Arbitrage Fund
Religare Arbitrage Fund
SBI Arbitrage Opportunities Fund
ICICI Prudential Equity & Derivatives Fund
IDFC Arbitrage Fund - Plan A
12.755
11.162
13.520
12.420
13.084
11.633
12.163
12.090
11.839
259.47
331.80
122.29
290.27
216.44
44.370
347.75
250.46
276.37
5000
5000
5000
5000
5000
5000
25000
5000
5000
9.559
7.419
7.317
7.277
7.264
6.836
6.728
6.519
5.901
9.370
--
8.063
8.055
8.004
--
7.672
8.410
6.869
9.089
7.713
8.090
8.215
7.878
8.018
8.323
8.628
7.555
26
Beyond Market 20th Apr ’09
It’s simplified...

Of the various options available, JM Arbitrage Advantage
Fund, has been giving higher payout NAV than its
previous one since inception. This fund is an open-ended
equity oriented interval fund, which was the second one
to be launched.
Asset Allocation:
72%
Equity 24% Debt 04% Money Market
JM Arbitrage Advantage Fund:
Investment Objective:
The primary investment objective of the scheme is to
generate income through arbitrage opportunities emerging
out of mispricing between the cash market and the
Top 10 Holdings as on 31 Mar’09
Company
Jammu and Kashmir Bank Ltd
Infosys Technologies Ltd
Hindustan Unilever Ltd
Oil & Natural Gas Corpn Ltd
CBLO
Global Tele-Systems Ltd
Mphasis BFL Ltd
HDFC Bank Ltd
ITC Ltd
Sun Pharmaceuticals Industries Ltd
Value
(Rs in Cr)
60.00
24.57
14.47
12.68
11.88
11.82
10.18
10.00
07.09
07.03
Top Industry Allocation as on 31 Mar’09
Sector %
Banks
30.71
Computers - Software & Education
14.77
Oil & Gas, Petroleum & Refinery
08.43
Telecom
06.47
Cement
05.58
Diversified
04.98
Engineering & Industrial Machinery
03.97
Pharmaceuticals
03.97
Power Generation, Transmission & Equip
03.29
Tobacco & Pan Masala
02.44
%
20.67
08.46
04.98
04.37
04.09
04.07
03.51
03.44
02.44
02.42
derivatives market and through deployment of surplus
cash in fixed income instruments.
Benefits of Arbitrage Fund:
No Price And Leverage Risk:
Cash positions completely hedged with futures, thus
insulated by market volatility.
Reduced Maturity Risk:
As the future maturity contracts used in the strategy are
for one month, it reduces the average maturity of the
portfolio.
Enhanced Return Over Comparable Risk Profile:
The returns are expected to be higher than the other
comparable alternative investments.
No tax on long-term capital gains (one year or more)
and only 15% tax on short-term capitals gains (less than
a year).
Unlike arbitrage activity carried out directly by the
investor that attracts 33.6% tax on his net profit, the
arbitrage activity carried out by Mutual Fund is tax-free.
Corpus As On 31 Mar’09: Rs 290.2788 cr
Nav As On 15 Apr’09: Rs 12.4203
52 Weeks High: Rs 12.44 (31 Mar’09)
52 Weeks Low: Rs 11.59 (17 Apr’08)
Fund Manager: Biren Mehta
Inception Date: 30 Jun’06
Benchmark Index: Crisil Liquid Fund Index
Due to its ability to generate risk-free returns, which in
turn, reduces the risk in one’s entire portfolio, Arbitrage
Funds make a perfect alternative investment option. With
the current global meltdown and general elections at the
door, volatility is expected to stay. Such an opportunity
can be used to invest in an Arbitrage FunD.
Beyond Market 20th Apr ’09 27
It’s simplified...

JJM Financial is an integrated financial services
group, offering a wide range of services to a
significant clientele that includes corporations,
financial institutions, high net-worth individuals
and retail investors.
The Group has interests in investment banking, institutional
equity sales, trading, research and broking, private
and corporate wealth management, equity broking,
‘Arbitrage Fund Is
A Safe Haven
Investment’
portfolio management, asset management, commodity
broking, NBFC (Non Banking Finance Company) activities,
private equity and asset reconstruction.
JM Financial Mutual Fund is one of India’s first private
sector Mutual Funds - an integral part of the first wave
that commenced operations in 1993-94. It is part of the
JM Financial Group, which has a rich heritage, built over
three decades.
Biren Mehta is the Fund Manager - Equity Derivatives at JM Financial. He
manages the JM Nifty Plus Fund and the JM Arbitrage Advantage Fund. He
brings with him a vast experience in equity trading and Arbitrage Funds. He
has worked with reputed equity trading houses and was Vice President-
Institutional Sales at Refco-Sify Securities Ltd.
Qualification: MBA – Finance
Experience: In Capital Markets since 1989.
28
Beyond Market 20th Apr ’09
It’s simplified...

Mehta speaks to Beyond Market on capital markets, JM
Arbitrage Advantage Fund and the different kinds of
funds people can opt for in the current scenario.
Excerpts from the interview:
Q. How have you seen the investment atmosphere
transform over the past decade
The Indian capital market has seen a massive transformation
in the past 10 to 15 years. I started my career when
the open outcry and the age-old badla system existed.
Then in 1994-1995 we saw the transformation of
exchanges into electronic trading systems and also the
entry of the private sector into the Mutual Fund space.
JM Financial Group took the leadoff by being the first
private sector Mutual Fund House. This opened up a lot
of opportunities for investors in terms of alternative
investment avenues. The process of investment has also
changed over the past few years. Unlike in the past, when
stocks were picked on the basis of news and some basic
fundamental analysis, a lot of research goes into stock
picking. Global inputs are taken into consideration, a lot
of new techniques are being used and the research is
more process-driven now. Investors have become aware
of the investment risks and are well informed of changes
in the Capital Markets.
Q. How is JM Financial‘s Arbitrage Fund better than
its competitors
JM Financial AMC was the first to launch the Arbitrage
scheme in India for people at large with an investment of
as low as Rs 5,000 way back in 2005. The concept was
new and a lot of hand-holding exercise and educational
seminars were held along with Dun & Bradstreet across
the country. JM Arbitrage Advantage Fund aims to
protect investors’ capital at all times and does not take
any directional position in the arbitrage space. All
positions are hedged at all times right from the start of the
trade. Our historical NAV’s show that our redemption
NAV’s are never lower than the previous redemption
NAV. The JM Arbitrage Advantage Fund provides all
tax benefits of an equity scheme and the risk parameters
are lower than that of debt schemes. The scheme has, till
date, paid dividends every quarter since 2006. And the
dividend is free of dividend distribution tax.
Q. How would an investor benefit from this scheme
going by the current economic and market scenario
Q. Do you feel investors should take extra risk for
better returns through Arbitrage Funds instead of
Income Funds
Arbitrage Funds may also be called ‘safe haven investments’.
The term arbitrage itself defines the term
risk-free. When all positions in a portfolio are completely
hedged at all times, there is no price or volatility risk. JM
Arbitrage Advantage Fund is one such product that
delivers risk-free returns. Our payout NAV has never
been lower than the previous payout NAV.
Q. What do you prefer more - value or growth Why
Value stocks are something that one can look for with a
short-term horizon of say, 6 to 8 months, like certain
stocks that are unnecessarily beaten down, but a growth
story is the kicker and that is where the real multi-bagger
lies. Depending on one’s investment horizon a strategy
needs to be adopted for value or growth stocks.
Q. What kind of funds should one invest in the
current situation
In the current situation, alternative investment avenues
like a capital protection fund with stable returns is a must
in every investor’s portfolio. The stock market scams in
the past and the global financial meltdown now have all
led to great wealth erosion in every portfolio. An
Arbitrage Fund may not give a handsome return like an
equity stock or equity scheme, but will give good and
stable returns over a longer period of time and give you a
good night’s sleep over your investments.
Q. How do you think Indian stock market will cope
with the ongoing economic meltdown
The Indian stock market is very resilient and history has
proven this in the past too. Indian bourses have witnessed
many a fall and have withstood all the stock market and
political scams over the years. We in India have a mature
set of traders and investors who understand the risks
associated with investing in direct equities. India has
definitely not been insulated from the global meltdown,
but our conservative financial policies by the Reserve
Bank of India have saved us from a major crisis. Our
banks have been strong and more resilient than the banks
in the western hemisphere. Our economy will be ready to
bounce back in a matter of 4 to 6 quarterS.
When an investor invests money he looks for a) capital
protection, b) stable returns and c) tax efficiency among
other things. JM Arbitrage Advantage Fund gives an
investor all the above benefits. This is how an investor
will benefit in the present time.
Beyond Market 20th Apr ’09 It’s simplified... 29

BULK DEALS
MAJOR BULK DEALS WHERE OVER 1% OF EQUITY WAS TRADED FROM 30 Mar’09 TO 09 Apr ’09
Exchange Date Company Client
Transaction Quantity % of Equity
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
BSE
30 Mar'09
30 Mar'09
30 Mar'09
30 Mar'09
30 Mar'09
30 Mar'09
31 Mar'09
31 Mar'09
31 Mar'09
31 Mar'09
31 Mar'09
31 Mar'09
31 Mar'09
31 Mar'09
01 Apr'09
02 Apr'09
02 Apr'09
06 Apr'09
06 Apr'09
06 Apr'09
06 Apr'09
BL Kashyap
Forbes Gokak
Indage Vintners
Indage Vintners
Spanco
Welspun India
BL Kashyap
Decolight Ceram
Indo Tech Trans
Shri Baj Alloys
Spanco
Steel Exchange
Temptation Food
TV 18
Allied Digital
Pritish Nandy
Pritish Nandy
Arshiya Intl
FAG Bearings
FAG Bearings
FAG Bearings
Arisaig Partners Asia Pte Ltd
Deutesche Int Trust Corp Mauritius Ltd
India Max Investment Fund Ltd.
Sicom Ltd
AVL India Leasing
Welspun Trading Ltd
Arisaig India Fund Ltd
Clarus Finance And Securities
Blackstone Asia Advisors L.l.c.
Clarus Finance And Securities
AVL India Leasing
Clarus Finance And Securities
Venture Business Advisors Pvt Ltd
T Rowe Price New Asia Fund
Blackrock Trust Japan
Cresta Fund Ltd
The Indiaman Mauritius Ltd
Swiss Finance Corporation Mauritius Ltd
Acacia Institutional Partners Lp
Acacia Partners Lp
Notz Stucki Et Cie S A
Sell
Buy
Buy
Sell
Buy
Buy
Sell
Buy
Sell
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Sell
Sell
Buy
Buy
Sell
400000
400000
200000
218620
400000
1543262
446650
268159
190628
240092
685000
419236
435171
1926292
191015
1000000
1000000
999729
192402
179181
447177
1.95
3.1
1.31
1.43
1.94
2.11
2.17
1.46
1.79
2.67
3.32
2.09
1.73
1.61
1.05
6.91
6.91
1.7
1.16
1.08
2.69
Price (Rs)
Traded Close
129.75
360
49.45
49.45
25.87
21.42
129
6.5
300.01
14.1
27.61
13.43
29.87
67.5
173
15.25
15.25
50.02
283
283
283
129.6
359.95
49.3
49.3
25.95
21.25
130.65
6.14
299.8
14
27.85
16.04
29.35
70.15
177.7
18
18
58
298.7
298.7
298.7
Source: NSE, BSE & RBI
PUT CALL RATIO
30 Mar'09
31 Mar'09
01 Apr'09
02 Apr'09
06 Apr'09
08 Apr'09
09 Apr'09
Call Open
Interest
108747425
122332365
131416682
136806696
150459528
165724537
174651562
Future
Open
Interest
969944473
990569595
1029992880
1072019450
1094927235
1170799943
1161765327
Put
Open
Interest
79129205
84422523
95350270
108552064
116411269
128970473
138168624
CLOSE
2988.10
3015.25
3061.50
3222.60
3260.25
3355.50
3355.40
Call
Volume
88693678
90606242
98187426
124537706
120602253
154326778
134251735
Put
Volume
50883871
43109942
47667320
63788569
48876709
64732095
57256615
Future
Value
28418
30386
30093
29937
28251
37304
37129
Call
Value
10180
9231
12008
13678
10674
14518
13261
Put
Value
10440
8999
10382
13265
9420
13377
12493
Put Call
Ratio
103
97
86
97
88
92
94
PUT CALL RATIO (CONTD.)
30 Mar'09
31 Mar'09
01 Apr'09
02 Apr'09
06 Apr'09
08 Apr'09
09 Apr'09
Future Open
Interest
Value
26586.32
27708.03
28981.36
31927.10
32607.54
35708.76
36369.59
Call Open
Interest
Value
11884.50
12688.38
13167.59
13926.41
15113.90
16467.82
17411.96
Put Open
Interest
Value
16644.24
17180.06
18923.05
21601.53
22394.46
24309.65
25628.99
Future
Volume
870882855
934239482
974038545
1092221891
1108878764
1363526699
1342209292
These tables show position
of futures and options for
the fortnight gone by
Source: NB Research
30
Beyond Market 20th Apr ’09
It’s simplified...

CHANGE IN PRICE AND OPEN INTEREST
Company Name
ABB Ltd
ACC Ltd
Ambuja Cements Ltd
Axis Bank Ltd
Bank NIFTY
Bharat Heavy Electricals Ltd
Bharat Petroleum Corporation Ltd
Bharti Airtel Ltd
Cairn India Ltd
Cipla Ltd
DLF Ltd
GAIL (India) Ltd
Grasim Industries Ltd
HCL Technologies Ltd
HDFC Bank Ltd
HDFC Ltd
Hero Honda Motors Ltd
Hindalco Industries Ltd
Hindustan Unilever Ltd
I T C Ltd
ICICI Bank Ltd
Idea Cellular Ltd
Infosys Technologies Ltd
Larsen & Toubro Ltd
Mahindra & Mahindra Ltd
Maruti Suzuki India Ltd
National Aluminium Co. Ltd
NIFTY
NTPC Ltd
Oil & Natural Gas Corporation Ltd
Power Grid Corporation of India Ltd
Punjab National Bank
Ranbaxy Laboratories Ltd
Reliance Capital Ltd
Reliance Communications Ltd
Reliance Industries Ltd
Reliance Infrastructure Ltd
Reliance Petroleum Ltd
Reliance Power Ltd
Siemens Ltd
State Bank of India
Steel Authority of India Ltd
Sterlite Industries (India) Ltd
Sun Pharmaceutical Industries Ltd
Suzlon Energy Ltd
Tata Communications Ltd
Tata Consultancy Services Ltd
Tata Motors Ltd
Tata Power Co. Ltd
Tata Steel Ltd
Unitech Ltd
Wipro Ltd
CHANGE IN PRICE AND OPEN INTEREST OF THE NIFTY 50 COMPANIES
30 Mar'09 09 Apr'09
Price
(Rs)
406.90
561.60
70.90
398.05
4044.00
1485.00
369.40
612.30
182.50
218.00
161.05
233.90
1540.00
99.00
941.00
1453.00
1047.00
50.30
240.60
179.80
339.20
50.35
1300.00
654.00
371.50
751.45
220.00
2995.00
183.60
790.10
95.00
396.40
159.00
339.00
164.85
1536.25
505.55
94.90
100.50
247.90
1026.00
93.65
349.50
1087.85
41.70
523.20
527.00
171.85
767.70
196.60
32.50
243.40
Open
Interest
1188500
2137184
7546920
5880600
674750
2383500
1127500
8581500
9387500
2230000
24646400
4475250
635008
2880800
3588400
2187600
2463200
13319148
9613000
16650000
13786500
22923000
6167600
5018000
3290976
4308800
2605900
36180350
24625250
5740200
19615750
2003400
5265600
7320624
19427800
8764200
5144088
21312700
23996000
1135520
3997224
20498400
8993016
891675
31872000
1286250
4966000
11184300
1130800
10893112
55521000
4003200
Price
(Rs)
463.8
584.25
77.95
445.1
4596.25
1504.8
385
670
200.25
228.7
214.55
270.2
1605.9
121.45
1050
1706.05
1066.75
59
236
189.25
397.7
55.75
1430.35
829
436.3
804.8
253.9
3360
196.1
889.15
96.6
453
192.5
469.15
209.75
1744
654
109
120.45
285
1142.05
111.55
399.9
1134.2
57.5
580.5
607.1
220.7
886.55
261.1
41.6
277.7
Open
Interest
1398500
2277056
8775872
7292700
1057450
2900400
1582900
9516500
12042500
3113750
26113600
5448375
874368
3052400
4525200
2205300
2576800
18378032
11309000
19273500
18689300
23895000
6952400
5116800
3715296
4381600
2987700
43957950
32677125
7803900
22861300
2641200
4672000
6907176
26213600
10356000
6484344
22116700
27570000
1540096
4938120
24829200
11417784
1083375
38568000
1548750
5644000
10670900
1304800
13348608
73458000
5241600
Change
in Price
(Rs)
56.90
22.65
7.05
47.05
552.25
19.80
15.60
57.70
17.75
10.70
53.50
36.30
65.90
22.45
109.00
253.05
19.75
8.70
-4.60
9.45
58.50
5.40
130.35
175.00
64.80
53.35
33.90
365.00
12.50
99.05
1.60
56.60
33.50
130.15
44.90
207.75
148.45
14.10
19.95
37.10
116.05
17.90
50.40
46.35
15.80
57.30
80.10
48.85
118.85
64.50
9.10
34.30
Change
in Open
Interest
210000
139872
1228952
1412100
382700
516900
455400
935000
2655000
883750
1467200
973125
239360
171600
936800
17700
113600
5058884
1696000
2623500
4902800
972000
784800
98800
424320
72800
381800
7777600
8051875
2063700
3245550
637800
-593600
-413448
6785800
1591800
1340256
804000
3574000
404576
940896
4330800
2424768
191700
6696000
262500
678000
-513400
174000
2455496
17937000
1238400
Change
in
Price(%)
13.98
4.03
9.94
11.82
13.66
1.33
4.22
9.42
9.73
4.91
33.22
15.52
4.28
22.68
11.58
17.42
1.89
17.30
-1.91
5.26
17.25
10.72
10.03
26.76
17.44
7.10
15.41
12.19
6.81
12.54
1.68
14.28
21.07
38.39
27.24
13.52
29.36
14.86
19.85
14.97
11.31
19.11
14.42
4.26
37.89
10.95
15.20
28.43
15.48
32.81
28.00
14.09
Change
in Open
Interest
(%)
17.67
6.54
16.28
24.01
56.72
21.69
40.39
10.90
28.28
39.63
5.95
21.74
37.69
5.96
26.11
0.81
4.61
37.98
17.64
15.76
35.56
4.24
12.72
1.97
12.89
1.69
14.65
21.50
32.70
35.95
16.55
31.84
-11.27
-5.65
34.93
18.16
26.05
3.77
14.89
35.63
23.54
21.13
26.96
21.50
21.01
20.41
13.65
-4.59
15.39
22.54
32.31
30.94
Source: NB Research
Beyond Market 20th Apr ’09
It’s simplified... 31

PRICE TO BOOK VALUE
The table given below represents companies
that are listed on the BSE . These companies
have a price to book value below 1
Company Name
Current Market Price
(16 Apr’09)
Book Value
Price / Book Value
Videocon Indsustries Ltd
Mahanagar Telephone Nigam Ltd
Raymond Ltd
Hindalco Industries Ltd
Hinduja Ventures Ltd
J K Cements Ltd
Gujarat Alkalies and Chemicals Ltd
Chennai Petroleum Corporation Ltd
Electrosteel Castings Ltd
Moser Baer India Ltd
Gujarat Narmada Valley Fertilizers Company Ltd
Zuari Indsustries Ltd
Finolex Cables Ltd
Gujarat State Fertilizers Chemicals Ltd
Gammon India Ltd
Shipping Corporation of India Ltd
Anant Raj Industries Ltd
PSL Ltd
Nirma Ltd
Tamil Nadu Newsprint and Papers Ltd
Dalmia Cement Bharat Ltd
Great Eastern Shipping Company Ltd
Provogue India Ltd
Bajaj Hindusthan Ltd
Kesoram Indsustries Ltd
Deepak Fertilisersand Petrochemicals Corporation Ltd
Patni Computer System Ltd
Ballarpur Industries Ltd
Bongaigaon Refinery and Petrochemicals Ltd
Dredging Corporation of India Ltd
Tube Investments of India ltd
MRF Ltd
Asian Hotels Ltd
EMCO Ltd
Gujarat Industries Power Company Ltd
Hindustan Petroleum Corporation Ltd
JSW Steel Ltd
Inox Leisure Ltd
Apollo Tyres Ltd
Shiv Vani Oil and Gas Exploration Services Ltd
Mercator Lines Lines
Prime Focus Ltd
Tata Steel Ltd
McNally Bharat Engineering Company Ltd
Sundram Fasteners Ltd
3i Infotech Ltd
Phoenix Mills Ltd
Usha Martin Ltd
HEG Ltd
Rajesh Exports Ltd
114.85
74.55
91.4
57.9
133.6
53.9
74.7
118.6
21.03
64.1
69.05
170.2
25.45
112.05
74.8
89.3
66.5
90.55
111.1
66.65
95.35
198.95
40.8
70.1
157.35
59.7
149.7
17.47
44.55
345.5
30.35
2083.05
233.85
52.5
62.9
262.75
330.85
35.85
21.75
125.15
34.45
130.15
269.15
48.45
18.24
39.65
95.05
33.4
117.5
32.45
294.96
189.23
227.81
128.42
287.67
108.99
146.85
232.61
40.94
117.03
118.75
286.84
41.94
184.62
111.93
133.01
98.04
132.45
162.26
95.37
132.8
273.03
55.77
95.13
213.51
79.23
196.8
22.83
57.66
442.42
38.86
2643.37
290.52
64.04
75.17
311.31
391.73
41.89
25.22
140.14
38.5
144.96
298.78
53.53
20.09
41.7
98.56
34.59
120.91
33.08
0.39
0.39
0.40
0.45
0.46
0.49
0.51
0.51
0.51
0.55
0.58
0.59
0.61
0.61
0.67
0.67
0.68
0.68
0.68
0.70
0.72
0.73
0.73
0.74
0.74
0.75
0.76
0.77
0.77
0.78
0.78
0.79
0.80
0.82
0.84
0.84
0.84
0.86
0.86
0.89
0.89
0.90
0.90
0.91
0.91
0.95
0.96
0.97
0.97
0.98
Source: Capital Line
32
Beyond Market 20th Apr ’09
It’s simplified...

CASH POSITION OF ASSET MANAGEMENT COMPANIES
This table signifies change in the amount of cash held by fund houses.
An increase in the cash position can be due to the fund houses
choosing to hold cash expecting better opportunities in the future or it could also be that
they are expecting more redemptions due to a liquidity crunch and are therefore
maintaining a high cash position.
A decrease in the cash holding can be the outcome of purchases made by fund houses
or due to redemptions that might have come in during the said period.
Fund House
AIG Global Investment Group Mutual Fund
Baroda Pioneer Mutual Fund
Benchmark Mutual Fund
Birla Sun Life Mutual Fund
Canara Robeco Mutual Fund
DBS Chola Mutual Fund
DSP BlackRock Mutual Fund
Deutsche Mutual Fund
Escorts Mutual Fund
Fidelity Mutual Fund
Fortis Mutual Fund
Franklin Templeton Mutual Fund
HDFC Mutual Fund
HSBC Mutual Fund
ICICI Prudential Mutual Fund
IDFC Mutual Fund
ING Mutual Fund
JM Financial Mutual Fund
JPMorgan Mutual Fund
Kotak Mahindra Mutual Fund
LIC Mutual Fund
Religare Mutual Fund
Mirae Asset Mutual Fund
Morgan Stanley Mutual Fund
PRINCIPAL Mutual Fund
Quantum Mutual Fund
Reliance Mutual Fund
Sahara Mutual Fund
SBI Mutual Fund
Sundaram BNP Paribas Mutual Fund
Tata Mutual Fund
Taurus Mutual Fund
UTI Mutual Fund
Total
Corpus*
as on
28 Feb '09
(Rs in Cr)
514.07
30.88
22.84
4120.77
301.73
122.32
5732.85
295.70
19.45
4216.14
347.06
7334.59
9792.88
2375.15
7454.32
2584.10
297.92
1235.01
645.76
2187.86
850.73
503.68
138.12
1373.13
1377.50
20.95
19494.84
37.54
9808.22
4573.00
3686.43
137.88
12319.54
103952.94
Feb'09
Cash
Holding
(Rs in Cr)
7.49
4.68
1.45
827.76
44.33
20.81
753.32
57.34
6.40
329.10
27.75
435.13
946.59
370.18
757.70
281.22
17.16
162.73
166.70
356.70
127.48
32.01
5.13
40.41
107.79
0.96
6306.97
13.47
2134.19
993.60
806.60
36.46
3620.56
19800.16
Cash
Holding
(%)
1.46
15.15
6.35
20.09
14.69
17.01
13.14
19.39
32.89
7.81
8.00
5.93
9.67
15.59
10.16
10.88
5.76
13.18
25.81
16.30
14.98
6.36
3.72
2.94
7.83
4.56
32.35
35.88
21.76
21.73
21.88
26.45
29.39
19.05
Corpus*
as on
31 Mar '09
(Rs in Cr)
537.18
30.88
22.12
4438.53
323.64
130.57
6108.61
300.59
17.77
4010.06
353.66
8034.43
10450.17
2492.96
7997.21
2443.05
307.35
1313.87
678.90
2299.44
868.74
493.80
152.42
1452.70
1460.41
22.79
20704.33
38.96
10581.25
4879.63
3955.41
130.60
13148.16
110180.16
Mar'09
Cash
Holding
(Rs in Cr)
13.24
4.68
2.46
804.66
35.82
12.06
682.63
57.14
7.53
350.27
22.83
550.73
999.16
350.48
826.06
272.44
15.95
301.47
152.29
362.93
142.80
39.02
5.42
75.46
141.54
0.91
5829.42
10.53
1374.34
978.07
713.71
28.60
3843.48
19008.14
Cash
Holding
(%)
2.46
15.15
11.12
18.13
11.07
9.24
11.17
19.01
42.39
8.73
6.46
6.85
9.56
14.06
10.33
11.15
5.19
22.95
22.43
15.78
16.44
7.90
3.55
5.19
9.69
4.00
28.16
27.03
12.99
20.04
18.04
21.90
29.23
17.25
* AUM of the Equity schemes owned by the fund house
Beyond Market 20th Apr ’09
It’s simplified... 33

COMPANIES IN AND OUT
IN
COMPANY QTY AMC
OUT
Shares of companies bought and sold by
FUND HOUSES from Feb’09 to Mar’09
COMPANY QTY AMC
ABB Ltd
ACC Ltd
Axis Bank Ltd
Bharat Heavy Electricals Ltd
Bharat Petroleum Corporation Ltd
Bharti Airtel Ltd
Cairn India Ltd
Cipla Ltd
DLF Ltd
Gas Authority Of India Ltd
Grasim Industries Ltd
HDFC Bank Ltd
Hindalco Industries Ltd
Hindustan Unilever Ltd
ICICI Bank Ltd
Idea Cellular Ltd
Infosys Technologies Ltd
Mahindra & Mahindra Ltd
Maruti Suzuki India Ltd
National Aluminium Company Ltd
NTPC Limited.
Power Grid Corporation of India Ltd
Punjab National Bank
Reliance Capital Ltd
Reliance Infrastructure Ltd
Reliance Petroleum Ltd
Reliance Power Ltd
Siemens Ltd
1488
30600
2040
34128
20636
29
117286
87135
225086
590
37538
163107
10130
210775
2801
190446
8356
890
354411
11948
367249
7810
274361
282171
55055
10
102480
1511000
1613480
44000
2530
61497
21776
600000
683273
680
7020
115000
449472
571492
37232
59635
96867
4533
548287
29560
1599
10001
59916
71516
1706
63548
65254
419520
759295
49962
5540
1234317
397479
60300
82727
540506
16844
18759
35603
2365
10000
12365
ICICI Prudential
Kotak Mahindra
Sahara
Escorts
Edelweiss
IDFC
JP Morgan
Bharti AXA
ICICI Prudential
JP Morgan
Taurus
Bharti AXA
JP Morgan
Benchmark
Benchmark
DSP BlackRock
ICICI Prudential
Benchmark
JP Morgan
JP Morgan
Sahara
Escorts
Sundaram BNP Paribas
DBS Chola
Bharti AXA
Fortis
ICICI Prudential
Sundaram BNP Paribas
Bharti AXA
Sahara
Sundaram BNP Paribas
Tata
JP Morgan
Tata
ICICI Prudential
JP Morgan
ICICI Prudential
Bharti AXA
Fortis
JP Morgan
ICICI Prudential
JP Morgan
DSP BlackRock
HSBC
JP Morgan
Religare
JP Morgan
Kotak Mahindra
Morgan Stanley
ICICI Prudential
Taurus
ICICI Prudential
Kotak Mahindra
ABB Ltd
ACC Ltd
Ambuja Cements Ltd
Axis Bank Ltd
Bharat Heavy Electricals Ltd
Bharat Petroleum Corporation Ltd
Bharti Airtel Ltd
Cairn India Ltd
Cipla Ltd
Gas Authority Of India Ltd
Grasim Industries Ltd
HCL Technologies Ltd
HDFC Bank Ltd
Hindalco Industries Ltd
Hindustan Unilever Ltd
HDFC Ltd
ICICI Bank Ltd
Idea Cellular Ltd
Infosys Technologies Ltd
ITC Ltd
Larsen & Toubro Ltd
Mahindra & Mahindra Ltd
Maruti Suzuki India Ltd
NTPC Ltd
Oil & Natural Gas Corpn Ltd
Punjab National Bank
Ranbaxy Laboratories Ltd
Reliance Capital Ltd
Reliance Industries Ltd
Reliance Infrastructure Ltd
Reliance Power Ltd
Siemens Ltd
1624369
574907
14000
46571
630934
3412157
9060
2233998
2243058
3999
6536229
6540228
7609703
19365
7629068
2422269
39955
1020553
8783
1069291
10787508
840464
44498
884962
3990
133684
12097902
12235576
6478488
1508904
5250
1514154
13417220
3047005
2077410
785
2078195
5968471
1949116
35000
1000
4352089
4353089
55000
959719
1014719
4829331
372
15000
27386
2148145
3400
2194303
1629000
1994691
46403
500000
4170094
191695
7306127
29200
8142870
8172070
10825
33000
3002
2274258
2310260
Reliance
Reliance
Sahara
JM Financial
Reliance
Reliance
Escorts
Reliance
Bharti AXA
Reliance
Reliance
Taurus
Reliance
DWS
Reliance
Religare
Reliance
Reliance
Religare
BOB
Kotak Mahindra
Reliance
Reliance
Reliance
Religare
Reliance
Reliance
Reliance
Taurus
Reliance
Reliance
Kotak Mahindra
BOB
Reliance
BOB
Reliance
Reliance
Benchmark
DBS Chola
Escorts
Reliance
Sahara
HSBC
Reliance
Religare
Tata
Reliance
Reliance
Mirae Asset
Reliance
BOB
BOB
DBS Chola
Reliance
(continued)
34
Beyond Market 20th Apr ’09
It’s simplified...

IN
OUT
COMPANY QTY AMC
COMPANY QTY AMC
Steel Authority of India Ltd
Sterlite Industries (India) Ltd
Sun Pharmaceuticals Industries Ltd
Suzlon Energy Ltd
Tata Communications Ltd
Tata Consultancy Services Ltd
Tata Motors Ltd
Tata Steel Ltd
Unitech Ltd
38406
29041
67447
1751
17817
495000
134813
178704
50
828135
74
65062
65136
29492
4635000
10531
4675023
2012
33048
35060
3150
2910
5124
8034
11404
26700
38104
Escorts
ICICI Prudential
Bharti AXA
Escorts
HSBC
JP Morgan
Kotak Mahindra
Sahara
Benchmark
JP Morgan
Bharti AXA
HSBC
ICICI Prudential
ICICI Prudential
Religare
ICICI Prudential
Benchmark
Sahara
ICICI Prudential
Taurus
State Bank of India
Steel Authority of India Ltd
Sterlite Industries (India) Ltd
Sun Pharmaceuticals Industries Ltd
Suzlon Energy Ltd
Tata Consultancy Services Ltd
Tata Motors Ltd
Tata Power Company Ltd
Tata Steel Ltd
Wipro Ltd
6738409
50000
2019671
2069671
2929618
389858
34798
9000
12601
8144
454401
11569027
735527
12304554
5622378
3863
5626241
6497
30943
37440
2094949
30180
9055589
9085769
2913007
Reliance
Mirae Asset
Tata
Reliance
Birla Sun life
ING
Mirae Asset
Religare
Taurus
Reliance
Sundaram BNP Paribas
Reliance
Taurus
BOB
Taurus
Reliance
Morgan Stanley
Reliance
Reliance
800
600
400
200
0
-200
-400
-600
MF Net , FII Net & Nifty
30 Mar’09 02 Apr’09 09 Apr’09
MF FII NIFTY
3400
3300
3200
3100
3000
2900
2800
2700
MUTUAL FUND ACTIVITY,
FII ACTIVITY
& NIFTY
This graph and data represents
the Mutual Fund and FII activity
that has taken place in the last 15 days,
whether the fund houses have
been buyers or sellers.
Beyond Market 20th Apr ’09
Date
30 Mar'09
31 Mar'09
01 Apr'09
02 Apr'09
06 Apr'09
08 Apr'09
09 Apr'09
Source: NB Research
MF Net*
-220.5
627.4
16.1
245.1
-222.9
-489.5
359.8
FII Net *
-270.7
-464.6
-531.4
234.8
696.3
172.3
484.1
Nifty
2978.15
3020.95
3060.35
3211.05
3256.6
3342.95
3342.05
*Net activity in Equity
It’s simplified... 35

Equity Schemes
36 Beyond Market 20th Apr ’09
Scheme Name
Movers
SBI Magnum Midcap Fund
JM Basic Fund
JM Emerging Leaders Fund
SBI Magnum Sector Umbrella - Emerging Businesses
Canara Robeco Emerging Equities
Laggards
UTI-MEPUS
IDFC India GDP Growth Fund
HSBC Dynamic Fund
Religare AGILE Fund
Escorts High Yield Equity Plan
Balance Schemes
Movers
HDFC Prudence Fund
Birla Sun Life 95
Canara Robeco Balance
PRINCIPAL Balanced Fund
Birla Sun Life Balance Fund
Laggards
Escorts Opportunities Fund
Escorts Balanced Fund
ICICI Prudential Balanced
Tata Balanced Fund
FT India Balanced Fund
Debt Schemes
Scheme Name
Scheme Name
Movers
ICICI Prudential Income Fund
DWS Premier Bond Fund - Regular Plan
HDFC Income Fund
HDFC HIF
IDFC D B F- Plan A
Laggards
Franklin India International Fund
Sundaram BNP Paribas Income Plus
SBI Magnum NRI Invst Fund - Long Term Bond Plan
Baroda Pioneer Income Fund
JM Income
NAV
(9-Apr’09)
11.4700
9.7693
3.9086
16.1000
8.7500
29.6600
10.4489
6.5717
4.6000
7.5582
NAV
(9-Apr’09)
98.7990
168.6300
34.4500
19.2500
28.3200
23.1569
37.6033
27.7200
45.0838
30.9417
NAV
(9-Apr’09)
28.5794
14.8599
20.5940
29.9510
17.8533
12.4207
14.4546
10.5555
13.8925
28.5173
Absolute %
(Point to Point)
2 Weeks
19.9791
18.4574
18.1560
17.4325
17.1352
0.1689
3.2347
3.7839
4.0724
4.5828
Absolute %
(Point to Point)
2 Weeks
9.6974
9.3864
8.7094
8.2069
7.0295
0.4472
2.6591
4.9602
5.2858
5.3356
Absolute %
(Point to Point)
2 Weeks
3.7723
3.4704
3.2741
3.1246
3.0446
-0.8494
0.0408
0.0417
0.0468
0.1071
Source: NB Research
It’s simplified...
MOVERS
AND
LAGGARDS
IN MUTUAL
FUND SCHEMES

TECHNICAL OUTLOOK FOR THE FORTNIGHT
As predicted in the last issue, the market continued to move up
and the Nifty also surged ahead positively crossing the 200-day
moving average. Earlier this month we saw a spectacular rally in
the Indian market after Nifty managed to sustain above the 3,150
mark. Thereafter, it went on a northbound journey and began
making higher tops and higher bottoms, testing the 3,511 mark in
nine trading sessions. Global cues were mixed. We, therefore, saw
buying across sectors along with short-covering in reality, banking
and capital goods. The turnovers also increased in the last
couple of days and recorded the highest figure since 25th September,
2008. Incidentally, FIIs were net buyers in the cash segment
in the past week while Mutual Funds were net sellers and were
seen booking profits.
Going forward, it is necessary that the market consolidates and
sustains above its 200-day SMA (3,415), which is its long-term
moving average. The Nifty Relative Strength Index (RSI) at one
time had reached 81. In a normal market, if the RSI is above 65
then it is considered as overbought. With the market being in the
overbought region, one may see a correction in the coming days.
Hence, aggressive positioning may not be sensible till we get a
clear picture of the market direction.
In the last nine trading sessions we saw huge volumes in small and
mid-cap stocks. We believe that one should focus on mid-cap
stocks rather than the frontline. Even if we look at the benchmark
indices, the market moved continuously in the nine
trading sessions and was up almost 1,800/545 points from the
April low.
The short-term outlook is overbought with the RSI at 81
suggesting higher level sell off in the coming days. Thus at the
current juncture, we believe that the upside is capped and going
forward the index is most likely to witness a correction before
giving a fresh break-out above the 3,520 level.
At this current market scenario the price does not offer great
risk or reward. So we recommend selling in this rally. The
overall trend is likely to remain cautiously positive as indices
are near their long-term moving average. In the near term, Nifty
faces resistance at 3,520 and 3,670 levels while 3,230 and 3,110
are its important support levels. If Nifty breaks the 3,110 level
then the market could witness a sharp fall and we may test
2,910 level. On the upside, the Sensex faces resistance at the
11,400 and 11,950 levels but seeks support at the 10,500 and
10,110 levels. So investors should wait for the market to settle
down and then enter again.
Stock Idea: Bhel, HDFC, LT, Bharti Airtel, Indian Oil Corporation
and State Bank of India appear to be great buys on dipS.
Nifty Future Daily Chart: Nifty Future resistance at 3,520, it’s a 50% retracement level from
the high of 4,800 to the low of 2,228. First strong support exits at 3,205.
1 61 .8 %
1 00 .0 %
6 1. 8%
5 0. 0%
3 8. 2%
2 3. 6%
0 .0 %
- N S E 50 - 1 M O N T H (3, 5 00 .6 0 , 3, 51 4 .0 0 , 3, 36 2 .1 0, 3 ,3 7 5 .6 0, -1 1 7. 3 00 )
F e b ru ary M a rc h A p ril M a y J u ne J u ly A u g us t S e p te m b erO c t ob e r N o v e m be rD e c em be r 2 00 9 F e b ru ary M a rc h A p ril M a y
7 20 0
7 10 0
7 00 0
6 90 0
6 80 0
6 70 0
6 60 0
6 50 0
6 40 0
6 30 0
6 20 0
6 10 0
6 00 0
5 90 0
5 80 0
5 70 0
5 60 0
5 50 0
5 40 0
5 30 0
5 20 0
5 10 0
5 00 0
4 90 0
4 80 0
4 70 0
4 60 0
4 50 0
4 40 0
4 30 0
4 20 0
4 10 0
4 00 0
3 90 0
3 80 0
3 70 0
3 60 0
3 50 0
3 40 0
3 30 0
3 20 0
3 10 0
3 00 0
2 90 0
2 80 0
2 70 0
2 60 0
2 50 0
2 40 0
2 30 0
2 20 0
2 10 0
2 00 0
1 90 0
Disclaimer
The information provided here has been obtained
from various sources and is considered to be
authentic and reliable. However, Nirmal Bang
Securities Private Limited is not responsible for
any error or inaccuracy in the same.
Beyond Market 20th Apr ’09
It’s simplified...
37

Cool Retreats
To Beat
The Heat
Visit the good old
destinations this summer
without burning a hole
in your pocket
Being a tropical country, India witnesses
quite harsh summers. And the sweltering heat
is pushing people to pack their bags and head
to cooler climes. Given the economic
meltdown, not many are willing to go abroad. So what
does one do keeping in mind all these factors We
suggest you take off to popular Indian hotspots to rejuvenate
and relax.
Getting there:
Bangalore (260 km), Mangalore (135 km)
Mysore (146 km)
The Mysore-Mangalore highway (NH48) passes
through Kodagu. The district headquarters Madikeri
(Mercara), is 260 km from Bangalore and 120 km from
Mysore. The distance from Mangalore is 136 km and
from Cannanore and Tellicherry, it is about 115 km.
There are regular buses plying from these locations
places to Madikeri.
1. Hotel Coorg International
Convent Road,
Madikeri.
Tel: (8272) 29390/28071/28072
Coorg:
One of the best places in the country you can be at during
summer, Coorg is also known as the ‘Scotland of India’.
Coorg or Kodagu will haunt you forever with its timeless
beauty. It offers a fascinating past, captivating natural
beauty, great cuisine and aromas of coffee plantations,
oranges and honey. Set amidst verdant valleys, imposing
mountains and teak wood forests, this is one of the most
beautiful hill stations you can visit. Only 252 km from
Bangalore, Coorg offers various activities such as
trekking, golf, angling and white water rafting.
2. Kabbe Holidays Home Stay
Chelavara Village, Cheyandane P.O., S.Coorg.
Tel: (8272) 200658
Mob: 098454 46652/098459 9451
3. Swarga Resorts
Coffee Planter, Kumbarahalli Estate Post, Via Yeslur,
Hassan District.
Tel: (8173) 329215, 278242
Mob: 094480 54505
38
Beyond Market 20th Apr ’09
It’s simplified...

3. Albert Guest House
41, Brooks Land, Coonoor.
Tel.: (0423) 2231223
Ooty:
Ooty, short for Ootacamund or Udagamandalam, is one
of South India’s most popular hill stations. It is also
called as the ‘Queen of hill stations’. Situated in the
Nilgiri Hills at an altitude of 2,240 mts and spread out
along a high plateau, Ooty is covered with green forests
and valleys, tea plantations, streams and mountains.
Though crowded during summer, Ooty remains a favourite
among travellers both local and foreign. It used to be
a popular summer and weekend getaway for the Britishers
during the colonial days. An added attraction for
tourists heading to Udagamandalam is the mountain train
journey on a ratchet and pinion track which commences
from Kallar near Mettupalayam and wends its way
through many hair-raising curves and fearful tunnels and
chugs along beside deep ravines full of verdant vegetation,
gurgling streams and tea gardens.
Manali:
This is Himachal Pradesh’s main summer destination for
backpackers, trekkers and partygoers wanting to escape
the summer heat. A popular tourist destination at 570 km
from New Delhi and 280 km from Shimla, Manali is the
northern-most town of Himachal Pradesh’s Kullu valley.
Situated on the national highway that leads to Leh,
Manali is also the gateway to the remote and desolate
valleys of Lahaul and Spiti. Manali and its surrounding
areas are of great significance to the Indian culture and
heritage as it was the home and abode of the Saptarshi’s
or seven sages. The ancient cave temple, Hidimba Devi
Temple, is not far from town, 3 km from the main city.
Manu Maharishi temple is also located in old Manali
village, which is 4 km far from the Manali. There are
various places around Manali too like Rohtang Pass,
Monasteries, Rahala waterfalls and Vashishat, which
people can visit.
Getting there:
Coimbatore (100 km). You can catch a direct flight
to Coimbatore from Chennai, Kozhikode, Bangalore and
Mumbai. Indian Airlines flies Delhi-Kochi via Mumbai
and Coimbatore.
Mettupalayam (46 km). The next major railway
junction is Coimbatore (89 km). It is connected with all
major cities.
It is 18 km from Coonoor (via Gudalur), 155 km
from Mysore, 187 km from Calicut. There are regular
bus services from most destinations.
1. Taj Savoy Hotel
77, Sylks Road,
Ooty.
Tel: (0423) 2444142
2. Nahar's Nilgiris Hotel
52A Charing Cross,
Ooty.
Tel: (0423) 2442173, 2443685
Getting there:
Bhuntar (50 km). There are a number of non-stop
services to Bhuntar from Delhi.
Manali is not easily approachable by rail. The nearest
broad gauge railheads are at Chandigarh (315 km),
Pathankot (325 km) and Kalka (310 km). The nearest
narrow gauge railhead is at Joginder Nagar (135 km).
Manali is well connected by road to Delhi through
NH-21 and NH 1 which goes on to Leh and is considered
to be world’s highest motorable road.
1. Albert Country Resorts
Address: Near Log-Huts,
Manali.
Tel.: (0902) 254187
Beyond Market 20th Apr ’09
It’s simplified... 39

2. Leela Huts
Sunshine Orchards, Club House Road,
Manali.
Tel.: 0902 (252464)
3. Hotel Gilbert Manali
Hadimba Road, Manali.
Mob: 099966 31113
3. Rands (Private Bungalow for family accommodation)
10, Vilpatty Road,
Kodaikanal.
Tel: (0484) 3230122
Mob: 098951 53002
Kodaikanal
A hilly retreat established by American missionaries
around 1845 to escape from the high temperatures of the
plains, Kodaikanal, or Kodai as it is better known, is a
quiet hill station at an altitude of 2,195 mts, on the southern
ridge of the Palani hills in Tamil Nadu. It is popular
among locals as well as other tourists and has earned the
nickname of ‘Princess of Hill Stations’. With its rocks,
woods, lovely lake and bracing air, Kodaikanal is an
ideal hill resort for tourists. The hill town is renowned for
its educational institutions of international repute. The
hill-plantain fruits and plums are known for their
freshness and taste. Berijam lake, one among the beautiful
lakes of South India, spreads over an area of 24
hectares and is a must visit.
Getting There:
Madurai (135 km), Coimbatore (170 km) and Trichy
(195 km).
Kodairoad (80 km).
It is connected by road with all important
towns. Buses are available to Kodaikanal from Madurai,
Bangalore and Coimbatore.
1. Green Acres Resort
11/213, Lake Road,
Kodaikanal.
Tel: (04542) 242384, 098415 65481.
2. Villa Retreat Coaker's Walk
Kodaikanal.
Tel: (4542) 240940
40 Beyond Market 20th Apr ’09
Srinagar
What better summer destination to recommend than the
summer capital of Jammu and Kashmir Srinagar, also
called ‘Paradise on Earth’ is set around the beautiful Dal
Lake, where picturesque houseboats or shikharas carry
tourists on boat rides. This scintillating hill resort set in
the Kashmir valley and on the banks of the Jhelum river
is an ideal summer getaway. Srinagar basically has an
alpine weather, as the summers are mild and winters are
cold. It is only in the recent years that the place has
become a little unsafe for tourists. However, things have
started getting better and tourism is opening up once
again. The city is famous for its lakes and houseboats. It
is also known for traditional Kashmiri handicrafts and
dry fruits.
Getting There:
Direct flights to Srinagar from Delhi and Mumbai.
Buses from Jammu and Leh. There are overnight
buses from Delhi too.
1. Hotel Paradise,
Boulevard, Srinagar.
Tel: (0194) 2500663
Mob: 094190 11632.
2. Intercontinental The Grand Palace
Gupkar Road,Srinagar.
Tel: (0194) 2470101.
3. Kolu Houseboats,
Old Boulard Road, Srinagar.
Mob: 09419 40457 / 099067 09713,
So what are you waiting for Pack you bags and head to
one of these famous summer retreatS.
It’s simplified...

Making Sense Of Personal
Financial Ratios
A person can evaluate his personal financial position by using six different ratios
E
very market savvy person is aware of the importance of technical and fundamental analysis to evaluate a company. Graphs, charts
and ratios form the crux of this analysis. Financial ratios are an integral part of the financial statement of a company and it helps
in comparing companies between different time periods, among companies and industries too. All these help investors in making
the right investment decisions.
Similarly, if a person wants to evaluate his personal financial position based on his financial statements considering the cash flow or his net
worth or whether he is over-borrowed or whether he has enough liquidity, he can gauge his position on the basis of basic financial ratios.
The components involved in reaching the appropriate ratio have been discussed below in detail.
Unlike company ratio analysis, personal financial ratio is quite simple. There are six ratios in all which help individuals to evaluate their
financial position.
1. Basic Liquidity Ratio:
This ratio indicates an individual’s ability to meet his or her monthly expenses in case of an emergency or a catastrophe.
Cash (near cash)
Basic Liquidity Ratio =
Monthly Expenses
Cash (near cash) includes all liquid assets like savings a/c, Fixed Deposit, cash in hand and Liquid Funds.
Monthly Expenses include mandatory fixed and variable expenses. An average of 12 months is taken into consideration while calculating
mandatory variable expense and the expenditure tends to vary every month. It does not include voluntary expenses like those on entertainment,
vacation or those that can be avoided, if needed.
Beyond Market 20th Apr ’09
It’s simplified...
41

Mandatory Fixed Expenses include EPF/PF contribution, EMIs on loans, insurance premium, mediclaim premium, professional fees, rent
and other such expenses.
Mandatory Variable Expenses are those like groceries, utilities, transportation, personal care, medical care, household repairs, educational
expenses and other expenses which are just unavoidable.
The ideal basic liquidity ratio is 3, where 3 stands for three months. Money equivalent to three months of mandatory expenditure should be
kept aside for emergency. Research has shown that if a person saves an average of three month’s expenditure, he can sail through an
emergency situation. In an economic turmoil like the one we are facing, this fund becomes all the more important.
2. Liquidity Ratio:
This ratio helps a person to know his financial liquidity. Maintaining a certain level of liquidity is essential to ward off any unforeseen financial
hardships. Property can be considered as a good investment avenue but lack of liquidity is its biggest drawback and while equity is risky,
its biggest advantage is liquidity.
Liquid Assets
Liquidity Ratio =
Net Worth
Liquid Assets include all cash (near cash assets), equities, Equity Mutual Funds (not Equity Linked Savings Schemes as they have three
years’ lock-in period), Debt Funds (which include Short Term, Gilt Funds, Monthly Income Plans and other such funds except Closed-Ended
Funds) and other assets which can be redeemed within three to four working days.
Net Worth is the amount left after deducting total liabilities from total assets.
The ideal liquidity ratio is 15%. At least 15% of one’s portfolio should have assets, which can be redeemed almost immediately in case of an
emergency. Anything less is not healthy.
3. Savings Ratio:
This ratio indicates the amount an individual sets aside as savings for his future goals.
Savings
Savings Ratio =
Gross Income
Savings include any form of savings like Fixed Deposits, Liquid Funds, Mutual Funds, Equities, Debt, Bonds, PPF, Post Office Small Saving
Schemes and others where the individual saves on a regular basis.
Gross Income includes income earned through business, profession or in the form of salary, bonus, EPF contribution, interest, dividend,
rent/royalty and any other form of income.
The ideal savings ratio is at least 10%. At least 10% of a person’s gross income should go towards savings. Anything less might not be quite
what one might want it to be.
4. Debt to Asset Ratio:
This ratio helps a person to understand whether he is over borrowed or is in a comfortable position, i.e., if he faces any solvency problems.
This ratio should always be used when one is planning to take a new loan. If an individual is over borrowed, it is best to avoid getting into
something new. Instead the person should wait until he has finished paying off his previous loan amount.
Total Liabilities
Debt to Asset Ratio =
Total Assets
Total Liabilities are all liabilities like personal loan, home loan, car loan, any credit card outstanding, amount taken from private money
lenders and any other form of loan.
42 Beyond Market 20th Apr ’09 It’s simplified...

Total Assets include all assets that a person has like investments, cash (near cash), home, car, jewellery and other assets.
The ideal debt to asset ratio is maximum 50%. The maximum debt any individual can take should not exceed 50% of his total assets.
5. Solvency Ratio:
This ratio is a continuation of the Debt to Asset Ratio. Solvency is a big problem and no one would want to be in a position where even daily
expenses become a problem by being over-borrowed. This ratio helps to determine if a person is in a comfortable position to lead a healthy
financial life after repaying all debts from his assets.
Total Net Worth
Solvency Ratio =
Total Assets
Total Net Worth is equal to total liabilities minus total assets.
Total Assets includes assets like investments, cash (near cash), home, car, jewellery and any other assets.
Ideal Solvency Ratio is minimum 50%. On the same lines as Debt-to-Asset Ratio, the solvency ratio should also be at least 50% of the total
assets.
6. Net Invested Assets to Net Worth Ratio:
An individual should have clear goals when accumulating assets for future goals. This ratio increases as a person nears his retirement as that
is the time when his savings is expected to be maximum, to sustain himself until the end of life in the absence of any other source of income
other than savings.
Net Invested Assets
Net Invested Assets to Net Worth Ratio =
Net Worth
Net Invested Assets are all invested assets like shares, Equity Mutual Funds, Debt Funds, Bonds, PPF, EPF, property, etc.
Net Worth is total liabilities deducted from total assets.
The net invested assets to net worth ratio should ideally be 50% or more.
The six ratios mentioned above serve as a guideline to help an individual understand how his income, savings and debt are related. One need
not be a fundamental analyst or a financial guru to understand these simple personal financial ratios. Simply maintaining a proper cash inflow
and outflow statement and statement of assets and liabilities will do. Maintain a healthy financial scenario by calculating these ratios from
time to timE.
RATIOS
Basic Liquidity Ratio =
Cash(Near Cash)/Monthly Expenses
Liquidity Ratio =
Liquid Assets/Net-Worth
Savings Ratio =
Savings /Gross Income
Debt To Asset Ratio =
Total Liabilities/ Total Assets
Solvency Ratio =
Total Net Worth/Total Assets
Net Invested Assets To Net Worth Ratio =
Total Invested Assets/Net Worth
IDEAL RATIO
3 months
15%
Min 10%
Max 50%
Min 50%
Preferably 50% or more
Beyond Market 20th Apr ’09
It’s simplified...
43

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DISCLAIMER
In the preparation of the content of this newsletter, Nirmal Bang Securities Private Limited has used information that is publicly available, including
information developed in-house. Such information has not been independently verified and we make no representation or warranty as to its accuracy,
completeness or correctness. Any opinions or estimates herein reflect the judgement of Nirmal Bang Securities Private Limited at the date of this
publication/ communication and are subject to change at any point without notice. This is not a solicitation or any offer to buy or sell. This publication/
communication is for information purposes only and is not intended to provide professional, investment or any other type of advice or recommendation
and does not take into account the particular investment objectives, financial situation or needs of individual recipients. For data reference to any third
party in this material no such party will assume any liability for the same. Further, all opinion included in this newsletter are as of date and are subject
to change without any notice. All recipients of this newsletter should seek appropriate professional advice and carefully read the offer document and
before dealing and/ or transacting in any of the products referred to in this material make their own investigation. Nirmal Bang Securities Private
Limited, its directors, officers, employees and other personnel shall not be liable for any loss (financial or otherwise), damage of any nature, including
but not limited to direct, indirect, punitive, special, exemplary and consequential, as also any loss of profit in any way arising from the use of this
material in any manner whatsoever. The recipient alone shall be fully responsible/ are liable for any decision taken on the basis of this material. This
newsletter is prepared for private circulation only. Nirmal Bang Securities Private Limited, its affiliates and their employees may from time to time hold
positions in securities referred to herein. Nirmal Bang Securities Private Limited or its affiliates may from time to time solicit from or perform investment
banking or other services for any company mentioned in this document.