FDI - Motilal Oswal

India Strategy | Fired up?MARKETSIndian equities – Top performer in CY12 YTDIn 3QCY12, Indian markets yielded 8% return QoQ, after an almost flat 2QCY12. Withthis, the BSE Sensex is up by 21% YTD CY12, and among the best performing marketsglobally. As the recent series of reforms led to significant appreciation in currency,USD return of Sensex at 22% is also among the best.With this performance, India now trades at a marginal premium to the rest of theglobal markets, well supported by an expected rebound in FY14 corporate performance14% earnings growth coupled with a strong 17% RoE. The confidence of FIIs hasremained intact throughout CY12, despite a significant slowdown in macroeconomicparameters. They have bought another USD16b of Indian equities, while DIIs havebeen big sellers to the extent of over USD7b.Indian markets grew 8% in 3QCY12 after a flat 2QCY121661318 23 311120920171118 1712149No negative quarters in 2012 to date,despite several challenges facing theeconomy and corporate sector182 0 1132130816 18 -2-19-6-8-10-4-14-6-5-4-14-23 -25-5 -3 -6-13Sep-01Mar-02Sep-02Mar-03Sep-03Mar-04Sep-04Mar-05Sep-05Mar-06Sep-06Mar-07Sep-07Mar-08Sep-08Mar-09Sep-09Mar-10Sep-10Mar-11Sep-11Mar-12Sep-12World Equity Indices CY12YTD (local currency, %) World Equity Indices 3QCY12 (local currency, %)India - Sensex21Brazil9S&P 50015South Korea8MSCI EM9India - Sensex8India is amongst the topperforming marketsglobally in 2012South KoreaTaiwan99MSCI EMS&P 50067Japan5Taiwan6Russia MICEX4UK3Brazil4Chi na3UK3Russia MICEX2China (HSCEI)-1Japan-2October 2012A–4

India Strategy | Fired up?World Equity Indices CY12 YTD Perf (%) in USDWorld Equity Indices 3QCY12 Perf (%) in USDIndia - Sensex22India - Sensex13S&P 50015South Korea11South Korea14Brazil8Taiwan13Taiwan8MSCI EM9MSCI EM7Even in USD terms, India'sperformance has beenamongst the better onesRussia MICEXUKJapan477Russia MICEXUKS&P 500667China (HSCEI)-1Chi na (HSCEI)3Brazil-4Japan1India v/s World: Richer valuations supported by superior growth and profitabilityGlobal Indices EPS growth and PEGlobal Indices P/B and RoE58PE (x) CY13 / FY14 EPS Growth CY13/FY14 (%)910 10 10 12 13 13 13140.61.1P/B (x) CY13 / FY141.1 1.2 1.2 1.3RoE (%) CY13 / FY141.5 1.6 2.0 2.32.6-2Russia15China17Korea811 12 918Average P/E :10.9x32 Average EPS Growth: 14.7%BrazilUK-FTSEHongKongUS-S&P500SingaporeIndonesia14India28Taiwan11 121315Average P/B :1.5xAverage RoE: 13.6%RussiaBrazilKoreaChina12HongKong10Singapore15UK-FTSE11Taiwan16US-S&P50017India19IndonesiaSectoral Performance for 3QCY12 (%) Sectoral Performance for CY12 YTD (%)Pvt-Ba nks15Pvt-Ba nks43RealEstate11Consumer36Consumer10Capita l Goods36Auto10PSU-Ba nks35Healthcare9RealEstate34Banks and Consumer havebeen the top performersin 2012CapitalGoodsSensexBSEMid-CapOil9877BSEMid-CapHealthcareAutoSensex29282821PSU-Ba nks4Oil15Utilities3Utilities14Technology3Meta l13Metal-2Technology3Telecom-8Telecom-17October 2012A–5

-2 -3 -5 -9 -9 -12-13India Strategy | Fired up?Sensex Stock Performance CY12 YTD (%)60 54 50 47 47 40 38 35 34 27 23 21 21 20 19 19 19 15 11 11 9 5 4 4 3 0-1 -4 -6 -8-23L&T, ICICI Bankthe top performersin CY12L&TICICI BankTataMotorsHDFCBankMarutiSunPharmaSBIITCHULM&MTataPowerSENSEXRelianceTataSteelCoalIndiaCiplaHDFCBajaj AutoTCSSterliteONGCNTPCDr Reddy'sHindalcoBHELGAILHeroMotoWiproJSPLInfosysBhartiSensex Stock Performance 3QCY12 (%)22 20 20 18 18 17 15 14 13 12 10 9 9 8 6 5 5 43 2 1 1 1 0M&MCiplaHULHDFCICICI BankBajajAutoMarutiL&TRelianceInd.HDFC BankTataMotorsSunPharmaGAILSENSEXBHELNTPCITCSBICoal IndiaTataPowerTCSInfosysHindalcoDrReddy'sONGCSterliteWiproJSPLTataSteelHero MotoBhartiTrend in net FII Investment (USD b)Annual Trend1.5 2.7 0.7CY00CY01CY026.7 8.6 10.8 8.1CY03CY04CY05CY06Trend in net DII Investment (USD b)Annual Trend3.75.416.95.317.8CY07-12.2CY0817.6CY0929.3CY105.9-0.5CY1116.1CY12 YTDIndian institutional investors have beennet sellers of equities Jan-09 to dateQuarterly Trend-1.3-2.4-3.36.4 7.4 5.2 4.42.312.610.10.1 0.8 -1.0 -0.4 9.1Sep-08Dec-08Mar-09Jun-09Sep-09Dec-09Mar-10Jun-10Sep-10Dec-10Mar-11Jun-11Sep-11Dec-11Mar-12Jun-12Sep-12Quarterly Trend3.0 3.22.1 2.41.80.4 0.5 0.82.4 2.10.8 0.60.10.56.9CY06CY07CY08CY09-4.7CY10CY11-7.4CY12YTD-2.2-3.4-4.4-5.2Sep-08Dec-08Mar-09Jun-09Sep-09Dec-09Mar-10Jun-10Sep-10Dec-10Mar-11Jun-11Sep-11Dec-11Mar-12Jun-12Sep-12October 2012A–6

India Strategy | Fired up?MACRO ECONOMYRe-starting the policy engine; FDI in limelightFurther growth catalysts: Lower deficits, improved flows, monetary easingThe UPA-2 government had significantly disappointed the Indian markets byabstaining from any critical policy decisions to improve the looming macroeconomiccrisis - industrial production slump, high inflation, high interest rates, depressedinvestment climate and damaged global perception of India.India has a track record of initiating far-reaching reforms only when faced withextreme crisis. With a precipitous fall in the Indian rupee coupled with a ratingdowngrade staring India, the government finally bit the proverbial bullet with achange in Finance Minister and a series of policy measures, even at the cost ofsevering ties with the largest ally, TMC (Trinamool Congress led by Mamta Banerjee).FDIThis, in turn, has catalyzed a slew of measures in the last few weeks that has led toan improvement in sentiment. These measure include (1) fuel price hike,(2) opening/relaxing FDI in multi-brand retail, aviation, broadcasting, (3) Cabinetapproval to raise FDI in insurance and pension fund, (5) easing of fundraising abroad,(6) proposed GAAR implementation, etc. It also appeared to wade through thepolitical fallout of these measures.Simultaneously, the government also sought to give a thrust to development byfinalizing the 12th Plan, putting in place a mechanism to monitor large infrastructureprojects at the PMO level, developing an airport hub, international airports, etc.While reality will take a lot longer to reflect the first round of reforms, and requireseveral more follow-up initiatives, the perception has undoubtedly started changingfor the better. To some extent, this is visible in INR appreciation, revival of flowsand market sentiment.In this backdrop, we attempt to reassess three factors that can act as significantcatalysts for further economic revival(1) fiscal situation(2) domestic flows into equity markets, and(3) possible shift towards a more accommodative monetary stance.A. Fiscal deficit slippage to be of lower order than envisaged earlierOctober 2012YTD FY13 fiscal situation has remained stressful• So far, the current financial year has displayed weaknesses on the fiscal front,with receipts falling short of expenditure, widening the fiscal gap (23% YoY).• On the receipts side, while tax revenue was buoyant (21% YoY), non-tax revenue(9% YoY) and capital receipts (-50% YoY) fell with spectrum sale and disinvestmentyet to take off.• On the expenditure front, subsidy ballooned resulting in highest ever non-planspend as a share of full-year budget in 15 years at 43%. Curtailment of planexpenditure (12% YoY) was not enough to bring the overall spending as apercentage of full-year budget at 38% higher than the long period average (LPA)of 35%.A–7

India Strategy | Fired up?• This resulted in the deficit indicators surpassing their 15-year averages by a fairlywide margin. Fiscal deficit reached 66% of full year target (v/s LPA of 52%) whilethe same for revenue deficit was as high as 79% (v/s LPA of 68%).• All these resulted in our prediction of a large fiscal slippage placed at 5.9% of GDP(as against the budgeted 5.1%), taking it closer to the FY12 level, indicating nofiscal correction YoY. If the current trend would have continued, the worst casefiscal deficit could stand as high as 6.3%.While tax trends have kept up with LPA, total receipts have lagged behindAs % of Budgeted Amount45%35%25%15%5%Tax Revenue (Ne t)Total Receipts5MFY985MFY995MFY005MFY015MFY025MFY035MFY045MFY055MFY065MFY075MFY085MFY095MFY105MFY115MFY125MFY13Highest ever non-plan expenditure along with lower than LPA plan expenditureAs % of B udgeted AmountNon-Plan Expenditure Plan Expe nditure Total Expe nditure48%44%40%36%32%28%24%20%5MFY985MFY995MFY005MFY015MFY025MFY035MFY045MFY055MFY065MFY075MFY085MFY095MFY105MFY115MFY125MFY13Deficit indicators stay well above the long period averageAs % of Budgeted Amount200%150%100%50%0%Fiscal DeficitReven ue De ficit5MFY985MFY995MFY005MFY015MFY025MFY035MFY045MFY055MFY065MFY075MFY085MFY095MFY105MFY115MFY125MFY13October 2012A–8

India Strategy | Fired up?Our initial fiscal deficit estimate for FY13 pegged it at 5.9%6.55.54.53.52.51.55.10.60.30.20.1-0.35.9FY13BEa dd fuelsubsidyadd food, fert.,droug htadd shortfallin spectrumadd shortfallindisinvestmentminus cashcarry forwardFY13EDivestmentRoadsSpectrumCoalSlew of measures taken may take fiscal deficit to GDP ratio to 5.5% in FY13• The recent policy measures taken by the government, however, have changedthe deficit outlook significantly for the remaining part of FY13.• As a first measure, the government increased the price of diesel and capped thesubsidized quantum of LPG, along with rationalization of taxes, resulting in a netgain of INR100b to the exchequer.• To kick-start the disinvestment program, the government has shortlisted four PSUs.Besides, it is considering alternative and fast track mode of disinvestment throughstrategic sale of Hindustan Zinc, Balco and SUUTI. All these may take thedisinvestment proceeds higher than the budgeted amount of INR300b.• The government has also alerted PSUs to transfer their huge cash reserves asspecial dividend or undertake fresh investment. Either way, it would help bridgethe fiscal gap.• As evidenced by recent experiences, the provision of planned expenditure hasexceeded actual expenditure by a fair margin. Continuation of this trend wouldprovide a cushion of INR200b buffer to spillover of non-plan spend, especially onsubsidies.• The recent Supreme Court opinion on Presidential reference has possibly givenadditional levers to the government for meeting its resource sale targets(eg. Spectrum, land, coal mines etc).• The above measures undertaken and contemplated have led us to reduce ourfiscal deficit estimate to 5.5% of GDP from 5.9% earlier. Further, we expect noadditional borrowing, as the extent of fiscal slippage is small and can be met byrecourse to short-term borrowing.Recent policy measures have rekindled hope of containing slippage at manageable levels6.5As % of GDP6.05.55.04.55.90. 10. 1 0.25.54.0FY13 - Earlierestimatelessdisinve stmentless lower oilbillless lowerplanexpenditureFY13E - Revis edOctober 2012A–9

India Strategy | Fired up?A few factors that can alter the fiscal scenario dramaticallyDisinvestment i) Government approved disinvestment of four PSUs includingthree mining and one OMC. This would mobilize INR150b.ii) Vedanta Group increases the offer for strategic sale ofHindustan Zinc and Balco to INR220b.iii) SUUTI stake sale to garner INR200b.Planned expenditureA curtailment in plan expenditure would free up sizable resources.For example, in FY12, planned expenditure grew 12.6% against 16.5%growth provided in the budget. A 4% scaling back on 22% growth inplan expenditure in FY13 would free resourses to the tune ofINR200b, or 0.2% of GDP.Special dividend from PSUs The nine cash rich PSUs have significant cash balance with them.Even if a part of this is ploughed back to the government, it wouldreduce fiscal deficit.Spectrum saleThe government has budgeted ~INR400b out of telecom spectrumsale. The recent Supreme Court opinion on Presidential referencehas possibly given additional levers to the government for meetingits resource sale targets (eg. Spectrum, land, coal mines etc).Expect fiscal consolidation in FY14 despite higher welfare bill• The fiscal consolidation attempt is likely to be carried forward to FY14, aided by afew additional factors.• We expect GDP growth to revive to 6.5% in FY14 from 5.8% in FY13. In the past, wehave seen that revenue buoyancy improves on the back of higher GDP growth.Imputing this trend, the tax-GDP ratio in FY14 should touch FY09 levels (close to8%), but be lower than the levels seen during the FY07-08 peak (8.2-8.8%).• Reform in petroleum product prices together with the oil and INR outlook wouldresult in lower petroleum subsidy bill in FY14 to INR660b than INR1.1t in FY13. Thiswould create the necessary headroom for implementing the Food Security Bill (ifonly on a limited scale to begin with) even if the principle of limiting subsidies to2% of GDP is broadly adhered to.• Additionally, as witnessed during the previous episode of fiscal correction, theplanned expenditure growth may be pruned to only 14-15% if need be.• These three factors, viz., higher revenue buoyancy on account of faster growth,reduction in petroleum subsidy and cutback on planned expenditure would seeFY14 fiscal deficit ratio improving to 4.5% to GDP as envisaged in the revised fiscalconsolidation framework (FRBM).With better growth in FY14, tax-GDP ratio is expected to inch up1086420Tax-GDPGDP growthFY90FY91FY92FY93FY94FY95FY96FY97FY98FY99FY00FY01FY02FY03FY04FY05FY06FY07FY08FY09FY10FY11FY12REFY13BEFY14EOctober 2012A–10

India Strategy | Fired up?Containment of oil subsidy would create headroom for Food Security Bill and still keep subsidybill within 2.2% of GDPFertilizer Foo d Petroleum Oth ers Sub sidy a s % o f GDP (RHS)3,00032,00021,000100FY12RE FY13BE FY13E FY14EIndia plans to come back to revised FRBM track5.76.2 5.94.53.9 4.03.32.56.0 6.44.75.75.34.53.9FY01FY02FY03FY04FY05FY06FY07FY08FY09FY10FY11FY12FY13EFY14 - FRBMFY15 - FRBMB. Likely revival of flows to equity market• Even during strong years for equity markets, a low share of savings actually getschannelized to the same.• While the average share of household equity investments stands at 5% of financialsavings, it goes down to half of that level and less than 2% when taken as a shareof household savings and overall savings of the country as a whole.• Even within that, there is a wide variation, with household savings as a percentageof financial savings varying between a negative 0.9% to a high of 12.8% in the lastdecade.• In recent years, flows to equity market (comprising of investments from mutualfunds, insurance, etc.) have been negligible due to GDP slowdown and nonperformanceof the domestic equity market.• With the revival in growth and recent market performance, interest in equitymarket should revive.• The government in recent weeks has been in active engagement with the domesticmutual fund and insurance sectors to initiate reforms and revive inflows. This,along with the likely drop in interest rates and improved GDP growth, shouldcreate a positive backdrop for domestic flows into Indian equities. These flowstypically come in phases, and the next 3-4 years could be one such significantlypositive phase.October 2012A–11

India Strategy | Fired up?INR appreciation would reduce the gap betweencommodity price trends in India and abroadCore inflation would go below 5% again by March 2013, if INRappreciates to 52 in 2HFY1320Ro gers USD (Yo Y %) Ro gers INR (YoY %)10India's core inflationRogers INR (RHS)40108250610‐104‐5‐202‐20Jan‐12Feb‐12Ma r‐12Apr‐12Ma y‐12Jun‐12Jul‐12Aug‐12Sep‐12Oct‐12Ma r‐10Ma y‐10Jul‐10Sep‐10Nov‐10Jan‐11Ma r‐11Ma y‐11Jul‐11Sep‐11Nov‐11Jan‐12Ma r‐12Ma y‐12Jul‐12Sep‐12Nov‐12Jan‐13Ma r‐13Inflationary pressures may ease somewhat on INRappreciation and easing commodity pricesLiquidity is coming close to neutral zone now9.0%8.5%8.0%7.5%7.0%6.5%FY13E ‐ EarlierFY13E ‐ Revise d900400‐100‐600‐1100LAF bala nce (ne t reverse repo ) (LHS)3mth CP rates (RHS)1272‐36.0%‐1600‐8Apr‐12Ma y‐12Jun‐12Jul‐12Aug‐12Sep‐12Oct‐12Nov‐12Dec‐12Jan‐13Feb‐13Ma r‐13Apr‐ 10Jun‐10Aug‐ 10Oct‐10Dec‐10Feb‐11Apr‐ 11Jun‐11Aug‐ 11Oct‐11Dec‐11Feb‐12Apr‐ 12Jun‐12Aug‐ 12LatestRBI would consider improved fiscaloutlook for monetary easing5.1FY13BE5.9FY13 (Earlierexpectations)5.3FY13 (Currentexpectations)Expect RBI to cut rates going forward9%8%7%6%5%4%3%Jan‐116.25%Feb‐11Ma r‐11Re po RateApr‐11Ma y‐11Jun‐11Jul‐116.00%Aug‐11Sep‐11Oct‐11Cash Res erve Ra tio8.50%Nov‐11Dec‐11Jan ‐125.50%Jan‐12Feb‐12Ma r‐12Mar‐124.75%Apr‐12Ma y‐12Jun‐12Apr‐128.00%Jul‐12R BI surprisedthe mktAug‐12Sep‐12Sep‐124.50%Oct‐12Nov‐12Oct‐127.50%Oct‐124.00%Dec‐12October 2012A–13

India Strategy | Fired up?INVESTMENTAddressing logjam the next big challengeRequires more involved decision making process• After a long hiatus during which the government was widely criticized for policy inaction,and the opposition and coalition politics too were blamed for stalling key reforms, thegovernment seems to have tightened its belt to streamline the decision making process.• The first round of reforms has centered around FDI approvals, subsidy rationalization anddiscussions on improving capital market flows.• The next big challenge is to address the investment logjam. However, unlike the initial setof reforms that have been largely addressed through policy decisions, the investmentphase requires a more involved decision making process, as land, water, resources, etc,are the prerogatives of the state governments.Crystal gazing: What can possibly revive the investment climate?The investment climate has worsened over the past 18 months due to structuralimpediments, policy uncertainty, persistent inflation and rising interest rates. Webelieve that the government will kick-start its efforts towards reviving the investmentclimate by accelerating public spending. Our action wish list includes:• Successful resolution of the contentious issues in the Power sector (through SEBdebt recast, standard bidding document, and coal price pooling)• Close monitoring of CPSU capex (FY13 investment target at INR1.8t is double thehighest ever - INR931b in FY11)• Take-off of large public expenditure projects (like Dedicated Freight Corridor,railways, urban transport, etc). Addressing structural issues impactinginfrastructure investments has become important.• Acceleration of financial sector reforms, including corporate bond market andaccess to Insurance / Pension money for investment projects. Also, an expenditureswitching strategy is required that reduces government revenue spending bycutting subsidies and steps up capital expenditure to crowd-in private investments.• Successful implementation of the National Investment Board that will provide"single window" clearance. The government has identified 89 projects worthUSD20b for fast track clearance.Rays of hope include…• Decline in global commodity prices• Currency appreciation• Moderation in interest rates• Fiscal consolidation, leading to possible crowd-in of private investmentsSlowdown more pronounced for industry, particularly in core sectorsThe investment climate has worsened over the past 18 months due to structuralimpediments, policy uncertainty, persistent inflation and rising interest rates. Theslowdown has had a pronounced impact on GDP growth rate. Addressing the currentlogjam is the next big challenge.Industrial sector has acted as a continued drag on the overall GDP growth with itscontribution to GDP dropping to 10-20% currently from 30-50% earlier. Moreover,industry has been particularly stuck by the empty middle structure with investmentfacing sectors dragging industrial growth to near zero level.October 2012A–14

India Strategy | Fired up?Collapse in the Industrial growth had triggereda downgrade in GDPEmpty middle structure continues to haunt1612Share of Industry in overall growth (%, RHS)Industry growthGDP growth604520100FY11 FY12 YTDFY13840FY01FY02FY03FY04FY05FY06FY07FY08FY09FY10FY11FY12Jun-11Sep-11Dec-11Mar-12Jun-1230150-10-20Basic goodsCapitalgoodsIntermediategoodsConsumergoodsDurablesNondurablesStructural issues impacting growth remain unaddressedThe next big challenge is to address the investment logjam, but this is easier said thandone. Unlike the initial set of reforms that have been largely addressed throughpolicy decisions, the investment phase requires a more involved decision makingprocess, as land, water, resources, etc, are the prerogatives of the state governments.Execution is the key challenge, as several structural issues impacting growth remainunaddressed.We identify the key structural issues in core segments like Utilities, Metals, Financials,Telecom, Oil & Gas and Infrastructure:#1 UTILITIES: Initial steps encouraging, but new investments sometime away#2 METALS & MINING: Huge investments stuck; will require close monitoring#3 FINANCIALS: Loan growth moderating; revival will ease asset quality concerns#4 TELECOM: Spectrum pricing and allocation, conducive M&A policy critical#5 OIL & GAS: Rational product pricing, gas reforms imperative#6 INFRASTRUCTURE: Creating conducive environment for large scale development#7 MEGA PROJECTS: DFC, railways, urban transport can accelerate investment spend#1 UtilitiesInitial steps encouraging, but new investments sometime awayThe Indian Utilities sector has seen step-up in capacity addition under the 11th Plan to52GW v/s ~20GW in the earlier plan period. However, the fuel supply ramp-up, bothfor coal and gas projects has been below par, impacting project economics.Additionally, higher commercial losses of DISCOMs have also impacted affordability,investments in T&D and growth in demand for power.Over the last 12 months, the Prime Minister's Office (PMO), Ministry of Petroleum(MoP) and Ministry of Coal (MoC) have taken several measures to put the sector backon track. These include (1) financial restructuring plan (FRP) for DISCOMs, (2) steps toenhance rake availability / easing of environment norms to help ramp up domesticcoal production, and (3) steps being taken to formulate new bid document, whichwould have fuel cost as pass-through under tariff. While these measures areOctober 2012A–15

India Strategy | Fired up?encouraging, their successful implementation would first boost current/upcomingcapacity additions under the 12th Plan. We believe new investments in the Powersector, particularly by the private sector, are still sometime away. Private developersmight face issues, given higher DER, existing PPA/FSA issues, ventures like overseasmine acquisition, etc.(a) DISCOMs: Weakest link in value chain but recent initiatives to driveimprovementCommercial losses atINR600b+-209-271-319-537-635-669-596FY06FY07FY08FY09FY10FY11EFY12EKey measures that will drive improvementParticularsRemarksTariff increase Loss making states like Tamil Nadu, Rajasthan and Haryana have raisedtariffs. UP too has filed tariff petition. Fuel adjustment on quarterly basis.State regulator empowered to carry out suo moto tariff hike.FinancialState government (50%) and lenders (50%) to recast debt of INR1.9t.restructuring plan Conditions include (1) abolition of any gaps between revenue and cost, (2)(FRP)annual tariff revision, (3) audit of books, (4) reduction in T&D losses, etc.Central government support of INR240b for debt to be assumed by state.Incentive-based scheme for T&D loss reduction.LT powerHigher availability at lower rates given sizable capacity addition.availability /ST power cap ST power procurement monitored and now through bids only.Cap on ST procurement as also regulatory approval.OUR VIEW: PositiveImpact of above measures• DISCOMs would have higher cash inflows through tariff, while moratorium wouldprovide cushion in cash outflows, which would drive growth in power demand.• Lenders relatively secured now, as state government is made party torestructuring - should start incremental disbursement/growth.• Kick-start investment in T&D sector, as reduction in AT&C losses is a preconditionto avail benefits.(b) Fuel, PPA issues at the forefront; domestic production ramp-up is key;new bid document to allow fuel cost pass-throughShortfall in meeting capacity addition beyond FY10FSA Qty Cumulative Requirement CIL's total OLD FSA Supply to ShortfallQuantity @ 80% supply Comm.# new FSAFY10 24 24 19 298 274 24 0FY11 25 49 39 304 274 30 -9FY12 72 121 97 312 274 38 -59FY13E 40 161 128 347 274 73 -55FY14E 44 205 164 377 274 103 -61FY15E 47 252 201 407 274 133 -68#Assumed old FSA will be given coal only up to 90% ACQ levels till FY09. * Calculatedassuming 65% domestic supply and 15% import for 80% trigger level are sacrosanct numbersOctober 2012A–16

India Strategy | Fired up?PPA review soughtDeveloper Cap (MW) RemarksAdani Power 1,000 GUVNL PPA signed at INR2.39/unit is proposed to be reviewedJSW Energy 300 PPA with MSEDCL under contest, given change in Indonesian lawsTata Power 4,000 Mundra UMPP tariff review sought; INR0.67/unit increase on levelizedtariff bid of INR2.26/unitReliance Power 4,000 Krishnapatnam UMPP progress halted due to Indonesia priceregulationLanco Infratech 600 Amarkantak project PPA in dispute with state over cost, tariff cap, etcJaiprakash Power 1,000 Karcham Wangtoo project PPA under review due to cost escalationKey measures taken to address issuesParticulars RemarksCoal production CEPI and No-Go hurdle removedRake availability enhancedGreater focus on captive coal developmentMandate to sign FSA to bring accountabilityPPAsReview taken up for discussion at various levelsAuditor General's view sought - PPA can be reviewedNew bid document under preparation - bid on capacity charge ONLY, fuel costpass-throughOUR VIEW: Steps in right direction; would watch for milestone/improvementImpact of above measures• Coal India's production has begun to look up - production/dispatches up 7.6%/6.2% YTD FY13 v/s near-zero growth in FY12. Domestic coal supply improvementto enable low cost power availability to DISCOMs.• Coal price pooling would be inevitable to tide over domestic shortfall throughimports - states' consent crucial.• New projects would have significantly lower risk, as developers bid on capacitycharge and fuel cost pass-through - an important enabler to kick-start investmentprocess.• Captive coal block development now being monitored and developers madeaccountable; several instances of de-allocation, forfeiture of bank guarantees.#2 Metals & MiningHuge investments stuck; will require close monitoringMetals & Mining is another sector that will require close monitoring to restart theinvestment cycle. The huge investments made by various companies are stuck atdifferent levels. Various projects of Vedanta, Hindalco, JSPL, JSW Steel, Tata Steel, etcstill face delays because of issues relating to land acquisition, mining clearances,availability of water, etc. These issues are yet to be addressed in the current wave ofreforms. Vedanta has served notice for its closure, as it is unable to source bauxitedespite proximity to mines in Odisha and has already run losses of INR25b. Operatingassets are closing down and projects are getting delayed.October 2012A–17

India Strategy | Fired up?The following examples highlight the deteriorating state of investmentsEconomic activity/Projects IssuesMahan 359ktpa smelterCoal block was allocated in JV with Essar Energyand 900MW CPPin 2006. Production was expected to start in2009. The Mahan Coal Block was declared inno-go area in 2010. EGOM gave the coal blockstage-I forest clearance in May 2012.Mining ban in GoaJSPL, Angul(Greenfield project)Iron ore mining in Goa is largely meant forexports. The low grade ore can be used afterblending it with high grade ore. High cost oflogistics makes it unviable for Indian steelproducers. Ineffective administration wasunable to check illegal mining. The ShahCommission report made numerousallegations. Clueless state and centralgovernments put a blanket ban on mining,impacting even the disciplined players.JSPL's 1.6mtpa steel expansion in Angulinvolves a coal gasification based DRI plant.The Utkal B1 coal mine is essential for theprofitability of the project.Current statusINR86b has already been spent from the totalINR107b. Without stage-I approval, productionis not expected in the next two years. Theproject NPV is negative without captive coalblock. There is no further communication bythe government on coal block clearance sinceMay 2012.The Goa government temporarily suspendedall mining operations in the state inSeptember. In a tug of war between the stateand the center, the MoEF later suspendedenvironmental clearances for iron ore mines.This has complicated the matter further forrestart of mining in the state.JSPL is yet to sign mining lease despite mostapprovals in place for the last one year. Theissue keeps moving between the state andcentral governments, as officials are reluctantto take any action in light of the controversyover various mine allotments. The mantraseems to be "no decision is a good decision".#3 FinancialsLoan growth moderating; economic revival will ease asset quality concernsDearth of deployment opportunities leading to moderation in loan growth: Given thebackdrop of slowing economic growth, policy logjam and issues related to documentalclearances, corporate capital spending has slowed down significantly. CMIE dataindicates that new project investments in FY12 have declined 35% and are lower thanin FY07. The deceleration continued in 1HFY13 as well, with new investments decliningby as much as 50% YoY. This has also translated into moderate loan growth, withdeceleration in key sectors like Infrastructure (especially Power), Metals and Services.New project additions slowing down Incremental loan growth decelerating (INR b)Quarterly project additions in the quarter ended September2012 lowest since June 2004Added Revi ved Shelved DeletedOn a quarterly basis, incremental loans decelerated in FY12except in 4Q and the trend of deceleration continues in FY13FY08 FY09 FY10 FY11 FY12 FY138,0006,0004,0002,00001,6341,461-874372565611,1091,454791171605561,2111,0661,4993,4012,1702,1541,1242,2021,7673,279Mar-10May-10Jul-10Sep-10Nov-10Jan-11Mar-11May-11Jul-11Sep-11Nov-11Jan-12Mar-12May-12Jul-12Sep-121Q 2Q 3Q 4QOctober 2012A–18

India Strategy | Fired up?Loan growth has moderated across key segments (%)YoY GrowthIncremental ContributionMar-09 Mar-10 Mar-11 Mar-12 YTD* Mar-09 Mar-10 Mar-11 Mar-12 YTD*Loans 17.8 16.6 20.8 17.2 4.4 100.0 100.0 100.0 100.0 100.0Industry 20.9 24.4 23.6 21.3 2.4 45.6 58.4 48.1 53.9 24.3within whichInfrastrcuture 31.5 40.7 38.6 17.6 9.8 16.1 24.9 22.8 14.4 31.4Of which Power 30.9 50.9 43.3 22.2 19.3 7.3 14.4 12.7 9.3 32.8Of which Telecom 31.5 18.0 69.2 -6.8 -13.6 3.0 2.1 6.4 -1.1 -6.5Of which Roads and Ports 36.5 56.3 25.8 23.6 13.9 3.1 6.0 3.0 3.4 8.2Metals 19.7 26.5 28.8 21.8 12.7 5.3 7.8 7.3 7.1 16.8Textiles 6.5 18.2 19.2 10.4 -5.6 1.6 4.2 3.6 2.4 -4.6Services 18.3 12.5 23.9 14.7 -0.3 24.9 18.3 27.1 20.6 -1.9Real Estate 48.4 -0.3 21.4 7.8 -9.6 7.5 -0.1 3.1 1.4 -6.0NBFCs 31.3 14.8 54.8 26.3 20.3 5.9 3.3 9.7 7.2 23.2Personal Loans 10.1 4.1 17.0 12.1 13.6 12.9 5.3 15.5 13.0 53.9Housing Loans 9.3 7.7 15.0 12.1 18.7 5.9 4.9 7.0 6.5 37.3Agriculture 23.8 22.9 10.6 13.5 2.1 16.2 17.6 6.9 9.7 5.8* till August 2012: annualizedCost of funds in the system needs to be lowered: With inflation being relatively stickyand above comfort zone, RBI has refrained from aggressive cuts in repo rate. Headlineinterest rates have remained at an elevated level. This is also reflected in higher termdeposit cost (+160bp YoY) for banks under our coverage. Coupled with sharp fall inincremental CASA ratio (especially due to decline in CA deposits), cost of funds forthe banking system has gone up significantly. With the current growth-inflationdynamics and government actions being pro-growth, it is important for interest ratesin the system to go down to boost the improving sentiment.Incremental CASA ratio lowestReduction in CRR to bring down negativein a decade (%) Cost of deposits has increased (%) carry by 3-4bps48.344.850.337.629.9 34.2 36.123.219.510.08.57.05.54.0Cos t of Depos i tsCos t of Term Depos i tsRepo RateNega tive Carry on CRR0 3 6 9 13161922262933364043475054FY04FY05FY06FY07FY08FY09FY10FY11FY12FY04FY05FY06FY07FY08FY09FY10FY11FY120.00.51.01.52.02.53.03.54.04.55.05.56.06.57.07.58.0Repo rate/CRR cut would help the cause: Under the current base rate regime, forlending rate to decline, it becomes imperative for cost of funds to go down first.However, with repo rate at the current level of 8%, it is unlikely that term depositrates (blended rate at ~8% v/s 6.5% in FY11; implies that cost of incremental termdeposits is even higher) would decline. Hence, RBI action in the form of reduction inrepo rate and CRR is warranted, which could ease pressure on systemic interest ratesand in-turn, a gradual decline in lending rates as well. Government action along withsupportive actions by the RBI is a must to combat the slowdown in the economy.October 2012A–19

India Strategy | Fired up?How did we derive incrementalcost of deposits (includingnegative carry) of 8.7%?• Incremental SA ratio of20% and CA ratio of 0%(due to sharp moderationin corporate profitabilityand better treasurymanagement). Thusweighted average CASAcost stood at 0.4%• Share of retail termdeposits in overalldeposits at 60% and costof deposits at 9%, thusweighted average cost ofdeposits at 5.4%• Share of bulk deposits at20% with the cost ofdeposits at 9.8%, thusweighted average cost ofdeposits at 1.96%• Negative carry on accountof CRR (50bp) and SLR (at8% Yield on Investmentsat 10bp)Incremental cost of fund have increased in the system5.4Retail TD Cost0.1-ve Carry onSLR0.5-ve Ca rry onCRRStress loans ex-AI and SEBs have increased 110bp v/s reported increase of 280bp:Stress loans for state-owned banks (MOSL coverage) have increased to 7.7% in 1QFY13as compared to 4.9% in FY11. However, it is important to note that restructuring of SEBand Air India (state-owned entities) loans constituted bulk of the stress loans (1.7%),excluding which the increase would have been 110bp. The stated stress loans appearhigher even on account of loans restructured prior to FY10 (2.1% of loan book), whichwould be eligible for removal from the restructured loan category if the MahapatraCommittee recommendations on restructuring are approved in the current form.Stress loans would decline significantly to 3.8% (ex-AI and SEBs) as against headlinenumbers of 7.7% (6% ex-AI and SEBs).0.82.08.7CASA Cos t Bul k Dep. Cos t Incr. Cos t ofDep.SEB and AI forms bulk of new restructer loans( %) 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13NNPA 1.1 1.1 1.1 1.1 1.2 1.5 1.6 1.5 1.8OSRL 4.2 4.1 4.0 3.8 3.8 3.8 4.1 5.3 6.0Of which AI and SEB - - - - - - 0.1 1.2 1.7Of Prior to FY10 - - - - - - - 2.1 2.1OSRL ex AI and SEB 4.2 4.1 4.0 3.8 3.8 3.8 4.0 4.2 4.2Stress loans 5.3 5.2 5.1 4.9 4.9 5.3 5.7 6.8 7.7Stress Loans ex AI and SEB 5.3 5.2 5.1 4.9 4.9 5.3 5.6 5.6 6.0Stress Loans ex AI and SEB and - - - - - - - 3.5 3.8loans restructured prior to FY10Growth revival will assuage asset quality concerns: The key feature of the currenteconomic slowdown is that it is particularly severe for the industrial sector. IIP growthdecelerated to 3.1% in FY12 and is expected to decelerate to sub-2% in FY13. This isimportant from the Banking sector's perspective because the industrial sector accountsfor ~45% of bank loans and improvement in economic growth could help assuage a lotof asset quality issues. Within Industry, we note that the proportion Power sectorloans has increased to 7.5% in FY12 as against 4.2% in FY08. There could be increasedstress in Power sector loans. However, the silver lining of the government's seriousintent to improve the health of SEBs and resolve issues relating to the Power sectorcould be a big boost to the health of banks.October 2012A–20

India Strategy | Fired up?#4 TelecomSpectrum pricing and allocation, conducive M&A policy criticalOver FY07-12, private telecom operators invested ~USD60b, including the outlay for 3Gand BWA spectrum. Hypercompetition and lack of regulatory clarity has significantlyimpacted the return ratios of all operators, with the challengers currently incurringsignificant losses. Listed operators require an RPM increase of 12-64% to reach even thebase RoCE level of 12%. Further investments in the sector have been curtailed due tolow returns and lower availability of funding due to stressed balance sheets of mostoperators. Investment activity is unlikely to resume, unless balance sheets get repaired.RPM increase required to reach 12% RoCE (FY13 basis)Bharti (India & SA) Idea RComAvg Capital Employed (INRb) 783 272 692EBIT for 12% ROCE (INRb) 140 49 124Wirelss traffic (b min) 997 556 426Wireless revenue (INRb) 444 231 185EBIT (INRb) 75 26 29Wireless RPM (INR) 0.43 0.41 0.43Incremental EBIT required (INRb) 66 22 95Incremental revenue required (INRb) 82 28 119Incremental RPM required (INR) 0.08 0.05 0.28Wireless RPM required (INR) 0.51 0.46 0.71% increase required 19 12 64Some of the initiatives that the government can take to restore financial health of thesector are:1) Clear policy on spectrum pricing and allocation, with visibility on roadmap for allspectrum blocks to be made available in the future2) Putting all available spectrum to auction upfront rather than creating artificialscarcity by putting limited amounts for auction3) Conducive M&A policy which can support transfer of spectrum from inefficientoperators to efficient ones4) Negotiation-based settlement on 3G intra-circle roaming and Vodafone tax case5) Removal of policy overhangs like spectrum re-farming that might result insignificant operational disruption as well as financial burden for the industry#5 Oil & GasRational product pricing, gas reforms imperativePetroleum product under-recoveries have been continuously rising in the last fewyears, led by increasing oil prices and a depreciating rupee. Gross under-recoveriesfor FY13 are likely to be at a new high of INR1.6t v/s INR1.4t in FY12. However, with oilprice at ~USD110/bbl and the rupee appreciating, the outlook for the sector appearsbetter. More importantly, over the years, the Indian economy has acquired increasedresilience to high oil prices and high under-recoveries. If the average oil price were toremain at USD105-110/bbl in FY13/FY14, the import bill as well as subsidy estimate asa percentage of GDP would be well below FY09 levels, when oil prices had averagedat USD85-90/bbl. Recent steps by the Indian government to hike diesel prices andlimit subsidized LPG cylinders are bold (though inevitable!), in our view. Further policyfollow-up by fast-tracking the implementation of subsidy through cash transfer ispositive.October 2012A–21

India Strategy | Fired up?Oil @ USD110 now is oil @ USD85-90 in FY09Brend Oil price (USD/BL)1209060300Brent Crude Price (USD/bbl) - LHSNet petroleum imports (% to GDP)Petroleum Subs idy (% to GDP)FY99FY00FY01FY02FY03FY04FY05FY06FY07FY08FY09FY10FY11FY12FY13EFY14E9.06.54.01.5-1.0Oil imports & subsidy(% to GDP)India's high oil dependence (~80%)overshadows the increased resilienceof the Indian economy to high oilprices and high under-recoveries.Brent price of USD110/bbl now…India's net oil import bill andgovernment subsidy burden as apercentage of GDP… is similar to Brent at USD85-90/bblin FY09Model diesel price hike of INR2/liter in FY14, exchange rate of INR54/52/USD for FY13/14Rational petroleum product prices imperative for healthy economic growth:Controlling (under-pricing) petroleum products not only results in inefficiencies suchas (i) substitution of low value products (e.g. fixed price diesel replacing marketpricedfuel oil), and (ii) adulteration, but also impacts (a) India's energy security, (b)financial health of oil companies (increased debt, reduced profitability), and (c)government finances (high fiscal deficit). If India's GDP were to grow by 9%, energyconsumption would grow by 6-7%. Rational energy prices are necessary for healthyeconomic growth. They would also incentivize domestic producers to increase theirproduction.Under-recoveries and their sharing (INR b) Sensitivity of under-recoveries to oil price/exchange rate (INR b)Auto FuelsDomestic FuelsTotal1,5771,3851,2031,033773780 812 968575 461695426375144347 458 316 405 573 610 508FY08 FY09 FY10 FY11 FY12 FY13EFY14E1,8001,2006000-600OMC's sharingOil Bonds/CashUpstreamTotalFY08FY09FY10FY11FY12FY13EFY14E2,0001,5001,0005000Gross Under recoveries (INRb)80* 90* 100* 105* 110* 120*50 191 296 709 921 1,134 1,55852 216 447 888 1,109 1,330 1,77154 242 609 1,068 1,297 1,526 1,98556 296 772 1,247 1,485 1,722 2,19858 441 934 1,426 1,673 1,919 2,411Brent (USD/bbl)*Fx Rate (INR /USDRecent policy actions are positive• The recent Kelkar Committee report had recommended immediate price hikesand had also provided a roadmap of policy goals to reduce under-recoveries.‣ Diesel: Aim to eliminate half the diesel subsidy per unit in FY13 and theremaining half over FY14.‣ LPG: To eliminate LPG subsidy by FY15 by reducing it by 25% by FY13, with theremaining 75% over the next two years.‣ Kerosene: To reduce the subsidy by one-third by FY15.October 2012A–22

India Strategy | Fired up?• Though government has been largely aware of the path required to reduce underrecoveriesand in turn the subsidy burden, it has not been able to follow a clearroadmap. Nevertheless, despite all the political constraints, the government hasin part put itself on a path to reduce under-recoveries. Few of its steps include:‣ Decontrol of petrol prices (with small hiccups, petrol is now largelyderegulated).‣ Limiting of subsidized LPG cylinders (real impact would be seen over themedium term).‣ Subsidy by cash transfer to beneficiaries' accounts (reduce leakages and subsidythrough direct targeting). For instance, a study by NCAER indicates that ~40%of the PDS kerosene is diverted for non-PDS use.Gas price reforms to boost domestic production: Domestic gas price has beenhistorically controlled by the government. Against the price of imported gas at USD11/mmbtu, domestic gas price is limited at USD4.2-5.7/mmbtu. The last hike inadministered gas price was in June 2011, post KG-D6 gas pricing. With domestic gasprices at a significant discount to imported gas prices, there is little incentive forupstream companies to invest at the fixed gas price of USD4.2/mmbtu. Also, thebreakeven price for new deepwater discoveries in the country is pegged at USD5-6/mmbtu.While there is no clear policy roadmap to increase or rationalize domestic gas price,we expect the next price revision to take place in sync with the scheduled pricerevision for KG-D6 gas in March 2014 or earlier in view of declining KG-D6 productionand dire need for gas in India. Though it would be difficult to estimate the likely pricerevision, it is easy to identify the beneficiaries. Higher gas price is likely to facilitatethe development of RIL's discoveries in KG-D6 and NEC-25, but from the earningsperspective, we believe ONGC will be the largest beneficiary.ONGC's EPS is more sensitive to increase in gas price than RIL'sGas Price (USD/mmbtu) 4.2 6.0 7.0 8.0 9.0Exchange rate (INR/USD) 55.0 55.0 55.0 55.0 55.0Gas Price (INR/mscm) 8,085 11,550 13,475 15,400 17,325ONGC - FY14 basisStandalone gas sales (mmscmd) 53 53 53 53 53Standalone gas sales (bcm) 19 19 19 19 19Incremental PBT (INRb) - cumulative 67 104 141 178Incremental PAT (INRb) - cumulative* 45 70 95 119Incremental EPS (INR/sh) - cumulative 33.4 5.2 8.1 11.1 14.0% increase over base FY14 EPS 16 24 33 42RIL - FY14 basis; 60% stake in KG-D6Gas production (mmscmd) 25.0 25.0 25.0 25.0 25.0Gas production (bcm) 9.1 9.1 9.1 9.1 9.1Incremental PBT (INRb) - cumulative 19 30 40 51Incremental PAT (INRb) - cumulative** - 15 24 32 40Incremental EPS (INR/sh) - cumulative 69.7 5.2 8.1 10.9 13.8% increase over base FY14 EPS 7 12 16 20* Full tax rate assumed; **tax rate of 20% assumed; Sensitivity would be in favor of RIL if itsproduction increases beyond 40mmscmdOctober 2012A–23

India Strategy | Fired up?#6 InfrastructureCreating conducive environment for large scale developmentInfrastructure spending in India was targeted at USD500b (7.5% of GDP) under the11th Plan, up from USD227b in the 10th Plan (5% of GDP). The initial estimate for the12th Plan suggested infrastructure spending at USD1t, representing 9% of GDP. Theshare of the private sector was expected to increase from 24% in the 10th Plan to36.2% in the 11th Plan and to 51% in the 12th Plan. This, in our view, is difficult, withseveral policy/regulatory hindrances, lack of established models for PPP framework,lack of initiatives to establish long-term funding for the sector, etc. Except for theRoads sector, other major areas of infrastructure are languishing. In Roads too,developers, particularly those that bid aggressively, are witnessing financial crunch.#7 Mega projectsDFC, railways, urban transport can accelerate investment spendTake-off of large public expenditure projects (like DFC, railways, urban transport, etc)has become important at the current juncture. In this context, the ruling coalitionregaining control over the Railway Ministry (contributing ~12% of the infrastructurespending in 12th Plan) raises hopes of an accelerated spending program.• Urban infrastructure development is now becoming an important priority, giventhe haphazard urbanization in various cities. There are 30 cities in India with apopulation of over 2m each, and according to the Planning Commission, thesecities might implement Metro Rail at some stage or the other. There are 14 citieswith a population of over 3m each and 7 cities with a population of over 5m each.Several of these cities are actively planning Metro Rail. Delhi has completed itsMetro Rail project, while Bangalore has opened a section. Metro Rail projects areunder construction in Chennai, Kolkata, Mumbai, Jaipur and Hyderabad. Duringthe 12th Plan (FY13-17), the Working Group of Urban Transportation estimatesinvestments in Metro Rail projects at INR1.3t.• Capacity addition in transport infrastructure (particularly railways) sinceindependence has been woefully inadequate. The railway route kilometers haveincreased at a CAGR of 0.3% and running track kilometers at a CAGR of 0.7%. Incomparison, net ton kilometers have increased at a CAGR of 4.5%. This has led tomassive pressure on the existing infrastructure, and the accumulated deficienciesare acting as key growth bottlenecks for several segments. Coal availability topower projects has been impacted, given the evacuation constraints, though CoalIndia continues to carry a large inventory of 60m tons. There is an urgent need toaddress the logistics issue, given that a large part of India's mineral resources islocated in the eastern states of Jharkhand, Chhattisgarh and Orissa, while westernand southern India are the major consumption and industrial centers. IndianRailways has planned a steep increase in spending in the 12th Plan to INR5t+ v/s~INR2.2t in the 11th Plan, but funding remains a key challenge.• The Dedicated Freight Corridor (DFC) is an important project that attempts topartly correct the under-investment in railway infrastructure, and we expectproject awards to commence in FY13. The project is being funded by multilateralagencies from Japan and World Bank. Hence, funding is not expected to be amajor challenge. We believe that the DFC combined with the Delhi MumbaiIndustrial Corridor will have a meaningful multiple effects on the economy.October 2012A–24

India Strategy | Fired up?FY14 EarningsEarly signs of a rebound in earnings growthSensex EPS growth reverts to LPA of 15%; Earnings downgrades bottoming out• Expect FY14 earnings growth of 14%• Sensex EPS growth has reverted to LPA of 15%• Is FY14 the beginning of a new earnings cycle? There are some early signs:#1 Earnings downgrade cycle has bottomed out#2 Our FY14 assumptions far from aggressive#3 FY14 earnings mix is less vulnerable than that of FY13 initial estimates#4 More stocks have a bias for earnings upgrade than downgradeExpect FY14 earnings growth of 14%Our bottom-up estimates for the MOSL universe of companies (ex RMs) suggests FY14sales growth of 8%, EBITDA growth of 15% and PAT growth of 14%. This growth isdriven mainly by –1. Bounceback in sectors which were affected in FY13 (Auto, Telecom); and2. Steady growth in secular sectors (Consumer, Healthcare, Financials) offsettinglow growth in specific sectors like Oil & Gas, Technology and Capital Goods.Annual Performance - MOSL UniverseSector Sales (INR B) EBIDTA (INR B) PAT (INR B)FY13E FY14E CH. CH. FY13E FY14E CH. CH. FY13E FY14E CH. CH.(%) # (%) @ (%) # (%) @ (%) # (%) @High PAT Growth YoY 5,309 5,989 14 13 952 1,114 9 17 324 420 -6 30Telecom (4) 1,264 1,386 11 10 376 423 4 12 48 73 -23 50Retail (4) 281 328 17 17 27 32 18 21 10 14 18 32Real Estate (11) 232 294 3 26 95 123 2 30 46 60 -1 30Auto (5) 3,532 3,981 16 13 454 537 14 18 219 274 -4 25Medium PAT Growth YoY 8,408 9,308 8 11 2,923 3,436 12 18 1,583 1,865 14 18Media (5) 112 128 11 14 36 41 10 17 17 20 15 20Health Care (17) 880 966 19 10 205 223 17 8 127 152 22 20Others (4) 173 192 10 11 34 39 6 16 19 22 4 19Consumer (12) 1,175 1,360 17 16 247 292 21 18 166 198 20 19Metals (10) 3,962 4,179 1 5 717 844 3 18 381 451 4 18Financials (27) 2,106 2,482 14 18 1,685 1,997 14 19 874 1,022 16 17NBFC (8) 272 323 23 19 265 315 21 19 176 209 19 19Private Banks (8) 484 583 21 20 410 499 22 22 248 294 20 18PSU Banks (11) 1,350 1,576 10 17 1,010 1,184 10 17 449 519 14 16Low PAT Growth YoY 14,216 14,807 15 4 2,695 2,984 8 11 1,675 1,800 9 7Cement (8) 963 1,104 13 15 228 260 20 14 118 134 19 13Utilities (10) 2,185 2,413 15 10 621 726 19 17 384 428 10 11Technology (6) 1,864 2,083 23 12 468 503 22 7 352 382 23 8Excl. RMs (10) 7,546 7,422 14 -2 1,166 1,275 -2 9 677 712 4 5Oil & Gas (13) 16,160 16,193 11 0 1,421 1,577 -2 11 761 810 -4 7Capital Goods (9) 1,659 1,785 9 8 212 222 2 5 144 146 1 1MOSL (145) 36,547 38,875 11 6 6,824 7,837 9 15 3,666 4,184 8 14MOSL Excl. RMs (142) 27,933 30,104 13 8 6,570 7,534 10 15 3,583 4,085 10 14Sensex (30) 9,740 10,314 13 6 1,902 2,160 9 14 1,039 1187 10 14Nifty (50) 10,978 11,605 11 6 2,183 2,474 10 13 1,199 1363 11 14*Growth FY12 over FY11; # Growth FY13 over FY12; @ Growth FY14 over FY13. For Banks : Sales = Net Interest Income, EBIDTA =Operating Profits; Note: Sensex & Nifty Numbers are Free FloatOctober 2012A–25

India Strategy | Fired up?Sensex EPS trend: Distinct boom-bust cyclesSensex EPS growth has reverted to LPA of 15%For the 5 years ending FY13, Sensex EPS CAGR has been muted at 8%. However, itbecomes more interesting when seen from a longer term perspective. India’s longperiodaverage (LPA) earnings growth is 15%. However, the last 20 years’ earnings canbe bracketed into 4 distinct cycles of 5 years each as shown below.1 2 3 4FY93-13: 15% CAGR81FY93-98: 29% CAGR129 181 250 266 291FY98-03: -1% CAGR278 280216 236 272FY03-08: 25% CAGR833718348 450 5231,395FY08-12: 8% CAGR 1,2211,1251,024820 834FY93FY94FY95FY96FY97FY98FY99FY00FY01FY02FY03FY04FY05FY06FY07FY08FY09FY10FY11FY12FY13EFY14EIs FY14 the beginning of a new earnings cycle?Post Cycle 3 i.e. the FY03-08 boom, the 15-year Sensex EPS CAGR scaled up to 17%.However, the slowdown since then has caused the same to revert to the LPA of 15%.Now, our bottom-up earnings estimates for Sensex companies suggest FY14 SensexEPS growth of 14%, close to the LPA. The key question: Is FY14 the beginning of a newearnings cycle?A definitive yes or no is tough, given the high level of global and domestic uncertaintyon several macroeconomic and business variables – resolution of Eurozone crisis,GDP growth (both global and for India), commodity prices especially oil, exchangerate, etc. Still, we believe that there are a few early signs that this is a distinctpossibility:1. Earnings downgrade cycle has bottomed out2. Our FY14 assumptions are far from aggressive3. FY14 earnings mix is less vulnerable than that of FY13 initial estimates4. More stocks have a bias for earnings upgrade than downgrade.Early sign #1Earnings downgrade cycle has bottomed outWe introduced our FY13 estimates in December 2010 when bottom-up aggregation ofSensex companies’ PAT suggested FY13 EPS of 1,492. Since then, a combination ofglobal headwinds (mainly sovereign debt crisis in Eurozone) and domestic politicoeconomiclogjam has led to an 18% downgrade in Sensex EPS to 1,218 currently.October 2012A–26

India Strategy | Fired up?However, the pace of downgrade has slowed down considerably. In the last 9 months,Sensex EPS downgrade is less than 4%, and in the last 3 months, there is actually aminiscule upgrade. Equally important, if not more, FY14 earnings estimates have notseen any meaningful downgrade in the last 6 months. Clearly, the last two quartersare some evidence of a possible end to the earnings downgrade cycle.Earnings downgrade cycle seems to have bottomed out for FY13 …FY13 EPS (INR) FY13 EPS Growth YoY (%)15% downgrade in the first 12 months Less than 4% downgradein last 9 months1,492 1,471 1,397 1,337 1,267 1,259 1,218 1,221… and also FY14FY14 EPS (INR) FY14 EPS YoY (%)1,4311,387 1,39514 14 1418 18 18 1714 148 9Dec 10 Mar 11 Jun 11NewSeriesSep 11 Dec 11NewSeriesMa r 12 June 12 Sep 12Mar 12 June 12 Sep 12Bharti, Reliance and Tata Steel led the downgrade of FY13 Sensex EPS1,4923518-13-16-17-18-18-19-20-21-43-54-64-211,221Sensex EPS(Dec-10)CoalIndiaTCSMarutiL&TONGCSterliteSBIBHELNTPCJSPLTataSteelRILBhartiOthers(net)Sensex EPS(Current)Early sign #2Our FY14 assumptions far from aggressiveWe believe most of our underlying assumptions for FY14 estimates are far fromaggressive, impacted by the current macroeconomic slowdown and weak businesssentiment. Thus, in most sectors, key operating metrics are assumed at the samedepressed levels of FY13 or lower e.g. Capital Goods order intake, Consumer revenuegrowth, prices of most metals and oil, credit offtake, credit cost, wireless traffic,power tariff, etc. The only metrics where some recovery is modeled in are Auto/Cement volumes and USD revenue growth for Technology sector.October 2012A–27

India Strategy | Fired up?Key Operating Metrics / AssumptionsFY12A FY13E FY14E RemarksAuto2 Wheeler Volume Growth 12% 3% 12% FY13 volume growth downgraded to 3%4 Wheeler Volume Growth 10% 5% 15% Recovery in FY14 on low base (strike in Maruti’s Manesar plant)CV Volume Growth 19% 8% 14% M&HCV to grow -2.5%/+12% in FY13/FY14, LCVs 15%/15%.Capital GoodsAvg order intake growth (%) -26% 21% 8% Industrial capex, orders to remain sluggish on high cost of capital.CementVolume Growth (%) 7.0 8.0 10.0 FY14 volumes to be driven by pre-election developmental activities,Price Change (INR/bag) 23.0 20.0 10.0 as well as demand from individual housing.ConsumerValue Growth (%) 19.0 17.0 16.0 Marginally revised the gross margin assumptions upwardEBITDA Margins (%) 20.0 21.0 21.0FinancialsCredit Growth (%) 17.0 16.0 16.0 Unchanged as investment climate is yet to improveCredit cost (% of average loans) 0.9 1.0 1.0 We continue to build higher credit cost in FY14MediaAd Revenue Growth (%) 2 10 12 Ad growth to recover in FY13 on a low base and improve in FY14MetalsSteel (USD/ton) 863 720 672 Domestic steel price assumptions lowered by 10%-15% given sluggishAluminium (USD/ton) 2,346 1,996 2,100 demand, significant decline in RM prices and increased threat ofCopper (USD/ton) 8,501 7,898 7,500 cheaper imports, especially from China.Zinc (USD/ton) 2,121 1,910 2,000 No major change in Base metals assumptions.Oil & GasBrent Oil Price (USD/bbl) 114.5 110 105 High uncertainty in oil market fundamentals: demand growth (peggedat 0.8mmbbl/d in 2012, 2013), geopolitics (Iran situation, US election).OPEC (ex Iran) producing at historically high levels.Singapore GRM (USD/bbl) 8.3 8.0 8.0 Unless meaningful closures happen. GRMs unlikely to rise above USD7-9/bbl. Global operating rates (ex of US) are likely to remain low led bylower demand and commissioning of new refineries.TechnologyUSD Rev. Growth (top-tier) 21% 12% 16% Sluggish beginning to CY12 marred growth rates for FY13. ContinuedUSD / INR 48.2 54.5 53 budget spends albeit at a slower pace imply some pick up in growth inFY14, though still not enough to match that in FY12TelecomWireless traffic growth (%) 16 11 8 Wireless traffic growth to impacted by withdrawal of promotions andlower subscriber additionsRPM change (%) -0.9 -1.9 2.4 Pricing pressures to recede on corrective actions by the industryUtilitiesMerchant Power Rate 3.5 4.0 4.0 Our assumptions for Utilities sector remain unchangedPLF 66 67 67Early sign #3FY14 earnings mix is less vulnerable than that of FY13 initial estimatesWe compared the FY14 earnings mix with that of our initial FY13 initial estimates(which saw sharp downgrades subsequently). We believe that the current earningsmix has lower likelihood of major downgrades. Our key observations:• Earnings mix has marginally improved in favor of domestic plays over global plays.• More importantly, with both domestic and global plays, share of non-cyclicals hasincreased. Thus, share of overall non-cyclical earnings has increased from 55% inFY13IE (initial estimates in Dec-2010) to 60% for FY14E.October 2012A–28

India Strategy | Fired up?• Within Domestic Non-cyclicals, the share of Telecom is lower in FY14E vis-à-visFY13IE, whereas share of Financials, Utilities and Consumer is higher.• Likewise, within Global cyclicals, share of volatile Oil & Gas and Metals is lower,whereas share of Tata Motors (which has majorly turned around) is higher.• Finally, there is no chunky contributor to the build-up of Sensex EPS from 1,221for FY13 to 1,395 for FY14. This, we believe, further reduces the risk of downgradedue to adverse developments in 1-2 companies.FY14 earnings mix suggests FY13 kind of downgrades unlikely to recurMOSL Universe PAT mix (%) Sensex EPS mix (%)FY13IE FY13CE FY14E FY13IE FY13CE FY14EDomestic Plays 57 54 55 48 48 49Domestic Non-cylical 47 45 47 41 43 44Financials 24 24 25 16 18 19Utilities 9 11 10 11 13 13Auto Ex Tata Motors 4 3 3 6 5 6Telecom 4 1 2 4 1 2Consumer 4 5 5 4 5 5Others 3 1 1 - - -Domestic Cyclical 10 9 9 6 5 4Capital Goods 5 4 4 6 5 4Cement 3 3 3 - - -Real Estate 2 1 2 - - -Global Plays 43 46 45 52 52 51Global Non-Cyclical 12 13 13 14 16 16Technology 9 10 9 12 14 13Health Care 3 4 4 2 3 3Global Cyclical 32 33 32 39 36 35Oil & Gas ex RMs 18 19 17 24 23 22Metals 11 11 11 11 7 8Tata Motors 3 3 3 4 5 6Total Non-cyclical 58 59 60 55 59 60Total Cylical 42 41 40 45 41 40Total PAT (INR b)/Sensex EPS (INR) 3,934 3,583 4,085 1,492 1,221 1,395Growth YoY (%) 17 10 14 18 9 14IE - Initial Estimates; CE - Current Estimates; Note: Others Include Media, RetailFY14 Sensex EPS build-up is well diversified22 20 16 14 14 12 11 9 8 8 5 5 5 4 4 4 4 3 3 3 2 2 2 2 1 1 11,395-1 -3 -51,221FY13E EPSTata MotorsTata SteelHDFC BankSBIICICI BankHDFCITCONGCInfosysM&MTCSMarutiBhartiBajaj AutoL&TNTPCReliance Ind.HULHindalcoSterlite Inds.Dr Reddy’sHero MotoWiproCoal IndiaSun PharmaCiplaGAILJSPLTata PowerBHELFY14E EPSOctober 2012A–29

India Strategy | Fired up?Early sign #4More stocks have a bias for earnings upgrade than downgradeAs things stand, we believe more stocks in the Sensex are likely to see an upgrade intheir FY14 estimates, based on the impact of recently announced policy measuresand expected macroeconomic developments (e.g. rate cut). More importantly, thestocks account for 48% of aggregate Sensex PAT v/s 24% of PAT for those with potentialdowngrades. Also, stocks like Bharti, Tata Steel and BHEL could see a swing in eitherdirection depending on 1-2 key triggers playing out. Such stocks account for 6% ofSensex PAT.FY14 Sensex EPS: Favorable Upgrade-Downgrade equationPotential Upgrades Potential Downgrades Potential swings either side(48% of Sensex PAT) (24% of Sensex PAT (6% of Sensex PAT)Dr Reddy’ s Labs Coal India Bharti AirtelICICI Bank Hero Motocorp BHELLarsen & Toubro Infosys Tata SteelMaruti SuzukiJSPLNTPCTCSONGCReliance Inds.State BankTata MotorsOctober 2012A–30

India Strategy | Fired Up?Valuations and Model PortfolioIndian markets have staged a strong comeback in September 2012 to end the quarterwith a gain of 8%. Our June quarter strategy report had focused on RAY OF HOPE as weexpected the changing political realignments to lead to some positive reforms. Andindeed, the Indian government, post the monsoon session of Parliament, has pursueda hectic agenda of reforms to kickstart growth and infuse confidence among investorsand corporates.Most of the measures announced till date have been largely confidence boosters.However, the government needs to act now on 2 key issues: (1) Strong steps to curbfiscal deficit, and (2) Re-starting the investment/capex cycle. Concrete actions onboth these fronts hold the key to further re-rating of the markets. Recent currencyappreciation will help ease inflation, and also enable RBI do its bit to stimulate growth.Combined action of government and RBI could lead to upgrades in FY13 GDP growthestimate (currently at 6.5%).Our earnings estimates for FY13 and FY14 have been stable for the last 2 quarters. Webelieve the downgrade cycle is now behind us. Recent government measures alongwith more to come, monetary easing, and stable to declining commodities can driveupgrades going forward. Valuations remain below historical averages (FY14 PE of 13.5xv/s 10-year average of 14.8x). We see more upsides in markets from here.Sensex PE (x): 12-month forwardSensex PB (x): 12-month forward272224.64.83.94.21712710 Year Avg:14.8x10.714.33.02.11.210 Year Avg:2.7x1.62.4Sep-02Sep-03Sep-04Sep-05Sep-06Sep-07Sep-08Sep-09Sep-10Sep-11Sep-12Sep-02Sep-03Sep-04Sep-05Sep-06Sep-07Sep-08Sep-09Sep-10Sep-11Sep-12Indian market Cap to GDP Sensex RoE (%)Average of 62%for the period4226 26 235282 83103559589706525.022.520.017.515.024.210 Year Avg: 20.2%15.817.2FY01FY02FY03FY04FY05FY06FY07FY08FY09FY10FY11FY12FY13ESep-02Sep-03Sep-04Sep-05Sep-06Sep-07Sep-08Sep-09Sep-10Sep-11Sep-12October 2012A–31

India Strategy | Fired Up?We make the following changes in our Model Portfolio for 2QFY13:• We marginally raise our weight in Financials through PSU Banks, and increase ourweight in Autos, and Infrastructure/related sectors• We cut weights in Technology, Consumer and Healthcare.• Our biggest Overweight is Infrastructure & related sectors, and our biggestUnderweight is Consumer.• We have further increased our exposure to mid-caps.Sensex v/s Autos indexSensex v/s Consumer index130Se nse xBse Auto145Sen sexBs e Cons ume r11510013011510085Sep-11Sep-11Oct-11Nov-11Dec-11Dec-11Jan-12Feb-12Ma r-12Ma r-12Apr-12Ma y-12Jun-12Jun-12Jul-12Aug-12Sep-12Sep-12Sensex v/s Bankex85Sep-11Sep-11Oct-11Nov-11Dec-11Dec-11Jan-12Feb-12Ma r-12Ma r-12Apr-12Ma y-12Jun-12Jun-12Jul-12Aug-12Sep-12Sep-12Sensex v/s BSE Mid-caps135Sen sexBs e Ba nke x126Sens exBs e Midcap12011210598908475Sep-11Sep-11Oct-11Nov-11Dec-11Dec-11Jan-12Feb-12Ma r-12Ma r-12Apr-12Ma y-12Jun-12Jun-12Jul-12Aug-12Sep-12Sep-1270Sep-11Sep-11Oct-11Nov-11Dec-11Dec-11Jan-12Feb-12Ma r-12Ma r-12Apr-12Ma y-12Jun-12Jun-12Jul-12Aug-12Sep-12Sep-12October 2012Financials +Financials: Biggest weight; ICICI Bank, SBI top picksFinancials remain the biggest weight in the Model Portfolio (in-line with thebenchmark) as recent policy measures by government and expected monetary easingwill lower asset quality pressures. We have raised our stance to Overweight as webelieve that credit costs have peaked and valuations will gain further.• ICICI Bank is our top bet in the sector. Re-rating of ICICI will be led by expansion inRoEs over the next 2 years coupled with strong capital adequacy of above 10%.Any release of capital in Insurance JV will be an added catalyst.• Among other private banks, we have kept our weights unchanged on HDFC Bankand Yes Bank, despite strong gains in CY12. Fall in deposit rates and growing loanbook will drive earnings for the sector.• SBI remains our second biggest Overweight in Financials. Despite high slippages,the bank has been able to show strong profits and improve RoE. As credit costspeak in FY13, earnings upgrade cycle can be strong for SBI in FY14. Valuations areattractive (FY14E P/B of 1.2x), and the stock could get re-rated in a falling interestrate scenario.A–32

India Strategy | Fired Up?• We retain Union Bank as we expect 22% EPS CAGR over FY12-14 (led by lowercredit costs) and improvement in RoE to 16.9%. Stock trades at 0.7x FY14 book andoffers dividend yield of 4%.• We have removed M&M Financial Services post a strong stock performance.• We have added LIC Housing (valuations now attractive at 1.8xP/B FY14, beneficiaryof fall in rates, and steady business growth).• Power Finance is another addition as SEB loan restructuring eases bad loan worriesand loan disbursements resume. The stock trades at 0.9x P/B FY14.ICICI Bank P/BYes Bank P/B3.32.6P/B (x) Avg(x) Peak (x) Min(x)2.96.04.5P/B (x) Avg(x) Pe ak(x) Mi n(x)4.81.91.71.83.02.22.11.20.50.71.50.00.5Sep-07Ma r-08Sep-08Ma r-09Sep-09Ma r-10Sep-10Ma r-11Sep-11Ma r-12Sep-12Sep-07Ma r-08Sep-08Ma r-09Sep-09Ma r-10Sep-10Ma r-11Sep-11Ma r-12Sep-12SBI P/BLIC HSF P/B2.6P/B (x) Avg(x) Peak(x) Min(x)2.3 3.2P/B (x) Avg(x) Pe a k(x) Min(x)2.12.42.92.0Infrastructure +1.61.61.41.61.21.10.80.80.60.00.5Infrastructure & related: Biggest Overweight; add L&T, Jaiprakash, DLFSep‐07Ma r‐08Sep‐08Ma r‐09Sep‐09Ma r‐10Sep‐10Ma r‐11Sep‐11Ma r‐12Sep‐12Sep-07Ma r-08Sep-08Last quarter, we had changed our stance on Infrastructure and related sectors fromUnderweight to Overweight after several quarters. Now, we have added furtherweight to the sector.• L&T remains the top stock (upgraded to Buy a quarter back) on the back of continuedstrong order intake (led by Infrastructure and Overseas orders), excellent riskmanagement, expected stable margins, and management commitment to correctcapital structure.• We have added our exposure to Jaiprakash as the stock benefits from strongcement realizations, de-leveraging of balance sheet, and fall in interest rate.• DLF is a new addition as it benefits from positive macro, improving operatingleverage and financial de-leveraging. Its favorable near-term market-mix andproduct-mix offer high conviction on meaningful uptick in FY13 sales (we estimate~INR60b v/s INR53b in FY12). Operating cash deficit to improve in FY13 to INR8.1b(v/s INR20.4b in FY12) before breakeven in FY14. Our target price is INR286.Ma r-09Sep-09Ma r-10Sep-10Ma r-11Sep-11Ma r-12Sep-12October 2012A–33

India Strategy | Fired Up?L&T P/EDLF P/B54P/E (x) Avg(x) Pe a k(x) Mi n(x)10.5P/B (x) Avg(x) Peak(x) Min(x)3645.98.08.85.5180Sep-07Ma r-08Sep-08Ma r-09Sep-09Ma r-1022.210.1Sep-10Ma r-11Sep-11Ma r-1218.1Sep-123.00.5Sep-07Ma r-08Sep-08Ma r-092.50.9Sep-09Ma r-10Sep-10Ma r-11Sep-11Ma r-121.4Sep-12Technology –Tech P/E relative to Sensex P/ETechnology: Remain Underweight; concerns on volumes, marginsOur stance on Technology remains Underweight with restricted exposure to Infosysand HCL Tech.• Our FY14 USD revenue growth estimate across the top-tier is 15%, up from 10% inFY13. However, signs of meaningful demand pick-up remain elusive, implyingdowngrade risk to current volume estimates for FY14.• INR has appreciated to 51.75/USD, which could trigger a 4-8% downgrade in ourFY14 EPS estimates (currently based on INR53/USD).• Despite ~22% INR depreciation from 1QFY12 to 1QFY13, margins across the toptierhardly benefited, as the currency gains got reinvested in lower-margincontracts and high-cost workforce onsite. As most of these investments areirrevocable in nature, offsets to margin headwinds appear limited in an appreciatingcurrency environment. Margin sustainability is a key concern.Infosys P/E40200-20-40Technology PE Relative to Se nse x PE (%)23.2LPA o f -2%-32.45.1302418126P/E (x) Avg Pea k (x) Mi n24.717.514.610.4Sep-07Apr-08Nov-08Ma y-09Dec-09Jul-10Jan-11Aug-11Ma r-12Sep-12Sep-07Ma r-08Sep-08Ma r-09Sep-09Ma r-10Sep-10Ma r-11Sep-11Ma r-12Sep-12Oil & Gas –Oil & Gas: Remain Underweight; cut Reliance, add ONGCWe remain Underweight on the Oil & Gas sector.• Expect RIL to deliver strong 2QFY13 earnings led by high GRMs; however, recentrefining margins have again turned weak. Core businesses remain volatile withvery limited upside potential. Upgrade in Reliance could come from hike in gasprices, which remains an event risk. As the stock has delivered a strong return of20% from the recent lows, we have cut our exposure.October 2012A–34

India Strategy | Fired Up?• We have added exposure to ONGC at current levels. Recent policy actions ofdiesel price hike/limiting subsidized cylinders, coupled with appreciating INR/USD, augur well for ONGC as its subsidy burden reduces. Despite subsidy burden,ONGC's RoE is at a respectable 18% level. The stock trades at P/E of 8.4x FY14 EPSof INR33.4, attractive EV/BOE of 5.3x (1P basis; >40% discount to global peers),and offers a dividend yield of 3.5%.Oil & Gas Sector P/EONGC P/B231711520.49.0Oil & Gas Se ctor - PELPA of 12.3x10.03.72.81.91.0P/B (x) Avg(x) Pe a k(x) Min(x)3.12.01.51.4Sep-07Apr-08Nov-08Ma y-09Dec-09Jul-10Jan-11Aug-11Ma r-12Sep-12Consumer: Biggest Underweight; valuations rich; ITC only exposureAfter a massive outperformance, Consumer sector now trades at historical highvaluations relative to the markets. We are Underweight on the sector due to slowingdemand growth led by weakening rural buoyancy. Our only exposure in the sector isITC (which is also an Underweight).Consumer P/E relative to Sensex P/EHUVR P/E16012080400Cons ume r PE Re lative to Sensex PE73 LPA of 50%10105-40Sep-07Apr-08Nov-08Ma y-09Dec-09Jul-10Jan-11Aug-11Ma r-12Sep-12Sep-07Ma r-08Sep-08Ma r-09Sep-09Ma r-10Sep-10Ma r-11Sep-11Ma r-12Sep-12Consumer –362820P/E (x) Avg(x) Pea k(x) Min(x)32.432.424.818.712Sep-07Ma r-08Sep-08Ma r-09Sep-09Ma r-10Sep-10Ma r-11Sep-11Ma r-12Sep-12Healthcare–Healthcare: Cutting weight; hit by recent headwindsWe have reduced our weight on Healthcare, given recent headwinds of new drugpricing policy, currency appreciation, and strong outperformance of the sector YTDCY12.• Our top bet in the sector is Dr Reddy's as we expect strong performance in FY13leading to earnings upgrade; valuations remain attractive.• We continue to like Divi's as it benefits from its core abilities of good chemistryskills coupled with strong customer relationships, leading to ramp-up in orderinflows. Strong order-backed capex and healthy guidance (25% topline growth forFY13) are the key positives from a near-to-medium term perspective.October 2012A–35

India Strategy | Fired Up?Healthcare Sector P/E Dr Reddy's P/E3326191230.0Healthcare Sector ‐ PE (x)LPA of 22.5x15.920.6846444244P/E (x) Avg(x) Pea k(x) Mi n(x)NegativeEarnings Cycle17.824.277.217.8Sep‐07Apr‐08Nov‐08May‐09Dec‐09Jul‐10Jan‐11Aug‐11Mar‐12Sep‐12Sep‐07Mar‐08Sep‐08Mar‐09Sep‐09Mar‐10Sep‐10Mar‐11Sep‐11Mar‐12Sep‐12Autos: Overweight; bet on Tata Motors, Maruti, Bajaj AutoWe raise our weight in Autos to Overweight in this quarter.• Tata Motors is our top bet in Autos and we have further raised our exposure to thestock. JLR volumes will retain volume momentum (15%) and profitability. Domesticvolumes should see recovery in FY14. Strong FCF will further help the balancesheet. Our target price of INR370 has over 40% upside.• Maruti is another top pick as it benefits from currency appreciation and stablecommodity prices including oil. Resolution of labor issues has led to stronger thanexpected volumes recently, driving upgrades. We expect earnings to rebound inFY14 with growth of14%. Our target price has 19% upside.• Within 2-wheelers, we prefer Bajaj Auto as FY14 volumes should grow 13% andmargins remain strong due to hedges at higher levels. Strong cash flow will driveINR300/share cash on books and high dividends. The stock trades at P/E of 14xFY14 EPS.Autos Sector P/EMaruti Cash P/E352729.2Auto Sector ‐ PE (x)1814Ca s h P/E (x) Avg(x) Pe ak(x) Mi n(x)14.9191136.1Autos +9.2LPA of 12x10.9106210.34.4Sep‐07Apr‐08Nov‐08May‐09Dec‐09Jul‐10Jan‐11Aug‐11Mar‐12Sep‐12Jul-03Feb-04Sep-04Apr-05Nov-05Jun-06Jan-07Aug-07Feb-08Sep-08Apr-09Nov-09Jun-10Jan-11Aug-11Feb-12Sep-12Utilities –Utilities: Cutting weight; remove Coal India on multiple concernsWe have cut our weight on Utilities as we remove Coal India from the portfolio.• For Coal India, lower international coal prices coupled with appreciating rupeewill impact PAT from market-linked e-auction sales (15%+ of volume, 40-45% atPBT level). We see risk to our FY13/14E earnings, as current realizations aremarginally higher than FY12 average, and have a downside risk. Importantly, currentearnings already factor superior production/dispatch growth. Negative surpriseOctober 2012A–36

India Strategy | Fired Up?could also come from implementation of MMDR Act. Valuations at 12x FY14E P/E(downside risk to EPS of INR31) and 3.6x P/BV (RoE of 25%) limit potential upside.• NTPC remains our preferred bet as capacity addition delays are now gettingaddressed and FY13-15 could see capacity addition of 4GW per annum v/s historicaverage of 2GW. Over FY12-15, NTPC would add 15GW of commercial capacity,which could drive FY14E EPS to ~INR14 FY14E (18 months from now). The stock istrading attractive at 1.7x FY14E BV of INR103/share.Utilities Sector P/BNTPC P/B4.03.33.7Utilities Sector - PB4.33.6P/B (x) Avg(x) Pe ak(x) Mi n(x)3.72.5LPA of 2.1x2.82.31.81.01.71.62.11.31.51.7Sep-07Apr-08Nov-08May-09Dec-09Jul-10Jan-11Aug-11Mar-12Sep-12Sep-07Mar-08Sep-08Mar-09Sep-09Mar-10Sep-10Mar-11Sep-11Mar-12Sep-12Telecom –Telecom: Wait & watch; concerns, stock prices bottomed out;We had cut our weight in Telecom last quarter and retain the lower weight. Pricingseems to have bottomed-out given renewed industry attempts to raise tariffs andlower promotions/discounting. Significant balance sheet stress, continued high levelof losses for challengers, and potential large payments towards spectrum shouldprevent irrational competition. We await outcome of upcoming 2G spectrum auctionin November which could provide visibility on future competitive structure as well asliability for spectrum payments. While stocks may have bottomed out, we would waitfor the earnings cycle to improve for any change in view.Bharti EV/EBITDAIdea EV/EBITDA16.013.010.07.04.0Sep-07EV/EBDITA(x) Pea k(x) Avg(x) Mi n(x)14.59.16.16.3Mar-08Sep-08Mar-09Sep-09Mar-10Sep-10Mar-11Sep-11Mar-12Sep-12EV/EBDITA(x) Pea k(x) Avg(x) Mi n(x)18.014.010.016.98.66.06.05.52.0Sep-07Mar-08Sep-08Mar-09Sep-09Mar-10Sep-10Mar-11Sep-11Mar-12Sep-12October 2012A–37

India Strategy | Fired Up?Metals –Metals: Underweight; but still like Hindalco, SterliteWe are Underweight on Metals as we have negative outlook for steel stocks, whilebase metal stocks still have to bear near-to-medium term pain of low returns on largeinvestment in greenfield aluminum projects in India. We believe that steel intensityof the world is on decline once again after a decade of high growth. China, which wasthe sole driver of demand, has already achieved high level of per capita steelconsumption vis-a-vis peak levels achieved by developed countries. Historically,decline in world steel intensity has resulted in stock underperformance. We believethat base metal stocks are better placed over steel stocks because (1) monetaryexpansion (e.g. QE3) boosts LME prices, earnings and stock valuations, and (2) thefundamentals of steel pricing are more dependent on return of high fixed assets.• We continue to like Hindalco because its conversion business provides 70% ofoperating cash flows and is insulated from LME volatility. Investments in low RoIaluminum greenfield projects in India have led to the stock's underperformance.We believe current valuations already factor in most negatives. Strong spotpremium and LME have improved earnings outlook. Valuation at 1x P/B FY14Eadjusted for goodwill (RoE 18.5%) is attractive.• We have introduced Sterlite in the portfolio. Sterlite is likely to get re-rated as itsinvestment cycle is now behind and Hindustan Zinc's cash flows after minoritybuy-out will de-stress the balance sheet of merged Sesa-Sterlite. Any visibility onavailability of bauxite in Odisha could be catalyst as well.Hindalco P/BSterlite P/B4.9P/B (x) Avg(x) Peak(x) Min(x)3.2P/B (x) Avg(x) Pe a k(x) Min(x)3.74.52.42.52.52.01.61.41.31.10.80.60.70.10.60.0Sep-07Ma r-08Sep-08Ma r-09Sep-09Ma r-10Sep-10Ma r-11Sep-11Ma r-12Sep-12Sep-07Ma r-08Sep-08Ma r-09Sep-09Ma r-10Sep-10Ma r-11Sep-11Ma r-12Sep-12October 2012A–38

India Strategy | Fired Up?Our preferred mid-capsYes Bank [YES IN, Mkt Cap USD2.6b, CMP INR382]Investment Argument• YES is effectively using the current phase of moderation in economic growth tode-risk and de-bulk its balance sheet, expand its retail franchise, and improve riskmanagement systems. In the process, growth is expected to be lower than historicallevels, but liability mix is likely to improve.• Rapid branch expansion, acquisition of new customers and deepening of existingcustomer relationships would ensure healthy growth across parameters. With50% of the existing branches less than 18 months old, we expect strong productivitygains to occur going forward.• Post deregulation of savings deposit rates, share of SA in overall deposits increasedto 6% v/s ~2% as on 1HFY12 and CASA ratio improved from 11% to 16.3%. Weexpect CASA ratio to further improve to 18.6%/20.9% in FY13/14.• Asset quality of the bank remains one of the best in the industry with stress assetsmerely 0.6% of the loan book.12-month Outlook• As rates decline and liquidity improves, YES (being a wholesale borrower) wouldbe a key beneficiary on margins.• Healthy core income growth, control over opex, and healthy asset quality willdrive PAT growth of 28%.• CRAR stood at 16.5%, with tier-I ratio at 9.2%. We expect the bank to raise capitalover next 12 months, which will further be book accretive.Key Risks• Deterioration in SME business outlook could increase YES's risk quotient.• Delay in capital raising could hurt growth prospects and expansion plans.Valuations• We expect earnings CAGR of 25% over FY12-14. RoA/RoE are expected to be strongat ~1.5%/23%+.• In an easy liquidity environment, the stock can see further re-rating from thecurrent P/B of 1.9x FY14E. Buy.Union Bank [UNBK IN, Mkt Cap USD2.2b, CMP INR208]Investment Argument• UNBK has been able to deliver impressive margins of 3%+ despite higher slippages(which led to higher interest income reversal) and tight liquidity conditions (FY12NIM was 3.2%, down just 10bp YoY). Management expects to maintain 3% margingoing forward led by fall in cost of funds and improvement in asset quality. LoanCAGR is expected to be ~16% during FY12-14 which would lead to similar NII CAGR.October 2012A–39

India Strategy | Fired Up?• UNBK's fee income to average assets (ex income on forex transactions) at 40bpremains low vis-a-vis peers. However, management's increased focus on the samehas started yielding results – fee income growth has improved to 17% in 1QFY13v/s 14% for FY12 and 4% in FY11. Continued traction in fee income can providecushion to earnings in case pressure on asset quality increases.• UNBK is highly leveraged to macroeconomic environment given the asset qualitypressure seen over past two years. As the situation improves and liquidity conditioneases, concerns over asset quality should abate, leading to re-rating of the stock.12-month Outlook• Near-term challenges remain in terms of asset quality risks and higher assetrestructuring. However, we believe current valuations largely discount the same.• Of UNBK's total SEB exposure of INR110b, INR58b is towards healthy SEBs andINR34b has already been restructured. As per the recent SEB debt restructuringplan, there could be some relief for UNBK on this front.Key Risks• Despite equity infusion of INR7.6b over FY11/12, UNBK's core Tier I ratio stood at7.7% which implies higher capital requirement in coming years, especially underthe Basel III regime.Valuations• We expect 16% earnings CAGR over FY12-14, and RoA/RoE at 0.8%/17%.• The stock has run up substantially (30%+ in past one month), in line with othermid-sized PSBs. Still, valuations remain attractive at 0.7x FY14E P/B and dividendyield of 4%+. Maintain Buy.Hexaware [HEXW IN, Mkt Cap USD678m, CMP INR123]Investment Argument• HEXW's decision to develop core competence and differentiation in key areas –Capital Markets, Travel & Transportation, EAS, and Testing – is the right approachfor a relatively small player. The 'foot-in-the-door' obtained from flagship serviceslike PeopleSoft helped it forge relationships, strengthened further by cross-sellingservices like IMS and BPO.• Large deals won by the company act as strong references in facilitating similarsuch wins in the future. It now has four services contributing more than 10% of itsrevenue v/s two a couple of quarters ago.Oracle may release a new version ofPeopleSoft in CY13, and HEXW is well placed to tap that opportunity.• HEXW has restricted itself to pure services deals, reducing the risk around revenuequality and profitability.12-month Outlook• We expect healthy growth to continue with CY11-13 USD revenue CAGR of 19.8%.• Our EBITDA margin estimate is 22.5% for CY12 (INR/USD @ 53.6) and 22.1% forCY13 (INR/USD @ 53.5).• Our EPS CAGR over CY11-13 stands at 24.8%.October 2012A–40

India Strategy | Fired Up?Key Risks• Sharp appreciation in the currency will impact profitability.• Slowdown in deal signings momentum will hurt revenue growth.• Within BFSI, it has high exposure to capital markets, the segment under maximumstress.Valuations• The stock trades at 9.9x CY12E and 8.6x CY13E EPS.• Our target price of INR167 is based on 12x CY13E EPS. Buy.MCX [MCX IN IN, Mkt Cap USD1.2bm, CMP INR1,244]Investment Argument• Multi Commodity Exchange of India (MCX) is a state-of-the-art electroniccommodity futures exchange, and has over 86% share (as at 31 March 2012) of theIndian commodity futures market.• Growth potential in volumes remains huge given that number of clients tradingon the commodities platform is currently less than 2m v/s an estimated 18-20m inequities. Also, globally, Gold futures volumes are 70-80x that of physical tradev/s 17-18x in India, 20x in Crude v/s 7x in India, 100x in Aluminum v/s 8-9x in India.• Bill to amend the outdated Forward Contracts (Regulation) Act (FCRA) could bepassed by the Parliament in the forthcoming session. This will give a fillip toMCX's volumes with entry of new products and participants. We believe valuefrom MCX-SX (stock exchange promoted by MCX and FTECH in 2008) is more definitethan merely option value.12-month Outlook• Given the drop in volatility index over the last couple of quarters, we assume flatvolumes YoY in FY13.• If the FCRA Bill gets passed in the forthcoming parliamentary session, it will leadto volume surge from:1) introduction of options trading,2) introduction of new related products such as freight-, rainfall-, and commodityindices, and3) increased investor participation, as banks, mutual funds and foreigninstitutional investors could be allowed to transact on India's commodityfutures markets.Key Risks• Significant proportion of costs incurred towards parent and group companies.• Concentration of turnover in four commodities.• Regulatory paralysis could impact growth.Valuations• We expect revenue CAGR of 11% over FY12-15 and EPS CAGR of 12.5%.• The stock trades at 22.2x FY13E and 18.7x FY14E EPS.October 2012A–41

India Strategy | Fired Up?• We value the standalone commodity exchange business at 20x FY14E earnings,which translates to a value of INR1,330/share. We value MCX-SX at INR14b, 11x thepotential revenues of INR1.3b in FY14. MCX's share in MCX-SX (including warrants)contributes additional INR110/share to its valuation.• Our target price is INR1,440. Buy.JAYPEE INFRATECH [JPIN IN, Mkt Cap USD1.4b, CMP INR53]Investment Argument• JPIN offers a unique synergistic business model of infrastructure development(Yamuna Expressway, YE) and real estate value unlocking.• The company is expected to generate free cash flow (FCF) beginning FY13 itself,given (1) expressway going ex-capex, and (2) strong operating performance inreal estate. FCF will be utilized for debt repayment and potential growth in payout.• Value unlocking story is sustainable, though a bit clouded by some concerns:(a) traffic growth at YE, (b) relative weakness real estate market mix, and (c) riskof policy actions. Some of the concerns are easing off.12-month Outlook• Expect steady sales momentum, and strong collections to continue in Noida andGB Nagar land parcels on the back of improvement in market outlook.• We expect meaningful clarity over YE toll income to emerge in the first 6-9 monthsof operations. Our recent interaction with the management suggests initial PCUsof ~10,000 in the month of August 2012.• We estimate net surplus (FCF - interest) of ~INR2.1b/5.2b in FY13/14, which wouldmost likely be utilized towards repayment of YE debt over the next 12-13 years,along with potential growth in payout.Key Risks• Downside risks to expressway traffic growth assumptions.• Delay in revival of Noida market.• Policy risks from new government at Uttar Pradesh.Valuations• We expect 22% revenue CAGR over FY12-14, translating into ~15% EBITDA CAGR.PAT is likely to decline @ 12% over FY12-14 on account of depreciation and interestcharge related to the Yamuna Expressway.• JPIN trades at (a) P/E of 7.9x FY13E and 7.4x FY14E, (b) P/BV of 1.1x FY13E and 1xFY14E vis-à-vis RoE of ~15%.• Buy with target price of INR60, given sustainable value unlocking story, steadyoperations and inexpensive valuations.October 2012A–42

India Strategy | Fired Up?United Phosphorus [UNTP IN, Mkt Cap USD1.1b, CMP INR131]Investment Argument• Worst is behind us with trough operating performance in FY12. Expect FY13 to bea recovery year: (a) strong volume bounceback in key markets, (b) integration ofLatAm acquisitions, c) benefit of lower crude, and (d) benefit of weaker INR.• UNTP is getting stronger in the global generic agrochem industry, as it hasoutperformed large peers like Makhteshim and Nufarm. While UPL's performancewas muted in FY09-12, its global peers performance was even worse with severemargin erosion and net losses.• With acquisitions of SIB and DVA Agro Brazil, UNTP has established a strong footholdin key LatAm market. These acquisitions will be a key growth driver over next 2-3years, reduce seasonality in its business and boost margins.• UNTP is targeting 5-year revenue CAGR of 15% and part recovery in profitability,driven by strong growth in emerging markets, ~USD5.5b products going off-patentover next 3-4 years, and focus on cost.12-month Outlook• FY13 revenues is expected to grow ~15%, EBITDA margin stable (not factoring infavorable forex), and PAT growth of 17% (adj for MTM forex loss).Key Risk• Adverse climatic conditions in any of the key regions.Valuations• Long-term outlook is positive given integration benefits from SIB and DVA Agro.However, there are no short-term re-rating catalysts. Ongoing buyback of up to19.2m shares up to INR150/share should support stock prices. The stock trades at8.8x FY13E and 6.7x FY14E EPS. Buy with target price of INR195 (~10x FY14E EPS).Petronet LNG [PLNG IN, Mkt Cap USD2.2b, CMP INR158]Investment Argument• Strong earnings visibility: Petronet LNG's earnings offer high visibility in near /long term given (a) huge gas demand-supply gap in India, and (b) annual re-gascharge escalation to protect IRR. Besides, 2.8x capacity expansion over next fewyears will further boost earnings.• Unlikely to come under PNGRB purview: PNGRB has no mandate to regulate LNGbusiness, and if desired, the same will have to be through an amendment to thePNGRB Act passed by the Parliament. Further, marketing margins are unlikely tobe curtailed as LNG prices are market determined and unlike domestic gas, LNGsourcing requires serious efforts.• Capacity expansion projects on track: PLNG expects to commission its Kochiterminal by Dec-12 and also, expect simultaneous completion of 44km Phase-I ofKochi-Bangalore pipeline through which it will supply gas. Further, it expects tocomplete (a) Dahej 2nd jetty project by 4QFY14 (additional capacity of 3mmt),(b) Dahej expansion by 2015-end (taking overall capacity to 18mmt), and(c) Gangavaram terminal by 2016-end and interim FSRU facility by 2014-end.October 2012A–43

India Strategy | Fired Up?12-month Outlook• As Phase 2 of Kochi-Mangalore-Bengaluru pipeline will commission in 2HCY13,earnings growth will be back ended in FY14. FY13 earnings will be muted (can seegrowth if marketing margins remain flat v/s our assumption of decline) as Kochiterminal's depreciation would hit P&L but its revenue contribution would startaccruing only in FY14.Key Risks• LNG business is currently unregulated. Recently, concerns have emerged on thelikely control of marketing margins. If this happens, it could pose a risk to PLNG'searnings.Valuations• With no risk to near-term earnings, we believe the next cycle of earnings growthwould come post FY13 led by (1) volume ramp-up at Kochi, (2) second jetty atDahej, and (3) new capacity at Dahej and Gangavaram. We build conservativemarketing margin of INR22/15 per mmbtu in FY13/14 and nil thereafter.• The stock trades at 10.5x FY14E EPS of INR15. We value PLNG at INR205, the averageof two methodologies (1) P/E (13x FY14E EPS), and (2) DCF (INR214). Buy.Crompton Greaves [CRG IN, Mkt Cap USD1.5b, CMP INR126]Investment Argument• For CG, the attempt now is to ensure that 'the value of whole is substantiallymore than the sum of the parts' and make a full transformation to a globalcorporation. We believe that this journey provides several levers to boostrevenues. Internationalization / integration could potentially double industrialbusiness revenues — new factories in new geographies, new products likeswitchgear plant in Brazil, transformer plant in Brazil / Saudi, etc will contributeincrementally in a meaningful manner. The recent acquisition of ZIV has targets tonearly treble revenues in 3 years' time given synergy benefits.• Overseas business is likely to see significant turnaround and could possibly becomeprofitable by mid-FY13 driven by ongoing revenue optimization and cost reduction.12-month Outlook• Aggressive restructuring of its manufacturing footprint in overseas business willhelp it turn profitable by mid-FY13, in our view. We expect internationalsubsidiaries to report EPS of INR0.5 in FY13, from loss of INR2.1 in FY12.• Organizational restructuring across geographies / product segments has beencompleted to break away from 'silo' structures towards integrated productofferings; initial success in railways / oil & gas has been encouraging.• The switchgear plant in Brazil is expected to add USD100m to revenues,contributing to ~10% of the overseas business. In India, commissioning of thedrives plant in 3QFY13 will also contribute meaningfully to standalone operations.October 2012A–44

India Strategy | Fired Up?Key Risks• Volatile macro environment, deterioration in European market, etc, could delayrecovery in earnings in overseas business.Valuations• The risk-reward appears favorable – we model 47% consolidated earnings CAGRover FY12-14 driven by 14% revenue CAGR and 230bp margin expansion.• We arrive at price target of INR163/sh, based on P/E of 12x FY14E for standalonebusiness and EV/EBIDTA of 8x FY14E for overseas business.CESC Ltd [CESC IN, Mkt Cap USD0.8b, CMP INR340]Investment Argument• Regulated business provides earnings/cash flow comfort: CESC gets an assuredreturn and steady cash flows from its regulated business in Kolkata (INR5b+ pa).• FY14 corporate EBITDA break-even for Spencer: Spencer's store-level EBITDA hasimproved from INR25/sq ft in FY11 to INR32 in FY12 and has already crossed INR50in YTDFY13. Robust revenue growth and expansion would help achieve corporateEBITDA break-even by FY14.• New projects on strong footing: CESC is constructing 1.2GW of power projectswith 0.6GW expected in next 12 months and additional 0.6GW by FY15. While PPAis not yet signed for 1GW, the new bid document allows fuel cost pass-through,and we believe that project return closer to regulated return (18-20% RoE) shouldnot be an issue. Equity already invested is INR8b+.12-month outlook• Key variables for CESC are: (1) Continued positive momentum in Spencerperformance, and (2) Progress on 600MW Chandrapur project. While FDI inmultibrand retail has recently been allowed, we believe this is only a long-termpositive for Spencer as it can currently fund its expansion through CESC.Key Risks• Slowdown in overall retail and Spencer, impacting pace of loss reduction (reductionof INR400-450m pa compared to loss of INR1.1b in FY12).Valuation• We expect CESC to report standalone PAT of INR6b in FY13 (up 8% YoY) and INR6.7bin FY14 (up 12% YoY).• Stock quotes at PER and P/B of 6x and 0.6x FY14E standalone. Maintain Buy.JSW Energy [JSW IN, Mkt Cap USD1.9b, CMP INR61]Investment Argument• Beneficiary of lower thermal coal prices: 2GW of JSWEL's capacity is combinationof merchant power sales and spot coal purchases. Also, these capacities are locatedin Southern/Western India, which are high deficit regions and command higher STtariffs. Lower international coal price thus would drive earnings.October 2012A–45

India Strategy | Fired Up?• 1.1GW of regulated project provides further comfort: JSWEL's 1.1GW Raj Westproject in Rajasthan has captive lignite mine, and is based on CERC terms (costplus RoE). This could provide sizable earnings growth in FY14 (project to be fullyoperational by 2QFY13).12-month outlook• Continue weakness in imported coal and rupee appreciation could be twinbenefits. JSWEL's gross margin improved to INR2.1/unit in 1QFY13 v/s INR0.21/unit in 2QFY12.• Sustained gross margin, higher PLF and contribution from Raj West are key earningsdrivers.Key Risks• Earnings volatility could be higher owing to converter business model.• INR depreciation in the past has been steep and volatility has been high –unfavorable to JSWEL.• Delay in the approval of Raj West tariff order could impact interim profitability.Valuations• We expect consolidated PAT of INR6.2b for FY13 (up 88%) and INR10.5b for FY14(up 69%).• Stock trades at 10x FY14E reported EPS. Buy.Sun TV Network [SUNTV IN, Mkt Cap USD2.6b, CMP INR349]Investment Argument• Deal with Arasu cable has removed a significant overhang for Sun TV and indicatesa more stable regulatory environment for Sun going forward.• Sun TV to benefit from mandatory digitization resulting in higher subscriptionrevenue from cable system without any incremental investment.• Advertising cycle is close to its lowest ebb and likely to improve as economicenvironment improves.• Most profitable media company with high dividend yield of 3% and a healthy payoutratio of 50%.12 Month Outlook• With de-growth in analog revenue from Tamil Nadu largely behind, we expectrevenue growth to improve from 5% in FY13 to 12% in FY14.• Success of digitization for phase I (4 metros) and phase II (38 cities) over the next12 months should be a significant sentiment booster for the entire TV value chain.Key Risk• Further delay in mandatory digitization• Continued sluggishness in ad environment• Any adverse news flow from ongoing investigations in 2G scam.Valuations• After a decline in FY13, we expect earnings growth of 10% in FY14• Sun TV is trading at a P/E of 19x FY13 and 17.4x FY14. BuyOctober 2012A–46

India Strategy | Fired Up?MOSL model portfolioSector weight / BSE-100 MOSL Weight relative Effective SectorPortfolio Picks Weight to BSE-100 StanceFinancials 27.6 28.0 0.4 OverweightPrivate 14.7 13 -1.7 NeutralICICI Bank 5.5 7 1.5 BuyHDFC Bank 5.3 4 -1.3 NeutralYes Bank 0.5 2 1.5 BuyPSU 5.9 10 4.1 OverweightSBI 2.7 6 3.3 BuyPNB 0.5 2 1.5 BuyUnion Bank 0.2 2 1.8 BuyNBFCs 7.0 5 -2.0 NeutralLIC Housing 0.4 3 2.6 BuyPower Finance 0.3 2 1.7 BuyInfrastructure & Related sectors 10.4 14.0 3.6 OverweightLarsen & Toubro 4.0 5 1.0 BuyJaiprakash Associates 0.4 3 2.6 BuyBHEL 1.0 2 1.0 NeutralACC 0.6 2 1.4 NeutralDLF 0.4 2 1.6 BuyOil & Gas 12.0 10.0 -2.0 UnderweightReliance Inds. 6.7 4 -2.7 NeutralONGC 2.7 4 1.3 BuyBPCL 0.5 2 1.5 BuyAuto 7.6 9.0 1.4 OverweightTat a Motor s 2.3 4 1.7 BuyMaruti Suzuki 0.9 3 2.1 BuyBajaj Auto 1.2 2 0.8 BuyTechnology 10.7 8.0 -2.7 UnderweightInfosys 5.6 6 0.4 BuyHCL Tech 0.7 2 1.3 BuyHealthcare 4.8 5.0 0.2 OverweightDr Reddy's 0.9 3 2.1 BuyDivi's Lab 0.3 2 1.7 BuyConsumer / Retail 13.3 4.0 -9.3 UnderweightITC 6.7 4.0 -2.7 BuyMetals 3.8 4.0 0.2 NeutralHindalco 0.7 2 1.3 BuySterlite 0.7 2 1.3 BuyTelecom 2.1 3.0 0.9 NeutralBharti Airtel 1.6 2 0.4 NeutralIdea Cellular 0.3 1 0.7 BuyUtilities 5.7 3.0 -2.7 UnderweightNTPC 1.2 3 1.8 BuyOthers 1.9 12.0 10.1 OverweightCESC 0.0 1 1.0 BuyCrompton 0.2 1 0.8 NeutralEicher Motors 0.0 1 1.0 Not RatedHexaware 0.0 1 1.0 BuyJaypee Infra 0.0 1 1.0 BuyJSW Energy 0.0 1 1.0 BuyMCX 0.0 1 1.0 BuyOberoi 0.0 1 1.0 BuyPetronet 0.0 1 1.0 BuySun TV 0.0 1 1.0 BuyUnited Phosphorous 0.2 1 0.8 BuyZee Entertainment 0.5 1 0.5 NeutralCash 0.0 0 0.0Total 100.0 100.0October 2012A–47

India Strategy | Fired up?2QFY13 PREVIEW Non-cyclicals have a field day in muted quarterTechnology, Healthcare, Financials & Consumer continue to deliver strong results• 2QFY13 PAT growth 9% YoY; lowest for any 2Q in last 7 years (ex global crisis)• Sectoral analysis: Non-cyclicals have a field day; Technology, Healthcare, Financials &Consumer continue to deliver strong results• 2QFY13 Sensex PAT growth just 2% YoY, lowest in last 12 quarters ex SBI-shocker 4QFY11• 2HFY13 residual PAT growth 9% for aggregate and 7% for Sensex; allays downgradeconcerns for FY13.2QFY13 PAT growth 9% YoY; lowest for any 2Q in last 7 years (ex global crisis)• 2QFY13 is likely to be yet another muted quarter in terms of India’s corporatesector performance. We expect MOSL Universe (ex RMs, oil refining and marketingcompanies) to report PAT growth of 9% YoY.• This is the lowest 2Q PAT growth in the last 7 years, barring the global-financialcrisisquarter of 2QFY10 when PAT de-grew 11%. In fact, excluding the financialcrisisquarters, 2QFY13 PAT growth is also the second lowest in the last 7 years.Ex crisis, 2QFY13 is lowest 2Q PAT growth in last 7 years …… and the second lowest PAT growth in last 28 quarter21372520Globalcrisis2211 95534 37 4236 3425242615 20 23 26 2224Global9 13 1811 11 9Crisis0‐11-8 -11-15 -15Sep‐05Sep‐06Sep‐07Sep‐08Sep‐09Sep‐10Sep‐11Sep‐12E1QFY073QFY071QFY083QFY081QFY093QFY091QFY103QFY101QFY113QFY111QFY123QFY121QFY13Sensex performance weak, both absolute and relative to aggregate: 2QFY13 aggregatePAT for Sensex 30 companies is expected to grow only 2% YoY. This is very weak inmore than one way –1. It is the lowest Sensex PAT growth in the last 12 quarters, excluding the “SBI-shockquarter” of 4QFY11 which saw SBI PAT collapsing to near zero; and2. Relative to the aggregate too, 2QFY13 Sensex PAT growth is weak – 6pp lower thanaggregate PAT growth, the highest in the last 12 quarters, again excluding the SBIshockquarter.Lowest Sensex PAT growth ex the "SBI-shock quarter" … … and worst growth relative to aggregate (ex SBI shock)204426 2722-21216630152-3204-2-11-152123-63QFY104QFY101QFY112QFY113QFY114QFY111QFY122QFY123QFY124QFY121QFY132QFY13E3QFY104QFY101QFY112QFY113QFY114QFY111QFY122QFY123QFY124QFY121QFY132QFY13EOctober 2012A–48

India Strategy | Fired up?Sectoral analysis: Non-cyclicals to have a field dayA sectoral breakdown of 2QFY13 corporate performance clearly suggests thedominance of non-cyclical sectors:• Of the large sectors, the highest YoY PAT growth is expected to be in Technology(+34%), Healthcare (+28%), Financials (+19%) and Consumer (+18%).• Telecom is the only major non-cyclical to report major PAT de-growth (-32% YoY).Another non-cyclical, Utilities, continues to maintain steady performance (PAT up7% YoY).• Expect most cyclicals to report negative or flat PAT growth: Oil & Gas ex RMs (+1.3%),Metals (-12%), Autos (flat), Capital Goods (flat) and Real Estate (-28%).• Cement is the only major cyclical expected to report robust PAT growth (+89%YoY).• Non-cyclicals contribute 103% of the incremental PAT over 2QFY12, whereascyclicals have a negative contribution of 3%.Quarterly performance - MOSL universe (INR b)Sector Sales EBITDA PAT EBITDA Margin(No of companies) Sep-11 Sep-12 Var % Sep-11 Sep-12 Var Sep-11 Sep-12 Var Sep-11 Sep-12 VarYoY % YoY % YoY (bp)High YoY PAT Growth 680 830 22 153 198 30 101 139 38 22.5 23.9 139Cement (8) 145 162 11 26 36 38 10 19 89 17.8 22.1 425Technology (6) 361 460 27 89 116 31 65 88 34 24.5 25.2 73Health Care (17) 174 208 20 39 46 20 25 32 28 22.3 22.3 8Medium/Low YoY PAT Growth 749 854 14 588 674 15 285 339 19 78.4 78.9 45Financials (25) 402 460 14 320 369 15 160 191 19 79.7 80.2 55Private Banks (8) 96 118 22 79 98 24 46 57 23 81.9 83.4 142PSU Banks (9) 251 276 10 189 206 10 78 91 17 75.1 74.8 -36NBFC (8) 54 66 21 53 64 22 36 43 19 96.6 97.4 83Consumer (12) 245 283 16 51 60 18 35 41 18 20.7 21.2 51Media (5) 25 27 10 8 9 2 4 4 17 34.5 32.1 -243Others (4) 38 40 7 8 7 -2 4 4 15 20.4 18.7 -172Utilities (10) 485 534 10 119 127 6 65 70 7 24.6 23.7 -87Oil & Gas ex RMs (10) 1,441 1,703 18 301 288 -4 179 181 1 20.9 16.9 -398Oil & Gas incl RMs (13) 3,126 3,886 24 191 385 102 38 245 539 6.1 9.9 381Negative YoY PAT Growth 1,017 1,148 13 121 135 11 76 75 -1 11.9 11.8 -17Auto (5) 623 721 16 75 86 15 46 46 0 12.1 12.0 -6Capital Goods (9) 336 364 8 41 42 4 28 27 -1 12.1 11.7 -47Retail (4) 57 64 12 5 6 14 2 2 -6 9.3 9.5 23Metals (10) 937 932 0 161 159 -2 91 80 -12 17.2 17.0 -23Real Estate (7) 41 35 -13 19 15 -21 8 6 -28 47.0 42.5 -452Telecom (4) 276 310 12 88 91 3 15 10 -32 31.9 29.4 -246MOSL (139) 7,271 8,487 17 1,240 1,555 25 597 865 45 17.1 18.3 127MOSL Excl. RMs (136) 5,587 6,304 13 1,350 1,458 8 738 802 9 24.2 23.1 -104Sensex (30) 3,769 4,229 12 838 866 3 466 477 2 22.2 20.5 -175Other aggregate highlights• Sales growth at 13% YoY is the lowest in the last 12 quarters, and is expected tomoderate further in 2HFY13 to 10%. This is led by a combination of both lowercommodity prices and slowing volume growth.• EBITDA margin is expected to contract 120bp YoY led by Oil & Gas ex RMs(-400bp)and Telecom (-250bp). As a result, EBIDTA growth at 8% is lower than Sales growth.October 2012A–49

India Strategy | Fired up?EBITDA growth is expected to pick up somewhat in 2HFY13, as lower commodityprices have a lag impact on raw material costs.• There are 3 sectors/sub-sectors where all companies are expected to reportpositive PAT growth – Technology, Private Banks and NBFCs. In 2 other sectors,only one company is expected to report PAT de-growth – Cement (Jaiprakash) andConsumer (United Spirits).• There are 3 sectors where only one company is expected to clock positive PATgrowth even as all its peers de-grow – Metals (Nalco), Telecom (Idea), and RealEstate (Phoenix Mills).Non-cyclicals (Technology, Healthcare, Consumer, Financials) dominate 2QFY13 corporate performance2QFY13 PAT growth by sector (%) Contribution to YoY PAT delta by sector (%)893421 17 14 11 10 10 7434 28 23 19 18 17 17 9 7 2 101 0 0-1 -6-12-28-32CementTechnologyHealth CareBanks - PvtNBFCConsumerMediaBanks-PSUMOSLEx.RMsUtilitiesSensexOil Ex. RMsAutoCap. GoodsRetailMetalsReal EstateTelecomTechnologyBanks-PSUBanks-PvtCementHealthNBFCConsumerUtilitiesOil Ex. RMsMediaAuto-1 -4 -8-17RetailCap. GoodsRealTelecomMetals2QFY13 sales growth (%) healthy across sectors …… but EBITDA margin damage widespread (chg in margin, bp)27 20 18 16 16 14 13 12 12 11 10 10 8042573 51 23 8-13-6-23-47-87 -124-243-246-398-452TechnologyHealth CareOil Ex. RMsAutoConsumerFinancialsMOSLEx.RMsTelecomRetailCementUtilitiesMediaCap GoodsMetalsReal EstateCementTechnologyConsumerRetailHealthCareAutoMetalsCap GoodsUtilitiesMOSL*MediaTelecomO&GexRMsReal EstDistribution of earnings growth: Skew towards PAT de-growth persistsEarnings Growth % >30% 15-30% 0-15%

India Strategy | Fired up?Sector highlights• AUTOS: Volume slowdown visible across segments, except UVs/LCVs. Whilecommodity prices are benign, adverse product mix and Fx movement would leadto an increase in RM cost by 30bp QoQ and 10bp YoY. We estimate 2QFY13 EBITDAmargins to decline 70bp QoQ (70bp YoY), impacted by adverse product mix, adverseFx movement and negative operating leverage. Maruti Suzuki (-200bp YoY/-290bpQoQ) and Hero MotoCorp (-190bp YoY/-120 QoQ) would be worst impacted. Weare downgrading our earnings estimates for Bajaj Auto and Hero MotoCorp tofactor in weaker than expected demand and adverse currency movement (exceptBajaj). We prefer Tata Motors, Maruti Suzuki and Bajaj Auto.• CAPITAL GOODS: We expect 2QFY13 revenue growth to moderate to 8% YoY(v/s 17% YoY in 1QFY13), given the depleting order book and constrainedenvironment. Ordering activity continues to be sluggish, particularly in theindustrial / power generation segment. Current BTB stands at 2.4x, the lowest in18 quarters and continues to impact reported performance. In 2QFY13, we expectEBITDA margin of 12%, down 40bp YoY, impacted by poor fixed cost absorption.While commodity prices have corrected meaningfully, a large part of the declineis negated by currency movements. Companies with high local manufacturingcontent (like BHEL, Cummins and Thermax) will be the key beneficiaries.• CEMENT: Cement volume growth is expected to be muted at 2% YoY (down~12%QoQ). As a result, capacity utilization is also expected to decline 120bp YoY(-10pp QoQ). However, cement prices remain strong with only moderate seasonalcorrections in 2QFY13 of INR5/bag (national average). QoQ drop in realizations,coupled with negative operating leverage (950bp QoQ lower utilizations) andcost push (partial impact of diesel price hike) would drive down EBITDA/ton toINR979/ton (down INR224/t QoQ, +INR383/ton YoY). We expect recovery in volumesand strong pricing in 2HFY13 to restore strong operating performance.• CONSUMER: Sustenance of volume growth amidst weaker macro environmentwill be the key highlight of 2QFY13, in our view. For 2QFY13, we estimate ourcoverage universe to post ~16% revenue growth (16% in 1QFY13) and ~18% PATgrowth (~22 % in 1QFY13). EBITDA is likely to grow 18.5% on the back of sustainedrevenue growth and some softening in input costs. We expect ITC to post 16%sales growth (1% cigarette volume growth) and ~17% PAT growth; HUL’s sales arelikely to grow 15% (8% volume growth) and 19% PAT growth.• FINANCIALS are likely to report healthy 2QFY13 PAT growth of 19%, led by PrivateBanks and select PSU banks, viz, SBI, BOI, OBC and UNBK. In terms of segments, weexpect PAT growth of 23% YoY for Private Banks, 8.6% YoY for Public Sector Banks(ex SBI), and ~19% YoY for NBFCs. Performance of Public Sector Banks is expectedto be mixed with SBI (+32%), OBC (+98%), BOI (+44%) and UNBK (+66%) reportingstrong numbers on a lower base and many others muted or lower. Asset qualitywill remain the most important driver of PAT performance. Private Banks are likelyto report better earnings and asset quality performance vis-à-vis Public SectorBanks. Ex Kotak Mahindra and Federal, private banks are expected to report PATOctober 2012A–51

India Strategy | Fired up?growth in the range of 20-30%. Among NBFCs, MMFSL is expected to report thestrongest earnings growth of 35%+, followed by DEWH. Other NBFCs are likely toreport 20% earnings growth, except LICHF whose PAT growth is likely to be muted.• HEALTHCARE: For 2QFY13, we expect topline growth of 21% YoY for our universe(ex one-offs) with EBITDA growth at 22% YoY. Adjusted PAT is expected to grow28% YoY. Adjusted PAT growth at 28% is higher than EBITDA growth mainly due toreversal of forex losses due to the appreciation of the INR v/s the USD in last fewweeks. Among CRAMS companies, we expect Divi's and Dishman to report strongoperational performance on a low base, new order inflow, and favorable currency.• MEDIA: Aggregate PAT for our media universe is expected to improve 10% YoY. Adrevenue trends remain sluggish but are likely bottoming-out. Headwinds for printcompanies seem to be receding on gradual decline in newsprint costs as well assharp appreciation in the INR. Digitization remains a strong theme for broadcastingand distribution stocks as most participants do not foresee a postponement in thedigitization deadline of October 31 for metros.• METALS: Ferrous: Domestic operations of steel majors are expected to report 3%lower revenue QoQ, with 4% higher volumes more than offset by 7% decline inrealization. EBITDA is expected to be down 10% QoQ and EBITDA/ton lower byUSD20-30/t. SAIL and Tata Steel (India) are expected to deliver volume growth of8% and 4% QoQ and JSW Steel flat. In 1QFY13 most steel companies had increasedinventories which are expected to be partially liquidated in the current quarter.Non-ferrous – Average 1QFY13 base metal LME prices corrected 0-3% QoQ butspot premiums moved up significantly supporting margins. Operating margins forboth Sterlite and Hindalco (standalone) are expected to improve QoQ. HZL volumesand margins are expected to remain flat QoQ.• OIL & GAS: Ex RMs, expect EBITDA decline of 4% and flat PAT (up 1% YoY). Weexpect Reliance Industries to report 17% YoY EBITDA decline, led by lower GRMs,petchem margins and KG-D6 gas volumes. Cairn is likely to report 79% YoY EBITDAgrowth led by Rajasthan production growth. ONGC and Oil India are estimated toreport 16% and 22% YoY decline in EBITDA led by lower net realization (~USD54/bbl in 2QFY13 v/s ~USD85/bbl in 2QFY12) and higher cess rate of INR4,500/MT v/sINR2,500 in FY12. The quantum of government support to OMCs and subsidy sharingby upstream companies remains uncertain. Still, refiners’ earnings are expectedto benefit by crude inventory gains and rupee appreciation.• REAL ESTATE: Given spillover launches (which were deferred by delay in approvals)and a weak 2QFY12, we expect our real estate universe to post a YoY uptick in salesmomentum. We expect aggregate sector revenue de-growth of 13.1% YoY (+7.7%QoQ), EBITDA decline of 21.4% YoY (-9.2% QoQ) and PAT decline of 27.6% YoY(-7.8% QoQ). Despite improved operating cash flow, meaningful success in debtreduction plan is likely to be visible in 2HFY13 only.October 2012A–52

India Strategy | Fired up?• TECHNOLOGY: Aggregate INR revenue is expected to grow 27.5% YoY and PAT33.6%, led by 21% YoY depreciation in the Rupee v/s the US Dollar. USD revenuegrowth across the top-tier is 8% YoY (10% including Cognizant). TCS, Cognizant andHCL are likely to continue leading revenue growth (+3.6%-4.6% QoQ), followed byInfosys (+2.9% QoQ) and Wipro (+1% QoQ). Pricing is expected to be stable acrossthe board. Margins are expected to decline at Wipro on two-month residual impactof wage hikes and hedge losses in the topline, as also at HCL due to wage hikesbecoming effective from July 1.• TELECOM: Aggregate 2QFY13 PAT for listed wireless majors is expected to decline32% YoY and 17% QoQ. For 2QFY13, we expect average wireless traffic for top 4operators to decline ~1% QoQ led by seasonal weakness and lower promotions.Wireless RPM decline is likely to abate, down 0.3% QoQ v/s ~2% QoQ decline inthe preceding two quarters. Among operators, we expect Bharti to exhibitrelatively lower traffic decline given its price aggression.• UTILITIES: We expect our Utility universe (ex Coal India) to report aggregate 2QFY13revenue growth of 9% YoY and PAT de-growth of 2% YoY. PAT growth is likely to bemuted for IPPs. NTPC (higher capacity addition) and PGCIL (better capitalization)would show PAT growth of 26% and 22% YoY, respectively. ST prices at IEX toucheda high of INR6/unit in mid-July but fell sharply post that. ST forward curve hasbeen strong and the last 3-month contracts are executed at price of INR4+/unit.Globally, imported coal prices have weakened and INR has shown weakness too.Players fueling their plants on imported coal will report improved gross margins.Company highlights• DLF: We expect flat revenue QoQ at INR21.4b in 2QFY13, 25% YoY de-growth inEBITDA and 18% PAT de-growth to INR2.9b owing to higher interest expense. During2QFY13, DLF divested NTC Mills and received initial tranche of INR5b. However,we expect leverage level to remain largely unaltered due to operating deficit.Progress in major divestments (Aman Resort, windmills) and balance payment inNTC Mills deals followed by debt reduction are key factors to watch out for.• HDFC BANK: It will most likely report its 52nd consecutive quarter of 30%+ PATgrowth on back of superior margins, strong loan growth and commendableperformance on asset quality. Our estimates suggest this trend will sustain allthrough FY13.• HUL: Turnaround which began in FY11 has gathered steam and is evident insustained volume momentum notwithstanding higher base. HUVR’s distributionand trade initiatives coupled with improved go-to-market capabilities andaggressive innovation pipeline has laid a foundation for strong performance inFY13 and FY14, in our view. This should translate into a robust 8% volume growthand 19% PAT growth for 2Q13.October 2012A–53

India Strategy | Fired up?• MARUTI SUZUKI: 2QFY13 performance is expected to be impacted by recent laborissue at its Manesar plant. Moreover, weak demand for petrol cars and consequenthigh discounts, adverse mix, unfavorable forex and recent wage hike negotiatedwith workers are expected to hurt margins. We estimate 260bp QoQ (-160bp YoY)decline in EBITDA margin to 4.7% and PAT decline of 51% YoY (-72% QoQ) to INR1.18b.• BHARTI: Consolidated PAT is expected to decline 36% YoY and 14% QoQ to INR6.6b.PAT for India & SA is expected to decline 22-23% YoY/QoQ. We have not assumedany forex gain/loss for Bharti in our 2QFY13 estimates. However Bharti could reportforex gain for the quarter due to INR appreciation.• WIPRO: Wipro accounts for its hedge losses in the topline; segmental breakdownof IT Services revenues also include translation losses. In 2QFY13, closing currencyappreciated QoQ (implying loss on assets translations) while average INRdepreciated QoQ (implying losses on hedges taken too). Therefore, while formost IT companies, this could imply other income losses, at Wipro, the same islikely to have operating margin implications. We are currently modeling 100bpQoQ decline in IT Services EBIT margin at 20%. Large forex impact would imply asignificant miss on the same.• NTPC: We expect NTPC to report PAT growth of 26% YoY largely on the back of baseeffect, as operations in September 2011 were impacted due to coal shortage/wetcoal and strike at Coal India. Generation for Jul-Aug 2012 stood at 36.5BUs (up 2%YoY) and coal plant PLF for the same period stood at 77% v/s 82% YoY.• SBIN is expected to report PAT growth of 30%+, led by strong margin and lowerprovisions (on a higher base of 2QFY12). Higher slippages have been a concern inthe past and the trend needs to be watched.• SESA GOA: Sesa Goa is expected to report 57% YoY decline in revenues due tolower iron ore volumes, affected by temporary closure of mining in Goa. There isfurther downside risk to our iron ore volume estimates of 7.9dmt in FY13 and15.7dmt in FY14 as restarting of mining could take much longer time than expected.October 2012A–54

India Strategy | Fired up?2QFY13 Sensex PAT growth just 2% YoY• For 2QFY13, we expect Sensex companies’ aggregate Sales growth of 12% YoY. A175bp damage to margin leads to EBITDA growth being sharply lower than Salesgrowth at only 3% YoY. PAT growth at 2% YoY is in line with EBITDA growth. Allgrowth figures are well below long-period averages.• This performance is very weak in more than one way –1. It is the lowest Sensex PAT growth in the last 12 quarters, excluding the “SBIshockquarter” of 4QFY11 which saw SBI PAT collapsing to near zero. Nearlyhalf (i.e. 14 out of 30) Sensex companies are expected to post YoY PAT declinefor 2QFY13.2. Relative to the aggregate too, 2QFY13 Sensex PAT growth is weak – 6pp lowerthan aggregate PAT growth, the highest in the last 12 quarters, again excludingthe SBI-shock quarter. This is primarily led by PAT decline in several cyclicals –Oil &Gas (ONGC, GAIL, Reliance Inds), Metals (Hindalco, Sterlite, Tata Steel)and Autos (Hero MotoCorp, Bajaj Auto, Maruti) – many of these companieshad reported PAT growth in 1QFY13.• As in the MOSL Universe aggregates, non-cyclicals and cyclicals have a major anddistinct impact on Sensex PAT:‣ Of the 9 Sensex companies with highest PAT growth, 8 are non-cyclicals.‣ Non-cyclicals more than offset the 390% drag on PAT contribution by thecyclicals.• Given ONGC’s high 13% weight in Sensex PAT and its sharp de-growth of 26% YoY,it alone accounts for a 7pp drop in Sensex PAT growth. Thus, ex ONGC, aggregateSensex PAT growth is a much more respectable 9%.• Top five Sensex companies by PAT growth: TCS (+42% YoY), SBI (+31%), HDFC Bank(+30%), Sun Pharma (+29%), and Infosys (+26%).Sensex Sales growth (YoY, %)20273423 214437 383633 323020222231 30166LPA 22%3228251923 26222218 191712-5-11-61Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2QEFY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13EOctober 2012A–55

India Strategy | Fired up?Sensex PAT growth (YoY, %)25283942 433331 302412 633302617192523LPA 19%20442627221216630152-7-2-15-21-251Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2QEFY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13ESensex 2QFY13 performance - It's cyclicals v/s non-cyclicals (INR b)Sales EBDITA EBITDA margin PAT PAT ContbnSep-12 Var % Sep-12 Var % Sep-12 Var Sep-12 Var % % GrowthYoY YoY (bp) YoY %High PAT Growth 898 17 313 18 34.9 47 203 29 42 404TCS 158 36 46 36 29.2 17 35 42 7 91State Bank 115 10 85 13 73.8 245 37 31 8 79HDFC Bank 36 22 28 30 76.5 432 16 30 3 32Sun Pharma 23 26 9 20 38.1 -201 7 29 1 14Infosys 100 24 31 23 30.9 -13 24 26 5 44NTPC 156 1 31 -3 20.1 -98 19 26 4 34Coal India 147 12 27 10 18.6 -27 28 25 6 50Wipro 111 22 21 22 19.2 9 16 22 3 26ICICI Bank 33 30 30 29 93.4 -51 18 21 4 29Cipla 20 15 5 18 25.2 58 4 21 1 6Med/Low PAT Growth 820 21 134 23 16.4 21 79 14 17 85HDFC 15 18 16 21 111.9 299 12 19 2 17Hind. Unilever 65 15 10 19 15.3 57 8 19 2 11M&M 95 31 11 28 11.7 -23 9 17 2 11ITC 70 15 26 16 36.8 33 18 17 4 23Tata Motors 443 22 58 29 13.1 66 25 11 5 21Larsen & Toubro 133 18 13 13 10.0 -44 8 3 2 2Negative PAT Growth 2,511 8 418 -10 16.6 -330 196 -18 41 -389Reliance Inds. 937 19 82 -17 8.8 -378 55 -3 12 -14BHEL 105 2 18 -1 16.8 -60 12 -4 3 -5Bajaj Auto 48 -7 9 -12 17.8 -105 7 -11 1 -8Sterlite Inds. 104 2 25 0 23.8 -51 13 -15 3 -20Hindalco 197 2 22 2 11.2 -2 9 -15 2 -15Dr Reddy’s Labs 25 15 5 9 18.3 -110 2 -17 0 -4JSPL 51 15 16 -14 30.6 -1019 8 -20 2 -19GAIL 112 15 14 -15 12.4 -454 8 -24 2 -23ONGC 218 -4 119 -16 54.9 -773 64 -26 13 -200Hero Motocorp 52 -11 5 -28 9.3 -220 4 -27 1 -15Tata Power 71 14 13 -3 18.4 -322 3 -30 1 -12Bharti Airtel 196 13 60 2 30.4 -324 7 -36 1 -33Maruti Suzuki 83 5 4 -21 4.7 -157 1 -51 0 -11Tata Steel 313 -5 28 2 9.0 58 1 -63 0 -12Sensex (30) 4,229 12 866 3 20.5 -175 477 2October 2012A–56

‐6 ‐9 ‐10 ‐12 ‐18 ‐18 ‐25 ‐28India Strategy | Fired up?• Bottom five Sensex companies by PAT growth: Tata Steel (-63% YoY), Maruti Suzuki(-51%), Bharti Airtel (-36%), Tata Power (-30%) and Hero MotoCorp (-27%).Tata Steel and Maruti Suzuki are the bottom performers for the second quarter ina row.2HFY13 residual PAT growth modest; allays downgrade concerns for FY13In 1HFY13, PAT growth for MOSL Universe (ex RMs) was 6% YoY. In order to meet ourfull year FY13 PAT growth estimate of 9%, implied residual 2HFY13 PAT works out to12% YoY.Most sectors comfortably placed for 2HFY13 PAT; no major earnings downgrade risk for FY1342‐2338‐292HFY13E YoY (PAT growth YoY, %) 2HFY12A (PAT growth YoY, %)32 2919 1820211943623281817211610 1015‐6‐1645‐13‐22‐19L to P2HFY13E YoY (PAT growth YoY, %)57 4830 25 25 20 20 18 17 17 16 13 11 9 9 8 6 3 3 3 27Tata SteelDr Reddy’sMaruti SuzukiHDFC BankTCSGAILHind. UnileverHDFCCiplaITCICICI BankNTPCReliance Inds.HindalcoWiproCoal IndiaM&MSensexSBISterlite Inds.InfosysL&TSun PharmaONGCBajaj AutoHero MotoJSPLBHELTata PowerTata MotorsBharti AirtelMediaReal EstateHealth CareCementConsumerRetailOil ex RMsTechnologyUtilitiesFinancialsMetalsCapitalGoodsAutomobilesTelecomEven the disaggregated, sector-wise picture for residual 2HFY13 is comforting. Only 4sectors need to deliver PAT growth of 25%+, viz, Media, Real Estate, Healthcare andCement. Of these, Media and Real Estate enjoy the benefit of low base as their 2HFY12PAT was down 23% and 29%, respectively.Sensex 2HFY13E PAT growth at 7%: As in the case of aggregates, even for Sensex,2HFY13 PAT growth is a modest 7% with earnings headwinds adequately modeled in,in our view.2HFY13E PAT for Sensex companies: As in the aggregates, no major downgrade concerns here tooOctober 2012A–57

India Strategy | Fired up?Intra-sector 2QFY13 earnings divergence (%)Sectors Sector +30% Growth 15-30% growth 0-15% growth -ve earnings EarningsGrowth (%) growth (%) momentumAutos 0 M & M: 17 Tata Motors: 11 Bajaj Auto: -11,HMCL: -27, MSIL: -51Capital Goods -1 Havells: 6, BHEL: -4,ABB: 145 Cummins: 23 L&T: 3 Siemens: -11,CRG: -14, TMX: -18Cement 89 Shree Cement: LP, India Grasim JaiprakashACC: 103, Ultratech: 94, Cements: 22 Industries: 4 Associates: -27ACEM: 92, Birla Corp: 54Consumer 18 Marico: 37, Pidilite Inds: 28, Britannia: 12, UnitedGodrej Consumer: 36 Dabur: 22, HUVR: 19, GSK Consumer: 12, Spirits: -2ITC: 17, CLGT/APNT: 16 Nestle: 10Bank - Private 23 Yes Bank: 30, IndusInd Bank: 28, ING Vysya Bk: 15,HDFC Bank: 30 Axis Bank: 22, KMB: 6,ICICI Bank: 21 Federal Bank: 5Bank - PSU 17 OBC: 98, Andhra Bank: 2, BOB: -7,Union Bank: 66, PNB: 1, Canara Bank: -14BOI: 44, SBIN: 31 Indian Bank: 0Bank - NBFC 19 M&M Financial: 37, PFC: 21, IDFC: 20, Shriram Trans: 10,Dewan Housing: 33 HDFC: 19, LIC Hsg. Fin.: 1REC: 19Healthcare 28 Dishman: LP, Sun Pharma: 29, Torrent Pharma: 12,Cadila: 110, Glenmark: 92, Divis Lab: 27, Opto Circuits: 10 Sanofi India: -9Jubilant Life: 67, Lupin: 22, Cipla: 21, Ranbaxy Labs: 4, Dr Reddy's Lab: -17IPCA Labs: 41 GSK Pharma: 18 Biocon: 3Media 17 Dish TV: Loss,Jagran Prakashan: 59 Zee Ent: 2 Sun TV: -1HT Media: -8Metals -12 HZ: -1, NMDC: -7,Sesa Goa: 139 Nalco: 23 STLT: -15, HNDL: 15,JSPL: -20, SAIL: -36,JSW: -35, TATA -63Oil & Gas 3 MRPL: 3,365, Indraprastha RIL: -3, GSPL: -16,(Ex RMS) Chennai Petroleum: 305, Gas: 12, Oil India: -17,Cairn India: 271 Petronet LNG: 0 GAIL: -24, ONGC: -26Real Estate -28 Oberoi Realty: 2,Phoenix Mills: 26 MLIFE: -3, HDIL: -27,DLF: -37, Unitech: -47Retail -6 Jubilant Foodworks: 45 Titan Inds: 15 Shopper's Stop: -82,Pantaloon: -94Technology 34 HCL Tech: 65, Infosys: 26, Tech MphasiS: 14TCS: 42 Mah: 24, Wipro: 22Telecom -32 Bharti Airtel: -36,Idea Cellular: 92 Tulip Telecom: -37,RCom: -60,Utilities 7 NTPC: 26, Adani Power: PL,JSW Energy: LP Coal India: 25, CESC: 14, Tata Power: -30,Powergrid: 24, NHPC: 10 Reliance Infra: -48PTC India: 19Earnings momentum: Represents number of companies in each of the growth brackets; PL: Profit to Loss; LP: Loss to Profit0 1 1 31 1255 1 112 6 3 12 3 3 0426101 1324 2 05 4 20083 0 2 50 1061 0 1 22 3 1 01 010331 4 2 3October 2012A–58

India Strategy | Fired up?N O T E SOctober 2012A–59

September 2012 Results PreviewBSE Sensex: 18,763 S&P CNX: 5,703MOSL Universe:2QFY13 Highlights&Ready ReckonerNote: In our quarterly performance tables, our four-quarter numbers may not always add up to the full-yearnumbers. This is because of differences in classification of account heads in the company’s quarterly andannual results or because of differences in the way we classify account heads as opposed to the company.All stock prices and indices as on 28 September 2012, unless otherwise stated.October 2012

MOSL UniverseMOSL Universe: 2QFY13 aggregate performance highlightsQuarterly performance - MOSL universe(INR Billion)Sales EBITDA Net Profit(No of companies) Sep-12 Var. Var. Sep-12 Var. Var. Sep-12 Var. Var.YoY (%) QoQ (%) YoY (%) QoQ (%) YoY (%) QoQ (%)Auto (5) 721 15.7 -3.2 86 15.1 -5.9 46 -0.2 -8.8Capital Goods (9) 364 8.2 14.7 42 4.0 26.3 27 -1.4 10.2Cement (8) 162 11.1 -9.9 36 37.7 -22.7 19 89.0 -24.9Consumer (12) 283 15.6 3.4 60 18.5 6.1 41 17.7 4.1Financials (25) 460 14.4 4.1 369 15.2 3.9 191 19.0 -0.4Private Banks (8) 118 22.1 3.6 98 24.2 4.8 57 22.9 2.9PSU Banks (9) 276 10.0 4.1 206 9.5 3.1 91 16.8 -4.0NBFC (8) 66 21.2 5.1 64 22.2 5.0 43 18.7 3.6Health Care (17) 208 19.7 6.8 46 20.2 4.9 32 28.2 16.7Media (5) 27 9.5 3.4 9 1.8 0.3 4 17.1 14.3Metals (10) 932 -0.5 -4.8 159 -1.8 -9.4 80 -12.1 -23.2Oil & Gas (13) 3,886 24.3 8.9 385 101.9 LP 245 539.3 LPExcl. RMs (10) 1,703 18.1 5.3 288 -4.4 24.8 181 1.3 25.7Real Estate (7) 35 -13.1 7.7 15 -21.4 -9.2 6 -27.6 -7.8Retail (4) 64 11.6 8.1 6 14.4 9.2 2 -5.5 11.8Technology (6) 460 27.5 4.8 116 31.3 2.9 88 33.6 2.5Telecom (4) 310 12.2 0.3 91 3.5 -0.1 10 -32.4 -16.1Utilities (10) 534 10.1 -2.0 127 6.2 -13.8 70 7.0 -22.6Others (4) 40 6.6 -6.1 7 -2.3 -7.4 4 15.3 -12.0MOSL (139) 8,487 16.7 4.1 1,555 25.4 48.0 865 44.9 112.3MOSL Excl. RMs (136) 6,304 12.8 1.6 1,458 8.0 2.4 802 8.7 -1.3Sensex (30) 4,229 12.2 0.8 866 3.3 0.4 477 2.4 -3.6For Banks : Sales = Net Interest Income, EBITDA = Operating Profits; LP = Loss to ProfitQuarterly performance - MOSL universeSector EBITDA Margin (%) Net Profit Margin (%)(No. of Companies) Sep.11 Sep.12 Chg. (%) Sep.11 Sep.12 Chg. (%)Auto (5) 12.1 12.0 -0.1 7.4 6.4 -1.0Capital Goods (9) 12.1 11.7 -0.5 8.2 7.5 -0.7Cement (8) 17.8 22.1 4.3 7.1 12.0 4.9Consumer (12) 20.7 21.2 0.5 14.1 14.4 0.3Financials (25) 79.7 80.2 0.6 39.9 41.5 1.6Private Banks (8) 81.9 83.4 1.4 47.9 48.2 0.3PSU Banks (9) 75.1 74.8 -0.4 31.2 33.1 1.9NBFC (8) 96.6 97.4 0.8 65.8 64.5 -1.3Health Care (17) 22.3 22.3 0.1 14.2 15.3 1.0Media (5) 34.5 32.1 -2.4 15.4 16.5 1.1Metals (10) 17.2 17.0 -0.2 9.8 8.6 -1.1Oil & Gas (13) 6.1 9.9 3.8 1.2 6.3 5.1Excl. RMs (10) 20.9 16.9 -4.0 12.4 10.7 -1.8Real Estate (7) 47.0 42.5 -4.5 20.1 16.7 -3.4Retail (4) 9.3 9.5 0.2 4.0 3.4 -0.6Technology (6) 24.5 25.2 0.7 18.1 19.0 0.9Telecom (4) 31.9 29.4 -2.5 5.6 3.4 -2.2Utilities (10) 24.6 23.7 -0.9 13.5 13.1 -0.4Others (4) 20.4 18.7 -1.7 9.4 10.2 0.8MOSL (139) 17.1 18.3 1.3 8.2 10.2 2.0MOSL Excl. RMs (136) 24.2 23.1 -1.0 13.2 12.7 -0.5Sensex (30) 22.2 20.5 -1.8 12.4 11.3 -1.1October 2012B–1

MOSL UniverseMOSL Universe: 2QFY13 aggregate performance highlights (Ex RMs)Quarter-wise sales growth (% YoY)Quarter-wise net profit growth (% YoY)22.2%17.1%17.6%15.3%12.8%10.8%8.7%5.1%Dec-11 Ma r-12 June-12 Sep-12ESectoral sales growth - quarter ended September 2012 (%)Dec-11 Ma r-12 June-12 Sep-12E27 20 1816 16 141312 12 11 10 10 80-13TechnologyHealthcareOil Ex. RMsAutoConsumerFinancialsMOSL Ex.RMsTelecomRetailCementUtilitiesMediaCap GoodsMetalsRealEstateSectoral EBITDA growth - quarter ended September 2012 (%)38 3120 18 15 15 1486 4 32-2 -4-21CementTechnologyHealthcareConsumerFinancialsAutoRetailMOSL Ex.RMsUtilitiesCap GoodsTelecomMediaMetalsOil Ex. RMsRealEstateSectoral net profit growth - quarter ended September 2012 (%)8934 2819 18 17971 0-1-6 -12-28 -32CementTechnologyHealthCareFinancialsConsumerMediaMOSL Ex.RMsUtilitiesOil Ex. RMsAutoCap GoodsRetailMetalsRealEstateTelecomOctober 2012B–2

MOSL UniverseCorporate Scoreboard (quarter ended September 2012)Top 10 by sales growth (%) Worst 10 by sales growth (%)845247 44 44 43 4340 39 37-22 -21 -20 -18-16 -14-11 -11 -9Cairn IndiaPetronet LNGShreeCementMRPLJubilantFoodworksDewanHousingIndraprasthaGasPower GridCorp.Divis LabsGodrejConsumer-57Sesa GoaUnitechOil IndiaStridesArcolabMCXDLFGujaratStateNHPCHeroMotocorpBGREnergyTop 10 by EBITDA growth (%) Worst 10 by EBITDA growth (%)1,135143111-31-28-25 -24-22 -2189 79 77 76 66 60 58-62-55-49 -49MRPLBirlaCorporationShreeCementACCCairn IndiaAmbujaCementsDishmanPharmaABBUltratechCementNalcoSesa GoaAdani PowerShopper'sStopUnitechRelianceInfrastructureHeroMotocorpDLFMCXOil IndiaMaruti SuzukiTop 10 by net profit growth (%) Worst 10 by net profit growth (%)3,365305271190145 139 120 110 103 98-63 -60-51 -48 -47-42-37 -37-94-82MRPLChennaiPetroleumCairn IndiaStridesArcolabABBSesa GoaUnitedPhosphorousCadilaHealthACCOrientalBank ofPantaloonRetailShopper'sStopTata SteelRelianceCommMaruti SuzukiRelianceInfrastructureUnitechBGR EnergyTulip TelecomDLFSource: MOSLOctober 2012B–3

MOSL UniverseAnnual performance - MOSL universe(INR Billion)Sales EBITDA Net ProfitFY12 FY13E FY14E Chg.# Chg.@ FY12 FY13E FY14E Chg.# Chg.@ FY12 FY13E FY14E Chg.# Chg.@(%) (%) (%) (%) (%) (%)Auto (5) 3,041 3,532 3,981 16.1 12.7 399 454 537 13.8 18.1 228 219 274 -3.8 24.8Capital Goods (9) 1,525 1,659 1,785 8.8 7.6 207 212 222 2.3 4.7 143 144 146 0.8 0.8Cement (8) 853 963 1,104 12.9 14.7 190 228 260 20.1 13.8 99 118 134 18.9 13.2Consumer (12) 1,005 1,175 1,360 17.0 15.7 204 247 292 20.7 18.4 138 166 198 20.4 18.8Financials (27) 1,843 2,106 2,482 14.3 17.9 1,473 1,685 1,997 14.4 18.5 751 874 1,022 16.4 17.0Private Banks (8) 400 484 583 20.9 20.5 336 410 499 22.0 21.6 207 248 294 19.8 18.3PSU Banks (11) 1,222 1,350 1,576 10.5 16.7 917 1,010 1,184 10.1 17.2 395 449 519 13.6 15.5NBFC (8) 221 272 323 23.1 18.8 219 265 315 20.8 19.0 148 176 209 18.8 18.9Health Care (17) 739 880 966 19.0 9.9 176 205 223 16.8 8.5 104 127 152 22.1 19.7Media (5) 101 112 128 10.9 14.2 32 36 41 9.7 16.6 15 17 20 14.5 20.3Metals (10) 3,914 3,962 4,179 1.2 5.5 694 717 844 3.3 17.7 365 381 451 4.5 18.3Oil & Gas (13) 14,578 16,160 16,193 10.8 0.2 1,447 1,421 1,577 -1.8 11.0 789 761 810 -3.6 6.5Excl. RMs (10) 6,603 7,546 7,422 14.3 -1.6 1,185 1,166 1,275 -1.6 9.3 653 677 712 3.8 5.1Real Estate (11) 226 232 294 2.6 26.4 93 95 123 1.8 29.6 47 46 60 -1.4 30.0Retail (4) 240 281 328 16.9 17.0 23 27 32 17.6 21.4 9 10 14 18.2 32.3Technology (6) 1,521 1,864 2,083 22.6 11.7 385 468 503 21.8 7.3 287 352 382 22.6 8.5Telecom (4) 1,140 1,264 1,386 10.9 9.6 360 376 423 4.5 12.3 63 48 73 -22.8 50.2Utilities (10) 1,893 2,185 2,413 15.4 10.4 521 621 726 19.1 16.8 350 384 428 9.7 11.4Others (4) 157 173 192 9.8 11.4 32 34 39 6.3 16.2 18 19 22 4.4 19.5MOSL (145) 32,778 36,547 38,875 11.5 6.4 6,236 6,824 7,837 9.4 14.8 3,405 3,666 4,184 7.7 14.1Excl. RMs (142) 24,803 27,933 30,104 12.6 7.8 5,973 6,570 7,534 10.0 14.7 3,269 3,583 4,085 9.6 14.0Sensex (30) 8,597 9,740 10,314 13.3 5.9 1,739 1,902 2,160 9.4 13.5 945 1,039 1,187 9.9 14.3Nifty (50) 9,902 10,978 11,605 10.9 5.7 1,981 2,183 2,474 10.2 13.3 1,077 1,199 1,363 11.3 13.7# Growth FY13 over FY12; @ Growth FY14 over FY13. For Banks : Sales = Net Interest Income, EBITDA = Operating Profits;Note: Sensex & Nifty Numbers are Free Float.Valuations - MOSL universeSector P/E EV/EBITDA P/BV RoE Div. PAT(x) (x) (x) (%) yld (%) CAGR(No. of companies) FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY12-14Auto (5) 11.9 12.4 9.9 6.7 5.6 4.6 3.9 3.0 2.5 32.4 24.4 25.1 1.7 9.6Capital Goods (9) 16.5 16.4 16.3 10.7 10.6 10.0 3.6 3.1 2.8 21.6 19.1 17.1 1.5 0.8Cement (8) 18.1 15.2 13.4 9.8 8.3 7.1 2.8 2.6 2.2 15.8 16.8 16.7 1.0 16.0Consumer (12) 38.1 31.6 26.6 25.5 21.0 17.6 13.3 10.8 9.1 34.9 34.2 34.0 1.2 19.6Financials (27) 12.3 10.6 9.0 NM NM NM 2.1 1.8 1.6 17.3 17.2 17.5 1.8 16.7Private Banks (8) 19.7 16.4 13.9 NM NM NM 3.1 2.7 2.4 15.9 16.7 17.4 1.1 19.1PSU Banks (11) 7.4 6.5 5.6 NM NM NM 1.3 1.1 0.9 17.4 16.7 16.8 2.5 14.6NBFC (8) 15.1 12.7 10.7 NM NM NM 2.9 2.5 2.1 19.5 19.4 19.9 2.1 18.9Health Care (17) 26.4 21.6 18.1 15.9 13.6 12.3 5.2 4.3 3.7 19.7 20.1 20.6 1.0 20.9Media (5) 32.0 27.9 23.2 14.4 12.8 10.7 5.7 5.0 4.5 17.7 18.0 19.4 1.2 17.4Metals (10) 9.6 9.2 7.8 6.4 6.5 5.6 1.3 1.2 1.1 13.3 12.8 13.6 1.9 11.2Oil & Gas (13) 9.9 10.3 9.6 6.2 6.2 5.5 1.6 1.4 1.3 15.8 13.9 13.4 2.0 1.3Excl. RMs (10) 10.5 10.1 9.6 5.6 5.6 5.0 1.7 1.5 1.4 16.0 14.9 14.1 2.0 4.4Real Estate (11) 18.0 18.3 14.0 14.0 13.4 10.0 1.1 1.1 1.0 6.1 5.8 7.0 0.9 13.2Retail (4) 45.2 38.3 28.9 19.0 16.1 13.2 7.3 6.4 5.5 16.0 16.7 19.1 0.6 25.0Technology (6) 19.3 15.7 14.5 13.5 10.8 9.7 4.9 4.1 3.4 25.2 26.4 23.5 1.8 15.3Telecom (4) 22.7 29.5 19.6 7.2 6.9 5.8 1.5 1.4 1.3 6.5 4.9 6.9 0.4 7.7Utilities (10) 14.6 13.3 12.0 11.0 9.6 8.4 2.4 2.2 1.9 16.3 16.1 16.2 2.4 10.6Others (4) 16.7 16.0 13.4 10.3 9.5 7.9 3.6 3.3 2.9 21.8 20.5 21.5 2.1 11.7MOSL (145) 14.6 13.5 11.8 N.M N.M N.M 2.5 2.2 1.9 16.8 16.1 16.3 1.7 10.9MOSL Excl. RMs (142) 14.9 13.6 11.9 N.M N.M N.M 2.5 2.2 2.0 16.9 16.4 16.5 1.7 11.8Sensex (30) 16.7 15.4 13.5 N.M N.M N.M 2.9 2.6 2.3 17.1 16.9 17.0 1.6 12.1Nifty (50) 16.3 15.0 13.2 N.M N.M N.M 2.7 2.6 2.3 16.7 17.0 17.0 1.6 12.5N.M. - Not Meaningful.Source: MOSLOctober 2012B–4

MOSL UniverseReady reckoner: quarterly performance(INR Million) CMP Rating Sales EBITDA Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQAutomobilesBajaj Auto 1,833 Buy 48,254 -6.9 -0.8 8,573 -12.1 -1.7 7,005 -11.3 -2.5Hero Motocorp 1,879 Buy 51,770 -10.5 -16.6 4,801 -27.7 -28.3 4,401 -27.1 -28.5Mahindra & Mahindra 865 Buy 95,445 30.6 3.2 11,193 28.1 0.9 8,656 17.4 19.3Maruti Suzuki 1,350 Buy 82,507 5.4 -23.4 3,909 -20.9 -50.3 1,175 -51.1 -72.3Tata Motors 267 Buy 442,658 22.3 2.2 57,988 28.7 0.8 24,824 10.5 -3.2Sector Aggregate 720,634 15.7 -3.2 86,465 15.1 -5.9 46,061 -0.2 -8.8Capital GoodsABB 798 Neutral 19,190 10.1 1.9 1,109 66.3 4.6 543 145.1 5.2BGR Energy 275 Neutral 7,038 -8.8 15.2 883 -19.9 0.4 296 -42.3 -11.5BHEL 247 Neutral 105,257 2.2 26.4 17,694 -1.3 47.2 12,329 -4.1 33.9Crompton Greaves 126 Neutral 29,629 9.5 5.4 1,981 -12.4 18.8 1,003 -14.0 16.8Cummins India 508 Neutral 12,056 10.6 -4.2 2,230 26.8 -4.1 1,584 23.2 -12.3Havells India 625 Buy 9,796 15.0 -5.4 1,162 12.9 -4.9 784 5.9 -10.9Larsen & Toubro 1,597 Buy 132,967 18.2 11.2 13,297 13.3 6.6 8,223 3.0 -18.0Siemens 709 Neutral 35,693 -1.1 25.5 2,914 0.7 201.6 1,579 -11.3 333.8Thermax 561 Neutral 12,020 -7.8 22.2 1,142 -18.7 18.5 837 -17.7 24.6Sector Aggregate 363,645 8.2 14.7 42,411 4.0 26.3 27,179 -1.4 10.2CementACC 1,469 Neutral 24,042 11.8 -13.4 4,167 89.0 -36.0 2,497 103.2 -40.3Ambuja Cements 202 Buy 21,709 20.3 -15.4 5,512 77.0 -23.7 3,561 92.1 -24.1Birla Corporation 282 Buy 5,456 5.8 -17.1 766 142.7 -39.1 404 54.5 -52.3Grasim Industries 3,315 Buy 11,736 -2.5 -5.3 2,856 -1.7 -3.3 3,597 4.3 31.8India Cements 95 Buy 11,466 5.3 -4.6 2,519 0.0 -9.3 854 22.5 14.1Jaiprakash Associates 82 Buy 32,233 2.9 8.8 7,266 -2.9 -5.8 943 -26.7 -31.6Shree Cement 3,954 Buy 10,927 47.4 -24.9 3,216 111.1 -33.2 2,166 LP -38.4Ultratech Cement 1,968 Buy 44,095 12.8 -13.1 9,358 60.3 -27.6 5,402 93.6 -30.6Sector Aggregate 161,664 11.1 -9.9 35,661 37.7 -22.7 19,423 89.0 -24.9ConsumerAsian Paints 3,937 Neutral 25,500 13.3 0.4 3,825 18.5 -12.6 2,428 16.3 -15.8Britannia 476 Sell 14,500 12.0 18.7 827 7.1 27.1 548 12.3 26.2Colgate 1,206 Sell 7,700 17.2 4.6 1,670 18.2 2.8 1,253 16.5 6.7Dabur 128 Neutral 14,700 16.5 0.5 2,852 20.5 38.4 2,122 22.1 37.5Godrej Consumer 668 Neutral 16,250 37.0 17.0 2,860 36.9 43.8 1,736 35.9 33.0GSK Consumer 2,994 Neutral 8,100 12.5 11.0 1,377 16.7 24.4 1,153 11.9 8.2Hind. Unilever 545 Neutral 64,500 15.0 1.1 9,869 19.4 2.1 7,784 19.3 -8.9ITC 272 Buy 69,700 14.5 3.8 25,650 15.6 8.3 17,680 16.8 10.4Marico 199 Buy 11,500 18.0 -9.2 1,564 34.1 -15.4 1,074 37.2 -13.3Nestle 4,374 Neutral 22,750 15.9 14.5 4,960 20.9 15.5 2,954 10.0 21.6Pidilite Inds. 206 Buy 8,450 19.0 -7.4 1,622 24.6 -14.9 1,108 28.2 -16.9United Spirits 1,218 Neutral 19,700 10.0 -4.2 2,916 13.9 -13.0 828 -2.3 -25.1Sector Aggregate 283,350 15.6 3.4 59,990 18.5 6.1 40,669 17.7 4.1PULL OUTOctober 2012B–5

MOSL UniverseReady reckoner: quarterly performance(INR Million) CMP Rating Sales EBITDA Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQHealthcareBiocon 275 Neutral 6,067 19.3 5.2 1,453 8.9 18.4 886 3.4 12.4Cadila Health 872 Buy 15,810 27.0 2.1 3,439 24.7 0.6 2,158 110.1 10.8Cipla 381 Neutral 20,468 15.1 17.2 5,156 17.8 24.8 3,735 20.9 22.2Dishman Pharma 96 Neutral 3,436 27.6 9.0 830 76.5 -0.7 304 LP -21.6Divis Labs 1,080 Buy 4,932 39.3 5.3 1,833 45.2 -3.8 1,350 27.3 -19.4Dr Reddy’ s Labs 1,647 Buy 24,822 15.1 8.9 4,542 8.6 26.4 2,229 -17.0 -4.3Glenmark Pharma 422 Buy 11,589 25.0 17.5 2,076 19.9 12.8 1,426 91.5 181.5GSK Pharma 1,977 Buy 6,674 9.8 2.4 2,082 18.3 2.7 1,720 17.8 1.4IPCA Labs. 482 Buy 7,133 14.4 12.4 1,639 3.7 23.3 1,098 40.9 155.5Jubilant Life 212 Neutral 12,803 22.2 3.6 2,691 14.0 -0.1 1,326 67.0 43.8Lupin 596 Buy 20,925 27.2 2.1 3,674 32.9 12.4 2,442 21.5 16.4Opto Circuits 130 Neutral 7,012 24.8 -1.9 1,885 21.9 -0.7 1,337 10.5 -3.1Ranbaxy Labs 530 Neutral 25,341 20.9 10.0 2,706 55.4 9.1 1,688 4.2 -2.0Sanofi India 2,374 Neutral 3,901 24.8 4.3 636 26.4 21.8 499 -8.9 23.3Strides Arcolab 883 Buy 6,185 -19.6 21.7 1,555 -9.6 37.6 1,347 189.9 1050.3Sun Pharma 693 Neutral 22,526 26.4 -2.2 8,583 20.1 -17.5 7,063 29.5 5.2Torrent Pharma 695 Buy 8,290 21.3 8.1 1,659 18.0 6.4 1,119 11.9 9.8Sector Aggregate 207,915 19.7 6.8 46,439 20.2 4.9 31,728 28.2 16.7MediaDish TV 83 Neutral 5,406 12.1 4.0 1,548 27.1 -0.5 -100 Loss LossHT Media 93 Neutral 4,982 1.0 1.7 674 -5.3 0.8 403 -8.0 -0.9Jagran Prakashan 91 Neutral 3,317 8.6 4.5 864 9.3 9.6 729 59.2 30.7Sun TV 349 Buy 4,491 -0.5 5.5 3,518 -3.7 8.9 1,787 -0.8 8.8Zee Entertainment 196 Neutral 8,640 20.3 2.5 1,997 -3.8 -14.4 1,598 2.4 1.0Sector Aggregate 26,836 9.5 3.4 8,602 1.8 0.3 4,417 17.1 14.3MetalsHindalco 121 Buy 197,200 2.0 -1.0 22,023 1.8 10.0 9,117 -15.5 1.2Hindustan Zinc 135 Buy 26,853 1.8 -2.3 14,162 -3.3 -0.9 13,555 -0.6 -14.3JSPL 428 Neutral 50,958 15.2 8.4 15,591 -13.6 -2.1 8,401 -20.0 -12.4JSW Steel 757 Sell 83,636 9.6 -7.5 14,335 9.4 -19.1 3,882 -35.2 -41.5Nalco 51 Neutral 16,991 5.3 -2.8 2,418 58.5 -20.5 1,714 23.0 -23.2NMDC 194 Buy 28,466 -7.0 0.2 22,246 -8.7 -3.4 18,226 -7.2 -4.4SAIL 85 Sell 107,892 -3.6 0.1 13,918 4.9 -8.2 6,377 -36.4 -27.8Sesa Goa 171 Neutral 3,363 -57.4 -80.6 1,001 -61.5 -85.2 5,621 138.8 -50.5Sterlite Inds. 99 Buy 104,064 2.1 -2.3 24,805 -0.1 7.5 12,653 -15.3 -10.8Tata Steel 401 Sell 312,934 -4.6 -7.5 28,051 2.0 -22.1 791 -62.8 -90.0Sector Aggregate 932,355 -0.5 -4.8 158,550 -1.8 -9.4 80,338 -12.1 -23.2OthersCastrol India 311 Buy 7,745 15.3 -9.0 1,490 14.4 -12.0 1,057 11.2 -12.6MCX 1,284 Buy 1,283 -17.7 4.3 811 -24.2 7.3 712 -20.6 10.0Sintex Inds. 67 Buy 10,710 -7.4 -0.9 1,669 -18.3 -6.0 751 -23.8 -0.8United Phosphorous 131 Buy 20,360 14.7 -8.1 3,521 8.2 -8.9 1,568 119.9 -22.7Sector Aggregate 40,097 6.6 -6.1 7,492 -2.3 -7.4 4,087 15.3 -12.0PULL OUTOctober 2012B–6

MOSL UniverseReady reckoner: quarterly performance(INR Million) CMP Rating Sales EBITDA Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQOil & GasBPCL 346 Buy 571,811 35.2 4.9 17,903 LP LP 10,183 LP LPCairn India 331 Neutral 48,725 83.7 9.7 37,609 78.8 7.7 28,308 271.0 -26.0Chennai Petroleum 129 Buy 100,501 6.7 -8.9 4,499 LP LP 2,962 304.7 LPGAIL 383 Neutral 111,932 15.4 0.9 13,935 -15.5 -26.6 8,364 -23.6 -26.2Gujarat State Petronet 81 Neutral 2,426 -13.6 -9.3 2,218 -14.2 -10.0 1,085 -16.1 -13.1HPCL 307 Buy 496,111 34.0 12.6 16,697 LP LP 11,403 LP LPIOC 251 Buy 1,115,444 25.1 15.5 62,858 LP LP 41,570 LP LPIndraprastha Gas 265 UR 8,530 42.9 12.2 1,861 18.3 3.8 866 12.2 1.9MRPL 61 Neutral 168,502 44.4 31.5 9,306 1134.8 LP 8,361 3365.2 LPOil India 490 Buy 25,886 -20.8 10.9 12,679 -21.7 15.7 9,399 -17.4 1.1ONGC 280 Buy 217,664 -3.8 8.4 119,438 -15.6 8.2 64,009 -25.9 5.3Petronet LNG 158 Buy 81,708 52.2 16.2 4,380 -2.3 -4.2 2,616 0.5 -3.4Reliance Inds. 837 Neutral 937,028 19.3 2.0 82,024 -16.7 21.6 55,482 -2.7 24.0Sector Aggregate 3,886,267 24.3 8.9 385,406 101.9 LP 244,609 539.3 LPOil & Gas Excl. RMs 1,702,901 18.1 5.3 287,949 -4.4 24.8 181,453 1.3 25.7UR = Under ReviewReal EstateAnant Raj Inds 71 Buy 868 -4.9 -12.2 425 -16.5 -15.1 299 -13.8 -15.6DLF 234 Buy 21,370 -15.6 -2.8 8,762 -25.3 -17.9 2,331 -37.4 -20.4HDIL 98 Neutral 4,192 -5.1 108.4 3,144 -14.6 8.2 1,084 -27.3 2.9Mahindra Lifespace 378 Buy 1,173 25.0 12.6 293 13.5 -8.0 303 -3.4 3.5Oberoi Realty 265 Buy 2,134 -4.1 6.7 1,238 7.1 8.7 1,090 -2.2 8.1Phoenix Mills 196 Buy 628 32.5 0.3 396 18.7 0.4 301 26.2 -1.5Unitech 24 Buy 4,888 -21.9 19.9 709 -48.7 29.5 492 -46.8 7.2Sector Aggregate 35,252 -13.1 7.7 14,966 -21.4 -9.2 5,901 -27.6 -7.8RetailJubilant Foodworks 1,373 Neutral 3,450 43.5 9.7 628 46.9 9.6 344 45.5 6.4Pantaloon Retail 214 Neutral 30,562 5.0 3.2 2,812 11.4 1.8 21 -93.6 -45.3Shopper's Stop 401 Neutral 5,660 13.8 26.7 198 -48.8 43.7 36 -81.8 186.0Titan Industries 262 Neutral 24,450 16.6 10.9 2,469 23.3 16.5 1,764 15.4 13.0Sector Aggregate 64,122 11.6 8.1 6,107 14.4 9.2 2,165 -5.5 11.8TechnologyHCL Technologies 577 Buy 62,080 33.5 4.9 11,987 54.4 -6.2 7,932 65.3 -5.7Infosys 2,534 Buy 100,052 23.5 4.0 30,956 23.0 5.1 24,015 26.0 4.9MphasiS 402 Sell 13,551 3.1 0.0 2,768 17.9 3.5 2,092 14.3 0.2TCS 1,294 Neutral 157,685 35.5 6.1 46,122 36.3 6.4 34,563 41.7 5.4Tech Mahindra 972 Neutral 16,291 22.2 5.6 3,085 51.1 -6.6 2,978 23.7 -12.0Wipro 381 Buy 110,824 21.9 4.0 21,299 22.4 -0.6 15,927 22.4 0.8Sector Aggregate 460,483 27.5 4.8 116,217 31.3 2.9 87,506 33.6 2.5TelecomBharti Airtel 265 Neutral 195,659 13.3 1.1 59,536 2.4 1.8 6,563 -36.1 -13.9Idea Cellular 85 Buy 54,458 17.9 -1.1 13,775 16.1 -4.0 2,036 92.5 -13.1Reliance Comm 65 Neutral 52,462 4.1 -1.4 15,916 -0.8 -3.5 1,281 -60.3 -33.1Tulip Telecom 46 Sell 7,328 4.2 2.3 1,949 -4.1 1.6 545 -37.4 -0.4Sector Aggregate 309,908 12.2 0.3 91,177 3.5 -0.1 10,424 -32.4 -16.1PL: Profit to Loss; LP: Loss to ProfitPULL OUTOctober 2012B–7

MOSL UniverseReady reckoner: quarterly performance(INR Million) CMP Rating Sales EBITDA Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQUtilitiesAdani Power 53 Neutral 11,649 8.6 -20.4 2,320 -55.3 88.3 -2,872 PL LossCESC 331 Buy 12,980 4.6 -8.6 2,882 10.8 -0.6 1,297 13.8 3.8Coal India 359 Buy 147,128 11.9 -10.8 27,321 10.3 -43.3 27,919 25.0 -37.7JSW Energy 61 Buy 20,198 102.7 -7.8 5,438 360.2 -6.8 1,100 LP -43.6NHPC 19 Neutral 16,515 -11.1 16.2 11,540 -13.1 27.7 8,533 9.8 32.3NTPC 168 Buy 155,840 1.3 -2.4 31,290 -3.4 -13.8 18,604 25.7 -22.1Power Grid Corp. 120 Buy 31,672 39.9 9.7 27,572 45.3 11.9 9,392 23.6 3.6PTC India 71 Buy 29,853 25.0 50.2 536 20.8 71.4 423 19.0 84.9Reliance Infrastructure 539 Buy 37,700 -4.6 9.4 4,901 -30.9 6.6 2,551 -48.0 -22.0Tata Power 107 Neutral 70,935 13.5 -2.2 13,048 -3.4 -7.7 3,097 -30.0 1.2Sector Aggregate 534,468 10.1 -2.0 126,847 6.2 -13.8 70,044 7.0 -22.6PL: Profit to Loss; LP: Loss to ProfitCMP Rating Net Interest Income Operating Profit Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQFinancialsPrivate BanksAxis Bank 1,137 Buy 22,743 13.3 4.3 20,314 14.4 3.5 11,242 22.2 -2.5Federal Bank 446 Buy 5,190 9.4 5.6 3,835 6.1 10.7 2,006 4.9 5.4HDFC Bank 629 Neutral 36,067 22.5 3.5 27,598 29.8 6.9 15,616 30.2 10.2ICICI Bank 1,057 Buy 32,582 30.0 2.0 30,430 29.3 3.2 18,236 21.3 0.5IndusInd Bank 354 Buy 5,232 24.8 8.1 4,300 29.1 6.4 2,481 28.5 5.0ING Vysya Bank 407 Buy 3,527 16.1 2.7 2,254 19.0 3.6 1,321 14.5 1.5Kotak Mahindra Bank 648 Neutral 7,463 23.3 3.5 4,564 20.1 1.8 2,764 6.3 -2.1Yes Bank 382 Buy 4,975 29.0 5.4 4,893 26.8 6.5 3,066 30.5 5.7Pvt Banking Sector Aggregate 117,778 22.1 3.6 98,187 24.2 4.8 56,733 22.9 2.9PSU BanksAndhra Bank 113 Buy 9,737 2.4 3.8 6,990 1.8 -0.6 3,209 1.5 -11.3Bank of Baroda 799 Neutral 28,121 9.6 0.5 22,446 5.5 0.2 10,833 -7.1 -4.9Bank of India 310 Neutral 23,844 25.2 16.7 18,708 20.6 11.8 7,095 44.5 -20.0Canara Bank 431 Buy 19,006 -3.1 3.1 13,970 -13.0 0.2 7,336 -13.9 -5.4Indian Bank 192 Buy 11,991 5.6 4.0 8,908 -3.3 6.0 4,709 0.5 2.0Oriental Bank 302 Buy 11,799 19.2 4.8 8,840 16.6 -1.4 3,320 98.0 -15.2Punjab National Bank 840 Buy 37,455 8.5 1.4 28,275 11.9 -0.5 12,183 1.1 -2.2State Bank 2,238 Buy 114,777 9.5 3.2 84,660 13.3 3.5 36,952 31.5 -1.5Union Bank 208 Buy 19,468 17.2 6.9 13,685 13.6 8.0 5,834 65.5 14.0PSU Banking Sector Aggregate 276,198 10.0 4.1 206,482 9.5 3.1 91,472 16.8 -4.0PSU Banking Sector Aggregate Ex SBI 161,421 10.4 4.7 121,822 7.0 2.7 54,520 8.6 -5.6NBFCDewan Housing 200 Buy 1,596 43.3 11.1 1,417 44.1 18.5 954 32.8 22.7HDFC 773 Buy 14,663 17.9 12.4 16,413 21.2 15.6 11,592 19.4 15.7IDFC 154 Buy 6,548 31.5 4.1 6,793 31.0 3.6 4,002 20.5 5.4LIC Housing Fin 282 Buy 3,817 14.2 8.9 3,730 11.2 7.2 2,559 1.3 12.4M & M Financial 898 Buy 5,214 33.6 6.9 3,430 35.1 5.6 1,863 37.4 15.7Power Finance Corp 189 Buy 14,031 29.9 0.7 13,806 30.9 0.4 9,713 21.1 -5.6Rural Electric. Corp. 218 Buy 11,711 23.3 0.5 11,801 23.0 -1.5 8,548 19.3 -5.5Shriram Transport Fin. 619 Buy 8,384 0.4 4.5 6,882 0.9 1.4 3,295 10.1 2.4NBFC Banking Sector Aggregate 65,964 21.2 5.1 64,272 22.2 5.0 42,527 18.7 3.6Financials Sector Aggregate 459,940 14.4 4.1 368,940 15.2 3.9 190,732 19.0 -0.4PULL OUTOctober 2012B–8

MOSL UniverseReady reckoner: valuationsCMP (INR) Rating EPS (INR) P/E (x) EV/EBITDA (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14EAutomobilesBajaj Auto 1,833 Buy 107.4 99.3 124.3 17.1 18.4 14.7 12.5 12.9 9.9 56.7 43.3 44.5Hero Motocorp 1,879 Buy 119.1 108.0 124.1 15.8 17.4 15.1 13.4 14.5 11.2 55.4 41.8 39.7Mahindra & Mah. 865 Buy 51.2 63.7 78.4 16.9 13.6 11.0 5.9 4.7 3.8 23.0 21.7 19.3Maruti Suzuki 1,350 Buy 58.2 67.2 94.8 23.2 20.1 14.2 13.2 9.0 6.3 10.8 10.5 13.2Tata Motors 267 Buy 37.8 33.2 41.3 7.1 8.0 6.5 4.6 3.8 3.1 38.4 25.2 24.7Sector Aggregate 11.9 12.4 9.9 6.7 5.6 4.6 32.4 24.4 25.1Capital GoodsABB 798 Neutral 8.7 11.3 17.4 91.6 70.9 45.7 58.6 41.7 27.6 7.4 9.1 13.0BGR Energy 275 Neutral 31.0 21.1 25.3 8.9 13.0 10.9 6.1 8.0 8.2 22.2 13.4 14.5BHEL 247 Neutral 28.2 24.9 20.3 8.8 9.9 12.2 5.4 6.1 7.3 30.3 22.2 16.0Crompton Greaves 126 Neutral 5.7 9.3 12.6 22.0 13.6 10.0 10.7 8.4 6.5 10.7 15.6 18.7Cummins India 508 Neutral 19.8 24.1 25.6 25.6 21.0 19.8 19.0 15.2 13.7 28.8 30.7 28.9Havells India 625 Buy 29.6 31.1 41.4 21.1 20.1 15.1 13.0 12.1 9.6 38.7 31.7 32.1Larsen & Toubro 1,597 Buy 78.0 85.2 91.4 20.5 18.7 17.5 14.3 12.7 10.9 17.8 17.1 16.4Siemens 709 Neutral 16.9 23.1 31.3 42.0 30.7 22.7 23.3 17.0 12.8 14.6 18.8 23.0Thermax 561 Neutral 33.9 27.1 31.5 16.6 20.7 17.8 9.9 11.4 9.0 27.4 18.7 19.2Sector Aggregate 16.5 16.4 16.3 10.7 10.6 10.0 21.6 19.1 17.1CementACC 1,469 Neutral 59.0 73.3 86.4 24.9 20.0 17.0 14.6 11.0 9.6 16.2 18.5 20.0Ambuja Cements 202 Buy 8.2 11.9 13.2 24.7 17.0 15.3 14.5 10.0 8.8 16.3 21.5 21.1Birla Corporation 282 Buy 31.1 33.0 32.9 9.1 8.5 8.6 5.8 5.5 5.1 10.7 10.5 9.7Grasim Industries 3,315 Buy 288.6 348.3 375.8 11.5 9.5 8.8 5.2 4.5 3.6 15.5 16.0 15.0India Cements 95 Buy 9.6 11.1 14.8 9.9 8.5 6.4 5.9 5.2 4.2 7.3 7.3 8.9J P Associates 82 Buy 4.8 3.6 4.6 17.1 23.1 17.9 9.4 9.6 8.5 10.4 7.6 9.8Shree Cement 3,954 Buy 274.4 310.2 361.4 14.4 12.7 10.9 9.0 6.9 5.8 40.5 34.4 31.7Ultratech Cement 1,968 Buy 87.5 109.5 122.6 22.5 18.0 16.1 13.4 11.3 9.7 20.4 21.2 19.9Sector Aggregate 18.1 15.2 13.4 9.8 8.3 7.1 15.8 16.8 16.7ConsumerAsian Paints 3,937 Neutral 103.1 117.8 137.3 38.2 33.4 28.7 24.4 21.0 17.4 36.0 34.0 33.2Britannia 476 Sell 15.6 18.4 23.7 30.4 25.9 20.1 21.9 16.8 12.1 34.9 35.1 37.9Colgate 1,206 Sell 33.4 38.6 43.8 36.1 31.2 27.6 26.7 22.6 19.3 107.7 111.3 103.5Dabur 128 Neutral 3.7 4.4 5.4 34.6 29.0 23.6 26.4 21.4 17.5 37.1 36.0 36.2Godrej Consumer 668 Neutral 16.3 21.6 26.3 41.0 30.9 25.4 29.0 21.9 17.9 25.2 23.1 24.3GSK Consumer 2,994 Neutral 84.5 101.7 113.5 35.4 29.4 26.4 22.2 19.0 16.6 31.0 31.4 29.8Hind. Unilever 545 Neutral 11.9 15.5 18.0 45.7 35.1 30.2 34.6 27.2 23.3 74.6 72.1 63.4ITC 272 Buy 8.0 9.4 11.0 34.1 29.0 24.7 22.9 19.1 16.0 32.7 32.5 32.4Marico 199 Buy 5.2 6.8 8.5 38.4 29.4 23.6 27.7 20.5 16.3 28.0 21.6 21.8Nestle 4,374 Neutral 105.7 117.1 138.5 41.4 37.4 31.6 27.6 22.7 18.7 95.7 73.6 63.5Pidilite Inds. 206 Buy 7.0 8.4 10.1 29.5 24.5 20.4 20.4 15.4 12.5 26.3 24.6 24.8United Spirits 1,218 Neutral 19.5 19.3 35.1 62.4 63.2 34.7 18.6 16.5 14.8 4.9 4.7 7.9Sector Aggregate 38.1 31.6 26.6 25.5 21.0 17.6 34.9 34.2 34.0PULL OUTOctober 2012B–9

MOSL UniverseReady reckoner: valuationsCMP (INR) Rating EPS (INR) P/E (x) EV/EBITDA (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14EHealthcareBiocon 275 Neutral 16.9 17.9 18.4 16.2 15.3 14.9 9.0 8.3 8.0 14.9 14.3 13.4Cadila Health 872 Buy 27.6 41.2 52.4 31.5 21.2 16.7 17.3 13.9 11.3 23.8 29.0 29.3Cipla 381 Neutral 14.0 16.2 18.4 27.2 23.5 20.7 17.6 15.0 14.0 15.0 15.0 15.1Dishman Pharma 96 Neutral 7.0 15.6 17.5 13.8 6.2 5.5 7.6 4.8 4.3 6.3 12.9 12.9Divis Labs 1,080 Buy 40.2 53.0 64.1 26.9 20.4 16.9 20.3 15.6 12.3 25.0 27.5 27.7Dr Reddy’ s Labs 1,647 Buy 71.4 85.1 100.1 23.1 19.4 16.5 12.3 14.0 12.4 21.1 21.9 22.7Glenmark Pharma 422 Buy 11.4 18.2 26.3 37.0 23.2 16.0 13.3 14.2 11.3 13.5 17.7 20.5GSK Pharma 1,977 Buy 74.5 81.0 92.6 26.5 24.4 21.4 19.6 18.3 15.7 32.9 33.5 34.2IPCA Labs. 482 Buy 21.9 29.3 38.2 22.0 16.4 12.6 12.8 10.3 8.7 24.0 26.4 27.6Jubilant Life 212 Neutral 13.6 21.0 33.4 15.5 10.1 6.3 8.4 6.0 5.0 9.7 13.5 18.8Lupin 596 Buy 19.4 24.1 31.2 30.7 24.8 19.1 21.0 16.3 13.4 23.8 24.3 26.2Opto Circuits 130 Neutral 23.6 22.5 25.3 5.5 5.8 5.1 6.7 5.6 4.9 37.2 28.7 26.6Ranbaxy Labs 530 Neutral 14.1 18.0 21.8 37.5 29.5 24.3 14.6 12.4 16.5 -72.0 28.3 15.7Sanofi India 2,374 Neutral 83.0 73.5 92.4 28.6 32.3 25.7 29.7 24.1 19.4 17.3 13.9 15.6Strides Arcolab 883 Buy 38.5 52.8 61.5 23.0 16.7 14.4 15.9 11.4 10.7 16.9 18.5 14.5Sun Pharma 693 Neutral 22.4 26.5 29.4 30.9 26.2 23.6 20.5 16.5 15.7 21.5 20.7 19.7Torrent Pharma 695 Buy 38.4 49.5 59.0 18.1 14.0 11.8 11.3 9.0 7.3 29.3 30.9 29.2Sector Aggregate 26.4 21.6 18.1 15.9 13.6 12.3 19.7 20.1 20.6MediaDish TV 83 Neutral -1.5 -0.5 0.3 -55.2 -181.0 264.6 19.3 15.2 11.7 NA NA NAHT Media 93 Neutral 7.0 6.0 6.8 13.2 15.5 13.8 6.4 6.3 5.2 11.0 8.6 8.8Jagran Prakashan 91 Neutral 5.6 5.6 6.5 16.2 16.3 14.1 10.3 8.9 8.1 24.5 20.6 20.2Sun TV 349 Buy 17.6 18.2 20.1 19.8 19.2 17.4 9.6 9.1 7.8 26.3 24.7 25.1Zee Entertainment 196 Neutral 5.9 7.0 8.5 33.2 27.9 23.1 24.9 20.7 17.0 17.5 18.3 19.3Sector Aggregate 32.0 27.9 23.2 14.4 12.8 10.7 17.7 18.0 19.4MetalsHindalco 121 Buy 17.1 18.9 20.6 7.1 6.4 5.9 6.9 7.2 6.3 20.3 20.2 18.5Hindustan Zinc 135 Buy 13.2 14.4 16.7 10.3 9.4 8.1 6.5 5.6 4.1 22.5 20.8 20.4JSPL 428 Neutral 42.4 39.8 38.5 10.1 10.7 11.1 8.4 9.5 8.9 24.6 19.7 17.0JSW Steel 757 Sell 66.5 49.9 73.7 11.4 15.2 10.3 6.7 6.6 6.0 8.9 6.6 9.3Nalco 51 Neutral 3.4 3.5 3.3 15.2 14.7 15.6 7.2 7.3 6.5 7.6 7.5 6.8NMDC 194 Buy 18.5 20.4 24.9 10.5 9.5 7.8 6.3 5.4 4.1 31.7 28.3 26.9SAIL 85 Sell 9.0 6.7 8.6 9.5 12.8 10.0 7.4 8.9 7.9 9.6 6.7 8.2Sesa Goa 171 Neutral 31.8 36.1 33.5 5.4 4.8 5.1 5.2 13.6 10.9 19.8 20.6 18.7Sterlite Inds. 99 Buy 16.7 16.3 17.7 6.0 6.1 5.6 3.0 2.8 2.4 14.1 12.4 12.3Tata Steel 401 Sell 18.6 31.2 56.6 21.6 12.9 7.1 7.3 6.8 6.1 7.8 11.5 18.9Sector Aggregate 9.6 9.2 7.8 6.4 6.5 5.6 13.3 12.8 13.6OthersCastrol India 311 Buy 9.8 9.5 11.7 31.7 32.7 26.7 22.6 22.6 18.0 93.7 83.8 75.6MCX 1,284 Buy 56.1 56.1 66.5 22.9 22.9 19.3 14.8 15.3 14.8 31.0 26.9 27.8Sintex Inds. 67 Buy 13.0 13.0 15.3 5.1 5.1 4.4 5.4 5.0 4.0 14.0 12.7 13.3United Phosphorous 131 Buy 12.8 14.9 19.5 10.3 8.8 6.7 5.7 4.7 3.7 14.9 15.5 17.8Sector Aggregate 16.7 16.0 13.4 10.3 9.5 7.9 21.8 20.5 21.5PULL OUTOctober 2012B–10

MOSL UniverseReady reckoner: valuationsCMP (INR) Rating EPS (INR) P/E (x) EV/EBITDA (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14EOil & GasBPCL 346 Buy 10.8 21.6 21.5 32.1 16.1 16.1 11.5 8.5 8.8 5.0 9.5 8.9Cairn India 331 Neutral 48.7 64.2 54.0 6.8 5.2 6.1 5.3 3.5 3.4 21.0 23.1 16.7Chennai Petroleum 129 Buy 4.2 13.8 34.5 31.1 9.4 3.7 50.9 9.8 5.3 1.6 5.3 12.5GAIL 383 Neutral 28.8 31.0 32.1 13.3 12.3 11.9 9.6 9.0 8.7 17.9 17.2 16.0Guj. State Petronet 81 Neutral 9.3 7.7 7.6 8.7 10.4 10.5 5.4 5.9 5.8 23.4 16.4 14.3HPCL 307 Buy 26.9 24.5 27.4 11.4 12.5 11.2 12.6 11.3 9.0 7.1 6.2 6.6Indraprastha Gas 265 UR 21.9 25.3 28.0 12.1 10.5 9.5 6.4 5.5 4.8 27.5 26.4 24.7IOC 251 Buy 49.2 24.4 30.3 5.1 10.2 8.3 8.1 8.9 7.0 20.2 9.5 11.0MRPL 61 Neutral 5.2 2.9 8.5 11.7 21.2 7.2 6.5 7.3 4.6 13.2 6.8 18.2Oil India 490 Buy 57.3 58.7 64.7 8.5 8.3 7.6 3.9 3.7 3.3 20.7 18.7 18.4ONGC 280 Buy 30.4 29.8 33.4 9.2 9.4 8.4 3.7 3.7 3.1 20.7 17.7 17.8Petronet LNG 158 Buy 14.1 13.1 15.0 11.2 12.1 10.5 7.6 7.9 5.9 34.1 25.1 23.8Reliance Inds. 837 Neutral 67.7 67.8 69.7 12.4 12.3 12.0 8.0 9.3 8.9 13.0 11.7 11.0Sector Aggregate 9.9 10.3 9.6 6.2 6.2 5.5 15.8 13.9 13.4Oil & Gas Ex RMS 10.5 10.1 9.6 5.6 5.6 5.0 16.0 14.9 14.1UR = Under ReviewReal EstateAnant Raj Inds 71 Buy 3.8 5.0 6.6 18.6 14.3 10.8 17.9 13.6 9.7 3.1 3.8 4.8DLF 234 Buy 7.1 9.0 10.7 33.0 26.1 21.8 16.3 17.1 13.4 4.5 5.5 6.3Godrej Properties 599 Neutral 12.6 16.0 19.6 47.7 37.4 30.6 39.5 32.3 24.4 8.3 8.4 9.5HDIL 98 Neutral 19.3 12.9 17.8 5.1 7.6 5.5 5.3 5.3 3.8 7.9 5.1 6.6IBREL 58 Buy 3.5 4.2 6.1 16.5 13.7 9.5 11.5 9.8 7.8 2.2 2.6 3.6Jaypee Infratech 52 Buy 9.3 6.7 7.2 5.6 7.7 7.2 8.3 7.8 6.2 24.5 15.2 14.3Mahindra Lifespace 378 Buy 29.2 32.5 34.0 12.9 11.6 11.1 10.8 9.7 9.1 10.3 10.5 10.0Oberoi Realty 265 Buy 14.1 15.8 24.7 18.8 16.8 10.7 15.3 11.9 6.9 13.1 13.1 17.9Phoenix Mills 196 Buy 7.3 7.8 16.0 26.9 25.2 12.3 20.9 17.3 10.2 6.2 6.3 11.7Prestige Estates 136 Buy 2.5 5.5 8.2 53.9 24.5 16.5 20.7 12.8 9.8 4.1 8.4 11.0Unitech 24 Buy 0.9 0.8 1.3 26.8 30.2 18.8 34.3 37.8 23.0 2.0 1.7 2.7Sector Aggregate 18.0 18.3 14.0 14.0 13.4 10.0 6.1 5.8 7.0RetailJubilant Foodworks1,373 Neutral 16.4 23.9 35.4 83.9 57.3 38.8 46.0 30.7 21.4 37.7 38.2 39.0Pantaloon Retail 214 Neutral 4.8 6.7 9.3 44.6 31.9 22.9 8.0 7.2 6.6 3.4 4.6 6.2Shopper's Stop 401 Neutral 7.8 2.7 6.8 51.2 149.1 59.3 23.3 33.9 21.8 9.9 3.3 7.8Titan Industries 262 Neutral 6.8 8.1 10.0 38.5 32.4 26.2 26.8 21.7 17.4 48.7 42.4 34.8Sector Aggregate 45.2 38.3 28.9 19.0 16.1 13.2 16.0 16.7 19.1TechnologyHCL Technologies 577 Buy 35.1 46.3 47.6 16.5 12.5 12.1 10.2 8.0 7.4 26.0 27.8 25.8Infosys 2,534 Buy 145.5 166.5 180.7 17.4 15.2 14.0 11.6 9.8 8.8 28.0 27.3 25.8MphasiS 402 Sell 37.5 40.8 37.2 10.7 9.9 10.8 8.3 7.6 8.2 18.7 17.5 13.9TCS 1,294 Neutral 54.4 71.6 78.8 23.8 18.1 16.4 17.4 13.0 11.5 36.7 38.3 33.7Tech Mahindra 972 Neutral 70.4 87.2 101.0 13.8 11.1 9.6 10.5 6.6 5.6 30.2 24.4 23.0Wipro 381 Buy 22.7 26.0 28.2 16.8 14.7 13.5 11.8 10.0 9.0 21.2 20.7 19.4Sector Aggregate 19.3 15.7 14.5 13.5 10.8 9.7 25.2 26.4 23.5TelecommunicationBharti Airtel 265 Neutral 11.2 7.6 10.5 23.6 34.9 25.2 7.0 6.9 5.8 8.1 5.3 7.0Idea Cellular 85 Buy 2.2 3.1 5.8 39.0 27.2 14.7 8.1 6.8 5.2 5.7 7.7 12.8Reliance Comm 65 Neutral 4.8 3.6 5.9 13.5 17.8 11.0 7.6 7.2 6.4 2.9 2.3 3.6Tulip Telecom 46 Sell 19.1 12.2 11.2 2.4 3.8 4.2 4.0 4.7 4.7 22.9 11.3 9.5Sector Aggregate 22.7 29.5 19.6 7.2 6.9 5.8 6.5 4.9 6.9PULL OUTOctober 2012B–11

MOSL UniverseReady reckoner: valuationsCMP (INR) Rating EPS (INR) P/E (x) EV/EBITDA (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14EUtilitiesAdani Power 53 Neutral -0.4 1.5 2.6 -124.7 36.2 20.3 28.6 13.8 10.0 -1.5 5.3 9.2CESC 331 Buy 44.1 47.5 53.0 7.5 7.0 6.2 5.5 5.2 4.9 12.1 11.7 11.7Coal India 359 Buy 25.4 28.8 30.9 14.1 12.5 11.6 10.3 8.1 7.1 31.9 28.5 25.0JSW Energy 61 Buy 2.0 3.7 6.3 30.1 16.5 9.7 12.4 8.0 6.1 5.8 10.3 15.9NHPC 19 Neutral 2.0 2.0 2.1 9.4 9.6 9.3 7.0 7.9 7.7 8.6 7.9 7.9NTPC 168 Buy 10.1 11.5 13.5 16.6 14.6 12.4 11.6 11.3 9.3 11.8 12.5 13.7Power Grid Corp. 120 Buy 7.2 8.6 10.3 16.8 14.0 11.6 12.4 10.1 9.4 14.8 16.1 17.4PTC India 71 Buy 6.9 7.7 9.5 10.2 9.2 7.4 14.0 7.3 6.5 5.4 6.4 7.6Reliance Infra. 539 Buy 74.8 43.5 48.0 7.2 12.4 11.2 2.0 3.0 2.4 11.4 6.3 6.6Tata Power 107 Neutral 7.4 5.7 4.0 14.4 18.7 27.0 17.9 17.2 17.6 9.8 8.6 6.5Sector Aggregate 14.6 13.3 12.0 11.0 9.6 8.4 16.3 16.1 16.2CMP (INR) Rating EPS (INR) P/E (x) P/BV (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14EPrivate BanksAxis Bank 1,137 Buy 102.7 109.5 125.6 11.1 10.4 9.0 2.1 1.8 1.6 20.3 18.8 18.4Federal Bank 446 Buy 45.4 47.0 55.7 9.8 9.5 8.0 1.3 1.2 1.1 14.4 13.4 14.3HDFC Bank 629 Neutral 22.0 28.7 35.8 28.6 21.9 17.6 4.9 4.2 3.6 18.7 20.7 21.9ICICI Bank 1,057 Buy 56.1 68.3 78.7 18.9 15.5 13.4 2.6 2.3 2.1 12.8 14.2 14.7IndusInd Bank 354 Buy 17.2 22.0 27.5 20.6 16.1 12.9 3.7 3.1 2.5 19.2 20.7 21.6ING Vysya Bank 407 Buy 30.4 35.4 40.3 13.4 11.5 10.1 1.6 1.4 1.3 14.3 13.0 13.2Kotak Mah. Bank 648 Neutral 24.7 26.2 29.8 26.2 24.7 21.8 3.7 3.2 2.8 15.4 14.0 13.9Yes Bank 382 Buy 27.7 35.4 43.0 13.8 10.8 8.9 2.9 2.4 1.9 23.1 24.1 23.9Private Bank Aggregate 19.7 16.4 13.9 3.1 2.7 2.4 15.9 16.7 17.4PSU BanksAndhra Bank 113 Buy 24.0 25.0 28.0 4.7 4.5 4.0 0.8 0.7 0.7 19.2 17.5 17.2Bank of Baroda 799 Neutral 121.4 110.6 129.0 6.6 7.2 6.2 1.3 1.1 1.0 22.1 16.6 16.8Bank of India 310 Neutral 46.6 53.9 63.7 6.7 5.8 4.9 1.0 0.8 0.7 15.6 15.5 16.0Canara Bank 431 Buy 74.1 73.7 85.5 5.8 5.9 5.0 0.9 0.8 0.7 17.1 14.9 15.2Corporation Bank 418 Neutral 101.7 110.5 119.2 4.1 3.8 3.5 0.7 0.6 0.6 19.5 18.4 17.3Dena Bank 106 Buy 22.9 27.0 31.1 4.6 3.9 3.4 0.9 0.7 0.6 20.7 20.2 19.6Indian Bank 192 Buy 40.6 42.8 45.7 4.7 4.5 4.2 0.9 0.8 0.7 19.8 18.0 16.8Oriental Bank 302 Buy 39.1 50.8 56.6 7.7 5.9 5.3 0.8 0.7 0.7 10.7 12.7 12.8Punj. National Bank 840 Buy 144.0 155.5 185.1 5.8 5.4 4.5 1.1 0.9 0.8 21.1 18.5 18.8State Bank 2,238 Buy 228.6 284.5 330.3 9.8 7.9 6.8 1.5 1.3 1.1 17.2 17.8 18.0Union Bank 208 Buy 32.3 42.0 48.1 6.4 4.9 4.3 0.9 0.8 0.7 14.9 16.8 16.9PSU Bank Aggregate 7.4 6.5 5.6 1.3 1.1 0.9 17.4 16.7 16.8NBFCDewan Housing 200 Buy 25.6 37.7 51.3 7.8 5.3 3.9 1.2 1.0 0.8 18.5 21.7 22.7HDFC 773 Buy 27.9 32.1 38.6 27.7 24.0 20.0 6.0 4.9 4.3 27.3 29.4 30.9IDFC 154 Buy 10.3 10.9 13.3 15.0 14.2 11.7 1.9 1.7 1.6 13.7 12.8 14.1LIC Housing Fin 282 Buy 18.1 21.8 31.7 15.6 12.9 8.9 2.5 2.2 1.8 20.3 18.0 20.8M & M Financial 898 Buy 60.4 79.4 93.7 14.9 11.3 9.6 3.1 2.6 2.2 22.8 25.1 24.6Power Finance Corp 189 Buy 23.9 29.5 32.7 7.9 6.4 5.8 1.2 1.1 0.9 17.5 17.6 17.4Rural Electric. Corp. 218 Buy 28.6 34.9 41.7 7.6 6.3 5.2 1.5 1.3 1.1 20.5 21.6 22.2Shriram Transport 619 Buy 55.6 59.8 70.4 11.1 10.3 8.8 2.3 2.0 1.6 23.1 20.6 20.3NBFC Aggregate 15.1 12.7 10.7 2.9 2.5 2.1 19.5 19.4 19.9Sector Aggregate 12.3 10.6 9.0 2.1 1.8 1.6 17.3 17.2 17.5PULL OUTOctober 2012B–12

September 2012 Results PreviewSectors & CompaniesBSE Sensex: 18,763 S&P CNX: 5,703Note: In our quarterly performance tables, our four-quarter numbers may not always add up to the full-yearnumbers. This is because of differences in classification of account heads in the company’s quarterly andannual results or because of differences in the way we classify account heads as opposed to the company.All stock prices and indices as on 28 September 2012, unless otherwise stated.October 2012 C–1

September 2012 Results PreviewSector: AutomobilesAutomobilesCompany NameBajaj AutoHero MotoCorpMahindra & MahindraMaruti Suzuki IndiaTata MotorsSlowdown visible across segments except UVs and LCVsSlowdown, hitherto visible in M&HCVs, cars and 3Ws, is now evident in 2Ws as wellwith volumes down 4% YoY in 2QFY13. The only segments with healthy growth areUVs (+29% YoY) and LCVs (+13% YoY). Our channel checks indicate that start to thefestive season has not been encouraging. Dealer inventory is high particularly in2Ws and cars. Recent hike in diesel prices does not augur well for CVs. Expectedsoftening in interest rates and reform-led improvement in macro environment andconsumer sentiment hold the key for volume growth to resume.2QFY13 margins to remain under pressure due to adverse mix, forex andnegative operating leverageDespite benign commodity prices, expect RM cost to rise 30bp QoQ and 10bp YoY onthe back of adverse product mix, weak currency and negative operating leverage.We expect 2QFY13 EBITDA margins to decline 70bp QoQ (70bp YoY). Maruti Suzuki (-200bp YoY/-290bp QoQ) and Hero MotoCorp (-190bp YoY/-120 QoQ) are likely to beworst impacted.Easing of macro headwinds a key catalyst for demand recoveryLending rates are expected to fall from near peak levels, auguring well for PV andCV demand. Strengthening INR is positive for Maruti Suzuki and Hero MotoCorp, butnegative for Bajaj Auto. Softening in commodity prices would support profitability.Easing of macro headwinds remains the key driver for volume growth andprofitability, and in turn, for re-rating of auto stocks.Widespread earnings downgrade; prefer Maruti, Tata Motors, BajajWe are downgrading our earnings estimates for Bajaj Auto, Hero MotoCorp andMaruti Suzuki to factor in weaker than expected demand in 2QFY13 and adversecurrency movement (except for Bajaj). Changing competitive landscape in the autosector will likely be a key determinant of stock performance. While we believe thatthe worst of competitive pressure is behind for passenger cars, the same is increasingfor incumbents in 2W, UVs and CVs, implying at least a near-term overhang onvaluations. We prefer Maruti Suzuki, Tata Motors and Bajaj Auto.Expected quarterly performance summary(INR Million)CMP Rating Sales EBITDA Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQBajaj Auto 1,833 Buy 48,254 -6.9 -0.8 8,573 -12.1 -1.7 7,005 -11.3 -2.5Hero Motocorp 1,879 Buy 51,770 -10.5 -16.6 4,801 -27.7 -28.3 4,401 -27.1 -28.5Mahindra & Mahindra 865 Buy 95,445 30.6 3.2 11,193 28.1 0.9 8,656 17.4 19.3Maruti Suzuki 1,350 Buy 82,507 5.4 -23.4 3,909 -20.9 -50.3 1,175 -51.1 -72.3Tata Motors 267 Buy 442,658 22.3 2.2 57,988 28.7 0.8 24,824 10.5 -3.2Sector Aggregate 720,634 15.7 -3.2 86,465 15.1 -5.9 46,061 -0.2 -8.8Jinesh Gandhi (Jinesh@MotilalOswal.com) / Chirag Jain (Chirag.Jain@MotilalOswal.com)October 2012C–2

September 2012 Results PreviewSector: AutomobilesCommodity prices have moderated (INR, indexed)INR continues to depreciate (indexed)1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13E180155USD Euro GBP JPY1001139710310095100103839087861009395959395100969595838113010580Steel (HRC) Lead Aluminium RubberJun-09Sep-09Dec-09Mar-10Jun-10Sep-10Dec-10Mar-11Jun-11Sep-11Dec-11Mar-12Jun-12Sep-12Source: Bloomberg/MOSLTrend in EBITDA margins (%) Trend in segment-wise EBITDA margins (%)18AggregateAggregate (incl JLR)1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13E15129613.914.915.114.713.913.511.29.08.98.79.48.58.87.26.79.57.37.31QFY102QFY103QFY104QFY101QFY112QFY113QFY114QFY111QFY122QFY123QFY124QFY121QFY132QFY13E2W Cars CVsSource: Company/MOSLInterest costs have started to moderate (%)Trend in fuel costs (INR/liter)11HDFC Bank Base Rate80PetrolDiesel (INR/ltr)1065950INR21.5/Ltr835207Aug-10 Jan-11 Jun-11 Nov-11 Apr-12 Sep-12Apr-05Dec-05Aug-06Apr-07Dec-07Aug-08Apr-09Dec-09Aug-10Apr-11Dec-11Aug-12Source: HDFC Bank PLRSource: Bloomberg/MOSLOctober 2012C–3

September 2012 Results PreviewSector: AutomobilesRelative Performance-3m (%)1151059585Relative Performance-1Yr (%)1401251109580Sep-11Sensex IndexMOSL Automobiles IndexJun-12Jul-12Aug-12Sep-12Sensex IndexMOSL Automobiles IndexDec-11Mar-12Jun-12Sep-12Trend in Key FinancialsVolumes (‘000 units) EBITDA Margins (%) Adj PAT (INR M)2Q YoY QoQ 2Q YoY QoQ 2Q YoY QoQFY13E (%) (%) FY13E (bp) (bp) FY13E (%) (%)Bajaj Auto 1,046 -10.2 -3.1 17.8 -100 -10 7,005 -11.3 -2.5Hero MotoCorp* 1,398 -9.5 -14.9 9.6 -190 -120 4,602 -23.8 -25.2Maruti Suzuki 208 -17.4 -29.6 4.4 -190 -290 684 -71.5 -83.9M&M 189 10.8 3.9 11.6 -30 -20 8,656 17.4 19.3Tata Motors (S/A) 222 5.2 16.5 7.3 10 -10 11,453 308.0 232.4Tata Motors (Cons) 13.1 70 -20 24,824 10.5 -3.2Aggregate ** 3,063 -8.4 -9.6 9.4 -70 -70 32,401 22.2 14.6*Normalized; **Aggregate includes Tata Motor’s standalone performance onlyTrend in industry volumes10%3,1081QFY1016%3,4842QFY1037%3,5593QFY1040%3,9484QFY104,0901QFY1132%Industry ('000 units) Growth YoY (%)26%4,3882QFY1128%4,5513QFY1120%4,7434QFY1118%4,8221QFY125,1112QFY1216%5,0793QFY1212%5,3074QFY1212%5,2141QFY138%4,949-3%2QFY13ESource: Bloomberg/MOSLRevised EPS estimates (INR)FY13EFY14ERev Old Chg (%) Rev Old Chg (%)Bajaj Auto 99.3 103.2 -3.7 124.3 130.1 -4.4Hero MotoCorp 108.0 113.0 -4.4 124.1 127.3 -2.5Maruti * 65.1 68.2 -4.5 93.6 95.6 -2.1M&M * 55.4 55.3 0.2 61.0 61.2 -0.3Tata Motors *# 33.2 33.5 -0.9 41.3 38.3 8.1Key operating indicators* Consolidated; # Normalized EPS adj. for R&D capitalization Source: MOSLVolumes ('000 units) EBITDA Margins (%) Adjusted PAT (INR m)2Q 2Q YoY 1Q QoQ 2Q 2Q YoY 1Q QoQ 2Q 2Q YoY 1Q QoQFY13E FY12 (%) FY13 (%) FY13E FY12 (bp) FY13 (bp) FY13E FY12 (%) FY12 (%)Bajaj Auto 1,046 1,164 -10.2 1,079 -3.1 17.8 18.8 -100 17.9 -10 7,005 7,898 -11.3 7,184 -2.5Hero MotoCorp* 1,398 1,544 -9.5 1,642 -14.9 9.6 11.5 -190 10.8 -120 4,602 6,036 -23.8 6,155 -25.2Maruti Suzuki 208 252 -17.4 296 -29.6 4.4 6.3 -190 7.3 -290 684 2,404 -71.5 4,238 -83.9M&M 189 171 10.8 182 3.9 11.6 11.9 -30 11.8 -20 8,656 7,374 17.4 7,256 19.3Tata Motors (S/A) 222 211 5.2 191 16.5 7.3 7.2 10 7.3 -10 11,453 2,807 308.0 3,446 232.4Tata Motors (Cons) 13.1 12.4 70 13.3 -20 24,824 22,461 10.5 25,651 -3.2Aggregate** 3,063 3,343 -8.4 3,390 -9.6 9.4 10.1 -70 10.1 -70 32,401 26,519 22.2 28,278 14.6*Normalized; ** Aggregate includes Tata Motor’s standalone performance onlySource: SIAM/ MOSLComparative valuationCMP (INR) Rating EPS (INR) P/E (x) EV/EBITDA (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14EAutomobilesBajaj Auto 1,833 Buy 107.4 99.3 124.3 17.1 18.4 14.7 12.5 12.9 9.9 56.7 43.3 44.5Hero Motocorp 1,879 Buy 119.1 108.0 124.1 15.8 17.4 15.1 13.4 14.5 11.2 55.4 41.8 39.7Mahindra & Mah. 865 Buy 51.2 63.7 78.4 16.9 13.6 11.0 5.9 4.7 3.8 23.0 21.7 19.3Maruti Suzuki 1,350 Buy 58.2 67.2 94.8 23.2 20.1 14.2 13.2 9.0 6.3 10.8 10.5 13.2Tata Motors 267 Buy 37.8 33.2 41.3 7.1 8.0 6.5 4.6 3.8 3.1 38.4 25.2 24.7Sector Aggregate 11.9 12.4 9.9 6.7 5.6 4.6 32.4 24.4 25.1* Consolidated # Normalized EPS (for R&D capitalization)October 2012C–4

BSE SensexS&P CNX18,763 5,703BloombergBJAUT INEquity Shares (m) 289.452 Wk Range (INR) 1,850/1,4101,6,12 Rel Perf (%) 2/2/7Mcap (INR b) 530.3Mcap (USD b) 10.1CMP: INR1,833September 2012 Results PreviewSector: AutomobilesBajaj AutoBuyYear Net Sales PAT EPS EPS P/E P/CE P/BV EV/ RoE RoCEEnd (INR m) (INR m) (INR) Gr. (%) (X) (X) (X) EBITDA (%) (%)3/11A 163,981 26,150 90.4 43.9 - - - - 66.7 76.03/12A 195,290 31,069 107.4 18.8 16.9 16.2 8.7 12.4 56.7 73.03/13E 195,245 28,748 99.3 -7.5 18.3 17.4 7.3 12.8 43.3 60.03/14E 226,449 35,980 124.3 25.2 14.6 14.0 5.9 9.8 44.5 61.2• We expect BJAUT’s 2QFY13 volumes to decline 10.2% YoY (-3.1% QoQ) to 1.05m, impacted by weak demand andlate start to the festive season. However, product mix is expected to improve QoQ with higher 3W sales (keyexport markets are stabilizing) and greater contribution of executive/premium segment motorcycles (drivenby recent launches in domestic market).• Price increases in July in both 2Ws and 3Ws together with product mix improvement should drive up realizations(+3.6% YoY, +2.3% QoQ). So, expect fall in net sales to be checked at 7% YoY (-0.8% QoQ) to INR48.3b.• Expect EBITDA margin to remain largely stable QoQ at 17.8% (-100bp YoY, -10bp QoQ) as RM cost pressures offsetthe benefits of price hikes and favorable product mix.• We expect EBITDA of INR8.57b (-12.1% YoY, -1.7% QoQ). Higher other income will likely offset impact of increasein taxation (Pantnagar tax exemption lower at 30% from 100% to 30%). We expect adjusted PAT to decline 11.3%YoY to INR7b (-2.5% QoQ).• We are downgrading our EPS estimates for FY13/14 by 3.7%/4.4% to factor in weaker than expected demandenvironment. We model in USD/INR at 52.5 for FY14; a weaker INR holds potential for upgrade. The stock tradesat 18.3x FY13E and 14.6x FY14E EPS. Maintain Buy.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEVolumes ('000nos) 1,092.8 1,164.1 1,075.4 1,017.2 1,079.0 1,045.6 1,106.3 1,027.1 4,349.6 4,257.8Change (%) 17.7 16.3 13.6 7.3 -1.3 -10.2 2.9 1.0 13.7 (2.1)Realization 43,066 44,543 46,361 45,729 45,095 46,151 46,382 45,786 44,899 45,856Change (%) 2.8 2.6 5.1 4.6 4.7 3.6 0.0 0.1 4.7 2.1Net Sales 47,063 51,854 49,859 46,514 48,657 48,254 51,310 47,025 195,290 195,245Change (%) 21.0 19.4 19.4 12.2 3.4 -6.9 2.9 1.1 19.1 0.0RM/Sales % 73.6 72.5 71.5 71.2 72.1 72.1 71.8 71.7 72.2 71.9Staff cost/Sales % 3.0 2.8 2.6 2.6 3.3 3.3 3.1 3.0 2.8 3.2Oth. Exp./Sales % 5.5 6.1 6.5 6.9 6.9 6.9 7.1 7.3 6.2 7.1EBITDA 8,398 9,755 9,841 9,206 8,717 8,573 9,280 8,503 37,200 35,073EBITDA Margins (%) 17.8 18.8 19.7 19.8 17.9 17.8 18.1 18.1 19.0 18.0Other Income 1,441 1,564 1,681 1,395 1,820 1,750 1,800 1,902 6,080 7,271Extraordinary Expenses/Inc 0 -954 -589 203 0 0 0 0 -1,340 0Interest 2 202 0 18 0 26 25 51 222 102Depreciation 306 394 321 434 352 360 370 383 1,456 1,466PBT 9,531 9,768 10,612 10,351 10,184 9,937 10,685 9,971 40,262 40,777Tax 2,420 2,510 2,660 2,631 3,000 2,931 3,152 2,946 10,221 12,029Effective Tax Rate (%) 25.4 25.7 25.1 25.4 29.5 29.5 29.5 29.5 25.4 29.5Rep. PAT 7,111 7,258 7,952 7,720 7,184 7,005 7,533 7,025 30,041 28,748Adj. PAT 7,111 7,898 8,340 7,590 7,184 7,005 7,533 7,025 31,069 28,748Change (%) 20.5 15.8 25.0 12.3 1.0 (11.3) (9.7) (7.4) -9.7 -7.5E: MOSL Estimates; 4QF12, 3QFY12, & 4QFY11 numbers are not comparable with other quarterly numbers due to restatementOctober 2012C–5

BSE SensexS&P CNX18,763 5,703BloombergHMCL INEquity Shares (m) 199.752 Wk Range (INR) 2,279/1,7031,6,12 Rel Perf (%) -8/-15/-18Mcap (INR b) 375.3Mcap (USD b) 7.1CMP: INR1,879September 2012 Results PreviewSector: AutomobilesHero MotoCorpBuyYear Net Sales PAT EPS EPS P/E P/CE P/BV EV/ RoE RoCEEnd (INR m) (INR m) (INR) GR. (%) (X) (X) (X) EBITDA (%) (%)3/11A 192,450 20,077 100.5 -10.0 - - - - 62.5 59.23/12A 233,681 23,781 119.1 18.4 15.8 14.2 8.7 10.1 55.4 52.43/13E 230,292 21,566 108.0 -9.3 17.4 15.3 7.3 10.6 41.8 45.73/14E 265,789 24,779 124.1 14.9 15.1 13.3 6.0 8.7 39.7 50.4• We expect HMCL’s 2QFY13 volume to decline 9.5% YoY to 1.39m (-14.9% QoQ) on the back of weak retail demandand high channel inventory. Realizations are expected to decline 25bp QoQ (+70bp YoY) given adverse productmix as buyers downtrade to cheaper and more fuel-efficient motorcycles.• We estimate net sales at INR52.7b, down 9% YoY, 15% QoQ. EBITDA margin (adjusted for change in royaltyaccounting) is expected to decline 120bp QoQ at 9.6% (-190bp YoY) on account of adverse product mix and lagimpact of weaker INR (on both RM cost and royalty). Adj EBITDA is expected to decline 24% YoY (-25% QoQ),translating into 24% YoY decline in PAT to INR4.6b (-25.2% QoQ).• The management expects 2W industry volumes to grow 4-5% in FY13, with Hero MotoCorp growing in-line withthe industry. Demand pick-up in festive season would be critical for the company to achieve this guidance.• HMCL has announced capacity addition of 2m by 2QFY14. It is investing INR25.75b on two plants (capacity of0.75m at Rajasthan by 1QFY14 and 1.25m at Gujarat by 2QFY14) and an R&D center. The company will be fundingthese investments through internal accruals and cash of ~INR40b as at March 2012.• We are downgrading our EPS estimates for FY13/14 by 4.4%/2.5%, to factor in weaker than expected demandenvironment and high channel inventory restricting wholesale dispatches. The stock trades at 17.4x FY13E and15.1x FY14E EPS. Maintain Buy.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QETotal Volumes ('000 nos) 1,529.6 1,544.3 1,589.3 1,572.0 1,642.3 1,373.0 1,520.0 1,538.5 6,235.2 6,073.8Change (%) 23.9 20.1 11.3 8.1 7.4 -11.1 -4.4 -2.1 15.4 -2.6Net Realization 36,858 37,456 37,649 37,929 37,799 37,705 37,988 38,155 37,478 37,915Change (%) 6.7 6.8 5.0 3.1 2.6 0.7 0.9 0.6 5.2 1.2Net Sales 56,376 57,843 59,836 59,625 62,078 51,770 57,741 58,703 233,681 230,292Change (%) 32.2 28.2 16.9 11.4 10.1 -10.5 -3.5 -1.5 21.4 -1.5Total Cost 48,536 49,106 50,887 51,097 53,104 44,968 50,023 50,478 199,603 198,574RM Cost (% sales) 75.3 73.0 73.4 74.1 74.1 74.5 74.3 74.1 74.0 74.3Staff Cost (% sales) 2.9 3.1 3.3 3.2 3.3 3.7 3.6 3.6 3.1 3.5Other Exp (% sales) 7.9 8.8 8.3 8.4 8.1 8.7 8.8 8.3 8.3 8.5EBITDA 7,840 8,737 8,949 8,529 8,974 6,801 7,718 8,225 34,078 31,718EBITDA Margins (%) 13.9 15.1 15.0 14.3 14.5 13.1 13.4 14.0 14.6 13.8Adj. EBITDA Margins (%) 10.7 11.5 11.1 10.8 10.8 9.3 9.7 10.4 11.0 10.1Other Income 1,379 1,248 1,305 1,774 1,439 1,300 1,400 1,583 5,756 5,722Depreciation 2,398 2,785 2,987 2,804 3,035 2,800 2,840 2,818 10,973 11,493PBT 6,696 7,245 7,238 7,469 7,349 5,271 6,248 6,959 28,647 25,827Effective Tax Rate (%) 16.7 16.7 15.3 19.2 16.3 16.5 16.5 16.8 17.0 16.5Adj. PAT 5,579 6,036 6,130 6,036 6,155 4,401 5,217 5,792 23,781 21,566Change (%) 13.5 19.4 24.3 20.3 10.3 -27.1 -14.9 -4.0 19.4 -9.3E: MOSL EstimatesOctober 2012C–6

BSE SensexS&P CNX18,763 5,703BloombergMM INEquity Shares (m) 598.652 Week Range (INR) 875/6221,6,12 Rel Perf (%) 6/17/-5Mcap (INR b) 517.5Mcap (USD b) 9.8CMP: INR865September 2012 Results PreviewSector: AutomobilesMahindra & MahindraBuyYear N. Sales PAT * S/A EPS * Cons. Con EPS Cons, RoE RoCE EV/ EV/End (INR m) (INR m) (INR) EPS (INR) Gr (%) P/E (X) (%) (%) Sales EBITDA3/11A 234,603 25,732 43.0 48.0 18.1 - 25.0 26.8 - -3/12A 318,535 28,888 48.3 51.2 6.6 16.9 23.0 23.1 1.6 13.53/13E 393,584 33,149 55.4 63.7 24.4 13.6 21.7 24.3 1.3 11.13/14E 443,341 36,511 61.0 78.4 22.9 11.0 19.3 22.7 1.2 10.4* S/A including MVML• 2QFY13 performance is not strictly comparable YoY due to merger of MADPL in 4QFY12. We expect MM to reportoverall 2QFY13 volume growth of 10.8% YoY (+3.9% QoQ), driven by 23.9% YoY (+10.2% QoQ) growth in UV &pick-ups, but 13.3% YoY de-growth (-16.5% QoQ) in tractors. Realizations to decline 0.6% QoQ to INR505k.• We estimate net sales at INR96.5b, up 31% YoY and 3% QoQ. We expect EBITDA margin to decline 20bp QoQ to11.6% (down 30bp YoY). However, EBITDA margin (incl MVML) is expected to improve 30bp YoY (down 30bpQoQ) to 13.6% driven by ramp-up in recent launches in auto segment (manufactured at Chakan plant). Weestimate EBITDA at INR11.2b, up 28% YoY and 0.9% QoQ. Other income is likely to be higher sequentially atINR2.6b due to receipt of dividend from subsidiaries; this would translate into adjusted PAT of INR8.7b (+17.4%YoY, 19.3% QoQ). Including MVML, EBITDA and adjusted PAT are estimated at INR12.5b and INR9.2b.• Outlook for the auto division remains healthy with both key segments UVs and pick-ups performing well.Recent launch of refreshed Verito and Quanto (mini-SUV based on Xylo platform) should help sustain healthygrowth momentum. Management has guided for FY13 tractor industry growth of 0-2% considering weak monsoon(albeit the late recovery), pressure on crop prices, and lower infrastructure/construction activity.• We have marginally upgraded our FY13 consolidated EPS by 1.6% to factor in strong performance from the autodivision. However, we downgrade our FY14 consolidated EPS 4.7% for higher than expected losses at SsangyongMotors. The stock trades at 13.6x FY13E and 11x FY14E consolidated EPS. Maintain Buy.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QETotal Volumes (nos) 159,197 170,701 183,228 195,478 182,149 189,175 204,250 196,678 704,935 772,252Change (%) 25.1 29.2 23.3 21.8 14.4 10.8 11.5 0.6 24.2 9.5Net Realization 416,344 428,047 451,808 472,753 507,713 504,531 499,425 501,084 445,318 503,053Change (%) 3.4 6.5 10.5 14.4 21.9 17.9 10.5 6.0 9.7 13.0Net Sales 66,281 73,068 82,784 92,413 92,479 95,445 102,008 98,552 313,920 388,484Change (%) 29.3 37.6 36.3 39.3 39.5 30.6 23.2 6.6 36.2 23.8Operating Other Income 990 538 1,045 1,459 1,195 1,050 1,300 1,556 4,615 5,100EBITDA 8,954 8,740 10,230 9,694 11,094 11,193 12,294 11,524 37,707 46,105EBITDA Margins (%) 13.3 11.9 12.2 10.3 11.8 11.6 11.9 11.5 11.8 11.7EBITDA Margins (incl MVML) 14.2 13.3 13.3 12.1 13.9 13.6 13.3 13.0 13.3 13.6Other income 550 2,315 667 956 599 2,600 850 1,231 4,658 5,280Interest 262 49 348 709 460 500 550 553 1,628 2,063Depreciation 1,099 1,257 1,408 1,997 1,548 1,675 1,925 2,028 5,761 7,176EO Expense 0 0 0 -1,083 1,083 0Effective Tax Rate (%) 25.7 24.4 27.6 3.1 25.1 25.5 25.5 25.9 20.2 25.5Reported PAT 6,049 7,374 6,622 8,745 7,256 8,656 7,948 7,538 28,789 31,398Adj PAT 6,049 7,374 6,622 7,696 7,256 8,656 7,948 7,538 27,924 31,398Change (%) 7.6 1.4 7.3 26.9 20.0 17.4 20.0 -2.1 8.1 12.4PAT (incl MVML) 6,770 8,030 7,785 9,154 8,441 7,768 28,888 33,149E: MOSL EstimatesOctober 2012C–7

BSE SensexS&P CNX18,763 5,703BloombergMSIL INEquity Shares (m) 302.152 Week Range (INR) 1,428/9061,6,12 Rel Perf (%) 10/-5/12Mcap (INR b) 407.8Mcap (USD b) 7.7CMP: INR1,350September 2012 Results PreviewSector: AutomobilesMaruti Suzuki IndiaBuyYear Net Sales PAT Cons.EPS EPS Cons.P/E P/CE P/BV EV/ RoE RoCEEnd (INR m) (INR m) (INR) Gr. (%) (X) (X) (X) EBITDA (%) (%)3/11A 369,199 23,101 82.4 -9.2 - - - - 16.5 22.13/12A 355,871 16,351 58.2 -29.4 23.2 14.1 2.6 12.6 10.8 13.23/13E 427,281 19,993 67.2 15.5 20.1 10.6 2.1 9.1 10.5 12.43/14E 500,583 28,234 94.8 41.1 14.2 8.1 1.9 6.3 13.2 15.9• Our quarterly estimates exclude SPIL merger, as the company would be reporting performance without SPIL.However, our full year estimates include SPIL.• MSIL’s 2QFY13 performance is expected to be impacted due to supply constraint in diesel cars given recentlabor unrest at its Manesar plant. Moreover, margins will be hit by (1) weak petrol car demand and consequenthigh discounts, (2) lag impact of unfavorable currency movement in 1QFY13, and (3) recent wage hike negotiatedwith workers (assuming 1HFY13 provisioning happens in 2QFY13).• We expect MSIL’s 2QFY13 volumes to de-grow 8.7% YoY (-22% QoQ) to 230,376. Realizations are likely to decline2.3% QoQ (+16.4% YoY) on lower proportion of diesel car given supply constraints. EBITDA margin is likely todecline 260bp QoQ (-160bp YoY) to 4.7% with lower volumes, adverse mix and forex, and higher wages. EBITDAexpected at INR3.9b, down 21% YoY (-50% QoQ), translating into recurring PAT of INR1.2b (-51% YoY, -72% QoQ).• We are revising our estimates to factor in for faster than estimated ramp-up. Our estimates now factors in forvolume growth of 3.8%/15% in FY13/FY14 to 1.18m/1.35m units, JPY/INR of 0.685/0.663 and ~10bp/10bp increasein staff cost in FY13 and FY14, resulting in -10bp/+140bp change in EBITDA margins in FY13/FY14 (excl SPIL). As aresult, our consol. EPS has seen upgrade of ~3%/1% for FY13/FY14 to INR67.2/94.8 and cash EPS upgrade of ~2/1%to INR127/INR166. The stock trades at 14.2x FY14E consolidated EPS and 8.1x FY14E cash EPS. Maintain Buy.Quarterly Performance(INR Million)Y/E March FY12 FY13* FY12 FY13E*1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QETotal Volumes ('000 nos) 281.5 252.3 239.5 360.3 295.9 230.4 305.1 345.5 1,133.7 1,176.8Change (%) -0.6 -19.6 -27.6 4.9 5.1 -8.7 27.4 -4.1 -10.8 3.8Realizations (INR/car) 293,279 298,741 314,247 318,770 355,839 347,724 351,202 360,311 306,131 354,361Change (%) 3.2 4.8 12.0 11.7 21.3 16.4 11.8 13.0 7.7 15.8Net Op. Revenues 84,541 78,316 77,316 117,270 107,782 82,507 109,786 127,206 355,871 427,281Change (%) 1.7 -14.4 -18.6 17.2 27.5 5.4 42.0 8.5 -2.8 20.1RM Cost (% of Sales) 78.0 78.6 79.1 79.6 77.8 78.8 78.3 78.6 78.9 78.4Staff Cost (% of Sales) 2.1 2.5 2.7 2.2 2.2 3.2 2.4 2.3 2.4 2.5Other exp. (% of Sales) 10.3 12.5 13.0 10.9 12.6 13.3 12.0 11.2 11.7 12.2Total Cost 76,437 73,374 73,282 108,685 99,919 78,598 101,737 117,134 330,742 397,387EBITDA 8,104 4,942 4,034 8,585 7,863 3,909 8,049 10,072 25,129 29,893EBITDA Margins (%) 9.6 6.3 5.2 7.3 7.3 4.7 7.3 7.9 7.1 7.0Change (%) -5.5 -48.5 -55.3 -15.3 -3.0 -20.9 99.6 17.3 -30.9 19.0Non-Operating Income 1,841 1,177 1,746 2,969 1,123 1,250 2,000 2,950 8,269 7,323Interest 58 109 178 208 332 300 300 269 552 1,200Depreciation 2,425 2,664 2,989 3,306 3,399 3,400 3,450 3,516 11,384 13,765PBT 7,462 3,346 2,613 8,040 5,255 1,459 6,299 9,237 21,462 22,251Tax 1,970 942 557 1,642 1,018 285 1,228 1,808 5,111 4,339Effective Tax Rate (%) 26.4 28.1 21.3 20.4 19.4 19.5 19.5 19.6 23.8 19.5PAT 5,492 2,404 2,056 6,398 4,238 1,175 5,071 7,429 16,351 17,912Change (%) 7.2 -59.8 -63.6 1.4 -22.8 -51.1 146.6 16.1 -29.2 9.5E:MOSL Estimates; * Excluding SPIL MergerOctober 2012C–8

BSE SensexS&P CNX18,763 5,703BloombergTTMT INEquity Shares (m) 3,323.852 Week Range (INR) 321/1451,6,12 Rel Perf (%) 6/-11/57Mcap (INR b) 889.0Mcap (USD b) 16.9CMP: INR267September 2012 Results PreviewSector: AutomobilesTata MotorsBuyYear Sales Adj. PAT Adj. EPS Normal Cons. Normal RoE RoCE EV/ EV/End* (INR M) (INR M) (INR) EPS (INR) ^ P/E (X) P/E (X) (%) (%) Sales EBITDA3/11A 1,221,279 90,695 27.3 15.4 - - 47.3 26.5 - -3/12A 1,656,545 125,568 37.8 22.2 7.1 12.0 38.4 24.1 0.6 4.43/13E 1,971,042 110,482 33.2 14.0 8.0 19.1 25.2 23.9 0.5 3.73/14E 2,185,850 137,408 41.3 19.5 6.5 13.7 24.7 24.2 0.4 3.1* Consolidated; ^ Normalized for capitalized expenses• On a consolidated basis, we expect 2QFY13 net operating revenues to grow 22% YoY (+2.2% QoQ) to INR442b.Expect standalone revenues to de-grow 4.2% YoY (+17.3% QoQ), while JLR should grow 17.2% YoY (-6.1% QoQ).• We expect EBITDA at INR58b, up 28.7% YoY (+0.4% QoQ), as EBITDA margin improves 70bp YoY (-20bp QoQ) to13.1%. However, Adjusted PAT is expected to grow only 10.5% YoY (down 3.2% QoQ) due to increase in JLR taxprovision (post tax credit accounted in 4QFY12 on accumulated JLR losses).• We expect 2QFY13 standalone volumes to grow 5.2% YoY (+16.5% QoQ), driven by growth in LCVs and PVs. Postinventory correction in 1Q, M&HCV volumes are expected to improve 27% QoQ but would still be lower YoY onweak demand. We estimate 2QFY13 standalone net sales at INR124, stable EBITDA margin at 7.3% (+10bp YoY, -10bp QoQ), and EBITDA at INR9b, down 3.4% YoY (+16.4% QoQ). Other income is expected to be higher QoQ/YoYwith dividend income from JLR (GBP150m); this would translate into PAT growth of 2.7x YoY (2.3x QoQ) toINR11.5b.• For JLR, we expect strong volume growth of 16.1% YoY (-5.4% QoQ) to 78,981 driven by Evoque. Realizationswould likely decline 75bp QoQ (+90bp YoY), resulting in 17.2% YoY (-6% QoQ) revenue growth to GBP3.4b (IFRS).We expect EBITDA margin at 14.1% (-40bp QoQ, -30bp YoY), impacted by negative operating leverage andweaker product mix in favor of Evoque & Freelander and lower RR volumes ahead of new model launch. As aresult, expect recurring PAT to be GBP240m (+39% YoY, +1.6% QoQ).• We marginally lower our FY13 consolidated EPS by 0.9% to factor in higher than expected weakness in theM&HCV business. However, we upgrade our FY14 consolidated EPS by 8% to factor better product/market mixin JLR. The stock trades at 6.5x FY14E consolidated EPS, and 13.7x FY14E normalized EPS. Maintain Buy.Quarterly Performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QETotal Op Income 332,888 361,975 452,603 509,079 433,236 442,658 503,274 591,873 1,656,545 1,971,042Growth (%) 23.0 26.9 44.0 44.3 30.1 22.3 11.2 16.3 35.6 19.0EBITDA 42,358 45,039 68,270 67,445 57,548 57,988 61,399 78,446 223,112 255,382EBITDA Margins (%) 12.7 12.4 15.1 13.2 13.3 13.1 12.2 13.3 13.5 13.0Depreciation 11,432 13,308 16,159 15,354 15,659 16,000 16,500 23,317 56,254 71,476Other Income 1,658 608 1,675 1,586 2,386 1,250 1,500 1,700 6,618 6,836Interest Expenses 8,556 5,251 7,204 7,721 8,044 7,000 7,000 9,648 29,822 31,692PBT before EO Exp 24,028 27,089 46,581 45,956 36,232 36,238 39,399 47,180 143,654 159,050Adj PAT 20,481 22,461 35,307 44,403 25,651 24,824 27,102 33,061 125,568 110,482Growth (%) (3.5) 6.4 43.9 79.2 25.2 10.5 -23.2 -25.5 38.5 -12.0JLR Volumes 62,037 68,000 86,322 98,074 83,452 78,981 94,250 105,877 314,433 362,560Growth (%) QoQ -6.2 9.6 26.9 13.6 -14.9 -5.4 19.3 12.3 29.1 15.3JLR EBITDA Margins (%) 13.4 14.4 17.0 14.6 14.5 14.1 14.2 14.8 15.0 14.4S/A Volumes (nos) 197,606 211,400 231,328 286,019 190,900 222,317 243,000 282,589 922,867 936,680Change (%) 3.8 1.8 19.2 16.7 -3.4 5.2 5.0 -1.2 10.4 1.5S/A EBITDA Margins (%) 8.8 7.2 6.7 9.5 7.3 7.3 7.9 8.9 8.1 8.0E: MOSL EstimatesOctober 2012C–9

September 2012 Results PreviewSector: Capital GoodsCapital GoodsCompany NameABBBGR EnergyBHELCrompton GreavesCummins IndiaHavells IndiaLarsen & ToubroSiemensThermaxRevenue, margins impacted by declining order book: We expect revenue growth in2QFY13 to moderate to 8% YoY (v/s 17% YoY in 1QFY13), given the depleting orderbooks and constrained environment. Ordering activity continues to be sluggish,particularly in the industrial / power generation segment. Current BTB stands at 2.4x,the lowest in 18 quarters and continues to impact reported performance. In 2QFY13,we expect EBITDA margin of 12%, down 40bp YoY, impacted by poor fixed costabsorption. While commodity prices have corrected meaningfully, a large part of thedecline is negated by currency movements. Companies with high local manufacturingcontent (like BHEL, Cummins and Thermax) will be the key beneficiaries.Investment climate at crossroads; environment challenging: Net banking credit tothe Infrastructure sector is declining since June 2011 and has reached FY09 levels.Project sanctions in 4QFY12 were the lowest since FY06, indicating accentuatingslowdown in Industrial and Infrastructure spending. Net projects added per quarterhave shown a continuous decline - INR1.5t in 1QFY13 v/s the run rate of INR5t duringthe period September 2006 to June 2010. Our interactions with several companiessuggest that banks are insisting on 70-100% upfront equity for Infrastructure projects,resulting in larger players taking a "bidding holiday". Structural issues like SEB finances(for Power sector), resource availability, land / water / environment, and tight liquidityfor project financing are challenges for capex upturn. The government is attemptingto address several of these.Gauging the environment through non-covered companies: Our analysis of 29 noncoveredcompanies also points towards growing challenges, particularly for industrialproducts, which have relatively shorter business cycles than projects. In 1QFY13,aggregate revenue declined 12% YoY for nine non-covered industrial productcompanies and 4% YoY for five covered companies (based on segmental analysis).Project revenues are relatively insulated (up 17% YoY in 1QFY13 for non-coveredcompanies), led by healthy execution of existing orders. Also, the impact of slowdownhas been building up over the last 3-4 quarters, with TTM sales growth declining from20% in 2QFY12 to 2% in 1QFY13, aggregated for the 14 companies. Managementcommentary across companies indicates challenging and uncertain outlook in themedium term.Expected quarterly performance summary(INR Million)CMP Rating Sales EBITDA Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQABB 798 Neutral 19,190 10.1 1.9 1,109 66.3 4.6 543 145.1 5.2BGR Energy 275 Neutral 7,038 -8.8 15.2 883 -19.9 0.4 296 -42.3 -11.5BHEL 247 Neutral 105,257 2.2 26.4 17,694 -1.3 47.2 12,329 -4.1 33.9Crompton Greaves 126 Neutral 29,629 9.5 5.4 1,981 -12.4 18.8 1,003 -14.0 16.8Cummins India 508 Neutral 12,056 10.6 -4.2 2,230 26.8 -4.1 1,584 23.2 -12.3Havells India 625 Buy 9,796 15.0 -5.4 1,162 12.9 -4.9 784 5.9 -10.9Larsen & Toubro 1,597 Buy 132,967 18.2 11.2 13,297 13.3 6.6 8,223 3.0 -18.0Siemens 709 Neutral 35,693 -1.1 25.5 2,914 0.7 201.6 1,579 -11.3 333.8Thermax 561 Neutral 12,020 -7.8 22.2 1,142 -18.7 18.5 837 -17.7 24.6Sector Aggregate 363,645 8.2 14.7 42,411 4.0 26.3 27,179 -1.4 10.2Satyam Agarwal (AgarwalS@MotilalOswal.com) / Deepak Narnolia (Deepak.Narnolia@MotilalOswal.com)October 2012C–10

September 2012 Results PreviewSector: Capital GoodsInitial ray of hope, but near-term concerns impact valuations: Our Capital Goodscoverage trades at 15x FY13E earnings (20% discount to long-term average of 18x). Thepremium relative to the Sensex enjoyed by the sector (MOSL coverage universe) hassignificantly eroded over the past two years. Our Capital Goods universe now tradesat a 4% discount to the Sensex v/s long-term average premium of 29%. We expect flatearnings over FY12-14 for our coverage. The government's resolve to address thecontentious issues in the Power sector, close monitoring of PSU capex, take-off oflarge public expenditure projects (like DFCC, railways, urban transport, etc) can possiblykick-start the investment cycle. Decline in commodity prices provides another ray ofhope. We are Neutral on the sector; our top picks are L&T and Crompton Greaves.Revenue growth supported by project businessExpect margin compression across companiesModerating sales growth is likely to impact margins, while softening commodity prices could have a positive impactgoing forward; estimate 2QFY13 industry margins at 10.5% (down 39bp YoY).Eng Sector (revenue growth %)Net Profit Margin (%) EB ITDA Margi n (%)1QF Y082QF Y083QF Y084QF Y081QF Y092QF Y093QF Y094QF Y091QF Y102QF Y103QF Y104QF Y101QF Y112QF Y113QF Y114QF Y111QF Y122QF Y123QF Y124QF Y121QF Y131QF Y092QF Y093QF Y094QF Y091QF Y102QF Y103QF Y104QF Y101QF Y112QF Y113QF Y114QF Y111QF Y122QF Y123QF Y124QF Y121QF Y1319.131.328.819.726.88.97.24.725.015.624.130.414.515.317.515.318.416.638.035.132.28.58.79.611.58.29.110.611.99.09.710.210.68.48.59.212.38.211.712.113.515.411.613.516.116.513.314.315.215.912.012.413.117.511.0Source: Company, MOSL1QFY13 order growth boosted by NTPC bulk tender awardsBTB (x) declining on slowing order inflowsOrder intake remains sluggish, impacted by slowdown in the power sector and slowing industrial capex; the T&Dsegment showed pick-up in ordering, driven by improved ordering by Power Grid. Ordering activity inthe building & construction has also been showing healthy traction.Order intake YoY %6453 40 46 4113 25 22-21QFY083QFY081QFY093QFY09-19 -7 231QFY103QFY109 20 -161QFY113QFY1120-22 -12 361QFY12-34-473QFY121QFY13Orde r book (INR bn)BTB (x)2.42.42. 42.62. 72.82. 62. 72.83.03. 03.03.12. 92.92.92. 82.62.42.41,4271,5291,6321,8492,0512,1962,2322,3402,4942,7052,8883,0073,1703,1993,3973,4053,4723,3743,2283,3202QF Y083QF Y084QF Y081QF Y092QF Y093QF Y094QF Y091QF Y102QF Y103QF Y104QF Y101QF Y112QF Y113QF Y114QF Y111QF Y122QF Y123QF Y124QF Y121QF Y13Source: Company, MOSLOctober 2012C–11

September 2012 Results PreviewSector: Capital GoodsIncremental credit disbursements now lower than industry Infrastructure credit disbursement declining since June 20111,6001,3001,000In frastru ctu re (Ba nk Cred it, ttm, INR b)In frastru ctu re ba nk cre dit (ttm, % YoY)804003,2002,4001,600Infra structure (Bank Cre dit, ttm, INR b)Industries excl infra (Bank Credit, ttm INR b)700-40800400Apr-08 Feb-09 De c-09 Oct-10 Aug-11 Jun-124QFY12 project sanctions at shocking levels-800Apr-07 Ap r-08 Ap r-09 Apr-10 Apr-11 Apr-12Net project additions decline to INR1.5t in 1QFY13146189Sanctions (INR B) Projects (No s)231202194167175 181160 154 15116910, 0008, 0006, 0004, 000Net Projects adde d (INR b)9081,3271,1948271,2501,0677878217875755062552, 000-1QF Y102QF Y103QF Y104QF Y101QF Y112QF Y113QF Y114QF Y111QF Y122QF Y123QF Y124QF Y12Ma r-96Apr-97Ma y-98Jun-99Jul-00Aug-01Sep-02Oct-03Nov-04Dec-05Jan-07Feb-08Ma r-09Apr-10Ma y-11Jun-12Industrial products revenue have strong co-relationwith GDP growth (revenue growth % YoY, ttm)Coverage companies have fared better in maintainingmargins (Industrial product EBIT Margins, %, ttm)50%25%0%GDP GrowthCovered comp aniesNon covered compan ies9%6%3%17%14%11%8%Non covered co mpa niesCo ve red com pa n i es-25%0%5%1QF Y083QF Y081QF Y093QF Y091QF Y103QF Y101QF Y113QF Y111QF Y123QF Y121QF Y13Power products Revenues show contrasting trends (ttm, % YoY), Power products margins have eroded, but showing signs ofwith coverage companies witnessing demand improvement stabilization (% EBIT margins, ttm)60%Covered comp a ni esNon covere d companies40%20%0%-20%1QF Y083QF Y081QF Y093QF Y091QF Y103QF Y101QF Y113QF Y111QF Y123QF Y121QF Y131QF Y083QF Y081QF Y093QF Y091QF Y103QF Y101QF Y113QF Y111QF Y123QF Y121QF Y1320%Covered comp anies Non covered co mpa nies )15%10%5%0%1QF Y083QF Y081QF Y093QF Y091QF Y103QF Y101QF Y113QF Y111QF Y123QF Y121QF Y13Source: Company, MOSLOctober 2012C–12

September 2012 Results PreviewSector: Capital GoodsRelative Performance - 3m (%) Relative Performance-1Yr (%)110Sen sex In dexMOSL Capital Goods Index120Sens ex Ind exMOSL Capita l Goods Inde x1051051009095759060Jun-12Jul-12Aug-12Sep-12Sep-11Dec-11Ma r-12Jun-12Sep-12Comparative valuationCMP (INR) Rating EPS (INR) P/E (x) EV/EBITDA (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14ECapital GoodsABB 798 Neutral 8.7 11.3 17.4 91.6 70.9 45.7 58.6 41.7 27.6 7.4 9.1 13.0BGR Energy 275 Neutral 31.0 21.1 25.3 8.9 13.0 10.9 6.1 8.0 8.2 22.2 13.4 14.5BHEL 247 Neutral 28.2 24.9 20.3 8.8 9.9 12.2 5.4 6.1 7.3 30.3 22.2 16.0Crompton Greaves 126 Neutral 5.7 9.3 12.6 22.0 13.6 10.0 10.7 8.4 6.5 10.7 15.6 18.7Cummins India 508 Neutral 19.8 24.1 25.6 25.6 21.0 19.8 19.0 15.2 13.7 28.8 30.7 28.9Havells India 625 Buy 29.6 31.1 41.4 21.1 20.1 15.1 13.0 12.1 9.6 38.7 31.7 32.1Larsen & Toubro 1,597 Buy 78.0 85.2 91.4 20.5 18.7 17.5 14.3 12.7 10.9 17.8 17.1 16.4Siemens 709 Neutral 16.9 23.1 31.3 42.0 30.7 22.7 23.3 17.0 12.8 14.6 18.8 23.0Thermax 561 Neutral 33.9 27.1 31.5 16.6 20.7 17.8 9.9 11.4 9.0 27.4 18.7 19.2Sector Aggregate 16.5 16.4 16.3 10.7 10.6 10.0 21.6 19.1 17.1October 2012C–13

BSE SensexS&P CNX18,763 5,703BloombergABB INEquity Shares (m) 211.952 Week Range (INR) 915/5411,6,12 Rel Perf (%) 2/-13/-6Mcap (INR b) 169.1Mcap (USD b) 3.2CMP: INR798September 2012 Results PreviewSector: Capital GoodsABBNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr (%) (x) (x) (%) (%) Sales EBITDA12/10A 62,871 632 3.0 -82.2 - - 2.6 3.1 - -12/11A 73,703 1,845 8.7 191.9 91.6 6.7 7.4 8.1 2.3 58.612/12E 80,876 2,386 11.3 29.3 70.9 6.3 9.1 9.5 2.0 41.712/13E 93,730 3,696 17.4 54.9 45.7 5.7 13.0 13.1 1.7 27.6• We expect ABB to report revenue growth of 10% YoY and EBITDA margin of 5.8% (up 200bp YoY) for 3QCY12,aided by a low base. Profitability would remain under pressure, given higher competitive intensity and executionof low margin fixed price contracts. Also, the benefit of softening commodity prices has largely been negatedby INR depreciation as 40% of the raw material consumption is imported (largely from parent company).• For CY12, we expect PAT to grow 30% on a low base to INR2.4b. We assume EBITDA margin of 5.8%, up 100bp;EBITDA margin expansion would be driven by ABB's exit from rural electrification projects. However, profitabilitycontinues to face headwinds and is lagging expectations due to intensifying competition and low margin legacyorders.• During 2QCY12, ABB reported a turnaround in Power Systems after reporting losses in the segment for 8consecutive quarters. However, its Process Automation business is facing cost overruns. Also, margins in itsLow Voltage Product business have been impacted by MCB capacity expansion by 3x, led by poor fixed costabsorption.• Order book currently stands at INR91.7b, up 9% YoY. BTB stands at 1.2x TTM sales.• ABB has announced plans to again double its MCB capacity and is also expanding its High Voltage Productscapacity at a cost of INR2.5b. In Process Automation, ABB is making efforts to build a service portfolio that willprovide stability to margins. We believe that correcting the manufacturing footprint will be the key driver ofstructural improvement in margins.• Key things to watch for: a) EBITDA margin devlopment, b) order in flow from industry sector.• The stock trades at 70.9x CY12E and 45.7x CY13E earnings. Maintain Neutral.Quarterly Performance(INR Million)Y/E December CY11 CY12 CY11 CY12E1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QESales 17,960 17,125 17,435 21,999 17,903 18,838 19,190 25,727 74,742 81,658Change (%) 21.7 18.4 24.8 6.2 (0.3) 10.0 10.1 16.9 17.5 9.3EBITDA 1,016 855 666 1,080 975 1,060 1,109 1,579 3,618 4,723Change (%) 356.2 70.8 93.3 230.5 -4.0 24.0 66.3 46.2 131.9 30.5As % of Sales 5.7 5.0 3.8 4.9 5.4 5.6 5.8 6.1 4.8 5.8Depreciation 144 264 263 124 223 231 260 280 795 995Interest 40 67 71 129 54 77 75 75 307 280Other Income 45 65 38 14 19 14 25 29 162 87PBT 877 589 371 840 716 766 799 1,254 2,677 3,535Tax 282 202 149 199 240 250 256 403 832 1,149Effective Tax Rate (%) 32.1 34.3 40.2 23.7 33.5 32.6 32.0 32.2 31.1 32.5Repot ed PAT 595 387 222 641 476 516 543 850 1,845 2,386Adj. PAT 595 387 222 641 476 516 543 850 1,845 2,386Change (%) 796.8 1.1 92.6 845.3 -20.0 33.2 145.1 32.6 191.8 29.3Order Intake 16,951 17,918 24,926 22,093 16,320 20,606 28,665 25,407 81,888 90,998Order Book 83,291 84,150 91,513 91,288 90,280 91,750 101,200 99,989 91,288 99,989BTB (x) 1.2 1.2 1.2 1.2 1.2 1.2 1.3 1.2 1.2 1.3E: MOSL EstimatesOctober 2012C–14

BSE SensexS&P CNX18,763 5,703BloombergBGRL INEquity Shares (m) 72.052 Week Range (INR) 374/1731,6,12 Rel Perf (%) 0/-24/-30Mcap (INR b) 19.8Mcap (USD b) 0.4CMP: INR275September 2012 Results PreviewSector: Capital GoodsBGR EnergyNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 47,632 3,124 43.3 54.6 - - 37.7 16.3 - -03/12A 34,471 2,237 31.0 -28.4 8.9 2.4 22.2 10.7 1.0 7.303/13E 35,162 1,522 21.1 -31.9 13.0 1.6 13.4 7.7 0.9 8.003/14E 41,489 1,823 25.3 19.8 10.9 1.5 14.5 8.1 1.0 8.2• For 2QFY13, we expect revenue of INR7.03b (down 9% YoY), EBITDA of INR883m (down 20% YoY), with EBITDAmargin at 12.5% (down 180bp YoY), and net profit of INR296m (down 42% YoY). For FY13, we expect revenue togrow 2% YoY, EBITDA margin of 11.8% (down 190bp), and PAT of INR1.55b (down 31%). The management expectsrevenue of INR37b-38b, up 10% on the back of existing order book and 11-12% EBITDA margin in FY13/14.• Order book as at the end of June 2012 stood at INR150b, of which INR7b were product orders and INR143b wereprojects. Projects include NTPC bulk tenders of INR86b (57% of total order book), INR22b of EPC and INR30b ofBOP. The management has indicated that bidding pipeline stands at ~11GW for FY13.• Land for the turbine factory has already been acquired and construction work is expected to have started by theend of July 2012, while 70% of the land for the Boiler factory has been acquired. However, we believe that orderexecution would be crucial, especially in light of the company’s constrained cash flows.• Key things to watch for: (a) Realization of the retention money, as increasing debtors’ balance has significantlydeteriorated working capital cycle, (b) Profitability in the NTPC bulk tenders, in which BGR has reportedly bidaggressively.• The stock trades at 13x FY13E and 10.9x FY14E earnings. Maintain Neutral.Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 7,329 7,715 8,037 11,377 6,109 7,038 8,447 13,595 34,471 35,190Change (%) -19.2 -32.1 -36.1 -22.2 -16.6 -8.8 5.1 19.5 -27.6 2.1EBITDA 948 1,102 1,313 1,356 880 883 977 1,430 4,731 4,169Change (%) -8.7 -16.7 -10.8 -19.0 -7.2 -19.9 -25.6 5.4 -14.1 -11.9As of % Sales 12.9 14.3 16.3 11.9 14.4 12.5 11.6 10.5 13.7 11.8Depreciation 37 40 41 43 41 43 48 53 161 185Interest 180 302 461 411 342 400 460 490 1,354 1,692Other Income 13 0 0 51 0 2 2 2 53 8PBT 743 761 811 954 496 442 471 889 3,268 2,300Tax 241 247 263 282 162 146 153 289 1,033 750Effective Tax Rate (%) 32.4 32.5 32.4 29.6 32.6 33.0 32.5 32.5 31.6 32.6Reported PAT 503 514 548 672 335 296 318 600 2,235 1,550Adj PAT 503 514 548 672 335 296 318 600 2,235 1,550Change (%) -17.0 -34.0 -37.4 -31.7 -33.4 -42.3 -42.0 -10.7 -31.1 -30.7Order Intake 2,602 5,260 15,469 6,537 31,073 56,907 8,000 14,020 29,868 29,868Order book 75,000 72,554 80,000 75,160 100,125 150,000 149,561 149,945 75,160 149,945BTB (x) 1.6 1.7 2.1 2.2 2.2 1.6 2.5 2.5 1.7 2.2E: MOSL EstimatesOctober 2012C–15

BSE SensexS&P CNX18,763 5,703BloombergBHEL INEquity Shares (m) 2,447.652 Week Range (INR) 344/1951,6,12 Rel Perf (%) 4/-12/-39Mcap (INR b) 604.2Mcap (USD b) 11.5CMP: INR247September 2012 Results PreviewSector: Capital GoodsBHELNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 404,443 56,650 23.1 20.9 - - 31.4 35.0 - -03/12A 479,788 68,918 28.2 21.7 11.5 3.1 30.3 33.0 1.5 7.303/13E 476,593 60,836 24.9 -11.7 9.9 2.1 22.2 23.6 1.1 6.103/14E 454,887 49,569 20.3 -18.5 12.2 1.8 16.0 16.9 1.2 7.3• Declining commodity prices in USD terms and INR depreciation have meaningfully improved BHEL's competitivepositioning, given that the competitors' cost base is largely composed of imported equipment, while BHEL hasa larger in-house domestic cost base.• Order book stood at INR1,329b (down 17%) as at June 2012; BTB declined from a peak of 4-4.5x in FY09 to 2.7x.Given the execution period of 3.5-4 years for power sector projects, the ratio is now in an uncomfortable zoneand would constrain revenue growth, going forward. We expect revenue to decline by 1%/5% in FY13/FY14.• In FY13, BHEL targets 14-15GW of orders, which appears challenging, given the prevailing business environmentin the Power sector. BHEL's utility power order intake in FY12 was 2.8GW and industry size was 4GW.• While the investment climate remains constrained, we believe that the situation could improve, driven bystructural drivers like the following: (1) Imposition of 21% effective import duty has improved the competitivepositioning of domestic players by 14%, (2) SEB debt restructuring, (3) Coal price pooling and increased domesticcoal availability, (4) New standard bidding document making fuel cost pass-through, (5) continued stronggrowth in power consumption, etc.• Key things to watch for: (a) Order inflow, (b) Performance on profitability - increasing pricing pressure andnegative operating leverage are likely to squeeze EBITDA margin.• The stock trades at 9.9x FY13E and 12.2x FY14E earnings. Maintain Neutral.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales (Net) 71,234 102,986 105,426 192,595 83,262 105,257 112,275 167,016 472,279 467,811Change (%) 9.9 23.7 19.1 7.5 16.9 2.2 6.5 -13.3 13.6 -0.9EBITDA 10,184 19,592 20,350 49,372 12,022 17,694 20,017 37,118 98,880 86,850As a % Sales 14.3 19.0 19.3 25.6 14.4 16.8 17.8 22.2 20.2 18.2Adjusted EBITDA 8,524 17,932 20,350 49,372 12,022 17,694 20,017 37,118 97,076 86,850Change (%) -17.1 5.2 -5.3 68.5 41.0 -1.3 -1.6 -24.8 20.6 -10.5As a % Sales 14.1 16.9 19.1 25.2 14.2 16.5 17.5 21.8 20.3 18.2Interest 88 96 145 183 55 125 130 408 513 718Depreciation 1,709 1,888 1,861 2,541 2,284 2,200 2,300 2,120 8,000 8,904Other Income 3,435 2,199 2,415 3,989 3,663 2,500 2,350 2,427 12,656 10,939PBT 11,822 19,806 20,758 50,637 13,346 17,869 19,937 37,017 103,023 88,167Tax 3,667 5,686 6,432 16,838 4,137 5,539 6,180 11,476 32,623 27,332Effective Tax Rate (%) 31.0 28.7 31.0 33.3 31.0 31.0 31.0 31.0 31.7 31.0Reported PAT 8,155 14,120 14,326 33,798 9,209 12,329 13,756 25,541 70,400 60,836Change (%) 21.8 23.6 2.1 20.8 12.9 -12.7 -4.0 -24.4 17.1 -13.6Adj. PAT 8,155 12,858 14,326 33,580 9,209 12,329 13,756 25,541 68,919 60,836Change (%) 14.8 11.1 -0.2 73.6 12.9 -4.1 -4.0 -23.9 21.8 -11.7Order intake 24,710 143,060 (15,040) 68,230 55,900 30,000 60,000 60,621 220,960 295,021Order book (INRb) 1,596 1,610 1,465 1,347 1,330 1,255 1,202 1,141 1,353 1,141BTB (x) 3.8 3.6 3.2 2.9 2.7 2.6 2.4 2.4 2.9 2.4E: MOSL EstimatesOctober 2012C–16

BSE SensexS&P CNX18,763 5,703BloombergCRG INEquity Shares (m) 641.552 Week Range (INR) 175/1021,6,12 Rel Perf (%) 4/-18/-31Mcap (INR b) 81.0Mcap (USD b) 1.5CMP: INR126September 2012 Results PreviewSector: Capital GoodsCrompton GreavesNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 100,051 9,268 14.3 12.4 - - 30.5 28.1 - -3/12A 112,486 3,733 5.7 -59.7 22.0 2.2 10.7 9.6 0.9 13.33/13E 131,290 6,029 9.3 61.5 13.6 2.0 15.6 13.0 0.7 7.83/14E 145,945 8,104 12.6 34.4 10.0 1.8 18.7 15.0 0.6 5.9• The management has guided 12-14% growth in consolidated revenue, EBITDA margin of 8-9%, and 15% growthin order intake for FY13.• Over the next three years, the management expects to improve EBITDA margin by 450bp (from 7.1% in FY12),driven by improved product offerings/new geographies (+150bp), raw material sourcing rationalization (+150bp),rationalization of manufacturing footprint (+100bp) and improvement in manufacturing processes (+100bp).• Key things to watch for: (a) Profitability in overseas and domestic power business, (b) Further announcementson efficiency improvement measures.• The stock trades at 13.6x FY13E and 10x FY14E earnings. Maintain Neutral.Quarterly performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEStandalone PerformanceSales 14,688 14,515 16,245 19,406 16,592 16,102 18,333 22,164 64,854 73,190Change (%) 9.4 0.5 16.1 9.9 13.0 10.9 12.9 14.2 9.0 12.9EBITDA 1,867 1,614 1,753 1,973 1,684 1,642 2,035 2,901 7,207 8,162Change (%) -10.8 -30.1 -23.1 -25.3 -9.8 1.8 16.1 47.0 -22.7 13.3As of % Sales (Adj) 12.7 11.1 10.8 10.2 10.1 10.2 11.1 13.1 11.1 11.2Subsidiaries PerformanceRevenues 9,689 12,541 14,035 11,367 11,520 13,527 14,624 13,693 47,632 53,364Revenue growth (%) 1.0 31.6 40.6 -0.5 18.9 7.9 4.2 20.5 17.5 12.0EBITDA -48 646 73 158 84 338 658 788 830 1,868As of % Sales (Adj) -0.5 5.2 0.5 1.4 0.7 2.5 4.5 5.8 1.7 3.5Consolidated performanceSales (Net) 24,377 27,056 30,280 30,774 28,111 29,629 32,956 40,593 112,486 131,290Change (%) 5.9 12.8 26.3 5.8 15.3 9.5 8.8 31.9 12.4 16.7EBITDA 1,819 2,260 1,826 2,132 1,668 1,981 2,693 4,588 8,037 10,930Change (%) -38.8 -32.2 -46.3 -42.9 -8.3 -12.4 47.5 115.2 -40.2 36.0As of % Sales (Adj) 7.5 8.4 6.0 6.9 5.9 6.7 8.2 11.3 7.1 8.3Depreciation 608 726 627 639 466 545 590 940 2,600 2,540Interest 110 102 112 139 99 172 218 341 463 830Other Income 151 215 155 3 192 142 127 20 524 480PBT 1,253 1,647 1,242 1,357 1,294 1,406 2,012 3,328 5,498 8,040Tax 475 463 487 396 445 420 520 696 1,821 2,080Effective Tax Rate (%) 37.9 28.1 39.2 29.2 34.4 29.9 25.8 20.9 33.1 25.9Minority interest -17.1 16.5 -16.4 -42.9 -9.6 -17.2 -17.3 -24.9 -59.9 -69.0PAT 795 1,167 771 1,003 859 1,003 1,510 2,657 3,736 6,029Change (%) (58.4) (45.4) (66.9) (65.4) 8.1 (14.0) 95.7 164.8 (59.7) 61.4Order book 70,880 71,200 81,830 83,664 91,720 97,537 102,675 104,087 83,664 104,087Order Intake 17,040 22,600 34,010 28,961 27,170 29,810 31,678 29,265 102,611 117,923BTB (x) 0.7 0.7 0.7 0.7 0.8 0.8 0.8 0.8 0.7 0.8E: MOSL EstimatesOctober 2012C–17

BSE SensexS&P CNX18,763 5,703BloombergKKC INEquity Shares (m) 277.252 Week Range (INR) 518/3221,6,12 Rel Perf (%) 3/0/9Mcap (INR b) 140.7Mcap (USD b) 2.7CMP: INR508September 2012 Results PreviewSector: Capital GoodsCummins IndiaNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (x) (x) (%) (%) Sales EBITDA3/11A 40,425 5,911 21.3 33.1 - - 35.5 35.4 - -3/12A 41,172 5,502 19.8 -6.9 25.6 6.9 28.8 28.8 2.8 16.33/13E 47,278 6,691 24.1 21.6 21.0 6.1 30.7 30.9 2.9 15.33/14E 52,885 7,107 25.6 6.2 19.8 5.4 28.9 29.1 2.6 13.8• For FY13, we expect revenue growth of 15%, aided by new products from Phaltan Megasite, and pre-buying,given stringent emission norms for Powergen. However, the scenario continues to be challenging, given theslowdown, and the impact is more pronounced in the high horsepower (HHP) segment. Domestic demand forDG sets declined 5-10% in FY12.• We believe that the twin trend of softening commodity prices and INR depreciation have meaningfully improvednear-term margin outlook for Cummins (KKC). Currency depreciation makes KKC more competitive in the globalnetwork of Cummins Inc, leading to possibilities for increased outsourcing. Weak INR has also improved KKC’scompetitive positioning vis-à-vis competitors, who largely rely on imports.• The DG sets business faces multiple headwinds: (1) Limited demand drivers, given economic slowdown andtight liquidity, (2) Increased competitive intensity, particularly in HHP segment, and (iii) Structural lowering ofpower deficit in India (KKC has been a key beneficiary of the demand spurt in Southern region over the last oneyear – current TTM base deficit at 11.3% v/s 4.1% TTM in August 2011; we believe that commissioning ofKudankulam nuclear plant / synchronous grid connection will lower deficits).• Key things to watch for: (a) Demand growth in the domestic market – tight liquidity conditions are likely toimpact growth, (b) Any slowdown in the export market, as Caterpillar dealer sales show 13% decline in YTDFY13.• The stock trades at 21x FY13E and 19.8x FY14E earnings. Maintain Neutral.Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 10,335 10,903 9,624 10,404 12,588 12,056 10,874 11,761 41,172 47,278Change (%) 11.4 -0.1 -3.0 -0.1 21.8 10.6 13.0 13.0 1.8 14.8EBITDA 1,739 1,759 1,612 1,948 2,325 2,230 1,979 2,358 6,972 8,892Change (%) -11.9 -19.0 -10.3 9.2 33.7 26.8 22.8 21.0 -8.7 27.5As of % Sales 16.8 16.1 16.7 18.7 19.5 18.5 18.2 20.0 16.9 19.1Depreciation 94 98 109 119 114 128 142 166 420 550Interest 11 5 11 21 14 15 15 17 54 60Other Income 283 163 454 242 385 175 350 232 1,233 1,141PBT 2,432 1,819 1,945 2,049 2,582 2,262 2,172 2,407 7,732 9,423Tax 661 534 536 604 777 679 608 669 2,334 2,733Effective Tax Rate (%) 27.2 29.3 27.5 29.5 30.1 30.0 28.0 27.8 30.2 29.0Reported PAT 1,772 1,286 1,410 1,446 1,806 1,584 1,564 1,738 5,913 6,691Change (%) 26.3 -23.4 1.5 0.4 1.9 23.2 10.9 20.2 0.0 13.2Adjusted PAT 1,360 1,286 1,410 1,446 1,806 1,584 1,564 1,738 5,501 6,691Change (%) (3.0) (23.4) 1.5 0.4 32.7 23.2 10.9 20.2 (6.9) 21.6Domestic Sales 7,456 7,689 6,653 6,846 8,104 8,376 7,444 7,874 28,614 31,798Change (%) 10.3 17% (4.04) (11.22) 8.7 8.9 11.9 15.0 (0.3) 10.5Exports 2,763 3,009 2,768 3,367 4,310 3,500 3,250 3,705 11,908 14,765Change (%) 27.9 9.0 4.5 24.7 56.0 16.3 17.4 10.0 12.3 24.0E: MOSL EstimatesOctober 2012C–18

BSE SensexS&P CNX18,763 5,703BloombergHAVL INEquity Shares (m) 124.852 Week Range (INR) 640/3351,6,12 Rel Perf (%) 11/2/59Mcap (INR b) 78.0Mcap (USD b) 1.5CMP: INR625September 2012 Results PreviewSector: Capital GoodsHavells IndiaBuyYear Net Sales PAT* EPS* EPS* P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 56,126 3,067 24.6 341.1 - - 46.9 20.6 - -3/12A 65,182 3,699 29.6 20.6 21.1 8.2 38.7 23.6 0.9 8.93/13E 70,469 3,879 31.1 4.9 20.1 6.3 31.7 22.7 1.2 12.13/14E 76,782 5,160 41.4 33.0 15.1 4.9 32.1 24.1 1.0 9.6* Consolidated nos, pre exceptionals• For 2QFY13, we expect standalone revenue of INR9.7b (up 15% YoY), EBITDA of INR1162m with EBITDA margin at11.9% (down 100bp YoY), impacted by doubling of Switchgear capacity. Net profit is likely to be INR784m (up 6%YoY).• For FY13, we expect revenue growth of 16%, EBITDA margin of 11.9% (down 30bp), and PAT of INR3.4b (up 11%).The management expects 15-20% growth in standalone sales on the back of 10-15% growth in Switchgear, 15-20% in Cables and Wires, and 20%+ growth in Consumer Durables along with Lighting and Fixtures. The companyis confident of maintaining its margin levels.• Sylvania, which had been reporting sustained improvement in profitability after its turnaround beginning2QFY11, has again reported losses in 1QFY13, impacted by adverse currency movement and decline in sales.The business continues to face currency headwinds in the near term while European sales are likely to bemuted. The management expects 2-3% growth in EUR terms and stable EBITDA margin in FY13. We have factoredin a sales growth of 1% in EUR terms and EBITDA margin of 6.5% (down 70bp).• Key things to watch for: (a) Growth in new product launches in Consumer Appliances, (b) Slowdown in overseasdemand, (c) Cross-selling opportunities.• The stock trades at 20.1x FY13E and 15.1x FY14E earnings. Maintain Buy.Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 8,235 8,518 8,982 10,485 10,353 9,796 10,239 11,668 36,220 42,056Change (%) 19.4 28.5 29.8 24.2 25.7 15.0 14.0 11.3 25.4 16.1EBITDA 973 1,029 1,144 1,468 1,222 1,162 1,218 1,402 4,621 5,004Change (%) 8.7 38.0 39.6 46.8 46.9 6.1 0.3 -4.5 29.1 8.3EBITDA margin (%) 10.8 12.9 13.5 13.8 12.6 11.9 11.9 12.0 12.8 11.9Depreciation 86 91 104 166 118 120 125 125 447 488Interest 94 71 75 197 102 90 85 88 444 365Other Income 2 2 1 3 2 4 5 9 8 20PBT 795 868 967 1,108 1,004 956 1,013 1,198 3,738 4,171Tax 147 166 178 192 204 172 182 214 683 772Effective Tax Rate (%) 18.5 19.1 18.4 17.3 20.3 18.0 18.0 17.8 18.3 18.5Reported PAT 648 703 789 916 800 784 830 984 3,060 3,404Change (%) 21.5 21.0 29.1 34.4 23.5 11.6 5.3 7.5 26.4 11.2Adj PAT 566 741 830 1,022 880 784 830 984 3,056 3,399Change (%) 3.6 39.9 44.1 50.0 55.5 5.9 0.0 -3.7 26.5 11.3E: MOSL EstimatesOctober 2012C–19

BSE SensexS&P CNX18,763 5,703BloombergLT INEquity Shares (m) 608.952 Week Range (INR) 1,619/9711,6,12 Rel Perf (%) 11/12/0Mcap (INR b) 972.2Mcap (USD b) 18.4CMP: INR1,597September 2012 Results PreviewSector: Capital GoodsLarsen & ToubroBuyYear Net Sales PAT* EPS* EPS P/E* P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%)* (X) (X) (%) (%) Sales EBITDA3/11A 439,059 42,416 69.7 13.0 - - 16.6 13.9 - -3/12A 531,705 47,730 78.0 11.9 18.5 3.5 17.8 14.1 1.7 14.33/13E 618,981 52,140 85.2 9.2 18.7 3.4 17.1 13.8 1.6 14.33/14E 701,694 55,953 91.4 7.3 17.5 3.0 16.4 13.5 1.5 12.6Consolidated; EPS is fully diluted• We expect standalone revenue to grow 18% YoY in 2QFY13, driven by healthy execution of existing order book.In FY13, we expect revenue to grow 16%. The management has guided 15-20% revenue growth in FY13.• We estimate standalone EBITDA margin at 10% (down 40bp YoY) for 2QFY13 and at 11.5% (down 30bp) for FY13.In the E&C business, we expect EBITDA margin to remain flat at 12.7% in FY13 v/s the management's guidanceof +/-50bp change. Margins will be supported by commodity price declines, especially in overseas orders.• In 1HFY12, L&T announced orders amounting to INR282b (INR151b in 1QFY13 and INR130b in 2QFY13). Reportedorder intake over 1QFY13 was INR196b, up 21% YoY. In 2QFY13, the company has been awarded an EPC orderworth INR7,490m by ONGC for four wellheads in the hydrocarbon sector after a long gap of over one year. Thisis significant, given the loss of key orders to competition in the last 1-2 years. L&T also won a significant orderworth INR13,020m from Petroleum Development Oman LLC.• Key things to watch for: (a) Any deterioration in working capital cycle, (b) E&C margins, as one-third of the orderbook is on fixed price contracts and decline in commodity prices should start supporting margins, going forward.• The stock trades at 18.7x FY13E and 17.5x FY14E earnings. Maintain Buy.Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 94,826 112,452 139,836 184,609 119,554 132,967 162,789 203,672 531,705 618,981Change (%) 21.1 20.5 22.5 21.0 26.1 18.2 16.4 10.3 21.1 16.4EBITDA 11,265 11,741 13,641 25,608 10,869 13,297 17,500 29,753 62,826 71,418Change (%) 12.1 16.7 10.2 9.3 -3.5 13.3 28.3 16.2 11.4 13.7Margin (%) 11.9 10.4 9.8 13.9 9.1 10.0 10.8 14.6 11.8 11.5Adjusted EBITDA 11,265 11,741 15,641 25,608 12,469 13,297 17,500 29,753 64,826 71,418Adjusted Margin (%) 11.9 10.4 11.2 13.9 10.4 10.0 10.8 14.6 12.2 11.5Depreciation 1,679 1,709 1,803 1,804 1,919 1,900 2,100 2,160 6,995 8,079Interest 1,613 1,970 1,907 1,211 2,284 2,300 2,300 2,316 6,661 9,200Other Income 2,962 3,632 4,271 3,142 6,058 2,650 2,650 2,498 13,383 13,856Extraordinary Inc/(Exp) 0 0 0 550 -383 0 0 0 550 -383Reported PBT 10,935 11,693 14,202 26,285 12,340 11,747 15,750 27,775 63,103 67,612Tax 3,474 3,709 4,286 7,081 3,705 3,524 5,040 7,793 18,538 20,061Effective Tax Rate (%) 31.8 31.7 30.2 26.9 30.0 30.0 32.0 28.1 29.4 29.7Reported PAT 7,461 7,984 9,915 19,204 8,635 8,223 10,710 19,982 44,565 47,550Adjusted PAT 7,461 7,984 11,275 18,654 10,023 8,223 10,710 19,982 44,825 48,948Change (%) 12.0 15.0 40.0 22.1 34.3 3.0 -5.0 7.1 23.7 9.2Adj PAT (excl Subs Dividend) 6,901 7,094 9,085 18,144 7,103 7,973 10,460 19,886 40,745 45,432Change (%) 12.0 10.6 19.5 25.5 2.9 12.4 15.1 9.6 20.0 11.5Order Intake 162 161 171 212 196 177 188 179 706 741Order book (INR b) 1,362 1,422 1,458 1,457 1,531 1,575 1,601 1,578 1,457 1,578BTB (x) 3.0 3.0 2.9 2.7 2.8 2.7 2.7 2.6 3.3 3.0E: MOSL Estimates; All quarterly numbers are for standalone entityOctober 2012C–20

BSE SensexS&P CNX18,763 5,703BloombergSIEM INEquity Shares (m) 337.052 Week Range (INR) 872/6271,6,12 Rel Perf (%) -1/-17/-29Mcap (INR b) 238.9Mcap (USD b) 4.5CMP: INR709September 2012 Results PreviewSector: Capital GoodsSiemensNeutralYear Net Sales PAT* EPS* EPS* P/E* P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA9/11A 121,064 8,434 25.0 2.0 - - 23.1 24.4 - -9/12E 125,775 5,690 16.9 -32.5 42.0 6.0 14.6 15.3 1.9 23.19/13E 140,580 7,769 23.1 36.5 30.7 5.6 18.8 19.6 1.6 16.99/14E 160,190 10,540 31.3 35.7 22.7 4.9 23.0 24.0 1.4 12.7* Standalone, Year end - September• For 4QFY12, we expect Siemens (SIEM) to report revenue of INR35b, down 1% YoY. In 9MFY12, it reportedrevenue of INR90b (up 6% YoY), impacted by delays in offtake by customers and sluggish industrial capex,though strong execution of Qatar/Torrent projects supported revenue. A large part of SIEM’s business portfoliocomprises of early and mid-cycle products; hence, the impact of slowdown has started becoming morepronounced. The revenue break-up is as follows: Products 56%, Projects 31% and Services 12%.• We expect order intake to remain muted, with a growth of 5% in FY12. During 9MFY12, order intake declined23% YoY to INR73b; excluding large orders received last year, base orders posted a growth of ~8% YoY. Post theQatar project, SIEM is aggressively tapping other MENA (Middle East and North Africa) markets, which shouldhelp support order intake.• We expect margins to remain flattish in 4QFY12 at 8.2% due to pricing pressure in the Power business thoughsoftening commodity prices should support margins. Depreciation of the INR against the EUR is likely to impactmargins, given that around half the raw material and components cost is based on imports from the parentcompany.• We expect SIEM to report a PAT of INR1.6b in 4QFY12, down 11% YoY. For FY12, we expect a PAT of INR5.7b (down32%).• Key things to watch for: (a) Margins, particularly in Industrial Solutions and Power Transmission businesses, (b)Any large size order inflow from MENA.• The stock trades at 30.7x FY13E and 22.7x FY13E earnings. Maintain Neutral, with a target price of INR743 (25xFY12E earnings).Quarterly Performance (Standalone) (INR Million)Y/E September FY11 FY12 FY11 FY12E1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QETotal Revenues 25,804 31,208 27,825 36,085 23,676 37,973 28,433 35,693 120,290 125,775Change (%) 35.7 40.2 23.9 19.3 -8.2 21.7 2.2 -1.1 28.0 3.9EBITDA 3,688 4,288 2,508 2,895 1,254 4,944 966 2,914 13,371 10,079Change (%) 0.3 49.9 3.6 -27.1 -66.0 15.3 -61.5 0.7 3.4 -25.3As % of Revenues 14.3 13.7 9.0 8.0 5.3 13.0 3.4 8.2 11.1 8.0Depreciation 345 367 401 410 431 469 506 630 1,522 2,036Interest Income 258 229 182 223 227 41 76 106 900 450PBT 3,600 4,151 2,288 2,708 1,050 4,516 536 2,391 12,750 8,492Tax 1,220 1,407 741 927 343 1,476 172 811 4,295 2,802Effective Tax Rate (%) 33.9 33.9 32.4 34.2 32.7 32.7 32.1 33.9 33.7 33.0Reported PAT 2,381 2,744 1,548 1,781 707 3,040 364 1,579 8,454 5,690Adjusted PAT 2,381 2,744 1,548 1,781 707 3,040 364 1,579 8,454 5,690Change (%) 25.9 51.5 -0.9 -29.1 -70.3 10.8 -76.5 -11.3 2.2 -32.5Order Intake (INR b) 40 33 23 27 28 18 27 31 123 104Order book (INR b) 151 154 150 139 140 126 125 119 139 119BTB (x) 1.5 1.4 1.3 1.2 1.2 1.0 1.0 1.0 1.2 1.0E: MOSL EstimatesOctober 2012C–21

BSE SensexS&P CNX18,763 5,703BloombergTMX INEquity Shares (m) 119.252 Week Range (INR) 570/3881,6,12 Rel Perf (%) 7/9/1Mcap (INR b) 66.9Mcap (USD b) 1.3CMP: INR561September 2012 Results PreviewSector: Capital GoodsThermaxNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (x) (x) (%) (%) Sales EBITDA3/11A 52,472 3,818 32.0 48.7 - - 31.9 29.0 - -3/12A 60,313 4,034 33.9 5.7 15.1 3.7 27.4 22.9 0.9 8.93/13E 57,936 3,231 27.1 -19.9 20.7 3.6 18.7 15.4 1.0 11.43/14E 57,229 3,748 31.5 16.0 17.8 3.2 19.2 16.1 0.9 9.0Consolidated• Revenue visibility for FY13 remains low, given loss of key expected projects to competition in recent monthsand lack of concrete pipeline for large power projects / slowing industrial capex.• We expect order intake to remain muted in FY13 – up 20% on a low base to INR53b. Consolidated order book asat the end of 1QFY13 was down 26% YoY at INR50.4b. Power EPC accounts for ~1/3rd of the current backlog.Thermax last reported large orders in 1QFY12, when it received two key orders – an order worth INR4b toconstruct a 3x32MW cogeneration plant on EPC basis and an order worth INR3.66b to supply of boilers for a120MW captive power plant. Project side orders from segments like Power, Oil & Gas, Metallurgy, Cement, etccontinue to get deferred, given the macro volatility; the scenario continues to be challenging.• Thus far, Thermax has shown impressive performance on the profitability front, even in a challenging businessenvironment. ~20% of its staff costs and 40-50% of other costs are variable, providing a cushion to managemargins. However, we believe that if the macro environment continues to be volatile, Thermax might have tostart compromising on margins to bag orders (as market share / fixed costs are important priorities). Decline incommodity prices should provide support to margins.• Key things to watch for: (a) Order inflow, particularly from the Power segment for the boiler-turbine-generator(BTG) manufacturing plant being built, (b) Pick-up in ordering activity in the Renewable Energy segment.• The stock trades at 20.7x FY13E and 17.8x FY14E earnings. Maintain Neutral.Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 10,443 13,035 12,693 16,868 9,835 12,020 11,530 15,678 53,041 49,063Change (%) 32.2 19.4 2.3 -4.5 -5.8 -7.8 -9.2 -7.1 9.3 -7.5EBITDA 1,135 1,405 1,364 1,853 964 1,142 1,153 1,647 5,839 4,906As of % Sales 10.9 10.8 10.7 11.0 9.8 9.5 10.0 10.5 11.0 10.0Depreciation 111 117 120 121 132 129 132 122 470 515Interest 4 11 17 34 37 12 18 2 66 69Other Income 149 208 157 272 187 230 180 221 705 818PBT 1,170 1,485 1,384 1,971 981 1,231 1,184 1,744 6,009 5,140Tax 371 468 429 673 309 394 367 575 1,940 1,645Effective Tax Rate (%) 31.7 31.5 31.0 34.1 31.5 32.0 31.0 33.0 32.3 32.0Reported PAT 799 1,017 955 1,298 672 837 817 1,169 4,069 3,495Change (%) 20.7 13.6 -4.7 2.6 -15.9 -17.7 -14.5 -9.9 6.4 -14.1Adj PAT 799 1,017 955 1,298 672 837 817 1,169 4,069 3,495Change (%) 20.7 13.6 (4.7) 2.6 (15.9) (17.7) (14.5) (9.9) 6.4 (14.1)Order Book 58,890 57,700 51,000 42,300 44,740 42,846 40,897 40,897 42,300 40,897Order Intake 14,440 11,890 5,900 8,090 12,580 8,323 8,260 11,137 40,320 40,300BTB (x) 1.1 1.1 0.9 0.8 0.9 0.8 0.8 0.8 0.8 0.8E: MOSL EstimatesOctober 2012C–22

September 2012 Results PreviewSector: CementCementCompany NameACCAmbuja CementsBirla CorporationGrasim IndustriesIndia CementsJaiprakash AssociatesShree CementUltraTech Cement2QFY13 dispatches growth to moderate at ~2% led by delayed monsoon: Recovery incement demand was thwarted in 2QFY13 given (1) heavy rains in August (delayedmonsoon), and (2) weak demand from organized housing and infrastructure. Weestimate cement dispatches growth of 2% YoY (down ~12% QoQ). As a result, capacityutilization is also expected to decline 120bp YoY (-10pp QoQ). We expect demand torecover post monsoon, with FY13 volume growth of 7.9% for the industry, translatinginto capacity utilization of 75% in FY13 as against 74% in FY12. 1HFY13 volume growthof ~6.7% implies residual growth of 8.9% for 2HFY13.Prices resilient; decline during monsoon lower than our initial estimates: Despitedemand weakness, cement prices remained strong with only modest seasonalcorrection in 2QFY13. National average retail price for 2Q was down only INR5/bagQoQ (+INR30/bag YoY). Prices are (1) broadly stable QoQ in West, North and South(except AP where prices are down INR30-35/bag QoQ), and (2) down INR10/bag inEast and Central. We are factoring in INR20/bag improvement in FY13 realizationsover FY12 average, which is INR10/bag higher than 2QFY13 average pricing.Valuation and view: Cement prices have been resilient even during seasonally weakperiod. This, we believe, reflects high cost (both opex and capex), implying littledownside risk to any major price correction in medium-to-long term. Cement stockshave outperformed the market led by strength in pricing; this has resulted in largecaps trading at slight premium to replacement cost. We expect strong earnings growthto drive stock performance hereon. Recovery in cement volume growth would be thekey catalyst for stock performance to sustain. We prefer Ambuja Cement andUltraTech/Grasim in large-caps, and Shree Cement in mid-caps.Expected quarterly performance summary(INR Million)CMP Rating Sales EBITDA Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQACC 1,469 Neutral 24,042 11.8 -13.4 4,167 89.0 -36.0 2,497 103.2 -40.3Ambuja Cements 202 Buy 21,709 20.3 -15.4 5,512 77.0 -23.7 3,561 92.1 -24.1Birla Corporation 282 Buy 5,456 5.8 -17.1 766 142.7 -39.1 404 54.5 -52.3Grasim Industries 3,315 Buy 11,736 -2.5 -5.3 2,856 -1.7 -3.3 3,597 4.3 31.8India Cements 95 Buy 11,466 5.3 -4.6 2,519 0.0 -9.3 854 22.5 14.1Jaiprakash Associates 82 Buy 32,233 2.9 8.8 7,266 -2.9 -5.8 943 -26.7 -31.6Shree Cement 3,954 Buy 10,927 47.4 -24.9 3,216 111.1 -33.2 2,166 LP -38.4Ultratech Cement 1,968 Buy 44,095 12.8 -13.1 9,358 60.3 -27.6 5,402 93.6 -30.6Sector Aggregate 161,664 11.1 -9.9 35,661 37.7 -22.7 19,423 89.0 -24.9Jinesh K Gandhi (Jinesh@MotilalOswal.com) / Sandipan Pal (Sandipan.Pal@MotilalOswal.com)October 2012Profitability to deteriorate QoQ on lower realization, higher cost: Expect EBITDA/tonto be down INR224 QoQ at INR979/ton (+INR383/ton YoY) on the back of (1) lowerrealizations, (2) negative operating leverage (utilization down 950bp QoQ), and (3)cost push (partial impact of diesel price hike). We expect the potential benefit ofsoftening rupee on lower imported coal prices to reflect partially from 2QFY13, whichwill dilute impact of higher freight rates due to diesel price hike. For FY13, we expectEBITDA to improve only ~INR210/ton (to INR1,110/ton) as INR400/ton higher realizationis diluted by cost push.C–23

September 2012 Results PreviewSector: CementExpect demand growth to moderate at 2.9%…utilization to decline YoY12.210.89.4Despatches (MT) Growth (%)9.310.3120%105%6.96.0544.0 6.23.210.29.02.10.950 46 49 55 53 48 51 58 51 56 64 595290%75%60%1QFY102QFY103QFY104QFY101QFY112QFY113QFY114QFY111QFY122QFY123QFY124QFY121QFY132QFY134QFY062QFY074QFY072QFY084QFY082QFY094QFY092QFY104QFY102QFY114QFY112QFY124QFY122QFY13Source: CMA/MOSL2QFY13 average cement prices seasonally down QoQ, although lower than estimated (INR/bag)Avg National Retail Prices (INR/bag) Cha nge (%)3.23.02.76.25.9-3.5-2.4-2.73.211.07.611.011.19.814.018.32QFY12 3QFY12 4QFY12 1QFY13 2QFY13E238238238250252229232243223 -11.22372582612482632832982932452622742732722292602993403282472592832902952942953043103032032232452752622482632832982932QFY093QFY094QFY091QFY102QFY103QFY104QFY101QFY112QFY113QFY114QFY111QFY122QFY123QFY124QFY121QFY132QFY13North East West South Central NationalAverage2QFY13 retail prices inclusive of excise duty hike of INR4-6/bagSource: CMA/MOSLCost inflation, negative operating leverage to offset benefit of higher realizationsRealization (INR/ton)EBITDA (INR/ton)1QFY092QFY093QFY094QFY091QFY102QFY103QFY104QFY101QFY112QFY113QFY114QFY111QFY122QFY123QFY124QFY121QFY132QFY13E1QFY092QFY093QFY094QFY091QFY102QFY103QFY104QFY101QFY112QFY113QFY114QFY111QFY122QFY123QFY124QFY121QFY132QFY13E3,4233,4753,4413,5203,7403,7443,4103,4973,7073,3463,5243,9104,1023,9154,2114,2994,4044,2684446016141,0399108941,1021,2981,2188439089659211,0688321,0361,034786Source: Company/MOSLOctober 2012C–24

September 2012 Results PreviewSector: CementTrend in key operating parametersVolume (m tons) Realization (INR/ton) EBITDA (INR/ton)2QFY13E YoY (%) QoQ (%) 2QFY13E YoY (INR) QoQ (INR) 2QFY13E YoY (INR) QoQ (INR)ACC 6.3 10.0 2.6 4,196 418 -200 606 219 -299Ambuja Cement 5.3 10.0 -9.1 4,220 466 -160 876 229 -261UltraTech 10.1 9.2 -3.5 4,598 419 -151 840 218 -258Birla Corp 1.4 -0.9 -3.4 3,854 206 -107 473 176 -275India Cement 2.6 5.1 4.1 4,386 163 60 1,033 -5 105Shree Cement 2.7 9.6 -16.8 3,411 0 -200 757 -46 -336Sector Aggregate 28.3 8.6 -4.2 4,268 353 -135 786 172 -248Trend in key financial parametersNet Sales (INR m) EBITDA Margins (%) Net Profit (INR m)2QFY13 YoY (%) QoQ (%) 2QFY13 YoY (BP) QoQ (BP) 2QFY13 YoY (%) QoQ (%)ACC 26,265 22.2 -2.1 14.4 420 -610 2,333 89.9 -33.7Ambuja Cement 22,320 23.7 -12.4 20.8 350 -520 2,979 60.7 -31.2UltraTech 46,322 18.5 -6.6 18.5 360 -490 4,770 71.0 -28.6Birla Corp 5,396 4.7 -6.1 7.6 150 -660 180 -31.3 -66.0India Cement 11,729 7.7 0.8 22.5 -70 290 1,083 25.6 26.6Shree Cement 9,657 13.0 -35.1 21.7 -170 -430 99 -43.8 -94.9Sector Aggregate 121,689 17.9 -9.3 18.2 270 -470 11,444 59.6 -35.9Relative Performance - 3m (%)14513011510085Relative Performance-1Yr (%)16014012010080Sep-11Sensex IndexMOSL Cement IndexJun-12Jul-12Aug-12Sep-12Sensex IndexMOSL Cement IndexDec-11Mar-12Jun-12Sep-12Source: Company/MOSLRevised EPS estimates (INR)FY13EFY14ERev Old Chg (%) Rev Old Chg (%)ACC 66.8 70.3 -4.9 83.0 86.1 -3.6Ambuja Cement 10.8 10.8 -0.2 12.6 12.7 -0.7Grasim 330.2 324.6 1.7 365.2 352.6 3.6UltraTech 103.4 103.4 -0.1 116.9 113.2 3.2Birla Corp 24.1 34.8 -30.7 26.9 36.7 -26.7India Cement 11.9 12.0 -0.4 15.6 15.6 0.2Shree Cement 310.2 300.7 3.2 361.4 345.2 4.7Recent correction makes valuations attractive (FY12)EV (USD/Ton)200150100500Replacement Cost atUSD140/tonIndia CementBirla CorpUltraTechACCAmbujaGrasimComparative valuationCMP (INR) Rating EPS (INR) P/E (x) EV/EBITDA (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14ECementACC 1,469 Neutral 59.0 73.3 86.4 24.9 20.0 17.0 14.6 11.0 9.6 16.2 18.5 20.0Ambuja Cements 202 Buy 8.2 11.9 13.2 24.7 17.0 15.3 14.5 10.0 8.8 16.3 21.5 21.1Birla Corporation 282 Buy 31.1 33.0 32.9 9.1 8.5 8.6 5.8 5.5 5.1 10.7 10.5 9.7Grasim Industries 3,315 Buy 288.6 348.3 375.8 11.5 9.5 8.8 5.2 4.5 3.6 15.5 16.0 15.0India Cements 95 Buy 9.6 11.1 14.8 9.9 8.5 6.4 5.9 5.2 4.2 7.3 7.3 8.9J P Associates 82 Buy 4.8 3.6 4.6 17.1 23.1 17.9 9.4 9.6 8.5 10.4 7.6 9.8Shree Cement 3,954 Buy 274.4 310.2 361.4 14.4 12.7 10.9 9.0 6.9 5.8 40.5 34.4 31.7Ultratech Cement 1,968 Buy 87.5 109.5 122.6 22.5 18.0 16.1 13.4 11.3 9.7 20.4 21.2 19.9Sector Aggregate 18.1 15.2 13.4 9.8 8.3 7.1 15.8 16.8 16.7Shree0% 6% 12% 18% 24% 30% 36% 42% 48% 54%RoCE (%)October 2012C–25

BSE SensexS&P CNX18,763 5,703BloombergACC INEquity Shares (m) 187.952 Wk Range (INR) 1,475/1,0771,6,12 Rel Perf (%) 4/1/21Mcap (INR b) 276.1Mcap (USD b) 5.2CMP: INR1,469September 2012 Results PreviewSector: CementACCNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/TonEnd (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) EBITDA (USD)12/10A 77,173 10,137 53.9 -38.2 - - 16.2 16.3 - 15712/11A 94,387 11,083 59.0 9.3 25.5 3.8 16.2 15.7 14.6 15412/12E 109,564 13,781 73.3 24.3 20.6 3.6 18.5 19.9 11.0 15012/13E 125,950 16,231 86.4 17.8 17.0 3.2 20.0 21.5 9.6 148• Expect 2QCY12 dispatches to de-grow 4.2% YoY (~10% down QoQ) to 5.45mt, and Average realization to decline3.9% QoQ to INR4,411/ton (+13% YoY).• Net sales should grow 11.8% YoY (down 13% QoQ) to INR24b. EBITDA margins are expected to compress 6.1ppQoQ (up 7pp YoY) to 17.3%, on the back of lower realizations and negative operating leverage. EBITDA/ton isestimated to improve by ~INR377/ton YoY (-INR311/ton QoQ) to INR765.• Expect EBITDA to de-grow 36% QoQ (up ~89% YoY) to INR4.2b, translating into PAT de-growth of ~40% QoQ (up~103% YoY).• We are downgrading our EPS estimates for CY12/CY13 by 1%/2% to INR73.3/86.4 to factor in lower volumes andmarginally lower realization.• We believe ACC stock valuations at 17x CY13E EPS and 9.6x CY13E EV/EBITDA fairly reflect underlying businessfundamentals. Maintain Neutral with target price of INR1,396 (9x CY13 EV/EBITDA).Quarterly Performance (Standalone)(INR Million)Y/E December CY11 CY12 CY11 CY12E1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QECement Sales (m ton) 6.16 5.93 5.69 5.95 6.72 6.05 5.45 6.46 23.7 24.7YoY Change (%) 10.4 12.5 17.8 6.1 9.1 2.0 -4.2 8.6 11.5 4.0Cement Realization 3,893 4,052 3,779 4,206 4,256 4,591 4,411 4,512 3,978 4,440YoY Change (%) 3.4 5.7 11.5 20.5 9.3 13.3 16.8 7.3 9.7 11.6QoQ Change (%) 11.6 4.1 -6.8 11.3 1.2 7.9 -3.9 2.3Net Sales 23,982 24,030 21,500 25,027 28,602 27,778 24,042 29,141 94,387 109,564YoY Change (%) 14.1 18.9 31.3 27.8 19.3 15.6 11.8 16.4 22.3 16.1Total Expenditure 18,439 18,527 19,296 21,134 22,442 21,270 19,876 23,882 77,395 87,469EBITDA 5,542 5,503 2,204 3,893 6,161 6,508 4,167 5,259 16,992 22,095Margins (%) 23.1 22.9 10.3 15.6 21.5 23.4 17.3 18.0 18.0 20.2Depreciation 1,125 1,158 1,199 1,270 1,305 1,356 1,375 1,411 4,753 5,448Interest 253 271 253 192 316 301 300 299 969 1,216Other Income 669 771 944 982 948 1,157 1,050 1,045 3,518 4,200PBT before EO Item 4,834 4,845 1,695 3,414 5,487 6,009 3,542 4,594 14,788 19,631EO Income/(Expense) 0 0 617 2,280 -3,354 0 0 0 2,897 -3,354PBT after EO Item 4,834 4,845 2,312 5,693 2,134 6,009 3,542 4,594 17,685 16,278Tax 1,327 1,479 637 2,466 580 1,829 1,045 1,348 4,431 4,802Rate (%) 27.5 30.5 27.5 43.3 27.2 30.4 29.5 29.3 25.1 29.5Reported PAT 3,507 3,366 1,676 3,227 1,554 4,179 2,497 3,246 13,254 11,476Adjusted PAT 3,507 3,366 1,229 1,935 3,859 4,179 2,497 3,246 11,083 13,781Margins (%) 14.6 14.0 5.7 7.7 13.5 15.0 10.4 11.1 11.7 12.6YoY Change (%) -13.4 -6.2 22.8 39.2 10.1 24.2 103.2 67.7 9.3 24.3E: MOSL EstimatesOctober 2012C–26

BSE SensexS&P CNX18,763 5,703BloombergACEM INEquity Shares (m) 1,534.452 Week Range (INR) 206/1361,6,12 Rel Perf (%) 2/11/23Mcap (INR b) 309.9Mcap (USD b) 5.9CMP: INR202September 2012 Results PreviewSector: CementAmbuja CementsBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/TonEnd (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) EBITDA (USD)12/10A 73,902 12,434 8.1 4.3 - - 18.1 24.1 - -12/11A 85,306 12,547 8.2 0.6 24.7 3.9 16.3 23.2 14.5 19412/12E 101,997 18,262 11.9 45.5 17.0 3.5 21.5 31.2 10.0 18912/13E 117,222 20,213 13.2 10.7 15.3 3.0 21.1 30.6 8.8 184• Expect dispatches to grow ~0.9% YoY (down 14% QoQ) to 4.85mt, and average realization to decline 1.8% QoQ(up ~19.2% YoY) to INR4,476/ton.• Net sales should grow 20.3% YoY (down 15% QoQ) to INR21.7b. EBITDA margin is expected to contract 280bpQoQ (up 8.1pp YoY) to 25.4%, impacted by QoQ lower utilization and negative operating leverage. EBITDA/tonshould be down INR146/ton QoQ to INR1,136 (+INR489/ton YoY).• Expect EBITDA to de-grow 24% QoQ (up +77% YoY) to INR5.5b, translating into PAT de-growth of 24% QoQ (up92% YoY) to INR3.6b.• We broadly maintain our EPS estimates for CY12/13 at INR11.9/13.2. We believe valuations at 15.3x CY13E and8.8x CY13E EV/EBITDA are attractive given Ambuja's superior profitability. Maintain Buy with target price ofINR207 (9x CY13E EV/EBITDA).Quarterly Performance(INR Million)Y/E December CY11 CY12 CY11 CY12E1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QESales Volume (m ton) 5.64 5.29 4.81 5.71 6.18 5.63 4.85 6.18 21.45 22.84YoY Change (%) 6.7 -3.5 6.7 12.6 9.6 6.5 0.9 8.2 5.4 6.5Realization (INR/ton) 3,923 4,114 3,754 4,092 4,260 4,556 4,476 4,579 3,977 4,465YoY Change (%) 4.2 10.1 8.1 16.0 8.6 10.7 19.2 11.9 9.5 12.3QoQ Change (%) 11.2 4.9 -8.7 9.0 4.1 6.9 -1.8 2.3Net Sales 22,125 21,764 18,051 23,366 26,333 25,660 21,709 28,296 85,306 101,997YoY Change (%) 11.2 6.3 15.4 30.6 19.0 17.9 20.3 21.1 15.4 19.6EBITDA 6,170 5,853 3,115 4,285 7,445 7,223 5,512 7,301 19,315 27,481Margins (%) 27.9 26.9 17.3 18.3 28.3 28.2 25.4 25.8 22.6 26.9Depreciation 1,061 1,074 1,079 1,238 1,209 1,215 1,265 1,306 4,452 4,995Interest 138 152 138 99 168 180 160 137 526 646Other Income 621 693 857 937 1,147 908 1,000 1,195 3,050 4,250PBT before EO Item 5,592 5,320 2,755 3,886 7,215 6,736 5,087 7,052 17,387 26,090Extraordinary Inc/(Exp) 0 0 -206 -243 -2,791 0 0 0 -358 -2,791PBT after EO Exp/(Inc) 5,592 5,320 2,548 3,643 4,424 6,736 5,087 7,052 17,029 23,299Tax 1,517 1,845 834 544 1,301 2,047 1,526 2,115 4,740 6,990Rate (%) 27.1 34.7 32.7 14.9 29.4 30.4 30.0 30.0 27.8 30.0Reported Profit 4,075 3,475 1,715 3,099 3,122 4,689 3,561 4,937 12,289 16,309Adj PAT 4,075 3,475 1,854 3,305 5,075 4,689 3,561 4,937 12,547 18,262YoY Change (%) -7.8 -11.2 21.9 31.2 24.5 34.9 92.1 49.4 0.9 45.5E: MOSL EstimatesOctober 2012C–27

BSE SensexS&P CNX18,763 5,703BloombergBCORP INEquity Shares (m) 77.052 Week Range (INR) 345/2021,6,12 Rel Perf (%) 26/-10/-29Mcap (INR b) 21.8Mcap (USD b) 0.4CMP: INR282September 2012 Results PreviewSector: CementBirla CorporationBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/TonEnd (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) EBITDA (USD)03/11A 21,238 3,199 41.5 -42.6 - - 15.5 15.4 - -03/12A 22,469 2,392 31.1 -25.2 9.1 1.0 10.7 11.3 5.8 4403/13E 24,243 2,545 33.0 6.4 8.5 0.9 10.5 12.0 5.5 4503/14E 27,537 2,532 32.9 -0.5 8.6 0.8 9.7 11.6 5.1 44• Expect Birla Corp's revenues to grow 18% YoY (down 17% QoQ) to INR5.5b. Cement volume growth should bemuted at 2.6% YoY (down ~11% QoQ) to 1.45mt, impacted by limestone mining ban at its Rajasthan plant.However, realization is likely to improve 19% YoY (down 5% QoQ) to INR3,821/ton.• Expect EBITDA margin to slip 5.1pp to 14% (+7.9% YoY) on the back of (1) lower realizations, (2) negativeoperating leverage, and (3) cost push due to higher RM cost (as purchased limestone/clinker replaces captivesource) and higher energy cost. We estimate cement EBITDA/ton at INR528 (down INR245/ton QoQ, but upINR305/ton YoY). As a result, EBITDA is estimated to de-grow 39% QoQ (up 143% YoY) to INR766m, translatinginto PAT de-growth of 52% QoQ (up 54.5% YoY) to INR404m.• Birla Corp's Rajasthan plant (~2mt capacity) operations are impacted since August 2011 due to ban on miningwithin 10km of the Chittorgarh Fort. The company lost its appeal in the High Court. The company has appealedagainst the verdict in the Supreme Court, and since then the levy has been stayed. Non-resolution of this issuewould severely curtail operations at Rajasthan plant, especially as the company is expanding capacity there.Our estimates partly factor in non-resolution of the ban in foreseeable future, resulting in higher RM Cost.• We are maintaining our EPS estimates for FY13/14 at INR33/INR32.9. The stock trades at 8.6x FY14E EPS and 5.1xFY14 EV/EBITDA. Maintain Buy with target price of INR277 (5x FY14E EV/EBITDA).Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QECement Sales (m ton) 1.52 1.41 1.39 1.63 1.63 1.45 1.47 1.71 5.96 6.26YoY Change (%) 2.0 2.0 -6.7 7.2 7.1 2.6 6.0 4.7 0.4 5.0Cement Realization 3,413 3,213 3,500 3,612 4,021 3,821 3,921 4,120 3,415 3,978YoY Change (%) -2.8 3.0 18.5 5.7 17.8 18.9 12.0 14.1 6.3 16.5QoQ Change (%) -0.1 -5.9 8.9 3.2 11.3 -5.0 2.6 5.1Net Sales 5,570 5,155 5,341 6,514 6,580 5,456 5,649 6,558 22,469 24,243YoY Change (%) -3.1 6.4 11.4 9.7 18.1 5.8 5.8 0.7 5.8 7.9Total Expenditure 4,082 4,840 4,678 5,731 5,322 4,690 4,865 5,340 19,345 20,217EBITDA 1,487 316 664 782 1,258 766 784 1,218 3,124 4,026Margins (%) 26.7 6.1 12.4 12.0 19.1 14.0 13.9 18.6 13.9 16.6Depreciation 175 178 188 259 235 280 300 300 800 1,115Interest 120 117 161 128 237 240 265 270 525 1,012Other Income 346 275 341 575 346 300 350 544 1,662 1,540Profit before Tax 1,538 295 656 970 1,132 546 569 1,192 3,461 3,439Tax 420 34 219 396 284 142 148 320 1,068 894Rate (%) 27.3 11.5 33.4 40.8 25.1 26.0 26.0 26.8 30.9 26.0PAT 1,119 261 437 575 847 404 421 872 2,392 2,545Margins (%) 20.1 5.1 8.2 8.8 12.9 7.4 7.5 13.3 10.6 10.5YoY Change (%) -5.4 -62.1 -37.2 -8.9 -24.3 54.5 -3.7 51.8 -25.2 6.4E: MOSL EstimatesOctober 2012C–28

BSE SensexS&P CNX18,763 5,703BloombergGRASIM INEquity Shares (m) 91.752 Wk Range (INR) 3,347/2,2081,6,12 Rel Perf (%) 4/19/32Mcap (INR b) 304.1Mcap (USD b) 5.8CMP: INR3,315September 2012 Results PreviewSector: CementGrasim IndustriesBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/TonEnd (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) EBITDA (USD)03/11A* 213,183 22,790 248.5 -16.7 - - 16.8 16.5 - 14303/12A* 249,878 26,475 288.6 16.2 11.5 1.8 16.7 17.7 7.4 14603/13E* 267,983 31,944 348.3 20.7 9.5 1.5 17.3 18.8 6.5 14703/14E* 306,836 34,468 375.8 7.9 8.8 1.3 16.0 18.5 5.3 109* Consolidated• Expect Grasim's 2QFY13 VSF volumes to be stable at 73,375 tons (+1.4% YoY, +1% QoQ) given steady demand andno production impact due to water shortage. VSF realization should also be stable at INR127/kg (+INR2.5/kg YoY,-INR1/kg QoQ) on back of bottomed-out utilization level. We assume FY13/14 realization of INR127/129 per kg.• Grasim's 2QFY13 standalone revenues are estimated to de-grow 2.5% YoY (-5% QoQ) to INR11.7b, impacted bylower volume. EBITDA margin is likely to remain stable YoY at 24.3% (up 50bp QoQ).• EBITDA is estimated to de-grow 2% YoY (-3% QoQ) to INR2.9b, translating into PAT of INR3.6b, up 4% YoY and 32%QoQ.• We are maintaining our consolidated EPS for FY13/14 at INR348.3/375.8. The stock trades at attractive valuationsof 8.8x FY14E consolidated EPS, 5.3x FY14E EV/EBITDA and 1.3x P/BV. Implied valuation of the cement businessis USD109/ton. Maintain Buy with target price of INR3,357 (SOTP based).Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEVSF Volume (ton) 54,839 78,959 78,215 94,904 77,013 77,838 82,915 100,662 306,917 338,428YoY Change (%) -18.5 17.0 -7.6 10.8 40.4 -1.4 6.0 6.1 0.6 10.3VSF Realization (INR/ton) 152,409 124,689 128,499 121,293 128,024 127,024 127,024 127,164 129,563 127,293YoY Change (%) 29.3 7.1 4.4 -16.3 -16.0 1.9 -1.1 4.8 2.3 -1.8QoQ Change (%) 5.1 -18.2 3.1 -5.6 5.5 -0.8 0.0 0.1Net Sales 10,237 12,035 12,429 13,885 12,390 11,736 12,557 14,384 48,724 51,067YoY Change (%) 8.3 29.0 2.4 -2.6 21.0 -2.5 1.0 3.6 7.3 4.8Total Expenditure 6,707 9,130 9,575 11,717 9,438 8,879 9,496 10,895 37,114 38,709EBITDA 3,529 2,905 2,854 2,168 2,953 2,856 3,061 3,488 11,611 12,358Margins (%) 34.5 24.1 23.0 15.6 23.8 24.3 24.4 24.3 23.8 24.2Depreciation 351 356 366 369 360 400 475 557 1,442 1,792Interest 106 107 72 74 61 60 80 83 358 284Other Income 1,010 2,157 1,093 1,503 844 2,100 1,000 1,556 5,607 5,500PBT after EO Items 4,082 4,599 3,509 3,228 3,376 4,496 3,506 4,404 15,418 15,782Tax 941 1,150 765 792 647 899 701 909 3,648 3,156Rate (%) 23.0 25.0 21.8 24.5 19.2 20.0 20.0 20.6 23.7 20.0Reported PAT 3,141 3,448 2,745 2,436 2,729 3,597 2,805 3,495 11,770 12,626Adj. PAT 3,141 3,448 2,745 2,436 2,729 3,597 2,805 3,495 11,770 12,626Margins (%) 30.7 28.7 22.1 17.5 22.0 30.7 22.3 24.3 24.2 24.7YoY Change (%) 40.3 23.3 -2.9 -38.4 -13.1 4.3 2.2 43.5 -0.4 7.3E: MOSL Estimates; '* Not comparable YoY due to demerger of cement businessOctober 2012C–29

BSE SensexS&P CNX18,763 5,703BloombergICEM INEquity Shares (m) 307.252 Week Range (INR) 119/651,6,12 Rel Perf (%) 5/-29/23Mcap (INR b) 29.2Mcap (USD b) 0.6CMP: INR95September 2012 Results PreviewSector: CementIndia CementsBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/TonEnd * (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) EBITDA (USD)03/11A 35,007 664 2.3 -79.6 - - 1.6 3.6 - -03/12A 42,034 2,958 9.6 314.9 9.9 0.7 7.3 10.3 5.8 6703/13E 46,069 3,035 11.1 16.2 8.5 0.6 7.3 11.2 4.8 6403/14E 52,563 3,918 14.8 32.6 6.4 0.6 8.9 12.5 3.9 58* Consolidated• Expect India Cement's 2QFY13 volumes to grow 3% YoY (+5% QoQ) to 2.5mt, and realization at INR4,374/ton (up3.6% YoY, down 2% QoQ) on stable pricing environment due to production discipline.• 2QFY13 revenues are estimated to grow 5.3% YoY (-5% QoQ) to INR11.5b, including INR400m revenues from IPL(v/s INR515m in 2QFY12).• Expect EBITDA of INR2.5b (-9% QoQ, flat YoY) with EBITDA margin down 1.1pp QoQ/YoY to 22%, translating intoPAT growth of 22.5% YoY (+14% QoQ) to INR854m. Our estimate does not factor in any MTM forex loss.• Pure Cement's EBITDA/ton is estimated to decline INR158/ton QoQ (-INR30/ton YoY) to INR1,008. Our estimatesfactor in EBITDA of INR100m from IPL in 2QFY13 and INR310m in FY13.• While our estimates do not yet factor in any benefit of softening in imported coal prices, India Cement wouldbe one of the biggest beneficiaries with ~15% higher EPS for 10% lower imported coal prices.• We are downgrading our EPS estimates for FY13/14 by 2%/4.5% to INR11.1/14.8, led by higher freight cost postincrease in diesel prices. Valuations at 6.4x FY14E EPS, 3.9x FY14E EBITDA and USD58/ton are attractive. MaintainBuy with target price of INR142 (5x FY14E EV/EBITDA).Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales Dispatches (m ton) 2.31 2.43 2.19 2.60 2.38 2.50 2.25 2.70 9.52 9.83YoY Change (%) -13.0 -10.6 7.1 2.0 2.9 3.0 3.0 3.9 -4.4 3.2Realization (INR/ton) 4,148 4,223 4,242 4,245 4,464 4,374 4,362 4,581 4,216 4,450YoY Change (%) 29.2 45.2 15.7 11.4 7.6 3.6 2.8 7.9 24.9 5.6QoQ Change (%) 8.8 1.8 0.5 0.1 5.1 -2.0 -0.3 5.0Net Sales 10,568 10,891 9,415 11,160 12,014 11,466 10,046 12,543 42,034 46,069YoY Change (%) 20.0 29.5 20.6 11.8 13.7 5.3 6.7 12.4 20.1 9.6Total Expenditure 8,151 8,371 7,470 9,008 9,237 8,947 8,194 9,698 33,001 36,075EBITDA 2,417 2,520 1,946 2,152 2,777 2,519 1,852 2,845 9,034 9,994Margins (%) 22.9 23.1 20.7 19.3 23.1 22.0 18.4 22.7 21.5 21.7Depreciation 619 626 622 646 692 700 725 753 2,513 2,870Interest 619 895 750 640 949 700 700 725 2,867 3,075Other Income 49 29 46 70 37 50 60 78 193 225PBT before EO expense 1,229 1,027 620 935 1,173 1,169 487 1,445 3,846 4,275Extra-Ord expense 0 0 0 0 200 0 0 0 0 200PBT 1,229 1,027 620 935 973 1,169 487 1,445 3,846 4,075Tax 208 330 57 286 353 316 131 382 880 1,182Rate (%) 16.9 32.1 9.2 30.6 36.2 27.0 27.0 26.4 22.9 29.0Reported PAT 1,021 697 563 649 621 854 356 1,063 2,966 2,893Adj PAT 1,021 697 563 649 748 854 356 1,063 2,966 3,035YoY Change (%) 749.5 -257.4 137.0 -9.5 -26.7 22.5 -36.9 63.8 347.1 2.3Margins (%) 9.7 6.4 6.0 5.8 6.2 7.4 3.5 8.5 7.1 6.6E: MOSL EstimatesOctober 2012C–30

BSE SensexS&P CNX18,763 5,703BloombergJPA INEquity Shares (m) 2,126.552 Week Range (INR) 89/501,6,12 Rel Perf (%) 10/-3/3Mcap (INR b) 174.8Mcap (USD b) 3.3CMP: INR82September 2012 Results PreviewSector: CementJaiprakash AssociatesBuyYear Net Sales PAT EPS* EPS* P/E* P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 129,665 7,421 3.5 -17.0 - - 8.3 10.6 - -3/12A 128,531 10,203 4.8 37.5 15.3 1.5 10.4 10.0 2.3 8.73/13E 142,843 8,997 4.2 -11.8 16.6 1.4 8.5 10.9 2.1 8.63/14E 160,665 11,577 5.4 28.7 12.9 1.3 10.4 12.5 1.8 7.6* Not Fully Diluted; FCCB O/S of INR14b at conversion price of INR166/sh (dilution of ~5%)• We expect Jaiprakash Associates (JPA) to post 2QFY13 revenue of INR32.2b, EBITDA of INR7.3b and PAt ofINR943m. The numbers are not comparable YoY due to de-merger of cement capacity.• Contribution from the EPC division is expected to be moderate with revenue down 12% YoY to INR12.5b. Weexpect EBIT of INR3b in 2QFY13 (v/s INR5.5b YoY) and EBIT margin of 21.5% v/s 35% YoY. 2QFY13 performancewould be healthy due to cement division where EBIT would be higher YoY, given the rise in cement capacity,coupled with improved realizations.• In FY12, cement capacity stood at 33m tons (up from 26m tons as at end-FY11). The management expectsinstalled capacity to reach 36m tons by March 2013, which would drive contribution from the division in FY13. Ofthis, Gujarat and AP capacity (~10m tons) has been hived off to wholly-owned subsidiary, Jaypee Cements Ltd.JPA is looking to divest stake in Jaypee Cement to raise funds for de-leveraging.• We expect JPA to post standalone PAT of INR7.6b in FY13E (down 26% YoY) and INR9.8b in FY14E (up 30% YoY).The stock trades at a reported P/E of 12.9x FY14E. Maintain Buy.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 31,833 31,324 33,054 40,621 29,636 32,233 37,860 41,871 128,531 141,997Change (%)* 0.3 4.6 14.2 4.0 -0.9EBITDA 7,728 7,482 8,160 10,194 7,713 7,266 8,992 10,423 34,397 34,505Change (%)* 20.4 9.9 3.1 31.7 19.1As of % Sales 24.3 23.9 24.7 25.1 26.0 22.5 23.8 24.9 26.8 24.3Depreciation 1,721 1,761 2,022 1,638 1,763 1,750 1,800 1,863 6,142 7,176Interest 4,284 4,049 4,485 5,800 4,653 4,700 4,750 4,771 17,817 18,874Other Income 74 560 1,205 317 731 550 600 618 2,645 2,499Extra-ordinary income -2 -3 16 49 9 0 0 0 61 0PBT 1,796 2,228 2,873 3,123 2,037 1,366 3,042 4,407 13,143 10,953Tax 726 942 824 285 649 424 943 1,380 2,880 3,395Effective Tax Rate (%) 40.4 42.3 28.7 9.1 31.8 31.0 31.0 31.3 21.9 31.0Reported PAT 1,070 1,287 2,050 2,838 1,388 943 2,099 3,027 10,264 7,558Adj PAT 1,072 1,287 2,034 2,789 1,379 943 2,099 3,027 10,203 7,558Change (%)* 1.3 11.4 -12.9 -3.3 37.8E: MOSL Estimates, *Change (% YoY) is not comparable due to Jaypee Cement de-mergerNalin Bhatt (NalinBhatt@MotilalOswal.com)/Satyam Agarwal (AgarwalS@MotilalOswal.com)October 2012C–31

BSE SensexS&P CNX18,763 5,703BloombergSRCM INEquity Shares (m) 34.852 Wk Range (INR) 3,989/1,7251,6,12 Rel Perf (%) 7/20/107Mcap (INR b) 137.7Mcap (USD b) 2.6CMP: INR3,954September 2012 Results PreviewSector: CementShree CementBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/TonEnd (INR m) (INR M) (INR) Gr. (%) (X) (X) (%) (%) EBITDA (USD)03/11A 34,535 6,972 200.1 -31.4 - - 36.5 8.4 - -06/12A 48,792 9,558 274.4 37.1 14.4 5.0 40.5 19.6 9.0 15706/13E 60,273 10,847 310.2 13.0 12.7 3.9 34.4 27.4 6.9 13106/14E 68,347 12,760 361.4 16.5 10.9 3.1 31.7 25.1 5.8 113• Expect Shree's 2QFY13 cement volumes to grow 14.7% YoY (-15% QoQ) to 2.85mt (including clinker) and realizationto improve 2.7% QoQ (flat YoY) to INR3,785/ton.• Merchant power sale is estimated at 100m units (v/s 14m units YoY and 390m QoQ) @ INR4.25/unit (v/s INR4.44in 5QFY12 and INR4.98 in 2QFY12).• Expect 2QFY13 sales to grow 47.4% YoY (down 25% QoQ) to INR10.9b, driven by strong recovery in both cementand merchant power business. Merchant power revenues are estimated at INR425m (v/s INR1.7b in 5QFY12 andINR69m in 2QFY12).• Cost push in form of fuel and freight will dilute benefit of better cement realizations and higher merchantpower volumes, resulting in EBITDA margin compression of 3.7pp QoQ (up 8.8pp YoY) to 29.4%. Cement EBITDA/ton is expected to decline by ~INR210/ton QoQ (up ~INR504/ton YoY) to INR1,114/ton. Expect lower depreciationto boost adjusted PAT to INR2.2b (v/s loss of INR1.3b in 2QFY12).• We are upgrading our adjusted EPS estimates for FY13/14 by 3%/5% to INR310/361.4 to account for (1) lower petcoke/imported coal prices, and (2) upgrade in volume on the back of new capacity.• The stock trades at 10.9x FY14E EPS, 5.8x FY14E EBITDA and USD113/ton. Maintain Buy with target price ofINR4,230 (SOTP based).Quarterly Performance(INR Million)Y/E June FY12 FY13E FY12 FY13E1Q 2Q 3Q 4Q 5Q * 1Q 2Q 3Q 4Q (15 Mon)Sales Dispat. (m ton) 2.69 2.49 2.85 3.47 3.37 2.85 3.09 3.76 3.67 14.87 13.37YoY Change (%) 8.3 9.0 8.8 20.6 25.1 14.7 8.6 8.1 8.8 15.9 -10.1Realization (INR/Ton) 3,405 2,955 3,798 3,560 3,805 3,685 3,785 3,985 3,988 3,576 3,876YoY Change (%) 4.0 -1.8 33.2 7.9 11.8 24.7 -0.3 11.9 4.8 14.8 8.4QoQ Change (%) 3.2 -13.2 28.5 -6.2 6.9 -3.2 2.7 5.3 0.1Net Sales 10,187 7,413 12,586 14,241 14,553 10,927 14,261 17,729 17,356 58,980 60,273YoY Change (%) 7.9 3.3 61.4 33.1 42.9 47.4 13.3 24.5 19.3 36.6 2.2EBITDA 2,591 1,524 3,320 4,210 4,812 3,216 3,829 5,328 4,981 16,456 17,353Margins (%) 25.4 20.6 26.4 29.6 33.1 29.4 26.9 30.1 28.7 27.9 28.8Depreciation 1,598 1,619 2,351 2,346 818 850 950 1,700 1,781 8,731 5,281Interest 476 468 519 411 480 450 455 470 476 2,354 1,851Other Income 158 204 172 774 322 250 175 700 325 1,630 1,450PBT before EO Exp 676 -360 622 2,227 3,836 2,166 2,599 3,858 3,048 7,001 11,671Extra-Ord Expense 83 -468 0 508 1 0 0 0 0 123 0PBT 593 108 622 1,719 3,835 2,166 2,599 3,858 3,048 6,878 11,671Tax 43 -277 30 576 320 0 552 820 1,079 693 2,451Rate (%) 7.3 -256.9 4.9 33.5 8.3 0.0 21.3 21.3 35.4 10.1 21.0Reported PAT 550 385 592 1,143 3,515 2,166 2,047 3,038 1,969 6,185 9,220Adj PAT 627 -1,286 592 1,481 3,516 2,166 2,047 3,038 1,969 6,296 9,220YoY Change (%) -73.7 -360.7 304.8 NA 460.9 -268.4 245.7 105.2 -44.0 66.9 46.4E:MOSL Estimates; ^ Y/E March for FY11; * volumes are estimatedOctober 2012C–32

BSE SensexS&P CNX18,763 5,703BloombergUTCEM INEquity Shares (m) 274.052 Wk Range (INR) 2,005/1,0571,6,12 Rel Perf (%) 7/23/57Mcap (INR b) 539.2Mcap (USD b) 10.2CMP: INR1,968September 2012 Results PreviewSector: CementUltraTech CementBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/TonEnd (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) EBITDA (USD)03/11A* 132,062 14,042 51.2 -41.7 - - 18.4 21.1 - -03/12A 181,664 23,982 87.5 70.8 22.5 4.2 20.4 23.7 13.4 20703/13E 210,570 30,013 109.5 25.2 18.0 3.5 21.2 24.7 11.3 20903/14E 244,669 33,594 122.6 11.9 16.1 2.9 19.9 24.2 9.7 172* Merger of Grasim's cement business assumed w.e.f. 1 July 2010• Expect UltraTech's 2QFY13 cement volumes to de-grow 1.3% YoY (down 12% QoQ) to 9.1mt, and realization toimprove 13.6% YoY (down 3.4% YoY) to INR3,984/ton. Consequently net revenue is expected to grow 12.8% YoY(down 13% QoQ) to INR44.1b.• White cement revenue should grow 5% YoY and RMC business volumes 9% YoY.• Despite cost push in energy and freight, higher realization should drive up EBITDA margin 6.3pp YoY at 21.2%(down 4.3pp QoQ). EBITDA/ton works out to INR1,051, up ~INR389 YoY (down +INR222 QoQ).• Expect EBITDA to grow 60% YoY (down ~28% QoQ) to INR9.4b, translating into PAT growth to ~94% YoY (-31%QoQ) to INR5.4b.• We maintaining our EPS estimate for FY13/14 at INR109.5/122.6. The UltraTech stock trades at 16.1x FY14E EPS,9.7x FY14E EBITDA and USD172/ton. Maintain Buy with target price of INR1,832 (9x FY14E EV/EBITDA).Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales (m ton) 9.86 9.22 10.11 11.54 10.33 9.10 10.80 12.49 40.7 42.7YoY Change (%) -3.9 0.3 3.2 6.9 4.8 -1.3 6.8 8.2 1.7 4.9Grey Cement Realn.(INR/ton) * 3,749 3,507 3,759 3,894 4,124 3,984 4,084 4,284 3,738 4,131YoY Change (%) 11.8 19.3 19.0 10.3 10.0 13.6 8.7 10.0 14.7 10.5QoQ Change (%) 6.2 -6.5 7.2 3.6 5.9 -3.4 2.5 4.9Net Sales 43,515 39,101 45,681 53,366 50,748 44,095 52,867 62,860 181,664 210,570YoY Change (%) 9.1 21.6 23.0 18.9 16.6 12.8 15.7 17.8 37.6 15.9EBITDA 11,882 5,837 9,647 12,641 12,918 9,358 11,513 15,467 40,007 49,256Margins (%) 27.3 14.9 21.1 23.7 25.5 21.2 21.8 24.6 22.0 23.4Depreciation 2,230 2,228 2,236 2,332 2,281 2,350 2,400 2,492 9,026 9,523Interest 712 660 281 586 498 500 565 571 2,239 2,135Other Income 641 1,002 876 2,000 849 1,100 900 2,051 4,520 4,900PBT before EO expense 9,583 3,952 8,005 11,723 10,987 7,608 9,448 14,455 33,262 42,498PBT after EO Expense 9,583 3,952 8,672 11,723 10,987 7,608 9,448 14,455 33,929 42,498Tax 2,752 1,162 2,503 3,050 3,203 2,206 2,740 4,175 9,467 12,324Rate (%) 28.7 29.4 28.9 26.0 29.2 29.0 29.0 28.9 27.9 29.0Reported PAT 6,831 2,790 6,169 8,673 7,784 5,402 6,708 10,280 24,462 30,174Adj PAT 6,831 2,790 5,695 8,673 7,784 5,402 6,708 10,280 23,982 30,174YoY Change (%) 22.5 141.0 78.5 19.3 14.0 93.6 17.8 18.5 70.8 25.8E: MOSL Estimates; * Grey cement realization is our estimateOctober 2012C–33

September 2012 Results PreviewSector: ConsumerConsumerCompany NameAsian PaintsBritannia IndustriesColgate PalmoliveDabur IndiaGSK ConsumerGodrej Consumer ProductsHindustan UnileverITCMaricoNestle IndiaPidilite IndustriesUnited SpiritsExpect another steady quarter - 16% sales growth, 18% PAT growth: For 2QFY13, weexpect our coverage universe to post ~16% revenue growth (16% in 1QFY13) and~18% PAT growth (~22% in 1QFY13). EBITDA is likely to grow 18.5% on sustainedrevenue growth and softening input costs. We expect ITC to post 16% sales growth(1% cigarette volume growth) and ~17% PAT growth; Hindustan Unilever's sales arelikely to grow 15% (volume growth of 8%) and PAT is likely to grow 19%, led byhealthy growth in Soaps & Detergents and Personal Care products.No concerns on broadbased demand outlook; no down-trading witnessed: Exceptfor a few discretionary categories, consumer demand in Processed Foods has beenhealthy. Late revival of the monsoon provides respite to future rural consumerdemand. Despite the past few quarters of price hikes, volume growth across productcategories is likely to remain healthy. We expect moderation in demand in fewdiscretionary categories. All companies under our universe, barring Nestle, are likelyto report healthy volume growth in HPC categories.Agri-based input costs and crude soften; INR depreciation negates impact: Prices ofedible oils like groundnut oil, safflower oil and sunflower oil, and other agricommodities like copra, wheat, barley, sugar and palm oil are down on a YoY basis.Prices of crude and crude-linked commodities are also on a downward trend.However, steep INR depreciation has negated the impact in many commodities,prices of which are linked globally. Britannia, GlaxoSmithKline, Hindustan Unilever,Nestle and Marico are likely to report EBITDA margin expansion while Asian Paintsand Colgate are likely to report flat margins.Expected quarterly performance summary(INR Million)CMP Rating Sales EBITDA Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQAsian Paints 3,937 Neutral 25,500 13.3 0.4 3,825 18.5 -12.6 2,428 16.3 -15.8Britannia 476 Sell 14,500 12.0 18.7 827 7.1 27.1 548 12.3 26.2Colgate 1,206 Sell 7,700 17.2 4.6 1,670 18.2 2.8 1,253 16.5 6.7Dabur 128 Neutral 14,700 16.5 0.5 2,852 20.5 38.4 2,122 22.1 37.5Godrej Consumer 668 Neutral 16,250 37.0 17.0 2,860 36.9 43.8 1,736 35.9 33.0GSK Consumer 2,994 Neutral 8,100 12.5 11.0 1,377 16.7 24.4 1,153 11.9 8.2Hind. Unilever 545 Neutral 64,500 15.0 1.1 9,869 19.4 2.1 7,784 19.3 -8.9ITC 272 Buy 69,700 14.5 3.8 25,650 15.6 8.3 17,680 16.8 10.4Marico 199 Buy 11,500 18.0 -9.2 1,564 34.1 -15.4 1,074 37.2 -13.3Nestle 4,374 Neutral 22,750 15.9 14.5 4,960 20.9 15.5 2,954 10.0 21.6Pidilite Inds. 206 Buy 8,450 19.0 -7.4 1,622 24.6 -14.9 1,108 28.2 -16.9United Spirits 1,218 Neutral 19,700 10.0 -4.2 2,916 13.9 -13.0 828 -2.3 -25.1Sector Aggregate 283,350 15.6 3.4 59,990 18.5 6.1 40,669 17.7 4.1October 2012New launches continue, albeit at a slower pace; we sense better pricingenvironment: Despite the relatively sober macroeconomic environment, new launchactivity remained healthy during the quarter. However, the pace of new launcheshas moderated. Our discussions with industry players as well as our channel checksdo not indicate any let down in competitive intensity. Consequently, sales promotionGautam Duggad (Gautam.Duggad@MotilalOswal.com) / Sreekanth P.V.S. (Sreekanth.P@MotilalOswal.com)C–34

September 2012 Results PreviewSector: ConsumerRelative Performance-3m (%)11210810410096Relative Performance-1Yr (%)145Jun-12October 2012Sensex IndexMOSL Consumer IndexJul-12Aug-12Sep-12schemes continue unabated, especially in modern trade outlets. Pricing environmentin the HPC bucket has improved, given P&G's focus on improving profitability. Pricebasedcompetition from P&G, especially in Hair Care, has softened.Peak sector valuations drive our preference for niche plays: Consumer demand in thestaples and HPC categories continues to be healthy, higher base and tough macroenvironment notwithstanding. Volume growth should remain healthy, barring fewexceptions. Given the absolute as well as relative peak sector valuations, we seelimited absolute upside in most of our coverage universe. We continue to preferniche plays with strong pricing power and greater visibility on volume growth andprofitability. ITC, Marico, GlaxoSmithKline Consumer and Pidilite are our top picks inthe sector.Slight moderation in volume growth visibleQuarter Ending Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12EAsian Paints 0.0 27.0 16.0 15.0 15.0 12.0 18.0 -2.0 5.0130Colgate (Toothpaste) 12.0 13.0 13.0 14.0 15.0 15.0 14.0 13.0 14.0115Dabur 13.5 10.0 9.3 8.6 10.0 10.8 12.4 12.0 9.0100Godrej Consumer85Soaps -10.0 3.0 9.0 9.0 19.0 19.0 17.0 22.0 12.0Hair Color 12.0 2.0 5.0 10.0 8.0 9.0 9.0 5.0 5.0GSK Consumer 18.0 13.0 5.5 14.0 8.0 12.0 7.0 7.4 7.0Hindustan Unilever 14.0 13.0 14.0 8.3 9.8 9.1 10.0 9.0 9.0ITC (cigarette) -0.5 2.0 -2.0 8.0 7.5 5.0 5.5 1.5 1.0MaricoParachute 10.0 5.0 5.0 10.0 10.0 13.0 11.1 18.0 9.0Hair Oil 18.0 31.0 21.0 32.0 26.0 20.0 17.5 12.0 14.0Saffola 14.0 13.0 14.0 15.0 11.0 15.0 3.3 25.0 15.0United Spirits 16.0 14.0 12.0 15.4 8.0 0.7 5.1 1.9 6.0New launches during 2QFY13Source: Company, MOSLCompany Brand CategoryBritannia Daily Fresh Flavoured yoghurt-mango, vanilla, strawberryParag Milk Foods Go Milk 100% natural & zero preservative UHT milkCavinKare Cavin's Pure+ Beverages (UHT treated milk)D S Group Yomil Milk-based powdered beveragePerfetti Van Melle Alpenliebe Juzt Jelly CandyHUL TRESemme/Comfort One Rinse Hair Care/Laundry CareMarico Saffola Muesli Breakfast cereal marketNestle India Munch Rollz, Kit Kat Chocolate/ChocolateSep-11Sensex IndexMOSL Consumer IndexDec-11Mar-12Jun-12Sep-12Softening in input costs augurs well for sector gross marginsInput Price Trend Unit Current 12m Change from Impact Companies(YoY) Price (INR) chg. % peak/bottomLAB Sideways INR/Kg 117 7 Peak Negative HULSoda Ash Up INR/50Kg 1,140 18 Peak Neutral HULPalm Fatty Acid Down US$/MT 670 -17 -62 Positive HUL, Godrej ConsumerPalm Oil Down MYR/MT 2,169 -26 -64 Positive Britannia, Nestle, HUL, ITCHDPE Sideways INR/Kg 93 19 Peak Negative All CompaniesSugar Sideways INR/Qtl 3,795 28 28 Positive Britannia, Nestle, GSK ConsumerWheat Up INR/Qtl 1,460 26 Peak Negative Nestle, ITC and BritanniaMilk Up Index 206 48 Peak Negative Nestle, GSK ConsumerTiO2 Sideways INR/Kg 250 0 -16 Positive Asian PaintsCopra Down INR/Qtl 4,025 -29 7 Positive MaricoSource:Companies, MOSLC–35

September 2012 Results PreviewSector: ConsumerInput costs: Mixed trendsPalm Fatty Acid: Range bound (INR/ton)LAB Prices: continue to stay firm (INR/kg)70,00055,00040,00025,00010,000PFAD pri ces (INR/ton)46,44630,21645,781INR/Kg14012511095806550116767190LAB Prices85898291112109114117Oct-09Dec-09Apr-10Jul-10Sep-10Dec-10Mar-11Jun-11Sep-11Dec-11Mar-12Jun-12Sep-12Sep-08Dec-08Mar-09Jun-09Sep-09Dec-09Mar-10Jun-10Sep-10Dec-10Mar-11Jun-11Sep-11Dec-11Mar-12Jun-12Sep-12Titanium Dioxide: at an all time highCopra prices; trending down after steep rise (INR/Qtl)300260220180TiO2 Dupont price Delhi220152278250INR/Qtl7,3006,1505,000Copra Pri ces6,7006,2505,5256,1255,4004,175140100Sep-09Dec-09Mar-10Jun-10Sep-10Dec-10Mar-11Jun-11Sep-11Dec-11Mar-12Jun-12Sep-123,8502,700Jan-10Apr-10Jul-10Oct-10Jan-11Apr-11Jul-11Oct-114,350Jan-12Apr-123,900Jul-12Source: Companies, MOSLComparative valuationCMP (INR) Rating EPS (INR) P/E (x) EV/EBITDA (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14EConsumerAsian Paints 3,937 Neutral 103.1 117.8 137.3 38.2 33.4 28.7 24.4 21.0 17.4 36.0 34.0 33.2Britannia 476 Sell 15.6 18.4 23.7 30.4 25.9 20.1 21.9 16.8 12.1 34.9 35.1 37.9Colgate 1,206 Sell 33.4 38.6 43.8 36.1 31.2 27.6 26.7 22.6 19.3 107.7 111.3 103.5Dabur 128 Neutral 3.7 4.4 5.4 34.6 29.0 23.6 26.4 21.4 17.5 37.1 36.0 36.2Godrej Consumer 668 Neutral 16.3 21.6 26.3 41.0 30.9 25.4 29.0 21.9 17.9 25.2 23.1 24.3GSK Consumer 2,994 Neutral 84.5 101.7 113.5 35.4 29.4 26.4 22.2 19.0 16.6 31.0 31.4 29.8Hind. Unilever 545 Neutral 11.9 15.5 18.0 45.7 35.1 30.2 34.6 27.2 23.3 74.6 72.1 63.4ITC 272 Buy 8.0 9.4 11.0 34.1 29.0 24.7 22.9 19.1 16.0 32.7 32.5 32.4Marico 199 Buy 5.2 6.8 8.5 38.4 29.4 23.6 27.7 20.5 16.3 28.0 21.6 21.8Nestle 4,374 Neutral 105.7 117.1 138.5 41.4 37.4 31.6 27.6 22.7 18.7 95.7 73.6 63.5Pidilite Inds. 206 Buy 7.0 8.4 10.1 29.5 24.5 20.4 20.4 15.4 12.5 26.3 24.6 24.8United Spirits 1,218 Neutral 19.5 19.3 35.1 62.4 63.2 34.7 18.6 16.5 14.8 4.9 4.7 7.9Sector Aggregate 38.1 31.6 26.6 25.5 21.0 17.6 34.9 34.2 34.0October 2012C–36

BSE SensexS&P CNX18,763 5,703BloombergAPNT INEquity Shares (m) 95.952-Week Range (INR) 4,170/2,5511,6,12 Rel. Perf. (%) -1/17/12M.Cap. (INR b) 377.6M.Cap. (USD b) 7.2CMP: INR3,937September 2012 Results PreviewSector: ConsumerAsian PaintsNeutralYear Net Sales Adj.PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 77,223 8,432 87.9 1.0 - - 38.5 50.7 - -3/12A 96,322 9,887 103.1 17.3 38.2 13.7 36.0 47.8 3.8 24.43/13E 110,400 11,637 121.3 17.7 32.4 11.2 34.7 46.6 3.4 20.43/14E 129,785 13,718 143.0 17.9 27.5 9.3 33.8 45.6 2.8 16.8• We expect Asian Paints (APNT) to report net sales of INR25.5b, a growth of 13.3%. Domestic decorative paintsdemand is likely to remain subdued but better than 1QFY13. We expect 4-5% volume growth.• In the international business, South Asia is likely to do well, but the Middle East business still remains underpressure.• We expect gross margin to expand 100bp to 41% on stable INR and lower titanium dioxide prices. We estimateEBITDA margin at 15% and adjusted PAT at INR2.4b, up 16.3%.• Average titanium dioxide (20% of RM) prices softened 3-4% in 2QFY13. APNT's RM index increased by 6% duringthe quarter.• APNT's current valuations adequately capture the positives, viz. strong long-term growth visibility, dominantmarket positioning, and thought leadership in the Paints industry. However, the current macroeconomicenvironment presents near-term challenges for decorative paints demand. The stock trades at 32.4x FY13E EPSand 27.5x FY14E EPS. Neutral.What to look for• Volume growth in domestic market and the trend in gross and EBITDA margins.Quarterly Performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEVolume Growth %* 15.0 15.0 12.0 18.0 -2.0 5.0 13.0 11.0 15.0 8.0Net Sales 22,571 22,508 25,605 25,387 25,393 25,500 30,100 29,407 96,322 110,400Change (%) 23.3 24.3 22.0 29.5 12.5 13.3 17.6 15.8 24.7 14.6Raw Material/PM 13,537 13,507 15,514 15,213 14,838 15,045 17,910 17,431 57,770 65,224Gross Profit 9,035 9,001 10,092 10,174 10,554 10,455 12,191 11,977 38,552 45,176Gross Margin (%) 40.0 40.0 39.4 40.1 41.6 41.0 40.5 40.7 40.0 40.9Operating Expenses 5,149 5,772 6,118 6,420 6,176 6,630 7,104 7,139 23,465 27,049% of Sales 22.8 25.6 23.9 25.3 24.3 26.0 23.6 24.3 24.4 24.5EBITDA 3,886 3,229 3,974 3,754 4,379 3,825 5,087 4,837 15,088 18,128Margin (%) 17.2 14.3 15.5 14.8 17.2 15.0 16.9 16.4 15.7 16.4Change (%) 11.9 -2.6 15.2 31.8 12.7 18.5 28.0 28.9 211.9 20.1Interest 65 88 90 166 109 130 130 135 410 504Depreciation 291 300 307 314 334 365 375 464 1,211 1,538Other Income 338 292 225 470 326 300 300 282 1,074 1,209PBT 3,868 3,133 3,802 3,744 4,262 3,630 4,882 4,521 14,541 17,295Tax 1,155 955 1,138 1,097 1,273 1,107 1,489 1,406 4,335 5,275Effective Tax Rate (%) 29.9 30.5 29.9 29.3 29.9 30.5 30.5 31.1 29.8 30.5PAT before Minority 2,713 2,179 2,664 2,647 2,989 2,523 3,393 3,115 10,206 12,020Minority Interest 79 91 96 52 106 95 95 87 319 382Adjusted PAT 2,634 2,087 2,569 2,595 2,884 2,428 3,298 3,028 9,887 11,637Change (%) 18.5 -2.8 16.6 39.5 9.5 16.3 28.4 16.7 17.3 17.7E: MOSL EstimatesOctober 2012C–37

BSE SensexS&P CNX18,763 5,703BloombergBRIT INEquity Shares (m) 119.552-Week Range (INR) 600/4341,6,12 Rel. Perf. (%) -9/-25/-9M.Cap. (INR b) 56.9M.Cap. (USD b) 1.1CMP: INR476September 2012 Results PreviewSector: ConsumerBritannia IndustriesSellYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (x) (%) (%) Sales EBITDA03/11A 41,983 1,453 12.2 -13.2 - - 32.2 31.2 - -03/12A 49,470 1,867 15.6 28.5 30.4 10.6 34.9 36.1 1.1 21.903/13E 56,500 2,198 18.4 17.7 25.9 9.1 35.1 59.3 1.0 16.803/14E 66,094 2,828 23.7 28.7 20.1 7.6 37.9 53.8 0.8 12.1• We expect Britannia Industries (BRIT) to report sales of INR14.5b, a growth of 12%. Volume growth is likely toremain in single digits, as the discretionary processed foods category is undergoing a slowdown.• We estimate 100bp expansion in gross margin to 35.2% and 30bp contraction in EBITDA margin due to firm inputcosts.• We estimate 12.3% PAT growth, with tax rate at ~28%, up 90bp.• Among input costs, wheat prices are up ~16%, sugar prices are 18% higher. INR depreciation has negated theeffect of declining palm oil prices to a large extent.• We expect competitive intensity to remain elevated, as players like Parle, ITC and Cadbury try to increase sharein the high margin premium creams and cookies segment. The increased competition will keep growth andmargin expansion under check.• Premiumization across product portfolios and launches in non Bakery segments (Milk, Snacks and BreakfastCereals) is likely to continue, as it offers attractive potential for growth.• The stock trades at 25.9x FY13E EPS and 20.1x FY14E EPS. Sell.What to look for• Gross and EBITDA margins, and new launches in premium categories.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 11,030 12,941 12,474 13,096 12,216 14,500 14,150 15,634 49,541 56,500YoY Change (%) 21.0 18.2 15.4 16.8 10.8 12.0 13.4 19.4 18.0 14.0COGS 7,257 8,408 7,910 8,223 7,575 9,396 8,971 10,144 31,798 36,085Gross Profit 3,773 4,533 4,565 4,873 4,642 5,104 5,179 5,491 17,743 20,415Margins (%) 34.2 35.0 36.6 37.2 38.0 35.2 36.6 35.1 35.8 36.1Other Exp 3,300 3,761 3,749 4,192 3,991 4,278 4,316 4,603 15,003 17,188% of Sales 29.9 29.1 30.1 32.0 32.7 29.5 30.5 29.4 30.3 30.4Total Exp 7,073 12,170 11,658 12,415 11,566 13,674 13,287 14,747 46,801 53,273EBITDA 473 772 816 680 651 827 863 887 2,740 3,227Margins (%) 4.3 6.0 6.5 5.2 5.3 5.7 6.1 5.7 5.5 5.7YoY Growth (%) 15.6 45.9 46.3 8.0 37.6 7.1 5.8 30.4 32.8 17.8Depreciation 111 116 122 125 130 135 140 142 473 547Interest 93 97 95 95 95 90 75 63 381 323Other Income 304 110 148 226 179 160 160 197 788 696PBT 573 670 747 685 605 762 808 879 2,675 3,053Tax 155 182 206 155 170 213 226 245 698 855Rate (%) 27.0 27.1 27.6 22.6 28.1 28.0 28.0 27.9 26.1 28.0Adjusted PAT 418 488 541 530 435 548 582 634 1,977 2,198YoY Change (%) 27.2 48.8 42.8 22.6 4.0 12.3 7.6 19.5 36.1 11.2E: MOSL EstimatesOctober 2012C–38

BSE SensexS&P CNX18,763 5,703BloombergCLGT INEquity Shares (m) 136.052-Week Range (INR) 1,264/9321,6,12 Rel. Perf. (%) -3/-2/11M.Cap. (INR b) 164.0M.Cap. (USD b) 3.1CMP: INR1,206September 2012 Results PreviewSector: ConsumerColgate PalmoliveSellYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 22,206 4,026 29.6 -0.3 - - 114.1 114.3 - -03/12A 26,239 4,544 33.4 12.9 36.1 38.7 107.7 108.4 6.1 26.703/13E 30,921 5,251 38.6 15.6 31.2 31.5 111.3 111.7 5.1 22.603/14E 35,798 5,950 43.8 13.3 27.6 26.1 103.5 103.9 4.4 19.3• We expect Colgate Palmolive (CLGT) to post sales growth of 17% to INR7.7b. Toothpaste volume growth is likelyto be 14% v/s ~13% in 1QFY13.• Gross margin would be flat at 60%. Price hikes and mix improvement would aid marginal gross margin expansionof 10bp.• We expect 20bp expansion in EBITDA margin to 21.1% due to continuous investments in ad spends and salespromotion on account of heightened competitive activity by HUL (has launched range of products under thePepsodent Expert Protection range).• PBT would grow 18%. Higher tax rate at 25.5% (up 260bp) would result in 16.3% increase in PAT to INR1.2b.• Though volume growth remains steady, input cost and increasing ad spends will keep earnings growth in check.• While we like CLGT's sustained double-digit volume growth in its core Toothpaste category, we believe currentvaluations leave little room for error, given the context of rising competitive intensity, especially in the highmargin Sensitive category.• We estimate PAT CAGR of 14.4% over FY12-14. The stock trades at 31.2x FY13E EPS and 27.6x FY14E EPS. Sell.What to look for• Ad spends and market share in both Toothpaste and Toothbrush categories.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEToothpaste Volume Gr % 14.0 15.0 15.0 14.0 13.0 14.0 14.0 13.0 14.0 13.0Net Sales 6,111 6,572 6,696 6,859 7,361 7,700 7,850 8,010 26,239 30,921YoY Change (%) 15.6 19.1 20.0 17.9 20.5 17.2 17.2 16.8 18.2 17.8COGS 2,467 2,637 2,651 2,748 2,997 3,080 3,062 2,968 10,502 12,107Gross Profit 3,644 3,936 4,045 4,112 4,364 4,620 4,789 5,042 15,736 18,814Gross Margin (%) 59.6 59.9 60.4 59.9 59.3 60.0 61.0 62.9 60.0 60.8Other operating Expenses 2,476 2,706 2,754 2,583 2,939 3,160 3,269 3,266 10,514 12,634% to sales 40.5 41.2 41.1 37.7 39.9 41.0 41.6 40.8 40.1 40.9Other operating Income 166 183 202 170 200 210 230 214 738 855EBITDA 1,335 1,413 1,493 1,699 1,625 1,670 1,750 1,990 5,960 7,035Margins (%) 21.3 20.9 21.6 24.2 21.5 21.1 21.7 24.2 22.1 22.1Depreciation 88 106 99 100 105 100 100 95 393 400Interest 4 8 6 2 0 8 7 5 21 20Financial other Income 138 95 97 131 112 120 100 102 443 434PBT 1,381 1,395 1,485 1,728 1,632 1,682 1,743 1,991 5,989 7,048Tax 377 319 330 420 457 429 436 475 1,446 1,797Rate (%) 27.3 22.9 22.2 24.3 28.0 25.5 25.0 23.9 24.1 25.5Adj PAT 1,004 1,076 1,156 1,308 1,174 1,253 1,307 1,516 4,544 5,251YoY Change (%) -17.6 7.2 74.3 14.6 16.9 16.5 13.1 15.9 12.9 15.6E: MOSL EstimatesOctober 2012C–39

BSE SensexS&P CNX18,763 5,703BloombergDABUR INEquity Shares (m) 1,740.752-Week Range (INR) 132/921,6,12 Rel. Perf. (%) -1/14/11M.Cap. (INR b) 223.0M.Cap. (USD b) 4.2CMP: INR128September 2012 Results PreviewSector: ConsumerDabur IndiaNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 40,774 5,686 3.3 13.2 - - 40.9 36.9 - -3/12A 52,832 6,449 3.7 13.4 34.6 12.9 37.1 37.3 4.3 26.43/13E 61,276 7,698 4.4 19.4 29.0 10.4 36.0 39.4 3.6 21.43/14E 70,614 9,463 5.4 22.9 23.6 8.5 36.2 41.2 3.1 17.5• We expect Dabur to report net sales of INR14.7b, up 16.5%, with 9% volume growth. We expect the stablegrowth trajectory to continue in 2QFY13. Growth would be led by a combination of volume growth (8-9%), miximprovement and modest price hikes.• Competitive intensity remains strong in Shampoos, with companies running various sales promotion schemesto gain market share. However, recent price hike by P&G in Pantene Bottles (up 5% w.e.f. October 2012) offerssome respite.• On the international business front, no positive surprises are expected and growth in the Middle East wouldremain muted.• We expect 70bp EBITDA margin expansion, driven by a favorable input cost environment and price hikes takenover the past 12 months. EBITDA is likely to grow 20.5% to INR2.8b.• PAT would grow 22% to INR2.1b.• The stock trades at 29x FY13E EPS and 23.6x FY14E EPS. Neutral.What to look for• Organic volume growth, ad spends and margins in the domestic business.Quarterly Performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEVolume Growth (%) 8.6 10.0 10.8 12.4 12.0 9.0 9.0 8.0 10.5 9.5Net Sales 12,046 12,623 14,527 13,636 14,620 14,700 16,500 15,457 52,832 61,276YoY Change (%) 31.4 29.8 34.5 23.0 21.4 16.5 13.6 13.4 29.6 16.0Total Exp 10,267 10,258 12,312 11,483 12,559 11,848 13,728 12,782 44,319 50,916EBITDA 1,779 2,366 2,215 2,153 2,061 2,852 2,772 2,675 8,513 10,360Margins (%) 14.8 18.7 15.2 15.8 14.1 19.4 16.8 17.3 16.1 16.9YoY Growth (%) 29.9 16.5 5.7 4.7 15.9 20.5 25.2 24.2 10.0 21.7Depreciation 248 217 208 293 267 280 300 300 967 1,147Interest 145 172 183 57 213 180 160 161 557 714Other Income 216 189 231 280 342 250 250 243 917 1,085PBT 1,602 2,166 2,055 2,083 1,923 2,642 2,562 2,457 7,905 9,584Tax 323 427 337 377 378 518 502 482 1,464 1,879Rate (%) 20.1 19.7 16.4 18.1 19.6 19.6 19.6 19.6 18.5 19.6Minority Interest 2 0 -10 0 2 2 2 2 -8 8Adjusted PAT 1,277 1,739 1,728 1,705 1,543 2,122 2,058 1,974 6,449 7,698YoY Change (%) 19.6 8.4 11.9 16.0 20.8 22.1 19.1 15.7 13.4 19.4E: MOSL EstimatesOctober 2012C–40

BSE SensexS&P CNX18,763 5,703BloombergSKB INEquity Shares (m) 42.152-Week Range (INR)3,111/2,1791,6,12 Rel. Perf. (%) -3/2/18M.Cap. (INR b) 125.9M.Cap. (USD b) 2.4CMP: INR2,994September 2012 Results PreviewSector: ConsumerGlaxoSmithKline ConsumerNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA12/10A 23,800 2,998 71.3 28.8 - - 31.2 47.3 - -12/11A 27,759 3,552 84.5 18.5 35.4 11.0 31.0 47.5 4.1 22.212/12E 30,253 4,278 101.7 20.4 29.4 9.2 31.4 47.2 3.6 19.013/13E 36,701 4,775 113.5 11.6 26.4 7.8 29.8 44.7 3.1 16.6• In 3QCY12, we expect GlaxoSmithKline Consumer (SKB) to report net sales of INR8.1b, up 12.5%. MFD volumewould grow ~7%, in line with 2QCY12 performance. We do not see any pick-up in CSD offtake in the remainingquarters of CY12.• We estimate 60bp increase in EBITDA margin despite high wheat prices on account of price hikes, miximprovement due to underperformance of the CSD segment and lower ad spends in non-MFD categories.• EBITDA is likely to grow 16.7%; we expect ~13% growth in PBT due to lower other income.• We estimate ~12% increase in PAT, impacted by higher tax rate at 33.3%.• We are positive on SKB's strong leadership position in the MFD space. However, we believe that the stock priceand current valuations factor in the positives. We maintain Neutral at 29.4x CY12E and 26.4x CY13E EPS.What to look for• MFD volume growth, performance of Horlicks Oats, update on CSD situation, and Foodles' current marketstatus.Quarterly Performance(INR Million)Y/E December CY11 CY12 CY11 CY12E1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QEMFD Volume Growth (%) 5.5 14.0 8.0 12.0 7.0 7.4 10.0 10.0 10.0 9.0Net Sales 7,100 6,534 7,201 6,021 8,130 7,297 8,100 6,725 26,855 30,253YoY Change (%) 9.5 21.6 17.5 18.6 14.5 11.7 12.5 11.7 16.5 12.7Total Exp 5,647 5,548 6,021 5,404 6,514 6,191 6,723 5,943 22,566 25,370EBITDA 1,453 985 1,180 616 1,617 1,107 1,377 782 4,289 4,883Margins (%) 20.5 15.1 16.4 10.2 20.3 15.2 17.0 11.6 16.0 16.1YoY Change (%) 9.2 10.2 24.1 5.5 11.3 12.3 16.7 26.9 13.8 13.8Depreciation 109 113 117 121 119 86 137 228 460 570Interest 7 9 10 9 12 8 11 9 35 40Other Income 340 360 476 487 479 572 500 560 1,608 2,114PBT 1,677 1,223 1,530 973 1,964 1,585 1,729 1,108 5,403 6,387Tax 571 398 499 327 645 519 576 369 1,851 2,109Rate (%) 34.0 32.6 32.6 33.6 33.0 32.8 33.3 33.3 34.3 33.0Adj PAT 1,106 825 1,030 646 1,320 1,066 1,153 739 3,552 4,278YoY Change (%) 15.0 14.9 31.1 21.0 19.3 29.3 11.9 14.5 18.5 20.4E: MOSL EstimatesOctober 2012C–41

BSE SensexS&P CNX18,763 5,703BloombergGCPL INEquity Shares (m) 340.352-Week Range (INR) 702/3701,6,12 Rel. Perf. (%) -6/30/52M.Cap. (INR b) 227.2M.Cap. (USD b) 4.3CMP: INR668September 2012 Results PreviewSector: ConsumerGodrej Consumer ProductsNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 36,763 4,736 14.6 32.8 - - 27.5 18.4 - -3/12A 48,509 5,266 16.3 11.2 41.0 10.3 25.2 20.4 4.9 27.73/13E 63,147 7,363 21.6 33.0 30.9 7.1 23.1 22.7 3.9 21.93/14E 78,327 8,962 26.3 21.7 25.4 6.2 24.3 24.6 3.2 17.9• We expect Godrej Consumer Products (GCPL) to post 37% increase in net sales to INR16.2b, driven by continuedmomentum in domestic business (both toilet soaps and household insecticides) and beneficial impact ofinorganic growth (Darling and Chile acquisition). We expect ~20% organic sales growth for the quarter.• Gross margin would expand in domestic business; we estimate EBITDA margin at 17.6% for 2QFY13.• Despite higher depreciation and interest costs, other income would lead PAT growth, which is likely to grow36% YoY to INR1.7b.• The volume growth momentum achieved in Soaps in the last few quarters is likely to continue in 2QFY13.However, margins in the category would be under pressure due to high competitive intensity anddisproportionate ad spends behind Cinthol re-launch.• GCPL has USD305m of unhedged forex loans; it plans to repay loans of USD60m in FY13 and retire its debt byFY18.• We expect GCPL's domestic business growth to remain healthy, driven by continued synergistic benefits fromGHPL and GCPL trade integration. However, recent outperformance leaves limited upside potential in the nearterm.• The stock trades at 30.9x FY13E EPS and 25.4x FY14E EPS. Neutral.What to look for• Soaps volume growth, revenue growth in Home Insecticides and performance of Megasari.Quarterly Performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 9,978 11,860 13,441 13,230 13,886 16,250 17,000 16,010 48,509 63,147YoY Change (%) 39.6 23.3 35.9 32.4 39.2 37.0 26.5 21.0 32.0 30.2EBITDA 1,427 2,088 2,653 2,481 1,988 2,860 3,366 3,083 8,607 11,298Margins (%) 14.3 17.6 19.7 18.8 14.3 17.6 19.8 19.3 17.7 17.9YoY Growth (%) 11.5 25.1 60.1 39.6 39.3 36.9 26.9 24.3 35.4 31.3Depreciation 159 159 171 155 199 220 230 238 644 887Interest 111 241 287 194 164 300 300 282 658 1,046Other Income 132 220 248 203 181 200 250 351 672 982Forex gain / (loss) 24 -166 -55 -8 -176 0 0 176 -205 0PBT 1,314 1,742 2,388 2,327 1,630 2,540 3,086 3,090 7,771 10,346Tax 312 432 555 547 112 660 802 829 2,261 2,404Rate (%) 23.8 24.8 23.2 23.5 6.9 26.0 26.0 26.8 29.1 23.2Minority Int 0 33 162 50 213 144 144 78 245 579Adj PAT 1,002 1,277 1,671 1,730 1,305 1,736 2,140 2,183 5,266 7,363YoY Change (%) 10.3 -2.0 40.7 22.1 30.2 35.9 28.0 26.2 11.2 39.8E: MOSL EstimatesOctober 2012C–42

BSE SensexS&P CNX18,763 5,703BloombergHUVR INEquity Shares (m) 2,159.552-Week Range (INR) 554/3191,6,12 Rel. Perf. (%) -2/22/49M.Cap. (INR b) 1176.0M.Cap. (USD b) 22.3CMP: INR545September 2012 Results PreviewSector: ConsumerHindustan UnileverNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 197,352 21,533 10.0 3.5 - - 81.8 103.7 - -3/12A 229,214 26,567 12.3 23.4 44.3 34.1 74.6 97.2 5.2 34.63/13E 262,323 33,530 15.5 26.2 35.1 25.3 72.1 94.3 4.4 27.23/14E 293,494 38,973 18.0 16.2 30.2 19.1 63.4 83.4 3.8 23.3• We expect Hindustan Unilever (HUVR) to report 15% increase in sales to INR64.5b and estimate volume growthof ~8%. Demand momentum in core categories remains healthy, barring some moderation in the discretionarypart of the Foods portfolio.• Gross margin would expand 240bp to 48%, led by change in product mix, better pricing environment for Soaps& Detergents and softening in palm oil and PFAD prices.• We believe that HUVR's limited pricing actions and comparatively higher base should restrict operating marginexpansion during the quarter to 60bp. Other income should revert to the normative trend in the absence ofone-offs. We expect PAT growth of 19% YoY to INR7.8b. In 2QFY13, the company launched Tresseme Shampoo.• The stock trades at 35.1x FY13E and 30.2x FY14E earnings. We like the sustained volume momentum in HUVR'scategories as also the increased aggression in trade coupled with strong innovation pipeline. However, richvaluations and tough comparables in 2HFY13 underscore our Neutral rating.What to look for• Volume growth: sustenance of volume growth in mid to high single digits.• 2Q margins for Soaps & Detergents and Personal Products.• Commentary around Foods business.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEVolume Growth (%) 8.3 9.8 9.1 10.0 9.0 9.0 9.0 9.0 9.3 9.0S&D EBIT Margin (%) 9.2 12.4 10.8 11.3 12.2 12.6 11.3 11.7 11.6 12.5PP EBIT Margin (%) 25.3 24.4 25.9 26.3 25.8 25.0 26.4 26.5 25.5 25.3Net Sales (incl service inc) 55,889 56,105 59,561 57,659 63,788 64,500 67,000 67,035 229,214 262,323YoY Change (%) 14.6 17.8 16.2 16.1 14.1 15.0 12.5 16.3 16.1 14.4COGS 30,798 30,010 30,751 31,223 33,677 33,540 34,237 34,808 122,781 136,262Gross Profit 25,091 26,095 28,810 26,437 30,110 30,960 32,763 32,227 106,432 126,061Margin % 44.9 46.5 48.4 45.8 47.2 48.0 48.9 48.1 46.4 48.1Operating Exp 17,548 17,828 18,921 18,103 20,446 21,092 21,239 21,921 72,399 84,697% to sales 31.4 31.8 31.8 31.4 32.1 32.7 31.7 32.7 31.6 32.3EBITDA 7,543 8,267 9,890 8,334 9,665 9,869 11,524 10,306 34,033 41,363YoY Change (%) 10.8 27.8 36.4 29.8 28.1 19.4 16.5 23.7 27.1 21.5Margins (%) 13.5 14.7 16.6 14.5 15.2 15.3 17.2 15.4 14.8 15.8Depreciation 562 571 568 571 576 590 595 596 2,272 2,357Interest 0 5 5 2 53 3 2 2 12 70Other Income 506 777 801 700 2,186 900 910 898 2,783 4,894PBT 7,487 8,467 10,118 8,461 11,222 10,176 11,837 10,606 34,532 43,830Tax 1,702 1,942 2,496 1,825 2,676 2,391 2,782 2,492 7,966 10,300Rate (%) 22.7 22.9 24.7 21.6 23.8 23.5 23.5 23.5 23.1 23.5Adjusted PAT 5,784 6,525 7,622 6,636 8,546 7,784 9,055 8,114 26,567 33,530YoY Change (%) 11.0 22.3 29.9 29.0 47.7 19.3 18.8 22.3 26.6 26.2E: MOSL EstimatesOctober 2012C–43

BSE SensexS&P CNX18,763 5,703BloombergITC INEquity Shares (m) 7,738.152-Week Range (INR) 273/1891,6,12 Rel. Perf. (%) -5/10/24M.Cap. (INR b) 2,104.0M.Cap. (USD b) 39.9CMP: INR272September 2012 Results PreviewSector: ConsumerITCBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 214,590 49,867 6.5 28.9 - - 31.3 43.5 - -3/12A 251,738 61,624 8.0 23.6 34.1 11.2 32.7 45.7 8.2 22.93/13E 291,436 72,431 9.4 17.5 29.0 9.5 32.5 45.8 6.9 19.13/14E 334,890 85,198 11.0 17.6 24.7 8.0 32.4 46.0 5.9 16.0• We expect ITC to post 14.5% revenue growth to INR69.7b. Margin expansion of 30bp would drive (a) ~15.6%growth in EBITDA to INR25.6b, and (b) 16.8% YoY growth in PAT to INR17.6b.• Cigarette volumes would grow ~1%, impacted by price hikes post the changes in duty structure and increase inVAT rates in many states. We expect flattish EBIT margin for the Cigarettes business.• Sustained momentum in Staples and Personal Care should drive non-Cigarette FMCG sales. We expectsequential improvement in profitability and estimate INR300m loss at EBIT level.• Paper margins are likely to remain flat; revenue growth would be moderate at ~11% owing to capacity constraints.• The Hotels business is likely to remain under pressure, owing to continued weak macroeconomic environmentand higher supply. ITC commissioned its Chennai property during the quarter.• The company is test marketing cigarettes in the 64mm category and has launched 5-6 brands at the INR2 andINR2.5 price points (Gold flake).• The stock trades at 29x FY13E EPS of INR9.4 and 24.7x FY14E EPS of INR11. Buy.What to look for• Cigarette volume growth and margins, reduction in losses in FMCG business.Quarterly PerformanceINR MillionY/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QECigarette Vol Gr (%) 8.0 7.5 5.0 5.0 1.5 1.0 2.2 2.5 6.4 2.0Cigarette-net EBIT Margin (%) 54.9 58.2 57.0 54.1 57.5 58.2 57.8 55.0 56.1 57.1Non Cigarette FMCG Loss (763) (559) (468) (167) (388) (297) (250) (50) (1,957) (985)Net Sales 58,524 60,852 62,478 69,545 67,131 69,700 73,500 81,105 251,738 291,436YoY Change (%) 20.4 17.6 14.2 16.9 14.7 14.5 17.6 16.6 17.3 15.8Total Exp 38,945 38,662 38,667 46,913 43,447 44,050 45,350 53,939 163,252 186,786EBITDA 19,579 22,190 23,811 22,633 23,683 25,650 28,151 27,166 88,486 104,650Growth (%) 19.1 18.0 18.0 18.8 21.0 15.6 18.2 20.0 19.4 18.3Margins (%) 33.5 36.5 38.1 32.5 35.3 36.8 38.3 33.5 35.2 35.9Depreciation 1,665 1,701 1,739 1,880 1,948 1,800 2,030 2,263 6,985 8,041Interest 200 142 157 148 138 200 200 212 779 750Other Income 1,656 1,808 2,851 2,079 1,768 1,900 2,950 2,117 8,253 8,734PBT 19,370 22,155 24,767 22,683 23,366 25,550 28,871 26,808 88,975 104,594Tax 6,043 7,012 7,757 6,540 7,344 7,869 8,892 8,057 27,352 32,163Rate (%) 31.2 31.6 31.3 28.8 31.4 30.8 30.8 30.1 30.7 30.8Adj PAT 13,327 15,143 17,010 16,143 16,021 17,680 19,978 18,751 61,624 72,431YoY Change (%) 24.5 21.5 22.5 26.0 20.2 16.8 17.5 16.2 23.6 17.5E: MOSL EstimatesOctober 2012C–44

BSE SensexS&P CNX18,763 5,703BloombergMRCO INEquity Shares (m) 643.852-Week Range (INR) 209/1341,6,12 Rel. Perf. (%) -3/9/24M.Cap. (INR b) 128.4M.Cap. (USD b) 2.4CMP: INR199September 2012 Results PreviewSector: ConsumerMaricoBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 31,283 2,375 3.9 1.4 - - 25.9 29.7 - -3/12A 39,968 3,189 5.2 34.2 38.4 10.7 28.0 30.5 3.1 26.53/13E 47,179 4,361 6.8 30.5 29.4 6.4 21.6 30.5 2.8 20.53/14E 54,963 5,442 8.5 24.8 23.6 5.1 21.8 30.6 2.3 16.3• Marico (MRCO) is likely to report net sales of INR11.5b, up 18%, with domestic volume growth at 13%.• We expect double-digit volume growth in value-added hair oil and Saffola. Parachute should report 8-10%volume growth.• Copra prices witnessed a sharp fall, with the 2QFY13 average 33% lower than in 2QFY12. Rice bran and kardi oilprices continue to be firm.• Gross margin should expand 300bp to 48.5% due to benefits of sharp fall in copra prices and lack of any meaningfulprice cuts.• We expect 160bp expansion in EBITDA margin to 13.6%. PAT would grow 37% YoY to INR1.07b.• The stock trades at 29.4x FY13E EPS and 23.6x FY14E EPS. Buy.What to look for• Volume growth in Parachute and Saffola, performance / gross margin of international business.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEVolume Growth (%) 14.0 14.0 13.0 17.0 14.0 13.0 14.0 14.0 14.0 13.5Net Sales 10,414 9,745 10,578 9,177 12,672 11,500 12,250 10,757 39,968 47,179YoY Change (%) 31.8 25.6 29.4 22.9 21.7 18.0 15.8 17.2 27.9 18.0COGS 5,952 5,329 5,451 4,264 6,411 5,923 6,125 6,012 20,987 24,470Gross Profit 4,462 4,415 5,127 4,913 6,261 5,578 6,125 4,745 18,981 22,709Gross margin (%) 42.8 45.3 48.5 53.5 49.4 48.5 50.0 44.1 47.5 48.1Other Expenditure 3,211 3,249 3,909 3,814 4,414 4,014 4,557 3,339 14,240 16,323% to Sales 30.8 33.3 37.0 41.6 34.8 34.9 37.2 31.0 35.6 34.6EBITDA 1,251 1,167 1,217 1,100 1,848 1,564 1,568 1,407 4,741 6,386Margins (%) 12.0 12.0 11.5 12.0 14.6 13.6 12.8 13.1 11.9 13.5YoY Change (%) 18.6 17.7 22.1 38.8 47.7 34.1 28.8 27.9 15.9 34.7Depreciation 169 177 188 191 193 205 220 240 725 858Interest 98 91 82 113 170 180 160 155 424 665Other Income 92 106 92 105 176 180 180 205 429 741PBT 1,075 1,005 1,039 901 1,660 1,359 1,368 1,216 4,021 5,604Tax 210 205 178 189 403 272 274 229 782 1,177Rate (%) 19.6 20.4 17.1 20.9 24.2 20.0 20.0 18.8 19.5 21.0Minority Interest 15 17 20 -2 19 13 13 21 50 66Adjusted PAT 850 783 841 714 1,238 1,074 1,081 967 3,189 4,361YoY Change (%) 15.3 9.4 21.0 -0.6 45.7 37.2 28.6 35.3 34.2 36.8E: MOSL EstimatesOctober 2012C–45

BSE SensexS&P CNX18,763 5,703BloombergNEST INEquity Shares (m) 96.452-Wk. Range (INR) 5,024/3,9301,6,12 Rel. Perf. (%) -13/-12/-11M.Cap. (INR b) 421.8M.Cap. (USD b) 8.0CMP: INR4,374September 2012 Results PreviewSector: ConsumerNestle IndiaNeutralYear Net Sales Adj. PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) YoY (%) (X) (X) (%) (%) Sales EBITDA12/10A 62,547 8,370 86.8 20.0 50.4 33.1 116.5 151.8 6.7 33.412/11A 74,908 10,188 105.7 21.7 41.4 33.1 95.7 89.6 5.7 27.612/12E 85,777 11,287 117.1 10.8 37.4 23.5 73.6 61.7 5.0 22.712/13E 101,953 13,349 138.5 18.3 31.6 17.5 63.5 59.6 4.2 18.7• We expect Nestle India (NEST) to report net sales of INR22.7b, up 16%. Growth would be price-led; volumerecovery would be gradual, in our view.• Gross margin is likely to expand 110bp YoY to 53% due to the benefit of price increases in the last few quarters.• We expect EBITDA margin to expand 90bp to 21.8% on account of mix improvement and savings in overheads.• EBITDA is likely to increase 21% to INR4.9b. We estimate higher interest at INR230m and depreciation at INR680mdue to capacity expansion.• We expect 10% growth in PBT and 10% growth in PAT, as tax rates remain flat at ~30%.• We remain positive on NEST's long-term prospects on healthy demand and growth potential of its portfolio.However, at current valuations, the stock appears expensive, given the context of sub-par volume growth. Thestock trades at 37.4x CY12E and 31.6x CY13E EPS. Neutral.Quarterly Performance(INR Million)Y/E December CY11 CY12 CY11 CY12E1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QENet Sales 18,100 17,631 19,631 19,547 20,475 19,866 22,750 22,686 74,908 85,777YoY Change (%) 22.3 20.2 19.9 17.0 13.1 12.7 15.9 16.1 19.8 14.5COGS 8,841 8,718 9,454 8,880 9,384 9,024 10,693 10,007 35,894 39,107Gross Profit 9,259 8,912 10,177 10,667 11,091 10,842 12,058 12,680 39,015 46,670Margin (%) 51.2 50.5 51.8 54.6 54.2 54.6 53.0 55.9 52.1 54.4Operating Exp 5,406 5,467 6,074 6,540 6,519 6,547 7,098 7,682 23,487 27,846EBITDA 3,853 3,445 4,103 4,127 4,572 4,295 4,960 4,997 15,528 18,824Margins (%) 21.3 19.5 20.9 21.1 22.3 21.6 21.8 22.0 20.7 21.9YoY Growth (%) 26.7 17.2 27.2 25.1 18.7 24.7 20.9 21.1 24.3 21.2Depreciation 327 367 394 446 528 673 680 683 1,533 2,564Interest 1 6 12 33 23 220 230 178 51 651Other income 128 80 121 181 136 113 165 172 509 586PBT 3,653 3,152 3,819 3,828 4,158 3,514 4,215 4,307 14,452 16,194Tax 1,027 956 1,134 1,148 1,272 1,085 1,260 1,290 4,264 4,907Rate (%) 28.1 30.3 29.7 30.0 30.6 30.9 29.9 29.9 29.5 30.3Adjusted PAT 2,626 2,196 2,685 2,681 2,886 2,429 2,954 3,018 10,188 11,287YoY Change (%) 33.3 9.0 23.5 20.9 9.9 10.6 10.0 12.6 21.7 10.8E: MOSL EstimatesOctober 2012C–46

BSE SensexS&P CNX18,763 5,703BloombergPIDI INEquity Shares (m) 506.152-Week Range (INR) 212/1341,6,12 Rel. Perf. (%) 5/16/11M.Cap. (INR b) 104.5M.Cap. (USD b) 2.0CMP: INR206September 2012 Results PreviewSector: ConsumerPidilite IndustriesBuyYear Net Sales Adj.PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 23,806 3,330 6.6 13.4 - - 29.2 30.9 - -3/12A 28,164 3,557 7.0 6.5 29.5 7.8 26.3 29.1 3.6 20.53/13E 33,820 4,415 8.4 20.2 24.5 6.0 24.6 31.4 3.0 16.03/14E 40,398 5,305 10.1 20.2 20.4 5.1 24.8 32.5 2.5 13.0• We expect Pidilite Industries (PIDI) to post 19% revenue growth, led by double-digit volume growth in theConsumer and Bazaar segments, though Industrial Chemicals would remain under pressure. We expect marginpressure to sustain in Industrial Chemicals but margins would expand in the Consumer and Bazaar segments.• Gross margin would expand 100bp on account of decline in VAM prices. EBITDA margin is also likely to increase90bp to 19.2%, driven by higher gross margin and operating leverage.• We expect tax rate to increase by 200bp to 27%. However, healthy revenue growth would ensure PAT growth of~28% to INR1.1b.• Uncertainty regarding the synthetic elastomer project continues and the company is yet to take a call on theproject implementation.• The stock trades at 24.5x FY13E EPS of INR8.4 and 20.4x FY14E EPS of INR10.1. Maintain Buy.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 7,680 7,103 6,918 6,519 9,125 8,450 8,300 7,946 28,164 33,820Change (%) 21.5 20.5 16.5 15.6 18.8 19.0 20.0 21.9 18.3 20.1Gross Profit 3,439 3,093 2,989 3,045 4,087 3,769 3,735 3,773 12,490 15,363Gross Margin % 44.8 43.5 43.2 46.7 44.8 44.6 45.0 47.5 44.3 45.4Operating Expenses 1,918 1,791 1,782 2,087 2,180 2,146 2,175 2,510 7,540 9,011% of sales 25.0 25.2 25.8 32.0 23.9 25.4 26.2 31.6 26.8 26.6EBITDA 1,521 1,302 1,207 958 1,907 1,622 1,560 1,263 4,950 6,353EBITDA Margin % 19.8 18.3 17.4 14.7 20.9 19.2 18.8 15.9 17.6 18.8Change (%) -2.2 4.8 1.9 17.8 25.4 24.6 29.3 31.8 2.5 28.3Depreciation 116 118 121 124 124 135 140 150 479 548Interest 48 59 73 47 91 40 35 39 245 205Other Income 70 29 45 152 139 70 50 148 428 407PBT 1,428 1,153 1,058 939 1,831 1,517 1,435 1,222 4,653 6,007Tax 350 289 268 190 498 410 388 296 1,096 1,592Effective Tax Rate (%) 24.5 25.1 24.8 20.2 27.2 27.0 27.0 24.2 23.6 26.5Adj PAT 1,078 864 790 749 1,333 1,108 1,048 926 3,557 4,415Change (%) 0.1 2.2 -6.5 41.6 23.6 28.2 32.7 23.7 6.8 24.1E: MOSL EstimatesOctober 2012C–47

September 2012 Results PreviewSector: ConsumerBSE SensexS&P CNX18,763 5,703BloombergUNSP INEquity Shares (m) 130.852-Week Range (INR) 1,295/4501,6,12 Rel. Perf. (%) 25/98/37M.Cap. (INR b) 159.3M.Cap. (USD b) 3.0CMP: INR1,218United SpiritsNeutralYear Net Sales Adj.PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 73,762 3,458 28.2 9.4 43.1 3.6 8.2 9.7 3.0 20.73/12A 87,794 2,390 19.5 -30.9 62.4 3.1 4.9 8.3 2.7 20.33/13E 101,377 2,359 19.3 -1.3 63.2 3.0 4.7 8.8 2.4 18.13/14E 116,676 4,299 35.1 82.2 34.7 2.8 7.9 10.4 2.1 14.8• We expect United Spirits (UNSP) to post 10% revenue growth to INR19.7b in 2QFY13, led by 6% volume growth.• The premium segment would grow at a faster pace, aided by up-trading and increased investments in thissegment by the company.• Modest ~3% QoQ growth in ENA prices would aid 50bp expansion in margins to 14.8%.• PAT would decline 2% to INR828m, impacted by 37% increase in interest cost and higher tax rate.• We note that Kerala has announced a price increase, which will provide support to margins. The industryexpects price increase in Andhra Pradesh in October, which could boost 3Q margins.• The stock trades at 63.2x FY13E EPS of INR19.3 and 34.7x FY14E EPS of INR35.1. Neutral. Positive news flowaround Diageo deal will favorably impact stock price.What to look for• Volume growth recovery, given the slower volume growth in 1QFY13 (1.9%).• ENA price trend and outlook; increase in ENA prices post 2Q can limit expected margin recovery in FY13.• Interest cost trends.Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEVolume Growth % 15.4 8.0 0.7 5.1 1.9 6.0 10.0 10.0 10.0 7.0ENA Price/Case 147 153 164 162 151 153 154 154 154 154Net Sales 19,354 17,906 19,539 18,627 20,573 19,700 24,500 22,414 75,427 87,186YoY Change (%) 32.3 32.2 -0.3 17.0 6.3 10.0 25.4 20.3 18.4 15.6Total Exp 16,051 15,346 17,671 16,867 17,223 16,784 21,193 20,299 65,934 75,499EBITDA 3,303 2,560 1,869 1,760 3,350 2,916 3,308 2,115 9,492 11,687Margins (%) 17.1 14.3 9.6 9.5 16.3 14.8 13.5 9.4 12.6 13.4Depreciation 127 152 155 175 162 180 200 206 609 748Interest 1,302 1,241 1,392 1,663 1,656 1,700 1,700 1,452 5,944 6,507PBT From operations 1,874 1,167 322 -77 1,532 1,036 1,408 457 2,940 4,432Other income 165 100 170 132 262 200 200 638 1,119 1,300PBT 2,039 1,267 492 55 1,794 1,236 1,608 1,095 4,059 5,732Tax 671 419 165 -24 689 408 530 322 1,288 1,949Rate (%) 32.9 33.1 33.5 -43.8 38.4 33.0 33.0 29.4 31.7 34.0PAT 1,369 848 327 79 1,105 828 1,077 774 2,771 3,783YoY Change (%) 12.6 5.7 -71.3 -86.7 -19.3 -2.3 228.9 874.2 -20.5 36.5Extraordinary Inc/(Exp) 8 632 143 21 345 657Reported PAT 1,377 1,479 471 100 1,450 828 1,077 774 3,428 3,783E: MOSL EstimatesOctober 2012C–48

September 2012 Results PreviewSector: FinancialsFinancialsCompany NameAndhra BankAxis BankBank of BarodaBank of IndiaCanara BankDewan HousingHDFCHDFC BankFederal BankICICI BankIDFCIndian BankIndusInd BankING VysyaKotak Mahindra BankLIC HousingM&M Financial ServicesOriental BankPower Finance CorporationPunjab National BankRural ElectrificationShriram TransportState BankUnion BankYes BankChallenges for the Financials sector continued in 2QFY13 as well, led by moderationin growth and sustained pressure on asset quality. However, the government'sconcrete steps towards reforms have brought in a ray of hope.Banks - aggregate PAT growth to remain healthyFor 2QFY13, we expect our Banking coverage universe to report healthy PAT growth of19% YoY (~15% YoY ex-SBIN), largely driven by 23% YoY profit growth from privatesector banks. PAT of state-owned banks is likely to grow 17% YoY (9% YoY ex-SBIN), butdecline 4% QoQ (led by higher provisions, muted fees and higher tax rate in somecases).A lean business quarter; CD ratio falls; higher monies parked in government securities:For the fortnight ended 21 September 2012, loans grew 16.4% YoY and deposits grew13.7% YoY. On a sequential basis, while loans were flat, deposits increased marginally.Higher funds are flowing into G-Secs, as a result of which the incremental ID ratio is100%+ whereas the overall CD ratio has declined from 76.4% to 75.8%. As in FY12, inFY13 too, working capital would be a key driver for corporate loan growth. 2-3 years ofcontinued moderation in the capex cycle will have a lag impact on other loan segments(Services and Retail). We expect loan growth for the system to be 15-16% for FY13.While SA deposit growth is likely to improve, it is unlikely to keep pace with overalldeposit growth. Further, CA deposits in the system continue to decline. This wouldpressurize CASA ratio.Benefits of fall in deposit rates to be compensated by fall in yields on assets - NIM toremain stable: QTD 3M, 6M and 12M bulk deposit rates have declined by 60bp each,whereas on YTD basis the decline is much sharper at 225bp, 180bp and 130bprespectively the benefits of which will percolate in the form of lower cost of funds.However, this would be compensated by (a) fall in yields on loans, as banks havereduced spreads on loans in certain cases and have reduced base rate/PLR in May2012, (b) continued pressure on CASA ratio, and (c) higher flow of money into lowyielding investments due to muted loan growth. We expect margins to be flattish/improve marginally QoQ. Specific banks (viz. Bank of India), wherein margins declinedsignificantly in 1QFY13 due to higher reversal of interest income (on the back ofrestructuring / slippages) may see some relief.Addition of stress on balance sheet to continue: Considering the challenging macroenvironment, we expect slippages to remain elevated (especially for state-ownedbanks), led by stress in mid-size corporate and SME segments. Retail focused banksare likely to be better placed (most private sector banks). However, unlike the past,retail delinquency has started increasing. Hence, NPAs are expected to rise in thissegment, as well. Increased focus on balance sheet management by banks may leadto improvement in recoveries and upgradations, which would provide cushion toasset quality.Alpesh Mehta (Alpesh.Mehta@MotilalOswal.com)/Sohail Halai (Sohail.Halai@MotilalOswal.com)/Umang Shah (Umang.Shah@MotilalOswal.com)October 2012C–49

September 2012 Results PreviewSector: FinancialsPace of restructuring has slowed down: With most SEB loans restructured and SEBrestructuring package approved by the Cabinet, we do not expect significant SEBrestructuring in 2QFY13. As witnessed in 1QFY13, restructuring would be significantlylower than in 4QFY12. However, stress in the large corporate segment and higherreferrals to CDR would lead to some increase in overall restructured portfolio.Muted trading gains in debt market; equity gains can surprise positively: In 2QFY13,the 1-year and 10-year benchmark G-Sec yields have remained largely stable. As aresult, higher MTM reversals in case of bond portfolio are unlikely, though there maybe some write-back on the equity portfolio. Trading gains would be flat/ declineQoQ, as yields remained in a narrow range.Estimate aggregate profit growth of ~19% YoY, led by private banks (23% YoY); Ex-SBIN, state-owned banks' profit to grow 8.6% YoY: The performance of private sectorbanks is likely to remain better than their state-owned counterparts. For the privatesector banks under our coverage, NII growth is likely to be ~22% YoY (led by healthyloan growth and largely stable margins), operating profit growth is likely to be ~24%YoY (due to contained cost) and PAT growth is likely to be ~23% (due to stable creditcost). State-owned banks are likely to report NII and operating profit growth of ~10%each YoY. PAT would grow 17% YoY, led by lower growth in provisions on a high base.Continued reforms key to improvement in growth and asset quality outlook: Recentreforms by the government have led to improvement in sentiment and growth outlook,in turn leading to improvement in valuations. Further re-rating will be contingentupon expected resolution of the problems faced in the Infrastructure space and fall ininterest rates (boost to G-Sec portfolio). On a reported basis, near-term profitabilityis likely to be under pressure due to continued stress on asset quality, led by economicmoderation and sluggish growth. Benefits of reforms would be reflected in businessand asset quality with a lag.Top picks in our Banking universe: Our top picks are SBIN (most exposed toimprovement in macroeconomic environment and strategy to recognize stressupfront), ICICIBC (healthy capitalization and asset quality, improving core operations),OBC (focused strategies and attractive valuations), and YES (strong play onimprovement in liquidity and healthy asset quality).Loan growth remains moderateDeposit growth improves16.228.012.728.713.830.2Loans (INR t) Chg YoY (%)17.121.919.224.521.520.019.515.918.732.434.134.337.739.440.941.543.746.916.547.616.447.722.040.319.817.741.242.717.244.9De posits (INR t) Chg YoY (%)15.046.416.814.447.149.91QFY102QFY103QFY104QFY101QFY112QFY113QFY114QFY111QFY122QFY123QFY124QFY121QFY1321-Sep-121QFY102QFY103QFY104QFY101QFY112QFY1152.154.917.416.956.258.314.361.013.43QFY1118.515.962.362.9 13.74QFY111QFY122QFY123QFY124QFY121QFY1321-Sep-12Source: Company, MOSLOctober 2012C–50

September 2012 Results PreviewSector: FinancialsIncremental loans flat QoQ (INR b) Incremental deposit mobilization healthy (INR b)CD ratio has moderated YTDLiquidity has improved since April/May-1278.074.070.066.062.04QFY052QFY064QFY062QFY074QFY072QFY084QFY08CD Ratio (%)2QFY094QFY092QFY104QFY102QFY114QFY112QFY124QFY1221‐Sep‐121,6008000‐800‐1,600‐2,400Jan‐10Apr‐10Jun‐10Sep‐10Net Repo (INR b)Nov‐10Feb‐11Apr‐11Jul‐11Sep‐11Nov‐11Feb‐12Apr‐12Jul‐12Sep‐12Bulk deposit rates have cooled off significantly Yield curve remains flat (%)12.510.58.56.54.52.510.59.4 9.89.0 9.7 10.2 9.59.57.910.1 8.96.5 8.8 9.6 9.4 9.4 9.36.78.75.8 6.0 5.6 7.66.06.34.7 4.6Slippage ratio for state-owned banks to remain high (%)Referrals to CDR remain highPSBs (Ex‐SBIN)3.32. 32. 82.42. 51.9 1.91.7PSBs3.4 3.32.6 2. 62.42. 231Agg. De bt (INR b) No. o f Ca ses Re cd .874941292022266792051921QF Y102QF Y103QF Y104QF Y101QF Y112QF Y113QF Y114QF Y111QF Y122QF Y123QF Y124QF Y121QF Y1321‐Sep‐121QFY102QFY103QFY104QFY101QFY112QFY113QFY114QFY111QFY122QFY123QFY124QFY121QFY1321‐Sep‐12256Apr‐09Jul‐09Oct‐09791171605561561, 9698761, 5022, 2401, 4407442, 7452, 2222, 8571, 3132, 0302, 6711, 1676171, 4992,2021, 6341, 7671,4612,1703,4013,2796 Month (%) 12 Month (%)Feb‐10Ma y‐10Sep‐10Dec‐10Apr‐11Jul‐11Nov‐11Feb‐12Jun‐12Sep‐129.08.07.06.05.04.01‐Year G‐Sec Yield10‐Yea r G‐Se c Yield8.4 8.6 8.58.18.38.0 7.98.1 8.27.28.37.08.5 8.1 8.08.06.98.07.45.85.0 4.85.24.1 4.3Apr‐09Jun‐09Aug‐09Nov‐09Jan‐10Apr‐10Jun‐10Sep‐10Nov‐10Jan‐11Apr‐11Jun‐11Sep‐11Nov‐11Feb‐12Apr‐12Jun‐12Sep‐124QF Y11 1QF Y12 2QFY12 3QFY12 4QF Y12 1QF Y13 2QF Y13EFY10 F Y11 FY12 1QF Y13 2Q‐QTDSource: Company, MOSLOctober 2012C–51

September 2012 Results PreviewSector: FinancialsNBFCs - performance continues to be strongThe performance of retail NBFCs (HFCs as well as retail AFCs) remains strong, led byhealthy growth and benign asset quality outlook. Pick-up in monsoon, expectedresolution of some of the issues faced by the Infrastructure segment, SEB package,and continued buoyancy in the rural economy augurs well for the growth and assetquality of NBFCs. Even improvement in liquidity and decline in bulk borrowing rateswill lead to healthy spreads and profitability. While there are various positives atplay, increasing competition from banks (especially in home loan and auto loansegments) and rising delinquencies in the CV segment reduce the margin of safety toan extent, as valuations remain rich. Within the NBFC space, we continue to likeHDFC, IDFC and MMFS.Housing Finance Companies: For housing finance companies (HFCs), 2QFY13 is likelyto remain a steady quarter, as growth in individual loans remains buoyant. Growth inthe developer loan portfolio is likely to remain muted due to unfavorable macroenvironment. However, we expect overall loan growth for HDFC, LICHF (despite weakdeveloper loan growth) and DEWH to remain healthy. Margins are likely to remainstable on a sequential basis. Asset quality would continue to be healthy. No majorregulatory changes were announced during the quarter.Infrastructure Finance Companies: 2QFY13 witnessed one of the major and muchawaited reforms in the form of SEB Debt Restructuring Plan to improve the financialhealth of DISCOMs. We believe this is a major step forward by the government towardsreforms and also for the Infrastructure / Power sector as a whole. For the majorinfrastructure finance companies (IFCs) - IDFC, POWF and RECL, we expect growth toremain healthy. Margins are likely to get some cushion due to fall in wholesale ratesYTD. Overall, we expect margins to be stable QoQ. While no large accounts are likelyto fall into NPA category, asset quality will remain a key monitorable in the currentenvironment.Asset Finance Companies: Retail asset finance companies (AFCs) have delivered strongperformance both in terms of growth as well as asset quality in the current cycle.Among the AFCs under our coverage, we expect MMFS to report healthy growth inAUM on the back of its multi-product strategy; for SHTF, growth is likely to remainsluggish. Margins would remain stable sequentially. Asset quality will be a keymonitorable against the backdrop of slowdown in the macroeconomic environmentand delayed monsoon. During the quarter, the RBI released the final securitization aswell as the final priority sector guidelines. The final guidelines on both the issues areless disruptive and are unlikely to impact the AFCs in a negative way.October 2012C–52

September 2012 Results PreviewSector: FinancialsExpected quarterly performance summary(INR Million)CMP Rating Net Interest income Operating Profit Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQFinancialsPrivate BanksAxis Bank 1,137 Buy 22,743 13.3 4.3 20,314 14.4 3.5 11,242 22.2 -2.5Federal Bank 446 Buy 5,190 9.4 5.6 3,835 6.1 10.7 2,006 4.9 5.4HDFC Bank 629 Neutral 36,067 22.5 3.5 27,598 29.8 6.9 15,616 30.2 10.2ICICI Bank 1,057 Buy 32,582 30.0 2.0 30,430 29.3 3.2 18,236 21.3 0.5IndusInd Bank 354 Buy 5,232 24.8 8.1 4,300 29.1 6.4 2,481 28.5 5.0ING Vysya Bank 407 Buy 3,527 16.1 2.7 2,254 19.0 3.6 1,321 14.5 1.5Kotak Mah. Bank (SA) 648 Neutral 7,463 23.3 3.5 4,564 20.1 1.8 2,764 6.3 -2.1Yes Bank 382 Buy 4,975 29.0 5.4 4,893 26.8 6.5 3,066 30.5 5.7Pvt Banking Sector Aggregate 117,778 22.1 3.6 98,187 24.2 4.8 56,733 22.9 2.9PSU BanksAndhra Bank 113 Buy 9,737 2.4 3.8 6,990 1.8 -0.6 3,209 1.5 -11.3Bank of Baroda 799 Neutral 28,121 9.6 0.5 22,446 5.5 0.2 10,833 -7.1 -4.9Bank of India 310 Neutral 23,844 25.2 16.7 18,708 20.6 11.8 7,095 44.5 -20.0Canara Bank 431 Buy 19,006 -3.1 3.1 13,970 -13.0 0.2 7,336 -13.9 -5.4Indian Bank 192 Buy 11,991 5.6 4.0 8,908 -3.3 6.0 4,709 0.5 2.0Oriental Bank of Comm. 302 Buy 11,799 19.2 4.8 8,840 16.6 -1.4 3,320 98.0 -15.2Punjab National Bank 840 Buy 37,455 8.5 1.4 28,275 11.9 -0.5 12,183 1.1 -2.2State Bank 2,238 Buy 114,777 9.5 3.2 84,660 13.3 3.5 36,952 31.5 -1.5Union Bank 208 Buy 19,468 17.2 6.9 13,685 13.6 8.0 5,834 65.5 14.0PSU Banking Sector Aggregate 276,198 10.0 4.1 206,482 9.5 3.1 91,472 16.8 -4.0PSU Banking Sector Aggregate Ex SBI 161,421 10.4 4.7 121,822 7.0 2.7 54,520 8.6 -5.6NBFCDewan Housing 200 Buy 1,596 43.3 11.1 1,417 44.1 18.5 954 32.8 22.7HDFC 773 Buy 14,663 17.9 12.4 16,413 21.2 15.6 11,592 19.4 15.7IDFC# 154 Buy 6,548 31.5 4.1 6,793 31.0 3.6 4,002 20.5 5.4LIC Housing Fin 282 Buy 3,817 14.2 8.9 3,730 11.2 7.2 2,559 1.3 12.4M & M Financial 898 Buy 5,214 33.6 6.9 3,430 35.1 5.6 1,863 37.4 15.7Power Finance Corp.* 189 Buy 14,031 29.9 0.7 13,806 30.9 0.4 9,713 21.1 -5.6Rural Electric. Corp.* 218 Buy 11,711 23.3 0.5 11,801 23.0 -1.5 8,548 19.3 -5.5Shriram Transport Fin. 619 Buy 8,384 0.4 4.5 6,882 0.9 1.4 3,295 10.1 2.4NBFC Banking Sector Aggregate 65,964 21.2 5.1 64,272 22.2 5.0 42,527 18.7 3.6Sector Aggregate 459,940 14.4 4.1 368,940 15.2 3.9 190,732 19.0 -0.4* For POWF/RECL operating profit and profit after tax are adjusted for forex gains/losses# For IDFC operating profit and profit after tax growth is adjusted for extraordinary gains in 2QFY12October 2012C–53

September 2012 Results PreviewSector: FinancialsRelative Performance-3m (%) Relative Performance-1Yr (%)12011010090Sensex IndexMOSL Financials Index13012011010090Sensex IndexMOSL Financials Index8080Jun-12Jul-12Aug-12Sep-12Sep-11Dec-11Mar-12Jun-12Sep-12Comparative valuationCMP (INR) Rating EPS (INR) P/E (x) P/BV (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14EPrivate BanksAxis Bank 1,137 Buy 102.7 109.5 125.6 11.1 10.4 9.0 2.1 1.8 1.6 20.3 18.8 18.4Federal Bank 446 Buy 45.4 47.0 55.7 9.8 9.5 8.0 1.3 1.2 1.1 14.4 13.4 14.3HDFC Bank 629 Neutral 22.0 28.7 35.8 28.6 21.9 17.6 4.9 4.2 3.6 18.7 20.7 21.9ICICI Bank 1,057 Buy 56.1 68.3 78.7 18.9 15.5 13.4 2.1 1.9 1.7 12.8 14.2 14.7IndusInd Bank 354 Buy 17.2 22.0 27.5 20.6 16.1 12.9 3.7 3.1 2.5 19.2 20.7 21.6ING Vysya Bank 407 Buy 30.4 35.4 40.3 13.4 11.5 10.1 1.6 1.4 1.3 14.3 13.0 13.2Kotak Mah. Bank 648 Neutral 24.7 26.2 29.8 26.2 24.7 21.8 3.7 3.2 2.8 15.4 13.7 13.8Yes Bank 382 Buy 27.7 35.4 43.0 13.8 10.8 8.9 2.9 2.4 1.9 23.1 24.1 23.9Private Bank Aggregate 19.7 16.4 13.9 3.1 2.7 2.4 15.9 16.7 17.4PSU BanksAndhra Bank 113 Buy 24.0 25.0 28.0 4.7 4.5 4.0 0.8 0.7 0.7 19.2 17.5 17.2Bank of Baroda 799 Neutral 121.4 110.6 129.0 6.6 7.2 6.2 1.3 1.1 1.0 22.1 16.6 16.8Bank of India 310 Neutral 46.6 53.9 63.7 6.7 5.8 4.9 1.0 0.8 0.7 15.6 15.5 16.0Canara Bank 431 Buy 74.1 73.7 85.5 5.8 5.9 5.0 0.9 0.8 0.7 17.1 14.9 15.2Indian Bank 192 Buy 40.6 42.8 45.7 4.7 4.5 4.2 0.9 0.8 0.7 19.8 18.0 16.8Oriental Bank 302 Buy 39.1 50.8 56.6 7.7 5.9 5.3 0.8 0.7 0.7 10.7 12.7 12.8Punjab Nat. Bank 840 Buy 144.0 155.5 185.1 5.8 5.4 4.5 1.1 0.9 0.8 21.1 18.5 18.8State Bank 2,238 Buy 228.6 284.5 330.3 9.4 7.5 6.5 1.4 1.2 1.0 17.2 17.8 18.0Union Bank 208 Buy 32.3 42.0 48.1 6.4 4.9 4.3 0.9 0.8 0.7 14.9 16.8 16.9PSU Bank Aggregate 7.4 6.5 5.6 1.3 1.1 0.9 17.4 16.7 16.8NBFCDewan Housing 200 Buy 25.6 37.7 51.3 7.8 5.3 3.9 1.2 1.0 0.8 18.5 21.7 22.7HDFC 773 Buy 27.9 32.1 38.6 22.7 19.1 15.0 5.9 5.4 4.3 27.3 29.4 30.9IDFC 154 Buy 10.3 10.9 13.3 15.0 14.2 11.7 1.8 1.6 1.5 16.2 14.8 16.0LIC Housing Fin 282 Buy 18.1 21.8 31.7 15.6 12.9 8.9 2.5 2.2 1.8 20.3 18.0 20.8M & M Financial 898 Buy 60.4 79.4 93.7 14.9 11.3 9.6 3.1 2.6 2.2 22.8 25.1 24.6Power Finance Corp 189 Buy 23.9 29.5 32.7 7.9 6.4 5.8 1.2 1.1 0.9 17.5 17.6 17.4Rural Electric. Corp. 218 Buy 28.6 34.9 41.7 7.6 6.3 5.2 1.5 1.3 1.1 20.5 21.6 22.2Shriram Transport 619 Buy 55.6 59.8 70.4 11.1 10.3 8.8 2.3 2.0 1.6 23.1 20.6 20.3NBFC Aggregate 15.1 12.7 10.7 2.9 2.5 2.1 19.5 19.4 19.9Sector Aggregate 12.3 10.6 9.0 2.1 1.8 1.6 17.3 17.2 17.5October 2012C–54

BSE SensexS&P CNX18,763 5,703BloombergANDB INEquity Shares (m) 559.652 Week Range (INR) 139/791,6,12 Rel Perf (%) 17/-12/-23Mcap (INR b) 63.0Mcap (USD b) 1.2CMP: INR113September 2012 Results PreviewSector: FinancialsAndhra BankBuyYear NET INC. PAT EPS EPS P/E BV P/BV P/ABV RoAA RoAEEnd (INR m) (INR m) (INR) Gr. (%) (X) (INR) (X) (X) (%) (%)3/11A 41,179 12,671 22.6 5.0 5.0 116 1.0 1.0 1.3 23.23/12A 46,193 13,447 24.0 6.1 4.7 134 0.8 0.9 1.1 19.23/13E 49,767 13,998 25.0 4.1 4.5 152 0.7 0.9 1.0 17.53/14E 56,158 15,658 28.0 11.9 4.0 173 0.7 0.8 1.0 17.2• NIM is likely to be stable QoQ, as the benefit of fall in cost of funds would be negated by correspondingpressure on yield on loans. The 25bp reduction in base rate in August 2012 and continuous reversal on accountof FITL would keep yields under pressure.• On a higher base of INR8.3b, slippages are likely to decline QoQ. However, due to challenges in the macroenvironment, we model in slippages at an elevated level of INR5b+. ANDB has performed well on recoveriesand upgradations in 2HFY12, and strong performance on these could provide cushion to asset quality.• With the exception of SEBs, the pace of restructuring is likely to slow down in 2QFY13. However, ANDB'sexposure to some SEBs may get restructured in FY13.• The stock trades at 0.7x FY14E BV, and at 4x FY14E EPS. Maintain Buy.• Key things to watch for: (1) Asset quality: Net slippages and outlook on restructuring and (3) NIM performance.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 26,342 27,825 29,230 29,990 31,215 32,004 32,887 34,083 113,387 130,188Interest Expense 17,239 18,313 19,392 20,851 21,830 22,267 22,712 23,428 75,794 90,237Net Interest Income 9,104 9,512 9,839 9,139 9,385 9,737 10,175 10,654 37,593 39,952% Change (Y-o-Y) 23.7 21.4 17.1 6.1 3.1 2.4 3.4 16.6 16.7 6.3Other Income 2,170 1,778 2,353 2,299 2,357 2,256 2,503 2,699 8,599 9,816Net Income 11,273 11,290 12,191 11,438 11,742 11,993 12,679 13,354 46,193 49,767Operating Expenses 4,277 4,423 4,515 4,828 4,708 5,003 5,172 5,656 18,042 20,540Operating Profit 6,997 6,868 7,676 6,610 7,034 6,990 7,507 7,697 28,150 29,228% Change (Y-o-Y) 37.1 21.7 22.5 -7.1 0.5 1.8 -2.2 16.5 16.7 3.8Other Provisions 1,770 2,607 3,094 2,437 2,066 2,502 2,516 2,702 9,907 9,785Profit before Tax 5,227 4,261 4,582 4,173 4,968 4,488 4,991 4,995 18,243 19,442Tax Provisions 1,370 1,100 1,550 776 1,350 1,279 1,422 1,392 4,796 5,444Net Profit 3,857 3,161 3,032 3,397 3,618 3,209 3,568 3,603 13,447 13,998% Change (Y-o-Y) 20.4 4.3 -8.4 8.6 -6.2 1.5 17.7 6.1 6.1 4.1Operating MetricsNIM (Reported, %) 3.8 3.8 3.8 3.3 3.3 - - - 3.7 -NIM (Cal, %) 3.7 3.8 3.8 3.3 3.2 3.3 3.3 3.3 3.5 3.2Deposit Growth (%) 21.7 20.2 20.2 14.9 18.5 16.3 16.3 16.0 14.9 16.0Loan Growth (%) 32.0 21.5 20.3 17.1 14.3 18.0 16.0 15.0 17.1 15.0CASA Ratio (%) 27.8 26.1 26.6 26.4 26.7 - - - 26.4 -Tax Rate (%) 26.2 25.8 33.8 18.6 27.2 28.5 28.5 27.9 26.3 28.0Asset QualityOSRL (INR b) 21.7 22.5 32.3 55.9 67.7 - - - 55.9 -OSRL (%) 2.9 3.0 4.1 6.6 7.8 - - - 6.6 -Gross NPA (INR b) 11.8 19.9 18.8 18.0 23.6 26.1 29.5 32.8 18.0 32.8Gross NPA (%) 1.6 2.7 2.4 2.1 2.7 3.0 3.2 3.4 2.1 3.4E: MOSL EstimatesOctober 2012C–55

BSE SensexS&P CNX18,763 5,703BloombergAXSB INEquity Shares (m) 413.252 Week Range (INR) 1,309/7851,6,12 Rel Perf (%) 5/-8/-8Mcap (INR b) 469.7Mcap (USD b) 8.9CMP: INR1,137September 2012 Results PreviewSector: FinancialsAxis BankBuyYear Net Income PAT EPS EPS P/E BV P/BV P/ABV RoAA RoAEEnd (INR m) (INR m) (INR) Gr. (%) (X) (INR) (X) (X) (%) (%)3/11A 111,951 33,885 82.5 33.0 - 463 - - 1.6 19.33/12A 134,380 42,422 102.7 24.4 11.1 547 2.1 2.1 1.6 20.33/13E 154,433 46,566 109.5 6.6 10.4 625 1.8 1.9 1.5 18.83/14E 182,976 53,422 125.6 14.7 9.0 731 1.6 1.6 1.5 18.4• Loan growth is expected to remain strong at over 25% YoY, partially aided by a lower base of 2QFY12.• NIM are likely to expand by 10bp, as low yielding priority sector loans runs off and bulk deposit rates havecooled down. In 1QFY13, AXSB had reported NIM of 3.4%.• Fee income growth is expected to be ~15% YoY. Pressure on fees from Corporate Banking and Capital Marketrelatedservices is expected to continue, but Retail fees would remain strong.• Gross stress addition (i.e. gross slippage and addition to restructured loans) is expected to remain high, so doesthe credit cost. Improvement in upgradations and recoveries remains the key.• The stock trades at 1.8x FY13E and 1.6x FY14E BV, and at 10.4x FY13E and 9.0x FY14E EPS. Buy.• Key things to watch for: (1) Pressure on asset quality has increased and performance on gross slippages andrestructured loans remains a key thing to monitor, (2) margins are expected to improve, but scope for positivesurprise remains, (3) fee income growth.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 48,814 52,760 57,770 60,603 64,829 66,526 68,292 69,665 219,946 269,311Interest Expense 31,573 32,687 36,367 39,142 43,030 43,783 44,549 45,791 139,769 177,153Net Interest Income 17,241 20,073 21,403 21,461 21,799 22,743 23,742 23,874 80,177 92,158% Change (Y-o-Y) 13.9 24.3 23.5 26.2 26.4 13.3 10.9 11.2 22.2 14.9Other Income 11,679 12,349 14,298 15,876 13,355 14,649 15,912 18,359 54,202 62,275Net Income 28,920 32,422 35,701 37,337 35,154 37,392 39,654 42,233 134,380 154,433Operating Expenses 13,335 14,665 15,109 16,962 15,517 17,078 18,104 19,007 60,071 69,706Operating Profit 15,585 17,756 20,592 20,376 19,637 20,314 21,550 23,227 74,309 84,728% Change (Y-o-Y) 7.5 19.5 24.2 11.9 26.0 14.4 4.7 14.0 15.8 14.0Other Provisions 1,758 4,056 4,223 1,393 2,588 3,659 4,590 4,903 11,430 15,740Profit before Tax 13,826 13,701 16,369 18,983 17,048 16,656 16,960 18,324 62,878 68,987Tax Provisions 4,403 4,497 5,346 6,210 5,513 5,413 5,512 5,983 20,456 22,421Net Profit 9,424 9,203 11,023 12,773 11,535 11,242 11,448 12,341 42,422 46,566% Change (Y-o-Y) 27.0 25.2 23.7 25.2 22.4 22.2 3.9 -3.4 25.2 9.8Operating MetricsNIM (Reported,%) 3.3 3.8 3.8 3.6 3.4 - - - 3.6 -NIM (Cal, %) 3.2 3.7 3.7 3.4 3.3 3.4 3.4 3.3 3.3 3.2Deposit Growth (%) 24.5 23.9 33.9 16.3 21.3 17.9 14.3 15.0 16.3 15.0Loan Growth (%) 21.4 26.7 20.4 19.2 29.8 25.8 24.4 18.0 19.2 18.0CASA Ratio (%) 40.5 42.2 41.6 41.5 39.1 - - - 41.5 -Tax Rate (%) 31.8 32.8 32.7 32.7 32.3 32.5 32.5 32.7 32.5 32.5Asset QualityOSRL (INR b) 21.5 24.1 27.0 30.6 38.3 - - - 30.6 -OSRL (%) 1.6 1.7 1.8 1.8 2.2 - - - 1.8 -Gross NPA (INR b) 15.7 17.4 19.1 18.1 20.9 24.7 28.3 32.5 18.1 32.5Gross NPA (on customer assets, %) 1.1 1.1 1.1 0.9 1.1 1.4 1.5 1.6 0.9 1.6E: MOSL EstimatesOctober 2012C–56

BSE SensexS&P CNX18,763 5,703BloombergBOB INEquity Shares (m) 412.452 Week Range (INR) 881/6061,6,12 Rel Perf (%) 21/-8/-13Mcap (INR b) 329.3Mcap (USD b) 6.2CMP: INR799September 2012 Results PreviewSector: FinancialsBank of BarodaNeutralYear Net Income PAT EPS EPS P/E BV P/BV P/ABV RoAA RoAEEnd (INR m) (INR m) (INR) Gr. (%) (X) (INR) (X) (X) (%) (%)3/11A 116,114 42,417 108 29.1 - 502 - - 1.3 25.23/12A 137,393 50,070 121 12.4 6.6 621 1.3 1.3 1.2 22.13/13E 154,075 45,605 111 -8.9 7.2 715 1.1 1.2 0.9 16.63/14E 180,172 53,193 129 16.6 6.2 825 1.0 1.0 0.9 16.8• Margins should remain stable QoQ or decline marginally, as the pressure on yields on loans would offset anybenefits from fall in bulk deposit rates. NII is likely to grow 10% YoY.• We expect fee income growth to moderate to sub-5% YoY. However, higher trading gains would lead to strongnon-interest income growth of over 23% YoY.• Stress on the balance sheet has increased, with gross slippage ratio in the last two quarters at 2%+. Whileslippages are expected to remain high, recoveries and upgradations could provide some respite to asset quality.• The pace of restructuring had slowed down in 1QFY13, with the bank restructuring loans worth INR7.7b asagainst INR50.3b in 4QFY12. However, pressure in corporate segment restructuring is likely to continue.• The stock trades at 1.1x FY13E and 1x FY14E BV, and 7.2x FY13E and 6.2x FY14E EPS. Maintain Neutral.• Key things to watch for: (1) Performance on asset quality, especially on gross slippages, (2) Restructured portfolio,(3) Fee income growth, (4) Guidance on tax rate.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 66,318 72,514 76,720 81,185 85,576 86,580 89,114 93,379 296,737 354,649Interest Expense 43,346 46,845 50,165 53,211 57,595 58,459 59,921 62,356 193,567 238,331Net Interest Income 22,972 25,669 26,555 27,974 27,981 28,121 29,193 31,023 103,170 116,317% Change (YoY) 23.6 25.9 15.8 7.0 21.8 9.6 9.9 10.9 17.2 12.7Other Income 6,409 7,343 11,493 8,978 7,708 9,082 9,775 11,193 34,223 37,758Net Income 29,380 33,013 38,048 36,952 35,689 37,203 38,968 42,216 137,393 154,075Operating Expenses 11,198 11,743 12,097 16,550 13,281 14,757 15,187 17,007 51,587 60,232Operating Profit 18,183 21,270 25,952 20,402 22,407 22,446 23,780 25,209 85,806 93,843% Change (YoY) 19.0 28.4 40.2 4.9 23.2 5.5 -8.4 23.6 22.9 9.4Other Provisions 3,911 4,834 8,367 8,437 8,938 7,807 8,109 8,981 25,548 33,836Profit before Tax 14,272 16,436 17,585 11,965 13,469 14,639 15,671 16,227 60,258 60,007Tax Provisions 3,944 4,775 4,686 -3,217 2,081 3,806 4,075 4,440 10,188 14,402Net Profit 10,328 11,661 12,899 15,182 11,389 10,833 11,597 11,787 50,070 45,605% Change (YoY) 20.2 14.4 20.7 17.3 10.3 -7.1 -10.1 -22.4 18.0 -8.9Operating MetricsNIM (Reported, %) 2.9 3.1 3.0 3.0 2.7 - - - 3.0 -NIM (Calculated, %) 2.7 2.9 2.9 2.8 2.6 2.6 2.6 2.7 2.8 2.6Deposit Growth (%) 22.9 22.1 24.0 26.0 22.3 19.8 18.5 16.0 26.0 16.0Loan Growth (%) 25.2 23.9 25.8 25.7 23.0 22.5 17.4 16.0 25.7 16.0CASA Ratio (%) 33.9 34.0 34.1 33.2 32.2 - - - 33.2 -Tax Rate (%) 27.6 29.1 26.6 -26.9 15.4 26.0 26.0 27.4 16.9 24.0Asset QualityOSRL (INR b) 92.4 98.4 116.6 171.4 179.8 - - - 171.4 -OSRL (%) 4.0 4.1 4.5 6.0 6.3 - - - 6.0 -Gross NPA (INR b) 34.3 34.0 39.0 44.6 53.2 58.7 64.3 68.7 44.6 68.7Gross NPA (%) 1.5 1.4 1.5 1.5 1.8 2.0 2.1 2.0 1.5 2.0E: MOSL Estimates; # This includes loans restructured in international bookOctober 2012C–57

BSE SensexS&P CNX18,763 5,703BloombergBOI INEquity Shares (m) 574.552 Week Range (INR) 408/2541,6,12 Rel Perf (%) 11/-20/-16Mcap (INR b) 178.3Mcap (USD b) 3.4CMP: INR310September 2012 Results PreviewSector: FinancialsBank of IndiaNeutralYear Net Income PAT EPS EPS P/E BV P/BV P/ABV RoAA RoAEEnd (INR m) (INR m) (INR) Gr.(%) (X) (INR) (X) (X) (%) (%)3/11A 104,525 24,887 45.5 37.4 - 283 - - 0.8 17.83/12A 116,346 26,775 46.6 2.5 6.7 327 1.0 1.1 0.7 15.63/13E 132,579 30,974 53.9 15.7 5.8 371 0.8 1.0 0.7 15.53/14E 156,010 36,582 63.7 18.1 4.9 423 0.7 0.9 0.7 16.0• Loan growth is likely to be above industry average at ~25% YoY, while deposit growth is likely to be lower at~17%. Lower deposit growth is in line with the bank’s strategy to reduce bulk deposits in its balance sheet.• Margins are expected to improve by ~25bp in the absence of one-offs. In 1QFY13, margins had declined sharplyby 60bp led by reversal of interest income on Air India restructuring and NPAs.• Fee income should grow ~15% YoY. However, overall growth in non-interest income is likely to be flat, led bymuted treasury gains and recoveries from written-off accounts.• High slippages and restructuring are likely to continue translating into higher credit cost.• The stock trades at 0.8x FY13E and 0.7x FY14E BV, and at 5.8x FY13E and 4.9x FY14E EPS. Maintain Neutral.• Key things to watch for: (1) Gross and net slippages, (2) Restructured portfolio and outlook on the same,(3) Margin movement.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 66,336 68,864 71,501 78,106 77,092 81,777 83,948 86,111 284,807 328,928Interest Expense 47,926 49,825 50,826 53,096 56,656 57,933 59,028 60,033 201,672 233,650Net Interest Income 18,410 19,039 20,676 25,010 20,436 23,844 24,920 26,078 83,134 95,278% Change (Y-o-Y) 5.8 7.2 4.1 8.4 11.0 25.2 20.5 4.3 6.4 14.6Other Income 6,601 8,418 8,522 9,671 8,409 8,553 9,363 10,977 33,212 37,302Net Income 25,011 27,457 29,197 34,681 28,844 32,397 34,283 37,055 116,346 132,579Operating Expenses 11,051 11,942 11,878 14,535 12,109 13,689 14,059 16,726 49,407 56,582Operating Profit 13,959 15,515 17,319 20,146 16,736 18,708 20,225 20,329 66,939 75,997% Change (Y-o-Y) -1.0 12.5 24.7 67.1 19.9 20.6 16.8 0.9 24.3 13.5Other Provisions 5,672 11,544 6,931 7,018 4,722 8,350 9,250 9,426 31,164 31,748Profit before Tax 8,287 3,972 10,388 13,128 12,013 10,358 10,975 10,903 35,775 44,249Tax Provisions 3,112 -940 3,227 3,601 3,139 3,263 3,457 3,416 9,000 13,275Net Profit 5,175 4,911 7,162 9,527 8,875 7,095 7,518 7,487 26,775 30,974% Change (Y-o-Y) -28.6 -20.4 9.7 93.0 71.5 44.5 5.0 -21.4 7.6 15.7Operating MetricsNIM (Reported, %) 2.2 2.4 2.6 2.9 2.3 - - - 2.5 -NIM (Cal, %) 2.3 2.4 2.5 2.9 2.2 2.5 2.6 2.6 2.5 2.5Deposit Growth (%) 25.4 24.1 21.7 6.5 15.7 16.7 17.6 18.0 6.5 18.0Loan Growth (%) 21.6 17.7 20.9 16.3 22.9 24.9 19.9 17.2 16.3 17.2CASA Ratio (Reported, %) 30.5 31.6 32.4 34.3 32.0 - - - 34.3 -Tax Rate (%) 37.6 -23.7 31.1 27.4 26.1 31.5 31.5 31.3 25.2 30.0Asset QualityOSRL (INR b) 87.6 84.5 104.5 134.8 175.7 - - - 134.8 -OSRL (%) 4.1 3.9 4.5 5.4 6.6 - - - 5.4 -Gross NPA (INR b) 57.9 65.5 63.9 58.9 67.5 75.3 83.7 92.7 58.9 92.7Gross NPA (%) 2.7 3.0 2.7 2.3 2.6 2.8 3.0 3.1 2.3 3.1E: MOSL EstimatesOctober 2012C–58

BSE SensexS&P CNX18,763 5,703BloombergCBK INEquity Shares (m) 443.052 Week Range (INR) 566/3061,6,12 Rel Perf (%) 28/-15/-19Mcap (INR b) 191.0Mcap (USD b) 3.6CMP: INR431September 2012 Results PreviewSector: FinancialsCanara BankBuyYear Net Income PAT EPS EPS P/E BV P/BV P/ABV RoAA RoAEEnd (INR m) (INR m) (INR) Gr. (%) (X) (INR) (X) (X) (%) (%)3/11A 105,108 40,259 90.9 23.3 - 405 - - 1.3 26.43/12A 106,169 32,827 74.1 -18.5 5.8 464 0.9 1.0 0.9 17.13/13E 111,631 32,634 73.7 -0.6 5.9 525 0.8 0.9 0.8 14.93/14E 133,833 37,860 85.5 16.0 5.0 597 0.7 0.8 0.8 15.2• Loan and deposit growth is expected to be below industry average at ~7% and ~10%, respectively, in line withCBK's strategy of de-bulking the balance sheet.• Margins are expected to remain largely flat QoQ.• Fee income growth is likely to be muted on a YoY basis. Lower decline in recoveries from written-off accountsmay pressurize overall non-interest income growth.• Slippages expected to remain at elevated levels. However, strong performance on recoveries and upgradationsmay ease some pressure. As at the end of 1QFY13, CBK has restructured INR55b of SEB loans, out of its overallexposure of INR120b.• The stock trades at 0.8x FY13E and 0.7x FY14E BV, and 5.9x FY13E and 5x FY14E EPS. Buy.• Key things to watch for: (1) Margins could surprise positively, (2) Trading profits and MTM write-back, given highproportion of AFS investments, (3) Performance on net slippages.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 71,565 76,145 78,121 82,675 84,729 85,962 87,872 90,080 308,506 348,642Interest Expense 53,877 56,528 58,935 62,273 66,293 66,956 67,626 68,343 231,613 269,218Net Interest Income 17,688 19,617 19,186 20,402 18,435 19,006 20,246 21,736 76,893 79,424% Change (Y-o-Y) 2.4 -2.1 -8.2 5.0 4.2 -3.1 5.5 6.5 -0.1 3.3Other Income 5,510 8,283 7,791 7,693 6,926 7,542 8,344 9,395 29,276 32,208Net Income 23,198 27,900 26,976 28,094 25,362 26,548 28,590 31,132 106,169 111,631Operating Expenses 10,495 11,847 11,209 13,187 11,424 12,578 13,342 15,066 46,737 52,409Operating Profit 12,703 16,053 15,767 14,907 13,938 13,970 15,248 16,066 59,432 59,222% Change (Y-o-Y) -14.4 13.4 4.2 -12.0 9.7 -13.0 -3.3 7.8 -2.4 -0.4Other Provisions 3,446 5,531 5,012 4,616 4,185 4,800 4,715 4,729 18,605 18,430Profit before Tax 9,258 10,522 10,756 10,291 9,752 9,170 10,533 11,337 40,827 40,792Tax Provisions 2,000 2,000 2,000 2,000 2,000 1,834 2,107 2,218 8,000 8,158Net Profit 7,258 8,522 8,756 8,291 7,752 7,336 8,426 9,119 32,827 32,634% Change (Y-o-Y) -28.4 -15.4 -20.8 -7.8 6.8 -13.9 -3.8 10.0 -18.5 -0.6Operating MetricsNIM (Rep, %) 2.4 2.6 2.6 2.6 2.4 - - - 2.5 -NIM (Cal, %) 2.4 2.5 2.4 2.5 2.2 2.2 2.3 2.4 2.5 2.3Deposit Growth (%) 25.7 25.4 19.7 11.5 11.5 10.3 12.5 12.0 11.5 12.0Loan Growth (%) 23.7 23.8 15.5 10.0 4.9 6.6 10.2 11.0 10.0 11.0CASA Ratio (%) 25.4 25.8 23.9 24.3 23.3 - - - 24.3 -Tax Rate (%) 21.6 19.0 18.6 19.4 20.5 20.0 20.0 19.6 19.6 20.0Asset QualityOSRL (INR b) 78.1 77.2 85.1 75.1 129.6 - - - 75.1 -OSRL (%) 3.6 3.5 3.9 3.2 5.7 - - - 3.2 -Gross NPA (INR b) 36.1 37.9 40.0 40.3 45.0 48.1 50.0 51.3 40.3 51.3Gross NPA (%) 1.7 1.7 1.8 1.7 2.0 2.1 2.1 2.0 1.7 2.0E: MOSL EstimatesOctober 2012C–59

BSE SensexS&P CNX18,763 5,703BloombergDEWH INEquity Shares (m) 116.852 Week Range (INR) 279/1421,6,12 Rel Perf (%) 13/-25/-19Mcap (INR b) 23.4Mcap (USD b) 0.4CMP: INR200September 2012 Results PreviewSector: FinancialsDewan Housing FinanceBuyYear Net Income PAT EPS EPS P/E BV P/BV RoAA RoAEEnd (INR m) (INR m) (INR) Gr. (%) (X) (INR) (X) (%) (%)3/11A 7,126 2,937 28.1 48.8 - 149 - 2.0 26.73/12E 8,418 2,987 25.6 -9.1 7.8 173 1.2 1.3 18.53/13E 12,158 4,408 37.7 47.6 5.3 206 1.0 1.5 21.73/14E 15,225 5,507 51.3 36.1 3.9 246 0.8 1.4 22.7Consolidated financials• DEWH’s strong loan growth momentum is likely to continue in 2QFY13. We expect loan growth (on balancesheet) of 35%+ YoY and AUM growth of 45%+ YoY. We expect NII to grow 43% YoY to INR1.6b.• Margins are likely to remain stable QoQ, as the liquidity situation has eased considerably and wholesaleborrowing costs have come off substantially.• We expect asset quality to remain stable sequentially.• We expect PAT to grow 33% YoY and 23% QoQ to INR954m.• The stock trades at 1x FY13E and 0.8x FY14E BV. Maintain Buy.• Key things to watch for: (1) Business growth trends, (2) Movement in spreads, (3) Cost to income ratio,(4) FBHFL performance.Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 4,652 5,404 6,029 6,498 6,957 7,531 8,039 8,603 22,583 31,130Interest Expenses 3,599 4,290 4,788 5,213 5,521 5,935 6,262 6,666 17,890 24,383Net Interest Income 1,053 1,114 1,241 1,285 1,436 1,596 1,778 1,937 4,693 6,747YoY Growth (%) 48.2 37.4 43.6 34.7 36.4 43.3 43.3 50.8 40.5 43.8Fees and other income 325 486 590 714 432 600 650 713 2,114 2,395Net Income 1,378 1,599 1,831 1,999 1,868 2,196 2,428 2,651 6,807 9,142YoY Growth (%) 36.0 3.9 47.2 40.3 35.5 37.3 32.6 32.6 30.4 34.3Operating Expenses 471 616 692 806 672 779 860 924 2,585 3,235YoY Growth (%) 36.0 50.0 60.0 46.0 43.0 26.0 24.0 15.0 48.0 25.0Operating Profits 907 983 1,138 1,193 1,196 1,417 1,568 1,727 4,221 5,907YoY Growth (%) 36.0 -13.0 40.0 36.0 32.0 44.0 38.0 45.0 21.0 40.0Provisions 33.0 116.0 150.0 -62.0 150.0 127.0 134.0 171.2 237.0 582.2Profit before Tax 874 867 988 1,255 1,046 1,290 1,434 1,556 3,984 5,325Tax Provisions 216 148 238 317 268 335 373 408 920 1,385PAT including extraordinary item 658.1 718.9 749.7 937.6 778.0 954.5 1,061.0 1,147.2 3,064.3 3,940.7YoY Growth (%) 28.4 -23.1 21.4 59.9 18.2 32.8 41.5 22.4 15.6 28.6Extraordinary Items 0 0 0 250 0 0 0 0 250 0PAT excluding extraordinary item 658 719 750 688 778 954 1,061 1,147 2,814 3,941YoY Growth (%) 28.4 23.9 21.4 17.2 18.2 32.8 41.5 66.8 22.5 40.0Operating MetricsLoan growth (%) 56.7 50.7 49.8 37.2 39.5 37.2 37.1 44.6 37.2 44.6Borrowings growth (%) 55.9 61.7 50.8 28.9 38.6 28.9 41.1 47.6 28.9 47.6Cost to Income Ratio (%) 34.2 38.5 37.8 40.3 36.0 35.5 35.4 34.9 38.0 35.4Tax Rate (%) 24.7 17.1 24.1 25.3 25.6 26.0 26.0 26.3 23.1 26.0E: MOSL EstimatesOctober 2012C–60

BSE SensexS&P CNX18,763 5,703BloombergFB INEquity Shares (m) 171.052 Week Range (INR) 480/3221,6,12 Rel Perf (%) 4/-3/7Mcap (INR b) 76.2Mcap (USD b) 1.4CMP: INR446September 2012 Results PreviewSector: FinancialsFederal BankBuyYear Net Income PAT EPS EPS P/E BV P/BV P/ABV RoAA RoAEEnd (INR m) (INR m) (INR) Gr. (%) (X) (INR) (X) (X) (%) (%)3/11A 22,634 5,871 34.3 26.4 - 298 - - 1.2 12.03/12A 24,857 7,768 45.4 32.3 9.8 333 1.3 1.4 1.4 14.43/13E 27,048 8,041 47.0 3.5 9.5 369 1.2 1.3 1.2 13.43/14E 32,209 9,530 55.7 18.5 8.0 412 1.1 1.2 1.3 14.3• We expect loan growth to remain in line with industry average at ~17%. However, on a high base deposit growthexpected to be below industry average at ~11%.• Easing pressure on cost of deposits, improving yield on advances and absence of one-offs is likely to providecushion to margins, which are expected to improve ~10bp.• Fee income is expected to grow by ~5% YoY. However, expected strong trading gains would drive overall noninterestincome, which is likely to grow ~24% YoY.• On slippages, we expect a run-rate similar to 1QFY13. However, stress in the large corporate segment remainsa risk.• The stock trades at 1.2x FY13E and 1.1x FY14E BV, with RoA of over 1.2%. However, RoE is likely to be in lowerteens,as leverage remains low on strong capital base. Maintain Buy.• Key things to watch for: (1) Trend in slippages and recoveries, (2) Business growth, (3) Fee income performance.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 12,447 13,678 14,668 14,790 15,367 15,849 16,128 16,424 55,584 63,769Interest Expense 7,850 8,934 9,388 9,878 10,451 10,660 10,793 10,928 36,050 42,832Net Interest Income 4,598 4,744 5,280 4,912 4,916 5,190 5,335 5,496 19,534 20,937% Change (YoY) 11.2 8.2 18.1 9.7 6.9 9.4 1.0 11.9 11.8 7.2Other Income 1,169 1,170 1,379 1,606 1,243 1,451 1,596 1,821 5,323 6,111Net Income 5,767 5,914 6,660 6,518 6,160 6,640 6,931 7,317 24,857 27,048Operating Expenses 2,226 2,301 2,472 2,793 2,695 2,805 2,944 3,162 9,793 11,605Operating Profit 3,541 3,613 4,187 3,724 3,465 3,835 3,988 4,156 15,065 15,443% Change (YoY) 5.6 -6.2 17.4 6.3 -2.1 6.1 -4.8 11.6 5.6 2.5Other Provisions 1,340 722 1,153 155 628 818 962 1,122 3,370 3,530Profit before Tax 2,200 2,891 3,035 3,569 2,837 3,017 3,025 3,033 11,695 11,913Tax Provisions 739 979 1,016 1,193 934 1,011 998 929 3,927 3,872Net Profit 1,462 1,912 2,019 2,376 1,904 2,006 2,027 2,104 7,768 8,041% Change (YoY) 10.8 36.2 41.1 38.4 30.2 4.9 0.4 -11.4 32.3 3.5Operating MetricsNIM (Reported,%) 3.9 3.8 3.9 3.6 3.4 - - - 3.8 -NIM (Cal, %) 3.9 3.8 4.0 3.6 3.4 3.5 3.5 3.5 3.8 3.5Deposit Growth (%) 22.7 30.9 26.6 13.8 17.8 10.7 16.4 16.0 13.8 16.0Loan Growth (%) 17.8 21.6 17.6 18.2 19.0 16.6 22.7 15.0 18.2 15.0CASA Ratio (%) 27.2 26.4 28.7 27.5 28.7 - - - 27.5 -Tax Rate (%) 33.6 33.9 33.5 33.4 32.9 33.5 33.0 30.6 33.6 32.5Asset QualityOSRL (INR b) 14.2 14.5 14.4 24.7 26.7 - - - 24.7 -OSRL (%) 4.4 4.3 4.3 6.5 7.0 - - - 6.5 -Gross NPA (INR b) 13.0 12.5 13.6 13.0 14.1 15.3 16.5 18.1 13.0 18.1Gross NPA (%) 3.9 3.6 4.0 3.4 3.6 3.8 3.9 4.1 3.4 3.4E: MOSL EstimatesOctober 2012C–61

BSE SensexS&P CNX18,763 5,703BloombergHDFC INEquity Shares (m) 1,477.052 Week Range (INR) 785/6011,6,12 Rel Perf (%) 0/7/7Mcap (INR b) 1,141.5Mcap (USD b) 21.7CMP: INR773September 2012 Results PreviewSector: FinancialsHDFCBuyYear Net Income PAT EPS EPS P/BV ABV* AP/ABV* AP/AE# RoAA Adj RoEEnd (INR m) (INR m) (INR) Gr. (%) (X) (INR) (X) (X) (%) (%)3/11A 53,181 35,350 24.1 22.4 - 91.2 - - 2.9 26.63/12A 61,975 41,226 27.9 15.8 6.0 100.5 5.9 22.7 2.8 27.33/13E 75,126 49,225 32.1 15.1 4.9 105.9 5.4 19.1 2.9 29.43/14E 90,173 59,173 38.6 20.2 4.3 125.8 4.3 15.0 2.9 30.9* Price adj. for value of key ventures. BV is adj. by deducting invt in key ventures from NW# Price adj. for value of key ventures. EPS is adj. for dividend from key ventures• HDFC’s loan growth (net of sell downs) is likely to remain healthy at ~20%+ YoY. Spreads should be largely stableat ~2.2%.• Non-interest income is likely to grow ~33% YoY. We have modeled investment gains of INR500m as againstINR869m in 2QFY12. We expect dividend income to increase to INR1.8b from INR1.6b in 1QFY13.• Asset quality has remained healthy over the past several quarters and the trend is likely to continue. In 1QFY13,GNPAs were 0.79% on 90 days overdue basis and 0.49% on 180 days overdue basis.• However, we conservatively model higher provisions (similar to 1QFY13 levels) of INR424m against INR400m in1QFY13 and INR170m in 2QFY12.• The stock trades at 4.3x FY14E AP/ABV and 15x FY14E AP/AEPS (price adjusted for value of other businesses andbook value adjusted for investments made in those businesses). Maintain Buy.• Key things to watch for: (1) Movement of spreads, (2) Loan growth and guidance, (3) Asset quality trend.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 36,098 39,340 42,488 46,823 46,924 49,222 50,596 56,535 163,689 203,277Interest Expense 25,149 26,905 30,124 29,389 33,882 34,560 35,078 35,906 111,568 139,426Net Interest Income 10,948 12,435 12,364 17,434 13,042 14,663 15,518 20,629 52,121 63,852YoY Change (%) 17.1 14.7 15.1 27.2 19.1 17.9 25.5 18.3 16.3 22.5Profit on Sale of Inv. 163 869 880 791 202 500 750 1,048 2,702 2,500Other operating income 1,909 1,430 1,306 1,233 2,223 2,550 1,600 2,151 6,939 8,524Net Operating Income 13,020 14,734 14,549 19,458 15,467 17,713 17,868 23,828 61,762 74,876YoY Change (%) 20.8 18.1 9.9 18.3 18.8 20.2 22.8 22.5 16.7 21.2Other Income 47 52 52 63 74 50 50 40 213 250Total Income 13,067 14,786 14,601 19,520 15,541 17,763 17,918 23,868 61,975 75,126Operating Expenses 1,132 1,239 1,119 1,030 1,342 1,350 1,475 1,337 4,519 5,504Pre Provisioning Profit 11,935 13,547 13,483 18,491 14,199 16,413 16,443 22,531 57,456 69,622YoY Change (%) 21.6 17.9 9.8 17.1 19.0 21.2 22.0 21.8 16.4 21.2Provisions 180 170 200 250 400 424 456 678 800 1,958PBT Ex Invest. profits 11,593 12,508 12,403 17,450 13,597 15,489 15,237 20,805 53,954 65,164YoY Change (%) 19.9 16.4 18.6 22.9 17.3 23.8 22.9 19.2 19.7 20.8PBT 11,755 13,377 13,283 18,241 13,799 15,989 15,987 21,852 56,656 67,664YoY Change (%) 21.6 18.0 9.5 17.4 17.4 19.5 20.4 19.8 16.4 19.4Provision for Tax 3,310 3,670 3,470 4,980 3,780 4,397 4,356 5,905 15,430 18,438PAT 8,445 9,707 9,813 13,261 10,019 11,592 11,630 15,947 41,226 49,225YoY Change (%) 21.6 20.2 10.1 16.1 18.6 19.4 18.5 20.3 16.6 19.4E: MOSL EstimatesOctober 2012C–62

BSE SensexS&P CNX18,763 5,703BloombergHDFCB INEquity Shares (m) 2,346.752 Week Range (INR) 639/4001,6,12 Rel Perf (%) 0/13/23Mcap (INR b) 1,475.4Mcap (USD b) 28.0CMP: INR629September 2012 Results PreviewSector: FinancialsHDFC BankNeutralYear Net Income PAT EPS EPS P/E BV P/BV P/ABV RoAA RoAEEnd (INR m) (INR m) (INR) Gr. (%) (X) (INR) (X) (X) (%) (%)3/11A 148,783 39,264 16.9 31.0 - 109.1 - - 1.6 16.73/12A 175,405 51,671 22.0 30.4 28.6 127.4 4.9 5.0 1.7 18.73/13E 217,274 67,291 28.7 30.2 21.9 149.4 4.2 4.3 1.8 20.73/14E 263,511 83,920 35.8 24.7 17.6 176.8 3.6 3.6 1.8 21.9• HDFCB is expected to deliver above industry loan and deposit growth, both on a YoY and QoQ basis. On a YoYbasis, loans and deposits are likely to grow ~20% and ~19%, respectively.• NIMs are expected to decline marginally QoQ. Strong loan growth coupled with healthy margins would translateinto NII growth of 3% QoQ and ~23% YoY .• Fee income growth is expected to be 20%+, aided by lower base. Further, trading gains and strong growth inforex income would boost growth in non-interest income to 30%+.• Asset quality is likely to remain healthy. However, stress in few segments of retail loans has increased, whichneeds to be watched.• The stock trades at 4.2x FY13E and 3.6x FY14E BV, and at 21.9x FY13E and 17.6x FY14E EPS. Maintain Neutral.• Key things to watch for: (1) Traction in fee income, (2) Being largely in retail lending, HDFCB has reportedcommendable asset quality performance; trend and outlook on retail portfolio remains a key factor to watch.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 59,780 67,177 72,026 73,880 80,074 82,658 85,171 87,352 272,864 335,254Interest Expense 31,300 37,732 40,867 39,997 45,234 46,591 47,290 47,857 149,896 186,971Net Interest Income 28,480 29,445 31,160 33,883 34,841 36,067 37,881 39,494 122,968 148,283% Change (Y-o-Y) 18.6 16.6 12.2 19.3 22.3 22.5 21.6 16.6 16.6 20.6Other Income 11,200 12,117 14,200 14,920 15,295 16,424 17,770 19,502 52,437 68,990Net Income 39,680 41,562 45,360 48,803 50,135 52,491 55,651 58,996 175,405 217,274Operating Expenses 19,346 20,304 21,580 24,671 24,326 24,894 25,304 28,336 85,901 102,860Operating Profit 20,334 21,258 23,780 24,132 25,809 27,598 30,347 30,660 89,504 114,414% Change (Y-o-Y) 16.3 17.6 14.7 15.1 26.9 29.8 27.6 27.1 15.9 27.8Other Provisions 4,437 3,661 3,292 2,983 4,873 4,800 3,200 2,946 14,373 15,819Profit before Tax 15,897 17,598 20,488 21,149 20,936 22,798 27,147 27,714 75,132 98,594Tax Provisions 5,047 5,604 6,191 6,618 6,762 7,181 8,551 8,809 23,461 31,304Net Profit 10,850 11,994 14,297 14,531 14,174 15,616 18,595 18,905 51,671 67,291% Change (Y-o-Y) 33.7 31.5 31.4 30.4 30.6 30.2 30.1 30.1 31.6 30.2Operating MetricsNIM (Reported,%)* 4.2 4.1 4.1 4.2 4.3 - - - 4.2 -NIM (Cal, %)# 4.7 4.5 4.6 4.7 4.6 4.5 4.5 4.5 4.6 4.5Deposit Growth (%) 15.4 18.1 21.0 18.3 22.0 18.9 24.4 21.0 18.3 21.0Loan Growth (%) 20.0 20.0 22.1 22.2 21.5 20.5 21.6 22.0 22.2 22.0CASA Ratio (%) 49.1 47.3 48.6 48.4 46.0 - - - 48.4 -Tax Rate (%) 31.7 31.8 30.2 31.3 32.3 31.5 31.5 31.8 31.2 31.8Asset QualityOSRL (INR b) 3.5 1.9 1.9 2.0 2.1 - - - 2.0 -OSRL (%) 0.2 0.1 0.1 0.1 0.1 - - - 0.1 -Gross NPA (INR b) 18.3 18.9 20.2 20.0 20.9 24.0 26.4 28.3 20.0 28.3Gross NPA (%) 1.0 1.0 1.0 1.0 1.0 1.0 1.1 1.2 1.0 1.2E: MOSL Estimates; * Reported on total assets; # Cal. on interest earning assetsOctober 2012C–63

BSE SensexS&P CNX18,763 5,703BloombergICICIBC INEquity Shares (m) 1,152.852 Week Range (INR) 1,087/6411,6,12 Rel Perf (%) 8/13/8Mcap (INR b) 1,218.8Mcap (USD b) 23.1CMP: INR1,057September 2012 Results PreviewSector: FinancialsICICI BankBuyYear Net Income PAT EPS EPS P/E AP/E* ABV* AP/ABV* Core RoAAEnd (INR m) (INR m) (INR) Gr. (%) (X) (X) (INR) (X) RoAE (%) (%)3/11A 156,648 51,514 44.7 23.9 - 19.7 371 - 11.5 1.33/12A 182,369 64,653 56.1 25.4 18.9 15.6 409 2.1 12.8 1.53/13E 220,063 78,775 68.3 21.8 15.5 12.6 453 1.9 14.2 1.53/14E 256,506 90,734 78.7 15.2 13.4 10.7 504 1.7 14.7 1.5* Price adjusted for value of key ventures and BV adjusted for investments in these ventures• Loan growth is expected to remain healthy at 18% YoY, led by growth in the domestic segment. While on a YoYbasis, deposit growth is likely to be a moderate 14%, on a QoQ basis, it is likely to be in line with loan growth.• Fee income is expected to be muted. However, trading profits as against trading loss of INR800m in 2QFY12would provide cushion to non-interest income.• Asset quality has been holding fairly well over the past few quarters. We expect this to continue, given thebenign asset quality in the retail segment, changing loan portfolio mix (unsecured retail loans now constitutejust 1.3% of overall loans as against 9%+ in FY08), and better risk management practices.• Excluding subsidiaries, the stock trades at 1.7x FY14E ABV (BV adjusted for NPAs and investments in subsidiaries)and 10.7x FY14E EPS. Maintain Buy.• Key things to watch for: (1) Margin performance, (2) Guidance on loan growth, (3) While performance on assetquality has been strong, increasing stress in large and mid-corporate segments might lead to higher restructuring.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 76,185 81,576 85,919 91,746 95,457 98,015 100,263 102,354 335,427 396,088Interest Expense 52,076 56,512 58,799 60,699 63,527 65,433 65,924 65,433 228,085 260,317Net Interest Income 24,109 25,064 27,120 31,048 31,929 32,582 34,339 36,920 107,342 135,771% Change (YoY) 21.1 13.7 17.3 23.7 32.4 30.0 26.6 18.9 19.0 26.5Other Income 16,429 17,396 18,919 22,285 18,799 19,902 22,060 23,530 75,028 84,292Net Income 40,538 42,460 46,039 53,332 50,729 52,484 56,399 60,451 182,369 220,063Operating Expenses 18,200 18,922 19,168 22,216 21,235 22,054 22,996 24,595 78,504 90,880Operating Profit 22,338 23,537 26,871 31,116 29,493 30,430 33,403 35,856 103,865 129,183% Change (YoY) 2.1 6.4 14.7 35.0 32.0 29.3 24.3 15.2 14.8 24.4Other Provisions 4,539 3,188 3,411 4,693 4,659 5,449 5,963 5,201 15,830 21,273Profit before Tax 17,800 20,350 23,460 26,423 24,835 24,981 27,440 30,654 88,034 107,910Tax Provisions 4,480 5,318 6,179 7,405 6,684 6,745 7,409 8,298 23,382 29,136Net Profit 13,320 15,032 17,281 19,018 18,151 18,236 20,031 22,356 64,653 78,775% Change (YoY) 29.8 21.6 20.3 31.0 36.3 21.3 15.9 17.6 25.5 21.8Operating MetricsNIM (Reported,%) 2.6 2.6 2.7 3.0 3.0 - - - 2.7 -NIM (Cal, %) 2.5 2.5 2.5 2.8 2.8 2.8 2.8 2.9 2.6 2.8Deposit Growth (%) 14.8 9.9 19.7 13.3 16.1 13.6 12.2 20.6 13.3 20.6Loan Growth (%) 19.7 20.5 19.1 17.3 21.6 18.2 15.7 15.4 17.3 15.4CASA Ratio (%) 40.0 38.3 39.0 39.0 39.1 - - - 39.0 -Tax Rate (%) 25.2 26.1 26.3 28.0 26.9 27.0 27.0 27.1 26.6 27.0Asset QualityOSRL (INR b) 19.7 25.0 30.7 42.6 41.7 - - - 42.6 -OSRL (%) 0.9 1.1 1.2 1.7 1.6 - - - 1.7 -Gross NPA (INR b) 99.8 100.2 97.2 94.8 98.2 99.2 102.2 104.1 94.8 104.1Gross NPA (%) 4.4 4.1 3.8 3.6 3.5 3.5 3.5 3.5 3.6 3.5E: MOSL EstimatesOctober 2012C–64

BSE SensexS&P CNX18,763 5,703BloombergIDFC INEquity Shares (m) 1,512.452 Week Range (INR) 162/901,6,12 Rel Perf (%) 6/11/25Mcap (INR b) 233.6Mcap (USD b) 4.4CMP: INR154September 2012 Results PreviewSector: FinancialsIDFCBuyYear Net Inc. PAT EPS EPS P/E ABV AP/ABV RoAA CoreEnd (INR m) (INR m) (INR) Gr. (%) (x) (INR)* (x) (%) RoE (%)3/11A 25,455 12,817 8.8 7.4 - 60.6 - 3.2 17.83/12A 29,788 15,540 10.3 17.1 15.0 72.7 1.8 2.9 16.23/13E 33,582 16,466 10.9 6.0 14.2 80.7 1.6 2.5 14.83/14E 39,479 20,047 13.3 21.7 11.7 90.5 1.5 2.6 16.0*Adjusted for Investment in subsidaries , Prices adjusted for other ventures• Loan growth is likely to remain strong. We model in 4% QoQ and 33% YoY loan growth.• We expect spreads to remain largely stable on a QoQ basis, translating into ~4% QoQ and 32% YoY growth in NII.• We factor modest gains of INR300m from principal investments as against INR2.4b in 2QFY12 (one-off; IDFC hadbooked gains on partial stake sale in NSE).• Revenues from Investment Banking and Broking likely to remain muted sequentially, given the subdued activitylevels in capital markets. However, we expect revenues from Asset Management to improve marginally QoQ.• Asset quality is expected to remain stable. However, we conservatively model in provisions of INR1b as againstINR631m in 2QFY12.• The stock trades at 11.7x FY14E EPS and 1.5x FY14E ABV. Maintain Buy.• Key things to watch for: (1) Business growth guidance, (2) Movement in spreads, (3) Emerging asset qualitytrends.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENII 4,830 4,980 5,460 5,860 6,290 6,548 6,882 7,301 21,130 27,022% Change (YoY) 43.3 33.2 18.7 22.6 30.2 31.5 26.1 24.6 28.1 27.9- Infra Loans 4,280 4,390 4,730 5,400 5,550 5,763 6,022 6,352 18,800 23,687- Treasury 550 590 730 460 740 786 860 949 2,330 3,335Fees 1,165 1,480 1,220 1,037 1,392 1,145 1,270 1,530 4,902 5,336- Asset management 620 800 680 600 640 750 800 940 2,700 3,130- IB and Broking 150 180 240 140 90 95 145 208 710 538- Loan related/others 395 500 300 297 662 300 325 382 1,492 1,669Principal investments (20) 2,430 910 290 20 300 325 379 3,610 1,024Other Income 76 11 7 63 14 40 65 81 157 200Net Income 6,051 8,901 7,597 7,251 7,716 8,033 8,542 9,291 29,799 33,582% Change (YoY) (1.1) 36.9 15.1 3.4 27.5 (9.7) 12.5 28.1 13.6 12.7Operating Expenses 1,142 1,314 1,266 1,505 1,160 1,240 1,400 1,842 5,227 5,642Operating profit 4,909 7,587 6,331 5,746 6,556 6,793 7,142 7,449 24,572 27,941% Change (YoY) - 44.0 27.0 13.0 34.0 (10.0) 13.0 30.0 22.0 14.0Provisions 399 631 978 838 1,026 1,000 1,000 1,051 2,846 4,077PBT 4,509 6,956 5,353 4,908 5,530 5,793 6,142 6,398 21,726 23,864Tax 1,378 1,715 1,537 1,590 1,713 1,796 1,904 1,984 6,219 7,398PAT 3,132 5,241 3,816 3,319 3,817 3,997 4,238 4,413 15,508 16,466Less: Consol Adjustments (4.8) (1.7) 4.1 (29.7) 19.2 (5.0) (5.0) (9.2) (32.1) 0.0Consol PAT 3,136 5,243 3,812 3,348 3,798 4,002 4,243 4,423 15,540 16,466% Change (YoY) (6.2) 54.9 18.6 16.5 21.1 (23.7) 11.3 32.1 21.2 6.0E: MOSL EstimatesOctober 2012C–65

BSE SensexS&P CNX18,763 5,703BloombergINBK INEquity Shares (m) 429.852 Week Range (INR) 265/1521,6,12 Rel Perf (%) 12/-23/-25Mcap (INR b) 82.6Mcap (USD b) 1.6CMP: INR192September 2012 Results PreviewSector: FinancialsIndian BankBuyYear Net Income PAT EPS EPS P/E BV P/BV P/ABV RoAA RoAEEnd (INR m) (INR m) (INR) Gr. (%) (X) (INR) (X) (X) (%) (%)3/11A 52,180 17,141 39.9 10.2 - 184 - - 1.5 22.93/12A 56,502 17,470 40.6 1.9 4.7 215 0.9 0.9 1.3 19.83/13E 60,014 18,386 42.8 5.2 4.5 248 0.8 0.8 1.2 18.03/14E 68,846 19,621 45.7 6.7 4.2 283 0.7 0.7 1.1 16.8• We expect business growth to moderate further, with a loan and deposit growth of 12-13%.• NIM is likely to remain stable on a QoQ basis, however, decline ~30bp on a YoY basis. Consequently, NII growthwould be restricted to just 5% YoY.• Asset quality is expected to be under pressure, led by increased stress in the large corporate segment.Performance on recoveries and upgradations would be a key thing to watch for.• INBK’s exposure to SEBs as at the end of 1QFY13 stood at INR50b, of which INR22b has been restructured.Restructuring of SEBs and other corporate accounts would lead to an increase in the restructured portfolio.• The stock trades at 0.8x FY13E and 0.7x FY14E BV, and at 4.5x FY13E and 4.2x FY14E EPS. Maintain Buy.• Key things to watch for: (1) Asset quality outlook: Gross slippages and restructured portfolio, (2) Marginperformance.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 27,814 30,348 32,240 31,911 33,738 34,530 35,220 35,799 122,313 139,287Interest Expense 17,514 18,994 20,540 21,085 22,206 22,540 22,878 22,832 78,133 90,455Net Interest Income 10,300 11,354 11,700 10,826 11,532 11,991 12,342 12,968 44,180 48,832% Change (Y-o-Y) 11.2 15.5 12.8 -2.6 12.0 5.6 5.5 19.8 9.5 10.5Other Income 2,493 3,423 2,812 3,070 2,227 2,958 2,973 3,024 12,322 11,181Net Income 12,793 14,777 14,513 13,896 13,759 14,949 15,315 15,991 56,502 60,014Operating Expenses 4,982 5,568 5,397 5,923 5,356 6,041 5,916 6,517 21,870 23,830Operating Profit 7,811 9,209 9,116 7,973 8,402 8,908 9,399 9,474 34,632 36,183% Change (Y-o-Y) -6.8 24.6 12.3 -11.7 7.6 -3.3 3.1 18.8 8.3 6.2Other Provisions 1,770 2,203 2,361 5,618 1,457 1,982 2,348 3,158 11,953 8,945Profit before Tax 6,042 7,005 6,754 2,354 6,945 6,926 7,051 6,316 22,679 27,238Tax Provisions 1,972 2,318 1,495 -1,100 2,328 2,216 2,256 2,052 5,209 8,852Net Profit 4,069 4,687 5,259 3,454 4,617 4,709 4,795 4,264 17,470 18,386% Change (Y-o-Y) 10.5 12.7 7.0 -21.3 13.5 0.5 -8.8 23.4 1.9 5.2Operating MetricsNIM (%) 3.4 3.8 3.6 3.2 3.3 - - - 3.4 -NIM (Cal, %) 3.6 3.8 3.7 3.3 3.5 3.5 3.5 3.5 3.6 3.5Deposit Growth (%) 21.3 18.6 17.8 14.2 15.0 12.6 13.3 15.0 14.2 15.0Loan Growth (%) 21.3 23.4 19.1 20.4 13.8 11.5 13.2 14.7 20.4 14.7CASA Ratio (%) 31.3 30.0 31.3 31.5 29.3 - - - 31.5 -Tax Rate (%) 32.6 33.1 22.1 (46.7) 33.5 32.0 32.0 32.5 23.0 32.5Asset QualityOSRL (INR b) 52.5 51.3 55.7 89.0 99.2 - - - 89.0 -OSRL (%) 6.4 5.9 6.3 9.8 10.6 - - - 9.8 -Gross NPA (INR b) 8.1 10.5 11.9 18.5 15.5 18.1 20.8 22.7 18.5 22.7Gross NPA (%) 1.0 1.2 1.4 2.0 1.7 1.9 2.1 2.2 2.0 2.2E: MOSL EstimatesOctober 2012C–66

BSE SensexS&P CNX18,763 5,703Bloomberg IIB INEquity Shares (m) 467.752 Week Range (INR) 356/2221,6,12 Rel Perf (%) 5/9/20Mcap (INR b) 165.5Mcap (USD b) 3.1CMP: INR354September 2012 Results PreviewSector: FinancialsIndusInd BankBuyYear Net Income PAT EPS EPS P/E BV P/BV P/ABV RoAA RoAEEnd (INR m) (INR m) (INR) Gr. (%) (X) (INR) (X) (X) (%) (%)3/11A 20,902 5,773 12.4 45.3 - 82 - - 1.4 19.33/12A 27,160 8,026 17.2 38.5 20.6 97 3.7 3.7 1.6 19.23/13E 35,438 10,287 22.0 28.2 16.1 115 3.1 3.1 1.6 20.73/14E 44,971 12,844 27.5 24.9 12.9 139 2.5 2.6 1.7 21.6• We expect IIB to report above industry business growth, with loan growth of 30% and deposit growth of 23%.• Margins are likely to expand ~10bp, led by decline in cost of funds and higher proportion of fixed loans. As aresult, NII is expected to grow 25%. Traction in savings account (SA) deposits is likely to continue, providingfurther cushion to margins.• Fee income growth expected to be strong at 30%.• Asset quality is likely to remain healthy. In 1QFY13, IIB had reported a slippage ratio of 1.5%, led by higherslippages in the corporate segment.• The stock trades at 3,1x FY13E and 2.5x FY14E BV, and at 16.1x FY13E and 12.9x FY14E EPS. Maintain Buy.• Key things to watch for: (1) IIB has shown commendable performance on the asset quality front over the lastfew quarters; however, given its high exposure to the CV segment, performance on asset quality needs to bewatched, (2) Growth in SA deposits, (3) Branch additions.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 11,646 13,239 13,897 14,810 16,320 16,941 17,492 18,012 53,592 68,765Interest Expense 7,746 9,047 9,591 10,166 11,479 11,709 11,885 12,012 36,549 47,085Net Interest Income 3,900 4,192 4,307 4,644 4,841 5,232 5,607 6,000 17,042 21,680% Change (YoY) 31.9 27.1 18.6 19.7 24.1 24.8 30.2 29.2 23.8 27.2Other Income 2,154 2,392 2,651 2,921 3,188 3,264 3,494 3,812 10,118 13,758Net Income 6,054 6,584 6,958 7,565 8,029 8,495 9,102 9,812 27,160 35,438Operating Expenses 2,937 3,254 3,465 3,774 3,989 4,195 4,474 4,823 13,430 17,481Operating Profit 3,117 3,330 3,492 3,791 4,040 4,300 4,628 4,989 13,730 17,957% Change (YoY) 35.2 27.2 19.9 27.2 29.6 29.1 32.5 31.6 26.9 30.8Other Provisions 446 470 428 460 535 625 725 832 1,804 2,717Profit before Tax 2,671 2,860 3,064 3,331 3,505 3,675 3,903 4,157 11,927 15,240Tax Provisions 870 929 1,005 1,097 1,143 1,194 1,268 1,347 3,900 4,953Net Profit 1,802 1,931 2,060 2,234 2,363 2,481 2,635 2,809 8,026 10,287% Change (YoY) 52.0 45.0 33.9 30.1 31.1 28.5 27.9 25.8 39.0 28.2Operating MetricsNIM (Reported,%) 3.4 3.4 3.3 3.3 3.2 - - - 3.3 -NIM (Cal, %) 3.3 3.4 3.3 3.3 3.3 3.4 3.4 3.5 3.6 3.7Deposit Growth (%) 28.8 22.6 32.3 23.3 27.8 23.4 23.7 25.0 23.3 25.0Loan Growth (%) 31.4 28.5 29.7 34.0 31.2 29.8 27.8 25.0 34.0 25.0CASA Ratio (%) 28.2 27.7 26.5 27.3 27.9 - - - 27.3 -Tax Rate (%) 32.5 32.5 32.8 32.9 32.6 32.5 32.5 32.4 32.7 32.5Asset QualityOSRL (INR b) 1.1 0.9 0.7 0.9 0.9 - - - 0.9 -OSRL (%) 0.4 0.3 0.2 0.3 0.2 - - - 0.3 -Gross NPA (INR b) 3.1 3.3 3.3 3.5 3.7 4.1 4.6 5.1 3.5 5.1Gross NPA (%) 1.1 1.1 1.0 1.0 1.0 1.0 1.1 1.2 1.0 1.2E: MOSL Estimates; Quarterly calculated margins based on total assets, yearly on interest earning assetsOctober 2012C–67

BSE SensexS&P CNX18,763 5,703BloombergVYSB INEquity Shares (m) 150.152 Week Range (INR) 415/2761,6,12 Rel Perf (%) 4/8/20Mcap (INR b) 61.1Mcap (USD b) 1.2CMP: INR407September 2012 Results PreviewSector: FinancialsING Vysya BankBuyYear Net Income PAT EPS EPS P/E BV P/BV P/ABV RoAA RoAEEnd (INR m) (INR m) (INR) Gr. (%) (X) (INR) (X) (X) (%) (%)3/11A 16,614 3,186 26.3 42.3 - 208 - - 0.9 13.43/12A 18,781 4,563 30.4 15.4 13.4 258 1.6 1.6 1.1 14.33/13E 22,409 5,313 35.4 16.4 11.5 288 1.4 1.4 1.0 13.03/14E 26,809 6,055 40.3 14.0 10.1 322 1.3 1.3 1.0 13.2• Business growth is expected to be above industry average, with loans and deposits growing at 21-22% YoY.• Though margins would be lower by 10bp on a YoY basis, they would be stable QoQ at 3.3%. NII is likely to grow16% YoY and 3% QoQ.• Macro-economic challenges coupled with high exposure to the SME segment could lead to some pressure onasset quality. In 1QFY13, slippages increased QoQ to INR1b, led by higher slippages in the mid-corporate andSME segments. We expect similar run-rate of slippages to continue; upgradations and recoveries need to bewatched.• The stock trades at 1.4x FY13E and 1.3x FY14E BV, and at 11.5x FY13E and 10.1x FY14E EPS. Maintain Buy.• Key things to watch for: (1) Margin movement, (2) Fee income and opex growth, which would be key factors forRoA improvement, (3) Performance on asset quality.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 8,708 9,331 9,915 10,615 11,714 11,973 12,248 12,516 38,568 48,451Interest Expense 6,088 6,295 6,679 7,423 8,281 8,447 8,616 8,720 26,485 34,064Net Interest Income 2,620 3,036 3,236 3,192 3,433 3,527 3,632 3,796 12,084 14,387% Change (Y-o-Y) 10.1 19.4 31.6 18.9 31.0 16.1 12.2 18.9 20.1 19.1Other Income 1,405 1,625 1,699 1,968 1,710 1,860 2,065 2,387 6,698 8,022Net Income 4,025 4,661 4,935 5,160 5,142 5,387 5,697 6,183 18,781 22,409Operating Expenses 2,557 2,767 2,822 2,957 2,967 3,133 3,289 3,455 11,102 12,844Operating Profit 1,468 1,894 2,113 2,203 2,175 2,254 2,408 2,729 7,679 9,565% Change (Y-o-Y) -1.2 2.8 32.5 53.9 48.1 19.0 13.9 23.8 20.9 24.6Other Provisions 62 175 334 566 267 325 450 711 1,138 1,752Profit before Tax 1,406 1,719 1,779 1,637 1,908 1,929 1,958 2,018 6,541 7,813Tax Provisions 466 566 584 363 607 608 627 659 1,978 2,500Net Profit 940 1,154 1,195 1,274 1,301 1,321 1,331 1,359 4,563 5,313% Change (Y-o-Y) 36.1 53.3 44.0 39.5 38.4 14.5 11.4 6.7 43.2 16.4Operating MetricsNIM (Reported,%) 3.0 3.4 3.5 3.3 3.3 - - - 3.3 -NIM (Calculated,%) 3.0 3.3 3.5 3.2 3.2 3.2 3.2 3.2 3.2 3.2Deposit Growth (%) 29.4 17.8 16.1 16.6 14.6 21.5 25.0 22.0 16.6 22.0Loan Growth (%) 25.5 22.8 22.6 21.8 22.9 20.7 19.8 20.0 21.8 20.0CASA Ratio (%) 33.8 32.6 32.6 34.2 33.3 - - - 34.2 -Tax Rate (%) 33.1 32.9 32.8 22.2 31.8 31.5 32.0 32.7 30.2 32.0Asset QualityGross NPA (INR b) 5.2 5.1 5.4 5.6 5.9 6.4 6.9 7.5 5.6 7.5Gross NPA (%) 2.2 2.0 2.0 1.9 2.0 2.1 2.1 2.1 1.9 2.1PCR ( %) 83.9 84.8 85.0 90.7 90.4 86.0 82.0 79.3 90.7 79.3E: MOSL EstimatesOctober 2012C–68

BSE SensexS&P CNX18,763 5,703BloombergKMB INEquity Shares (m) 740.752 Week Range (INR) 650/4181,6,12 Rel Perf (%) 6/15/27Mcap (INR b) 479.9Mcap (USD b) 9.1CMP: INR648September 2012 Results PreviewSector: FinancialsKotak Mahindra BankNeutralYear Cons. PAT Cons. EPS EPS P/E Cons. BV P/BV P/ABV Cons. RoAA* CoreEnd (INR m) (INR) Gr. (%) (X) (INR) (X) (X) RoE (%) (%) RoE*(%)3/11A 15,667 21.3 13.3 - 148.8 - - 16.6 1.9 15.43/12A 18,322 24.7 16.3 26.2 174.2 3.7 3.8 15.4 1.9 15.43/13E 19,420 26.2 6.0 24.7 199.6 3.2 3.3 14.0 1.5 13.73/14E 22,046 29.8 13.5 21.8 228.5 2.8 2.9 13.9 1.5 13.8* For standalone BankLending business• Growth in profit of the lending business is likely to remain muted. We expect ~8% YoY growth in lendingbusiness profit.• Growth in loans and deposits for the standalone bank is expected to be ~19% YoY and ~21% YoY, respectively.Margins are likely to remain under pressure on a QoQ basis.• For Kotak Prime, we expect loan growth of ~18% YoY and PAT growth of ~10% YoY.Capital Market and Asset Management business• We expect PAT of capital market related businesses to grow by ~22% YoY on a lower base. Profit from theSecurities business would grow sequentially but decline on a YoY basis.• In the Asset Management business, we expect strong growth in profit to INR155m v/s INR80m in 2QFY12 andINR70m in 1QFY13, as international subsidiaries are expected to report profit in 2QFY13 v/s net loss of INR70min 2QFY12.• The stock trades at 3.2x FY13E and 2.8x FY14E BV. Maintain Neutral.• Key things to watch for: (1) Business growth and outlook, (2) Improvement in CASA ratio, (3) Asset qualitytrends and (4) Margin movement.KMB Group: Earnings Trends(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEKotak Bank (Standalone) 2,520 2,600 2,760 2,970 2,820 2,764 2,718 2,892 10,850 11,195Kotak Prime 940 900 1,040 970 940 991 1,034 1,092 3,849 4,057Kotak Mah. Investments 30 30 30 60 40 44 48 53 153 185Lending Business 3,490 3,530 3,830 4,000 3,800 3,799 3,800 4,038 14,852 15,437YoY Growth (%) 29.3 33.7 34.7 17.5 8.9 7.6 -0.8 0.9 28.0 3.9Kotak Securities 230 290 240 500 230 256 269 288 1,260 1,044Kotak Mah. Capital Co. 10 -40 40 50 60 49 54 59 60 222Capital Market Business 240 250 280 550 290 305 323 347 1,320 1,265YoY Growth (%) -55.8 -57.7 -48.4 -16.9 20.8 22.0 15.3 -36.9 -43.5 -4.2Intl. Subsidiaries -30 -70 -40 30 -50 10 20 20 -110 0Kotak Mah. AMC & Trustee Co. 90 70 30 30 40 55 70 95 220 260Kotak Investment Advisors 110 80 70 100 80 90 95 110 360 375Asset Management Business 170 80 60 160 70 155 185 225 470 635YoY Growth (%) -52.0 -60.7 -71.3 -34.7 -58.8 93.8 208.3 40.6 -53.4 35.1Consol. PAT excluding Kotak Life 3,900 3,860 4,170 4,710 4,160 4,259 4,308 4,610 16,642 17,337YoY Growth (%) 8.4 12.4 16.0 9.2 6.7 10.3 3.3 -2.1 11.3 4.2Kotak OM Life Insurance 460 530 470 570 320 583 541 790 2,030 2,233Consolidation Adjust. -200 -60 -10 -70 -50 -30 -30 -40 -349 -150Consol. PAT Including Kotak Life 4,160 4,330 4,630 5,210 4,430 4,812 4,818 5,359 18,322 19,420YoY Growth (%) 26.9 18.9 20.7 6.2 6.5 11.1 4.1 2.9 16.9 6.0E: MOSL EstimatesOctober 2012C–69

BSE SensexS&P CNX18,763 5,703BloombergLICHF INEquity Shares (m) 505.052 Week Range (INR) 290/2061,6,12 Rel Perf (%) 7/-1/21Mcap (INR b) 142.3Mcap (USD b) 2.7CMP: INR282September 2012 Results PreviewSector: FinancialsLIC Housing FinanceBuyYear Net Inc. PAT Adj. PAT EPS EPS P/E BV P/BV Adj. Adj. RoAEEnd (INR m) (INR m) (INR m)* (INR)* Gr. (%) (X) (INR) (X) RoAA (%) (%)3/11A 17,710 9,743 10,285 21.7 55.5 - 87.8 - 2.4 27.23/12A 16,240 9,142 10,011 19.8 -8.4 14.2 112.5 2.5 1.8 20.33/13E 19,094 11,015 11,015 21.8 10.0 12.9 129.2 2.2 1.6 18.03/14E 25,128 15,987 14,827 29.4 34.6 9.6 153.5 1.8 1.7 20.8*Adjusted for extraordinary items• LICHF’s loan growth is likely to remain healthy on the back of buoyant demand in the individual loans segment.We expect loan growth to remain healthy at ~23% YoY. However, the YoY decline in the builder loan portfolio islikely to continue.• We expect margins to expand ~10bp QoQ, led by (1) moderating cost of funds, and (2) re-pricing of teaser rateloans (expected re-pricing of loans worth ~INR25b in 2QFY13), which would provide cushion to margins.• Asset quality is likely to remain healthy. We model provisioning expense of ~INR200m (v/s INR2b of provisionsin 2QFY12 on account of change in the standard asset provisioning requirement by NHB) for the quarter.• The stock trades at 2.2x FY13E and 1.8x FY14E BV. Maintain Buy.• Key things to watch for: (1) Outlook on disbursement growth, especially builder loans, (2) Movement in spreads,(3) Emerging asset quality trends.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 13,581 14,580 15,387 16,280 17,179 18,038 18,869 20,152 59,827 74,237Interest Expenses 9,971 11,238 12,129 12,572 13,674 14,221 14,718 15,084 45,911 57,697Net Interest Income 3,610 3,342 3,258 3,708 3,505 3,817 4,151 5,068 13,916 16,540YoY Growth (%) 22.6 9.5 -7.5 -11.8 -2.9 14.2 27.4 36.7 1.4 18.9Fees and other income 601 574 538 610 494 603 676 781 2,324 2,554Net Income 4,211 3,916 3,795 4,318 3,999 4,420 4,826 5,849 16,240 19,094YoY Growth (%) 24.7 5.9 -30.4 -16.7 -5.0 12.9 27.2 35.5 -8.3 17.6Operating Expenses 422 561 534 854 521 690 715 872 2,371 2,798Operating Profit 3,789 3,354 3,262 3,464 3,479 3,730 4,111 4,976 13,870 16,296YoY Growth (%) 27.0 5.1 -33.3 -22.7 -8.2 11.2 26.0 43.7 -10.8 17.5Provisions and Cont. 334 2,047 -797 -24 436 200 225 242 1,561 1,103Profit before Tax 3,454 1,307 4,059 3,488 3,043 3,530 3,886 4,734 12,309 15,193Tax Provisions 889 323 1,003 952 766 971 1,069 1,373 3,167 4,178Net Profit 2,565 984 3,056 2,536 2,277 2,559 2,817 3,361 9,142 11,015YoY Growth (%) 21.0 -58.0 43.1 -19.4 -11.2 160.1 -7.8 32.5 -6.2 20.5Adj PAT (Post Tax) 2,565 2,527 2,258 2,536 2,277 2,559 2,817 3,361 10,011 11,015YoY Growth (%) 21.0 7.9 -23.5 -12.9 -11.2 1.3 24.8 32.5 -2.7 10.0Operating MetricsLoan Growth (%) 32.1 29.3 26.6 23.5 24.1 23.4 24.3 23.9 23.5 23.9Borrowings Growth (%) 31.3 28.0 25.9 24.2 23.7 22.7 24.0 26.1 24.2 26.1Cost to Income Ratio (%) 10.0 14.3 14.1 19.8 13.0 15.6 14.8 14.9 14.6 14.7Tax Rate (%) 25.7 24.7 24.7 27.3 25.2 27.5 27.5 29.0 25.7 27.5E: MOSL EstimatesOctober 2012C–70

BSE SensexS&P CNX18,763 5,703BloombergMMFS INEquity Shares (m) 102.752 Week Range (INR) 910/5901,6,12 Rel Perf (%) 12/27/26Mcap (INR b) 92.3Mcap (USD b) 1.8CMP: INR898September 2012 Results PreviewSector: FinancialsM & M Financial ServicesBuyYear Net Income PAT EPS EPS P/E BV P/BV P/ABV RoA on RoAEEnd (INR m) (INR M) (INR) Gr. (%) (X) (INR) (X) (X) AUM (%) (%)3/11A 13,173 4,631 45.2 26.0 - 243 - - 3.7 22.03/12A 16,743 6,201 60.4 33.6 14.9 287 3.1 3.2 3.5 22.83/13E 22,688 8,151 79.4 31.4 11.3 346 2.6 2.7 3.6 25.13/14E 27,460 9,625 93.7 18.1 9.6 415 2.2 2.2 3.5 24.6• MMFS will continue to benefit from its multi-product strategy and sustain the strong growth momentum in theCV, used vehicle and car segments. We expect AUM growth to be healthy at ~32% YoY.• Margins are likely to remain stable on a sequential basis. In 1QFY13, gross spreads were 9.3%.• MMFS delivered strong asset quality performance in FY12, which continued in 1QFY13. As at June 2012, GNPAswere 3.8% and NNPAs were 1.2%. We expect asset quality to remain healthy.• During the quarter, the company sold partial stakes in its insurance broking subsidiary. Gains on the same arelikely to be booked in 3QFY13.• The stock trades at 2.6x FY13E and 2.2x FY14E BV. Maintain Buy.• Key things to watch for: (1) Business growth trends, (2) Movement in spreads, (3) Asset quality trends.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEOperating Income 5,538 6,491 7,378 8,393 8,351 8,810 9,295 10,382 27,425 36,838Other Income 64 159 36 77 39 100 100 133 521 372Total income 5,603 6,650 7,414 8,470 8,390 8,910 9,395 10,515 27,946 37,210YoY Growth (%) 39.6 38.9 39.9 44.6 49.8 34.0 26.7 24.1 41.3 33.2Interest Expenses 2,160 2,589 3,150 3,304 3,475 3,596 3,722 3,729 11,203 14,523Net Income 3,443 4,061 4,264 5,166 4,916 5,314 5,673 6,786 16,743 22,688Operating Expenses 1,369 1,521 1,467 1,603 1,667 1,884 1,858 2,131 5,920 7,540Operating Profit 2,074 2,539 2,797 3,563 3,248 3,430 3,815 4,654 10,823 15,148YoY Growth (%) 25.5 22.3 22.8 45.0 56.6 35.1 36.4 30.6 29.0 40.0Provisions 561 523 494 142 854 650 750 728 1,570 2,982Profit before Tax 1,513 2,016 2,303 3,421 2,395 2,780 3,065 3,926 9,254 12,167Tax Provisions 491 661 756 1,144 784 917 1,011 1,302 3,051 4,015Net Profit 1,022 1,355 1,547 2,277 1,610 1,863 2,054 2,624 6,202 8,152YoY Growth (%) 37.7 16.3 33.5 45.4 57.6 37.4 32.7 15.3 33.9 31.4Operating MetricsAUM growth (%) 38.9 40.7 40.1 36.2 37.9 31.6 27.9 25.6 36.2 25.6Borrowings growth (%) 49.2 51.1 49.5 44.3 44.8 34.0 24.1 24.9 44.3 24.9Cost to Income Ratio (%) 39.8 37.5 34.4 31.0 33.9 35.4 32.7 31.4 35.4 33.2Provisions/Operating Profits (%) 27.1 20.6 17.7 4.0 26.3 18.9 19.7 15.6 14.5 19.7Tax Rate (%) 32.4 32.8 32.8 33.4 32.8 33.0 33.0 33.2 33.0 33.0E: MOSL EstimatesOctober 2012C–71

BSE SensexS&P CNX18,763 5,703BloombergOBC INEquity Shares (m) 291.852 Week Range (INR) 324/1901,6,12 Rel Perf (%) 36/15/-11Mcap (INR b) 88.0Mcap (USD b) 1.7CMP: INR302September 2012 Results PreviewSector: FinancialsOriental Bank of CommerceBuyYear Net Income PAT EPS EPS P/E BV P/BV P/ABV RoAA RoAEEnd (INR m) (INR m) (INR) Gr. (%) (X) (INR) (X) (X) (%) (%)3/11A 51,376 15,029 51.5 13.7 - 350 - - 1.0 17.13/12A 54,560 11,416 39.1 -24.0 7.7 380 0.8 0.9 0.7 10.73/13E 64,461 14,821 50.8 29.8 5.9 419 0.7 0.8 0.8 12.73/14E 74,684 16,502 56.6 11.3 5.3 462 0.7 0.8 0.7 12.8• Focus on de-bulking of balance sheet coupled with higher base of 2QFY12 (sequential growth was 7.5%+) wouldlead to moderation in business growth. We expect sub-10% YoY growth in loans and deposits.• Margins are likely to expand ~5bp, led by re-pricing of liabilities. However, pressure on loan yields wouldcontain the expansion. We expect NII to grow ~5% QoQ and 19% YoY.• Slippages are likely to remain elevated; continued traction in recoveries and upgradations would be the key.• With the cabinet approving the SEB debt restructuring package, the pending restructuring of SEB loans wouldbe important. Further stress in the large corporate segment could lead to increase in the restructuring pool.• The stock trades at 0.7x FY13E and 0.7x FY14E BV, and at 5.9x FY13E and 5.3x FY14E EPS. Buy.• Key things to watch for: (1) Performance on asset quality, especially on net slippages and restructured loans, (2)Margin movement, (3) Fee income growth has been volatile in the last few quarters; improvement in feeincome growth would be a key positive, (4) Decrease in bulk deposits on the balance sheet.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 35,965 38,011 41,965 42,208 42,872 43,996 45,167 46,636 158,149 178,671Interest Expense 25,782 28,116 30,566 31,526 31,613 32,197 32,738 33,261 115,991 129,810Net Interest Income 10,183 9,895 11,399 10,682 11,258 11,799 12,429 13,375 42,158 48,861% Change (YoY) -3.7 -8.1 10.7 5.4 10.6 19.2 9.0 25.2 0.9 15.9Other Income 3,238 2,774 2,953 3,438 4,084 3,591 3,557 4,367 12,402 15,600Net Income 13,421 12,669 14,352 14,119 15,343 15,390 15,986 17,743 54,560 64,461Operating Expenses 5,408 5,087 6,081 6,580 6,377 6,550 6,781 7,417 23,155 27,125Operating Profit 8,014 7,582 8,271 7,539 8,965 8,840 9,204 10,325 31,406 37,336% Change (YoY) -2.5 -5.9 6.9 -10.6 11.9 16.6 11.3 37.0 -3.2 18.9Other Provisions 3,143 4,853 3,809 5,344 3,321 4,097 4,180 4,565 17,148 16,163Profit before Tax 4,871 2,729 4,462 2,196 5,644 4,744 5,024 5,761 14,258 21,172Tax Provisions 1,324 1,051 920 -453 1,730 1,423 1,457 1,742 2,842 6,352Net Profit 3,547 1,677 3,542 2,649 3,914 3,320 3,567 4,019 11,416 14,821% Change (YoY) -2.4 -57.8 -13.2 -20.6 10.4 98.0 0.7 51.7 -24.0 29.8Operating MetricsNIM (Rep, %) 2.9 2.6 2.9 2.7 2.8 - - - 2.8 -NIM (Cal,%) 2.7 2.6 2.9 2.6 2.7 2.8 2.8 2.9 2.7 2.7Deposit Growth (%) 17.5 18.9 20.8 12.2 9.4 8.4 7.9 16.0 12.2 16.0Loan Growth (%) 14.1 20.8 21.9 16.7 16.0 10.5 9.7 15.0 16.7 15.0CASA Ratio (%) 23.4 22.9 22.3 24.1 24.0 - - - 24.1 -Tax Rate (%) 27.2 38.5 20.6 -20.6 30.7 30.0 29.0 30.2 19.9 30.0Asset QualityOSRL (INR b) 36.6 41.2 60.9 95.1 109.5 - - - 95.1 -OSRL (%) 3.7 3.9 5.5 8.4 9.6 - - - 8.4 -Gross NPA (INR b) 20.3 31.1 32.3 35.8 33.8 34.8 36.0 37.0 35.8 37.0Gross NPA (%) 2.1 3.0 2.9 3.2 3.0 3.0 3.0 2.8 3.2 2.8E: MOSL EstimatesOctober 2012C–72

BSE SensexS&P CNX18,763 5,703BloombergPOWF INEquity Shares (m) 1,319.952 Week Range (INR) 224/1311,6,12 Rel Perf (%) 11/0/10Mcap (INR b) 249.0Mcap (USD b) 4.7CMP: INR189September 2012 Results PreviewSector: FinancialsPower Finance CorporationBuyYear Net Inc. Adj PAT EPS EPS P/E BV P/BV Adj. RoAA Adj. RoAEEnd (INR m) (INR m) (INR) Gr. (%) (X) (INR) (X) (%) (%)3/11A 36,736 26,391 23.0 16.0 - 133 - 2.9 18.53/12A 43,756 31,539 23.9 3.9 7.9 158 1.2 2.7 17.53/13E 54,505 38,924 29.5 23.4 6.4 177 1.1 2.8 17.63/14E 61,599 43,180 32.7 10.9 5.8 200 0.9 2.7 17.4• We expect loan growth to remain healthy at ~25% YoY. On a sequential basis, loans and borrowings are expectedto grow at ~2%.• After increasing sharply in 1QFY13 (+31bp QoQ), we expect margins to decline by ~10bp QoQ. As a result, NIIwould grow ~30% YoY, but remain largely flattish sequentially.• We expect MTM loss of INR600m in 2QFY13 (due to higher proportion of unhedged foreign currency borrowings),lower than the INR770m recorded in 1QFY13 (due to currency appreciation during the quarter).• Asset quality would be a key monitorable given the uncertain macro environment. We are conservativelyfactoring in INR500m of provisions for the quarter.• The stock trades at 1.1x FY13E and 0.9x FY14E BV. Maintain Buy.• Key things to watch for: (1) Management’s outlook on business growth, (2) Asset quality trend, and (3) Impactof SEB debt restructuring plan.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 28,480 30,740 32,130 35,890 39,000 39,780 40,377 41,725 97,605 126,025Interest Expenses 18,580 19,940 21,160 23,600 25,060 25,749 26,393 27,375 64,606 84,940Net Interest Income 9,900 10,800 10,970 12,290 13,940 14,031 13,984 14,351 43,960 56,305YoY Gr % 15.4 20.5 18.5 45.8 40.8 29.9 27.5 16.8 24.5 37.0Other Income 350 80 240 530 90 150 200 260 1,200 700Net Operational Income 10,250 10,880 11,210 12,820 14,030 14,181 14,184 14,611 45,160 57,005Exchange gain/(loss) -750 -5,040 4,210 200 -770 -600 -600 -530 -1,380 -2,500Total Net Income 9,500 5,840 15,420 13,020 13,260 13,581 13,584 14,081 43,780 54,505YoY Gr % 10.3 -41.6 64.7 48.6 39.6 132.5 -11.9 8.1 19.2 24.5Operating Expenses 270 330 290 409 286 375 410 476 1,294 1,547YoY Gr % N.M. -10.8 0.0 32.0 5.8 13.6 41.4 16.5 32.5 19.6% to Income 2.8 5.7 1.9 3.1 2.2 2.8 3.0 3.4 3.0 2.8Operating Profit 9,230 5,510 15,130 12,611 12,974 13,206 13,174 13,604 42,486 52,958YoY Gr % 7.3 -42.8 66.8 49.2 40.6 139.7 -12.9 7.9 18.8 24.6Adjusted PPP (For Forex) 9,980 10,550 10,920 12,411 13,744 13,806 13,774 14,134 43,861 55,458YoY Gr % 8.2 17.6 17.7 51.4 37.7 30.9 26.1 13.9 23.0 26.4Provisions 70 0 390 960 20 500 1,000 980 1,420 2,500PBT 9,160 5,510 14,740 11,651 12,954 12,706 12,174 12,624 41,066 50,458Tax 2,298 1,320 3,660 3,455 3,240 3,431 3,287 3,414 10,733 13,371Tax Rate % 25.1 24.0 24.8 29.7 25.0 27.0 27.0 27.0 26.1 26.5PAT 6,862 4,190 11,080 8,196 9,714 9,275 8,887 9,210 30,333 37,087YoY Gr % 5.1 -40.2 68.1 35.2 41.6 121.4 -19.8 12.4 15.8 22.3Adjusted PAT (For Forex) 7,424 8,023 7,915 8,055 10,292 9,713 9,325 9,597 31,417 38,927E:MOSL Estimates; Quarterly and annual numbers would not match due to differences in classificationOctober 2012C–73

BSE SensexS&P CNX18,763 5,703BloombergPNB INEquity Shares (m) 339.252 Week Range (INR) 1091/6591,6,12 Rel Perf (%) 18/-18/-27Mcap (INR b) 284.8Mcap (USD b) 5.4CMP: INR840September 2012 Results PreviewSector: FinancialsPunjab National BankBuyYear Net Income PAT EPS EPS P/E BV P/BV P/ABV RoAA RoAEEnd (INR m) (INR m) (INR) Gr. (%) (X) (INR) (X) (X) (%) (%)3/11A 154,199 44,335 139.9 13.0 - 632 - - 1.3 24.53/12A 176,175 48,847 144.0 2.9 5.8 777 1.1 1.2 1.2 21.13/13E 203,863 52,753 155.5 8.0 5.4 906 0.9 1.1 1.1 18.53/14E 235,001 62,776 185.1 19.0 4.5 1,059 0.8 0.9 1.1 18.8• We expect loan growth to remain above industry average at 21% YoY. Deposit growth would be moderate at 16%YoY on a higher base.• Margins are likely to be stable at ~3.6% QoQ, but would be lower by 35bp on a YoY basis. Consequently, NII islikely to grow ~10% YoY and be flat QoQ.• Stress on the balance sheet has increased, with gross slippage ratio in the last two quarters at 4.5%+. We expectslippages to remain high, but recoveries and upgradations could provide some respite to asset quality.• The pace of restructuring had slowed down in 1QFY13, with the bank restructuring loans worth INR12b asagainst INR86b in 4QFY12. However, with referrals to CDR remaining at an elevated level, restructuring duringthe quarter would be a key thing to watch for.• The stock trades at 0.9x FY13E and 0.8x FY14E BV, and at 5.4x FY13E and 4.5x FY14E EPS. Buy.• Key things to watch for: (1) Balance sheet growth and guidance, (2) Net slippages, (3) Outlook on restructuring,(4) Margin movement, (4) CASA ratio.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 83,152 89,520 94,810 96,798 105,450 107,251 110,304 113,782 364,280 436,787Interest Expense 52,000 54,994 59,444 63,698 68,498 69,795 71,131 72,433 230,131 281,858Net Interest Income 31,153 34,526 35,366 33,100 36,951 37,455 39,173 41,349 134,149 154,929% Change (YoY) 19.9 16.0 10.4 9.3 18.6 8.5 10.8 24.9 13.6 15.5Other Income 10,837 8,889 9,541 12,760 11,660 11,410 11,957 13,908 42,026 48,934Net Income 41,990 43,414 44,907 45,859 48,611 48,865 51,130 55,257 176,175 203,863Operating Expenses 17,250 18,137 18,143 16,498 20,203 20,590 20,880 21,815 70,028 83,488Operating Profit 24,739 25,278 26,764 29,362 28,409 28,275 30,250 33,441 106,148 120,375% Change (YoY) 17.9 20.4 13.9 17.1 14.8 11.9 13.0 13.9 17.2 13.4Other Provisions 8,935 7,103 9,461 10,273 10,325 10,489 11,180 11,368 35,773 43,362Profit before Tax 15,804 18,175 17,303 19,089 18,084 17,786 19,070 22,073 70,375 77,012Tax Provisions 4,753 6,124 5,803 4,848 5,627 5,602 6,007 7,022 21,528 24,259Net Profit 11,051 12,050 11,501 14,241 12,457 12,183 13,063 15,051 48,847 52,753% Change (YoY) 3.4 12.1 5.5 18.6 12.7 1.1 13.6 5.7 10.2 8.0Operating MetricsNIM (Rep, %) 3.8 4.0 3.9 3.5 3.6 - - - 3.8 -NIM (Cal, %) 3.6 3.9 3.8 3.3 3.5 3.5 3.5 3.5 3.5 3.4Deposit Growth (%) 26.9 25.0 23.4 21.3 18.9 16.1 15.8 15.0 21.3 15.0Loan Growth (%) 23.4 19.3 18.7 21.3 21.2 21.2 21.3 16.0 21.3 16.0CASA Ratio (%) 38.1 37.1 36.2 36.2 35.6 - - - 36.2 -Tax Rate (%) 30.1 33.7 33.5 25.4 31.1 31.5 31.50 31.81 30.6 31.50Asset QualityOSRL (INR b) 114.2 137.4 155.5 230.6 240.5 - - - 230.6 -OSRL (%) 4.7 5.5 5.9 7.9 8.2 - - - 7.9 -Gross NPA (INR b) 48.9 51.5 64.4 87.2 99.9 112.7 126.9 142.2 87.2 142.2E: MOSL Estimates, Yearly numbers vary with full year number on account of reclassificationOctober 2012C–74

BSE SensexS&P CNX18,763 5,703BloombergRECL INEquity Shares (m) 987.552 Week Range (INR) 251/1421,6,12 Rel Perf (%) 6/2/13Mcap (INR b) 215.4Mcap (USD b) 4.1CMP: INR218September 2012 Results PreviewSector: FinancialsRural Electrification CorpBuyYear Net Inc. PAT EPS EPS P/E BV P/BV RoAA RoAEEnd (INR m) (INR m) (INR) Gr. (%) (X) (INR) (X) (%) (%)3/11A 36,443 25,664 25.9 28.2 - 129 - 3.4 21.53/12A 40,777 28,170 28.6 10.1 7.6 149 1.5 3.0 20.53/13E 49,817 34,455 34.9 22.2 6.3 174 1.3 3.1 21.63/14E 59,561 41,199 41.7 19.6 5.2 202 1.1 3.1 22.2• We expect loan growth momentum to remain healthy at ~23% YoY and ~4% QoQ.• After the sharp improvement in 1QFY13, we expect NIM to moderate by ~20bp QoQ in 2QFY13, as RECL utilizedthe excess liquidity on the balance sheet in 1QFY13. The higher increase in borrowings during the quarter couldimpact margins.• We are factoring in MTM loss of INR200m for 2QFY13 v/s INR374m in 1QFY13.• Asset quality is likely to remain a key monitorable given the uncertain macro environment. We conservativelymodel in higher provisions (INR250m) during the quarter.• The stock trades at 1.3x FY13E and 1.1x FY14E BV. Maintain Buy.• Key things to watch for: (1) Management’s outlook on business growth and asset quality, (2) Movement inspreads, and (3) Impact of SEB debt restructuring plan.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Interest Income 9,097 9,501 10,052 10,207 11,654 11,711 11,925 12,322 38,852 47,612YoY Gr (%) 17.3 21.8 18.5 19.5 28.1 23.3 18.6 20.7 19.3 22.5Other Operational Income 393 171 136 595 717 250 250 169 736 1,386Net Operational Income 9,490 9,673 10,188 10,803 12,372 11,961 12,175 12,491 39,588 48,999YoY Gr (%) 18.9 18.1 12.6 22.2 30.4 23.7 19.5 15.6 16.2 23.8Other Income 136 -880 1,221 145 -133 200 300 451 1,189 819Total Net Income 9,625 8,793 11,408 10,948 12,239 12,161 12,475 12,943 40,777 49,817YoY Gr (%) 16.3 0.5 21.4 9.2 27.2 38.3 9.4 18.2 11.9 22.2Operating Expenses 419 456 779 671 456 560 660 831 2,326 2,506YoY Gr (%) 22.2 18.5 101.6 19.7 8.7 22.9 -15.2 23.9 38.7 7.8% to Income 4.4 5.2 6.8 6.1 3.7 4.6 5.3 6.4 5.7 5.0Operating Profit 9,206 8,337 10,629 10,277 11,784 11,601 11,815 12,112 38,451 47,311YoY Gr % 16.1 -0.3 17.9 8.6 28.0 39.1 11.2 17.9 10.6 23.0Op. Profit adj. forex gain /loss 9,278 9,597 9,763 10,341 11,984 11,801 11,941 13,012 38,980 78,438YoY Gr (%) 16.9 18.7 8.6 16.2 29.2 23.0 22.3 25.8 14.9 101.2Provisions 250 0 241 32 0 250 250 250 523 750PBT 8,956 8,337 10,389 10,245 11,784 11,351 11,565 11,862 37,929 46,561YoY Gr (%) 12.9 -0.3 15.2 8.3 31.6 36.2 11.3 15.8 9.1 22.8Tax 2,338 2,112 2,693 2,618 3,016 2,951 3,007 3,139 9,758 12,106Tax Rate (%) 26.1 25.3 25.9 25.6 25.6 26.0 26.0 26.5 25.7 26.0PAT 6,619 6,225 7,695 7,627 8,767 8,400 8,558 8,723 28,170 34,455YoY Gr (%) 12.7 0.7 15.9 8.9 32.5 34.9 11.2 14.4 9.6 22.3Adjusted PAT 6,672 7,166 7,054 7,675 9,046 8,548 8,706 8,816 28,566 35,115YoY Gr (%) 13.5 19.8 6.5 16.5 35.6 19.3 23.4 14.9 14.0 22.9E:MOSL Estimates; Quarterly and annual numbers would not match due to differences in classificationOctober 2012C–75

BSE SensexS&P CNX18,763 5,703BloombergSHTF INEquity Shares (m) 226.352 Week Range (INR) 680/4161,6,12 Rel Perf (%) -6/-4/-14Mcap (INR b) 140.1Mcap (USD b) 2.7CMP: INR619September 2012 Results PreviewSector: FinancialsShriram Transport FinanceBuyYear Net Income PAT EPS EPS P/E BV P/BV P/ABV RoA on AUM RoAEEnd (INR m) (INR m) (INR) GR. (%) (X) (INR) (X) (X) (%) (%)3/11A 30,680 12,028 53.2 37.4 - 217 - - 3.2 27.53/12A 34,130 12,574 55.6 4.5 11.1 265 2.3 2.4 2.8 23.13/13E 36,273 13,542 59.8 7.7 10.3 316 2.0 2.0 2.6 20.63/14E 41,445 15,930 70.4 17.6 8.8 377 1.6 1.7 2.6 20.3• We expect AUM to grow ~15% YoY. On a sequential basis, disbursements are likely to remain largely stable. Weare modeling growth of 1.5% QoQ.• Margins are expected to remain stable sequentially. As a result, NII (including securitization income) growthshould be flat on a YoY basis.• Given the uncertain macro environment, asset quality continues to be a key monitorable. We have factored inhigher provisions (INR2b) similar to 1QFY13 levels.• We expect PAT to grow ~10% YoY and 2% QoQ.• The stock trades at 2x FY13E and 1.6x FY14E BV. Maintain Buy.• Key things to watch for: (1) Outlook on growth, (2) Movement in spreads, (3) Asset quality trend.Quaterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 8,368 9,675 9,458 9,158 8,876 10,384 11,215 11,850 35,581 42,325Interest expenses 5,714 6,153 6,347 6,259 6,173 6,729 7,032 7,445 23,950 27,379Net Interest Income 2,654 3,522 3,110 2,899 2,702 3,655 4,183 4,405 11,632 14,946YoY Growth (%) -15.1 -4.4 -23.2 -10.6 1.8 3.8 34.5 51.9 -17.0 28.5Securitisation income 5,167 4,825 4,927 5,157 5,323 4,729 4,530 4,565 20,075 19,147Net Income (Incl. Securitization) 7,821 8,347 8,038 8,056 8,025 8,384 8,714 8,970 31,707 34,093YoY Growth (%) 16.0 19.3 4.5 5.4 2.6 0.4 8.4 11.3 9.5 7.5Fees and Other Income 477 258 294 255 702 450 475 553 2,423 2,181Net Operating Income 8,297 8,605 8,331 8,311 8,727 8,834 9,189 9,523 34,130 36,273YoY Growth (%) 16.8 19.0 5.7 6.3 5.2 2.7 10.3 14.6 11.2 6.3Operating Expenses 1,678 1,788 1,867 1,782 1,940 1,952 2,159 2,196 7,638 8,248Operating Profit 6,620 6,818 6,465 6,529 6,787 6,882 7,029 7,327 26,492 28,026YoY Growth (%) 18.3 20.4 5.5 4.1 2.5 0.9 8.7 12.2 13.0 5.8Provisions 1,420 2,363 1,920 1,918 2,026 2,000 1,975 1,963 7,683 7,963Profit before Tax 5,200 4,454 4,545 4,610 4,761 4,882 5,054 5,365 18,809 20,062Tax Provisions 1,727 1,460 1,518 1,530 1,543 1,587 1,643 1,748 6,235 6,520Net Profit 3,473 2,994 3,027 3,081 3,219 3,295 3,412 3,617 12,574 13,542YoY Growth (%) 20.2 0.2 0.4 -9.6 -7.3 10.1 12.7 17.4 4.5 7.7Operating MetricsAUM Growth (%) 22.3 19.9 16.2 11.1 13.3 14.5 15.1 15.5 11.1 15.5Disbursement Growth (%) 20.4 5.0 -4.2 -19.7 12.2 13.7 12.3 11.9 -2.0 12.5Securitization Inc. / Net Inc. (%) 62.3 56.1 59.1 62.0 61.0 53.5 49.3 47.9 58.8 52.8Cost to Income Ratio (%) 20.2 20.8 22.4 21.4 22.2 22.1 23.5 23.1 22.4 22.7Tax Rate (%) 33.2 32.8 33.4 33.2 32.4 32.5 32.5 32.6 33.1 32.5E: MOSL Estimates; * Quaterly nos and full year nos will not tally due to different way of reporting financial nosOctober 2012C–76

BSE SensexS&P CNX18,763 5,703BloombergSBIN INEquity Shares (m) 671.052 Wk Range (INR) 2,475/1,5761,6,12 Rel Perf (%) 15/-2/0Mcap (INR b) 1,501.7Mcap (USD b) 28.5CMP: INR2,238September 2012 Results PreviewSector: FinancialsState Bank of IndiaBuyYear Net Income PAT EPS *Cons. Cons. Cons. BV *Cons. *Cons. RoAA RoAEEnd (INR m) (INR m) (INR) EPS (INR) P/E (X) (INR) P/BV (X) P/ABV (X) (%) (%)3/11A 483,510 82,645 130.2 168.3 - 1,303 - - 0.7 12.73/12A 576,425 117,073 174.5 228.6 9.4 1,541 1.4 1.6 0.9 16.03/13E 636,297 151,763 226.2 284.5 7.5 1,773 1.2 1.5 1.0 17.43/14E 725,138 174,922 260.7 330.3 6.5 2,043 1.0 1.4 1.0 17.5* Valuation multiples are adjusted for SBI Life's value• Strong traction in CASA and fall in bulk deposits rates would keep a check on cost of funds. However, this wouldbe offset by the impact on yields, as the bank has reduced lending rates in specific segments. We expectmargins to remain largely stable QoQ; NII is likely to grow 3% QoQ and ~10% YoY.• We expect slippages to decline QoQ but still remain at an elevated level, given the challenging macroenvironment. Improvement in upgrades and recoveries would be critical. In 1QFY13, gross slippages had increasedsignificantly to INR108.4b (annualized slippage ratio of 5.6%).• Restructuring is likely to increase sequentially, led by systemic restructuring.• Adjusted for the value of Insurance (INR107/share), the stock trades at 1x FY14E consolidated BV and 6.5x FY14Econsolidated EPS. Maintain Buy.• Key things to watch for: (1) Trend in slippages and recoveries, (2) Restructured loans and outlook on the same,(2) Growth and margin outlook.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 241,974 260,269 277,144 285,828 289,167 295,095 301,432 309,663 1,065,215 1,195,358Interest Expense 144,979 155,452 161,956 169,918 177,979 180,318 182,934 187,877 632,304 729,107Net Interest Income 96,995 104,817 115,188 115,911 111,189 114,777 118,499 121,786 432,911 466,250% Change (YoY) 32.8 29.2 27.3 43.8 14.6 9.5 2.9 5.1 33.1 7.7Other Income 35,342 33,674 20,730 53,768 34,988 36,421 39,885 58,752 143,514 170,046Net Income 132,338 138,492 135,918 169,678 146,177 151,198 158,384 180,538 576,425 636,297Operating Expenses 59,913 63,749 63,318 73,710 64,410 66,538 72,969 85,173 260,690 289,091Operating Profit 72,424 74,743 72,600 95,968 81,767 84,660 85,414 95,365 315,735 347,206% Change (YoY) 18.1 17.6 7.3 57.8 12.9 13.3 17.7 -0.6 24.6 10.0Other Provisions 41,569 33,855 24,074 31,404 24,563 28,245 29,886 32,812 130,902 115,507Profit before Tax 30,855 40,888 48,526 64,564 57,204 56,415 55,528 62,553 184,833 231,699Tax Provisions 15,020 12,784 15,895 24,061 19,688 19,463 19,157 21,628 67,760 79,936Net Profit 15,835 28,104 32,630 40,503 37,516 36,952 36,371 40,925 117,073 151,763% Change (YoY) -45.7 12.4 15.4 N.A. 136.9 31.5 11.5 1.0 41.7 29.6Operating MetricsNIM (Reported, %) 3.6 3.8 4.1 3.9 3.6 - - - 3.9 -NIM (Cal, %) 3.7 3.9 4.1 4.0 3.7 3.6 3.6 3.6 3.9 3.6Deposit Growth (%) 16.5 13.8 13.9 11.7 16.1 17.3 18.0 18.0 11.7 18.0Loan Growth (%) 18.0 16.1 16.5 14.7 18.9 18.9 15.5 18.0 14.7 18.0CASA Ratio (%) 47.8 47.6 47.5 46.6 46.1 - - - 46.6 -Tax Rate (%) 48.7 31.3 32.8 37.3 34.4 34.5 34.5 34.6 36.7 34.5Asset QualityOSRL (INR b) 289 277 261 312 295 - - - 312 -OSRL (%) 3.8 3.5 3.1 3.6 3.2 - - - 3.6 -Gross NPA (INR b) 278 340 401 397 472 528 581 631 397 631Gross NPA (%) 3.5 4.2 4.6 4.4 5.0 5.4 5.8 6.0 4.4 6.0E: MOSL EstimatesOctober 2012C–77

BSE SensexS&P CNX18,763 5,703BloombergUNBK INEquity Shares (m) 550.552 Week Range (INR) 274/1501,6,12 Rel Perf (%) 29/-16/-31Mcap (INR b) 114.3Mcap (USD b) 2.2CMP: INR208September 2012 Results PreviewSector: FinancialsUnion Bank of IndiaBuyYear Net Income PAT EPS EPS P/E BV P/BV P/ABV RoAA RoAEEnd (INR m) (INR m) (INR) GR. (%) (X) (INR) (X) (X) (%) (%)3/11A 82,550 20,819 39.6 -3.6 - 211 - - 1.0 20.93/12A 92,413 17,871 32.3 -18.5 6.4 236 0.9 1.0 0.7 14.83/13E 102,017 23,221 42.0 30.1 4.9 267 0.8 1.0 0.8 16.73/14E 119,311 26,585 48.1 14.6 4.3 303 0.7 0.9 0.8 16.9• Loan growth is expected to remain healthy at 22% YoY and deposit growth to improve to 17% YoY on lower base.• Margins are likely to expand by 10bp+ QoQ. In 1QFY13, UNBK reported a 25bp decline in NIM to 3%, led by(1) higher reversal of interest income and (2) due to seasonal factors.• Fee income growth is expected to be healthy at ~15%, however, lower trading and forex gain would lead tonon-interest income growth of ~5%.• Slippages are expected to remain high. However, the high base of 1QFY13 would lead to a sequential decline.In 1QFY13, UNBK had reported slippages of INR16.3b, led by slippages in few large corporate accounts. Recoveriesand upgradations are likely to remain healthy and provide cushion to asset quality.• The stock trades at 0.8x FY13E and 0.7x FY14E BV, and at 4.9x FY13E and 4.3x FY14E EPS. Maintain Buy.• Key things to watch for: (1) Margin movement, (2) Gross slippages and traction in recoveries and upgradations.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 49,157 51,104 53,747 57,434 60,699 63,377 65,056 67,972 211,443 257,104Interest Expense 33,255 34,492 35,939 38,668 42,482 43,909 44,863 46,838 142,354 178,091Net Interest Income 15,902 16,611 17,809 18,766 18,217 19,468 20,193 21,134 69,089 79,013% Change (YoY) 18.0 8.2 10.2 9.3 14.6 17.2 13.4 12.6 11.1 14.4Other Income 4,840 5,009 5,921 7,554 4,912 5,247 5,886 6,960 23,324 23,004Net Income 20,742 21,621 23,730 26,320 23,129 24,715 26,078 28,094 92,413 102,017Operating Expenses 9,084 9,571 10,889 10,332 10,459 11,030 11,413 12,464 39,875 45,365Operating Profit 11,658 12,050 12,841 15,988 12,671 13,685 14,666 15,631 52,538 56,652% Change (YoY) 11.7 6.6 1.8 83.9 8.7 13.6 14.2 -2.2 22.0 7.8Other Provisions 4,284 6,228 9,727 5,172 5,185 5,041 5,600 6,425 25,410 22,250Profit before Tax 7,374 5,822 3,114 10,816 7,486 8,644 9,066 9,206 27,128 34,401Tax Provisions 2,730 2,297 1,144 3,085 2,370 2,809 2,946 3,055 9,256 11,180Net Profit 4,644 3,524 1,970 7,732 5,116 5,834 6,119 6,151 17,871 23,221% Change (YoY) -22.8 16.2 -66.0 29.4 10.2 65.5 210.6 -20.4 -14.2 29.9Operating MetricsNIM (Reported,%) 3.1 3.2 3.3 3.3 3.0 - - - 3.3 -NIM (Cal, %) 3.0 3.2 3.3 3.2 3.0 3.1 3.1 3.1 3.0 3.0Deposit Growth (%) 16.4 10.0 10.0 10.1 11.5 17.0 15.9 16.0 10.1 16.0Loan Growth (%) 16.7 16.5 16.8 18.3 19.5 21.7 19.5 15.0 18.3 15.0CASA Ratio (%) 31.5 32.1 32.5 31.3 31.0 - - - 31.3 -Tax Rate (%) 37.0 39.5 36.7 28.5 31.7 32.5 32.5 33.2 34.1 32.5Asset QualityOSRL - Facilitywise (INR b) 24.1 23.2 39.3 74.7 84.2 - - - 74.7 -OSRL (%) 1.7 1.6 2.5 4.1 4.8 - - - 4.1 -Gross NPA (INR b) 37.5 51.4 52.1 54.5 65.4 69.0 74.3 79.4 54.5 79.4Gross NPA (%) 2.6 3.5 3.3 3.0 3.8 3.9 4.0 3.8 3.0 3.8E: MOSL EstimatesOctober 2012C–78

BSE SensexS&P CNX18,763 5,703BloombergYES INEquity Shares (m) 353.052 Week Range (INR) 389/2311,6,12 Rel Perf (%) 7/0/26Mcap (INR b) 134.9Mcap (USD b) 2.6CMP: INR382September 2012 Results PreviewSector: FinancialsYes BankBuyYear Net Income PAT EPS EPS P/E BV P/BV P/ABV RoAA RoAEEnd (INR m) (INR m) (INR) Gr. (%) (X) (INR) (X) (X) (%) (%)3/11A 18,702 7,271 20.9 48.9 - 109 - - 1.5 21.13/12A 24,728 9,770 27.7 32.1 13.8 132 2.9 2.9 1.5 23.13/13E 32,650 12,506 35.4 28.0 10.8 162 2.4 2.4 1.5 24.13/14E 40,727 15,167 43.0 21.3 8.9 197 1.9 2.0 1.5 23.9• Loan growth is expected to be ~16% YoY as bank continues to focus on building granularity and invest in highrated corporate papers. Deposit growth would be ~17%.• YES is focusing on increasing its CASA base to build its liability franchise. Its CASA ratio stood at 16.3% as at theend of 1QFY13. Movement in CASA ratio remains a key parameter to monitor.• Margins are expected to remain largely stable QoQ, despite a decline in bulk deposit rates. As higher investmentin credit substitutes would put pressure on yields on assets.• YES has been able to manage asset quality fairly well as of 2QFY13. However, increasing stress in the largecorporate segment could throw a negative surprise.• The stock trades at 2.4x FY13E and 1.9x FY14E BV, and at 10.8x FY13E and 8.9x FY14E EPS. Buy.• Key things to watch for: (1) Business growth and outlook for FY14, (2) Margin movement in a falling interest ratescenario, led by higher SA deposit rate, (3) CASA ratio, (4) Branch expansion.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEInterest Income 13,995 14,387 16,841 17,851 18,863 19,294 19,710 20,256 63,074 78,123Interest Expense 10,454 10,530 12,565 13,369 14,142 14,318 14,461 14,742 46,917 57,663Net Interest Income 3,542 3,856 4,276 4,482 4,722 4,975 5,249 5,514 16,156 20,460% Change (Y-o-Y) 35.1 23.1 32.3 28.6 33.3 29.0 22.8 23.0 29.6 26.6Other Income 1,653 2,141 2,114 2,664 2,881 2,925 3,075 3,308 8,571 12,189Net Income 5,195 5,997 6,390 7,146 7,603 7,900 8,324 8,823 24,728 32,650Operating Expenses 1,944 2,138 2,402 2,842 3,007 3,008 3,148 3,302 9,325 12,465Operating Profit 3,251 3,859 3,988 4,304 4,596 4,893 5,175 5,520 15,402 20,184% Change (Y-o-Y) 30.6 37.1 28.1 23.4 41.4 26.8 29.8 28.3 29.4 31.0Other Provisions 15 379 224 285 300 350 450 557 902 1,657Profit before Tax 3,236 3,481 3,765 4,019 4,296 4,543 4,725 4,963 14,500 18,527Tax Provisions 1,075 1,130 1,224 1,301 1,395 1,476 1,536 1,615 4,730 6,021Net Profit 2,161 2,350 2,541 2,718 2,901 3,066 3,190 3,348 9,770 12,506% Change (Y-o-Y) 38.2 33.3 32.9 33.6 34.3 30.5 25.5 23.2 34.4 28.0Operating MetricsNIM (Reported,%) 2.8 2.9 2.8 2.8 2.8 - - - 2.8 -NIM (Cal, %) 2.7 2.9 2.9 2.8 2.8 2.8 2.9 2.9 2.6 2.7Deposit Growth (%) 44.1 10.2 18.9 7.0 15.2 17.3 15.7 17.0 7.0 17.0Loan Growth (%) 26.1 12.7 15.3 10.5 16.4 15.5 14.5 15.0 10.5 15.0CASA Ratio (%) 10.9 11.0 12.6 15.0 16.3 - - - 15.0 -Tax Rate (%) 33.2 32.5 32.5 32.4 32.5 32.5 32.5 32.5 32.6 32.5Asset QualityOSRL (INR m) 870 1,755 1,757 2,013 1,965 - - - 2,013 -OSRL in bp 26 51 49 53 51 - - - 53 -Gross NPA (INR b) 0.6 0.7 0.7 0.8 1.1 1.4 1.9 2.3 0.8 2.3Gross NPA (%) 0.2 0.2 0.2 0.2 0.3 0.4 0.4 0.5 0.2 0.5E: MOSL EstimatesOctober 2012C–79

September 2012 Results PreviewSector: HealthcareHealthcareCompany NameBioconCadila HealthcareCiplaDishman PharmaDivi’s LaboratoriesDr Reddy’s Labs.GSK PharmaGlenmark PharmaIPCA LaboratoriesJubilant Life SciencesLupinOpto CircuitsRanbaxy Labs.Sanofi IndiaStrides ArcolabSun PharmaceuticalsTopline to grow by 21%, EBITDA by 22% on the back of strong operationalperformance by Sun Pharmaceuticals, Ranbaxy, Divi's Laboratories, Cadilaand LupinFor 2QFY13, we expect topline growth of 21% YoY for our universe (excluding oneoffs),with EBITDA growth at 22% YoY. Adjusted PAT is likely to grow 28% YoY. EBITDAgrowth would be mainly led by strong performance by Sun Pharmaceuticals,Ranbaxy, Cadila, Lupin and Divi's Laboratories, and would be partly aided by favorablecurrency. Adjusted PAT growth at 28% would be higher than EBITDA growth, mainlybecause of reversal of forex losses due to the appreciation of the INR v/s the USD inthe last few weeks.2QFY13 aggregates excluding one-offsHealthcare Universe YoY Growth (%) EBITDA Margin Net Profit MarginAggregates Sales EBITDA Adj. PAT Sep-12 Sep-11 Chg.(bp) Sep-12 Sep-11 Chg.(bp)MNC Pharma 14.9 20.1 10.5 25.7 24.6 111 21.0 21.8 -83Big 4 Generics 21.8 25.7 14.5 23.1 22.4 71 15.5 16.4 -98CRAMS 26.7 30.8 66.4 25.3 24.5 79 14.1 10.7 336Second Tier generics 18.7 16.6 52.2 20.4 20.8 -37 13.8 10.8 303Sector Aggregate 20.9 22.6 28.2 22.6 22.3 32 15.1 14.2 87Note: Above numbers exclude one-offs to facilitate comparison of core operations. Big-4Generics include Ranbaxy, Cipla, Dr Reddy's and Sun.Torrent PharmaExpected quarterly performance summary(INR million)CMP Rating Sales EBITDA Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQBiocon 275 Neutral 6,067 19.3 5.2 1,453 8.9 18.4 886 3.4 12.4Cadila Health 872 Buy 15,810 27.0 2.1 3,439 24.7 0.6 2,158 110.1 10.8Cipla 381 Neutral 20,468 15.1 17.2 5,156 17.8 24.8 3,735 20.9 22.2Dishman Pharma 96 Neutral 3,436 27.6 9.0 830 76.5 -0.7 304 LP -21.6Divis Labs 1,080 Buy 4,932 39.3 5.3 1,833 45.2 -3.8 1,350 27.3 -19.4Dr Reddy’ s Labs 1,647 Buy 24,822 15.1 8.9 4,542 8.6 26.4 2,229 -17.0 -4.3Glenmark Pharma 422 Buy 11,589 25.0 17.5 2,076 19.9 12.8 1,426 91.5 181.5GSK Pharma 1,977 Buy 6,674 9.8 2.4 2,082 18.3 2.7 1,720 17.8 1.4IPCA Labs. 482 Buy 7,133 14.4 12.4 1,639 3.7 23.3 1,098 40.9 155.5Jubilant Life 212 Neutral 12,803 22.2 3.6 2,691 14.0 -0.1 1,326 67.0 43.8Lupin 596 Buy 20,925 27.2 2.1 3,674 32.9 12.4 2,442 21.5 16.4Opto Circuits 130 Neutral 7,012 24.8 -1.9 1,885 21.9 -0.7 1,337 10.5 -3.1Ranbaxy Labs 530 Neutral 25,341 20.9 10.0 2,706 55.4 9.1 1,688 4.2 -2.0Sanofi India 2,374 Neutral 3,901 24.8 4.3 636 26.4 21.8 499 -8.9 23.3Strides Arcolab 883 Buy 6,185 -19.6 21.7 1,555 -9.6 37.6 1,347 189.9 1050.3Sun Pharma 693 Neutral 22,526 26.4 -2.2 8,583 20.1 -17.5 7,063 29.5 5.2Torrent Pharma 695 Buy 8,290 21.3 8.1 1,659 18.0 6.4 1,119 11.9 9.8Sector Aggregate 207,915 19.7 6.8 46,439 20.2 4.9 31,728 28.2 16.7Note: Historic numbers include one-offs and hence YoY comparison may not give the correct pictureNimish Desai (NimishDesai@MotilalOswal.com)October 2012C–80

September 2012 Results PreviewSector: HealthcareCore 2QFY13 performance: Key highlights• Sun, Ranbaxy, Divi's, Cadila and Lupin to record strong operational improvement:From our coverage universe, we expect Sun Pharmaceuticals, Ranbaxy, Divi'sLaboratories, Cadila and Lupin to record strong EBITDA growth for 2QFY13. Weattribute the following company-specific reasons for this performance:1. Sun Pharmaceuticals: Expect strong operating performance, primarily led byimprovement in profitability of Taro and favorable currency.2. Ranbaxy: Likely to report healthy growth in EBITDA, led by a very low base.3. Divi's Laboratories: Strong operational performance, led by healthy toplinegrowth, favorable currency and low base effect.4. Cadila: Expect strong growth in EBITDA, led by healthy topline growth, mainlydue to strong growth in the international business.5. Lupin: Healthy growth in EBITDA, led by topline growth (mainly regulated andsemi-regulated markets) and partly due to favorable currency.• CRAMS companies to report strong operational performance: We expect Divi'sLaboratories and Dishman to report strong operational performance on a low base,new order inflows and favorable currency.Sector viewGenerics• Emerging markets to help improve profitability gradually from 2012.• New launches imperative for driving growth in core US business.• Differentiation becoming imperative - low competition/patent challenge products,brands, NCE research will be key differentiators.• Increasing MNC interest in Generics space - may lead to large acquisitions/supplyarrangements with Indian companies.• Top picks: Dr Reddy's, Cadila, IPCA and Torrent.CRAMS (Contract Research & Manufacturing Services)• Favorable macro trends: India on the threshold of significant opportunity, giventhe optimum combination of strong chemistry & regulatory skills and low-costs.• Inventory de-stocking impacted performance over the last couple of years. Expecthealthy performance FY13 onwards.• Top picks: Divi's Laboratories.MNC Pharma• Portfolio realignment in favor of lifestyle products to drive growth in medium-tolongterm.• Branded generics, patented products and in-licensing to drive long-term growth.• Parent's commitment to listed entity is imperative.• Short-term adverse impact likely from the proposed new pharma policy.• Top picks: GlaxoSmithKline Pharmaceuticals.October 2012C–81

September 2012 Results PreviewSector: HealthcareProposed New Pharma Policy: HighlightsThe GoM (Group of Ministers) has recently proposed the New Pharma Policy (althoughthe Supreme Court has raised some objections to it). We give below the key highlightsbased on broad details released to the media:• All 348 drugs under the National List of Essential Medicines (NLEM) will comeunder price control.• Price cap for these drugs will be calculated as the weighted average price (WAP)of all the brands having market share of more than 1%. Players selling any of thesedrugs at prices higher than WAP will have to lower their prices.• Combinations will be kept out of price controls.• These proposals will now be sent by the GoM to the Cabinet for a final approval.Our view• Based on the overall details available (we are still awaiting the fine print and theactual policy document), we expect MNC players to take the maximum hit due totheir premium pricing policy.• Among Indian players, companies with high exposure to anti-infectives may getadversely impacted since such medicines account for 17% of NLEM. In our coverageuniverse of Indian companies, Cipla, Cadila and Ranbaxy have high exposure toanti-infectives. For the remaining companies, the impact is likely to be relativelymoderate-to-low. Actual impact on these companies may vary depending on theirpositioning/pricing policy for each drug.• We await details from various companies on the exact impact.• Combinations to be kept outside price controls: The proposed policy is relativelybetter than general expectations, since combination drugs have been kept outsidethe purview of price control. It was generally perceived that combinations will besubjected to price controls, thus increasing the overall span of price control to~60%. If combinations are kept outside the purview of price controls, then thespan of price control will be 30-40% rather than 60%, which should please theindustry.• Market-based pricing: The GoM has resisted pressure of finalizing a cost-basedpricing policy, which is also incrementally positive, as for the first time, the policywill make drug prices market-determined.• Trade channels to share part of the impact: The hit on the industry due to lowerprices will be partly compensated by lower margins for the trade/retail channelsfor drugs that get impacted.• Preliminary estimates indicate that the hit to the overall industry will be higherthan the impact under the proposed NPPP (in October 2011), wherein the impactwas estimated at INR25b-30b. Once cleared by the Cabinet, prices of 60% ofessential medicines (NLEM) will be reduced by over 20%, while in certain casesthe prices may come down by even 70%.• This implies that under the new proposals, the overall impact on the industry willbe 2-3x that proposed under the NPPP.October 2012C–82

September 2012 Results PreviewSector: Healthcare• The table below gives the impact on key companies if the same ratio is applied:Proposed Pharma Policy: Impact on FY14 EPS (INR m)Company DF % of Total Impact on EPS (%)Sales Sales NPPP w/o combinations 2x NPPP 3x NPPPGSK Pharma 27,905 97 13 20-25 30-40Ranbaxy 25,701 24 4 5-10 10-15Cadila 27,151 36 3 5-7 7-10Cipla 43,220 48 3 5-7 7-10Dr Reddy's Lab 17,101 15 2 3-5 5-10Glenmark 13,950 26 2 3-5 5-10IPCA 10,050 32 2 3-5 5-10Sun Pharma 38,734 34 1 2 3-5Lupin 28,284 28 1 2 3-5Source: Company, MOSL• However, it should be noted that application of the above multiples may not givethe exact picture, as the NPPP had proposed bringing all combination drugs underprice control whereas the latest proposals exclude combination drugs from pricecontrol. The table above gives our approximate estimates.• We note that MNCs like GlaxoSmithKline Pharmaceuticals will be adverselyimpacted along with Indian players like Ranbaxy, Cipla and Cadila. While the actualimpact on these companies will be known only when further details on the policyare available, we believe that these three companies will be relatively moreimpacted, given their significant exposure to the anti-infective segment.• None of the companies have confirmed the impact depicted in the table aboveand we await more clarity from the management of these companies.• The above view is based on the preliminary details that have been made public.We will analyze the actual impact post the receipt of the final policy document.Spate of US FDA clearances during the quarter2QFY13 witnessed some positive news flows related to US FDA clearances for Indianplayers. Some of the companies that had favorable outcome include:1. Cadila: Resolved the US FDA warning letter for its Moraiya facility. This couldpotentially have positive implications during the coming quarters, as the US FDAstarts clearing pending products from this facility.2. Claris Lifesciences: Resolved the US FDA warning letter for its Gujarat facility. Thiswill help the company ramp up the US business gradually from CY13.3. Sun Pharmaceuticals: US subsidiary, Caraco received US FDA clearance for resumingmanufacturing at its US facility. The manufacturing was stopped by the US FDA inFY10.Recent appreciation of the INR will reverse forex losses for many companiesThe INR has depreciated by ~17% YoY against the USD but has appreciated ~5% from 30June 2012. This appreciation is likely to partially reverse the forex losses recorded bymany pharmaceuticals companies in 1QFY13. Some of the key companies where suchreversals will result in significant positive impact on profits are: 1. Ranbaxy, 2. Cadila,3. Dishman, 4. Glenmark, 5. IPCA Labs and 6. Jubilant Lifesciences.October 2012C–83

September 2012 Results PreviewSector: HealthcareCurrency movement (INR/USD)58555249464340Source: BloombergRelative Performance-3m (%) Relative Performance-1Yr (%)115Sensex IndexMOSL Healthcare Index140Sensex IndexMOSL Healthcare Index110125105110100959580Jun-12Jul-12Aug-12Sep-12Sep-11Dec-11Mar-12Jun-12Sep-12Jun-11Jul-11Aug-11Sep-11Oct-11Nov-11Dec-11Jan-12Feb-12Mar-12Apr-12May-12Jun-12Jul-12Aug-12Sep-12Comparative valuationCMP (INR) Rating EPS (INR) P/E (x) EV/EBITDA (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14EHealthcareBiocon 275 Neutral 16.9 17.9 18.4 16.2 15.3 14.9 9.0 8.3 8.0 14.9 14.3 13.4Cadila Health 872 Buy 27.6 41.2 52.4 31.5 21.2 16.7 17.3 13.9 11.3 23.8 29.0 29.3Cipla 381 Neutral 14.0 16.2 18.4 27.2 23.5 20.7 17.6 15.0 14.0 15.0 15.0 15.1Dishman Pharma 96 Neutral 7.0 15.6 17.5 13.8 6.2 5.5 7.6 4.8 4.3 6.3 12.9 12.9Divis Labs 1,080 Buy 40.2 53.0 64.1 26.9 20.4 16.9 20.3 15.6 12.3 25.0 27.5 27.7Dr Reddy’ s Labs 1,647 Buy 71.4 85.1 100.1 23.1 19.4 16.5 12.3 14.0 12.4 21.1 21.9 22.7Glenmark Pharma 422 Buy 11.4 18.2 26.3 37.0 23.2 16.0 13.3 14.2 11.3 13.5 17.7 20.5GSK Pharma 1,977 Buy 74.5 81.0 92.6 26.5 24.4 21.4 19.6 18.3 15.7 32.9 33.5 34.2IPCA Labs. 482 Buy 21.9 29.3 38.2 22.0 16.4 12.6 12.8 10.3 8.7 24.0 26.4 27.6Jubiliant Life 212 Neutral 13.6 21.0 33.4 15.5 10.1 6.3 8.4 6.0 5.0 9.7 13.5 18.8Lupin 596 Buy 19.4 24.1 31.2 30.7 24.8 19.1 21.0 16.3 13.4 23.8 24.3 26.2Opto Circuits 130 Neutral 23.6 22.5 25.3 5.5 5.8 5.1 6.7 5.6 4.9 37.2 28.7 26.6Ranbaxy Labs 530 Neutral 14.1 18.0 21.8 37.5 29.5 24.3 14.6 12.4 16.5 -72.0 28.3 15.7Sanofi India 2,374 Neutral 83.0 73.5 92.4 28.6 32.3 25.7 29.7 24.1 19.4 17.3 13.9 15.6Strides Arcolab 883 Buy 38.5 52.8 61.5 23.0 16.7 14.4 15.9 11.4 10.7 16.9 18.5 14.5Sun Pharma 693 Neutral 22.4 26.5 29.4 30.9 26.2 23.6 20.5 16.5 15.7 21.5 20.7 19.7Torrent Pharma 695 Buy 38.4 49.5 59.0 18.1 14.0 11.8 11.3 9.0 7.3 29.3 30.9 29.2Sector Aggregate 17 26.4 21.6 18.1 15.9 13.6 12.3 19.7 20.1 20.6Ranbaxy core valuations adjusted for DCF value of Para-IV upsides of INR61/shOctober 2012C–84

BSE SensexS&P CNX18,763 5,703BloombergBIOS INEquity Shares (m) 200.052 Week Range (INR) 363/2081,6,12 Rel Perf (%) 5/8/-35Mcap (INR b) 54.9Mcap (USD b) 1.0CMP: INR275September 2012 Results PreviewSector: HealthcareBioconNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 27,707 547 2.7 -81.3 - - 2.7 6.5 - -03/12A 20,865 3,384 16.9 518.6 16.3 2.4 14.9 13.0 2.2 9.003/13E 24,895 3,580 17.9 5.8 15.4 2.2 14.3 13.6 1.9 8.303/14E 27,549 3,675 18.4 2.7 15.0 2.0 13.4 13.2 1.8 8.0• We expect Biocon’s 2QFY13 topline to grow 19% YoY to INR6b, mainly on the back of (1) contract researchrevenue, led by new customer additions, and (2) 19% growth in Biopharma revenue. Licensing income is likelyto decline 28% YoY to INR262m.• EBITDA would grow 9% YoY to INR1.45b and EBITDA margin would shrink 230bp to 24% due to increased R&Dspending on the biogeneric pipeline.• We expect adjusted PAT to grow just 3% YoY to INR886m on account of higher depreciation and higher tax rate.The key growth drivers for FY13/14 would be: (1) traction in the company’s Insulin initiative in emerging markets,(2) ramp-up in Contract Research business, and (3) incremental contribution from immunosuppressant API supplies.However, given the high cost of developing biogeneric products, we believe cost pressures are likely to continuein FY13/14, impacting earnings and return ratios. Option values for the future include separate listing of ContractResearch business and potential out-licensing of the Oral Insulin NCE. The stock trades at 15.4x FY13E and 15x FY14Eearnings. Return ratios are likely to remain subdued, with both RoE and RoCE in the 13-14% range for FY13 and FY14.Maintain Neutral.Consolidated Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 4,417 5,084 5,172 6,102 5,767 6,067 6,354 6,707 20,865 24,895YoY Change (%) -33.3 -25.1 -29.0 -13.0 30.6 19.3 22.9 9.9 -24.7 19.3Total Expenditure 3,213 3,750 3,898 4,556 4,540 4,615 4,855 5,117 15,691 19,126EBITDA 1,204 1,334 1,274 1,546 1,227 1,453 1,500 1,590 5,174 5,769Margins (%) 27.2 26.2 24.6 25.3 21.3 23.9 23.6 23.7 24.8 23.2Depreciation 451 429 434 431 427 473 482 548 1,744 1,930Interest 57 20 29 30 32 20 33 48 122 133Other Income 123 160 150 13 159 161 215 233 618 769PBT 820 1,045 961 1,099 927 1,121 1,199 1,228 3,926 4,475Tax 119 188 113 121 137 235 258 265 541 895Rate (%) 14.6 18.0 11.8 11.0 14.8 21.0 21.5 21.6 13.8 20.0Minority Interest 0 0 0 0 2 0 0 -2 0 0PAT 701 857 848 978 788 886 941 965 3,384 3,580YoY Change (%) -8.7 -3.9 -15.8 -3.0 12.5 3.4 11.0 -1.3 518.6 5.8Margins (%) 15.9 16.9 16.4 16.0 13.7 14.6 14.8 14.4 16.2 14.4Licensing income 140 365 292 463 139 262 294 395 1,253 1,090YoY Change (%) -33.3 58.7 -62.0 35.4 -0.7 -28.3 0.8 -14.7 -19.2 -13.0Contract research 880 928 1,120 1,180 1,224 1,280 1,386 1,442 4,101 5,331YoY Change (%) 22.2 19.0 42.1 32.3 39.1 37.9 23.8 22.2 29.0 30.0E: MOSL Estimates; Note - Quarterly nos will not add up to full-year nos due to restatements; FY12 topline shows degrowth dueto divestment of Axicorp business which had contributed INR9.7b to topline in FY11October 2012C–85

BSE SensexS&P CNX18,763 5,703BloombergCDH INEquity Shares (m) 204.752 Week Range (INR) 964/6291,6,12 Rel Perf (%) -7/9/-2Mcap (INR b) 178.6Mcap (USD b) 3.4CMP: INR872September 2012 Results PreviewSector: HealthcareCadila HealthcareBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 46,302 6,334 30.9 26.4 - - 37.5 30.5 - -03/12A 52,633 5,660 27.6 -10.6 31.5 6.9 27.5 22.8 3.7 17.303/13E 65,272 8,431 41.2 49.0 21.2 5.5 29.0 25.2 3.0 13.803/14E 75,697 10,718 52.4 27.1 16.7 4.4 29.3 26.9 2.5 11.2• Cadila’s 2QFY13 topline is likely to grow 27% YoY to INR15.8b, led by 30% YoY growth in the domestic formulationsbusiness and 29% YoY growth in the formulations export business. While the acquisition of Biochem woulddrive growth in the domestic formulations, growth in the formulations export business would be partially ledby favorable currency.• We expect EBITDA to grow 25% YoY to INR3.4b. EBITDA margin is likely to contract by 30bp YoY to 21.8% due tolower profitability of the acquired companies.• Adjusted PAT would grow 110% YoY to INR2.1b, primarily led by the low base of 2QFY12, when PAT was impactedby forex losses of INR900m v/s estimated forex gains of INR160m.We expect strong 37% EPS CAGR over FY12-14 for the core operations, excluding one-offs. Over the next two years,RoCE would be 25% and RoE would be ~29%. Our estimates exclude the impact of the proposed new pharma policy.Sustaining double-digit growth without diluting return ratios has been Cadila’s key USP over the past few years.The company has chalked out a detailed plan to achieve revenue of USD3b in FY16. We believe it will be a difficulttarget to achieve this organically. Yet, we expect strong earnings growth trajectory, given (1) recovery in growth forthe US business post the recent resolution of US FDA’s warning letter, (2) presence in key geographies, and (3)strong growth expected in revenue from various JVs. The stock trades at 21.2x FY13E and 16.7x FY14E consolidatedEPS. Maintain Buy.Quarterly Performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Revenues 12,457 12,450 13,832 13,980 15,486 15,810 16,799 17,176 52,633 65,272YoY Change (%) 9.9 11.5 18.6 15.3 24.3 27.0 21.4 22.9 13.7 24.0Total Expenditure 9,433 9,693 11,193 11,152 12,067 12,372 13,304 13,402 41,385 51,145EBITDA 3,024 2,757 2,640 2,828 3,419 3,439 3,495 3,774 11,248 14,127Margins (%) 24.3 22.1 19.1 20.2 22.1 21.8 20.8 22.0 21.4 21.6Depreciation 347 375 465 391 434 476 495 499 1,579 1,904Interest 189 255 276 350 301 318 324 329 1,069 1,272Other Income 140 -790 -160 151 -21 255 20 135 -658 389PBT after EO Income 2,628 1,337 1,739 2,238 2,663 2,900 2,695 3,081 7,942 11,340Tax 285 235 174 436 654 667 620 668 1,130 2,608Rate (%) 10.9 17.6 10.0 19.5 24.5 23.0 23.0 21.7 14.2 23.0Min. Int/Adj on Consol 45 75 74 93 61 75 74 90 286 300Reported PAT 2,298 1,027 1,492 1,709 1,948 2,158 2,002 2,323 6,526 8,431Adj PAT 1,433 1,027 1,492 1,709 1,948 2,158 2,002 2,323 5,660 8,431YoY Change (%) -11.9 -39.9 -7.9 23.9 36.0 110.1 34.2 36.0 -10.6 49.0Margins (%) 11.5 8.2 10.8 12.2 12.6 13.6 11.9 13.5 10.8 12.9Adj PAT incl one-offs 2,298 1,027 1,492 1,709 1,948 2,158 2,002 2,323 6,526 8,431E: MOSL Estimates; # Forex loss is lowerOctober 2012C–86

BSE SensexS&P CNX18,763 5,703BloombergCIPLA INEquity Shares (m) 802.952 Week Range (INR) 395/2761,6,12 Rel Perf (%) -3/17/18Mcap (INR b) 305.6Mcap (USD b) 5.8CMP: INR381September 2012 Results PreviewSector: HealthcareCiplaNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 63,145 9,671 12.0 -3.7 - - 14.5 15.8 - -03/12A 70,207 11,442 14.0 16.2 27.1 4.0 14.7 18.8 4.3 18.303/13E 79,591 12,993 16.2 15.3 23.5 3.5 15.0 19.9 3.8 15.703/14E 88,698 14,779 18.4 13.6 20.6 3.1 15.1 19.0 3.4 14.8• Cipla’s core topline for 2QFY13 is likely to grow 15% YoY to INR20.46b while reported topline (including oneoffs)is likely to grow 23% YoY, driven by generic Lexapro supplies to Teva. The domestic formulations businesswould grow 19% YoY to INR9.8b while exports (excluding one-offs) would grow 12% YoY to INR10.2b, impactedby muted 10% YoY growth in formulation exports to INR8.2b.• Core EBITDA would grow 18% YoY. EBITDA margin is likely to expand 60bp YoY to 25.2%, led by favorable revenuemix, improving capacity utilization at Indore SEZ, and favorable currency. Reported EBITDA (including one-offs)is likely to grow 37% YoY.• We expect adjusted PAT to grow 21% YoY to INR3.7b, led by healthy operational performance and higher otherincome. Reported PAT (including one-offs) is likely to grow 41% YoY to INR4.4b.Cipla continues to face short-term headwinds in ramping up its core formulation exports business despite a favorablecurrency. Its muted export performance raises uncertainty on the timelines of ramp-up at Indore SEZ. While largecapex (for past few years) is a long-term positive, we believe it is imperative for the company to improve assetutilization at Indore to drive future growth and derive benefits of operating leverage (overhead expenses continueto adversely impact performance). Strong 1HFY13 bottomline growth will be mainly driven by generic Lexaprosupplies to Teva which will not recur from 2HFY13. The stock trades at 23.5x FY13E and 20.6x FY14E earnings. Ourestimates exclude the impact of the proposed new pharma policy. Maintain Neutral.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Revenues 15,914 17,780 17,580 18,530 19,582 20,468 19,832 19,709 70,207 79,591YoY Change (%) 7.5 10.1 13.2 11.2 23.0 15.1 12.8 6.4 11.2 13.4Total Expenditure 12,219 13,404 13,666 14,330 14,183 15,312 15,240 15,487 53,619 60,222EBITDA 3,695 4,376 3,915 4,200 5,399 5,156 4,592 4,222 16,589 19,369Margins (%) 23.2 24.6 22.3 22.7 27.6 25.2 23.2 21.4 23.6 24.3Depreciation 703 656 757 1,006 728 766 781 850 3,122 3,125Interest 43 24 32 22 11 12 13 13 383 49Other Income 249 243 302 390 531 291 306 328 1,395 1,456Profit before Tax 3,199 3,939 3,426 3,561 5,190 4,669 4,104 3,688 14,478 17,651Tax 666 850 727 794 1,182 934 821 770 3,036 3,707Rate (%) 20.8 21.6 21.2 22.3 22.8 20.0 20.0 20.9 21.0 21.0Reported PAT 2,533 3,090 2,699 2,767 4,008 4,369 3,283 2,918 11,442 13,944Adj PAT 2,533 3,090 2,699 2,577 3,057 3,735 3,283 2,918 11,252 12,993YoY Change (%) -1.6 17.5 16.0 20.3 20.7 20.9 21.7 13.2 16.3 15.5Margins (%) 15.9 17.4 15.4 13.9 15.6 18.3 16.6 14.8 16.0 16.3Domestic formulation sales 7,202 8,208 8,457 7,182 9,388 9,771 9,581 8,068 31,048 36,808YoY Change (%) 8.9 9.8 17.5 12.3 30.4 19.0 13.3 12.3 12.2 18.6Other operating income 411 462 465 498 408 492 496 406 1,730 1,802YoY Change (%) -21.6 30.2 -11.0 13.2 -0.7 6.5 6.5 -18.6 -6.1 4.1E: MOSL EstimatesOctober 2012C–87

BSE SensexS&P CNX18,763 5,703BloombergDISH INEquity Shares (m) 81.352 Week Range (INR) 107/331,6,12 Rel Perf (%) -8/104/48Mcap (INR b) 7.8Mcap (USD b) 0.1CMP: INR96September 2012 Results PreviewSector: HealthcareDishman PharmaNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 9,908 814 10.0 -29.6 - - 9.7 8.1 - -03/12A 11,221 568 7.0 -30.2 13.7 0.8 6.3 8.9 1.5 7.503/13E 13,898 1,265 15.6 122.5 6.2 0.7 12.9 13.6 1.2 4.803/14E 15,856 1,426 17.5 12.7 5.5 0.7 12.9 13.8 1.0 4.3• We expect Dishman’s revenue to increase 27.6% YoY to INR3.4b in 2QFY13, partially led by favorable currency.The CRAMS business is likely to grow 26% YoY to INR2.1b, boosted mainly by strong performance in CRAMSsupplies from Indian facilities. Revenue from CarbogenAMCIS is would decline 10% YoY to INR957m. Revenuefrom MM business would grow 30% YoY to INR1.3b.• EBITDA is likely to grow 76% YoY to INR830m. EBITDA margin would expand 670bp YoY to 24.2% due to low baseeffect, better product mix with lower share of QUATs business, and favorable currency.• The company is likely to report net profit of INR304m due to better operational performance and absence offorex losses (forex losses for 2QFY12 were INR187m).The macro environment for CRAMS business remains favorable given India’s inherent cost advantages and chemistryskills. We believe Dishman’s India operations will benefit from increased outsourcing from India, given itsstrengthening MNC relations and expansion of some of the existing customer relationships. However, the companyneeds to ramp-up its contracts with innovators to take advantage of the macro opportunity. We expect revenueCAGR of 18.8%, EBITDA CAGR of 27.8% and earnings CAGR of 58% over FY12-14. Earnings growth is led by recoveryin operational performance, better product-mix and lower tax expense. Low asset utilization, high debt and delayedramp-up of CRAMS contracts remain our main concern. The stock currently trades at 6.2x FY13E and 5.5x FY14Eearnings. RoCE will continue to be subdued till new facilities and CRAMS contracts ramp up. Maintain Neutral.Quarterly Performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 2,372 2,692 2,655 3,502 3,153 3,436 3,565 3,745 11,221 13,898YoY Change (%) 17.5 26.5 14.5 1.7 32.9 27.6 34.3 6.9 13.2 23.9Total Expenditure 1,935 2,222 2,128 2,677 2,317 2,605 2,756 2,871 8,996 10,549EBITDA 437 471 526 825 836 830 809 875 2,225 3,350Margins (%) 18.4 17.5 19.8 23.5 26.5 24.2 22.7 23.3 19.8 24.1Depreciation 187 207 191 180 193 203 216 234 765 847Interest 137 150 164 218 231 238 243 239 729 951Other Income 56 -183 89 95 26 39 35 35 150 135PBT after EO Income 169 -70 260 522 438 428 385 436 880 1,686Tax 17 -7 93 208 50 124 112 135 312 422Rate (%) 10.4 9.3 35.7 39.9 11.5 29.0 29.0 31.1 35.4 25.0Reported PAT 151 -64 167 313 387 304 274 300 568 1,265Adj PAT 151 -64 167 313 387 304 274 300 568 1,265YoY Change (%) -44.3 -121.6 859.7 36.4 156.1 63.6 -4.2 -30.1 122.5Margins (%) 6.4 -2.4 6.3 8.9 12.3 8.8 7.7 8.0 5.1 9.1CRAMS - India Sales 840 626 668 1,044 640 1,169 1,275 1,366 3,178 4,450YoY Change (%) 56.9 -10.0 -15.1 19.6 -23.7 86.6 90.7 30.9 9.9 40.0Carbogen AMCIS Sales 748 1,062 1,023 1,154 1,330 957 1,037 664 3,987 3,987YoY Change (%) -16.1 16.4 28.7 9.1 77.8 -9.9 1.3 -42.5 9.0 0.0E: MOSL EstimatesOctober 2012C–88

BSE SensexS&P CNX18,763 5,703BloombergDIVI INEquity Shares (m) 132.752 Week Range (INR) 1,201/6951,6,12 Rel Perf (%) -11/36/33Mcap (INR b) 143.4Mcap (USD b) 2.7CMP: INR1,080September 2012 Results PreviewSector: HealthcareDivi's LaboratoriesBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 13,071 4,293 32.4 25.7 - - 25.9 28.2 - -03/12A 18,586 5,333 40.2 24.1 26.9 6.7 27.1 34.1 7.7 21.003/13E 23,488 7,030 53.0 31.8 20.4 5.6 30.0 37.2 6.1 16.003/14E 29,363 8,507 64.1 21.0 16.9 4.7 30.2 37.6 4.9 12.9• Divi’s Laboratories (DIVI) is likely to post 39% YoY increase in 2QFY13 revenue to INR4.9b on new order inflows.The CCS business would grow 44% YoY while the API business is likely to grow 39% YoY. Carotenoids revenuewould grow 10% YoY.• EBITDA is likely to grow 45% YoY to INR1.83b, led by strong revenue growth and low base effect. EBITDA marginwould expand 150bp.• We expect adjusted PAT to grow 27% YoY to INR1.35b. PAT growth would be lower than EBITDA growth YoY dueto higher depreciation and absence of forex gains (for 2QFY12, the company had recorded forex gains ofINR90m).We expect DIVI to be a key beneficiary of the increased pharmaceutical outsourcing from India, given its strongrelationships with global innovator companies. It is targeting a fresh capex of INR1.5b-2b for FY13, despite the~INR4.5b capex undertaken in the past two years. We believe that this reflects the management’s confidence indriving future growth since DIVI does not usually undertake capex without adequate visibility of customer orders.We estimate 37% RoCE and 30% RoE for the next two years, led by traction in the high-margin CRAMS business,sustained profitability in the Generics business and increased contribution from the new SEZ. The stock trades at20.4x FY13E and 16.9x FY14E earnings. Maintain Buy.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Op Revenue 3,586 3,541 4,147 7,080 4,684 4,932 5,520 8,352 18,586 23,488YoY Change (%) 36.1 38.7 33.9 47.9 30.6 39.3 33.1 18.0 42.2 26.4Total Expenditure 2,308 2,279 2,663 4,251 2,780 3,100 3,456 5,220 11,736 14,555EBITDA 1,277 1,262 1,484 2,829 1,904 1,833 2,064 3,132 6,850 8,932Margins (%) 35.6 35.6 35.8 40.0 40.7 37.2 37.4 37.5 36.9 38.0Depreciation 140 152 162 166 175 198 211 243 621 827Interest 2 6 2 27 4 8 8 13 37 34Other Income 164 227 284 78 418 83 124 203 615 827PBT 1,299 1,332 1,604 2,714 2,143 1,708 1,969 3,079 6,806 8,899Tax 273 257 341 566 469 359 413 627 1,474 1,869Deferred Tax 1 14 38 0 0 0 0 0 0 0Rate (%) 21.0 20.4 23.6 20.9 21.9 21.0 21.0 20.4 21.7 21.0Reported PAT 1,026 1,061 1,226 2,148 1,674 1,350 1,555 2,452 5,333 7,030Adj PAT 1,026 1,061 1,226 2,148 1,674 1,350 1,555 2,452 5,333 7,030YoY Change (%) 22.5 47.4 24.5 22.9 63.2 27.3 26.9 14.1 24.2 31.8Margins (%) 28.6 30.0 29.6 30.3 35.7 27.4 28.2 29.4 28.7 29.9CCS Revenues 1,757 1,650 1,831 3,682 2,148 2,382 2,723 3,988 8,921 11,241YoY Change (%) 42.6 49.3 26.8 58.9 22.2 44.3 48.7 8.3 46.3 26.0Carotenoid Revenues 140 240 200 230 210 262 283 335 810 1,090YoY Change (%) -17.6 100.0 33.3 27.1 50.0 9.0 41.7 45.7 30.4 34.6E: MOSL Estimates; Quarterly financials from 1QFY12 are on stand-alone basis while annual financials are on consolidated basisOctober 2012C–89

September 2012 Results PreviewSector: HealthcareBSE SensexS&P CNX18,763 5,703BloombergDRRD INEquity Shares (m) 169.252 Wk Range (INR) 1,818/1,4441,6,12 Rel Perf (%) -9/-13/-3Mcap (INR b) 278.7Mcap (USD b) 5.3CMP: INR1,647Dr Reddy's LaboratoriesBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 74,693 11,099 65.6 - - - 24.1 16.7 - -03/12A 96,737 12,109 71.4 12.6 23.1 4.9 21.1 20.3 3.0 12.303/13E 104,990 14,426 85.1 19.1 19.4 4.2 21.9 17.0 2.8 14.003/14E 116,165 16,977 100.1 17.7 16.5 3.7 22.7 18.0 2.6 12.3• We expect Dr Reddy’s Laboratories (DRRD) to post 15% YoY growth in core revenue (excluding one-off sales) for2QFY13 to INR24.8b. This would be led by 18% YoY growth in core US revenue and 16% YoY growth in theinternational branded formulations segment. PSAI business revenue is likely to grow 15.5% YoY.• Core EBITDA is likely to grow just 7% YoY to INR4.5b, impacted mainly by higher SG&A and R&D expenses andpartly due to absence of export incentives. We expect core EBITDA margin to decline 140bp YoY to 18.3%.• Adjusted PAT would decline 17% YoY to INR2.2b, impacted mainly by muted EBITDA growth and estimated forexloss of INR450m v/s forex gain of INR151m for 2QFY12. Higher tax rate will also adversely impact PAT growth.Including contribution from one-off opportunities, we expect PAT to decline 11% YoY to INR2.7b.Traction in the US, branded formulations and PSAI businesses will be the key growth drivers for DRRD over the nexttwo years. We believe that FY13 will be a year of strong growth for DRRD, with the management guiding a toplineof USD2.5b. Earnings upgrade is likely as and when the street gets convinced that DRRD can achieve this target. Weestimate core EPS at INR85.1 for FY13 and INR100 for FY14. Our estimates exclude upsides from patent challenges/low-competition opportunities in the US (we estimate one-time PAT contribution of INR3.3b from suchopportunities in FY13). The stock currently trades at 19.4x FY13E and 16.5x FY14E core earnings. Our estimatesexclude the impact of the proposed new pharma policy. Maintain Buy.Quarterly Performance - IFRS(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEGross Sales 19,783 22,679 27,692 26,583 25,406 24,822 26,734 28,028 96,737 104,990YoY Change (%) 17.5 21.3 45.9 31.8 28.4 9.5 -3.5 5.4 29.5 8.5Total Expenditure 15,948 17,880 19,003 20,167 20,410 20,280 21,254 21,839 72,997 83,782EBITDA 3,835 4,799 8,689 6,416 4,996 4,542 5,481 6,189 23,740 21,208Margins (%) 19.4 21.2 31.4 24.1 19.7 18.3 20.5 22.1 24.5 20.2Amortization 1,233 1,268 1,307 2,444 1,296 1,394 1,451 1,548 6,254 5,689Other Income 144 178 365 292 25 -363 74 79 979 -185Profit before Tax 2,746 3,709 7,747 4,264 3,725 2,786 4,104 4,719 18,465 15,334Tax 120 631 2,616 837 365 557 821 1,017 4,204 2,760Rate (%) 4.4 17.0 33.8 19.6 9.8 20.0 20.0 21.6 22.8 18.0Net Profit 2,626 3,078 5,131 3,427 3,360 2,737 3,854 4,986 14,261 14,938One-off/low-competition PAT in US 363 393 2,726 1,372 1,031 508 571 1,284 4,854 3,394Adjusted PAT 2,263 2,685 2,405 2,055 2,329 2,229 3,283 3,702 9,408 11,543YoY Change (%) 47.6 9.3 0.8 -3.5 2.9 -17.0 36.5 80.1 10.6 22.7Margins (%) 11.4 11.8 8.7 7.7 9.2 9.0 12.3 13.2 9.7 11.0E: MOSL Estimates; Note-Estimates do not include one-off upsides.October 2012C–90

BSE SensexS&P CNX18,763 5,703BloombergGLXO INEquity Shares (m) 84.752 Wk Range (INR) 2,338/1,8301,6,12 Rel Perf (%) -11/-21/-19Mcap (INR b) 167.5Mcap (USD b) 3.2September 2012 Results PreviewSector: HealthcareGlaxoSmithKline PharmaceuticalsCMP: INR1,977BuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA12/10A 21,116 5,814 68.6 15.2 - - 30.1 44.8 - -12/11A 23,380 6,314 74.5 8.6 26.5 8.7 32.9 47.9 6.2 19.612/12E 25,650 6,864 81.0 8.7 24.4 8.2 33.5 48.9 5.7 18.312/13E 28,899 7,840 92.6 14.2 21.4 7.3 34.2 49.9 5.0 15.7• We expect GlaxoSmithKline Pharmaceuticals (GLXO) to post 10% YoY growth in 3QCY12 topline to INR6.6b. Themuted growth in topline would be because of lower offtake of acute therapy products during the quarter dueto erratic rainfall.• EBITDA is likely to grow 18% YoY to INR2.1b, on a low base. EBITDA margin would expand 220bp to 31.2% due tolow base of 3QCY11, when EBITDA margin was 29%.• We expect PAT to grow 18% YoY to INR1.7b in 3QCY12, in line with operational performance.We believe GLXO is one of the best plays on the IPR regime in India, with aggressive plans to launch new productsin the high-growth lifestyle segments. It is likely to record double-digit topline growth in the long-term, thoughthe proposed new pharma policy may adversely impact growth in the short term. Given the high profitability ofoperations, we expect this growth to lead to sustainable RoE of ~30%. This growth is likely to be funded throughminiscule capex and negative net working capital. GLXO deserves premium valuations due to strong parentage,brand-building ability and likely positioning in post patent era. It is one of the few companies with the ability todrive reasonable growth without any major capital requirement, leading to high RoCE of 45-50%. Our estimatesexclude potential adverse impact of the proposed new pharma policy. The stock is currently valued at 24.4x CY12Eand 21.4x CY13E earnings. Maintain Buy.Quarterly Performance(INR Million)Y/E December CY11 CY12 CY11 CY121Q 2Q 3Q 4Q 1Q 2Q 3QE 4QENet Sales 6,029 5,615 6,076 5,660 6,228 6,520 6,674 6,229 23,380 25,650YoY Change (%) 11.4 12.8 4.4 15.4 3.3 16.1 9.8 10.0 10.7 9.7Total Expenditure 3,920 3,746 4,316 3,954 4,271 4,492 4,592 4,353 15,935 17,707EBITDA 2,109 1,870 1,760 1,706 1,957 2,028 2,082 1,876 7,445 7,944Margins (%) 35.0 33.3 29.0 30.1 31.4 31.1 31.2 30.1 31.8 31.0Depreciation 44 49 49 61 41 43 43 44 204 171Interest 0 0 0 3 0 0 0 0 3 0Other Income 580 421 441 535 804 479 472 492 1,978 2,248PBT before EO Expense 2,645 2,242 2,152 2,177 2,720 2,464 2,511 2,324 9,216 10,020Tax 782 725 692 703 863 768 791 734 2,902 3,156Rate (%) 29.6 32.3 32.2 32.3 31.7 31.2 31.5 31.6 31.5 31.5Adjusted PAT 1,863 1,517 1,460 1,474 1,857 1,696 1,720 1,590 6,314 6,864YoY Change (%) 15.6 8.6 -7.7 20.5 -0.3 11.8 17.8 7.9 8.6 8.7Margins (%) 30.9 27.0 24.0 26.0 29.8 26.0 25.8 25.5 27.0 26.8Extra-Ord Expense 1,859 41 1 106 628 61 0 0 2,008 689Reported PAT 5 1,475 1,459 1,367 1,229 1,635 1,720 1,590 4,306 6,175E: MOSL EstimatesOctober 2012C–91

BSE SensexS&P CNX18,763 5,703BloombergGNP INEquity Shares (m) 269.852 Week Range (INR) 450/2651,6,12 Rel Perf (%) -4/29/17Mcap (INR b) 113.8Mcap (USD b) 2.2CMP: INR422September 2012 Results PreviewSector: HealthcareGlenmark PharmaceuticalsBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 29,491 3,548 12.5 7.2 - - 17.4 13.4 - -03/12A 40,206 3,244 11.4 -8.6 37.0 4.8 13.5 12.1 3.3 13.303/13E 47,388 5,169 18.2 59.3 23.2 3.9 17.7 16.8 2.8 14.203/14E 54,005 7,472 26.3 44.5 16.1 3.1 20.5 20.6 2.4 11.3Note: Company has adopted IFRS accounting wef FY11. Estimates exclude one-off upsides• We expect Glenmark Pharmaceuticals (GNP) to post 25% YoY growth in core revenue (excluding one-offs andR&D income) for 2QFY13 to INR11.59b, led mainly by like-to-like growth of 33% in the generics business. Thebranded business is likely to grow 19% YoY. We do not expect any R&D licensing income in 2QFY13 (INR1.18brecorded in 2QFY12).• Core EBITDA is likely to grow 20% YoY to INR2.07b, while EBITDA margin would decline 80bp to 18% due tohigher R&D expenses.• GNP is likely to report 91% YoY growth in adjusted PAT to INR1.4b, primarily due to low base of 2QFY12, whenthe company had recorded MTM forex losses of INR810m.We believe that improved working capital and moderate capex will impart flexibility to the management to targetdebt reduction. Return ratios should improve gradually over the next two years, with RoCE increasing from 12.1%to 20-21% and RoE increasing from 13.5% to 20-21%. GNP has differentiated itself among Indian pharmaceuticalcompanies through its significant success in NCE research. Improved working capital cycle coupled with potentialdebt reduction is likely to address investor concerns related to adverse balance sheet in the coming quarters. Thestock trades at 23.2x FY13E and 16.1x FY14E EPS. Our estimates exclude the impact of the proposed new pharmapolicy. Maintain Buy.Quarterly performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Revenues (Core) 8,683 10,554 10,311 10,659 10,404 11,589 12,464 12,931 40,206 47,388YoY Change (%) 27.4 45.7 37.3 34.5 19.8 9.8 20.9 21.3 40.6 17.9EBITDA 2,966 2,983 2,046 1,864 2,198 2,076 2,371 2,646 9,860 9,291Margins (%) 34.2 28.3 19.8 17.5 21.1 17.9 19.0 20.5 24.5 19.6Depreciation 264 247 231 236 275 261 272 259 979 1,067Interest 408 291 357 410 380 385 371 346 1,466 1,482Other Income 125 -808 -912 377 -521 250 -25 40 -1,218 -256PBT before EO Expense 2,420 1,637 545 1,595 1,022 1,679 1,703 2,082 6,198 6,486Extra-Ord Expense 0 1,317 0 0 0 0 0 0 1,317 0PBT after EO Expense 2,420 321 545 1,595 1,022 1,679 1,703 2,082 4,881 6,486Tax 319 -238 84 73 218 233 237 272 238 961Rate (%) 13.2 -74.2 15.4 4.6 21.3 13.9 13.9 13.1 4.9 14.8Reported PAT (incl one-offs) 2,101 559 461 1,522 804 1,589 1,577 1,920 4,643 5,891Minority Interest 8 11 10 11 21 20 20 19 40 80Adj PAT (excl one-offs) 1,092 745 76 1,331 506 1,426 1,446 1,791 3,244 5,169YoY Change (%) 17.8 -24.6 -92.2 101.4 -53.6 91.5 1,803.5 34.5 -8.6 59.3Margins (%) 12.6 7.1 0.7 12.5 4.9 12.3 11.6 13.8 8.1 10.9US Sales 2,512 3,001 3,190 3,435 3,924 3,803 3,883 4,238 12,137 15,848YoY Change (%) 37.2 34.1 56.3 53.1 56.2 26.8 21.7 23.4 45.3 30.6R&D licensing income 1,112 1,185 238 0 0 0 0 0 2,535 245YoY Change (%) 24.3 -100.0 183.2 -90.3E: MOSL Estimates; 1Q and 2Q numbers will not be comparable yoy due to absence of R&D licensing incomeOctober 2012C–92

BSE SensexS&P CNX18,763 5,703BloombergIPCA INEquity Shares (m) 125.752 Week Range (INR) 493/2301,6,12 Rel Perf (%) 12/35/66Mcap (INR b) 60.6Mcap (USD b) 1.1CMP: INR482September 2012 Results PreviewSector: HealthcareIPCA LaboratoriesBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 18,969 2,628 20.9 25.7 - - 27.4 25.6 - -03/12A 23,587 2,762 21.9 4.7 22.0 4.8 24.0 24.1 2.8 12.803/13E 27,968 3,701 29.3 34.0 16.4 3.9 26.4 27.7 2.3 10.303/14E 32,555 4,816 38.2 30.1 12.6 3.1 27.6 29.4 2.0 8.7• We expect IPCA’s 2QFY13 topline to grow 14.4% YoY to INR7.1b, led mainly by 23% growth in API exports.Domestic formulations would grow 13.4% YoY to INR2.6b. The malaria season in the domestic market did notpick up strongly due to erratic rainfall though there was some recovery in September. This would impact growthin domestic formulations.• EBITDA is likely to grow just 4% YoY to INR1.6b due to a 230bp decline in EBITDA margin to 23%, led mainly bylower growth in the domestic formulations business.• We expect adjusted PAT to grow 41% YoY to INR1b despite the muted growth in EBITDA due to low base of2QFY12, when the company had reported forex loss of INR271m against which we expect it to report a forexgain of INR100m.Strong traction in exports coupled with growth recovery in the domestic formulations business will be the keytriggers for IPCA over the next two years. We expect IPCA to clock EPS CAGR of 32% over FY12-14 on the back of 17%revenue CAGR, coupled with 120bp EBITDA margin expansion and reversal of MTM forex losses. Return ratioscontinue to be strong, with RoCE of ~28% and RoE of 27%, which is reflective of the conservative managementstrategy and efficient capital allocation. The stock currently trades at 16.4x FY13E and 12.6x FY14E EPS. Our estimatesexclude the impact of the proposed new pharma policy. Maintain Buy.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Revenues (Core) 5,299 6,235 6,148 5,611 6,344 7,133 7,112 7,378 23,587 27,968YoY Change (%) 26.8 20.3 31.8 13.5 19.7 14.4 15.7 31.5 24.3 18.6EBITDA 952 1,580 1,513 1,117 1,329 1,639 1,720 1,670 5,135 6,359Margins (%) 18.0 25.3 24.6 19.9 21.0 23.0 24.2 22.6 21.8 22.7Depreciation 154 176 181 142 199 202 219 222 671 843Interest 83 118 108 111 95 102 117 112 413 426Other Income 118 -245 -359 88 -470 130 60 125 -408 -155PBT 832 1,042 864 952 565 1,464 1,444 1,461 3,643 4,935Tax 215 262 225 186 135 366 361 372 881 1,234Rate (%) 25.9 25.2 26.0 19.5 23.9 25.0 25.0 25.4 24.2 25.0Reported PAT 617 780 639 766 430 1,098 1,083 1,090 2,762 3,701Adj PAT 617 780 639 766 430 1,098 1,083 1,090 2,762 3,701YoY Change (%) 58.8 -17.1 0.0 16.9 -30.3 40.9 69.4 42.2 5.3 34.0Margins (%) 11.6 12.5 10.4 13.7 6.8 15.4 15.2 14.8 11.7 13.2Domestic formulation 1,890 2,292 1,876 1,477 2,242 2,599 2,166 1,657 7,534 8,664YoY Change (%) 12.3 3.3 5.7 14.7 18.6 13.4 15.5 12.2 8.2 15.0Export formualtions 2,066 2,605 2,898 2,393 2,245 2,892 3,269 4,167 9,961 12,573YoY Change (%) 69.3 48.8 73.4 5.2 8.7 11.0 12.8 74.2 44.0 26.2E: MOSL EstimatesOctober 2012C–93

BSE SensexS&P CNX18,763 5,703BloombergJOL INEquity Shares (m) 159.352 Week Range (INR) 226/1541,6,12 Rel Perf (%) 21/8/-7Mcap (INR b) 33.7Mcap (USD b) 0.6CMP: INR212September 2012 Results PreviewSector: HealthcareJubilant Life SciencesNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 34,334 2,297 14.4 -45.7 - - 10.5 6.0 - -03/12A 42,540 2,173 13.6 -5.4 15.5 1.4 0.6 8.1 1.6 8.403/13E 52,145 3,345 21.0 53.9 10.0 1.3 13.5 12.2 1.2 6.003/14E 59,572 5,328 33.4 59.3 6.3 1.1 18.8 15.5 1.0 5.0• For 2QFY13, we expect healthy topline growth for Jubilant Organosys (JOL) at 22.2% YoY to INR12.8b, driven bythe Generics and Life Science Ingredients businesses. While the Generics business would grow 30% YoY, theLife Science Ingredients business would grow 24% YoY. The Life Science Services business is likely to grow 8%YoY.• We expect EBITDA to grow 14% YoY to INR2.69b despite 22% YoY topline growth due to a 150bp decline in EBITDAmargin to 21%.• Adjusted PAT would grow 67% YoY to INR1.3b, mainly led by a low base of 2QFY12, when JOL had reported forexloss of INR426m against our expectation of a forex gain of INR313m.We expect JOL to record 18% topline CAGR, 22% EBITDA CAGR, and 56% EPS CAGR (on a low base) over FY12-14.Strong earnings growth would be partly led by the reversal of forex loss to forex gains based on our assumption ofcurrency appreciation over FY12. JOL needs to restructure its balance sheet significantly (currently, it has debt ofINR36b to support an overall topline of INR42.5b). High debt continues to be concerning. Some of its past acquisitions(like Draxis) have been at expensive valuations, resulting in extended payback periods and lower return ratios.High debt and low RoCE (12-15%) remain overhangs. The stock trades at 10x FY13E and 6.3x FY14E EPS. MaintainNeutral.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 9,443 10,481 10,872 11,711 12,359 12,803 13,325 13,657 42,540 52,145YoY Change (%) -3.8 6.1 25.5 31.5 30.9 22.2 22.6 16.6 23.9 22.6Total Expenditure 7,623 8,120 8,801 9,899 9,666 10,113 10,594 11,210 34,547 41,584EBITDA 1,820 2,361 2,071 1,812 2,693 2,691 2,731 2,447 7,992 10,561Margins (%) 19.3 22.5 19.0 15.5 21.8 21.0 20.5 17.9 18.8 20.3Depreciation 498 508 539 662 591 649 703 762 2,207 2,705Interest 434 497 566 586 593 595 619 620 2,096 2,427Other Income 37 -372 -1,507 29 -968 383 80 75 -929 -429PBT before EO Expense 925 984 -541 593 541 1,830 1,489 1,140 2,761 5,000Extra-Ord Expense 0 0 0 820 0 0 0 0 1,620 0PBT after EO Expense 925 984 -541 -227 541 1,830 1,489 1,140 1,141 5,000Tax 152 93 89 351 389 403 298 161 684 1,250Rate (%) 16.4 9.5 -16.4 -154.5 71.8 22.0 20.0 14.1 60.0 25.0PAT 774 891 -630 -578 152 1,427 1,191 979 457 3,750Minority Interest 3 97 154 57 102 101 101 100 311 405Reported PAT 771 794 -784 -635 50 1,326 1,090 879 146 3,345Adjusted PAT 771 794 -784 476 50 1,326 1,090 879 2,173 3,345YoY Change (%) 22.9 -3.3 -277.7 -22.8 -93.5 67.0 84.5 -5.4 53.9Margins (%) 8.2 7.6 -7.2 4.1 0.4 10.4 8.2 6.4 5.1 6.4E: MOSL EstimatesOctober 2012C–94

BSE SensexS&P CNX18,763 5,703BloombergLPC INEquity Shares (m) 446.252 Week Range (INR) 632/4101,6,12 Rel Perf (%) -2/6/11Mcap (INR b) 266.1Mcap (USD b) 5.0CMP: INR596September 2012 Results PreviewSector: HealthcareLupinBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 57,068 8,582 19.3 25.9 - - 29.3 25.1 - -03/12A 69,597 8,676 19.4 0.7 30.7 6.6 23.8 24.6 4.0 21.003/13E 88,755 10,748 24.1 23.9 24.8 5.5 24.3 26.8 3.1 16.303/14E 101,852 13,950 31.2 29.8 19.1 4.6 26.2 27.8 2.7 13.4• We expect Lupin’s 2QFY13 topline to grow 27% YoY, driven mainly by 73% YoY growth in Japan on the back of Iromacquisition and favorable currency, 28% YoY growth in revenue from advanced markets (Ex-Japan) and 31% YoYgrowth in formulations revenue from exports to semi-regulated markets. The domestic formulations businessis likely to report 17% YoY growth to INR6b.• EBITDA would grow 33% YoY, with EBITDA margin expanding 80bp YoY on the back of a low base, favorablecurrency and better product mix.• We expect adjusted PAT to grow 21.5% YoY to INR2.4b. PAT growth would be lower than EBITDA growth due tohigher tax rate.Key growth drivers for Lupin will be: (1) increased traction in India formulations and emerging markets, (2) stronglaunch pipeline for the US, and (3) contribution from oral contraceptives in the US. We expect EPS of INR24.1 forFY13 (up 24%) and INR31.2 for FY14 (up 30%), translating into 27% EPS CAGR over FY12-14. Significantinternationalization of operations without dilution of return ratios has been Lupin’s key achievement over the lastfive years. We expect this to sustain. The stock trades at 24.8x FY13E and 19.1x FY14 EPS. Our estimates exclude theimpact of the proposed new pharma policy. Maintain Buy.Quarterly Performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 15,432 16,448 17,917 18,832 22,192 20,925 22,280 23,359 69,597 88,755YoY Change (%) 17.6 17.1 22.1 23.7 43.8 27.2 24.3 24.0 22.0 27.5Total Expenditure 12,734 13,684 14,134 15,511 17,961 17,250 17,831 18,681 56,382 71,723EBITDA 2,698 2,764 3,783 3,321 4,230 3,674 4,449 4,678 13,215 17,032Margins (%) 17.5 16.8 21.1 17.6 19.1 17.6 20.0 20.0 19.0 19.2Depreciation 471 522 576 706 654 698 712 728 2,275 2,791Interest 58 66 86 145 101 117 113 120 355 451Other Income 257 324 -15 489 582 420 340 407 1,376 1,749PBT 2,426 2,499 3,106 2,960 4,058 3,279 3,965 4,237 11,961 15,539Tax 286 441 701 1,677 1,208 787 912 978 3,086 3,885Rate (%) 11.8 17.6 22.6 56.7 29.8 24.0 23.0 23.1 25.8 25.0Reported PAT 2,140 2,718 2,406 1,283 2,850 2,618 3,053 3,259 10,295 11,780Extra-Ordinary Exp/(Inc) 0 -659 0 0 0 0 0 0 659 0Minority Interest 39 49 55 56 46 50 50 54 199 200Recurring PAT 2,101 2,010 2,498 499 2,098 2,442 3,003 3,205 8,677 10,748YoY Change (%) 7.0 -6.5 11.5 -77.6 -0.1 21.5 20.2 542.3 1.1 23.9Margins (%) 13.6 12.2 13.9 2.6 9.5 11.7 13.5 13.7 12.5 12.1Advanced mkt formulations 7,013 7,761 9,300 11,811 11,826 10,729 12,030 13,021 35,885 47,606YoY Change (%) 11.9 15.3 26.0 50.4 68.6 38.2 29.4 10.2 27.1 32.7Emerging mkt formulations 6,317 6,711 6,637 6,065 8,049 8,095 8,113 8,376 25,730 32,633YoY Change (%) 24.4 28.7 32.3 22.6 27.4 20.6 22.2 38.1 27.0 26.8E: MOSL Estimates; Quarterly nos will not add up to full year nos due to restatement of past quartersOctober 2012C–95

BSE SensexS&P CNX18,763 5,703BloombergOPTC INEquity Shares (m) 242.352 Week Range (INR) 225/1151,6,12 Rel Perf (%) -2/-41/-41Mcap (INR b) 31.4Mcap (USD b) 0.6CMP: INR130September 2012 Results PreviewSector: HealthcareOpto CircuitsNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 15,856 3,661 15.1 49.3 - - 30.4 24.1 - -03/12A 23,569 5,719 23.6 56.2 5.5 1.8 37.2 22.4 1.7 6.703/13E 29,207 5,441 22.5 -4.9 5.7 1.5 28.7 22.5 1.5 5.603/14E 33,413 6,128 25.3 12.6 5.1 1.2 26.6 22.1 1.2 4.9• We expect Opto Circuits (OPTC) to post 25% YoY growth in 2QFY13 revenue to INR7b, led by a growth of 49% YoYin the invasive business. The non-invasive segment is likely to post 20% YoY growth to INR5.6b.• EBITDA would grow 22% YoY to INR1.9b and EBITDA margin would contract by 60bp, mainly due to higheroverheads.• We expect OPTC to post PAT growth of 10.5% YoY despite healthy operational performance due to higherdepreciation & amortization, increased interest cost and higher tax rate.OPTC has delivered strong revenue and earnings growth over the last few years, coupled with high return ratios.Despite rapid growth, it remains a marginal player in the global medical devices industry, which gives OPTC theopportunity to sustain its high revenue growth rate for the next couple of years. However, large accumulatedgoodwill in the books , high working capital requirements leading to high debt, inadequate free cash flow generationremain our major concerns. We note that the management is targeting reduction in working capital. We believe itis imperative for the company to deliver this without diluting the overall growth for the business. Potential fundraising in Eurocor could dilute earnings, with commensurate benefits from the equity dilution accruing only overthe long-term (since the funds are likely to be utilized for financing clinical trials for key products, which could betime-consuming). The stock trades at 5.7x FY13E and 5.1x FY14E EPS. Maintain Neutral.Quarterly Performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Revenues 5,208 5,620 6,113 6,627 7,151 7,012 7,476 7,569 23,569 29,207YoY Change (%) 78.4 69.6 46.4 21.7 37.3 24.8 22.3 14.2 48.6 23.9Total Expenditure 3,776 4,074 4,403 5,163 5,251 5,126 5,510 5,682 17,404 21,569EBITDA 1,432 1,547 1,710 1,464 1,899 1,885 1,966 1,887 6,165 7,638Margins (%) 27.5 27.5 28.0 22.1 26.6 26.9 26.3 24.9 26.2 26.2Depreciation 150 109 141 146 196 202 234 175 546 806Interest 109 138 168 177 187 197 213 192 592 789Other Income 49 -51 -42 186 27 16 18 9 136 70PBT before EO Income 1,222 1,248 1,359 1,328 1,544 1,502 1,537 1,528 5,162 6,112EO Exp/(Inc) 0 0 -5 0 0 0 0 0 0 0PBT after EO Income 1,222 1,248 1,364 1,328 1,544 1,502 1,537 1,528 5,162 6,112Tax 57 33 109 -772 150 150 154 158 -572 611Rate (%) 4.7 2.7 8.0 -58.1 9.7 10.0 10.0 10.3 -11.1 10.0Min. Int/Adj on Consol 1 5 3 6 15 15 -15 15 15 60Reported PAT 1,164 1,210 1,251 2,093 1,380 1,337 1,398 1,355 5,719 5,441Adj PAT 1,164 1,210 1,253 2,093 1,380 1,337 1,368 1,355 5,719 5,441YoY Change (%) 40.6 56.3 30.4 90.9 18.6 10.5 9.2 -35.3 56.2 -4.9Margins (%) 22.4 21.5 20.5 31.6 19.3 19.1 18.3 17.9 24.3 18.6Non Invasive sales 4,220 4,640 4,770 5,090 5,828 5,566 5,913 5,883 18,720 23,190YoY Change (%) 99.4 100.9 56.2 23.8 38.1 19.9 24.0 15.6 61.5 23.9Invasive sales 940 940 1,300 1,490 1,251 1,401 1,518 1,667 4,670 5,838YoY Change (%) 25.3 4.3 24.5 19.8 33.1 49.0 16.8 11.9 18.6 25.0E: MOSL EstimatesOctober 2012C–96

BSE SensexS&P CNX18,763 5,703BloombergRBXY INEquity Shares (m) 420.452 Week Range (INR) 578/3671,6,12 Rel Perf (%) -10/17/-6Mcap (INR b) 222.6Mcap (USD b) 4.2CMP: INR530September 2012 Results PreviewSector: HealthcareRanbaxy LaboratoriesNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) GR. (%) (X) (X) (%) (%) Sales EBITDA12/10A 73,623 3,008 25.8 467.1 - - 19.4 15.9 - -12/11A 80,509 5,955 14.1 -45.3 33.2 4.9 -72.0 19.4 2.3 14.612/12E 98,819 7,586 18.0 27.4 26.0 3.9 28.3 21.9 2.0 12.312/13E 110,022 9,203 21.8 21.3 21.5 3.4 15.7 14.7 2.2 16.5Note: All valuation ratios adjusted for INR61/sh DCF value of FTFs• We expect Ranbaxy Laboratories (RBXY) to post 21% YoY growth in core topline for 3QCY12, partially led byfavorable currency. 3QCY12 performance will reflect the core operating performance after several quarters, aswe do not expect any one-offs from Para-IV upsides.• We expect core EBITDA to grow 55% YoY to INR2.7b. EBITDA margin would expand by 240bp YoY to 10.7% on avery low base.• Adjusted PAT would grow 4% YoY to INR1.68b despite healthy operational performance due to higher interestcost and significantly higher tax outgo.The US FDA/DoJ settlement and signing of the consent decree is likely to delay the full recovery of supplies to USfrom India into CY13 compared to our previous assumption of the benefits coming through in CY12. The currentvaluations factor in the likely improvement in core EBITDA margin (we expect margins to improve to 13.6% by CY13from the current 10-11%). We believe that for the stock to get higher valuations, it is imperative for RBXY toimprove core business margins, as one-offs wane in the coming quarters. The stock is valued at 26x CY12E and 21.5xCY13E core EPS, adjusting for INR61/share of DCF value of Para-IV pipeline. Our estimates exclude the impact of theproposed new pharma policy. We rate the stock Neutral.Quarterly performance(INR Million)Y/E December CY11 CY12 CY11 CY12E1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QENet Income 21,809 20,931 20,955 37,923 37,868 32,285 25,341 29,282 101,614 124,776YoY Change (%) -19.2 -2.7 8.3 74.3 73.6 54.2 20.9 -22.8 13.4 22.8EBITDA 4,032 1,817 1,741 8,601 9,552 5,113 2,706 3,221 16,189 20,592Margins (%) 18.5 8.7 8.3 22.7 25.2 15.8 10.7 11.0 15.9 16.5Depreciation 736 735 788 1,681 799 783 892 958 3,940 3,432Interest 145 166 153 304 377 483 486 489 768 1,836Other Income 671 607 -1,490 -790 1,556 -2,972 2,302 439 -1,001 1,325PBT before EO Expense 3,823 1,522 -690 5,825 9,933 875 3,629 2,212 10,480 16,649Extra-Ord Expense -20 -1,118 3,624 34,859 -4,047 5,994 -2,420 550 37,345 76PBT after EO Expense 3,842 2,640 -4,313 -29,034 13,980 -5,119 6,049 1,662 -26,865 16,573Tax 782 185 256 747 1,374 683 726 200 1,969 2,983Rate (%) 20.4 7.0 -5.9 -2.6 9.8 -13.3 12.0 12.0 -7.3 18.0Reported PAT 3,060 2,455 -4,569 -29,780 12,606 -5,801 5,323 1,461 -28,834 13,590Minority Interest 16 23 77 47 139 56 100 106 -163 400Reported PAT (incl one-offs) 3,044 2,432 -4,646 -29,828 12,468 -5,857 5,223 3,921 -28,997 16,610Adj PAT 1,724 1,055 1,620 1,556 2,017 1,722 1,688 2,159 5,955 7,586YoY Change (%) 223.2 -30.4 58.9 -2,675.7 17.0 63.2 4.2 38.7 98.0 27.4Margins (%) 7.9 5.0 7.7 4.1 5.3 5.3 6.7 7.4 5.9 6.1E: MOSL EstimatesOctober 2012C–97

BSE SensexS&P CNX18,763 5,703BloombergSANL INEquity Shares (m) 23.052 Wk Range (INR) 2,430/2,0021,6,12 Rel Perf (%) 4/1/-10Mcap (INR b) 54.7Mcap (USD b) 1.0CMP: INR2,374September 2012 Results PreviewSector: HealthcareSanofi IndiaNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA12/10A 10,850 1,550 67.3 -1.5 - - 15.5 23.6 - -12/11A 12,297 1,912 83.0 23.3 28.6 4.9 17.3 25.3 4.3 29.712/12E 14,864 1,693 73.5 -11.4 32.3 4.5 13.9 20.6 3.4 24.112/13E 17,144 2,128 92.4 25.7 25.7 4.0 15.6 23.1 2.9 19.4• We expect Sanofi India’s 3QCY12 topline to grow 25% YoY to INR3.9b, led by the domestic formulations business.The domestic formulations business is likely to grow 27% YoY to INR3.2b on the back of the acquisition ofUniversal Medicare. The export business would grow 13% YoY to INR625m.• EBITDA is likely to grow 26% YoY to INR636m, led mainly by topline growth. We expect EBITDA margin to expandby 20bp YoY to 16.3%.• We expect PAT to decline 9% YoY to INR499m, despite better operational performance. This is because otherincome would decline 16% YoY due to payment made towards the acquisition of Universal Medicare anddepreciation & amortization charges would jump 219% YoY due to amortization of acquisition goodwill.We believe Sanofi India (SANL) will be one of the key beneficiaries of the patent regime in the long term. Theparent has a strong R&D pipeline, with a total of 61 products undergoing clinical trials, of which 18 are in Phase-IIIor pending approvals. Some of these are likely to be launched in India. However, SANL’s profitability has declinedsignificantly in the last five years, with EBITDA margin declining from 25% in CY06 to 14.3% in CY11, mainly impactedby discontinuation of Rabipur sales in the domestic market, lower export growth and higher staff & promotionalexpenses. RoE has declined from 28.6% to 17.3% during the period. The stock trades at 32.3x CY12E and 25.7x CY13EEPS. Our estimates do not factor in the impact of the proposed new pharma policy. We believe that the stockperformance will remain muted in the short term until clarity emerges on future growth drivers. Maintain Neutral.Quarterly Performance(INR Million)Y/E December CY11 CY12 CY11 CY12E1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QENet Sales 2,763 3,028 3,127 3,379 3,225 3,741 3,901 4,008 12,297 14,864YoY Change (%) 9.9 11.5 13.5 17.9 16.7 23.5 24.8 18.6 13.3 20.9Total Expenditure 2,328 2,600 2,624 2,985 2,733 3,219 3,266 3,525 10,537 12,743EBITDA 435 428 503 394 492 522 636 483 1,760 2,122Margins (%) 15.7 14.1 16.1 11.7 15.3 14.0 16.3 12.1 14.3 14.3Depreciation 54 54 61 142 183 186 195 200 311 764Interest 2 0 0 2 4 4 0 2 4 10Other Income 379 361 369 286 289 267 309 323 1,395 1,188PBT 758 735 811 535 594 599 750 604 2,839 2,535Tax 252 238 263 -10 193 194 250 205 743 842Effective tax Rate (%) 33.2 32.4 32.4 -1.8 32.5 32.4 33.4 33.8 26.2 33.2PAT 506 497 548 545 401 405 499 400 2,096 1,693YoY Change (%) 40.2 17.2 15.9 -20.8 -18.5 -8.9 -26.7 31.2 -19.2Margins (%) 18.3 16.4 17.5 16.1 12.4 10.8 12.8 10.0 17.0 11.4Domestic sales 2,221 2,440 2,575 2,788 2,765 3,029 3,276 3,293 10,024 12,364YoY Change (%) 12.6 12.1 11.0 24.5 24.5 24.1 27.2 18.1 15.1 23.3E: MOSL EstimatesOctober 2012C–98

BSE SensexS&P CNX18,763 5,703BloombergSTR INEquity Shares (m) 57.752 Week Range (INR) 958/3301,6,12 Rel Perf (%) 0/42/144Mcap (INR b) 51.0Mcap (USD b) 1.0CMP: INR883September 2012 Results PreviewSector: HealthcareStrides ArcolabBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) YOY (%) (X) (X) (%) (%) Sales EBITDA12/10A 16,958 1,220 20.9 99.8 - - 11.6 11.9 - -12/11A 25,245 2,245 38.5 84.0 23.4 3.8 16.9 12.8 2.3 12.712/12E 23,880 3,080 52.8 37.2 17.1 2.3 18.5 13.7 2.2 8.912/13E 25,790 3,588 61.5 16.5 14.6 2.0 14.5 14.8 2.0 8.3• We expect Strides Arcolabs (STR) to post 19.6% QoQ decline in 3QCY12 revenue to INR6.18b, impacted by thedivestment of the Australasia generics business. On a like-to-like basis, we expect topline growth of 7%, led by33% growth in specialty business. The residual pharma business (post divestment) is likely to grow 20% YoY toINR2.1b, while licensing income is likely to decline by a significant 51% YoY to INR839m.• EBITDA would decline 10% YoY to INR1.56b on account of lower licensing income and divestment of the Australasiagenerics business. However, EBITDA margin would expand 280bp due to higher contribution of the high-marginspecialty business.• We expect adjusted net profit to grow 190% YoY to INR1.34b due to a significantly low base of 3QCY11, when thecompany had reported forex loss of INR583m. Lower interest cost and lower tax rate is also likely to aid PATgrowth.STR is set to emerge as a specialty products company, with revenue contribution from this segment increasing from28% in CY09 to an estimated 67% in CY13. The company has an impressive specialty product pipeline. It has largemanufacturing capacities in place to support revenue scale-up, coupled with strong marketing partners like Pfizerand GSK. We expect STR to post 26% earnings CAGR over CY11-13, led by revenue ramp-up in the SI (sterile injectables)segment and substantial reduction in interest cost owing to debt repayment. Return ratios are set to improve overCY11-13 and debt-equity should decline from 1.9x in CY10 to 0.6x in CY13. The stock trades at 17.1x CY12E and 14.6xCY13E EPS. Maintain Buy.Quarterly performance (consolidated)(INR Million)Y/E December CY11 CY12 CY11 CY121Q 2Q 3Q 4Q 1Q 2Q 3QE 4QENet Revenues 4,875 5,813 7,693 6,865 5,275 5,083 6,185 7,338 25,245 23,880YoY Change (%) 30.5 27.9 86.6 50.7 8.2 -12.6 -19.6 6.9 48.9 -5.4Total Expenditure 3,958 4,731 5,973 5,893 4,007 3,952 4,630 5,458 20,594 18,048EBITDA 917 1,081 1,720 972 1,267 1,130 1,555 1,879 4,652 5,833Margins (%) 18.8 18.6 22.4 14.2 24.0 22.2 25.1 25.6 18.4 24.4Depreciation 183 340 222 298 237 257 275 290 1,043 1,059Interest 438 467 491 507 390 510 410 400 1,903 1,710Other Income 245 515 -477 700 -143 -223 595 375 1,021 603PBT before EO Income 540 790 530 867 497 141 1,464 1,565 2,727 3,666EO Exp/(Inc) 0 0 0 0 -6,316 -946 0 0 0 -7,263PBT after EO Income 540 790 530 867 6,813 1,087 1,464 1,565 2,727 10,929Tax 89 94 62 141 392 182 117 116 387 807Rate (%) 16.5 12.0 11.7 16.3 5.7 16.7 8.0 7.4 14.2 7.4Minority Int/Adj on Consol 44 6 4 42 1 0 0 -1 95 0Reported PAT 407 689 465 684 6,421 905 1,347 1,450 2,245 10,122Adj PAT 407 689 465 684 467 117 1,347 1,450 2,245 2,860YoY Change (%) 18.2 8.7 76.0 14.8 -83.0 189.9 111.9 84.0 27.4Margins (%) 8.4 11.9 6.0 10.0 8.9 2.3 21.8 19.8 8.9 12.0E: MOSL Estimates; Note: Quarterly numbers don't add up to full year numbers due to restatementOctober 2012C–99

BSE SensexS&P CNX18,763 5,703BloombergSUNP INEquity Shares (m) 1,035.652 Week Range (INR) 698/4481,6,12 Rel Perf (%) -5/12/33Mcap (INR b) 718.0Mcap (USD b) 13.6September 2012 Results PreviewSector: HealthcareSun Pharmaceuticals IndustriesCMP: INR693NeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 52,066 14,041 13.6 47.8 51.1 0.0 16.2 23.4 0.0 0.003/12A* 80,057 25,873 25.0 42.5 27.7 5.9 21.5 30.3 8.3 20.403/12A 74,406 23,228 22.4 65.403/13E 90,922 27,449 26.5 18.2 26.1 5.0 20.7 30.2 6.4 16.503/14E 111,894 30,425 29.4 10.8 23.6 4.3 19.7 27.0 5.5 15.7*Including Para-IV/one-off upsides• We expect Sun Pharmaceuticals (SUNP) to post 37% YoY growth in core topline (excluding one-offs) for 2QFY13to INR24.5b, mainly led by 37% YoY growth in revenue from Taro and 40% YoY growth in core revenue from theUS. While better product pricing would aid growth in revenue from Taro, low base would aid growth in corerevenue from the US. The domestic formulations business is likely to grow 21% YoY to INR8.5b. The exportformulations business (other than the US) is likely to grow 35% YoY. Including revenue from one-off productopportunities, the topline would grow 40% YoY to INR26.5b.• Core EBITDA (ex-Para IV/low competition products) is likely to grow 34% YoY to INR9.6b. Core EBITDA marginwould decline 100bp to 39.1% on a high base. Including the upsides from one-off product opportunities, EBITDAis likely to grow 35% YoY to INR10.6b.• We expect adjusted PAT to grow 30% YoY to INR7b, in line with strong operational performance, but pulleddown by increased tax rate. Including one-offs, reported PAT is likely to grow 30% YoY to INR7.8b.An expanding generics portfolio coupled with sustained double-digit growth in high-margin lifestyle segments inIndia is likely to bring in long-term benefits for SUNP. Its ability to sustain superior margins even on a high base isa clear positive. Key drivers for the future include: (1) Ramp-up in US business and recovery of sales at Caraco postthe resolution of cGMP issues, (2) Monetization of the Para-IV pipeline in the US, (3) Launch of controlled substancesin the US, and (4) Sustaining Taro’s high profitability. The stock is currently valued at 26.1x FY13E and 23.6x FY14Ecore earnings. Our estimates exclude the impact of the proposed new pharma policy. While we are positive onSUNP’s business outlook, rich valuations have tempered our bullishness. We maintain Neutral. Large inorganicinitiatives (SUNP has cash of USD0.9b-1b) would be the key upside risk to our Neutral view.Quarterly Performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Revenues 16,357 18,946 21,451 23,299 26,581 24,501 24,153 25,060 80,057 100,296YoY Change (%) 16.9 38.3 34.0 59.2 62.5 29.3 12.6 7.6 39.9 25.3Total Expenditure 10,883 11,106 11,814 13,748 14,413 14,910 15,296 16,772 47,550 61,392EBITDA 5,474 7,840 9,638 9,552 12,169 9,591 8,856 8,288 32,507 38,904Margins (%) 33.5 41.4 44.9 41.0 45.8 39.1 36.7 33.1 40.6 38.8Depreciation 647 668 774 823 801 805 872 876 2,912 3,354Net Other Income 969 1,183 -272 2,082 -231 1,165 1,940 2,203 3,958 5,078PBT 5,796 8,355 8,591 10,811 11,136 9,951 9,925 9,615 33,554 40,627Tax 143 1,281 634 1,768 1,925 1,791 1,786 1,810 3,826 7,313Rate (%) 2.5 15.3 7.4 16.4 17.3 18.0 18.0 18.8 11.4 18.0Profit after Tax 5,653 7,074 7,957 9,043 9,211 8,160 8,138 7,805 29,727 33,314Share of Minority Partner 643 1,097 1,274 841 1,256 1,097 1,274 999 3,855 4,626Reported PAT 5,010 5,977 6,683 8,202 7,956 7,775 7,999 7,229 25,873 30,958One-off upsides 624 523 573 923 1,240 712 1,135 423 2,644 3,510Adj Net Profit 4,386 5,454 6,110 7,279 6,716 7,063 6,864 6,806 23,228 27,449YoY Change (%) 30.4 32.8 99.2 39.5 53.1 29.5 12.3 -6.5 65.4 18.2Margins (%) 26.8 28.8 28.5 31.2 25.3 28.8 28.4 27.2 29.0 27.4E: MOSL Estimates; Quarterly no. don’t match with annual no. because of reinstatement of financialsOctober 2012C–100

BSE SensexS&P CNX18,763 5,703BloombergTRP INEquity Shares (m) 84.652 Week Range (INR) 727/5051,6,12 Rel Perf (%) -8/4/13Mcap (INR b) 58.8Mcap (USD b) 1.1CMP: INR695September 2012 Results PreviewSector: HealthcareTorrent PharmaBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 22,049 2,702 31.9 0.8 - - 29.2 25.9 - -03/12A 26,959 3,251 38.4 20.3 18.1 4.9 29.3 28.5 2.1 11.303/13E 32,764 4,191 49.5 28.9 14.0 3.9 30.9 32.0 1.7 9.003/14E 38,020 4,989 59.0 19.0 11.8 3.1 29.2 31.5 1.4 7.3• We expect Torrent Pharmaceuticals (TRP) to post 21% YoY growth in core topline for 2QFY13 to INR8.29b, led bythe international formulations segment, which is likely to grow 26% YoY on the back of strong growth in the US,Europe (ex-Germany) and Brazil. Topline growth would be partially led by favorable currency. We expectdomestic formulations to grow 11.7% YoY to INR2.6b.• EBITDA is likely to grow 18% YoY while EBITDA margin is likely to decline by 60bp mainly due to higher staff costsand overheads as well as uptick in R&D spending.• We expect adjusted PAT to grow 12% YoY to INR1.1b despite 18% EBITDA growth due to higher tax outgo.Over the last seven years, TRP has delivered 33% EPS CAGR, though capital employed has grown at a CAGR of just17%. It has consistently improved its profitability, with RoCE increasing from 14.5% in FY05 to 28.5% in FY12. Weexpect 24% EPS CAGR over FY12-14, in line with strong operating performance. Its high return ratios are likely tosustain, despite large capex and growing cash on the books. We believe that current valuations do not reflect theimprovement in business profitability, the turnaround of international operations, and TRP’s strong positioning inthe domestic formulations business, particularly in chronic therapeutic segments. TRP should trade at a premiumto most mid-cap pharma companies, and its valuation gap vis-à-vis frontline pharma companies should reduce. Thestock trades at 14x FY13E and 11.8x FY14E earnings. Our estimates exclude the impact of the proposed new pharmapolicy. Maintain Buy.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Revenues (Core) 6,475 6,833 6,966 6,743 7,669 8,290 8,476 8,171 26,959 32,764YoY Change (%) 19.7 17.5 20.6 33.6 18.4 21.3 21.7 21.2 22.3 21.5EBITDA 1,531 1,406 1,215 850 1,560 1,659 1,607 1,201 5,006 6,186Margins (%) 23.6 20.6 17.4 12.6 20.3 20.0 19.0 14.7 18.6 18.9Depreciation 202 201 197 218 201 224 238 269 817 932Interest 41 28 2 89 94 89 82 106 395 371Other Income 24 43 23 124 140 145 150 125 445 560PBT before EO Expense 1,313 1,219 1,040 668 1,404 1,491 1,438 950 4,240 5,443Extra-Ord Expense 0 0 0 654 0 0 0 0 654 0PBT after EO Expense 1,313 1,219 1,040 14 1,404 1,491 1,438 950 3,586 5,443Tax 287 212 201 24 374 373 324 182 723 1,252Rate (%) 21.9 17.3 19.3 3.6 26.6 25.0 22.5 19.1 17.1 23.0Reported PAT 1,026 1,008 839 -10 1,030 1,119 1,114 769 2,863 4,191Minority Interest 1 8 7 7 12 0 0 0 23 0Adj PAT 893 1,000 832 527 1,019 1,119 1,114 769 3,251 4,191YoY Change (%) 20.3 31.2 8.1 23.1 14.1 11.9 34.0 45.8 20.3 28.9Margins (%) 13.8 14.6 11.9 7.8 13.3 13.5 13.1 9.4 12.1 12.8Dom. formulations sales 2,460 2,385 2,294 2,016 2,802 2,665 2,633 2,350 9,167 10,450YoY Change (%) 10.1 8.4 8.4 9.6 13.9 11.7 14.8 16.6 9.3 14.0Intl. formulations sales 3,061 3,762 3,787 3,854 4,071 4,745 4,910 4,928 14,332 18,795YoY Change (%) 19.3 36.7 33.6 51.1 33.0 26.1 29.7 27.9 33.9 31.1E: MOSL EstimatesOctober 2012C–101

September 2012 Results PreviewSector: MediaMediaCompany NameDish TVH T MediaJagran PrakashanSun TV NetworkZee EntertainmentAd environment remains tough but worst likely behind; festive season holds the key:Advertising spends remained subdued in 2QFY13. Zee is likely to clock another strongquarter of ad growth (17% YoY), led by low base, contribution from the sports segmentand strong ratings performance. However, ad growth for other companies is likely toremain subdued - 6-8% YoY growth for Sun TV / Jagran and ~1% YoY decline for HTMedia.PAT to remain flat YoY for broadcasting companies; expect significant reduction inDish TV's Net loss: Zee's adjusted PAT is likely to remain largely flat YoY and QoQ, ashigher ad revenue would be offset by higher programming costs, launch expensesand sports loss. Sun TV's PAT would be flat, led by muted ad growth and decline inoverall subscription revenue due to lower analog revenue from Tamil Nadu. Dish TV'snet loss is likely to decline 70-80% YoY/QoQ on better margin performance and noforex loss. Among print companies, we expect Jagran to report 11% PAT growth whileHT Media is likely to report 19% PAT decline, largely due to ad revenue decline in theEnglish print segment v/s growth in Hindi.DTH: Subscriber additions likely to remain flat QoQ; festive season and mandatorydigitization to favorably impact 3QFY13 numbers: We expect DTH subscriber additionsto remain largely flat QoQ, given the relatively tough macroeconomic situation andlimited benefit of digitization in the metros. DTH additions are likely to increasemeaningfully in 3QFY13, led by festive season as well as the implementation ofmandatory digitization in the metros.Abbreviations and acronymsGEC: General entertainmentchannelDTH: direct to homeAll eyes on metro digitization; further postponement unlikely: Our interactions acrossthe industry value chain indicate that 31 October 2012 is likely to remain the deadlinefor digitization of metros and further postponement is unlikely. Data released by theMinistry of I&B indicate that 68% set-top box seeding has already been achieved as ofSeptember 2012, with Mumbai at ~95% and other metros at 50-70%.Hindi GEC ratings: Strong competition among top-4: During 2QFY13, Zee TV improvedits average weekly GRP by ~11% QoQ to 239 - third consecutive quarter ofimprovement. All top-4 GECs, except Star Plus, improved average ratings performancein 2QFY13, significantly bringing down the lead enjoyed by Star Plus. Sustenance ofratings in 3QFY13 would be critical for Zee to monetize the festive season.Expected quarterly performance summary(INR million)CMP Rating Sales EBITDA Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQDish TV 83 Neutral 5,406 12.1 4.0 1,548 27.1 -0.5 -100 Loss LossHT Media 93 Neutral 4,982 1.0 1.7 674 -5.3 0.8 403 -8.0 -0.9Jagran Prakashan 91 Neutral 3,317 8.6 4.5 864 9.3 9.6 729 59.2 30.7Sun TV 349 Buy 4,491 -0.5 5.5 3,518 -3.7 8.9 1,787 -0.8 8.8Zee Entertainment 196 Neutral 8,640 20.3 2.5 1,997 -3.8 -14.4 1,598 2.4 1.0Sector Aggregate 26,836 9.5 3.4 8,602 1.8 0.3 4,417 17.1 14.3Shobhit Khare (Shobhit.Khare@MotilalOswal.com)October 2012C–102

September 2012 Results PreviewSector: MediaDigitization remains a strong theme for broadcasting stocks; headwinds for printreceding: Ad revenue trends remain sluggish but likely bottoming out, with mostcompanies expecting stable/improving ad spends QoQ. Headwinds for printcompanies seem to be receding, with gradual decline in newsprint costs and sharpINR appreciation. Digitization remains a strong theme for broadcasting and distributionas most participants do not foresee postponement in digitization deadline for metros.Media coverage - Quarterly1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13E YoY (%) QoQ (%)Advertisement Revenue (INR b)ZEEL 3.8 4.1 4.4 4.8 3.8 3.9 4.0 4.2 4.5 4.6 17 3Sun TV 2.6 2.7 3.0 3.0 2.7 2.7 2.9 2.8 2.8 2.9 6 4Dish TV NM NM NM NM NM NM NM NM NM NM NM NMHT Media 3.3 3.3 3.7 3.6 3.8 3.7 4.1 3.7 3.7 3.7 -1 -2Jagran Prakashan 1.9 1.9 1.9 1.9 2.0 2.1 2.2 2.1 2.2 2.3 8 4Subscription Revenue (INR b)ZEEL 2.6 2.7 2.8 3.1 3.1 2.9 3.3 4.0 3.6 3.7 27 1Sun TV 1.7 1.4 2.7 1.5 1.6 1.6 1.2 1.3 1.2 1.3 -17 10Dish TV 2.5 2.7 3.1 3.7 3.9 4.1 4.3 4.3 4.6 4.7 14 3HT Media 0.5 0.4 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 6 2Jagran Prakashan 0.6 0.5 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.7 11 6Total Revenue (INR b)ZEEL 6.8 7.1 7.5 8.0 7.0 7.2 7.5 8.7 8.4 8.6 20 2Sun TV 4.4 4.2 6.0 4.6 4.5 4.5 4.3 4.3 4.3 4.5 0 5Dish TV 3.0 3.3 3.7 4.3 4.6 4.8 4.9 5.2 5.2 5.4 12 4HT Media 4.0 4.5 4.7 4.7 5.0 4.9 5.3 4.9 4.9 5.0 1 2Jagran Prakashan 2.7 2.8 2.9 2.8 3.0 3.1 3.2 3.1 3.2 3.3 9 4EBITDA (INR b)ZEEL 1.9 1.9 1.5 2.3 1.6 2.1 2.2 1.6 2.3 2.0 -4 -14Sun TV 3.6 3.3 5.0 3.6 3.7 3.7 3.4 3.3 3.2 3.5 -4 9Dish TV 0.3 0.5 0.7 0.9 1.1 1.2 1.2 1.4 1.6 1.5 27 -1HT Media 0.80 0.79 0.88 0.88 0.90 0.71 0.78 0.48 0.67 0.67 -5 1Jagran Prakashan 0.90 0.91 0.90 0.71 0.82 0.79 0.85 0.66 0.79 0.86 9 10EBITDA Margin (%)ZEEL 27.6 26.5 20.4 28.4 22.3 28.9 28.6 18.4 27.7 23.1 -578bp -455bpSun TV 81.7 78.2 83.9 79.0 80.6 81.0 80.2 76.9 75.9 78.3 -263bp 249bpDish TV 10.6 15.3 17.9 20.8 24.4 25.2 24.5 27.5 29.9 28.6 338bp -129bpHT Media 19.8 17.8 19.0 18.6 18.2 14.4 14.8 9.7 13.7 13.5 -91bp -12bpJagran Prakashan 33.4 32.8 31.4 25.3 26.9 25.9 26.3 21.2 24.8 26.1 17bp 123bpAdjusted PAT (INR b)ZEEL 1.21 1.26 1.14 2.09 1.34 1.56 1.39 1.42 1.58 1.60 2 1Sun TV 1.71 1.67 2.25 2.08 1.88 1.80 1.68 1.59 1.64 1.79 -1 9Dish TV -0.63 -0.45 -0.44 -0.37 -0.18 -0.49 -0.43 -0.49 -0.32 -0.10 NM NMHT Media 0.41 0.39 0.48 0.53 0.52 0.44 0.48 0.22 0.38 0.35 -19 -7Jagran Prakashan 0.56 0.56 0.53 0.42 0.50 0.46 0.41 0.43 0.39 0.51 11 31Source: Company, MOSLPhase-I digitization status (September 2012)House TV penetration TV HHs DTH subs Cable TV 20% provision Cable TV STB STB seedingHolds (m) (%) (m) (m) HHs (m) for 2nd TV subs (m) installed (m) achieved (%)Mumbai 2.7 85 2.3 0.7 1.6 0.3 1.9 1.8 95Kolkata 3.3 61 2.0 0.3 1.6 0.3 2.0 1.3 67Delhi 3.3 88 2.9 0.9 2.1 0.4 2.5 1.3 53Chennai 1.1 95 1.1 0.6 0.4 0.1 0.5 0.3 49Total 10.4 80 8.2 2.6 5.7 1.1 6.8 4.7 68Source: Company, MOSLOctober 2012C–103

September 2012 Results PreviewSector: MediaRecent GRP trends of major Hindi GEC’s Hindi GEC: QoQ increase (decrease) in GRP (%)GRPs ofleadingHindi GECs,exceptStar Plus,improvedduring thequarter.42033024015060Zee TV Star Plus Co l orsSon y Sab Life OkDec-10Jan-11Jan-11Ma r-11Ma r-11Apr-11Ma y-11Jun-11Jul-11Aug-11Sep-11Oct-11Nov-11Dec-11Jan-12Feb-12Ma r-12Apr-12Ma y-12Jun-12Jul-12Aug-12Sep-1210% 11%6%-2%Star Plus Colors Zee TV SonyMarket share trendsHindi GEC (~31% of viewership)Source: Bloomberg/MOSLWith a decline in ratingsfor Star Plus, the top-4GECs are evenly placed.The success of launchesduring the festive seasonis likely to determine theleadership position403020100Jan-09Star Plus Col o rs Zee TV Sony SABMa r-09Jun-09Aug-09Oct-09Jan-10Ma r-10Jun-10Aug-10Nov-10Jan-11Apr-11Jun-11Sep-11Nov-11Feb-12Apr-12Jul-12Sep-12Hindi movies (~12% of viewership)60Zee Ci n ema MAX Star Gold Movi es OKTop-3 channels continueto compete strongly inthe Hindi Movie genre.Movies OK has emergedas the undisputednumber-4 in a clutteredgenre4530150Jan-09Ma r-09Ma y-09Aug-09Oct-09Dec-09Ma r-10Ma y-10Jul-10Oct-10Dec-10Feb-11Ma y-11Jul-11Sep-11Dec-11Feb-12Apr-12Jul-12Sep-12Bengali GEC (~3% of viewership)65Star Jalsha Ze e Ban gl a ETV B angl aThe Bengali GECmarket has become aneffective duopoly givencontinued market sharedecline for ETV5035205Jan-09Ma r-09Ma y-09Aug-09Oct-09Dec-09Ma r-10Ma y-10Jul-10Oct-10Dec-10Feb-11Ma y-11Jul-11Sep-11Dec-11Feb-12Apr-12Jul-12Sep-12October 2012C–104

September 2012 Results PreviewSector: MediaMarathi GEC (4% of viewership)Star Pravah continues toimprove upon itsleadership position in theMarathi GEC market604530150Ze e Marathi ETV Mara thi Star PravahJan-09Ma r-09Ma y-09Aug-09Oct-09Dec-09Ma r-10Ma y-10Jul-10Oct-10Dec-10Feb-11Ma y-11Jul-11Sep-11Dec-11Feb-12Apr-12Jul-12Sep-12Tamil GEC (~5% of viewership)Sun TV Star Vijay TV Kalaignar TV Jaya TVSun TV remains themarket leader in theTamil GEC market75604530150Jan-09Apr-09Jul-09Oct-09Jan-10Apr-10Jul-10Oct-10Jan-11Apr-11Jul-11Sep-11Dec-11Ma r-12Jun-12Sep-12Telugu GEC (~4% of viewership)Gemini TV remains themarket leader inTelugu GEC; Maa Teluguhas emerged as the clearnumber-2 and hasbeen closing the gapv/s Gemini50403020100Jan-09Gemini TV ETV Telugu Zee Te l ugu Maa TeluguApr-09Jul-09Sep-09Dec-09Ma r-10Jun-10Sep-10Dec-10Ma r-11Jun-11Sep-11Dec-11Ma r-12Jun-12Sep-12Kannada GEC (~3% of viewership)Udaya TV continues tomaintain a wide lead overcompetitors in theKannada GEC market50403020100Udaya TV Suvarna ETV Kanna da Zee KannadaJul-09Sep-09Dec-09Feb-10Ma y-10Jul-10Oct-10Jan-11Ma r-11Jun-11Aug-11Nov-11Jan-12Apr-12Jun-12Sep-12October 2012C–105

September 2012 Results PreviewSector: MediaMalyalam GEC (~1% of viewership)Asi a net Su rya TV Mazhavil Manora ma75Asianet remains astrong number-1604530150Jan-09Ma r-09Jun-09Aug-09Oct-09Jan-10Ma r-10Jun-10Aug-10Nov-10Jan-11Apr-11Jun-11Sep-11Nov-11Feb-12Apr-12Jul-12Sep-12Balaji Telefilms: Trends in OPH and programming ratesSource: Company, MOSLRate per hour for BalajiTelefilms improved in1QFY13 after twoconsecutive quartersof decline360270180900Commissioned programming hours Ra te pe r hour (INR m)4.03.02.01.00.03QF Y064QF Y061QF Y072QF Y073QF Y074QF Y071QF Y082QF Y083QF Y084QF Y081QF Y092QF Y093QF Y094QF Y091QF Y102QF Y103QF Y104QF Y101QF Y112QF Y113QF Y114QF Y111QF Y122QF Y123QF Y124QF Y121QF Y13Industry DTH subscriber base and additions trendDTH s ubscribe rs (m)Quarte rly sub scriber a dds (m)Industry DTH additionsremain sluggish; expectimprovement in 3QFY135.63.13.53.42.0 2.1 2.21.82.2 2.5 2.72.92.3 2.01.0 1.27 8 11 13 15 17 19 21 24 26 32 36 39 41 44 461QF Y092QF Y093QF Y094QF Y091QF Y102QF Y103QF Y104QF Y101QF Y112QF Y113QF Y114QF Y111QF Y122QF Y123QF Y124QF Y12Newsprint prices have been largely stable (USD/MT)800Newsprint prices(USD/ton) haveremained largely flat700600500400Jan-08Apr-08Jul-08Oct-08Jan-09Apr-09Jul-09Sep-09Dec-09Ma r-10Jun-10Sep-10Dec-10Ma r-11Jun-11Sep-11Dec-11Ma r-12Jun-12Sep-12October 2012C–106

September 2012 Results PreviewSector: MediaRelative Performance-3m (%) Relative Performance-1Yr (%)140Sens ex Inde xMOSL Media Inde x140Sens ex Inde xMOSL Media Index12512511011095958080Jun-12Jul-12Aug-12Sep-12Sep-11Dec-11Ma r-12Jun-12Sep-12Comparative valuationCMP (INR) Rating EPS (INR) P/E (x) EV/EBITDA (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14EMediaDish TV 83 Neutral -1.5 -0.5 0.3 -55.2 -181.0 264.6 19.3 15.2 11.7 NA NA NAHT Media 93 Neutral 7.0 6.0 6.8 13.2 15.5 13.8 6.4 6.3 5.2 11.0 8.6 8.8Jagran Prakashan 91 Neutral 5.6 5.6 6.5 16.2 16.3 14.1 10.3 8.9 8.1 24.5 20.6 20.2Sun TV 349 Buy 17.6 18.2 20.1 19.8 19.2 17.4 9.6 9.1 7.8 26.3 24.7 25.1Zee Entertainment 196 Neutral 5.9 7.0 8.5 33.2 27.9 23.1 24.9 20.7 17.0 17.5 18.3 19.3Sector Aggregate 32.0 27.9 23.2 14.4 12.8 10.7 17.7 18.0 19.4October 2012C–107

BSE SensexS&P CNX18,763 5,703BloombergDITV INEquity Shares (m) 1,063.652 Week Range (INR) 85/521,6,12 Rel Perf (%) 14/29/-9Mcap (INR b) 87.7Mcap (USD b) 1.7CMP: INR83September 2012 Results PreviewSector: MediaDish TVNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 14,366 -1,897 -1.8 NA NA 139.8 NA NA - -03/12A 19,578 -1,588 -1.5 NA NA NA NA NA 4.8 18.903/13E 22,622 -485 -0.5 NA NA NA NA 3 4.2 15.003/14E 28,197 332 0.3 NA 264.6 NA NA 10 3.3 11.5• We expect revenue to increase 12% YoY and 4% QoQ to INR5.4b.• Subscription revenue is likely to grow 3% QoQ to INR4.7b.• We expect gross additions of 0.5m and net additions of 0.15m in 2QFY13.• EBITDA margin is likely to decline 130bp QoQ to 28.6% largely due to higher opex.• Net loss would decline 70-80% YoY/QoQ to INR0.1b. We have not modeled any forex gain/loss in 2QFY13.• The stock trades at an EV of 15x FY13E and 11.5x FY14E EBITDA. Maintain Neutral.Quarterly performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 4,604 4,822 4,905 5,247 5,200 5,406 5,773 6,243 19,578 22,622YoY Change (%) 51.3 47.8 31.4 21.2 12.9 12.1 17.7 19.0 36.3 15.5Operating expenses 3,482 3,605 3,703 3,805 3,644 3,858 4,366 4,458 14,594 16,326EBITDA 1,122 1,217 1,202 1,442 1,556 1,548 1,408 1,785 4,984 6,296YoY Change (%) 248.5 144.5 80.2 59.9 38.7 27.1 17.2 23.8 108.7 26.3EBITDA margin (%) 24.4 25.2 24.5 27.5 29.9 28.6 24.4 28.6 25.5 27.8Depreciation 1,107 1,162 1,232 1,678 1,512 1,452 1,474 1,502 5,180 5,939Interest 334 634 477 348 473 303 234 263 1,778 1,273Other Income 137 92 78 94 106 107 108 111 386 432PBT -183 -487 -430 -490 -324 -100 -192 131 -1,588 -485Adjusted net profit -183 -487 -430 -490 -324 -100 -192 131 -1,588 -485YoY Change (%) -71.0 7.7 -3.0 32.4 76.8 -79.5 -55.4 -126.6 -16.3 -69.5Net Subs (m) 8.9 9.2 9.5 9.6 9.8 10.0 10.8 11.3 9.6 11.3ARPU (INR/month) 150 152 152 151 156 158 161 165 153 157Revenue break-up (INR m)Subscription revenue 3,923 4,133 4,258 4,338 4,556 4,707 5,039 5,474 16,650 19,776Lease rentals 550 550 449 660 460 500 520 540 2,209 2,020Others 131 140 198 249 184 199 215 229 719 827Total revenue 4,604 4,822 4,905 5,247 5,200 5,406 5,773 6,243 19,578 22,622E: MOSL EstimatesOctober 2012C–108

BSE SensexS&P CNX18,763 5,703BloombergHTML INEquity Shares (m) 235.052 Week Range (INR) 157/821,6,12 Rel Perf (%) -6/-38/-47Mcap (INR b) 21.9Mcap (USD b) 0.4CMP: INR93September 2012 Results PreviewSector: MediaH T MediaNeutralYear Net Sales Adj. PAT Adj EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (x) (x) (%) (%) Sales EBITDA03/11A 17,861 1,809 7.7 26 - - 14.9 13.0 - -03/12A 20,030 1,655 7.0 -9 13.2 1.4 11.0 10.5 0.9 6.403/13E 20,226 1,594 6.0 -14 15.5 1.3 8.6 9.9 0.9 6.303/14E 22,417 1,792 6.8 12 13.8 1.2 8.8 10.4 0.7 5.2• We expect revenue to grow 1% YoY to INR5b.• Ad revenue would decline 1% YoY to INR3.7b, led by 3% decline in the English business.• We expect circulation revenue to increase 6% YoY to INR0.53b.• EBITDA margin is likely to decline 90bp YoY to 13.5%.• Adjusted earnings would decline 19% YoY to INR0.35b.• The stock trades at 15.5x FY13E and 13.8x FY14E EPS. Neutral.Quarterly performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QERevenue 4,969 4,931 5,266 4,941 4,899 4,982 5,243 5,102 20,107 20,226YoY (%) 22.9 10.7 13.2 5.0 -1.4 1.0 -0.4 3.3 12.6 0.6Operating expenses 4,066 4,219 4,489 4,460 4,230 4,308 4,459 4,475 17,234 17,472EBITDA 903 713 777 481 669 674 784 627 2,873 2,754YoY (%) 13.0 -9.9 -12.0 -45.1 -25.9 -5.3 0.9 30.4 -14.2 -4.1EBITDA margin (%) 18.2 14.4 14.8 9.7 13.7 13.5 15.0 12.3 14.3 13.6Depreciation 214 233 220 249 220 225 230 248 916 923Interest 53 74 83 104 103 100 101 101 315 405Other Income 146 204 168 179 209 185 190 190 697 774Extra-ordinary exps 0 0 0 0 0 0 0 0 0 0PBT 782 610 642 307 555 534 643 469 2,340 2,201Tax 242 141 161 81 129 101 122 88 625 440Effective Tax Rate (%) 30.9 23.1 25.1 26.4 23.2 18.9 19.0 18.9 26.7 20.0PAT 540 469 481 226 426 433 521 380 1,715 1,761Minority Interest 25 31 -1 6 19 30 48 70 61 167Reported PAT 515 438 482 220 407 403 473 310 1,655 1,594Adj PAT 515 438 482 220 407 403 473 310 1,655 1,594YoY (%) 24.4 13.0 0.8 -58.5 -21.0 -8.0 -1.8 41.2 -9 -4Ad revenue growth (%) 17 12 10 3 -3 -1 -3 1 10 -1-English 18 8 11 -4 -6 -3 -10 0 8 -5-Hindi 15 24 8 21 5 3 18 5 17 8Circulation revenue growth (%) 3 21 7 3 8 6 7 13 8 9-English 4 34 0 -15 -3 -5 -8 10 4 -2-Hindi 3 16 10 13 13 11 15 15 10 14E: MOSL EstimatesOctober 2012C–109

BSE SensexS&P CNX18,763 5,703BloombergJAGP INEquity Shares (m) 316.352 Week Range (INR) 115/781,6,12 Rel Perf (%) -7/-19/-29Mcap (INR b) 28.9Mcap (USD b) 0.5CMP: INR91September 2012 Results PreviewSector: MediaJagran PrakashanNeutralYear Net Sales Adj PAT Adj EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 12,211 2,183 6.9 18 - - 33.2 24.4 - -03/12A 13,557 1,783 5.6 -18 16.2 3.8 24.5 15.6 2.4 10.303/13E 15,833 1,777 5.6 0 16.3 3.8 20.6 18.1 1.9 8.903/14E 17,172 2,050 6.5 15 14.1 2.7 20.2 14.1 1.7 8.1• We expect advertising revenue to grow 8% YoY to INR2.3b on a standalone basis.• Circulation revenue is likely to grow 11% YoY and 6% QoQ to INR0.7b.• Aggregate revenue would increase 9% YoY to INR3.3b.• We estimate EBITDA at INR0.86b, up 9% YoY. We expect EBITDA margin to expand 20bp YoY to 26.1%.• Adjusted earnings would grow 11% YoY to INR0.51b.• The stock trades at 16.3x FY13E and 14.1x FY14E EPS. Neutral.Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 3,046 3,054 3,240 3,104 3,175 3,317 3,591 3,391 12,445 13,474YoY (%) 12.9 10.3 13.3 9.8 4.2 8.6 10.8 9.2 11.6 8.3Operating expenses 2,226 2,263 2,389 2,445 2,387 2,453 2,600 2,614 9,324 10,054EBITDA 820 791 851 659 788 864 990 777 3,121 3,419YoY (%) -9.0 -13.0 -5.2 -7.7 -3.9 9.3 16.3 17.9 -8.8 9.6EBITDA margin (%) 26.9 25.9 26.3 21.2 24.8 26.1 27.6 22.9 25.1 25.4Depreciation 150 160 165 181 148 150 150 150 657 598Interest 28 29 44 45 76 73 70 68 146 287Other Income 78 40 -42 183 -7 88 88 88 259 255PBT 720 642 600 615 557 729 858 646 2,577 2,790Tax 223 184 187 187 0 0 0 0 781 0Effective Tax Rate (%) 31.0 28.6 31.2 30.4 0 0 0 0 30.3 0Reported net profit 497 458 413 428 557 729 858 646 1,796 2,790YoY (%) -10.6 -17.5 -21.5 1.8 12.1 59.2 107.7 50.9 -12.7 55.3Extra-ordinary item 0 0 0 0 167 219 257 194 0 837Adjusted net profit 497 458 413 428 390 510 600 452 1,796 1,953Revenue break-upAd revenue 2,043 2,119 2,235 2,103 2,207 2,288 2,459 2,271 8,500 9,225Circulation revenue 582 612 623 628 641 676 704 701 2,445 2,722Others (Outdoor,event mgmt, etc) 422 323 382 373 328 352 428 418 1,500 1,527Total revenue 3,046 3,054 3,240 3,104 3,175 3,317 3,591 3,391 12,445 13,474E: MOSL EstimatesOctober 2012C–110

BSE SensexS&P CNX18,763 5,703BloombergSUNTV INEquity Shares (m) 394.152 Week Range (INR) 362/1771,6,12 Rel Perf (%) 15/6/19Mcap (INR b) 137.7Mcap (USD b) 2.6CMP: INR349September 2012 Results PreviewSector: MediaSun TV NetworkBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 19,237 7,722 19.6 36.1 - - 32.4 63.1 - -3/12A 17,574 6,946 17.6 -10.0 19.8 5.2 26.3 51.2 7.7 9.63/13E 18,390 7,178 18.2 3.3 19.2 4.7 24.7 47.0 7.1 9.13/14E 20,616 7,914 20.1 10.3 17.4 4.4 25.1 49.5 6.1 7.8• We expect revenue to remain flat YoY but increase 5% QoQ to INR4.5b.• Advertising and broadcasting revenue would grow 6% YoY and 4% QoQ to INR2.9b.• We expect total subscription revenue (domestic + international) to decline 17% YoY to INR1.3b.• EBITDA is likely to decline 4% YoY to INR3.5b.• We expect PAT to decline 1% YoY to INR1.79b.• The stock trades at 19.2x FY13E and 17.4x FY14E EPS. Maintain Buy.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q* 4Q 1Q 2QE 3QE 4QERevenue 4,540 4,513 4,251 4,270 4,258 4,491 4,839 4,804 17,574 18,390YoY (%) 3.1 6.2 -4.9 -7.3 -6.2 -0.5 13.8 12.5 -8.6 4.6EBITDA 3,659 3,654 3,411 3,282 3,230 3,518 3,814 3,752 14,007 14,314YoY (%) 1.7 10.0 -2.8 -9.8 -11.7 -3.7 11.8 14.3 -10.1 2.2As of % Sales 80.6 81.0 80.2 76.9 75.9 78.3 78.8 78.1 79.7 77.8Depreciation and Amortization 1,061 1,176 1,125 1,068 933 1,026 1,180 1,180 4,430 4,318Interest 2 8 36 9 2 5 5 5 56 17Other Income 173 186 232 151 132 152 172 167 742 623PBT 2,769 2,657 2,483 2,355 2,427 2,640 2,801 2,734 10,263 10,602Tax 892 856 804 765 784 853 905 883 3,317 3,425Effective Tax Rate (%) 32.2 32.2 32.4 32.5 32.3 32.3 32.3 32.3 32.3 32.3Reported PAT 1,876 1,801 1,679 1,590 1,643 1,787 1,896 1,851 6,946 7,178Adj PAT 1,876 1,801 1,679 1,590 1,643 1,787 1,896 1,851 6,946 7,178YoY (%) 9.8 7.6 -14.4 -23.7 -12.4 -0.8 13.0 16.4 -10.0 3.3Revenue Breakup (INR m)Advertising and Broadcast 2,700 2,740 2,850 2,800 2,800 2,904 3,192 3,113 11,090 12,009International 200 180 240 220 260 270 276 286 840 1,092DTH 840 790 840 860 890 916 941 959 3,330 3,706Domestic Cable 560 470 290 310 300 370 400 420 1,630 1,490Films and Others 240 333 31 80 8 30 30 25 684 93Total 4,540 4,513 4,251 4,270 4,258 4,491 4,839 4,804 17,574 18,390E: MOSL Estimates * YoY growth for 3QFY12 adjusted for one-time revenue/cost related to 'Enthiran' in 3QFY11October 2012C–111

BSE SensexS&P CNX18,763 5,703BloombergZ INEquity Shares (m) 958.852 Week Range (INR) 202/1101,6,12 Rel Perf (%) 12/50/54Mcap (INR b) 187.6Mcap (USD b) 3.6September 2012 Results PreviewSector: MediaZee Entertainment EnterprisesCMP: INR196NeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 29,414 5,852 6.0 14.4 - - 16.9 23.8 - -3/12A 30,406 5,712 5.9 -1.4 33.2 5.6 17.5 25.5 5.8 23.83/13E 35,139 6,730 7.0 19.0 27.9 4.9 18.3 26.4 4.9 19.73/14E 39,786 8,107 8.5 20.5 23.1 4.3 19.3 27.8 4.3 16.2• We expect advertising revenue to grow 17% YoY and 3% QoQ to INR4.6b.• We estimate subscription revenue at INR3.7b, up 1% QoQ. Broadcasters continue to focus on signing new dealsfor upcoming digitization, limiting near-term growth in domestic subscription revenue.• EBITDA margin is likely to decline 580bp YoY and 450bp QoQ to 23.1%. Margins would be impacted by higherprogramming costs, launch expenses for new channels like Zee Aflam and higher Sports loss due to India-SriLanka series telecast (monetization was further impacted, as the series was not telecast on DD).• Adjusted PAT is likely to increase 2% YoY and 1% QoQ to INR1.6b.• The stock trades at 28x FY13E and 23x FY14E EPS. Neutral.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEAdvertsing Revenue 3,787 3,949 3,955 4,150 4,472 4,621 4,701 4,774 15,841 18,567Subscription Revenue 3,051 2,910 3,262 4,022 3,641 3,693 3,836 4,079 13,245 15,248Other Sales and Services 145 324 332 519 317 327 337 345 1,320 1,325Net Sales 6,983 7,184 7,548 8,691 8,430 8,640 8,873 9,197 30,406 35,139Change (%) 3.2 1.0 0.0 8.9 20.7 20.3 17.5 5.8 3.4 15.6Prog, Transmission & Direct Exp 3,423 3,224 3,422 4,242 3,757 4,283 4,283 4,283 14,311 16,605Staff Cost 747 688 731 759 888 828 836 850 2,925 3,402Selling and Other Exp 1,253 1,197 1,236 2,090 1,453 1,532 1,624 1,716 5,775 6,325EBITDA 1,560 2,076 2,160 1,600 2,332 1,997 2,129 2,348 7,395 8,807As of % Sales 22.3 28.9 28.6 18.4 27.7 23.1 24.0 25.5 24.3 25.1Depreciation 89 78 74 81 99 100 101 102 323 401Finance cost 30 56 182 -219 18 18 18 19 50 73Other Income 255 279 340 330 301 302 304 302 1,204 1,210Extraordinary items 0 0 0 180 0 0 0 0 180 0PBT 1,696 2,221 2,243 2,248 2,517 2,181 2,314 2,530 8,407 9,543Tax 394 621 867 618 947 595 632 689 2,500 2,863Effective Tax Rate (%) 23.2 28.0 38.6 28.2 37.6 27.3 27.3 27.3 29.7 30.0PAT 1,302 1,600 1,376 1,630 1,570 1,586 1,682 1,841 5,907 6,680Minority Interest -35 40 -17 28 -12 -12 -12 -14 15 -50Adj PAT after Minority Interest 1,337 1,560 1,393 1,422 1,582 1,598 1,694 1,855 5,712 6,730Change (%) 10.4 23.6 22.1 -31.8 18.3 2.4 21.6 30.5 -2.4 17.8E: MOSL EstimatesOctober 2012C–112

September 2012 Results PreviewSector: MetalsMetalsCOMPANY NAMEHindalcoHindustan ZincJindal Steel & PowerJSW SteelNalcoGlobal steel prices decline, led by China; domestic prices also correct9-10% QoQGlobal steel prices continued their downtrend, with major correction in China. Averagesteel prices declined 8%, 4%, 14% and 4% QoQ, respectively in Russia, Europe, Chinaand North America. Domestic steel prices also mirrored global steel prices, with longand flat steel prices declining 9% and 10% QoQ, respectively. The price correction inChina is also impacting prices in other regions, as Chinese mills are flooding steelproducts elsewhere to compensate for domestic slowdown. In India, imports havealready jumped by 39% YoY in 1HFY13 to 3.3mt.NMDCGlobal HRC prices trending downwards (USD/ton)Sesa Goa900Ru ss ia North America Europe RHS(Euro /to n)650SAIL810600Sterlite Industries720550Tata Steel630500540450Sep‐10Nov‐10Jan‐11Ma r‐11Ma y‐11Jul‐11Sep‐11Nov‐11Jan‐12Ma r‐12Ma y‐12Jul‐12Sep‐12Source: Bloomberg/MOSLExpected quarterly performance summary(INR Million)CMP Rating Sales EBITDA Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQHindalco 121 Buy 197,200 2.0 -1.0 22,023 1.8 10.0 9,117 -15.5 1.2Hindustan Zinc 135 Buy 26,853 1.8 -2.3 14,162 -3.3 -0.9 13,555 -0.6 -14.3JSPL 428 Neutral 50,958 15.2 8.4 15,591 -13.6 -2.1 8,401 -20.0 -12.4JSW Steel 757 Sell 83,636 9.6 -7.5 14,335 9.4 -19.1 3,882 -35.2 -41.5Nalco 51 Neutral 16,991 5.3 -2.8 2,418 58.5 -20.5 1,714 23.0 -23.2NMDC 194 Buy 28,466 -7.0 0.2 22,246 -8.7 -3.4 18,226 -7.2 -4.4SAIL 85 Sell 107,892 -3.6 0.1 13,918 4.9 -8.2 6,377 -36.4 -27.8Sesa Goa 171 Neutral 3,363 -57.4 -80.6 1,001 -61.5 -85.2 5,621 138.8 -50.5Sterlite Inds. 99 Buy 104,064 2.1 -2.3 24,805 -0.1 7.5 12,653 -15.3 -10.8Tata Steel 401 Sell 312,934 -4.6 -7.5 28,051 2.0 -22.1 791 -62.8 -90.0Sector Aggregate 932,355 -0.5 -4.8 158,550 -1.8 -9.4 80,338 -12.1 -23.2Sanjay Jain (SanjayJain@MotilalOswal.com) / Pavas Pethia (Pavas.Pethia@MotilalOswal.com)October 2012C–113

September 2012 Results PreviewSector: MetalsChina’s domestic steel prices also declining (USD/ton)800HRCReb ar700600500Sep-10Nov-10Dec-10Feb-11Apr-11May-11Jul-11Aug-11Oct-11Nov-11Jan-12Mar-12Apr-12Jun-12Jul-12Sep-12Source: Bloomberg/MOSLIn India, both flat and long steel prices witnessed 9-10% correction (INR/ton)39,000HRC Mumbai42,000TMT (Mumba i)37,00040,00035,00033,00038,00036,00034,00031,00032,000Sep-11Oct-11Nov-11Dec-11Jan-12Feb-12Ma r-12Apr-12Ma y-12Ma y-12Jun-12Jul-12Aug-12Sep-12Sep-11Nov-11Dec-11Feb-12Ma r-12Ma y-12Jun-12Aug-12Sep-12Source: Bloomberg/MOSLGlobal steel production growth stagnates, as Chinese demand plateausThe global monthly crude steel production decreased 0.5% YoY to 123.7mt in August,as most regions registered degrowth/flat production. Though demand had been weakin Europe and other developed regions, China alone was able to fuel global steelconsumption growth so far. However, demand in China too appears to have plateaued.Major economic indicators in China point to a slowdown - China PMI dropped to 49.2in August 2012. We expect China's per capita steel consumption growth to moderateto ~2% from the double-digit growth witnessed in the last decade (refer to our report,"Downhill Run" dated August 2012 for more information)Global steel production flat in August, as capacity utilization declined 3pp to 75%(m tons)133126119112Global YoY (%)3524132Percenta ge84817774Capacity Utilization105Aug-09Oct-09Dec-09Feb-10Apr-10Jun-10Aug-10Oct-10Dec-10Feb-11Apr-11Jun-11Aug-11Oct-11Dec-11Feb-12Apr-12Jun-12-970Aug-10Oct-10Dec-10Feb-11Apr-11Jun-11Aug-11Oct-11Dec-11Feb-12Apr-12Jun-12Aug-12Source: Bloomberg/MOSLOctober 2012C–114

September 2012 Results PreviewSector: MetalsChina production growth averaged just 3% in last 12 months China PMI dipped below 50 to 49.2 in August 201265China YoY (%)4358(m tons)60555030174YoY (%)PMI545045-946Aug-09Oct-09Dec-09Feb-10Apr-10Jun-10Aug-10Oct-10Dec-10Feb-11Apr-11Jun-11Aug-11Oct-11Dec-11Feb-12Apr-12Jun-12Aug-12Aug-09Oct-09Dec-09Feb-10Apr-10Jun-10Aug-10Oct-10Dec-10Feb-11Apr-11Jun-11Aug-11Oct-11Dec-11Feb-12Apr-12Jun-12Aug-12Source: Bloomberg/MOSLSpreads of Chinese steel mills unaffected due to falling raw material prices;expect steel prices to decline furtherDespite severe correction in steel prices, Chinese mills are still able to maintain healthyspreads, as raw material prices have also declined. Low-vol premium hard coking coalaverage prices (fob Australia) have declined 18% QoQ in 2QFY13. Similarly, averageiron ore prices have corrected 18% QoQ in 2QFY13. With China's burgeoning demandfor raw materials moderating, the downtrend in both iron ore and coking coal pricesis likely to continue. We expect Chinese steel prices to correct further, in line withraw material prices.Correction in raw material prices much more severe than in steel prices (USD/ton)570China 2n d grade coke63.5% Iron ore Fines CIF215320Spot coking coal (fob Aus tralia)49018027041014522033011017025075120Sep-10Nov-10Jan-11Mar-11Ma y-11Jul-11Sep-11Nov-11Jan-12Mar-12Ma y-12Jul-12Sep-12Oct-10Dec-10Feb-11Apr-11Jun-11Aug-11Oct-11Dec-11Feb-12Apr-12Jun-12Jul-12Aug-12Aug-12Sep-12Sep-12... while Chinese mills spread remained healthyUSD/t13512010590Richa rds Bay Ste am Coal75Sep-10Nov-10Jan-11Ma r-11Ma y-11Jul-11Sep-11Nov-11Jan-12USD PER TSSMa r-12Ma y-12Jul-12Sep-12250200150100500Nov-10Dec-10Dec-10Jan-11Ma r-11Apr-11Ma y-11Jun-11Jul-11Aug-11Sep-11Sep-11Nov-11Dec-11Jan-12Feb-12Ma r-12Apr-12Ma y-12Jun-12Jul-12Aug-12Sep-12Source: Bloomberg/MOSLOctober 2012C–115

September 2012 Results PreviewSector: MetalsNon-ferrousBase metal prices recover in September; aluminum spot premiums at alltimehighAverage 2QFY13 non-ferrous metal prices have corrected 0-3% QoQ, with sharprecovery in September, after the announcement of QE III. With LME prices remainingweak during the quarter, aluminum spot premium has shot up to all-time high levels.Weaker demand for the metal has resulted in capacity cuts by aluminum majors suchas Rusal, Alcoa Inc and Norsk Hydro. However, subsidies and other benefits offeredby the governments in Australia, China and Europe are still keeping some of the highcost smelters afloat. We are factoring aluminum prices of USD1,996/ton in FY13 andUSD2,100/ton in FY14.Margin pressure has eased a little4,000CPC Al umina Pow er LMEUSD/ton3,0002,0001,0000Oct-07Feb-08May-08Sep-08Jan-09May-09Aug-09Dec-09Apr-10Jul-10Nov-10Mar-11Jun-11Oct-11Feb-12May-12Sep-12Source: Bloomberg/MOSLUS aluminum spot premiums at all-time high300Aluminium Zinc Copper23517010540Apr-06Oct-06Mar-07Sep-07Feb-08Aug-08Jan-09Jul-09Dec-09Jun-10Nov-10May-11Oct-11Apr-12Sep-12Source: Bloomberg/MOSLOctober 2012C–116

September 2012 Results PreviewSector: MetalsQuarterly average of base metal prices on LME (USD/tonne)Quarter Zinc Aluminium Copper Lead Alumina Silver (INR/kg)Avg. QoQ YoY Avg. QoQ YoY Avg. QoQ YoY Avg. QoQ YoY Avg. QoQ YoY Avg. QoQ YoY2QFY13 1,879 -2 -15 1,912 -3 -20 7,689 -2 -14 1,964 0 -20 315 -1 -15 55,532 2 -61QFY13 1,927 -5 -14 1,978 -9 -24 7,869 -5 -14 1,973 -6 -23 317 0 -22 54,406 -2 -54QFY12 2,024 7 -15 2,175 4 -13 8,308 11 -14 2,093 6 -20 317 -4 -19 55,256 3 153QFY12 1,897 -15 -18 2,090 -13 -11 7,488 -17 -13 1,982 -19 -17 329 -12 -10 53,770 -9 352QFY12 2,223 -1 10 2,398 -8 15 8,982 -2 24 2,458 -4 21 372 -8 17 58,791 2 961QFY12 2,249 -6 12 2,598 4 24 9,137 -5 30 2,550 -2 31 404 4 21 57,430 20 1014QFY11 2,393 3 5 2,502 7 16 9,644 12 33 2,603 9 17 391 7 20 48,008 20 823QFY11 2,315 15 5 2,343 12 17 8,633 19 30 2,389 18 4 366 15 20 39,929 33 462QFY11 2,012 0 15 2,089 0 16 7,242 3 24 2,031 5 6 317 -5 18 29,948 5 281QFY11 2,017 -12 37 2,092 -3 41 7,013 -3 50 1,943 -12 29 335 3 61 28,557 8 30%Relative performance-3m (%) Relative performance-1Yr (%)110Sensex IndexMOSL Metals Index120Sen sex In dexMOS L Meta l s I nde x1051009590Jun-12Jul-12Aug-12Sep-121101009080Sep-11Dec-11Ma r-12Jun-12Sep-12Comparative valuationCMP (INR) Rating EPS (INR) P/E (x) EV/EBITDA (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14EMetalsHindalco 121 Buy 17.1 18.9 20.6 7.1 6.4 5.9 6.9 7.2 6.3 20.3 20.2 18.5Hindustan Zinc 135 Buy 13.2 14.4 16.7 10.3 9.4 8.1 6.5 5.6 4.1 22.5 20.8 20.4JSPL 428 Neutral 42.4 39.8 38.5 10.1 10.7 11.1 8.4 9.5 8.9 24.6 19.7 17.0JSW Steel 757 Sell 66.5 49.9 73.7 11.4 15.2 10.3 6.7 6.6 6.0 8.9 6.6 9.3Nalco 51 Neutral 3.4 3.5 3.3 15.2 14.7 15.6 7.2 7.3 6.5 7.6 7.5 6.8NMDC 194 Buy 18.5 20.4 24.9 10.5 9.5 7.8 6.3 5.4 4.1 31.7 28.3 26.9SAIL 85 Sell 9.0 6.7 8.6 9.5 12.8 10.0 7.4 8.9 7.9 9.6 6.7 8.2Sesa Goa 171 Neutral 31.8 36.1 33.5 5.4 4.8 5.1 5.2 13.6 10.9 19.8 20.6 18.7Sterlite Inds. 99 Buy 16.7 16.3 17.7 6.0 6.1 5.6 3.0 2.8 2.4 14.1 12.4 12.3Tata Steel 401 Sell 18.6 31.2 56.6 21.6 12.9 7.1 7.3 6.8 6.1 7.8 11.5 18.9Sector Aggregate 9.6 9.2 7.8 6.4 6.5 5.6 13.3 12.8 13.6October 2012C–117

BSE SensexS&P CNX18,763 5,703BloombergHNDL INEquity Shares (m) 1,990.052 Week Range (INR) 165/1001,6,12 Rel Perf (%) 7/-14/-23Mcap (INR b) 239.8Mcap (USD b) 4.5CMP: INR121September 2012 Results PreviewSector: MetalsHindalcoBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 720,779 34,998 17.6 278.5 - - 23.1 10.1 - -3/12A 808,214 33,970 17.1 -3.0 7.1 1.4 20.3 7.5 0.7 6.93/13E 816,863 37,671 18.9 10.9 6.4 1.2 20.2 7.6 0.8 7.23/14E 854,498 41,002 20.6 8.8 5.9 1.0 18.5 8.2 0.7 6.3Consolidated• Net sales to grow 5% QoQ: We expect net sales to grow 5% QoQ (1% YoY) to INR63.5b on a lower base of 1QFY13,where production of both copper and aluminium was affected due to operational hiccups. Copper operationsare back to normal and sales volume is likely to grow 13% QoQ to 80k tons. Aluminum volume is likely to remainflat at 125k tons, as Hirakud smelter's captive power plant operations were partially shut due to breach of ashpond. Average LME aluminum and copper prices have decreased 3% and 2% QoQ, respectively to USD1,912/tonand USD7,689/ton. HNDL's blended realization for aluminum is likely to decrease 3% QoQ to INR162,311/tonwhile copper realization would decrease 4% QoQ to INR540,340/ton.• EBITDA to grow 29% QoQ: We expect EBITDA to grow 29% QoQ to INR6b on a lower base of 1QFY13. We expectaluminum EBITDA to increase 12% QoQ to INR3.8b and copper EBITDA to increase 77% QoQ to INR2.1b.• Maintain Buy: We expect consolidated EBITDA to increase 14% to INR100.8b in FY14, driven by 28% growth inprimary aluminum production to 700k tons and 36% growth in alumina production to 1.9m tons in India and 6%volume growth at Novelis. EPS growth, however, would be lower at 9% to INR20.6 due to higher interest anddepreciation charge. The stock trades at 5.9x FY14E EPS and at an EV of 6.3x FY14E EBITDA. Maintain Buy.Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEProduction ('000 tons)Aluminium (sales, kt) 131 129 147 149 124 125 145 155 556 549Copper (sales, kt) 73 75 84 94 71 80 86 95 325 332Exchange USD/INR 44.7 45.4 51.0 50.2 54.5 55.5 54.0 54.0 47.9 54.5Avg LME Aluminium (USD/T) 2,618 2,450 2,115 2,225 1,985 1,900 2,000 2,100 2,352 1,996Net Sales 60,309 62,719 66,470 76,471 60,279 63,491 70,878 79,121 265,968 273,770Change (YoY %) 16.5 7.0 11.3 11.7 0.0 1.2 6.6 3.5 11.5 2.9EBITDA 8,671 6,692 7,149 8,648 4,631 5,804 6,775 8,536 31,160 25,746As % of Net Sales 14.4 10.7 10.8 11.3 7.7 9.1 9.6 10.8 11.7 9.4EBITDA - Aluminium 6761 4,758 4,532 5,258 3,415 3,815 4,627 6,127 21,309 15,403EBITDA-Copper 1,909 1,935 2,618 3,390 1,216 2,147 2,306 2,567 9,851 10,343Interest 667 675 793 801 815 847 881 916 2,936 3,460Depreciation 1,754 1,741 1,747 1,658 1,705 1,776 1,782 1,824 6,900 7,087Other Income 1,779 1,761 901 1,605 3,014 1,796 919 1,637 6,046 7,366PBT (after EO item) 8,029 6,037 5,509 7,794 5,126 4,977 5,030 7,433 27,370 22,566Tot al Tax 1,589 1,012 1,002 1,395 878 1,045 1,056 1,561 4,998 4,541% Tax 19.8 16.8 18.2 17.9 17.1 21.0 21.0 21.0 18.3 20.1Reported PAT 6,440 5,025 4,507 6,400 4,248 3,932 3,974 5,872 22,372 18,025Adjusted PAT 6,440 5,025 4,507 6,400 4,248 3,932 3,974 5,872 22,372 18,025Novelis adj. EBITDA (USD m) 306 301 213 233 259 266 252 270 1,053 1,047Consolidated adj. PAT 11,772 10,784 7,519 10,141 9,008 8,993 8,340 10,945 33,970 37,296E: MOSL EstimatesOctober 2012C–118

BSE SensexS&P CNX18,763 5,703BloombergHZ INEquity Shares (m) 4,225.352 Week Range (INR) 150/1071,6,12 Rel Perf (%) 3/-2/-2Mcap (INR b) 572.3Mcap (USD b) 10.9CMP: INR135September 2012 Results PreviewSector: MetalsHindustan ZincBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 99,121 49,179 11.6 21.7 - - 24.2 28.3 - -3/12A 114,053 55,604 13.2 13.1 10.3 2.1 22.5 27.2 3.4 6.53/13E 119,276 60,947 14.4 9.6 9.4 1.8 20.8 24.8 3.0 5.63/14E 136,299 70,707 16.7 16.0 8.1 1.5 20.4 24.3 2.3 4.1Consolidated• Net sales to decline 2% QoQ on lower LME prices and flat volumes: We expect net sales to decline 2% QoQ(grow 2% YoY) to INR26.9b on lower LME prices and flat sales volume. LME zinc prices have declined 2% QoQ toUSD1,879/ton while lead prices have remained flat at USD1,964/ton. We expect zinc realization to decrease 1%QoQ to INR112,515/ton and lead realization to increase 6% QoQ to INR121,070/ton. Refined zinc and leadproduction volume is likely to decrease 1% QoQ to 184k tons.• EBITDA to decrease 1% QoQ: We expect EBITDA to decrease 1% QoQ to INR14.2b (-3% YoY) on lower LME prices.Silver volumes are expected to increase 4% QoQ to 76 tons. Current metal production has been lower as permining plan which is expected to improve in 2HFY13.• Zinc production to remain flat in FY13; maintain Buy: Zinc production has been impacted as the Rampur Aguchamines are currently mining narrow ore body. Though production ramp-up in 2HFY13 is likely to make up for lostproduction in 1HFY13, we expect FY13 production to remain flat. Silver volume would increase to 331 tons. Thestock trades at 8.1x FY14E EPS and at an EV of 4.1x FY14E EBITDA. Maintain Buy.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEZn & Pb ('000 tons) 207 200 218 227 186 184 230 235 852 835Silver (tons) 41 41 49 74 73 76 92 89 205 331Net Sales 28,471 26,368 27,868 31,350 27,477 26,853 32,248 32,698 114,053 119,276Change (YoY %) 44.3 19.8 6.0 -3.2 -3.5 1.8 15.7 4.3 15.1 4.6EBITDA 15,923 14,648 14,023 16,590 14,286 14,162 17,180 17,390 60,695 63,018As % of Net Sales 55.9 55.6 50.3 52.9 52.0 52.7 53.3 53.2 53.2 52.8Interest 65 120 87 24 129 129 129 129 140 515Depreciation 1,345 1,455 1,591 1,671 1,734 1,665 1,665 1,684 6,107 6,747Other Income 3,554 3,868 3,819 3,811 5,743 4,366 4,496 4,783 15,428 19,388PBT (before EO item) 18,066 16,940 16,164 18,706 18,166 16,734 19,882 20,360 69,877 75,143Extra-ordinary Income -44 -239 -64 -84 0 0 0 0 -431 0PBT (after EO item) 18,022 16,702 16,099 18,622 18,166 16,734 19,882 20,360 69,445 75,143Tot al Tax 3,073 3,255 3,363 4,494 2,353 3,180 3,778 4,886 14,185 14,196% Tax 17.1 19.5 20.9 24.1 13.0 19.0 19.0 24.0 20.4 18.9Reported PAT 14,949 13,447 12,736 14,128 15,813 13,555 16,104 15,474 55,260 60,947Adjusted PAT 14,986 13,639 12,787 14,192 15,813 13,555 16,104 15,474 55,604 60,947Change (YoY %) 68.2 41.2 -0.8 -19.9 5.5 -9.5 18.1 21.0 13.1 9.6Avg LME Zinc (USD/T) 2,271 2,247 1,917 2,050 1,938 1,900 1,900 1,900 2,121 1,910Avg LME Lead (USD/T) 2,531 2,449 2,009 2,120 1,989 1,980 1,900 1,900 2,277 1,942Silver (USD/oz) 35 36 29 31 28 28 28 28 33 28E: MOSL EstimatesOctober 2012C–119

BSE SensexS&P CNX18,763 5,703BloombergJSP INEquity Shares (m) 934.852 Week Range (INR) 663/3211,6,12 Rel Perf (%) 13/-28/-31Mcap (INR b) 399.6Mcap (USD b) 7.6CMP: INR428September 2012 Results PreviewSector: MetalsJindal Steel & PowerNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 131,122 37,539 40.1 6.0 - - 30.5 21.3 - -3/12A 182,086 39,649 42.4 5.6 10.1 2.2 24.6 16.9 3.1 8.43/13E 208,816 37,215 39.8 -6.1 10.7 2.0 19.7 13.6 3.0 9.53/14E 212,763 36,045 38.5 -3.1 11.1 1.8 17.0 12.2 3.1 8.9Consolidated• Steel volumes to increase 3% YoY: We expect standalone net sales to grow 11% YoY (11% QoQ) to INR36.9b onliquidation of inventory accumulated in the previous quarter and higher power sales. Steel sales volume wouldincrease 3% YoY (10% QoQ) to 615k tons. We expect pellet sales volume to grow 1% YoY (35% QoQ). Power salesare likely to grow 147% YoY (decline 6% QoQ) to 549m units. We expect standalone EBITDA to decline 2% QoQto INR10.1b on lower steel prices.• Jindal Power PAT to increase 21% QoQ: Power sales volumes at Jindal Power are likely to be up 2% YoY to 1.9bunits while the average rate is likely to decline 8% YoY (flat QoQ) to INR3.7/unit. PAT would grow 21% QoQ, asperformance in the previous quarter was impacted by INR1b of accumulated electricity duty imposed byChhattisgarh government.• Earnings have peaked; maintain Neutral: JSP's existing operating assets continue to deliver superior results,but future projects are likely to have lower return ratios. We believe that earnings have already peaked andexpect them to decline at 5% per annum over FY12-14. The stock trades at 11.1x FY14E EPS, 1.8x FY14E BV, and anEV of 8.9x FY14E EBITDA. Maintain Neutral.Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales volumeSteel ('000 tons) 457 598 591 737 561 615 735 741 2,385 2,652Pellets (000 tons) 347 526 464 691 395 533 489 516 2,028 1,934CPP (M kwh) 259 222 350 557 584 549 709 709 1,446 2,550Net Sales 25,265 33,338 32,983 41,740 33,311 36,906 39,453 39,787 133,326 149,457Change (YoY %) 19.1 45.0 36.8 52.2 31.8 10.7 19.6 -4.7 39.3 12.1Total Expenditure 15,631 21,471 22,528 28,648 22,934 26,765 28,629 28,723 88,278 107,051EBITDA 9,634 11,867 10,454 13,093 10,377 10,141 10,824 11,064 45,048 42,406Change (YoY %) 21.7 38.6 11.7 22.5 7.7 -14.5 3.5 -15.5 23.3 -5.9As % of Net Sales 38.1 35.6 31.7 31.4 31.2 27.5 27.4 27.8 33.8 28.4Interest 1,325 1,459 1,553 2,490 2,186 1,870 1,870 1,870 6,827 7,796Depreciation 2,066 2,139 2,103 2,364 2,372 2,390 2,366 2,342 8,672 9,469Other Income 167 77 202 1,412 122 81 212 1,515 1,857 1,930PBT (before EO item) 6,410 8,346 7,001 9,650 5,942 5,962 6,800 8,367 31,407 27,072Extra-ordinary Income 0 -2,478 -500 0 -5,741 0 0 0 -2,978 -5,741PBT (after EO item) 6,410 5,869 6,501 9,650 201 5,962 6,800 8,367 28,430 21,330Tot al Tax 1,709 1,911 1,890 1,814 76 1,669 1,904 2,343 7,324 5,993% Tax 26.7 32.6 29.1 18.8 38.1 28.0 28.0 28.0 25.8 28.1Reported PAT 4,702 3,958 4,610 7,836 124 4,293 4,896 6,024 21,106 15,338Adjusted PAT 4,702 6,435 5,110 7,836 4,602 4,293 4,896 6,024 24,083 19,816Consolidated PAT 9,188 10,495 10,210 11,670 9,594 8,401 9,645 9,574 41,563 37,215Change (YoY %) -2.4 19.1 15.4 2.0 4.4 -20.0 -5.5 -18.0 10.7 -10.5E: MOSL EstimatesOctober 2012C–120

BSE SensexS&P CNX18,763 5,703BloombergJSTL INEquity Shares (m) 223.152 Week Range (INR) 885/4641,6,12 Rel Perf (%) 0/-3/19Mcap (INR b) 168.8Mcap (USD b) 3.2CMP: INR757September 2012 Results PreviewSector: MetalsJSW SteelSellYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 241,059 16,783 75.2 17.7 - - 12.3 9.9 - -3/12A 343,681 14,844 66.5 -11.6 11.4 1.0 8.9 9.2 1.2 6.73/13E 363,204 11,143 49.9 -24.9 15.2 1.0 6.6 8.5 1.2 6.63/14E 363,314 16,442 73.7 47.6 10.3 0.9 9.3 9.5 1.2 6.0Consolidated• Revenue to increase 10% YoY on higher steel sales: We expect standalone net sales to increase 10% YoY (fall 7%QoQ) to INR83.6b due to lower steel realization and flat QoQ volumes. Average steel realization would fall 7%QoQ to INR39,827/ton. Domestic steel pricing environment remained weak in 2QFY13; long and flat pricesdecreased 9% and 10% QoQ, respectively.• EBITDA to decrease 19% QoQ: We expect JSTL's EBITDA to decline 19% QoQ to INR14.3b on lower realization andhigher iron ore cost. With rapidly depleting inventory at Karnataka, JSTL is forced to procure iron ore fromOdisha, which would result in higher raw material cost on account of transportation cost. We expect EBITDA/ton to decrease 20% QoQ to USD123.• Low cost iron ore benefit faded permanently in Karnataka; maintain Sell: Availability of iron ore is likely to easepost the starting of category A mines in Karnataka, but lower caps on volumes coupled with increased costssuch as FBT would result in higher iron ore prices. We believe that the benefit of low cost iron ore for steel millsin Karnataka has faded permanently. We also expect steel prices to correct further and eat up any benefits onaccount of lower coking coal prices. The stock trades at an expensive 10.3x FY14E EPS and an EV of 6x FY14EEBITDA. Maintain Sell.Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales ('000 tons) 1,714 1,882 1,908 2,310 2,109 2,100 2,036 2,170 7,814 8,415Change (YoY %) 44.0 19.0 19.8 33.3 23.0 11.6 6.7 -6.0 28.1 7.7Realization (INR per ton) 41,245 40,553 41,281 41,319 42,853 39,827 37,066 36,324 41,109 39,014Net Sales 70,694 76,321 78,765 95,447 90,376 83,636 75,464 78,836 321,227 328,312Change (YoY %) 51.0 32.1 35.6 34.3 27.8 9.6 -4.2 -17.4 37.5 2.2EBITDA 14,082 13,104 12,534 16,518 17,728 14,335 11,957 15,706 56,238 59,726Change (YoY %) 36.1 32.1 25.3 -0.1 25.9 9.4 -4.6 -4.9 17.7 6.2As % of Net Sales 19.9 17.2 15.9 17.3 19.6 17.1 15.8 19.9 17.5 18.2EBITDA (USD per ton) 184 152 129 143 154 123 109 134 150 130Interest 2,268 2,645 3,274 3,677 4,067 4,116 4,198 4,083 11,864 16,464Depreciation 3,879 4,039 4,444 4,720 4,678 4,859 4,956 4,943 17,082 19,435Other Income 327 527 456 483 723 537 465 493 1,793 2,218PBT (before EO Item) 8,263 6,947 5,271 8,604 9,706 5,898 3,267 7,174 29,085 26,045EO Items 0 -5,130 -3,188 1,992 -5,921 0 0 0 -6,326 -5,921PBT (after EO Item) 8,263 1,817 2,083 10,596 3,786 5,898 3,267 7,174 22,759 20,124Total Tax 2,480 546 -4,600 3,074 1,096 1,946 1,078 2,367 1,499 6,487% Tax 30.0 30.0 -220.8 29.0 28.9 33.0 33.0 33.0 6.6 32.2Reported PAT 5,783 1,271 6,684 7,522 2,690 3,951 2,189 4,806 21,260 13,637Preference Dividend 70 70 70 70 70 70 70 70 279 279Adjusted PAT 5,713 5,993 9,592 5,592 6,632 3,882 2,119 4,737 26,890 17,370Change (YoY %) 66.6 82.6 155.7 -32.3 16.1 -35.2 -77.9 -15.3 36.5 -35.4E: MOSL EstimatesOctober 2012C–121

BSE SensexS&P CNX18,763 5,703BloombergNACL INEquity Shares (m) 2,577.252 Week Range (INR) 68/481,6,12 Rel Perf (%) -6/-16/-32Mcap (INR b) 131.8Mcap (USD b) 2.5CMP: INR51September 2012 Results PreviewSector: MetalsNalcoNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 59,590 10,703 4.2 33.2 - - 9.9 13.3 - -3/12A 66,116 8,650 3.4 -19.2 15.2 1.1 7.6 10.0 1.2 7.23/13E 71,495 8,960 3.5 3.6 14.7 1.1 7.5 10.2 1.3 7.33/14E 77,506 8,448 3.3 -5.7 15.6 1.1 6.8 9.7 1.1 6.5Consolidated• Net sales to grow 5% YoY on higher alumina sales, despite lower LME prices: We expect net sales to grow 5% YoYto INR17b on higher alumina volumes, despite lower realizations. LME prices have fallen 3% QoQ (20% YoY) toUSD1,912/ton. We expect average metal realization to decrease 3% QoQ to INR118,104/ton and aluminarealization to decrease 9% QoQ to INR16,872/ton. Alumina sales volume would grow 14% QoQ to 287k tonswhile metal volumes would increase 1% QoQ to 103k tons.• EBITDA to decrease 21% QoQ: We expect EBITDA to decline 21% QoQ to INR2.4b on lower LME prices, despitebetter volumes. Adjusted PAT would decline 23% QoQ to INR1.7b.• Power cost to remain high till Utkal coal block commissioning; maintain Neutral: NACL has been suffering onaccount of high power cost and lower LME prices. It is unable to get sufficient linkage coal from Mahanadi CoalField and has to depend on high cost e-auction and imported coal. Till the commissioning of Utkal coal block,NACL will not be able to reap full benefits of its increased refining capacity and power capacity. Coal fieldremains a risk. The stock trades at 15.6x FY14E EPS, 1.1x FY14E BV, and an EV of 6.5x FY14E EBITDA. MaintainNeutral.Quarterly performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEAluminium Sales ('000 tons) 109 101 98 107 102 103 105 107 415 417Alumina Sales ('000 tons) 197 180 163 285 253 287 298 309 826 1,147Avg LME Aluminium (USD/ton) 2,618 2,450 2,115 2,225 1,985 1,900 2,000 2,100 2,352 1,996Alumina Exports (USD/ton) 428 448 358 343 341 304 320 336 394 325Net Sales 17,625 16,139 14,509 17,845 17,481 16,991 17,833 19,190 66,118 71,495Change (YoY %) 34.7 9.1 0.5 -2.2 -0.8 5.3 22.9 7.5 11.0 8.1Total Expenditure 12,327 14,614 13,824 14,778 14,439 14,573 14,753 14,887 55,543 58,652EBITDA 5,298 1,526 684 3,067 3,042 2,418 3,080 4,303 10,575 12,843As % of Net Sales 30.1 9.5 4.7 17.2 17.4 14.2 17.3 22.4 16.0 18.0Interest 0 0 1 8 32 0 0 0 9 32Depreciation 1,019 1,179 1,235 1,232 1,224 1,230 1,236 1,242 4,666 4,931Other Income 1,266 1,321 1,262 1,594 1,403 1,333 1,266 1,203 5,442 5,205PBT 5,545 1,667 710 3,960 3,190 2,521 3,111 4,264 11,882 13,086Tot al Tax 1,776 274 198 1,139 959 807 995 1,364 3,387 4,126% Tax 32.0 16.4 27.9 28.8 30.1 32.0 32.0 32.0 28.5 31.5Reported PAT 3,768 1,393 512 2,821 2,231 1,714 2,115 2,899 8,495 8,960Adjusted PAT 3,768 1,393 512 2,437 2,231 1,714 2,115 2,899 8,109 8,960Change (YoY %) 32.7 -37.8 -80.0 -20.2 -40.8 23.0 313.0 19.0 -24.2 10.5E: MOSL EsitmatesOctober 2012C–122

BSE SensexS&P CNX18,763 5,703BloombergNMDC INEquity Shares (m) 3,964.752 Week Range (INR) 255/1361,6,12 Rel Perf (%) -6/13/-29Mcap (INR b) 768.4Mcap (USD b) 14.6CMP: INR194September 2012 Results PreviewSector: MetalsNMDCNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 113,689 64,992 16.4 88.8 - - 29.7 29.5 - -3/12A 112,615 73,182 18.5 12.6 10.5 3.1 31.7 31.5 5.0 6.33/13E 126,708 81,052 20.4 10.8 9.5 2.6 28.3 28.2 4.2 5.43/14E 158,171 98,826 24.9 21.9 7.8 2.1 26.9 26.8 3.3 4.1Consolidated• Iron ore sales to decline 21% QoQ: We expect standalone net sales to decline 7% YoY (flat QoQ) to INR28.5b dueto lower iron ore sales. Production during the quarter was impacted due to heavy rains, leading to lower salesvolume. We expect iron ores sales volume to decrease 21% YoY to 6m tons. Iron ore realization is likely toincrease 17% YoY (15% QoQ) to INR4,744/ton.• EBITDA to decrease 3% QoQ: We expect EBITDA to decrease 3% QoQ to INR22.2b on lower iron ore volume andhigher operating cost. 1QFY13 margins were boosted by lower operating cost, especially royalty payments.• Domestic iron ore scenario favoring NMDC; maintain Buy: Declining grades and availability of iron ore, increasedregulatory vigil and increasing steel capacity has shifted the domestic iron ore demand-supply dynamics infavor of NMDC. Despite falling iron ore prices internationally, NMDC is able to maintain its realization andmargins. It is our most preferred pick in the Metals space. We expect earnings to register a CAGR of 16% overFY12-14 due to strong volume growth. The stock trades at 7.8x FY14E EPS, 2.1x FY14E BV, and an EV of 4.1x FY14EEBITDA. Maintain Buy.Quarterly performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales (m tons) 6.9 7.6 6.4 6.5 6.8 6.0 7.7 7.7 27.3 28.2Avg Iron ore realisation (USD/t) 90 88 86 79 76 85 84 84 86 82Net Sales 27,826 30,623 28,220 25,946 28,404 28,466 34,783 35,056 112,615 126,708Change (YoY %) 10.5 24.5 7.7 -31.2 2.1 -7.0 23.3 35.1 -0.9 12.5EBITDA 22,547 24,354 22,607 19,774 23,020 22,246 27,707 27,144 89,281 100,117As % of Net Sales 81.0 79.5 80.1 76.2 81.0 78.1 79.7 77.4 79.3 79.0EBITDA per ton (USD) 73 70 69 61 62 67 67 65 68 65Interest 0 0 0 15 0 0 0 0 15 0Depreciation 338 324 345 321 328 336 344 353 1,328 1,362Other Income 4,418 5,029 5,254 5,468 5,521 5,705 5,937 6,222 20,169 23,385PBT (before EO Item) 26,627 29,059 27,516 24,905 28,214 27,615 33,299 33,013 108,108 122,141Extra-ordinary Income -513 -513PBT (after EO Item) 26,627 29,059 27,516 24,392 28,214 27,615 33,299 33,013 107,595 122,141Tot al Tax 8,615 9,428 8,928 7,970 9,154 9,389 11,322 11,224 34,941 41,089% Tax 32.4 32.4 32.4 32.7 32.4 34.0 34.0 34.0 32.5 33.6Reported PAT 18,012 19,632 18,588 16,423 19,060 18,226 21,977 21,789 72,654 81,052Adjusted PAT 18,012 19,632 18,588 16,768 19,060 18,226 21,977 21,789 73,000 81,052Change (YoY %) 19.8 42.4 22.4 -20.1 5.8 -7.2 18.2 29.9 12.3 11.0E: MOSL EsitmatesOctober 2012C–123

BSE SensexS&P CNX18,763 5,703BloombergSESA INEquity Shares (m) 869.152 Week Range (INR) 270/1491,6,12 Rel Perf (%) -12/-19/-26Mcap (INR b) 149.0Mcap (USD b) 2.8CMP: INR171September 2012 Results PreviewSector: MetalsSesa GoaNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 92,051 42,225 48.6 53.6 - - 40.0 47.3 - -3/12A 83,101 27,616 31.8 -34.6 5.4 1.0 19.8 25.7 2.2 2.13/13E 39,514 31,359 36.1 13.6 4.8 1.0 20.6 19.5 4.6 5.53/14E 58,000 29,142 33.5 -7.1 5.1 0.9 18.7 18.9 3.2 4.5Consolidated• Revenue to decline 57% YoY: We expect SESA's revenue to decline 57% YoY to INR3.4b due to lower salesvolumes. The Goa government temporarily suspended all mining operations in the state in September. Theannouncement was followed by suspension of environmental clearances for iron ore mines in Goa by MoEF.We expect iron ore sales volumes to decrease 72% YoY in 2QFY13 to 437k tons due to suspension of mining inGoa. Average iron ore realization is likely to decline 19% QoQ to USD80/ton due to significant decline ininternational iron ore prices in 2QFY13. Average iron ore spot prices in China have declined 18% YoY to USD118/ton CFR.• EBITDA to decline 85% QoQ: We expect EBITDA to decline 85% QoQ to INR1b and EBIT/ton to decline 28% QoQto USD22 due to lower iron ore realization.• FY13 volumes at risk on Goa mining suspension; maintain Neutral: We have cut our volume assumption for FY13from 14.7m tons to 7.9m tons due to Goa mining suspension. We are still maintaining our FY14 volume estimateof 15.7m tons, which is contingent on restarting of mining in Goa (13.5m tons) and Karnataka (2.2m tons). Thestock trades at 5.1x FY14E EPS, 0.9x FY14E BV, and an EV of 4.5x FY14E EBITDA. We upgrade the stock to Buy, basedon the valuation of the Sesa-Sterlite merged entity.Quarterly Performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QERealization (USD/dmt) 102 84 93 102 99 80 62 58 99 74Sales Qty ('000 dmt) 4,247 1,540 5,040 5,100 2,900 437 1,176 3,450 15,927 7,963Net Sales 21,089 7,897 26,171 27,944 17,326 3,363 5,980 12,844 83,101 39,514Change (YoY %) -12.6 -14.0 16.3 -22.9 -17.8 -57.4 -77.2 -54.0 -9.7 -52.5EBITDA 11,474 2,600 10,852 11,579 6,762 1,001 1,845 3,861 36,505 13,469As % of Net Sales 54.4 32.9 41.5 41.4 39.0 29.8 30.9 30.1 43.9 34.1Interest 493 516 730 702 1,178 934 934 934 2,441 3,979Depreciation 269 243 263 286 303 303 303 303 1,061 1,211Other Income 1,521 504 180 141 151 129 77 39 2,346 397PBT (before XO item) 12,232 2,345 10,039 10,732 5,432 -106 686 2,664 35,348 8,676EO -15 -2,341 -1,779 79 -2,522 0 0 0 -4,056 -2,522PBT (after XO item) 12,217 4 8,260 10,811 2,910 -106 686 2,664 31,292 6,154Tot al Tax 3,811 -9 2,564 3,848 922 -32 206 799 10,214 1,895% Tax 31.2 -245.9 31.0 35.6 31.7 30.0 30.0 30.0 32.6 30.8Reported PAT before MI 8,406 13 5,696 6,963 1,988 -74 480 1,865 21,078 4,259Profit from associates 0 0 1,219 4,658 7,652 5,696 5,708 5,523 5,877 24,578Adjusted PAT 8,421 2,354 8,695 11,542 11,362 5,621 6,188 7,388 31,012 30,582Change (YoY %) -39.7 -33.0 -18.4 -20.9 34.9 138.8 -28.8 -36.0 -27.2 -1.4E: MOSL EstimatesOctober 2012C–124

BSE SensexS&P CNX18,763 5,703BloombergSAIL INEquity Shares (m) 4,130.452 Week Range (INR) 117/731,6,12 Rel Perf (%) -3/-17/-34Mcap (INR b) 352.9Mcap (USD b) 6.7CMP: INR85September 2012 Results PreviewSector: MetalsSteel Authority of IndiaSellYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 428,144 49,466 12.0 -27.4 - - 13.9 13.9 - -3/12A 463,726 37,174 9.0 -24.8 9.5 0.9 9.6 10.1 1.0 7.43/13E 439,733 27,527 6.7 -26.0 12.8 0.8 6.7 7.4 1.2 8.93/14E 483,437 35,442 8.6 37.7 10.0 0.8 8.2 8.2 1.2 7.3Consolidated• Net sales to decline 4% YoY on lower volumes: We expect net sales to decline 4% YoY (flat QoQ) to INR108b dueto lower saleable steel volumes. Sales volumes are likely to decrease 5% YoY to 2.7m tons. Realization would beup 2% YoY (down 7% QoQ) to INR39,960/ton. The domestic steel pricing environment remained weak in 2QFY13;long and flat prices decreased 9% and 10% QoQ, respectively. Global steel prices have also shown downwardbias. Average steel prices have decreased 8%, 4%, 14% and 4% QoQ, respectively in Russia, Europe, China andNorth America• Margins to shrink 16% QoQ to USD93/ton: We expect EBITDA/ton to decline 16% QoQ to USD93/ton due tolower realization. We expect the benefits of lower coking coal prices to accrue slowly but downward pressureon realization would overshadow any incremental benefit. Other income would fall by 43% QoQ to INR1.6b, ascash is used to support capex.• Steel volumes to remain flat in FY13; maintain Sell: We expect earnings to decline at 2% per annum over FY12-14 despite 10% CAGR in volumes due to SAIL's uncompetitive cost structure, execution delays, decline in steelrealization and poor operating efficiencies. The full benefits of the INR720b capex will be seen only in FY15. Thestock still appears expensive at 10x FY14E EPS and an EV of 7.3x FY14E EBITDA. Maintain Sell.Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales (m tons) 2.75 2.85 2.60 3.20 2.50 2.70 3.0 3.2 11.4 11.4Realization (INR per ton) 40,689 39,289 42,476 42,787 43,110 39,960 37,800 37,044 41,336 39,264Change (YoY %) 3.4 10.2 22.0 10.6 5.9 1.7 -11.0 -13.4 11.8 -5.0Net Sales 111,896 111,973 110,437 136,920 107,775 107,892 113,400 118,541 471,226 447,608Change (%) 22.5 3.6 -2.4 12.9 -3.7 -3.6 2.7 -13.4 8.6 -5.0EBITDA 13,114 13,271 15,811 18,713 15,153 13,918 13,222 17,854 60,909 60,147Change (YoY %) -28.8 -21.7 -12.0 -15.4 15.5 4.9 -16.4 -4.6 -19.3 -1.3As % of Net Sales 11.7 11.9 14.3 13.7 14.1 12.9 11.7 15.1 12.9 13.4EBITDA per ton (USD) 107 102 119 117 111 93 82 103 111 97Interest 1,710 2,000 1,855 1,210 1,249 1,499 2,411 2,878 6,774 8,036Depreciation 3,742 3,938 4,093 3,891 4,018 4,871 5,070 5,922 15,664 19,881Other Income 4,630 4,903 3,837 2,156 2,785 1,599 1,469 1,352 15,526 7,205PBT (after EO Inc.) 12,293 7,149 9,037 23,014 10,101 9,148 7,211 10,407 51,493 36,866Tot al Tax 3,913 2,203 2,716 7,244 3,137 2,744 2,163 3,122 16,076 11,166% Tax 31.8 30.8 30.1 31.5 31.1 30.0 30.0 30.0 31.2 30.3Reported PAT 8,381 4,946 6,321 15,770 6,964 6,403 5,048 7,285 35,418 25,700Adjusted PAT 8,381 10,034 10,984 8,524 8,833 6,377 5,027 7,255 37,140 27,491Change (YoY %) -28.8 -7.9 -0.8 -38.1 5.4 -36.4 -54.2 -14.9 -22.5 -26.0E: MOSL EstimatesOctober 2012C–125

BSE SensexS&P CNX18,763 5,703BloombergSTLT INEquity Shares (m) 3,361.252 Week Range (INR) 138/861,6,12 Rel Perf (%) -11/-19/-31Mcap (INR b) 333.9Mcap (USD b) 6.3CMP: INR99September 2012 Results PreviewSector: MetalsSterlite IndustriesBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 304,285 50,993 15.2 26.2 - - 13.9 15.2 - -3/12A 411,789 56,058 16.7 9.9 6.0 0.8 14.1 15.1 0.7 4.03/13E 421,214 54,883 16.3 -2.1 6.1 0.7 12.4 13.7 0.7 3.83/14E 463,018 59,632 17.7 8.7 5.6 0.7 12.3 14.0 0.6 3.5Consolidated• Net sales to decrease 2% QoQ: We expect consolidated net sales to decline 2% QoQ (increase 2% YoY) toINR104b on lower base metal prices. LME prices for all base metals have declined 0-3% QoQ. Refined zinc andlead production would be 1% lower QoQ at 184k tons. Aluminum production from Balco is likely to increase 2%QoQ to 61k tons. Copper cathode production would increase 1% QoQ to 88k tons.• EBITDA to grow 7% QoQ: We expect EBITDA to grow 7% QoQ (flat YoY) to INR24.8b on a lower base of 1QFY13,when copper business was impacted by lower by-product realizations. Copper EBIT is likely to increase 29%QoQ to INR2.6b. Aluminum (Balco) EBIT would decline to a negative INR358m on account of lower LME prices.EBIT from the Power segment would grow 38% QoQ to INR2.6b.• Maintain Buy: We expect adjusted PAT to grow at a CAGR of just 3% over FY12-14 to INR59.6b due to projectcommissioning delays, lower LME prices and higher raw material costs (coal and bauxite). Domestic zincproduction growth would be moderate, as mine production has witnessed some setbacks recently. However,valuations remain attractive. The stock trades at 5.6x FY14E EPS and an EV of 3.5x FY14E EBITDA. Maintain Buy.Quarterly Performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QECopper cathode ('000 tons) 74 87 84 80 88 88 82 82 325 340Aluminum (BALCO, '000 tons) 61 60 63 62 60 61 62 61 246 260Aluminum (VAL, '000 tons) 112 89 107 115 124 124 124 124 423 500Net Sales 98,607 101,957 103,037 108,189 106,484 104,064 103,006 107,660 411,789 421,214Change (YoY %) 65.2 67.6 23.7 7.6 8.0 2.1 0.0 -0.5 35.3 2.3EBITDA 27,583 24,820 23,183 27,054 23,083 24,805 28,205 29,641 102,640 105,734As % of Net Sales 28.0 24.3 22.5 25.0 21.7 23.8 27.4 27.5 24.9 25.1Interest 1,740 1,549 1,573 3,280 2,419 2,501 2,601 2,701 8,142 10,223Depreciation 4,200 4,450 4,575 5,072 5,182 5,268 6,018 6,768 18,298 23,234Other Income 7,646 8,002 8,768 7,035 9,484 8,107 8,236 8,524 31,452 34,350PBT (before XO item) 29,289 26,823 25,803 25,737 24,966 25,143 27,822 28,696 107,652 106,626Extra-ordinary Exp. 726 -4,339 -4,318 -1,005 -2,174 0 0 0 -8,936 -2,174PBT (after XO item) 30,015 22,485 21,484 24,733 22,792 25,143 27,822 28,696 98,717 104,452Tot al Tax 6,137 5,049 5,053 4,867 3,339 5,783 6,677 7,174 21,106 22,973% Tax 20.4 22.5 23.5 19.7 14.7 23.0 24.0 25.0 21.4 22.0Reported PAT 23,878 17,436 16,431 19,866 19,453 19,360 21,145 21,522 77,611 81,479Minority interest Profit/ (Loss) 6,420 5,030 4,660 5,499 5,771 4,706 5,721 5,670 21,609 21,867Loss/(profit) of Associates 1,061 1,812 2,636 1,598 1,666 2,001 1,746 1,490 7,107 6,903Adjusted PAT 15,672 14,932 13,453 13,774 14,190 12,653 13,678 14,361 57,831 54,883Change (YoY %) 81.7 48.1 21.7 -20.5 -9.5 -15.3 1.7 4.3 22.8 -5.1Avg LME Aluminium (USD/T) 2,618 2,450 2,090 2,225 1,985 1,900 2,000 2,100 2,346 1,996Avg LME Copper (USD/T) 9,163 8,993 7,530 8,318 7,890 7,700 8,000 8,000 8,501 7,898Avg LME Zinc (USD/T) 2,271 2,247 1,917 2,050 1,938 1,900 1,900 1,900 2,121 1,910E: MOSL EstimateOctober 2012C–126

BSE SensexS&P CNX18,763 5,703BloombergTATA INEquity Shares (m) 971.452 Week Range (INR) 501/3321,6,12 Rel Perf (%) -1/-22/-20Mcap (INR b) 389.3Mcap (USD b) 7.4CMP: INR401September 2012 Results PreviewSector: MetalsTata SteelSellYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 1,187,531 59,724 62.3 -n/a- - - 40.5 13.2 - -3/12A 1,328,997 18,054 18.6 -70.1 21.6 1.5 7.8 9.1 0.7 7.33/13E 1,354,936 30,279 31.2 67.7 12.9 1.4 11.5 8.8 0.7 6.83/14E 1,372,147 55,029 56.6 81.7 7.1 1.2 18.9 10.5 0.7 6.1Consolidated• Tata Steel India (TSI): We expect net revenue to increase 5% YoY (fall 3% QoQ) to INR86.5b due to increase of 5%YoY (decline of 5% QoQ) in steel realization and flat YoY volumes. Sales volumes are likely to remain flat YoY(increase 4% QoQ) to 1.65m tons in 2QFY13. Average steel price realization is expected to be INR48,840/ton.Domestic steel pricing environment remained weak in 2QFY13; long and flat prices decreased 9% and 10% QoQ,respectively. We expect EBITDA to decline 4% QoQ to INR28.7b and EBITDA/ton to decline 6% QoQ to USD304/ton.• TSE and others: We expect Tata Steel Europe (TSE) and other subsidiaries to report negative EBITDA due todeclining realization in Europe. Average steel prices declined 4% QoQ in 2QFY13 in Europe. We expect EBITDA/ton to decrease from USD28 in 1QFY13 to a negative USD3 in 2QFY13. We also expect steel shipments to decline16% YoY (8% QoQ) to 3.8m tons, as demand is very weak in Europe.• Steel environment challenging, price outlook negative; maintain Sell: We expect further correction in steelprices due to weak demand in developed regions, correction in raw material prices and slowdown in Chinesesteel consumption, which has been the major demand driver so far. Though TSE's converter model will enableit to get benefits of lower raw material prices, lower realization will eat away the gains. TSI margins are alsolikely to decline in FY13 and FY14 due to higher proportion of purchased coking coal in the mix and lowerrealization. The stock trades at 7.1x FY14E EPS, 1.2x FY14E BV, and an EV of 6.1x FY14E EBITDA. Maintain Sell.Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales ('000 tons) 1,593 1,648 1,622 1,768 1,590 1,650 1,900 2,350 6,631 7,490Avg Seg. Realization (INR/tss) 45,832 46,402 47,340 49,103 51,530 48,840 45,900 44,982 47,214 47,455Net Sales 78,603 82,119 83,819 94,794 89,080 86,509 94,549 113,509 339,335 383,647Change (YoY %) 20.0 15.6 13.3 13.7 13.3 5.3 12.8 19.7 15.4 13.1EBITDA 31,148 27,698 26,441 29,916 29,768 28,703 27,151 31,074 115,368 116,696(% of Net Sales) 39.6 33.7 31.5 31.6 33.4 33.2 28.7 27.4 34.0 30.4EBITDA(USD/tss) 419 357 305 324 324 304 251 223 347 268Interest 4,537 2,343 4,811 5,140 4,544 5,460 5,559 5,657 19,254 21,221Depreciation 2,853 2,871 2,891 2,900 3,544 3,886 4,132 4,379 11,514 15,941Other Income 2,564 236 1,976 1,829 1,519 1,848 1,857 1,866 8,864 7,090PBT (after EO Inc.) 30,482 22,720 20,716 23,706 21,229 21,204 19,317 22,904 97,624 84,654Tot al Tax 8,288 7,767 6,503 8,101 7,663 5,513 4,443 4,810 30,659 22,429% Tax 27.2 34.2 31.4 34.2 36.1 26.0 23.0 21.0 31.4 26.5Reported PAT 22,194 14,952 14,213 15,605 13,566 15,691 14,874 18,094 66,964 62,225Adjusted PAT 18,034 14,952 14,213 15,605 15,536 15,691 14,874 18,094 62,804 64,195Consolidated FinancialsNet Sales 330,002 327,979 331,031 339,986 338,212 312,934 338,232 365,559 1,328,997 1,354,936EBITDA 44,572 27,500 19,133 31,788 36,003 28,051 37,967 40,068 124,168 142,088Reported PAT (before MI & asso.) 52,937 1,390 -6,874 2,032 5,170 238 11,017 12,212 49,485 28,637Adj. PAT (after MI & asso) 19,846 2,124 -6,027 4,335 7,949 791 11,469 12,686 20,279 32,895E: MOSL Estimates; tss=ton of steel salesOctober 2012C–127

September 2012 Results PreviewSector: Oil & GasOil & GasCompany NameBPCLCairn IndiaChennai PetroleumGAILGujarat State PetronetHPCLIOCIndraprastha GasMRPLOil IndiaONGCPetronet LNGReliance IndustriesGRM up 36% QoQ, but YTD, both oil and GRM down 5% : Brent average crude price for2QFY13 was marginally up 1% QoQ to USD110/bbl. However, volatility was high, led byEurozone uncertainty, geopolitical developments, and QE3. Brent, after hitting a lowof USD89/bbl in June-12, again rose to high of USD116/bbl in mid-Aug, before settlingat current levels of USD111/bbl.Similar to oil, product cracks also were volatile with regional benchmark, ReutersSingapore GRM averaging USD9.1/bbl v/s USD6.7/bbl in 1QFY13. Unless meaningfulrefinery closures happen, we expect margins to remain subdued as global utilizationis likely to remain low led by lower demand and commissioning of new refineries.Petchem spreads subdued: In 2QFY13, polymer spreads over naphtha are down 7-8%QoQ, while integrated polyester spreads are down 2-4% QoQ. However, YoY, PE spreadsare up 24% and PP spreads 7%. Polymer margins seem to have bottomed out and areexpected to slowly recover, contingent on the global economic growth.Lower LPG losses help QoQ drop in under-recoveries: We estimate 2QFY13 underrecoveriesat INR390b, down 18% QoQ, primarily helped by lower LPG losses due tolower international prices. As the recent government decision to increase diesel priceby INR5/ltr and limit subsidized LPG cylinder was effected on 13 September 2012, themeaningful positive impact of the same will be seen in subsequent quarters. Subsidysharing would be again ad hoc as in the previous years, and it will be finalized in thelast quarter. We model upstream sharing at 40% and downstream sharing at nil/8% forFY13/FY14, with the balance being the government's share.October 2012Valuation and view: Recent diesel price hike and limiting subsidized LPG cylinderswill reduce under-recoveries. However, FY13 estimated under-recoveries remain highat INR1.6t (+14% YoY) v/s INR1.4t in FY12. Nevertheless, OMC stocks are at attractivevaluations and BPCL is our top pick for its E&P upside potential.Expected quarterly performance summary(INR Million)CMP Rating Sales EBITDA Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQBPCL 346 Buy 571,811 35.2 4.9 17,903 LP LP 10,183 LP LPCairn India 331 Neutral 48,725 83.7 9.7 37,609 78.8 7.7 28,308 271.0 -26.0Chennai Petroleum 129 Buy 100,501 6.7 -8.9 4,499 LP LP 2,962 304.7 LPGAIL 383 Neutral 111,932 15.4 0.9 13,935 -15.5 -26.6 8,364 -23.6 -26.2Gujarat State Petronet 81 Neutral 2,426 -13.6 -9.3 2,218 -14.2 -10.0 1,085 -16.1 -13.1HPCL 307 Buy 496,111 34.0 12.6 16,697 LP LP 11,403 LP LPIOC 251 Buy 1,115,444 25.1 15.5 62,858 LP LP 41,570 LP LPIndraprastha Gas 265 Under Review8,530 42.9 12.2 1,861 18.3 3.8 866 12.2 1.9MRPL 61 Neutral 168,502 44.4 31.5 9,306 1134.8 LP 8,361 3365.2 LPOil India 490 Buy 25,886 -20.8 10.9 12,679 -21.7 15.7 9,399 -17.4 1.1ONGC 280 Buy 217,664 -3.8 8.4 119,438 -15.6 8.2 64,009 -25.9 5.3Petronet LNG 158 Buy 81,708 52.2 16.2 4,380 -2.3 -4.2 2,616 0.5 -3.4Reliance Inds. 837 Neutral 937,028 19.3 2.0 82,024 -16.7 21.6 55,482 -2.7 24.0Oil & Gas Sector Aggregate 3,886,267 24.3 8.9 385,406 101.9 LP 244,609 539.3 LPOil & Gas Excl. RMs 1,702,901 18.1 5.3 287,949 -4.4 24.8 181,453 1.3 25.7Harshad Borawake (HarshadBorawake@MotilalOswal.com)C–128

September 2012 Results PreviewSector: Oil & Gas• Valuations are also attractive for upstream companies, ONGC and Oil India. Likelyfurther policy actions to reduce under-recoveries augurs well for them too.• We maintain Neutral on GAIL and GSPL due to headwinds on incremental gasavailability in the medium term. In contrast, domestic gas scarcity is a positive forPetronet LNG.• RIL's new mega projects (petcoke gasification and off-gases cracker) are likely toadd to earnings from FY15/FY16. However, the medium-term outlook on corebusiness remains weak with RoE reaching sub-15%. Neutral.GRM up QoQ; crude average remains largely flatCrude price average largely flatQoQ (USD/bbl)16012080400Sep-04 Sep-06 Sep-08 Sep-10 Sep-12Brent-WTI spread average at USD17.7/bbl in 2QFY13 (USD/bbl)205-10-25-40Aug-08 Aug-09 Aug-10 Aug-11 Aug-12Singapore GRM up 36% QoQ to USD9.1/bbl in 2QFY13 (USD/bbl) Auto fuel cracks meaningfully up QoQ (USD/bbl)Singapore GRM (Qtr Avg)8.89.59.18.0 8.98.1 8.6 9.17.27.76.87.4 8.05.87.0 5.5 4.9 7.54.7 6.46.76.6 6.2 6.34.1 5.54.64.23.93.6 3.2 3.71.92QFY054QFY052QFY064QFY062QFY074QFY072QFY084QFY082QFY094QFY092QFY104QFY102QFY114QFY112QFY124QFY122QFY13Arab L-H differential lower by USD0.7/bbl in 2QFY13 (USD/bbl)1030150-15-30-452QFY12 3QFY12 4QFY12 1QFY13 2QFY1312.6-6.4-31.919.520.5GasolineNaphtha LPG Diesel Jet/Kero Fuel Oil-0.686420Sep-02 Sep-04 Sep-06 Sep-08 Sep-10 Sep-12Our key assumptions• Our crude price assumption for FY13/14/15 is USD110/105/100/bbl and USD90/bbl over long term.• We expect regional benchmark Singapore Reuters GRMto remain in the USD7-9/bbl range for the near term.• We model Singapore GRM at USD8/bbl in FY13 and FY14.Source: Reuters/Bloomberg/MOSLOctober 2012C–129

September 2012 Results PreviewSector: Oil & GasPetchem margins weak on QoQ basis in 2QFY13 (INR/kg)(RIL basic prices) Simple spreads Integrated spreadsPE PP PVC POY PSF Naphtha PE PP PVC POY PSF2QFY11 70.1 72.4 52.0 69.7 68.9 31.2 38.9 41.3 20.8 45.2 44.33QFY11 73.4 76.1 53.3 79.8 80.8 36.4 37.0 39.7 16.9 51.0 52.04QFY11 74.3 81.9 53.5 97.1 103.8 41.9 32.4 40.0 11.6 64.2 70.91QFY12 76.6 87.9 60.7 95.1 104.4 44.8 31.8 43.0 15.8 59.8 69.12QFY12 76.3 81.9 57.3 89.3 93.4 44.1 32.1 37.8 13.2 54.4 58.53QFY12 80.3 84.0 53.5 91.2 97.1 45.6 34.7 38.5 7.9 55.2 61.14QFY12 83.4 84.1 56.2 91.7 96.4 51.9 31.4 32.1 4.2 50.5 55.21QFY13 91.9 92.1 61.8 92.4 95.8 48.5 43.3 43.5 13.3 54.0 57.42QFY13 91.2 91.9 63.5 93.8 96.2 51.3 39.9 40.6 12.2 53.0 55.4QoQ (%) -0.7 -0.2 2.7 1.5 0.4 5.7 -7.9 -6.8 -8.3 -1.9 -3.5YoY (%) 19.6 12.2 10.8 5.0 2.9 16.2 24.2 7.4 -7.6 -2.6 -5.4Source: Bloomberg/MOSLPolymer spreads decline QoQ in 2QFY13 (INR/kg)POY/PSF spreads largely flat QoQ (INR/kg)60PE PP PVC80POYPSF4565305015350202QFY113QFY114QFY111QFY122QFY123QFY124QFY121QFY132QFY132QFY113QFY114QFY111QFY122QFY123QFY124QFY121QFY132QFY13Relative Performance-3m (%)11010510095Sensex IndexMOSL Oi l & Gas IndexJun-12Jul-12Aug-12Sep-12Relative Performance-1Yr (%)1201101009080Sep-11Sensex IndexMOSL Oil & Gas IndexDec-11Mar-12Jun-12Sep-12Source: Company/MOSL2QFY13 under-recoveries down 18% QoQ to INR390b; we model upstream share at 40% in FY13(INR b) FY09 FY10 FY11 FY12 1QFY13 2QFY13E FY13E FY14EFx Rate (INR/USD) 46.0 47.5 45.6 47.9 54.2 55.5 54.4 53.0Brent (USD/bbl) 84.8 69.6 86.3 114.5 108.7 110.2 110.0 105.0Gross Under recoveries (INR b)Auto Fuels 575 144 375 812 290 243 968 695Domestic Fuels 458 316 405 573 188 147 610 508Total 1,033 461 780 1,385 478 390 1,577 1,203Sharing (INR b)Oil Bonds/Cash 713 260 410 835 0 242 946 626Upstream 329 145 303 550 151 148 631 481OMC's sharing -9 56 67 0 324 0 0 96Total 1,033 461 780 1,385 475 391 1,577 1,203Sharing (%)Government 69 56 53 60 0 62 60 52Upstream 32 31 39 40 32 38 40 40OMC's sharing -1 12 9 0 68 0 0 8Total 100 100 100 100 100 100 100 100Source: Company/MOSLOctober 2012C–130

September 2012 Results PreviewSector: Oil & GasONGC's net realization estimated at USD53/bblGAIL transmission volumes under pressure (mmscmd)Net Realizat ion (USD/ bbl)Subsidy Burden (USD/bbl)97 107 109 115 116 115 120 120 117 119 119 116 110 10933.214.1 19.027.7 32.8 16.5 24.3 70.1 73.2 66.8 77.3 63.3 59.42.358.356.4 57.751.4 48.1 62.7 64.8 83.738.748.1 45.0 44.346.6 53.31Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2QFY10 FY11 FY12 FY131Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2QFY10 FY11 FY12 FY13Source: Company/MOSLLower Light-Heavy spreads to pressure RIL premium(USD/bbl)Cairn's Rajasthan production likely to average 173kbpd20151050-5Premium/ (discount) Singapore GRM (Qtr Avg)RIL1234123412341234123412341234123412341234123412FY02FY03 FY04 FY05FY06 FY07 FY08FY09 FY10 FY11 FY12FY13167 173138125116 118125 125 125451Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2QFY11 FY12 FY13Source: Company/MOSLComparative valuationCMP (INR) Rating EPS (INR) P/E (x) EV/EBITDA (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14EOil & GasBPCL 346 Buy 10.8 21.6 21.5 32.1 16.1 16.1 11.5 8.5 8.8 5.0 9.5 8.9Cairn India 331 Neutral 48.7 64.2 54.0 6.8 5.2 6.1 5.3 3.5 3.4 21.0 23.1 16.7Chennai Petroleum 129 Buy 4.2 13.8 34.5 31.1 9.4 3.7 50.9 9.8 5.3 1.6 5.3 12.5GAIL 383 Neutral 28.8 31.0 32.1 13.3 12.3 11.9 9.6 9.0 8.7 17.9 17.2 16.0Guj. State Petronet 81 Neutral 9.3 7.7 7.6 8.7 10.4 10.5 5.4 5.9 5.8 23.4 16.4 14.3HPCL 307 Buy 26.9 24.5 27.4 11.4 12.5 11.2 12.6 11.3 9.0 7.1 6.2 6.6Indraprastha Gas 265 UR 21.9 25.3 28.0 12.1 10.5 9.5 6.4 5.5 4.8 27.5 26.4 24.7IOC 251 Buy 49.2 24.4 30.3 5.1 10.2 8.3 8.1 8.9 7.0 20.2 9.5 11.0MRPL 61 Neutral 5.2 2.9 8.5 11.7 21.2 7.2 6.5 7.3 4.6 13.2 6.8 18.2Oil India 490 Buy 57.3 58.7 64.7 8.5 8.3 7.6 3.9 3.7 3.3 20.7 18.7 18.4ONGC 280 Buy 30.4 29.8 33.4 9.2 9.4 8.4 3.7 3.7 3.1 20.7 17.7 17.8Petronet LNG 158 Buy 14.1 13.1 15.0 11.2 12.1 10.5 7.6 7.9 5.9 34.1 25.1 23.8Reliance Inds. 837 Neutral 67.7 67.8 69.7 12.4 12.3 12.0 8.0 9.3 8.9 13.0 11.7 11.0Sector Aggregate 9.9 10.3 9.6 6.2 6.2 5.5 15.8 13.9 13.4Oil & Gas Ex RMS 10.5 10.1 9.6 5.6 5.6 5.0 16.0 14.9 14.1October 2012C–131

BSE SensexS&P CNX18,763 5,703BloombergBPCL INEquity Shares (m) 723.052 Week Range (INR) 395/2301,6,12 Rel Perf (%) -9/-6/-6Mcap (INR b) 250.4Mcap (USD b) 4.8CMP: INR346September 2012 Results PreviewSector: Oil & GasBPCLBuyYear Net Sales Adj. PAT Adj. EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR b) (INR b) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 1,536 16.3 22.6 0.2 - - 11.1 5.5 - -03/12A 2,121 7.8 10.8 -52.2 32.1 1.6 5.0 5.2 0.3 11.503/13E 2,455 15.6 21.6 99.8 16.1 1.5 9.5 7.4 0.2 8.503/14E 2,339 15.6 21.5 -0.1 16.1 1.4 8.9 6.5 0.2 8.8* Consolidated• Similar to prior quarters, profitability of OMCs (BPCL, HPCL, IOC) would depend more on subsidy sharing, whichis ad hoc, than on business fundamentals. Government subsidy compensation typically comes with a delay.• OMCs' 2QFY13 results would be benefited by (a) inventory gains as crude price are higher USD14/bbl at thequarter-end, and (b) forex gain as rupee has appreciated by ~4%.• 2QFY13 under-recoveries are down 18% QoQ, despite higher crude price and average exchange rate, primarilydue to lower LPG prices and diesel price hike effected on 13 September 2012.• For subsidy sharing, we model OMCs' sharing at nil/8%, upstream sharing at 40%/40% and government sharingat 60%/52% in FY13/FY14. We model nil under recovery sharing for 2FY13.• We expect BPCL to report PAT of INR10b v/s loss of INR32.3b in 2QFY12 and INR88.4b in 1QFY13.• Key things to watch out for: (a) Subsidy sharing, (b) Forex fluctuations and (c) GRM.• Adjusted for investment value of INR187/sh (E&P, Bina and other listed investments post 25% discount), thestock trades at FY13E P/B of INR0.7x. Buy.Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 461,177 422,819 588,245 646,422 545,227 571,811 662,679 571,855 2,118,662 2,351,572Change (%) 34.7 19.7 60.4 42.9 18.2 35.2 12.7 -11.5 39.9 11.0EBITDA -21,861 -27,148 36,874 50,571 -81,757 17,903 56,235 53,889 38,436 46,270Change (%) nm nm 406.3 207.6 nm nm 52.5 6.6 12.6 20.4% of Sales -4.7 -6.4 6.3 7.8 -15.0 3.1 8.5 9.4 1.8 2.0Depreciation 4,901 4,600 4,667 4,681 4,801 4,950 5,245 5,564 18,849 20,560Interest 3,349 4,532 5,174 4,941 5,205 5,215 5,200 5,000 17,996 20,619Other Income 4,492 3,987 4,389 4,382 3,395 4,991 3,707 2,308 17,250 14,402PBT -25,619 -32,293 31,422 45,331 -88,368 12,729 49,497 45,634 18,842 19,493Tax 0 0 26 5,703 0 2,546 9,899 -6,013 5,729 6,433Tax rate (%) 0.0 0.0 0.1 12.6 0.0 20.0 20.0 -13.2 30.4 33.0PAT -25,619 -32,293 31,396 39,628 -88,368 10,183 39,598 51,646 13,113 13,060Change (%) nm nm 1,575.5 323.8 nm nm 26.1 30.3 -15.2 -0.4Adj. PAT -25,619 -32,293 31,396 39,628 -88,368 10,183 39,598 51,646 13,113 13,060Adj. EPS -35.4 -44.7 43.4 54.8 -122.2 14.1 54.8 71.4 18.1 18.1Key Assumption (INR b)Gross under recovery 103 49 76 98 116 93 91 93 326 393Upstream sharing 34 16 36 43 37 35 41 43 130 156Govt. sharing 35 0 70 92 0 58 90 90 197 237Net Under/(Over) recovery 34 32 -29 -36 80 0 -40 -40 0 0As a % of Gross 32.6 66.3 nm nm 68.5 0.1 nm nm 0.0 nmE: MOSL EstimatesOctober 2012C–132

BSE SensexS&P CNX18,763 5,703BloombergCAIR INEquity Shares (m) 1,907.452 Week Range (INR) 401/2581,6,12 Rel Perf (%) -9/-12/4Mcap (INR b) 630.9Mcap (USD b) 12.0CMP: INR331September 2012 Results PreviewSector: Oil & GasCairn IndiaNeutralYear Net Sales PAT Adj. EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) BOE (1P)EBITDA03/11A 102,779 63,343 33.3 502.6 - - 17.1 17.9 18.5 -03/12A 131,130 92,929 48.7 46.3 6.8 1.3 21.0 20.3 16.2 5.303/13E 188,419 122,387 64.2 31.7 5.2 1.1 23.1 23.9 12.7 3.503/14E 184,280 102,970 54.0 -15.9 6.1 1.0 16.7 18.5 11.5 3.4*Consolidated• We expect Cairn India to report net sales of INR48.7b (v/s INR44.4b in 1QFY13), led by higher average productionat its Rajasthan block. We estimate EBITDA at INR37.6b v/s INR21b in 2QFY12 and INR35b in 1QFY13.• We estimate gross oil sales of 173kbpd from Rajasthan field and total net sales of 131kboepd (v/s 99.2kboepd in2QFY12 and 127kboepd in 1QFY13).• We expect Other income to increase led by higher cash balance. We estimate forex loss of INR2.7b v/s gain ofINR8.7b in 1QFY13 due to ~4% QoQ rupee appreciation v/s 10% depreciation in 1QFY13.• The company's near-term focus areas are: (1) debottlenecking of its pipeline, (2) production ramp-up, (3)approvals on further exploration in Rajasthan, and (4) maiden dividend.• We model in Brent crude price of USD110/105/105bbl in FY13/14/15 and long-term price of USD90/bbl, and takea quality discount for Cairn India of 10.5% in FY13 and 12% long-term. We have assumed FY13 tax rate of 9% atthe upper end of management guidance of 5-9%.• Key things to watch out for: (a) Net realization, (b) Forex fluctuations.• The stock currently trades at 5.2x FY13E EPS of INR64.2. Maintain Neutral.Quarterly Performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 37,127 26,522 30,968 36,513 44,400 48,725 47,238 48,055 131,130 188,419Change (%) 341.7 -1.3 0.0 -0.1 19.6 83.7 52.5 31.6 27.6 43.7EBITDA 31,748 21,040 25,456 29,812 34,921 37,609 36,028 37,075 108,056 145,633D,D & A (inc. w/off) 3,647 3,531 5,550 4,663 4,726 4,963 6,450 7,196 17,391 23,335Interest 446 1,228 240 305 295 50 0 0 2,220 345Other Income (Net) 528 620 1,124 923 964 1,476 1,597 1,809 3,194 5,846Forex Fluctuations -8 5,310 3,015 -2,170 8,663 -2,752 0 0 6,148 5,910Exceptional items 13,552 13,552 0PBT 28,175 22,211 23,803 23,598 39,528 31,319 31,175 31,688 97,787 133,710Tax 909 1,029 1,184 1,735 1,271 3,011 2,806 4,236 4,857 11,323Tax rate* (%) 3.2 6.1 5.7 6.7 4.1 8.8 9.0 13.4 5.3 8.9PAT 27,266 7,630 22,619 21,862 38,257 28,308 28,369 27,452 79,378 122,387YoY Change (%) 868.9 -51.9 12.5 -11.0 40.3 271.0 25.4 25.6 25.3 54.2EPS 14.3 4.0 11.9 11.5 20.1 14.8 14.9 14.4 41.6 64.2Key Assumptions and Cain's share in production (kboepd)Exchange rate (INR/USD) 44.7 45.8 51.0 50.2 54.2 55.5 54.0 54.0 47.9 54.4Brent Price (USD/bbl) 116.8 112.9 109.3 118.8 108.7 110.2 110.0 111.1 114.5 110.0Ravva and Cambay Prodn. 12.1 11.5 11.4 10.9 10.2 10.2 10.2 10.2 11.5 10.2Rajasthan Production 87.6 87.7 87.6 96.3 117.0 121.1 122.5 123.8 89.8 121.1Total 99.6 99.2 99.0 107.3 127.2 131.3 132.7 134.0 101.3 131.3E: MOSL Estimates; * Excluding forex fluctuations, includes MAT credit.October 2012C–133

BSE SensexS&P CNX18,763 5,703BloombergMRL INEquity Shares (m) 149.052 Week Range (INR) 206/1171,6,12 Rel Perf (%) -10/-25/-51Mcap (INR b) 19.3Mcap (USD b) 0.4CMP: INR129September 2012 Results PreviewSector: Oil & GasChennai Petroleum CorporationBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE Div EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Yld (%) EBITDA03/11A 331,406 5,115 34.3 -15.2 - - 14.2 12.2 8.1 -03/12A 407,962 619 4.2 -87.9 31.1 0.51 1.6 1.0 1.3 50.903/13E 520,945 2,053 13.8 231.9 9.4 0.49 5.3 7.2 3.4 9.803/14E 510,725 5,146 34.5 150.7 3.7 0.45 12.5 11.4 7.7 5.3• We expect CPCL to report 2QFY13 PAT of INR2.9b v/s INR732m in 2QFY12 and loss of INR9.7b in 1QFY13.• EBITDA is expected to be INR4.5b against EBITDA loss of INR7.8b in 1QFY13. The turnaround is led by positiveGRM helped by crude inventory gains. Regional benchmark Reuters Singapore GRM is up 36% QoQ to USD9.1/bbl from USD6.7/bbl.• On the operational front, we expect refinery throughput at 2mmt (down 21% QoQ and 23% YoY) due to planned75-day shutdown for tie-up of revamped CDU/VDU units which will increase its refining capacity by 0.6mmt.• We expect refining margins to remain subdued as the global operating rates (ex US) are likely to remain low ledby lower demand (particularly in Europe), commissioning of new refineries and delay in capacity closures(protectionist policies by European governments).• Key things to watch out for: (a) GRM, (b) Forex fluctuations, (c) Inventory changes.• For CPCL we model in GRM of USD4.7/bbl for FY13 and USD5.5/bbl for FY14. The stock trades at FY14E P/E of 3.7xand EV/EBITDA of 5.3x. Maintain Buy.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 98,953 94,231 111,509 103,270 110,379 100,501 153,688 156,377 407,962 520,945Change (%) 55.6 16.0 33.6 0.2 11.5 6.7 37.8 51.4 23.1 27.7EBITDA 642 -2,102 619 2,239 -7,848 4,499 6,895 5,764 1,398 9,311% of Sales 0.6 -2.2 0.6 2.2 -7.1 4.5 4.5 3.7 0.3 1.8% Change 255.6 nm -82.2 -61.5 nm nm 1,014.3 157.4 -88.4 565.9Depreciation 913 918 910 913 894 950 980 1,096 3,654 3,919Interest 587 93 956 858 1,093 1,095 1,100 1,135 2,494 4,423Other Income 42 110 309 2,707 60 1,350 480 480 3,168 2,370PBT -816 -3,002 -939 3,175 -9,774 3,804 5,295 4,013 -1,582 3,338Tax -265 -3,734 -305 2,103 -85 842 1,173 -929 -2,201 1,002Rate (%) nm nm 32.5 66.2 0.9 22.1 22.1 -23.1 139.1 30.0PAT -551 732 -634 1,072 -9,690 2,962 4,122 4,942 619 2,337Change (%) nm -25.1 nm -65.9 nm 304.7 nm 361.1 -87.9 277.8EPS -3.7 4.9 -4.3 7.2 -65.0 19.9 27.7 33.2 4.2 15.7Key AssumptionsGRM (USD/bbl) 2.4 0.3 3.4 4.5 -2.2 7.1 7.1 6.7 2.6 4.7Throughput (mmt) 2.5 2.6 2.7 2.7 2.5 2.0 3.2 3.2 10.6 10.9E: MOSL EstimatesOctober 2012C–134

BSE SensexS&P CNX18,763 5,703BloombergGAIL INEquity Shares (m) 1,268.552 Week Range (INR) 445/3031,6,12 Rel Perf (%) -2/-5/-23Mcap (INR b) 485.9Mcap (USD b) 9.2CMP: INR383September 2012 Results PreviewSector: Oil & GasGAIL (India)NeutralYear Net Sales Adj. PAT EPS EPS *P/E *P/BV RoE RoCE *EV/ *EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 324,586 35,610 28.7 16.0 - - 19.8 24.8 - -03/12A 402,807 36,538 28.8 0.4 10.6 1.8 17.9 21.0 1.1 7.203/13E 445,447 39,363 31.0 7.7 9.8 1.6 17.2 18.6 1.1 7.203/14E 489,873 40,771 32.1 3.6 9.5 1.4 16.0 16.2 1.1 7.1*Adjustment for investments• We expect GAIL to report adjusted PAT of INR8.4b (down 24%YoY and 26% QoQ).• Subsidy sharing assumption: For FY13, we model upstream sharing at 40%, similar to FY12. We also model GAIL'sshare at INR7.9b in 2QFY13 v/s INR5.7b in 2QFY12 and INR7b in 1QFY13.• Segmental EBIT (pre-subsidy) is sharply down 20% QoQ primarily due to lower LPG realizations (down 30%QoQ) and lower gas trading EBIT (1Q included one-time gains). This is partly compensated by higher petchemEBIT (volumes up 59% QoQ). We model gas transmission volumes at 109mmscmd v/s 119 in 2QFY12 and 110 in1QFY13.• Key things to watch out for: a) Subsidy sharing, b) Transmission volumes.• Adjusted for investments, the stock trades at 9.5x FY14E EPS of INR32.1. Though we like the management'sstrategy to build network to enable gas sourcing, we remain Neutral due to medium-term earnings concern ledby likely under-utilization of its new network on account of headwinds to incremental gas availability.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 88,674 96,990 112,598 104,546 110,886 111,932 113,224 109,405 402,807 445,447Change (%) 25.0 19.7 34.6 17.6 25.0 15.4 0.6 4.6 24.1 10.6EBITDA 15,556 16,482 17,605 7,338 18,991 13,935 17,409 15,214 56,981 65,549% of Net Sales 17.5 17.0 15.6 7.0 17.1 12.4 15.4 13.9 14.1 14.7Change (%) 8.4 15.0 33.9 -42.3 22.1 -15.5 -1.1 107.3 4.5 15.0Depreciation 1,782 2,008 1,975 2,143 2,169 2,185 2,223 2,276 7,907 8,853Interest 208 226 207 523 588 590 598 307 1,165 2,082Other Income 863 1,434 557 2,637 612 1,008 1,350 39 5,491 3,008PBT 14,429 15,682 15,980 7,309 16,846 12,168 15,938 12,670 53,400 57,622Tax 4,582 4,738 5,066 2,476 5,508 3,804 4,997 3,950 16,862 18,259Rate (%) 31.8 30.2 31.7 33.9 32.7 31.3 31.4 31.2 31.6 31.7PAT 9,847 10,944 10,914 4,833 11,338 8,364 10,942 8,720 36,538 39,363Change (%) 11.0 18.5 12.8 -38.3 15.1 -23.6 0.3 80.4 2.6 7.7Key AssumptionsGas Trans. volume (mmsmd) 117 119 119 116 110 109 114 124 118 114Petchem sales ('000MT) 88 129 113 118 66 105 110 113 448 394LPG realization (USD/MT) 958 898 819 977 1,015 710 900 800 912 856Segmental EBIT Breakup (INRm)Natural Gas transmission 6,520 5,562 6,208 3,248 5,673 5,487 5,740 5,527 21,539 22,427LPG transmission 690 722 775 533 709 686 690 692 2,720 2,777Natural Gas Trading 3,131 2,866 3,230 1,659 4,956 2,978 2,978 2,908 10,886 13,821Petrochemicals 2,434 4,041 3,875 4,309 1,958 3,754 3,894 3,973 14,658 13,579LPG & Liq.HC (pre-subsidy) 9,104 9,187 8,416 10,663 11,373 6,851 10,599 8,683 37,371 37,506Total 21,544 21,560 22,068 20,037 24,751 19,755 23,900 21,783 85,209 90,189Less: Subsidy -6,819 -5,666 -5,361 -13,980 -7,000 -7,887 -8,616 -9,354 -31,826 -32,858Total 14,725 15,894 16,707 6,057 17,751 11,868 15,284 12,429 53,383 57,332E: MOSL EstimatesOctober 2012C–135

BSE SensexS&P CNX18,763 5,703BloombergGUJS INEquity Shares (m) 562.752 Week Range (INR) 107/621,6,12 Rel Perf (%) -6/-2/-35Mcap (INR b) 45.4Mcap (USD b) 0.9CMP: INR81September 2012 Results PreviewSector: Oil & GasGujarat State PetronetNeutralYear Net Sales Adj. PAT Adj. EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (x) (x) (%) (%) Sales EBITDA03/11A 10,391 5,064 9.0 22.3 - - 28.4 25.6 - -03/12A 11,153 5,221 9.3 3.1 8.7 1.8 23.4 22.8 4.9 5.403/13E 9,676 4,350 7.7 -16.7 10.4 1.6 16.4 17.9 5.4 5.903/14E 9,278 4,303 7.6 -1.1 10.5 1.4 14.3 15.9 5.3 5.8*Our EPS numbers does not factor in any provision towards "Social Contribution Fund"• We expect GSPL to report net sales of INR2.4b and PAT of INR1.1b (down 16% YoY and 13% QoQ).• We build lower gas transmission volumes at 30mmscmd in 2QFY13 (v/s 35.2mmscmd in 2QFY12 and 31.1mmscmdin 1QFY13) led by decline in KG-D6 production.• The recent tariff approval by PNGRB for GSPL's high pressure pipeline indicates 12.5% tariff cut for GSPL,however was above our and consensus estimate. Further, as against our earlier understanding of retrospectivelikely impact of (a) tariff change and (b) return the cost of system use gas (SUG), including unaccounted gas;management indicated that they are unlikely to have to refund. Given the non-clarity on this issue we do notbuild any impact in our estimates and would await for more clarity.• GSPL has won all 3 bids for cross country pipelines and in JV with OMC's is currently building the same. However,concerns remain on the gas availability for these pipelines and are likely to remain underutilized in the initialyears of operation.• Key things to watch out for: a) Transmission volumes, b) Clarity on the recent tariff order by PNGRB.• We build gas transmission volumes of 30mmscmd in FY13 and 33mmscmd in FY14. We model average tariff atINR850/mscm in FY13 and INR800/mscm in FY14. The stock trades at 10.5x FY14E EPS of INR7.6. Neutral.Quarterly Performance(INR Milllion)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 2,843 2,808 2,739 2,763 2,676 2,426 2,387 2,188 11,153 9,676Change (%) 12.9 11.0 -1.9 8.3 -5.9 -13.6 -12.8 -20.8 7.3 -13.2EBITDA 2,619 2,584 2,518 2,520 2,465 2,218 2,181 1,988 10,241 8,852% of Net Sales 92.1 92.0 91.9 91.2 92.1 91.4 91.4 90.9 91.8 91.5% Change 10.0 11.3 -3.9 9.7 -5.9 -14.2 -13.4 -21.1 6.5 -13.6Depreciation 453 440 460 466 439 475 478 509 1,819 1,902Interest 324 337 325 316 317 320 324 336 1,302 1,297Other Income 112 143 175 165 176 175 175 353 593 878PBT 1,954 1,949 1,907 1,902 1,884 1,598 1,554 1,495 7,714 6,532Tax 581 656 646 610 636 513 499 534 2,493 2,182Rate (%) 29.7 33.7 33.9 32.0 33.7 32.1 32.1 35.7 32.3 33.4PAT 1,374 1,293 1,261 1,293 1,248 1,085 1,055 962 5,221 4,350Change (%) 31 41 -21 -14 -9 -16 -16 -26 3 -17EPS (INR) 2.4 2.3 2.2 2.3 2.2 1.9 1.9 1.7 9.3 7.7Transmission Vol. (mmscmd) 36.8 35.2 32.8 31.1 31.1 30.0 29.5 29.4 34.0 30.0Implied tariff (INR/mscm) 813 835 899 956 903 850 850 797 872 850E: MOSL EstimatesOctober 2012C–136

BSE SensexS&P CNX18,763 5,703BloombergHPCL INEquity Shares (m) 339.052 Week Range (INR) 385/2391,6,12 Rel Perf (%) -8/0/-29Mcap (INR b) 104.2Mcap (USD b) 2.0CMP: INR307September 2012 Results PreviewSector: Oil & GasHPCLBuyYear Sales Adj. PAT Adj. EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 1,309,342 15,390 45.4 18.3 - - 12.8 8.6 - -03/12A 1,781,392 9,115 26.9 -40.8 11.4 0.8 7.1 6.7 0.2 9.603/13E 1,898,362 8,292 24.5 -8.7 12.5 0.8 6.2 6.2 0.1 7.903/14E 2,007,946 9,295 27.4 11.7 11.2 0.7 6.6 6.6 0.1 6.4Standalone• Similar to prior quarters, profitability of OMCs (BPCL, HPCL, IOC) would depend more on subsidy sharing, whichis ad hoc, than on business fundamentals. Government subsidy compensation typically comes with a delay.• OMCs' 2QFY13 results would be benefited by (a) inventory gains as crude price are higher USD14/bbl at thequarter-end, and (b) forex gain as rupee has appreciated by ~4%.• 2QFY13 under-recoveries are down 18% QoQ, despite higher crude price and average exchange rate, primarilydue to lower LPG prices and diesel price hike effected on 13 September 2012.• For subsidy sharing, we model OMCs' sharing at nil/8%, upstream sharing at 40%/40% and government sharingat 60%/52% in FY13/FY14. We model nil under recovery sharing for 2FY13.• We expect HPCL to report PAT of INR11.4b v/s loss of INR33.6b in 2QFY12 and INR92.5b in 1QFY13.• Key things to watch out for: (a) Subsidy sharing, (b) Forex fluctuations and (c) GRM.• HPCL trades at 12.5x FY13E EPS and 0.8x FY13E BV. We have a Buy rating due to attractive valuations.Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 407,980 370,302 479,174 523,936 440,765 496,111 513,057 448,428 1,781,392 1,898,362Change (%) 39.6 31.6 41.3 32.1 8.0 34.0 7.1 -14.4 36.1 6.6EBITDA -26,873 -29,437 35,725 54,667 -88,759 16,697 52,817 50,319 34,082 31,073% of Net Sales -6.6 -7.9 7.5 10.4 -20.1 3.4 10.3 11.2 1.9 2Change (%) 66.3 nm 470.1 176.8 nm nm 47.8 -8.0 3.0 -215.6Depreciation 3,886 4,150 4,368 4,726 4,544 4,650 4,755 4,995 17,129 18,944Interest 2,641 3,028 6,982 4,326 5,492 4,160 3,520 3,040 16,977 16,212Other income 2,585 2,971 2,876 3,790 6,337 4,925 1,925 1,291 12,222 14,478Exceptional Item 12 0 -17 -29 0 0 0 -5 -29PBT -30,803 -33,644 27,252 49,387 -92,488 12,812 46,467 43,574 12,193 10,366Tax 0 0 0 3,077 0 1,409 5,111 -4,448 3,077 2,073Rate (%) 0.0 0.0 0.0 6.2 0.0 11.0 11.0 nm 25.2 20.0PAT -30,803 -33,644 27,252 46,310 -92,488 11,403 41,356 48,022 9,115 8,292Change (%) 63.5 nm 1,191.6 312.5 nm nm 51.8 3.7 -40.8 -9.0Adj. EPS -90.9 -99.2 80.4 136.6 -272.8 33.6 122.0 141.7 26.9 24.5Key Assumptions (INR b)Gross under recovery 95 47 71 91 107 86 84 85 304 362Upstream sharing 32 16 34 40 34 33 38 40 121 144Oil Bonds/Cash subsidy 33 0 66 85 0 53 83 82 183 218Net Under recovery 31 31 -28 -34 73 0 -36 -36 0 0Net Sharing (%) 32 67 nm nm 69 nm nm nm nm nmE: MOSL EstimatesOctober 2012C–137

BSE SensexS&P CNX18,763 5,703BloombergIOCL INEquity Shares (m) 2,428.052 Week Range (INR) 323/2391,6,12 Rel Perf (%) -5/-13/-34Mcap (INR b) 608.3Mcap (USD b) 11.5CMP: INR251September 2012 Results PreviewSector: Oil & GasIndian Oil CorporationBuyYear Net Sales Adj. PAT Adj. EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR b) (INR b) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 3,081 78.3 32.3 -26.9 - - 14.2 11.2 - -03/12A 4,072 119.3 49.2 52.4 5.1 1.0 20.2 12.9 0.3 7.203/13E 4,261 59.4 24.4 -50.3 10.2 0.9 9.5 9.4 0.3 8.003/14E 4,425 73.6 30.3 24.0 8.3 0.9 11.0 11.1 0.3 6.3*Consolidated• Similar to prior quarters, profitability of OMCs (BPCL, HPCL, IOC) would depend more on subsidy sharing, whichis ad hoc, than on business fundamentals. Government subsidy compensation typically comes with a delay.• OMCs' 2QFY13 results would be benefited by (a) inventory gains as crude price are higher USD14/bbl at thequarter-end, and (b) forex gain as rupee has appreciated by ~4%.• 2QFY13 under-recoveries are down 18% QoQ, despite higher crude price and average exchange rate, primarilydue to lower LPG prices and diesel price hike effected on 13 September 2012.• For subsidy sharing, we model OMCs' sharing at nil/8%, upstream sharing at 40%/40% and government sharingat 60%/52% in FY13/FY14. We model nil under recovery sharing for 2FY13.• We expect IOCL to report PAT of INR41.6b v/s loss of INR75b in 2QFY12 and INR224b in 1QFY13. Reported PAT inFY12 was impacted due to one-time provision of INR77.1b towards entry tax for its Mathura refinery in UP.• Key things to watch out for: (a) Subsidy sharing, (b) Forex fluctuations, and (c) GRM.• IOC trades attractively at 0.9x FY13E book value and 10.2x FY13E EPS. Buy.Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 1,007,239 891,456 1,152,084 1,277,355 966,028 1,115,444 1,199,679 1,257,876 4,328,133 4,539,026Change (%) 40.5 16.1 43.4 30.0 -4.1 25.1 4.1 -1.5 32.3 4.9EBITDA -24,225 -53,618 107,247 140,402 -202,360 62,858 149,549 143,184 169,807 153,230% of Net Sales -2.4 -6.0 9.3 11.0 -20.9 5.6 12.5 11.4 3.9 3.4% Change nm nm 293.2 163.7 nm nm 39.4 2.0 45.7 -9.8Depreciation 12,235 12,638 12,839 10,966 12,775 13,500 13,700 14,099 48,678 54,074Interest 10,376 14,840 15,652 15,038 18,491 15,930 14,813 14,672 55,905 63,906Other Income 9,649 6,241 7,810 25,699 9,117 10,795 10,433 7,209 49,398 37,554PBT -37,187 -74,855 86,566 140,098 -224,510 44,223 131,469 121,622 114,621 72,805Tax 0 0 0 -2,003 0 2,653 10,518 1,390 -2,003 14,561Rate (%) nm nm nm -1.4 nm 6.0 8.0 1.1 -1.7 20.0Adj. PAT -37,187 -74,856 86,566 142,101 -224,510 41,570 120,952 120,232 116,624 58,245Change (%) nm nm 429.5 263.9 nm nm 39.7 -15.4 56.6 -50.1Extraordinary Items -61,682 -15,396 0 0 0 0 -77,078 0PAT -37,187 -74,856 24,884 126,704 -224,510 41,570 120,952 120,232 39,546 58,245Adj. EPS -15.3 -30.8 35.7 58.5 -92.5 17.1 49.8 49.5 48.0 24.0Key Assumptions (INR b)Gross under recovery 238 118 178 222 255 211 205 208 755 880Upstream sharing 79 39 83 98 80 80 92 97 300 350Govt. sharing 82 0 164 209 0 131 201 198 455 530Net Under recovery 77 78 -70 -85 175 0 -87 -88 0 0As a % of Gross 32.2 66.7 nm nm 68.5 0.1 nm nm 0.0 0.0E: MOSL EstimatesOctober 2012C–138

BSE SensexS&P CNX18,763 5,703BloombergIGL INEquity Shares (m) 140.052 Week Range (INR) 439/1701,6,12 Rel Perf (%) -1/-38/-51Mcap (INR b) 37.1Mcap (USD b) 0.7CMP: INR265September 2012 Results PreviewSector: Oil & GasIndraprastha GasUnder ReviewYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 17,437 2,594 18.5 20.4 - - 28.4 35.7 - -03/12A 25,151 3,072 21.9 18.4 12.1 3.0 27.5 33.2 1.6 6.403/13E 35,309 3,540 25.3 15.2 10.5 2.6 26.4 32.2 1.2 5.503/14E 43,200 3,916 28.0 10.6 9.5 2.2 24.7 29.5 0.9 4.8• We expect IGL to report 2QFY13 volume of 3.72mmscmd and PAT of INR866m (up 12% YoY and 2% QoQ).• We expect 2QFY13 CNG volumes to grow 8% YoY to 2.8mmscmd and PNG volumes to grow 24% YoY to 0.9mmscmd.• Historically, owing to favorable economics vis-à-vis alternative fuels, IGL has been able to pass on any hike in itsgas cost thereby insulating any impact on its EBITDA margin. But with absence of KG-D6 gas supply, there ispressure on company's margin as it is sourcing more expensive RLNG to meet demand.• Key things to watch out for: (a) EBITDA margin, (b) Sales volume.• We model in total volumes of 3.9/4.5mmscmd in FY13/FY14. The stock trades at 10.5x FY13E EPS of INR25.3.• Post the High Court quashing PNGRB's tariff cut order on IGL, PNGRB has now approached Supreme Court andthe hearing is still on. Given the uncertainty in the likely judgment and impact on the profitability of thecompany, we keep our rating Under Review.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 5,364 5,969 6,615 7,203 7,602 8,530 9,178 9,999 25,151 35,309Change (%) 60.1 34.1 45.5 41.4 41.7 42.9 38.7 38.8 44.2 40.4EBITDA 1,573 1,574 1,488 1,685 1,793 1,861 1,899 1,977 6,320 7,529EBITDA (INR/scm) 5.6 5.1 4.7 5.3 5.6 5.4 5.2 5.2 5.2 5.3% of Net Sales 29.3 26.4 22.5 23.4 23.6 21.8 20.7 19.8 25.1 21.3% Change 47.4 27.9 17.3 24.2 13.9 18.3 27.6 17.3 28.4 19.1Depreciation 322 344 368 397 427 445 457 464 1,432 1,793Interest 90 118 135 136 155 158 159 177 479 650Other Income 24 21 31 27 36 39 45 51 103 171PBT 1,185 1,132 1,016 1,179 1,247 1,297 1,327 1,386 4,512 5,257Tax 384 360 324 372 396 431 441 449 1,440 1,717Rate (%) 32.4 31.8 31.9 31.5 31.8 33.2 33.2 32.4 31.9 32.7PAT 801 772 692 808 850 866 886 937 3,072 3,540PAT (Rs/scm) 2.8 2.5 2.2 2.5 2.6 2.5 2.4 2.5 2.5 2.5Change (%) 40.1 16.5 2.9 16.8 6.2 12.2 28.2 16.0 18.3 15.2EPS (INR) 5.7 5.5 4.9 5.8 6.1 6.2 6.3 6.7 21.9 25.3Gas Volumes (mmscmd)CNG 2.38 2.60 2.64 2.66 2.67 2.80 2.97 3.19 2.57 2.91PNG 0.71 0.74 0.77 0.86 0.88 0.92 0.98 1.06 0.77 0.96Total 3.10 3.34 3.41 3.52 3.55 3.72 3.94 4.25 3.34 3.87E: MOSL EstimatesOctober 2012C–139

BSE SensexS&P CNX18,763 5,703BloombergMRPL INEquity Shares (m) 1,752.652 Week Range (INR) 75/501,6,12 Rel Perf (%) -12/-7/-17Mcap (INR b) 106.6Mcap (USD b) 2.0CMP: INR61September 2012 Results PreviewSector: Oil & GasMRPLNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 389,567 11,766 6.7 11.2 - - 19.4 23.7 - -03/12A 537,703 9,086 5.2 -22.8 11.7 1.5 13.2 19.2 0.3 6.203/13E 659,992 5,026 2.9 -44.7 21.2 1.4 6.8 10.3 0.2 7.703/14E 648,920 14,841 8.5 195.3 7.2 1.2 18.2 16.8 0.2 4.4• We expect MRPL to report 2QFY13 PAT of INR8.4b (v/s INR241m in 2QFY12 and net loss of INR15b in 1QFY13).• EBITDA is expected at INR9.3b (v/s INR754m in 2QFY12 and EBITDA loss of INR13b in 1QFY12). The QoQ turnaroundto profit is led by positive GRM helped by crude inventory gains. Regional benchmark Reuters Singapore GRMis up 36% QoQ to USD9.1/bbl from USD6.7/bbl.• On the operational front, we expect refinery throughput at 3.5mmt (up 21% QoQ and 14%YoY), helped by noshutdowns and start of Phase 2 CDU by end-September 2012.• Key things to watch out for: a) GRM, b) Forex fluctuations, c) Inventory changes.• We expect refining margins to remain subdued as the global operating rates (ex US) are likely to remain low ledby lower demand (particularly in Europe), commissioning of new refineries and delay in capacity closures(protectionist policies by European governments).• For MRPL, we model inn GRM of USD4/bbl for FY13 and USD7.3/bbl for FY14. The stock trades at FY14E P/E of 7.2xand EV/EBITDA of 4.4x. Maintain Neutral.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 133,691 116,657 129,308 158,384 128,099 168,502 175,883 187,438 538,040 659,922Change (%) 69.9 39.6 25.3 27.6 -4.2 44.4 36.0 18.3 38.1 22.7EBITDA 2,225 754 3,011 7,821 -12,966 9,306 8,015 8,538 13,811 12,893% of Net Sales 1.7 0.6 2.3 4.9 nm 5.5 4.6 4.6 2.6 2.0% Change 67 -80 -45 -8 nm 1,135 166 9 -27.2 -6.7Depreciation -952 -965 -1,174 -1,248 -1,375 -1,380 -1,382 -1,382 -4,339 -5,519Interest -270 -999 -423 -375 -1,102 -1,110 -1,113 -633 -2,067 -3,958Other Income 1,352 1,522 248 2,697 495 1,694 800 881 5,819 3,869Exceptional items -11 8 47 -22 0 0 0 0 22 0PBT 2,366 304 1,615 8,918 -14,948 8,509 6,320 7,404 13,203 7,285Tax -639 -63 -518 -2,897 -257 -148 -126 -1,727 -4,116 -2,258Rate (%) nm -20.6 -32.0 -32.5 nm -1.7 -2.0 -23.3 -31.2 -31.0PAT 1,727 241 1,098 6,021 -15,206 8,361 6,194 5,677 9,086 5,026Change (%) 506.8 -91.5 -65.0 8.9 nm 3,365.2 464.3 -5.7 -22.9 -44.7EPS (INR) 1.0 0.1 0.6 3.4 -8.7 4.8 3.5 3.2 5.2 2.9GRM (USD/bbl) 3.0 1.7 3.8 7.1 -4.2 7.5 6.3 6.4 3.9 4.0Throughput (mmt) 3.3 3.1 3.0 3.4 2.9 3.5 3.8 4.0 12.8 14.2E: MOSL EstimatesOctober 2012C–140

BSE SensexS&P CNX18,763 5,703BloombergOINL INEquity Shares (m) 601.152 Week Range (INR) 552/4311,6,12 Rel Perf (%) -6/-10/-22Mcap (INR b) 294.3Mcap (USD b) 5.6CMP: INR490September 2012 Results PreviewSector: Oil & GasOil IndiaBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV (USD)/ EV/End (INR b) (INR b) (INR) Gr (%) (X) (X) (%) (%) BoE EBITDA03/11A 83,034 28,872 48.0 10.6 - - 19.7 27.3 - -03/12A 97,741 34,469 57.3 19.4 8.5 1.7 20.7 27.7 7.6 3.903/13E 102,845 35,259 58.7 2.3 8.3 1.5 18.7 25.8 6.7 3.703/14E 113,194 38,867 64.7 10.2 7.6 1.3 18.4 25.7 6.9 3.3• We expect Oil India to report 2QFY13 PAT of INR9.4b (v/s INR11.4b in 2QFY12 and INR9.3b in 1QFY13). Weestimate EBITDA at INR12.7b (down 22% YoY and up 16% QoQ).• We estimate gross realization at USD110.4/bbl v/s USD112.5 in 2QFY12 and USD109.8 in 1QFY13 and net realizationat USD55.5/bbl v/s USD86.3 in 2QFY12 and USD53.9 in 1QFY13.• Subsidy sharing assumption: For FY13, we model upstream sharing at 40% (similar to FY12), and Oil India's shareat 13.2% of upstream. We model Oil India to share INR21.2b (USD55/bbl) in 2QFY13.• Key things to watch out for: (a) Subsidy sharing, (b) DD&A charges, (c) Oil & Gas production volumes.• Our Brent price assumption is USD110/105/100/90bbl for FY13/14/15/long-term and we model upstream sharingat 40% in FY13/14 and 33% beyond that.• The stock trades at 7.6x FY14E EPS of INR64.7. We remain positive on Oil India due to its strong operationalfoothold: (1) steady production growth, (2) high share of oil in its reserves (55% in 1P and 62% in 2P), and (3)attractive valuations (>50% discount to its global peers on EV/BOE, 1P basis). Buy.Quarterly Performance (Standalone)(INR Billion)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 22.9 32.7 25.0 17.2 23.3 25.9 27.1 26.5 97.7 102.8Change (%) 50.2 37.8 4.5 -14.8 2.0 -20.8 8.5 54.4 0.0 5.2EBITDA 12.5 16.2 13.3 4.8 11.0 12.7 13.5 12.4 46.9 49.6% of Net Sales 54.5 49.5 53.5 28.0 47.0 49.0 49.9 46.9 47.9 48.2Change (%) 67.8 19.9 -3.4 -50.0 -12.2 -21.7 1.2 158.0 5.5 352.4D,D&A 3.6 5.9 2.9 2.8 2.0 3.9 4.1 4.2 15.3 14.2Interest 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0OI (incl. Oper. other inc) 3.8 6.8 4.7 4.2 4.8 5.1 4.9 5.5 19.5 20.3PBT 12.6 17.1 15.1 6.2 13.8 13.8 14.3 13.8 51.0 55.7Tax 4.1 5.7 5.0 1.7 4.5 4.4 4.7 4.5 16.5 18.2Rate (%) 32.4 33.5 33.0 28.2 32.5 32.1 33.0 33.0 32.4 32.6PAT 8.5 11.4 10.1 4.4 9.3 9.4 9.6 9.2 34.5 37.5Change (%) 69.5 24.3 1.2 -20.9 9.5 -17.4 -5.6 107.3 15.6 303.2% of Net Sales 37.1 34.8 40.6 25.9 39.9 36.3 35.3 34.7 35.3 36.5Adj. PAT 8.5 11.4 10.1 4.4 9.3 9.4 9.6 9.2 34.5 37.5Key Assumptions (USD/bbl)Exchange rate (INR/USD) 44.7 45.8 51.0 50.2 54.2 55.5 54.0 54.0 47.9 54.4Gross Oil Realization 116.3 112.5 110.1 119.7 109.8 110.4 110.2 111.3 114.7 110.4Subsidy 56.8 26.2 53.1 80.8 55.9 54.9 51.3 50.1 54.2 53.1Net Oil Realization 59.6 86.3 57.0 38.9 53.9 55.5 58.9 61.2 60.4 57.4Subsidy (INR b) 17.8 8.4 18.5 28.7 20.2 21.2 19.7 19.1 73.5 80.1E: MOSL EstimatesOctober 2012C–141

BSE SensexS&P CNX18,763 5,703BloombergONGC INEquity Shares (m) 8,555.552 Week Range (INR) 304/2401,6,12 Rel Perf (%) -7/-1/-7Mcap (INR b) 2,399.0Mcap (USD b) 45.5CMP: INR280September 2012 Results PreviewSector: Oil & GasONGCBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR b) (INR b) (INR) Gr. (%) (X) (X) (%) (%) BoE EBITDA03/11A 1,176 210 24.5 8.1 - - 19.5 18.8 6.9 -03/12A 1,464 260 30.4 24.1 9.2 1.8 20.7 19.4 6.6 3.703/13E 1,599 255 29.8 -1.9 9.4 1.6 17.7 16.6 5.5 3.703/14E 1,696 286 33.4 11.8 8.4 1.4 17.8 16.8 5.3 3.1*Consolidated, EV/BOE in USD on 1P basis• We expect ONGC to report 2QFY13 PAT of INR64b (v/s INR86.4b in 2QFY12 and INR60.8b in 1QFY13). We estimateEBITDA at INR119b (down 16% YoY and up 8% QoQ). YoY EBITDA decline is primarily due to lower net realizationand higher cess rate of INR4,500/MT v/s INR2,500MT in FY12.• We estimate gross realization at USD112.7/bbl v/s USD116.8 in 2QFY12 and USD109.9 in 1QFY13, and net realizationat USD53.3/bbl v/s USD83.6 in 2QFY12 and USD46.6 in 1QFY13.• Subsidy sharing assumption: For FY13, we model upstream sharing at 40% (similar to FY12), and ONGC's share at~82% of upstream. We expect ONGC to share INR119.2b (USD59.4/bbl) in 2QFY13.• Key things to watch out for: (a) Subsidy sharing, (b) DD&A charges, (c) Oil & Gas production volumes.• Key medium term earnings triggers include (a) likely production increase in FY14 led by monetization of marginalfields v/s flat production in last several years and (b) likely gas price hike in March-14. Further, likely reserveupsides from its large NELP/nomination acreage would add value over longer term.• Our Brent price assumption is USD110/105/100/90bbl for FY13/14/15/long-term and we model upstream sharingat 40% in FY13/14 and 33% beyond that.• Despite subsidy burden, RoE is at respectable level of ~18%. Stock trades at P/E of 8.4x FY14 EPs of INR33.4/sh;attractive EV/BOE of 5.3x (1P basis; >40% discount to global peers) and has an implied dividend yield of 3.5%.We value ONGC on SOTP basis at INR320/sh. Buy.Quaterly performance (Standalone)(INR Billion)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 162.0 226.2 181.2 188.2 200.8 217.7 202.9 190.4 757.6 811.8Change (%) 18.5 24.3 -2.5 22.2 24.0 -3.8 11.9 1.2 15.1 7.2EBITDA 92.7 141.6 106.6 110.6 110.4 119.4 107.1 97.6 451.4 434.5% of Net Sales 57.2 62.6 58.8 58.8 55.0 54.9 52.8 51.3 59.6 53.5D,D & A 41.2 32.8 45.3 49.1 32.0 40.6 49.2 50.2 168.4 172.0Interest 0.0 0.1 0.0 0.2 0.3 0.3 0.2 0.2 0.3 1.0Other Income 9.3 14.4 44.9 15.1 11.3 14.4 13.3 15.9 83.8 54.9PBT 60.7 123.2 106.2 76.4 89.4 92.9 70.9 63.0 366.5 316.3Tax 19.8 36.7 38.7 20.0 28.6 28.9 21.7 15.8 115.2 95.1Rate (%) 32.5 29.8 36.5 26.1 32.0 31.1 30.6 25.1 31.4 30.1PAT 40.9 86.4 67.4 56.5 60.8 64.0 49.2 47.2 251.3 221.2Adjusted PAT 40.9 86.4 46.4 56.4 60.8 64.0 49.2 47.2 230.2 221.2Change (%) 11.8 60.4 -20.2 119.4 48.4 -25.9 6.1 -16.3 32.0 -3.9Adj. EPS (INR) 4.8 10.1 5.4 6.6 7.1 7.5 5.7 5.5 26.9 25.9Key Assumptions (USD/bbl)Fx rate (INR/USD) 44.7 45.8 51.0 50.2 54.2 55.5 54.0 54.0 47.9 54.4Gross Oil Realization 121.3 116.8 111.7 121.6 109.9 112.7 112.5 113.6 117.9 112.2Subsidy 73.2 33.2 66.8 77.3 63.3 59.4 65.2 73.8 62.6 65.4Net Oil Realization 48.1 83.6 45.0 44.3 46.6 53.3 47.3 39.8 55.2 46.8Subsidy (INR b) 120.5 57.1 125.4 141.7 123.5 119.2 127.4 144.1 444.7 514.2E: MOSL EstimatesOctober 2012C–142

BSE SensexS&P CNX18,763 5,703BloombergPLNG INEquity Shares (m) 750.052 Week Range (INR) 180/1221,6,12 Rel Perf (%) -3/-13/-13Mcap (INR b) 118.3Mcap (USD b) 2.2CMP: INR158September 2012 Results PreviewSector: Oil & GasPetronet LNGBuyYear Net Sales PAT Adj. EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 131,973 6,197 8.3 53.2 - - 25.2 19.9 - -03/12A 226,959 10,575 14.1 70.7 11.2 3.4 34.1 26.6 0.6 7.803/13E 310,807 9,795 13.1 -7.4 12.1 2.8 25.1 22.4 0.5 8.103/14E 362,088 11,253 15.0 14.9 10.5 2.3 23.8 34.1 0.4 6.1• We expect Petronet to report 2QFY13 PAT of INR2.6b (largely flat YoY and QoQ). We estimate EBITDA at INR4.4b(down 2% YoY and 4% QoQ). Our lower QoQ profit estimate is primarily due to our lower marketing marginassumption.• We have built in LNG volumes at 2.8mmt in 2QFY13, higher than 2.5mmt in 1QFY13 given (1) completion ofseasonal fertilizer plant shutdown, and (2) likely uptick in spot volumes due to lower spot LNG prices. Wemodel in 10.7mmtpa volume in FY13 at Dahej, of which 7.5mmtpa would be on long-term contract, 2mmtpa on2-year contract and the rest on spot/third party basis. We model in Kochi volumes at 0.2mmtpa in 4QFY13.• We model in 5% escalation in re-gasification tariff till FY14 and flat thereafter at Dahej, and Kochi volumes at0.3/1.1mmt for FY13/14.• Key things to watch out for: (a) Spot volumes, (b) Regasification margin on spot volumes.• With no risk to near term earnings, we believe the next cycle of earnings growth would come post FY13 led by(1) volume ramp-up at Kochi, (2) second jetty at Dahej, and (3) new capacity at Dahej and Gangavaram. We buildconservative marketing margin of INR22/15/mmbtu in FY13/14 and nil thereafter.• The stock trades at 10.5x FY14E consolidated EPS of INR15. Lower spot LNG prices and the likely gas price poolingpolicy for power sector are key near-term positives for the stock. Buy.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 46,233 53,669 63,303 63,754 70,304 81,708 77,291 81,503 226,959 310,807Change (%) 83.0 75.5 74.5 0.6 0.5 0.5 0.2 0.2 72.0 36.9EBITDA 4,381 4,483 5,080 3,655 4,571 4,380 4,022 4,524 17,600 17,497% of Net Sales 9.5 8.4 8.0 5.7 6.5 5.4 5.2 5.6 7.8 5.6Change (%) 76.9 65.1 47.0 4.0 4.3 -2.3 -20.8 23.8 44.7 -0.6Depreciation 458 463 463 458 459 462 464 1,000 1,842 2,386Interest 464 458 393 342 329 365 382 839 1,657 1,915Other Income 263 201 164 796 266 295 275 268 1,424 1,104PBT 3,722 3,763 4,389 3,651 4,048 3,848 3,451 2,953 15,525 14,299Tax 1,155 1,160 1,435 1,200 1,340 1,231 1,104 829 4,950 4,504Rate (%) 31.0 30.8 32.7 32.9 33.1 32.0 32.0 28.1 31.9 31.5PAT 2,567 2,603 2,954 2,451 2,708 2,616 2,347 2,124 10,575 9,795Change (%) 130.5 98.5 72.8 18.8 5.5 0.5 -20.5 -13.4 70.7 -7.4EPS (INR) 3.4 3.5 3.9 3.3 3.6 3.5 3.1 2.8 14.1 13.1Dahej Gas Volume (TBTU) 133.4 135.1 144.9 135.0 127.2 138.4 135.9 137.0 548.4 538.6Dahej Gas Volumes (mmt) 2.7 2.7 2.9 2.7 2.5 2.8 2.7 2.7 10.9 10.7Kochi Gas Volumes (mmt) 0.2 0.0 0.2Avg. Dahej Regas (INR/mmbtu) 42.2 41.7 45.2 41.7 45.3 40.7 38.2 40.1 42.7 41.1E: MOSL EstimatesOctober 2012C–143

BSE SensexS&P CNX18,763 5,703BloombergRIL INEquity Shares (m) 3,242.552 Week Range (INR) 902/6711,6,12 Rel Perf (%) -1/6/-9Mcap (INR b) 2,713.0Mcap (USD b) 51.5CMP: INR837September 2012 Results PreviewSector: Oil & GasReliance IndustriesNeutralYear Net Sales PAT EPS P/E ADJ. EPS* Adj. P/E Adj. P/B RoE RoCE EV/End (INR b) (INR b) (INR) (X) (INR) (X) (X) (%) (%) EBITDA03/11A 2,482 203 62.0 - 68.4 - - 14.8 12.9 -03/12A 3,299 200 61.3 13.7 67.7 12.4 1.5 13.0 12.1 8.103/13E 3,682 198 61.3 13.6 67.8 12.3 1.4 11.7 11.1 9.203/14E 3,364 204 63.0 13.3 69.7 12.0 1.2 11.0 10.7 8.9*Adjusted for treasury shares• We estimate RIL to report strong 2QFY13 GRM at USD9.5/bbl v/s USD6.7/bbl in 1QFY13 helped by higher cracks inauto fuels. However, petchem profits are unlikely to increase due to subdued product spreads.• We expect average 2QFY13 KG-D6 volume of 29mmscmd v/s 33mmscmd in 1QFY13.• We expect RIL to report PAT of INR55.5b (v/s INR57b in 2QFY12 and INR44.7b in 1QFY13).• Key things to watch out for: (a) GRM, (b) Petchem margin, (c) KG-D6 production.• RIL trades at 12x FY14E adjusted EPS of INR69.7. We maintain Neutral due to concerns on cash utilization, RoEreaching sub-15% and increased share (80%) of cyclical refining and petchem businesses in its earnings.Quarterly Performance (Standalone)(INR Billion)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 810.2 785.7 851.4 851.8 918.8 937.0 915.8 927.4 3,299.0 3,698.9Change (%) 39.1 36.7 42.4 17.2 13.4 19.3 7.6 8.9 32.9 12.1EBITDA 99.3 98.4 72.9 65.6 67.5 82.0 74.2 73.3 336.2 297.1% of Net Sales 12.3 12.5 8.6 7.7 7.3 8.8 8.1 7.9 10.2 8.0Change (%) 6.3 4.8 -23.7 -33.3 -32.0 -16.7 1.9 11.7 -11.8 -11.6Depreciation 32.0 29.7 25.7 26.6 24.3 24.2 24.2 24.3 113.9 97.0Interest 5.5 6.6 6.9 7.7 7.8 7.7 7.6 7.6 26.7 30.7Other Income 10.8 11.0 17.2 23.0 19.0 19.2 20.3 20.6 61.9 79.1PBT 72.6 73.2 57.4 54.3 54.3 69.3 62.8 62.0 257.5 248.4Tax 16.0 16.1 13.0 12.0 9.6 13.8 13.1 13.5 57.1 50.1Rate (%) 22.1 22.1 22.6 22.0 17.7 19.9 20.9 21.8 22.2 20.2PAT 56.6 57.0 44.4 42.4 44.7 55.5 49.7 48.5 200.4 198.4Change (%) 16.7 15.8 -13.6 -21.2 -21.0 -2.7 11.9 14.4 -1.2 250.4Key Assumptions (USD/bbl)Fx Rate (INR/USD) 44.7 45.8 51.0 50.2 54.2 55.5 54.0 54.0 47.9 54.4Brent Price (USD/bbl) 117 113 109 119 108.7 110.2 110.0 111.1 114 110RIL GRM 10.3 10.1 6.8 7.6 7.6 9.5 8.4 8.3 8.7 8.5Singapore GRM 8.6 9.1 7.9 7.5 6.7 9.1 8.1 8.1 8.3 8.0Premium/(disc) to Singapore 1.7 1.0 -1.1 0.1 0.9 0.4 0.3 0.3 0.4 0.5KG-D6 Gas Prodn (mmscmd) 48.6 45.3 41.0 35.5 33.0 29.0 26.5 23.5 42.6 28.0Segmental EBIT Breakup (INR b)Refining 32.0 30.8 16.9 17.0 21.5 35.0 26.7 26.3 96.6 109.4Petrochemicals 22.2 24.2 21.6 21.7 17.6 17.5 17.6 20.1 89.7 72.8E&P, others 14.8 15.4 12.9 9.5 9.7 8.7 8.7 7.2 52.7 34.3Total 69.0 70.4 51.4 48.2 48.8 61.2 53.0 53.6 238.9 216.5E: MOSL Estimates; EPS adjusted for treasury sharesOctober 2012C–144

September 2012 Results PreviewSector: Real EstateReal EstateCompany NameAnant Raj IndustriesDLFHDILMahindra LifespacesOberoi RealtyPhoenix MillsUnitechMacro impetus and reform thrust positive for the sector• Recent favorable macro trends and reform thrust, viz, much-awaited FDI in multibrandretail, policy relaxation in single brand retail, expected interest ratedowncycle, etc, are positive for the real estate (RE) sector.• Approval hurdles in worst performing Mumbai market are seemingly easing offwith fast-track clearances on the back of new DCR (development controlregulations), resulting in visible increase in new launches.• Rational approaches from developers in choosing right product and market mixin their near-term monetization plan have led to better offtake in their recentlaunches.• While leverage situation is broadly unaltered, improving liquidity outlook andsuccess in divestment transactions have enhanced the expectation of substantialde-leveraging over 2HFY13.Despite seasonal weakness, 2QFY13 to see YoY improvement in salesmomentum• We expect our real estate universe to post a YoY uptick in 2QFY13 sales momentumon the back of (1) spillover launches (which were deferred by delay in approvals)and (2) low base of weak 2QFY12.• Some much awaited launches in Sep-12 (e.g. Phoenix's One Bangalore West andGodrej Summit, Gurgaon) have seen encouraging success even during a weakhome buying season.• Phoenix sold ~0.7msf (275+ units @ INR7,000/sf, INR5.3b) in a week's time afterlaunch and Godrej Properties sold ~1msf (695 units @ INR5,800/sf) on the day oflaunch, despite doing unconventional non-broker marketing. This reaffirms theunderlying demand for products offered by branded developers at right prices.• We expect the outperformance to continue in NCR and Southern Markets, butmeaningful sign of sales revival in Mumbai market is anticipated in take placeonly over 2HFY13.Expected quarterly performance summary(INR Million)CMP Rating Sales EBITDA Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQAnant Raj Inds 71 Buy 868 -4.9 -12.2 425 -16.5 -15.1 299 -13.8 -15.6DLF 234 Buy 21,370 -15.6 -2.8 8,762 -25.3 -17.9 2,331 -37.4 -20.4HDIL 98 Neutral 4,192 -5.1 108.4 3,144 -14.6 8.2 1,084 -27.3 2.9Mahindra Lifespace 378 Buy 1,173 25.0 12.6 293 13.5 -8.0 303 -3.4 3.5Oberoi Realty 265 Buy 2,134 -4.1 6.7 1,238 7.1 8.7 1,090 -2.2 8.1Phoenix Mills 196 Buy 628 32.5 0.3 396 18.7 0.4 301 26.2 -1.5Unitech 24 Buy 4,888 -21.9 19.9 709 -48.7 29.5 492 -46.8 7.2Sector Aggregate 35,252 -13.1 7.7 14,966 -21.4 -9.2 5,901 -27.6 -7.8Sandipan Pal (Sandipan.Pal@MotilalOswal.com)October 2012C–145

Key expectationsSeptember 2012 Results PreviewSector: Real Estate• For 2QFY13, our RE universe is expected to post revenue de-growth of 13.1% YoY(up +7.7% QoQ), EBITDA decline of 21.4% YoY (down 9.2% QoQ) and PAT decline of27.6% YoY (down 7.8% QoQ).• We expect operating cash flow to (a) improve for DLF (higher focus on execution),HDIL (FSI and TDR sales), Phoenix (on the back of new launches in residential),and (b) remain stable for Oberoi, Prestige, and Unitech. Despite improving supportfrom operating cash flow, meaningful success in debt reduction is likely to bevisible only in 2HFY13.Key factors to watch for• Status of planned launches for Mahindra Lifespaces, Oberoi, and DLF's Magnolialaunch.• Sign of uptick in revenue booking for Prestige (booked higher sales in past quarters),DLF (execution outsourcing), Unitech (refinancing trouble) and customercollection run-rate;• Leasing velocity and outlook of management in the commercial vertical.• Progress in divestment plan de-leveraging target.• New project acquisition by developers with better liquidity (Oberoi, MahindraLifespaces).Expect a restrained business focus to pay off during recovery; return metricsto improve• We believe RE developers are now highly controlled and rational in their businessapproach. Funding constraint has forced them to focus only on select verticals andperforming assets, which we believe would be beneficial for medium-term supplydemandeconomics.• Higher focus on execution by moving to outsourcing model (DLF, IBREL) wouldbring more certainty to construction and cash flow timelines.• We expect RoE to improve with (a) better asset turn, (b) stable costs, and (c)easing financial leverage.Sticking to bottom-up stock picking; prefer DLF, Prestige, Phoenix and Oberoi• We continue to prefer companies with (a) strong operating performance, and (b)delta from ebbing concerns - DLF (a play on improving operating and financialleverage), Prestige, Phoenix (steady operations), and Oberoi (still the bestdefensive bet in inefficient Mumbai market). Coincidentally DLF, Phoenix andPrestige are also the biggest beneficiaries of the likely revival in the retail vertical.• Despite weaker operating performances, high beta stocks like UT, HDIL, IBREL andAnantraj may surprise positively due to bigger scope of macro-driven operationalimprovement.October 2012C–146

September 2012 Results PreviewSector: Real EstatePrestige, Sobha, JPIN and DLF have been key outperformers in salesSales (INR b) 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13DLF 12.9 12.6 15.0 18.9 11.1 6.3 9.6 25.8 6.0Unitech 13.0 10.1 10.4 9.8 10.2 10.7 9.4 7.8 7.0Anantraj 2.1 0.9 2.3 0.1 1.0 1.6 0.9 0.9 1.6IBREL 3.1 31.0 8.7 5.6 3.8 4.9 4.5 6.3 NAHDIL 6.4 5.2 7.7 1.5 1.9 7.7 0.6 0.5 0.5ORL 1.8 1.4 3.3 3.5 2.6 2.3 1.8 2.8 2.1PEPL 0.8 7.4 3.2 2.5 2.1 7.8 4.7 6.0 10.0MAHLIFE 0.9 2.6 2.3 1.2 1.7 0.8 3.0 0.6 0.5GPL 1.4 0.6 3.3 4.6 2.3 2.1 3.5 3.5 5.0Sobha 2.7 2.7 2.8 2.7 3.0 4.9 4.5 5.0 4.8JPIN 13.9 10.8 6.3 10.0 5.7 5.8 16.4 11.0 6.8Source: Company/MOSLBank loan to developers rose to INR1157b as on July-12 Cost of debt stabilized (%)1,600Loan (INR b) Growth (%)241QFY11 4QFY11 2QFY12 4QFY121,20016800400-80-8Launch volume improved QoQ, sales volume steadySales value (INR b) jumped 11%QoQ (Top 6 cities)Launch (msf)Sales (msf)9589848874706355533861 67 69 62 6658 63 68 69 7058 56Trend of QoQ price growth (%) shows (a) moderation for Mumbai, b) stagnation for NCR20151050-5-104QCY09 1QCY10 2QCY10 3QCY10 4QCY101QCY11 2QCY11 3QCY11 4QCY11 2QCY12MumbaiNCRBangalorePuneHyderabadChennai3QCY094QCY091QCY102QCY103QCY104QCY101QCY112QCY113QCY114QCY111QCY122QCY122002322272482212502272422172342853172QCY093QCY094QCY091QCY103052QCY103QCY104QCY101QCY112QCY113QCY1111.812.84QCY111QCY122QCY1210.512.89.59.911.111.212.513.813.713.513.013.014.014.012.013.014.014.012.512.914.014.0Sep-05Feb-06Jul-06Dec-06May-07Oct-07Mar-08Aug-08Jan-09Jun-09Nov-09Apr-10Sep-10Feb-11Jul-11Dec-11May-12DLF GPL PEPL HDIL UT SobhaSource: Liases Foras/Company/MOSLOctober 2012C–147

September 2012 Results PreviewSector: Real EstateMumbaiNew launches yet to pick upSales volume up, value down - implyingto desired level (msf) higher sales in mid-segments Quoted prices refuse to fall81216122721161611129171199 936462 71 80 79Sales volume (msf)Sales value (INR b)8567 7257 50 5320 18 13 12 13 1211 9 8 9 8 9 10Thousands12108642Avg. Quo ted p rice s (INR /s f)Avg. sales prices (INR/sf)Inventory month50403020102QCY093QCY094QCY091QCY102QCY103QCY104QCY101QCY112QCY113QCY114QCY111QCY122QCY122QCY093QCY094QCY091QCY102QCY103QCY104QCY101QCY112QCY113QCY114QCY111QCY122QCY122QCY093QCY094QCY091QCY102QCY103QCY104QCY101QCY112QCY113QCY114QCY111QCY122QCY12NCRLaunch volume down, absence of anyPricings firm, inventory level decliningbig project (msf) Sales performance down QoQ (still very high at Noida)111119592649305048193432172QCY093QCY094QCY091QCY102QCY103QCY104QCY101QCY112QCY113QCY114QCY111QCY122QCY1236271890Sales volume (msf)Sales value (INR b)2QCY093QCY094QCY091QCY102QCY103QCY104QCY101QCY112QCY113QCY114QCY111QCY122QCY1214010570350Thousands44332Avg Quoted prices (INR/sf)Avg. sa les price s (INR/sf)Inventory month (RHS)2QCY093QCY094QCY091QCY102QCY103QCY104QCY101QCY112QCY113QCY114QCY111QCY125040302010BangaloreLaunch volume down QoQ (msf) Sales momentum showing spiraling trend Pricing strengthened, inventory down514116107118314111Sales volume (msf)Sales value (INR b)675427 23 30 35 3633232381235 393 8 4 8 8 1110 7 9 7 9 14 11 162QCY093QCY094QCY091QCY102QCY103QCY104QCY101QCY112QCY113QCY114QCY111QCY122QCY12Thousands1QCY092QCY093QCY094QCY091QCY102QCY103QCY104QCY101QCY112QCY113QCY114QCY111QCY122QCY1254321Inventory ask prices (INR/sf)Sold prices (INR/sf)Inventory mon th6834 3030 231816 20 2222 30 1817 121QCY092QCY093QCY094QCY091QCY102QCY103QCY104QCY101QCY112QCY113QCY114QCY111QCY122QCY12Source: Liases Foras/Company/MOSLOctober 2012C–148

September 2012 Results PreviewSector: Real EstateSupply (msf)Absorption (msf)Vacancy (%)Overall commercial absorption deteriorates; Bangalore remain best placed in vacancy2Q2011 3Q2011 4Q2011 1Q2012 2Q2012NCR 2.0 1.6 2.0 1.0 0.7Mumbai 3.4 2.4 1.0 2.7 0.5Bangalore 1.7 1.6 0.8 1.7 0.7Chennai 2.2 0.8 - 0.3 0.6Pune 2.6 0.6 0.6 0.3 0.2Hyderabad 1.8 - - - 0.3Kolkata 0.4 - 0.3 - 0.2India 14.1 7.0 4.7 6.0 3.1NCR 2.0 1.0 1.6 0.9 1.7Mumbai 2.1 1.0 1.2 1.1 0.4Bangalore 3.3 2.4 3.0 3.6 1.8Chennai 1.1 0.6 1.2 0.7 0.7Pune 1.0 0.4 0.5 0.5 0.3Hyderabad 1.3 0.6 0.4 0.5 0.5Kolkata 0.3 1.4 0.5 0.2 0.5India 11.0 7.4 8.4 7.5 5.9NCR 32 32 31 31 30Mumbai 23 24 23 23 23Bangalore 18 18 16 15 14Chennai 26 27 25 24 24Pune 28 28 26 26 25Hyderabad 10 10 11 10 10Kolkata 28 21 19 18 15India 24 24 22 22 22Source: DTZ/MOSLRelative Performance-3m (%) Relative Performance-1Yr (%)125Sensex IndexMOSL Rea l Estate Inde x120Sens ex IndexMOSL Re al Estate Index1151051059095758560Jun-12Jul-12Aug-12Sep-12Sep-11Dec-11Mar-12Jun-12Sep-12Comparative valuationCMP (INR) Rating EPS (INR) P/E (x) EV/EBITDA (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14EReal EstateAnant Raj Inds 71 Buy 3.8 5.0 6.6 18.6 14.3 10.8 17.9 13.6 9.7 3.1 3.8 4.8DLF 234 Buy 7.1 9.0 10.7 33.0 26.1 21.8 16.3 17.1 13.4 4.5 5.5 6.3Godrej Properties 599 Neutral 12.6 16.0 19.6 47.7 37.4 30.6 39.5 32.3 24.4 8.3 8.4 9.5HDIL 98 Neutral 19.3 12.9 17.8 5.1 7.6 5.5 5.3 5.3 3.8 7.9 5.1 6.6Indiabulls Real Estate58 Buy 3.5 4.2 6.1 16.5 13.7 9.5 11.5 9.8 7.8 2.2 2.6 3.6Jaypee Infratech 52 Buy 9.3 6.7 7.2 5.6 7.7 7.2 8.3 7.8 6.2 24.5 15.2 14.3Mahindra Lifespace 378 Buy 29.2 32.5 34.0 12.9 11.6 11.1 10.8 9.7 9.1 10.3 10.5 10.0Oberoi Realty 265 Buy 14.1 15.8 24.7 18.8 16.8 10.7 15.3 11.9 6.9 13.1 13.1 17.9Phoenix Mills 196 Buy 7.3 7.8 16.0 26.9 25.2 12.3 20.9 17.3 10.2 6.2 6.3 11.7Prestige Estates 136 Buy 2.5 5.5 8.2 53.9 24.5 16.5 20.7 12.8 9.8 4.1 8.4 11.0Unitech 24 Buy 0.9 0.8 1.3 26.8 30.2 18.8 34.3 37.8 23.0 2.0 1.7 2.7Sector Aggregate 18.0 18.3 14.0 14.0 13.4 10.0 6.1 5.8 7.0October 2012C–149

BSE SensexS&P CNX18,763 5,703BloombergARCP INEquity Shares (m) 294.652 Week Range (INR) 80/351,6,12 Rel Perf (%) 47/17/9Mcap (INR b) 21.0Mcap (USD b) 0.4CMP: INR71September 2012 Results PreviewSector: Real EstateAnant Raj IndustriesBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 4,241 1,681 5.7 -29.5 - - 4.6 5.9 - -3/12A 3,115 1,135 3.8 -32.5 18.6 0.5 3.1 3.7 9.8 18.03/13E 4,326 1,473 5.0 29.7 14.3 0.5 3.8 4.4 6.7 13.63/14E 5,667 1,948 6.6 32.3 10.8 0.5 4.8 5.9 4.9 9.7• Delay in Gold Course Road project revenue recognition: We expect revenue to de-grow 5% YoY to INR868m,EBITDA to de-grow 17% YoY to INR425m and PAT to de-grow 14% YoY to INR299m. We estimate EBITDA margin of49%. The de-growth is attributable to delay in revenue recognition from plotted project at Golf Course Road,which is yet to reach 25% development expenditure hurdle (development expenditure comprises infrastructuredevelopment like road network, water supply etc - almost INR7.5m/acre)• Sales run-rate lowered QoQ, collections up in Golf Course Road project: During 2QFY13, the company soldadditional 100 at Neemrana (v/s 462units in 1QFY13) and 20 units in Sector-91 (v/s 27 units in 1QFY13). Sellingprices at Sector-91 is up to INR4,800/sf (from INR,4200/sf in 1Q), while at Golf Course Road project, the companyis selling at INR90,000/sq yard as against initial launch price of INR75,000/sq yard. Of the total sales of INR4.5bin the Golf Course Road project, the company has collected ~INR1.25b to date.• Rental income to improve with higher contribution from mall: Expect rental run-rate (ex Tricolor Hotel) toimprove to INR273m (v/s INR255m in 1QFY13) on account of higher contribution from Kirti Nagar mall. While themall is already 80% occupied, it is operating at effective rental of INR70/sf/m, almost 30% below minimumguarantee rental of INR100/sf/m.• Anant Raj trades at 34% discount to our one-year forward NAV of INR108/share, 10.8x FY14E EPS of INR6.6 and0.5x FY14E BV. Maintain Buy.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QETotal Sales 838 913 922 449 989 868 1,180 1,244 3,115 4,326Change (%) -19.0 -31.3 -25.9 -29.1 18.0 -4.9 28.1 176.7 -26.5 38.8EBITDA 493 509 490 199 501 425 578 630 1,699 2,134Change (%) -13.3 -18.8 -36.5 -56.2 1.5 -16.5 18.0 216.3 -27.9 25.6As of % Sales 59 56 53 44 51 49 49 51 55 49Depreciation 27 30 36 17 32 35 37 43 110 147Interest 45 57 69 36 37 51 58 76 206 223Other Income 45 76 51 25 44 55 51 62 195 213PBT 466 498 437 174 475 394 535 573 1,578 1,977Tax 115 135 97 48 110 95 134 156 396 494Effective Tax Rate (%) 24.7 27.2 22.2 27.8 23.3 24.0 25.0 27.1 25.1 25.0Reported PAT 351 347 315 122 355 299 401 418 1,135 1,473Change (%) -23.5 -27.7 -37.4 -60.1 1.2 -13.8 27.3 242.1 -32.4 29.7E MOSL EstimatesOctober 2012C–150

BSE SensexS&P CNX18,763 5,703BloombergDLFU INEquity Shares (m) 1,714.452 Week Range (INR) 261/1701,6,12 Rel Perf (%) 10/9/-10Mcap (INR b) 400.8Mcap (USD b) 7.6CMP: INR234September 2012 Results PreviewSector: Real EstateDLFBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 95,606 16,396 9.7 -5.2 - - 5.8 7.1 - -3/12A 96,294 12,008 7.1 -26.8 33.0 1.5 4.5 7.4 6.5 16.03/13E 85,482 15,191 9.0 26.5 26.1 1.5 5.5 8.4 7.0 16.83/14E 103,723 18,243 10.7 20.1 21.8 1.4 6.3 8.6 5.6 13.2• EBITDA, PAT to de-grow YoY: We expect DLF's 2QFY13 revenue at INR21.4b (near-flat QoQ), EBITDA to de-grow25% YoY to INR8.8b, and PAT to de-grow 37% to INR2.3b owing to higher interest expense.• Leverage level to remain broadly unaltered: During 2QFY13, DLF concluded divestment of NTC Mills and receivedinitial tranche of INR5b. However, we expect leverage level to remain largely unaltered due to prevailingoperating deficit. Receipt of balance INR22b by 3QFY13 would be a key debt reduction trigger to watch out for.• Focus on luxury launches: In 2QFY13, DLF launched Bella Greens, a luxury-end villa project at BannerghattaRoad, Bengaluru (ticket size INR28.4-45.6m), re-affirming its strong focus on premium projects in FY13. Weexpect successful launch of super luxury Magnolia II in 3QFY13 to hold the key to improve its operating deficit.• Key things to watch out for:1. Progress in major divestments (Aman Resort, windmills), and receipt of balance amount in NTC Mills salefollowed by debt-reduction.2. Successful launch of Magnolia II.3. Pick-up in cash conversion post shift to third-party contractors and4. Leasing momentum in the backdrop of FY13 guidance of 2msf.• DLF trades at 21.8x FY14E EPS of INR10.7, 1.4x FY14E BV and 18% discount to our NAV estimate of INR286.Maintain Buy.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 24,458 25,324 20,344 26,168 21,977 21,370 20,516 21,619 96,294 85,482Change (%) 20.6 6.9 (18.0) -2.5 -10.1 (15.6) 0.8 -17.4 0.7 -11.2Total Expenditure 13,349 13,594 12,116 18,192 11,307 12,609 12,309 13,368 57,251 49,592EBITDA 11,110 11,730 8,227 7,976 10,670 8,762 8,206 8,251 39,043 35,889Change (%) 13.4 26.3 -30.2 19.7 -4.0 -25.3 -0.3 3.4 4.0 -8.1As % of Sales 45.4 46.3 40.4 30.5 48.6 41.0 40.0 38.2 40.5 42.0Depreciation 1,702 1,753 1,797 1,636 1,786 1,751 1,860 1,898 6,888 7,295Interest 4,964 5,263 6,199 6,039 6,226 6,321 5,896 5,142 22,465 23,585Other Income 574 448 3,617 1,307 1,311 2,249 9,747 1,688 5,945 14,996PBT 5,018 5,161 3,848 1,448 3,970 2,940 10,197 2,898 15,635 20,005Tax 1,278 1,475 1,353 -413 1,137 705 2,651 707 3,694 5,201Effective Tax Rate (%) 25 29 35 -28.5 29 24 26 24 23.6 26.0Reported PAT 3,584 3,724 2,584 2,117 2,928 2,331 7,642 2,289 12,008 15,191Change (%) (12.8) (11.0) (44.5) (38.6) (18.3) (37.4) 195.8 26.4 (26.8) 26.5E: MOSL EstimatesOctober 2012C–151

BSE SensexS&P CNX18,763 5,703BloombergHDIL INEquity Shares (m) 419.052 Week Range (INR) 135/521,6,12 Rel Perf (%) 28/9/-16Mcap (INR b) 40.9Mcap (USD b) 0.8CMP: INR98September 2012 Results PreviewSector: Real EstateHDILNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 18,655 8,218 19.8 25.5 - - 9.0 10.7 - -3/12A 20,064 8,098 19.3 -2.5 5.1 0.4 7.9 10.0 3.9 5.33/13E 19,054 5,394 12.9 -33.4 7.6 0.4 5.1 8.9 3.9 5.33/14E 24,259 7,461 17.8 38.3 5.5 0.4 6.6 10.9 2.8 3.8• We expect HDIL's 2QFY13 consolidated revenue at INR4.2b (down 5%YoY), EBITDA at INR3.1b, and PAT at INR1.1b(down 27%).• The key revenue contributors are likely to be (1) 1.5-2msf/quarter of FSI sales in Virar/Vasai, (2) TDR sales fromnewly generated 2msf at Kurla Premiere (owing to change in usage), and (3) other potential FSI sales like oneadvance staged deal for 1.2msf of Metropolis commercial.• With deferment completion target of its three residential projects (Premiere, Galaxy and Metropolis) to 3/4QFY13, no revenue is going to get recognized under project completion method (PCM) in 1HFY12.• We expect cash flow from FSI sales (has been weak till date) to improve on the back of early sign of easing offof approval hurdles. This should also boost construction pace and customer collection run-rate.• Key things to watch out for:1. Response to its recently launched plotted project Imperial County, Noida, and Premiere Kurla2. Progress on new launches in Virar, Ghatkopar and Shahad3. Clarity over other FSI sales under negotiation4. Progress in de-leveraging5. Progress in MIAL relocation and status of subsequent phases• The stock trades at 5.5x FY14E and 0.4x FY14E BV and 29% discount to NAV of INR138. Maintain Neutral.Consolidated Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 5,144 4,416 4,254 6,251 2,012 4,192 5,145 7,706 20,064 19,054Change (%) 13.0 15.7 -8.2 13.1 -60.9 -5.1 21.0 23.3 7.6 -5.0Total Expenditure 920 733 1,229 2,122 -893 1,048 1,286 3,662 5,005 5,104EBITDA 4,223 3,683 3,024 4,129 2,904 3,144 3,858 4,044 15,059 13,951Change (%) 45.6 41.6 9.0 -6.5 -21.1 -14.6 27.6 -2.1 -9.4 -7.4As % of Sales 82.1 83.4 71.1 66.0 144.4 75.0 75.0 52.5 75.1 73.2Depreciation 213 214 216 215 210 225 225 234 858 901Interest 1,437 1,527 1,603 1,682 1,541 1,806 1,878 1,998 6,249 7,222Other Income 60 73 133 247 94 133 133 172 513 533PBT 2,633 2,014 1,338 2,401 1,248 1,246 1,889 1,977 8,464 6,360Tax 739 524 -220 -752 195 162 246 288 290 890Effective Tax Rate (%) 28.1 26.0 -16.4 -31.3 15.6 13.0 13.0 14.6 3.4 14.0Reported PAT 1,894 1,491 1,558 3,156 1,054 1,084 1,643 1,613 8,098 5,394Change (%) -12.5 -24.2 -31.6 70.4 -29.3 -27.3 5.5 -48.9 -1.5 -33.4E: MOSL Estimates; Numbers as per Schedule 6October 2012C–152

BSE SensexS&P CNX18,763 5,703BloombergMLIFE INEquity Shares (m) 40.852 Week Range (INR) 390/2351,6,12 Rel Perf (%) 3/10/15Mcap (INR b) 15.4Mcap (USD b) 0.3CMP: INR378September 2012 Results PreviewSector: Real EstateMahindra LifespacesBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 6,119 1,082 26.5 37.7 - - 10.2 10.8 - -3/12A 7,013 1,191 29.2 10.1 12.9 1.3 10.3 10.9 2.9 10.83/13E 7,760 1,325 32.5 11.3 11.6 1.2 10.5 11.1 2.7 9.73/14E 8,086 1,389 34.0 4.8 11.1 1.1 10.0 11.3 2.4 9.1• We expect Mahindra Lifespaces' 2QFY13 standalone revenue to grow 25% YoY to INR1,173m, EBITDA to de-grow9.2% YoY to INR293m and PAT to de-grow 3.4% YoY to INR303m.• We expect EBITDA margin at 25%, lower than 31% in 1QFY13 given higher proportion revenue contribution fromnon-Mumbai projects.• Key things to watch out for1. Progress in stated launches at Hyderabad and Pune (yet to take off)2. Leasing progress in Jaipur DTA3. Progress of land acquisition in North Chennai SEZ.• The stock trades at a ~19% discount to our one-year forward SOTP value of INR469/share, 11.1x FY14E EPS ofINR4.8 and 1.1x FY14E BV. Buy.Quarterly Performance: Standalone(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 815 938 1,538 1,400 1,041 1,173 1,407 1,069 4,690 4,690Change (%) 19.9 5.4 -1.3 -14.6 27.8 25.0 -8.5 -23.6 -1.6 0.0Total Expenditure 642 679 1,076 1,082 723 879 1,055 814 3,479 3,471EBITDA 172 258 462 318 319 293 352 255 1,210 1,219As % of Sales 21.2 27.5 30.0 22.7 30.6 25.0 25.0 23.9 25.8 26.0Change (%) -11.5 5.0 9.3 -7.7 44.6 -9.2 -16.7 5.0 -1.4 0.7Depreciation 7 7 7 7 4 7 7 10 27 29Interest 2 5 2 20 14 24 24 34 30 95Other Income 91 182 87 162 134 154 154 173 522 614PBT 255 428 539 453 434 416 474 385 1,676 1,709Tax 84 114 144 132 141 112 123 102 474 479Effective Tax Rate (%) 32.9 26.6 31.0 29.1 32.5 27.0 26.0 26.5 28.3 28.0Reported PAT 171 314 395 321 293 303 351 283 1,202 1,231Change (%) 18.0 27.4 18.1 5.3 71.5 -3.4 -11.1 -11.9 16.6 2.4E: MOSL Estimates; *Revenue outside Standalone is largely contributed by Mahindra World City (MWC) Chennai and JaipurOctober 2012C–153

BSE SensexS&P CNX18,763 5,703BloombergOBER INEquity Shares (m) 328.252 Week Range (INR) 323/2051,6,12 Rel Perf (%) 9/-6/5Mcap (INR b) 87.0Mcap (USD b) 1.7CMP: INR265September 2012 Results PreviewSector: Real EstateOberoi RealtyBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 9,960 5,172 15.8 12.9 - - 19.9 23.6 - -3/12A 8,247 4,629 14.1 -10.5 18.8 2.3 13.1 17.1 9.0 15.33/13E 10,669 5,178 15.8 11.9 16.8 2.1 13.1 17.9 6.8 11.93/14E 17,178 8,109 24.7 56.6 10.7 1.8 17.9 24.8 4.1 6.9• We expect Oberoi Realty's 2QFY13 revenue to de-grow 4.1% YoY to INR2.1b, EBITDA to grow 7% YoY to INR1.2band PAT to de-grow ~2% to INR1.1b. We estimate EBITDA margin of 58%. Esquire is likely to cross revenuerecognition threshold by 4QFY13.• We expect 2QFY13 sales to remain largely flat QoQ. Post increase in the prices across its ongoing projects, theofftake run-rate has declined to 2 apartments every 3 days from 1 per day.• Mulund project is yet to receive MoEF approvals and will be delayed further. On the other hand, we believeWorli project is witnessing decent response during soft launch.• Key things to watch out for1. Sales momentum in Esquire (Goregaon) and Grande (Andheri)2. Visibility on new project acquisition3. Leasing visibility in commercial projects.• The stock trades at 10.7x FY14E EPS of INR24.7, 1.8x FY14E BV and ~21% discount to one-year forward NAV ofINR337. Maintain Buy.Consolidated Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QETotal Revenue 1,609 2,226 1,873 2,548 1,999 2,134 2,347 4,189 8,247 10,669Change (%) 0.5 30.9 -53.0 -4.5 24.2 -4.1 25.3 64.4 -17.2 29.4Total Expenditure 706 1,071 739 906 860 896 962 1,877 3,412 4,596EBITDA 903 1,156 1,134 1,642 1,139 1,238 1,385 2,312 4,835 6,073Change (%) 6.6 14.8 -54.1 13.3 26.1 7.1 22.1 40.8 -16.2 25.6As of % Sales 56 51.9 60.5 64.5 57 58.0 59 55 58.6 56.9Depreciation 65 66 68 70 70 77 77 85 269 310Interest 1 0 1 1 1 0 0 0 3 0Other Income 542 343 310 307 309 333 333 356 1,501 1,330PBT 1,374 1,432 1,375 1,879 1,376 1,493 1,640 2,585 6,059 7,090Tax 316 317 354 443 368 403 443 701 1,430 1,915Effective Tax Rate (%) 20.0 22.2 25.8 23.6 26.8 27.0 27.0 27.1 23.6 27.0Reported PAT 1,058 1,114 1,021 1,436 1,008 1,090 1,197 1,883 4,629 5,174Change (%) 32.5 16.7 -50.3 5.1 -4.7 -2.2 17.3 31.2 -10.5 11.9E: MOSL EstimatesOctober 2012C–154

BSE SensexS&P CNX18,763 5,703BloombergPHNX INEquity Shares (m) 144.852 Week Range (INR) 222/1491,6,12 Rel Perf (%) 19/-15/-21Mcap (INR b) 28.4Mcap (USD b) 0.5CMP: INR196September 2012 Results PreviewSector: Real EstatePhoenix MillsBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 2,102 842 5.8 36.5 - - 5.0 5.2 - -3/12A 3,666 1,056 7.3 25.5 26.9 1.7 6.2 6.1 12.1 20.93/13E 4,315 1,128 7.8 6.7 25.2 1.6 6.3 6.1 10.0 17.33/14E 8,690 2,316 16.0 105.4 12.3 1.4 11.7 10.4 4.8 10.2• In 1QFY13, PHNX changed its accounting practice by including electricity charges recovered from licensees inrevenue (on gross basis), which were earlier netted off against expense. With this, results for FY13 will not becomparable YoY.• We expect High Street Phoenix's (HSP) 2QFY13 rental at INR628m (v/s INR626m in 1QFY13), EBITDA at INR396m(v/s INR394m in 1QFY13), and PAT of INR301m, up 26%. The growth in rental is attributable to revenue sharing.• Among Market City retails, we expect further increase in pre-leasing in Bengaluru and Chennai, while in Pune,we expect incremental pre-leasing to remain muted due to new product proposition under evaluation.• Recent residential launch at Bangalore One has been encouraging with sales of 0.7msf+ (INR5.3b). Steady salesat Chennai project led to prices rising to INR10,000/sf.• Key things to watch out for:1. Momentum in commercial and residential sales in Market City projects2. Progress on ramp-up in recently commenced malls3. Visibility over stake increase in Market City projects or new acquisitions.• The stock trades at a PER of 12.3x FY14E EPS of INR16, 1.4x FY14E BV and a 25% discount to its one-year forwardNAV of INR262. Maintain Buy.Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QE Cons. Cons.Sales 535 474 505 600 626 628 638 630 3,666 4,315Change (%) 32.4 6.9 12.0 28.3 17.0 32.5 26.4 5.0 74.4 17.7Total Expenditure 205 141 132 237 232 232 223 221 1,552 1,804EBITDA 331 333 373 363 394 396 415 410 2,114 2,511Change (%) 12.6 5.1 14.0 13.2 19.3 18.7 11.1 12.7 50.4 18.8As % of Sales 62 70 74 61 63 63 65 65 57.7 58.2Depreciation 67 69 74 73 67 67 67 67 563 884Interest 10 31 57 68 58 64 78 90 944 1,097Other Income 110 89 113 146 143 137 143 147 446 646PBT 363 323 355 368 413 402 412 401 1,053 1,175Tax 91 84 86 95 107 100 103 97 189 282Effective Tax Rate (%) 25 26 24 26 26 25 25 24 18.0 24.0Adj. PAT 272 239 269 273 306 301 309 304 1,056 1,128Change (%) 49.1 8.0 13.1 0.6 12.4 26.2 15.0 11.3 25.5 6.7E: MOSL EstimatesOctober 2012C–155

BSE SensexS&P CNX18,763 5,703BloombergUT INEquity Shares (m) 2,438.852 Week Range (INR) 38/171,6,12 Rel Perf (%) 20/-22/-24Mcap (INR b) 59.3Mcap (USD b) 1.1CMP: INR24September 2012 Results PreviewSector: Real EstateUnitechBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 33,960 5,677 2.2 -21.6 - - 4.9 5.6 - -3/12A 24,219 2,373 0.9 -58.2 26.8 0.6 2.0 2.8 4.8 35.63/13E 22,217 2,106 0.8 -11.3 30.2 0.6 1.7 2.1 5.2 39.33/14E 28,746 3,470 1.3 60.6 18.8 0.6 2.7 3.2 4.0 23.9• Expect margins to improve: We expect 2QFY13 revenue to de-grow 22% YoY to INR4.9b, EBITDA to de-grow 49%to INR709m and PAT to de-grow 47% YoY to INR492m. EBITDA margin is estimated at 14.5%, which should seesteady improvement with MTM loss provisioning taken out of P&L.• New launches subdued: Focus on new launches has been low (as guided by the management earlier) to prioritizeexecution of ongoing projects. We expect sales to deteriorate YoY, except in Noida where run-rate shouldremain steady. The company launched Exquisite in Noida during 2QFY13.• Execution run-rate contingent on liquidity improvement: Successful re-financing is the key to boost Unitech'sexecution. We remain concerned about Unitech's FY13 repayment obligation of INR15b+.• Key things to watch out for1. Sales momentum on the back of lower new launches (estimate INR37b in FY13)2. Progress in construction and delivery (the company aims at INR4-4.5b/qtr run-rate v/s INR3b currently),along with improvement in debtor days.3. Strategy to address impending repayment of INR15b+ loan in FY13.• Unitech trades at 40% discount to its one-year forward NAV estimate of INR40 and 18.8x FY14E EPS of INR1.3 and0.6x FY14E BV. Maintain Buy.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 6,155 6,261 5,086 6,717 4,077 4,888 5,999 7,253 24,219 22,217Change (%) -25.7 -2.9 -22.9 -46.8 -33.8 -21.9 17.9 8.0 -28.7 -8.3Total Expenditure 4,957 4,880 4,057 6,772 3,530 4,179 5,129 6,432 20,938 19,270EBITDA 1,198 1,381 1,029 -54 547 709 870 822 3,281 2,948Change (%) -59.2 -45.4 -50.7 -102.8 -54.3 -48.7 -15.4 -1,612 -65.3 -10.2As of % Sales 19.5 22.1 20.2 -0.8 13.4 14.5 14.5 11.3 13.5 13.3Depreciation 84 85 93 172 99 111 116 120 434 446Interest 337 338 279 252 117 141 141 166 563 564Other Income 714 403 387 576 345 322 322 299 2,080 1,289PBT 1,490 1,362 1,044 97 677 779 935 834 4,365 3,227Tax 468 424 469 475 261 265 318 189 1,896 1,033Effective Tax Rate (%) 31.4 31.1 44.9 491.0 38.5 34.0 34.0 22.7 43.4 32.0Reported PAT 984 924 552 23 459 492 595 622 2,373 2,106Change (%) -45.4 -46.8 -50.4 -97.9 -53.4 -46.8 7.8 2,652 -58.2 -11.3E: MOSL EstimatesOctober 2012C–156

September 2012 Results PreviewSector: RetailRetailCompany NameJubilant FoodworksPantaloon RetailShoppers StopTitan IndustriesWe expect our Retail universe to post 11.6% and 14.4% YoY growth in sales and EBITDArespectively. PAT would decline 5%, due to weak performance by Shoppers Stop andPantaloon Retail. However, we estimate Jubilant Foodworks' to continue to outpeformand post 45% YoY PAT growth. Titan should post sequentially better Jewellery volumes.No recovery yet; expect specialty retailers to outperform: Consumer sentimentremains subdued, impacting footfalls and same store sales (SSS) growth of traditionalretailers, in our view. Discretionary consumption has not shown any upticknotwithstanding the improving macro environment post the recent governmentannouncements. Jewelry volumes, though sequentially better, are likely to remainunder pressure, as higher gold prices and macro uncertainty continue to deter buying.The Quick Service Restaurant (QSR) segment remains an outlier, with continuedmomentum on the back of more store openings and new launches.Footfalls back to normal after discount season: Discount season sale attracted footfallsin August. However, post the discount season, the footfalls did not sustain. Thiscoupled with weaker than expected ramp up in new stores will continue to impactoperating margins of traditional retailers. Committed capex plans will further putstrain on financials and increase debt. Shoppers Stop has added 1 department storeand Jubilant Foodworks is likely to add ~25 stores during the quarter. We understandthat Titan Industries is expanding Fastrack and Jewelry at a rapid pace, but is goingslow on Eyewear.FDI in multi-brand retail cleared; do not expect deals in near term: During the quarter,the Government of India (GoI) allowed 51% FDI in multi-brand retail and also amendedthe sourcing norms for single-brand retail. The most important change vis-à-vis theearlier announced policy is that state governments will have the final say in allowingmulti-brand retail in their respective states. It will be the privilege of stategovernments to decide whether and where a multi-brand retailer with foreign partnershould be allowed to open outlets in the state. It will be restricted to cities withpopulation above one million. We believe letting in FDI is a long term positive forIndian Retail, as apart from the natural benefits like technology, back-end expertise,etc, which a global player may bring to the table, it allows capital starved players anExpected quarterly performance summary(INR Million)CMP Rating Sales EBITDA Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQJJubilant Foodworks 1,373 Neutral 3,450 43.5 9.7 628 46.9 9.6 344 45.5 6.4Pantaloon Retail 214 Neutral 30,562 5.0 3.2 2,812 11.4 1.8 21 -93.6 -45.3Shopper's Stop 401 Neutral 5,660 13.8 26.7 198 -48.8 43.7 36 -81.8 186.0Titan Industries 262 Neutral 24,450 16.6 10.9 2,469 23.3 16.5 1,764 15.4 13.0Sector Aggregate 64,122 11.6 8.1 6,107 14.4 9.2 2,165 -5.5 11.8Gautam Duggad (Gautam.Duggad@MotilalOswal.com) / Sreekanth P.V.S. (Sreekanth.P@MotilalOswal.com)October 2012C–157

September 2012 Results PreviewSector: Retailaccess to long-term capital. However, given the tough preconditions and complexityin stitching a deal (separate entity, which complies with extant state FDI rules, willhave to be floated), we do not see any deal announcement in the near term.No dawn yet; prefer specialty retailers: We remain cautious in the near term, as thesector continues with flat to low single digit same store sales (SSS) growth. We believesegments like Apparel, Home Retailing and Jewelry will take some time to recoverfrom the slowdown due to weak macroeconomic environment and low consumerconfidence. Shoppers Stop will face pressure on profitability due to low SSS growthand resultant lack of operating leverage, given weaker ramp up in stores opened inthe past 18 months. Jubilant Foodworks has strong cash flows; we would watch forSSS growth trends and revenue from the newly opened Dunkin Donuts. We maintainour Neutral rating on Jubilant and Shoppers Stop. Festive season demand in 3Q holdsthe key for Titan.Shoppers' Stop - SSS growth remains flatTitan's jewelry SBU; watch out for Gold prices, volume mixLTL Sa les Gr (%)2290Jewelry growth %Gold price change % (YoY)162113602214711-11012300-6-3030,00043.827,00024,00021,00018,00026,60729,29737.035.733.236.726.730.126.222.325.015,00012,000Dec-09Mar-10Jun-10Sep-10Dec-10Mar-11Jun-11Sep-11Dec-11Mar-12Jun-12Sep-121QFY112QFY113QFY114QFY111QFY122QFY123QFY124QFY121QFY132QFY13EJun-09Sep-09Dec-09Mar-10Jun-10Sep-10Dec-10Mar-11Jun-11Sep-11Dec-11Mar-12Jun-12Sep-12E3QFY074QFY071QFY082QFY083QFY084QFY081QFY092QFY093QFY094QFY091QFY102QFY103QFY104QFY101QFY112QFY113QFY114QFY111QFY122QFY123QFY124QFY121QFY132QFY13Gold prices up 31% YoY and 5% QoQ (INR/10g)Jubilant Foodworks' LTL sales growthINR/10 gmSource: Company, MOSLOctober 2012C–158

September 2012 Results PreviewSector: RetailArea addition plans on trackShoppers StopJubilant Foodworks6050403020307Shoppers Stop (LHS)414310 10849Hypercity (RHS)145551 521212 121086Stores Ci ti es514439465 489378 39241132033836474 77 87 90 93 96 100 105 110 115Relative to performance-3m (%) Relative to performance-1Yr (%)125Sensex IndexMOSL Retail Index140Sensex IndexMOSL Retail Index11512010510095808560Jun-12Jul-12Aug-12Sep-12Sep-11Dec-11Mar-12Jun-12Sep-12Jun-10Sep-10Dec-10Mar-11Jun-11Sep-11Dec-11Mar-12Jun-12Sep-121QFY112QFY113QFY114QFY111QFY122QFY123QFY124QFY121QFY132QFY13ESource: Company, MOSLComparative valuationCMP (INR) Rating EPS (INR) P/E (x) EV/EBITDA (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14ERetailJubilant Foodworks1,373 Neutral 16.4 23.9 35.4 83.9 57.3 38.8 46.0 30.7 21.4 37.7 38.2 39.0Pantaloon Retail 214 Neutral 4.8 6.7 9.3 44.6 31.9 22.9 8.0 7.2 6.6 3.4 4.6 6.2Shopper's Stop 401 Neutral 7.8 2.7 6.8 51.2 149.1 59.3 23.3 33.9 21.8 9.9 3.3 7.8Titan Industries 262 Neutral 6.8 8.1 10.0 38.5 32.4 26.2 26.8 21.7 17.4 48.7 42.4 34.8Sector Aggregate 45.2 38.3 28.9 19.0 16.1 13.2 16.0 16.7 19.1UR: Under ReviewOctober 2012C–159

BSE SensexS&P CNX18,763 5,703BloombergJUBI INEquity Shares (m) 63.552 Week Range (INR) 1,397/6331,6,12 Rel Perf (%) 12/18/44Mcap (INR b) 87.2Mcap (USD b) 1.7CMP: INR1,373September 2012 Results PreviewSector: RetailJubilant FoodworksNeutralYear Net Sales Adj PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 6,783 720 11.2 112.4 - - 37.6 45.1 - -03/12A 10,175 1,056 16.4 46.7 83.9 31.6 37.7 51.4 8.6 46.803/13E 14,807 1,545 23.9 46.3 57.3 21.9 38.2 53.7 5.8 31.203/14E 20,697 2,284 35.4 47.8 38.8 15.1 39.0 53.5 4.1 21.8• We expect Jubilant Foodworks (JUBI) to report 43.5% increase in sales to INR3.4b. Like to like (LTL) sales growthwould be ~25%, marginally higher than in 1QFY13.• Gross margin would improve marginally to 74.2%; operating leverage would enable 40bp expansion in EBITDAmargin to 18.2%.• EBITDA is likely to grow 47% to INR628m. PAT would grow 45.5% to INR344m, driven by 100bp increase in taxrate.• We expect the company to add 25 new stores, taking the total to 514 stores. In August, JUBI inaugurated its500th store in Delhi.• Three Dunkin Donuts stores are under operation in New Delhi. The company plans to add 80-100 stores in Indiain the next five years.• We estimate 47% PAT CAGR over FY12-14. However, valuations of 57.3x FY13E and 38.8x FY14E EPS capture thepositives and do not factor in an increase in competitive activity in the existing business. Neutral.What to look for• Operating leverage; trend in EBITDA margin, given price increases and rising overheads on new stores.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENo of Stores 392 411 439 465 489 514 535 563 463 563LTL Growth (%) 36.7 26.7 30.1 26.2 22.3 25.0 23.0 23.0 30.0 23.0Net Sales 2,169 2,404 2,770 2,832 3,145 3,450 4,000 4,212 10,175 14,807YoY Change (%) 60.0 47.1 49.2 46.2 45.0 43.5 44.4 48.7 50.0 45.5Gross Profit 1,617 1,769 2,066 2,113 2,309 2,559 2,967 3,148 7,564 10,982Gross Margin (%) 74.5 73.6 74.6 74.6 73.4 74.2 74.2 74.7 74.3 74.2Other Expenses 1,196 1,341 1,551 1,604 1,736 1,931 2,207 2,348 5,698 8,221% of Sales 55.2 55.8 56.0 56.6 55.2 56.0 55.2 55.7 56.0 55.5EBITDA 420 427 516 509 573 628 760 800 1,866 2,761EBITDA Growth % 67.2 43.8 59.9 54.0 36.3 46.9 47.4 57.2 55.3 48.0Margins (%) 19.4 17.8 18.6 18.0 18.2 18.2 19.0 19.0 18.3 18.6Depreciation 87 93 96 100 117 135 140 141 377 533Interest 0 0 0 0 0 3 3 5 0 11Other Income 12 14 14 17 19 24 24 23 57 90PBT 346 348 434 425 475 514 641 676 1,546 2,306YoY Change (%) 84.9 51.6 72.9 65.7 11.7 47.7 47.8 58.9 67.3 49.1Tax 108 111 139 132 152 170 212 223 490 761Rate (%) 31.1 32.0 32.1 31.1 31.9 33.0 33.0 33.0 31.7 33.0Adjusted PAT 232 237 295 293 323 344 429 453 1,056 1,545YoY Change (%) 52.0 28.4 55.4 51.8 39.3 45.5 45.8 54.5 46.7 46.3E: MOSL EstimatesOctober 2012C–160

BSE SensexS&P CNX18,763 5,703BloombergPF INEquity Shares (m) 217.152 Week Range (INR) 239/1251,6,12 Rel Perf (%) 42/40/-15Mcap (INR b) 46.4Mcap (USD b) 0.9CMP: INR214September 2012 Results PreviewSector: RetailPantaloon RetailNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA06/11A 110,122 1,897 8.7 7.1 - - 6.2 12.1 - -06/12A 122,526 1,071 4.8 -45.2 44.6 1.5 3.4 12.0 0.7 8.206/13E 139,931 1,498 6.7 39.9 31.9 1.5 4.6 13.2 0.7 7.206/14E 158,024 2,086 9.3 39.0 22.9 1.4 6.2 9.5 0.6 6.6• We expect core retail sales to grow 5% to INR30.6b in 5QFY13 (year extended to December for FY12) for PantaloonRetail (PF).• Same store sales (SSS) growth dynamics has not seen improvement in the September quarter due to prevailingweak consumer sentiment.• EBITDA would grow 11% to INR2.8b, with operating margins expanding 50bp YoY.• Adjusted PAT would decline 94% to INR21m, as interest cost continues to consume 2/3rd of EBITDA.• Recent deals (AB Nuvo-Pantaloon transaction, Future Capital) will help alleviate the debt strain for PF. Coreretail debt stands at INR60b.• News flow around potential deals after the allowance of 51% FDI in multi-brand retail will keep fundamentalsin the background, we believe.• The stock trades at 31.9x FY13E EPS and 22.9x FY14E EPS. Maintain Neutral.What to look for• Same store sales growth for Value and Lifestyle business.• Space addition.• Interest cost.Quarterly Performance; Core Retailing(INR Million)Y/E June FY11 FY12 FY12E1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 5QE 6QENet Sales 25,814 27,586 28,119 28,604 29,106 28,933 30,264 29,627 30,562 31,827 180,319YoY Change (%) 32.1 31.2 17.6 15.4 12.8 4.9 7.6 3.6 5.0 10.0 66.8Total Exp 23,687 25,202 25,641 26,019 26,583 26,321 27,488 26,864 27,750 28,867 163,873EBITDA 2,127 2,383 2,479 2,585 2,523 2,612 2,776 2,763 2,812 2,960 16,446Growth (%) 15.3 12.1 14.0 26.2 18.6 9.6 12.0 6.9 11.4 13.3 117.3Margins (%) 8.2 8.6 8.8 9.0 8.7 9.0 9.2 9.3 9.2 9.3 9.1Depreciation 630 650 660 737 828 877 887 929 940 960 5,422Interest 933 1,078 1,096 1,177 1,305 1,582 1,725 1,804 1,890 1,947 10,253Other Income 81 52 34 63 79 40 16 28 50 53 266PBT 645 708 757 735 468 193 180 58 32 106 1,037Tax 218 235 252 242 138 58 60 19 10 35 321Rate (%) 33.7 33.2 33.2 33.0 29.5 30.1 33.3 33.0 33.0 33.0 30.9Adjusted PAT 428 472 505 492 330 135 120 39 21 71 716YoY Change (%) 62.4 5.5 34.8 -17.1 -22.8 -71.4 -76.2 -92.1 -93.6 -47.5 -62.3E: MOSL EstimatesOctober 2012C–161

BSE SensexS&P CNX18,763 5,703BloombergSHOP INEquity Shares (m) 82.252 Week Range (INR) 427/2511,6,12 Rel Perf (%) 7/-6/-1Mcap (INR b) 32.9Mcap (USD b) 0.6CMP: INR401September 2012 Results PreviewSector: RetailShoppers StopNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 16,589 752 9.1 120.1 - - 12.6 16.3 - -03/12A 19,300 643 7.8 -14.5 51.2 5.1 9.9 11.0 1.7 23.303/13E 22,308 221 2.7 -65.7 149.1 4.9 3.3 5.0 1.5 35.103/14E 26,579 555 6.8 151.3 59.3 4.6 7.8 9.6 1.2 21.8• We expect Shoppers Stop (SHOP) to report 13.8% increase in sales to INR5.7b. However, same store sales (SSS)growth would be 1-2%, in our view.• We estimate EBITDA margin at 3.5%, still below the normal trend of 5-6%, as new stores continue to see weaktraction. We expect PAT to decline 81% due to weak SSS performance and consequent lack of operating leverage.• Like to like (LTL) sales are likely to grow 1-2% on account of modest demand, despite discount sale season inAugust.• Higher overheads on new store openings and extended discount period would impact profit margins for thequarter.• Hypercity would remain a drag on consolidated profitability.• The company has added one Shoppers Stop departmental store in 2QFY13.• The stock trades at 149.1x FY13E and 59.3x FY14E standalone EPS. Maintain Neutral.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QELTL Sales Gr % 7 11 -1 10 1 2 7 5 7 4Deptt Stores 41 43 49 51 52 55 58 60 51 60Net Sales 3,930 4,973 5,017 5,406 4,467 5,660 5,850 6,331 19,300 22,308YoY Change (%) 14.4 14.9 9.9 18.5 13.6 13.8 16.6 17.1 16.3 15.6Total Exp 3,667 4,586 4,603 5,042 4,329 5,462 5,558 6,006 17,873 21,354EBITDA 263 387 414 363 138 198 293 325 1,427 954Growth % 5.2 1.4 -19.7 -2.8 -47.7 -48.8 -29.3 -10.5 -6.2 -33.2Margins (%) 6.7 7.8 8.2 6.7 3.1 3.5 5.0 5.1 7.4 4.3Depreciation 81 88 94 115 120 110 115 108 377 453Interest 44 57 76 74 77 75 75 102 250 329Other Income 37 52 46 44 74 40 40 4 178 159PBT 176 294 290 218 15 53 143 119 978 329Tax 59 98 97 81 3 18 47 41 335 109Rate (%) 33.5 33.5 33.5 37.1 17.9 33.0 33.0 34.9 34.3 33.0Adjusted PAT 117 195 193 137 12 36 95 77 643 221YoY Change (%) 17.2 12.5 -30.8 -31.0 -89.4 -81.8 -50.5 -43.8 -14.5 -65.7E: MOSL EstimatesOctober 2012C–162

BSE SensexS&P CNX18,763 5,703BloombergTTAN INEquity Shares (m) 887.852 Week Range (INR) 263/1541,6,12 Rel Perf (%) 12/7/12Mcap (INR b) 232.2Mcap (USD b) 4.4CMP: INR262September 2012 Results PreviewSector: RetailTitan IndustriesNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 65,209 4,336 4.9 65.8 - - 49.6 61.8 - -03/12A 88,384 6,048 6.8 38.4 38.7 16.0 48.7 66.8 2.5 26.803/13E 103,823 7,158 8.1 19.3 32.4 12.0 42.4 58.7 2.1 21.703/14E 123,199 8,858 10.0 23.8 26.2 9.1 34.8 54.1 1.7 13.9• We expect Titan Industries (TTAN) to post sales of INR24.5b, up 16.6%. EBITDA is likely to grow 23%, with marginexpansion of 50bp, driven by savings on excise and direct import of gold. PAT is likely to increase 15.4% toINR1.7b.• Sequentially, footfalls have increased in the Jewelry segment, driven by improved consumer sentiment andbetter wedding demand.• We estimate 10% decline in Jewelry volumes, as higher gold prices and weak consumer sentiment continue toimpact footfalls and demand; however, value growth will remain healthy due to ~23% higher gold prices.• We expect sales to grow 15% in the Jewelry segment and 14% in the Watches segment.• We believe store expansion and festive season demand in 3QFY13 are the key factors to watch for in FY13.• We estimate 21% PAT CAGR over FY12-14, but deterioration in consumer sentiment and decline in gold pricesare risks to our estimates. The stock trades at 32.4x FY13E EPS of INR8.1 and 26.2x FY14E EPS of INR10. Neutral.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Sales 20,205 20,963 24,401 22,814 22,057 24,450 29,000 28,316 88,384 103,823YoY Change (%) 61.3 36.5 24.8 28.3 9.2 16.6 18.8 24.1 35.5 17.5Total Exp 18,284 18,961 22,272 20,744 19,937 21,981 26,100 25,709 80,054 93,727EBITDA 1,921 2,002 2,129 2,071 2,120 2,469 2,900 2,607 8,329 10,096EBITDA Growth % 73 15 9.2 95.7 10.3 23.3 36.2 25.9 42 21Margins (%) 9.5 9.6 8.7 9.1 9.6 10.1 10.0 9.2 9.4 9.7Depreciation 99 106 119 125 123 110 117 131 449 482Interest 88 2 10 131 126 160 160 204 437 650Other Income 233 201 247 255 252 250 240 235 941 977PBT 1,968 2,096 2,247 2,070 2,122 2,449 2,863 2,507 8,384 9,941Tax 532 567 608 627 561 686 802 735 2,336 2,784Rate (%) 27.0 27.1 28.5 30.3 28.0 28.0 28.0 29.3 27.9 28.0Adjusted PAT 1,436 1,529 1,639 1,443 1,561 1,764 2,061 1,772 6,048 7,158YoY Change (%) 76.9 19.7 16.4 72.0 8.7 15.4 25.8 22.8 39.5 18.3E: MOSL EstimatesOctober 2012C–163

September 2012 Results PreviewSector: TechnologyTechnologyCompany NameCognizant TechnologyHCL TechnologiesInfosysMphasiSTCSTech MahindraWiproExpect TCS, Cognizant to lead growth amid moderate traction in seasonally strongquarter: We expect tier-I IT to grow USD revenue by 1-4.7% QoQ, led by TCS (4.1%QoQ) and Cognizant (4.7% QoQ). Infosys' revenue growth estimate stands at 2.9%QoQ, after two successive quarters of sequential revenue decline, bridging the growthgap with leaders. HCL is likely to continue steady growth (3.6% QoQ), while Wipromay lag, growing 1% QoQ (v/s guidance of 0.3-2.3%), as large deals remain elusive.Margins to decline at HCL Tech and Wipro, remain flat at TCS and Infosys: INR hasdepreciated by 1.9% QoQ in 2QFY13, which will be slight tailwind for margins. Also,the commentary around pricing remained stable across the board, with no spike ininstances of abnormal pricing. Given the wage hikes effective from 1 June 2012 atWipro and 1 July 2012 at HCL Tech, we expect operating profit margins to decline atthese two companies (by 90bp QoQ and 220bp QoQ, respectively). Despite pressuresfrom continued hiring, onsite shift and geographic mix, we expect margins to remainstable at TCS QoQ. Even at Infosys, we expect margins to remain within a tight band.Expect guidance to remain unchanged on the back of unchanged macro outlook:Worries on the macro front have not abated, and there is not enough to suggestincremental change in the commentary across the board. We expect caution todominate the outlook for FY13, and guidance to remain unchanged. Deal signingslend confidence to Infosys' outlook of at least 5% growth, and Cognizant too shouldmaintain guidance of at least 20% growth. Change in currency assumed in the guidanceis likely to moderate EPS estimate at Infosys by ~2pp to INR162. We expect hiringguidance to remain unchanged at TCS and Wipro to guide 1-3% QoQ growth in USDrevenue for 3QFY13.Watch for commentary on deal pipeline and velocity, BFSI and Europe: Given thecontinued sluggishness in the environment, deal signing cycles are likely to remainstretched, potentially thwarting the growth outlook. Also, continued trouble in Europeand BFSI imply that outlook on the two would be keenly anticipated. From theindividual company's perspective, watch for volume growth and hiring at TCS, USDrevenue growth and pricing at Infosys, volume growth at Wipro and HCL Tech, andBFSI performance at Cognizant.Expected quarterly performance summary(INR Million)CMP Rating Sales EBITDA Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQHCL Technologies 577 Buy 62,080 33.5 4.9 11,987 54.4 -6.2 7,932 65.3 -5.7Infosys 2,534 Buy 100,052 23.5 4.0 30,956 23.0 5.1 24,015 26.0 4.9MphasiS 402 Sell 13,551 3.1 0.0 2,768 17.9 3.5 2,092 14.3 0.2TCS 1,294 Neutral 157,685 35.5 6.1 46,122 36.3 6.4 34,563 41.7 5.4Tech Mahindra 972 Buy 16,291 22.2 5.6 3,085 51.1 -6.6 2,978 23.7 -12.0Wipro 381 Buy 110,824 21.9 4.0 21,299 22.4 -0.6 15,927 22.4 0.8Sector Aggregate 460,483 27.5 4.8 116,217 31.3 2.9 87,506 33.6 2.5Ashish Chopra (Ashish.Chopra@MotilalOswal.com)October 2012C–164

September 2012 Results PreviewSector: TechnologyPrefer HCL Tech, Infosys: Large deals signed lend visibility to HCL Tech's revenuegrowth in FY13, while Infosys' commentary improved slightly through the quarter onthe back of deals won. TCS' incrementally cautious outlook on Telecom and richvaluations keep us Neutral on the stock. We agree with Wipro's strategy of investingin the downturn; but improvement in environment remains imperative for quickfruition of its efforts.Expect TCS to lead growth, Infosys to bridge the gap13TCS Infosys Wipro HCL TecgRelative Performance - 3m (%)110105100959085Relative Performance - 1Yr (%)13012011010090Sep-11Sensex IndexMOSL Technology IndexJun-12Jul-12Aug-12Sep-12Sensex IndexMOSL Technology IndexDec-11Mar-12Jun-12Sep-12951-3Q1FY11Q2FY11Q3FY11Q4FY111QFY122QFY12EBITDA margin to decline at HCL and Wipro on wage hikes38%32%26%20%14%1QFY102QFY10EBITDA Margins across top‐tierInfosys TCS Wipro (overall) HCLT3QFY104QFY101QFY112QFY113QFY114QFY111QFY123QFY122QFY124QFY123QFY121QFY134QFY121QFY134.12.91.03.62QFY13E2QFY13ESource: Company, MOSLAggregate PAT to increase 35% YoY, aided by currency swingRevenues (USD) Revenues (INR b)Company 2QFY13E 2QFY12 Yoy (%) 1QFY13 QoQ (%) 2QFY13E 2QFY12 Yoy (%) 1QFY13 QoQ (%)TCS 2,841 2,525 12.5 2,728 4.1 158 116 35.5 149 6.1Infosys 1,803 1,746 3.2 1,752 2.9 100 81 23.5 96 4.0Wipro 1,530 1,473 3.9 1,515 1.0 111 91 21.9 107 4.0HCLT 1,119 1,002 11.6 1,080 3.6 62 47 33.5 59 4.9Aggregate 7,292 6,746 8.1 7,074 3.1 431 335 28.6 411 4.9EBIT Margin(%) PAT (INR b)Company 2QFY13E 2QFY12 Yoy (%) 1QFY13 QoQ (%) 2QFY13E 2QFY12 Yoy (%) 1QFY13 QoQ (%)TCS 27.6 27.1 51 27.5 12 35 24 41.7 33 5.4Infosys 28.3 28.2 16 28.0 32 24 19 26.0 23 4.9Wipro 16.7 16.4 32 17.6 -89 16 13 22.4 16 0.8HCLT 16.8 13.9 291 19.0 -224 8 5 65.2 8 -5.7Aggregate 23.4 22.6 80 23.8 (42) 82 61 34.6 80 3.2Source: Company, MOSLOctober 2012C–165

September 2012 Results PreviewSector: TechnologyEBITDA margin to decline at HCL and Wipro on wage hikes225Incremental revenues - USD m150750-75TCS Infosys Wipro HCL CognizantSource: Company, MOSLEPS Estimates (INR) - MOSL v/s Consensus2QFY13 FY13 FY14 Upside/Downside to Consensus (%)MOSL Consensus MOSL Consensus MOSL Consensus 3QFY12 FY12 FY13Infosys 42.0 42.0 166.4 164.3 180.7 177.0 0.1 1.3 2.1TCS 17.7 17.4 71.6 69.3 78.8 76.6 1.4 3.5 3.0Wipro 6.5 6.4 26.0 26.2 28.2 28.6 2.1 -0.9 -1.5HCL Tech 11.3 11.0 46.3 43.5 47.6 48.3 2.6 6.4 -1.6Mphasis 9.9 9.7 37.5 37.3 40.8 39.2 2.9 0.6 3.9Tech Mahindra 22.4 22.5 87.2 81.9 101.0 89.1 -0.4 6.4 13.3Cognizant 0.9 0.9 3.4 3.5 3.9 4.1 0.6 -2.2 -4.1Source: Company, MOSL2QFY13 Currency highlights (INR)Rates (INR) Change (QoQ, %)USD EUR GBP AUD USD EUR GBP AUDAverage 55.2 69.0 87.1 57.3 0.9 -0.1 1.9 5.0Closing 52.9 68.3 85.6 55.1 -5.0 -2.5 -1.5 -2.8Source: Company,MOSL2QFY13 Currency highlights (in USD)Rates (USD) Change (QoQ, %)EUR GBP AUD EUR GBP AUDAverage 1.25 1.58 1.04 -2.5 -0.2 2.9Closing 1.29 1.62 1.04 1.5 2.9 1.4Source: Company/MOSL2QFY13 guidance exchange rate assumptionsGuided at EUR GBP AUD INR/USDInfosys 1.26 1.56 1.02 55.00Wipro 1.26 1.58 1.01 54.76Actual (Average) 1.25 1.58 1.04 55.30Source: Company/MOSLComparative valuationCMP (INR) Rating EPS (INR) P/E (x) EV/EBITDA (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14ETechnologyHCL Technologies 577 Buy 35.1 46.3 47.6 16.5 12.5 12.1 10.2 8.0 7.4 26.0 27.8 25.8Infosys 2,534 Buy 145.5 166.5 180.7 17.4 15.2 14.0 11.6 9.8 8.8 28.0 27.3 25.8MphasiS 402 Sell 37.5 40.8 37.2 10.7 9.9 10.8 8.3 7.6 8.2 18.7 17.5 13.9TCS 1,294 Neutral 54.4 71.6 78.8 23.8 18.1 16.4 17.4 13.0 11.5 36.7 38.3 33.7Tech Mahindra 972 Buy 70.4 87.2 101.0 13.8 11.1 9.6 10.5 6.6 5.6 30.2 24.4 23.0Wipro 381 Buy 22.7 26.0 28.2 16.8 14.7 13.5 11.8 10.0 9.0 21.2 20.7 19.4Sector Aggregate 19.3 15.7 14.5 13.5 10.8 9.7 25.2 26.4 23.5October 2012C–166

BSE SensexS&P CNX18,763 5,703BloombergCTSH USEquity Shares (m) 307.352-Week Range (USD) 84/531,6,12 Rel. Perf. (%) 4/-5/21M.Cap. (INRb) 1,118.6M.Cap. (USD b) 21.2September 2012 Results PreviewSector: TechnologyCognizant Technology SolutionsCMP: USD69Not RatedYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (USD m) (USD m) (USD) Gr. (%) (X) (X) (%) (%) Sales EBITDA12/10A 4,592 734 2.38 34.2 - - 23.5 27.2 - -12/11A 6,121 884 2.86 20.0 24.4 5.5 23.4 28.6 3.2 15.512/12E 7,347 1,060 3.45 20.5 20.3 4.6 24.6 29.5 2.6 12.512/13E 8,711 1,211 3.94 14.2 17.7 3.7 23.0 27.3 2.1 10.4• We expect Cognizant's revenue to grow 4.7% QoQ to USD1.88b in 3QCY12. The company had guided revenue ofUSD1.875b, implying a growth of 4.4% QoQ.• We expect Cognizant to retain its full-year revenue growth guidance of at least 20%, which implies 4QCY12growth rate of 4.3% QoQ on our 3Q revenue estimate.• 1QCY12 was only the second time in the past six years when the company lowered its full-year guidance. Thelast time when it did so in CY08 (in the middle of the financial meltdown), it was just a one-quarter phenomenonand guidance was again increased in the next quarter.• Our EBITDA margin estimate stands at 21.2% (+70bp QoQ) v/s 20.5% in 2QCY12, on some favorable impact fromcurrency.• Our GAAP EPS estimate is USD0.9 v/s the company's guidance of USD0.86.• Key things to watch: Commentary on likely client budgets in CY13; traction in discretionary spending; commentaryon Europe.• The stock trades at 20.3x CY12E and 17.7x CY13E EPS. Not Rated.Quarterly Performance (US GAAP)(USD Million)Y/E December CY11 CY12 CY11 CY12E1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QERevenues 1,371 1,485 1,601 1,664 1,711 1,795 1,880 1,961 6,121 7,347Q-o-Q Change (%) 4.6 8.3 7.8 3.9 2.9 4.9 4.7 4.3 33.3 20.0Direct Expenses 782 861 925 971 985 1,031 1,067 1,118 3,539 4,201SG&A 296 327 353 352 374 397 413 431 1,329 1,616SG&A as % of Sales 21.6 22.0 22.1 21.2 21.9 22.1 22.0 22.0 21.7 22.0EBITDA 293 298 323 341 353 368 399 411 1,254 1,530Margins (%) 21.3 20.0 20.2 20.5 20.6 20.5 21.2 21.0 20.5 20.8Other Income 15 8 -5 15 4 3 9 10 33 26Depreciation 27 28 30 32 35 36 38 39 117 147PBT bef. Extra-ordinary 280 278 288 323 322 335 371 382 1,169 1,410Provision for Tax 72 70 61 83 79 83 93 95 286 350Rate (%) 25.7 25.1 21.1 25.7 24.4 24.8 25.0 25.0 24.4 24.8PAT before EO 208 208 227 240 244 252 278 286 884 1,060Q-o-Q Change (%) 1.0 -0.1 9.2 5.7 7.3 3.4 10.4 2.9 20.5 19.9Operating MetricsHeadcount addition 7,200 7,100 11,700 7,700 2,800 4,500 6,399 5,335 33,700 19,150Closing Headcount 111,200 118,300 130,000 137,700 140,500 145,000 151,450 156,850 137,700 156,850Utilization (%) 70 70 70 68 67 68 69 69 69 68October 2012C–167

BSE SensexS&P CNX18,763 5,703BloombergHCLT INEquity Shares (m) 702.952 Week Range (INR) 595/3741,6,12 Rel Perf (%) -3/13/28Mcap (INR b) 405.8Mcap (USD b) 7.7CMP: INR577September 2012 Results PreviewSector: TechnologyHCL TechnologiesBuyYear Sales PAT* EPS* EPS P/E* P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA6/11A 159,118 16,098 23.1 35.0 - - 20.8 15.9 - -6/12A 210,312 24,556 35.1 52.0 16.5 3.8 26.0 21.4 1.9 9.96/13E 257,162 32,655 46.3 31.9 12.5 3.1 27.8 25.2 1.5 7.96/14E 288,099 33,784 47.6 2.9 12.1 2.6 25.8 22.3 1.3 7.4* After ESOP charges• We estimate HCL Tech's 1QFY13 revenue at USD1.12b, up 3.6% QoQ. In INR terms, our revenue estimate isINR62.08b, up 4.9% QoQ.• We expect volume growth of 3.6% QoQ in Software Services, and USD revenue growth of 3.5% QoQ in SoftwareServices, 2.1% QoQ in BPO and 4.2% QoQ in IMS.• Despite our assumption of 1.2% QoQ depreciation in the INR v/s the USD, we expect EBITDA margin to decline230bp QoQ (after adjusting for ESOP charges) on account of wage hikes effective from 1 July 2012.• We estimate SGA spends at 13.9% of revenue, +70bp QoQ.• We expect PAT to decline 5.7% QoQ to INR7.9b (after adjusting for ESOP charges), translating into an EPS ofINR11.3.• Key things to watch: Commentary on deal pipeline; impact of wage hikes on margins.• The stock trades at 12.5x FY13E and 12.1x FY14E EPS. Maintain Buy.Quarterly Performance (US GAAP)(INR Million)Y/E June FY12 FY13E FY12 FY13E1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QRevenues 46,513 52,452 52,156 59,191 62,080 62,794 65,061 67,227 210,312 257,162Q-o-Q Change (%) 8.2 12.8 -0.6 13.5 4.9 1.2 3.6 3.3 32.2 22.3EBITDA 7,764 9,487 9,363 12,782 11,987 11,768 12,471 12,867 39,396 49,094Margins (%) 16.7 18.1 18.0 21.6 19.3 18.7 19.2 19.1 18.7 19.1Other Income 59 -670 -136 -423 287 342 370 400 -1,170 -942PAT 4,800 5,526 5,818 8,409 7,932 7,774 8,334 8,615 24,553 27,685Q-o-Q Change (%) -2.3 15.1 5.3 44.5 -5.7 -2.0 7.2 3.4Y-o-Y Change (%) 59.8 48.5 30.6 71.2 65.3 62.0 50.8 48.1 43.6 12.8Diluted EPS (INR) 6.9 7.9 8.3 12.0 11.3 11.0 11.8 12.2 35.1 46.3USD Revenues 1,002 1,022 1,048 1,080 1,119 1,163 1,205 1,253 4,152 4,268Q-o-Q Change (%) 4.1 2.0 2.5 3.0 3.6 4.0 3.6 4.0 17.1 2.8Operating MetricsGross Margin (%) 31.1 32.6 32.1 34.8 33.2 32.8 33.0 33.0 31.3 31.3SGA (%) 14.4 14.5 14.2 13.2 13.9 14.1 13.9 13.8 14.7 14.7Tax rate (%) 26.3 25.5 25.5 22.4 24.0 24.0 24.0 24.0 24.5 24.5Net Employee additions 3,474 2,556 -612 1,855 2,600 2,800 3,200 3,650 7,273 12,250Util. - incl. trainees (%) 69.7 69.6 72.2 72.4 73.0 72.5 72.5 72.5 70.8 72.6Q-o-Q Volume Growth (%) 4.0 4.9 2.9 1.8 3.6 3.8 3.7 3.7 16.7 13.9Q-o-Q Realization change (%) 1.1 -1.2 -1.0 0.0 -0.1 -0.1 -0.1 0.0 0.4 -0.8Offshore revenues (%) 42.3 42.1 43.8 42.8 42.9 43.0 43.1 43.1 42.8 43.0E: MOSL Estimates; After adjusting for ESOP charges; Axon is consolidated since December 2008October 2012C–168

BSE SensexS&P CNX18,763 5,703BloombergINFO INEquity Shares (m) 571.452 Wk Range (INR) 2,990/2,1021,6,12 Rel Perf (%) -2/-20/-12Mcap (INR b) 1,447.9Mcap (USD b) 27.5CMP: INR2,534September 2012 Results PreviewSector: TechnologyInfosysBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 275,010 68,230 119.4 11.2 - - 27.8 33.1 - -3/12A 337,340 83,160 145.5 21.9 17.4 4.3 28.0 32.9 3.7 11.63/13E 405,699 95,045 166.5 14.4 15.2 4.0 27.3 32.5 3.0 9.93/14E 446,507 103,248 180.7 8.5 14.0 3.3 25.8 30.3 2.6 8.8• Our 2QFY13 revenue estimate stands at USD1.8b, up 2.9% QoQ. In INR terms, our revenue growth estimate isINR100b, up 4% QoQ.• We expect Infosys to grow its volumes by 3% QoQ in 2QFY13. To meet its minimum volume growth of 9.5% inFY13, the company requires a volume CQGR of 2.8% over 2Q-4Q.• Infosys had guided USD revenue growth of "at least" 5% for FY13, and had stopped giving guidance for theimmediate quarter.• We expect reported pricing to be flattish, after declining 3.2% on a blended basis in constant currency in 1Q.This would still imply some like-to-like decline, given that there is a tailwind of ~80bp on the realization metricfrom one-time revenue reversal in 1QFY13.• We expect EBITDA margin to expand 30bp QoQ to 30.9%, given our assumption of ~1% depreciation in therealized INR QoQ.• We expect 4.9% increase in PAT to INR24b. Our EPS estimate is INR42.• Key things to watch: Volume growth in 2QFY13; commentary on discretionary spends and pricing; deal signingsperformance QoQ.• The stock trades at 15.2x FY13E and 14x FY14E EPS. Maintain Buy.Quarterly Performance (IFRS)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QERevenues 74,850 80,990 92,980 88,520 96,160 100,052 103,412 106,075 337,340 405,699Q-o-Q Change (%) 3.2 8.2 14.8 -4.8 8.6 4.0 3.4 2.6 22.7 20.3EBITDA 21,750 25,160 31,350 28,900 29,460 30,956 31,164 32,201 107,160 123,689Margins (%) 29.1 31.1 33.7 32.6 30.6 30.9 30.1 30.4 31.8 30.5Other Income 4,430 3,870 4,220 6,520 4,760 5,249 5,140 4,257 19,040 19,405PAT 17,220 19,060 23,720 23,160 22,890 24,015 24,069 24,164 83,160 95,045Q-o-Q Change (%) -5.3 10.7 24.4 -2.4 -1.2 4.9 0.2 0.4 21.9 14.3Diluted EPS (INR) 30.1 33.4 41.5 40.5 40.1 42.0 42.1 42.3 145.5 166.5USD Revenues 1,671 1,746 1,806 1,771 1,752 1,803 1,915 1,964 6,994 7,434Q-o-Q Change (%) 4.3 4.5 3.4 -1.9 -1.1 2.9 6.2 2.6 15.8 6.3Operating MetricsGross Margin (%) 41.8 44.3 45.7 44.0 42.2 42.7 42.6 42.6 44.1 42.5SGA (%) 12.8 13.3 11.9 11.4 11.6 11.8 12.4 12.3 12.3 12.0Tax rate (%) 28.1 28.6 28.6 29.8 27.8 28.5 28.5 28.5 28.8 28.3Net Employee additions 2,740 8,262 3,266 4,906 1,157 5,210 4,159 3,184 19,174 13,710Utilization - incl. trainees (%) 74.9 77.3 77.4 73 79.1 76.0Q-o-Q Volume Growth (%) 3.2 4.4 3.0 -0.6 2.8 3.0 3.3 2.6 10.8 9.8Q-o-Q Realization change (%) 1.2 0.5 (0.1) (1.1) (3.7) (0.1) 2.9 - 4.7 -3.2E: MOSL EstimatesOctober 2012C–169

BSE SensexS&P CNX18,763 5,703BloombergMPHL INEquity Shares (m) 210.052 Week Range (INR) 439/2771,6,12 Rel Perf (%) 3/-12/4Mcap (INR b) 84.5Mcap (USD b) 1.6CMP: INR402September 2012 Results PreviewSector: TechnologyMphasisSellYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) Ratio (x) (%) (%) Sales EBITDA10/10A 50,366 10,269 48.6 12.5 - - 36.4 36.4 - -10/11A 50,980 8,308 39.3 -19.1 10.2 2.2 23.1 22.2 1.3 6.710/12E 54,063 7,921 37.5 -4.7 10.7 1.9 18.7 19.4 1.2 5.910/13E 56,775 8,611 40.8 8.7 9.9 1.6 17.5 18.6 1.0 4.9• We expect Mphasis to report sequentially flattish revenue at INR13.5b in 4QFY12, as growth in the directchannel is offset by continued decline in the HP channel.• In USD terms, we expect revenue of USD254m v/s USD252m in 3QFY12 (+0.7% QoQ). We estimate 1.1% QoQgrowth in ITS and 1% QoQ decline in revenue from Applications.• We model INR400m hedge losses for the company in the topline.• Our EBITDA margin estimate is 20.4%, +70bp QoQ, given the company's continued cost focus amid limitedrevenue visibility.• We expect 10.2% QoQ growth in PAT to INR2.09b, translating into an EPS of INR9.9.• Key things to watch: Outlook on HP channel in FY13; plans around cash; traction and deal pipeline in the directchannel.• The stock trades at 10.7x FY12E and 9.9x FY13E EPS. Maintain Sell.Mphasis - Quarterly Performance(INR Million)Y/E October FY11 FY12 FY11 FY12E1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QERevenues 12,335 12,571 12,936 13,138 13,672 13,289 13,551 13,551 50,980 54,063Q-o-Q Change (%) -8.3 1.9 2.9 1.6 5.7 -2.8 2.0 0.0 1.2 6.0Direct Expenses 8,769 8,950 9,396 9,626 9,995 9,454 9,596 9,513 36,741 38,558Sales, Gen. & Admin. Exp. 1,167 949 1,024 1,165 1,155 1,221 1,280 1,271 4,305 4,927Operating Profit 2,399 2,672 2,516 2,347 2,522 2,614 2,675 2,768 9,934 10,579Margins (%) 19.5 21.3 19.4 17.9 18.4 19.7 19.7 20.4 19.5 19.6Other Income 346 497 429 479 338 340 441 386 1,751 1,505Depreciation 359 337 440 414 468 455 415 419 1,550 1,757PBT bef. Extra-ordinary 2,386 2,832 2,505 2,412 2,392 2,499 2,701 2,735 10,135 10,327Provision for Tax 295 393 557 582 544 605 614 643 1,827 2,406Rate (%) 12.4 13.9 22.2 24.1 22.7 24.2 22.7 23.5 18.0 23.3PAT bef. Extra-ordinary 2,091 2,439 1,948 1,830 1,848 1,894 2,087 2,092 8,308 7,921Q-o-Q Change (%) -19.9 16.6 -20.1 -6.1 -5.1 2.5 10.2 0.2 -19.1 -4.7Diluted EPS (INR) 9.9 11.6 9.3 8.7 8.8 9.0 9.9 9.9 39.3 37.5USD Revs 271 282 290 276 271 266 252 254 1,119 1,042Q-o-Q Change (%) -8.5 3.9 2.9 -4.7 -2.0 -1.8 -5.2 0.7 1.7 -6.8E: MOSL EstimatesOctober 2012C–170

BSE SensexS&P CNX18,763 5,703BloombergTCS INEquity Shares (m) 1,957.252 Wk Range (INR) 1,438/1,0151,6,12 Rel Perf (%) -10/2/9Mcap (INR b) 2,532.6Mcap (USD b) 48.1CMP: INR1,294September 2012 Results PreviewSector: TechnologyTata Consultancy ServicesNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 373,245 86,826 44.4 26.3 - - 37.4 42.2 - -3/12A 488,938 106,384 54.4 22.5 23.8 7.8 36.7 44.1 5.1 17.43/13E 632,683 140,221 71.6 31.8 18.1 6.2 38.3 45.4 3.8 13.03/14E 725,936 154,286 78.8 10.0 16.4 5.0 33.7 39.8 3.2 11.5• We expect TCS to grow its revenue by 4.1% QoQ to USD2.84b in 2QFY13, on the back of 3.9% sequential growthin volumes.• In INR terms, we expect revenue growth of 6% QoQ to INR158b. Pricing would remain flat QoQ.• EBITDA margin would be sequentially flattish at 29.2%, as gains from currency would be offset by [1] continuedtraction in hiring, [2] slight onsite shift on account of new project start-ups, and [3] higher growth from lowermargin geographies like APAC and South America.• We expect PAT to grow 5.4% QoQ to INR34.6b, translating into an EPS of INR17.7.• We expect net hiring of 9,181 employees. Utilization including trainees would increase by 200bp QoQ to 74.3%.• Key things to watch: Volume growth; gross hiring; impact from forex.• The stock trades at 18.1x FY13E and 16.4x FY14E EPS. Maintain Neutral.Quarterly Performance (IFRS)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QERevenues 107,970 116,335 132,040 132,593 148,687 157,685 159,882 166,429 488,938 632,683Q-o-Q Change (%) 6.3 7.7 13.5 0.4 12.1 6.1 1.4 4.1 31.0 29.4EBITDA 30,310 33,829 40,921 39,117 43,328 46,122 46,263 49,718 144,177 185,430Margins (%) 28.1 29.1 31.0 29.5 29.1 29.2 28.9 29.9 29.5 29.3Other Income 2,887 997 -920 1,077 1,754 2,430 3,011 3,156 4,041 10,351PAT 23,804 24,390 28,866 29,324 32,806 34,563 35,057 37,796 106,384 140,221Q-o-Q Change (%) -0.9 2.5 18.3 1.6 11.9 5.4 1.4 7.8 22.5 31.8Diluted EPS (INR) 12.2 12.5 14.7 15.0 16.8 17.7 17.9 19.3 54.4 71.6USD Revenues 2,412 2,525 2,586 2,648 2,728 2,841 2,961 3,082 10,171 11,612Q-o-Q Change (%) 7.5 4.7 2.4 2.4 3.0 4.1 4.2 4.1 24.2 14.2Operating MetricsGross Margin (%) 45.5 46.6 48.0 47.8 47.2 47.1 47.3 47.6 47.1 47.3SGA (%) 17.5 17.5 17.1 18.3 18.1 17.9 18.3 17.8 17.6 18.0Tax rate (%) 22.7 24.3 22.6 21.6 22.2 24.0 24.0 24.0 22.8 23.6Net Employee additions 3,576 12,580 11,981 11,832 4,962 9,181 7,924 7,702 39,969 29,768Utilization - excluding trainees (%) 83.2 83.1 82.0 80.6 81.3 83.7 84.0 83.9 82.2 83.3Q-o-Q Volume Growth (%) 7.5 6.3 3.2 3.3 5.3 3.9 4.2 3.5 23.0 15.7Q-o-Q Realization change (%) -0.5 -1.0 2.0 -1.0 -1.0 -0.1 0.0 0.6 1.1 -0.9Offshore revenues (%) 55.2 54.8 55.0 54.8 55.3 55.4 55.9 55.9 54.9 55.6E: MOSL EstimatesOctober 2012C–171

BSE SensexS&P CNX18,763 5,703BloombergTECHM INEquity Shares (m) 127.552 Week Range (INR) 980/5241,6,12 Rel Perf (%) 9/29/53Mcap (INR b) 123.9Mcap (USD b) 2.4CMP: INR972September 2012 Results PreviewSector: TechnologyTech MahindraBuyYear Net Sales PAT# EPS* EPS P/E P/BV R0E RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 48,413 7,093 54.3 7.4 - - 30.2 22.1 - -3/12A 54,897 9,299 70.4 29.7 13.8 2.9 30.2 24.5 2.9 13.83/13E 70,869 11,512 87.2 23.8 11.1 2.3 24.4 24.0 2.3 8.93/14E 82,293 13,337 101.0 15.9 9.6 1.7 23.0 22.1 1.7 7.6# Reported PAT incl Satyam; * EPS incl profits from Satyam, adjusted for restructuring charge• We expect Tech Mahindra's revenue to grow 4.3% QoQ to USD294m, on account of ~USD12m contribution fromthe acquisition of HGS. In INR terms, we expect revenue of INR16.3b, +55.6% QoQ.• At Mahindra Satyam, we expect revenue to grow 3% QoQ to USD352m. In Rupee terms, revenue would beINR19.55b.• Tech Mahindra's EBITDA margin is expected to decline 250bp QoQ to 18.9% in 2QFY13, on account of wage hikeseffective from the onset of the quarter. Even at Satyam, we expect EBITDA margin to decline 210bp QoQ to19.6%.• Our PAT estimate for Tech Mahindra is INR1.73b and INR1.34b after adjusting the impact of restructuring fees.Our PAT estimate for Satyam is INR2.9b.• Key things to watch: Pipeline in Managed Services; outlook on BT; margin profile post acquisitions.• The stock trades at 11.1x FY13E and 9.6x FY14E EPS. Maintain Buy.Quarterly Performance (Indian GAAP) - SA(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QERevenues 12,925 13,333 14,449 14,190 15,434 16,291 19,300 19,844 54,897 70,869Q-o-Q Change (%) 2.5 3.2 8.4 -1.8 8.8 5.6 18.5 2.8 13.4 29.1Direct Cost 8,540 9,069 9,861 9,312 9,684 10,551 12,790 13,003 36,782 46,027Other Operating Exps 1,967 2,222 2,245 2,487 2,448 2,655 3,127 3,215 8,921 11,445Operating Profit 2,418 2,042 2,343 2,391 3,302 3,085 3,384 3,626 9,194 13,397Margins (%) 18.7 15.3 16.2 16.8 21.4 18.9 17.5 18.3 16.7 18.9Other Income 460 972 147 -211 -174 -123 -39 -6 1,368 -342Interest 223 721 338 131 240 286 258 231 1,413 1,014Depreciation 334 507 390 383 421 436 507 512 1,614 1,876PBT bef. Extra-ordinary 2,321 1,786 1,762 1,666 2,467 2,240 2,580 2,878 7,535 10,165Provision for Tax 509 393 294 242 585 515 593 662 1,438 2,355Rate (%) 21.9 22.0 16.7 14.5 23.7 23.0 23.0 23.0 19.1 23.2Net Inc. aft. sh. of profits fr. asso. 2,768 2,407 2,763 3,023 3,384 2,978 3,190 3,479 4,104 5,863Q-o-Q Change (%) 200.5 -13.0 14.8 9.4 11.9 -12.0 7.1 9.1 -17.6 42.9Diluted EPS (INR) 18.2 15.3 17.8 19.7 22.6 19.5 21.1 23.3 70.9 86.7USD Revenues 290 296 289 282 281 294 357 367 1,156 1,300Q-o-Q Change (%) 4.1 2.2 -2.5 -2.5 -0.1 4.3 21.8 2.8 8.8 12.4E: MOSL EstimatesOctober 2012C–172

BSE SensexS&P CNX18,763 5,703BloombergWPRO INEquity Shares (m) 2,455.652 Week Range (INR) 453/3241,6,12 Rel Perf (%) -2/-21/-4Mcap (INR b) 936.3Mcap (USD b) 17.8CMP: INR381September 2012 Results PreviewSector: TechnologyWiproBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 310,986 52,794 21.6 15.1 - - 24.2 20.1 - -3/12A 375,248 55,731 22.7 5.1 16.8 3.3 21.2 19.4 2.3 11.83/13E 440,757 63,749 26.0 14.4 14.7 2.8 20.7 19.5 1.9 10.03/14E 480,255 69,192 28.2 8.5 13.5 2.4 19.4 18.6 1.7 8.9• We estimate Wipro's IT revenue at USD1.53b, +1% QoQ, in line with the company's guidance of USD1.52b-1.55b.In INR terms, we estimate Services revenue at INR84.9b, +2.1% QoQ.• We expect volume growth of 1.3% QoQ and flat pricing for IT Services. Wipro's overall revenue is likely to grow4% QoQ to INR111b.• IT Services EBIT margin would decline 100bp QoQ to 20% on two months of residual impact from wage hikes.Overall EBIT margin would decline 90bp QoQ to 16.7%.• We estimate PAT at INR15.9b, up 0.8% QoQ, and EPS at INR6.48.• Key things to watch: Guidance for 3QFY13; commentary around deals; outlook on BFSI and Telecom.• The stock trades at 14.7x FY13E and 13.5x FY14E EPS. Maintain Buy.Wipro Quarterly Performance (IFRS)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QERevenues 85,640 90,945 99,972 98,691 106,530 110,824 111,205 112,198 375,248 440,757Q-o-Q Change (%) 3.2 6.2 9.9 -1.3 7.9 4.0 0.3 0.9 20.7 17.5EBITDA 17,290 17,397 19,843 19,611 21,426 21,299 21,195 21,380 74,141 85,300Margins (%) 20.2 19.1 19.8 19.9 20.1 19.2 19.1 19.1 19.8 19.4Margins after taking hedgeson top-line (%) 17.5 16.4 17.2 17.2 17.6 16.7 16.5 16.5Other Income 1,542 962 1,249 1,984 1,223 1,444 1,482 1,681 5,737 5,829PAT 13,349 13,009 14,564 14,809 15,802 15,927 15,866 16,154 55,731 63,749Q-o-Q Change (%) -2.9 -2.5 12.0 1.7 6.7 0.8 -0.4 1.8Y-o-Y Change (%) 1.2 1.2 10.4 7.7 18.4 22.4 8.9 9.1 5.2 14.4Diluted EPS (INR) 5.4 5.3 5.9 6.0 6.4 6.5 6.5 6.6 22.7 26.0USD Revenues 1,408 1,473 1,506 1,536 1,515 1,530 1,568 1,601 5,921 6,213Q-o-Q Change (%) 0.5 4.6 2.2 2.0 -1.4 1.0 2.5 2.1 13.4 4.9Operating MetricsGross Margin (%) 29.9 28.6 30.3 30.6 30.4 30.3 30.2 29.8 29.9 30.6SGA (%) 12.5 12.2 13.0 13.5 14.0 13.8 13.8 13.7 12.8 13.8IT Services EBIT (%) 22.0 20.0 20.8 20.7 21.0 20.0 19.8 19.5 20.8 20.1Tax rate (%) 18.9 18.0 20.7 21.2 20.2 19.5 19.5 19.5 19.8 19.7Net Employee additions 4,105 5,240 5,004 -814 2,632 2,415 2,915 3,565 13,535 11,527Utilization-incl.trainees (%) 71.2 70.1 67.0 67.8 69.5 69.3 70.0 70.0 69.0 69.7Q-o-Q Volume Growth(%) 1.8 6.0 1.8 0.8 0.8 1.3 2.7 2.4 11.5 6.9Q-o-Q Realization Chg. (%) -2.1 -0.5 2.7 0.5 -2.2 -0.3 -0.2 -0.3 3.2 -0.6Offshore revenues (%) 47.6 45.7 45.6 46.1 45.6 46.1 46.2 45.6 46.2 46.1Rev Guidance (USDm) 1,394- 1,436- 1,500- 1,520- 1,520- 1,520-1,422 1,464 1,530 1,540 1,550 1,550Q-o-Q Change (%) -0.4-+1.6 2.0-4.0 1.9-3.9 1-3 -1 to 1 0.3-2.3E: MOSL EstimatesOctober 2012C–173

September 2012 Results PreviewSector: TelecomTelecomCompany NameBharti AirtelIdea CellularReliance CommunicationTulip TelecomWireless traffic to decline ~1% QoQ; RPM pressure to abate: We expect averagewireless traffic for top-4 operators to decline ~1% QoQ, led by seasonal weaknessand lower promotions. Wireless RPM decline is likely to abate, with average RPMdeclining by 0.3% QoQ v/s ~2% QoQ declines in the preceding two quarters. Withinoperators, we expect Bharti Airtel (BHARTI) to exhibit relatively lower traffic decline,given its price aggression.Abbreviations and acronymsRPM: revenue per minuteMNP: mobile number portabilityVLR: visitor location registerTRAI: Telecom RegulatoryAuthority of IndiaARPU: average revenue per userMOU: minutes of useWireless EBITDA margin to be under pressure: We expect consolidated EBITDA marginfor BHARTI to remain largely flat QoQ at 30.4%; margin for India and South Asia businessis also likely to be stable at 32%, despite flat revenue, driven by lower SGA expenses.Idea Cellular (IDEA) is likely to report consolidated EBITDA margin of ~25%, down80bp QoQ. For Reliance Communications (RCOM), we model 2QFY13 consolidatedEBITDA margin of 30%.Forex gain could boost PAT: Consolidated PAT is likely to decline by 13-14% QoQ forBHARTI/IDEA and 33% for RCOM, largely due to decline in wireless traffic. While wehave not modeled any forex gains, sharp appreciation of the INR v/s the USD coulddrive mark-to-market gains for all the wireless companies, given their significant USDliabilities.Expect improved performance at Bharti Africa: We expect improved performance inAfrica business with QoQ revenue/EBITDA likely to grow at 3/5% QoQ. 2QFY13performance in Africa should be supported by ~1% average appreciation in Bharti'sAfrican currency basket vs USD. We have not modeled any forex gain/loss in Africabusiness.Industry subscriber numbers decline in July/August: Industry subscribers declined by~21m in July 2012 and by a further ~6m in August 2012. While the decline in July waslargely due to disconnection by one operator (RCOM), all major operators exceptRCOM/Aircel reported MoM decline in subscribers during August 2012. The declinewas led by lower promotions/ channel commissions as well as likely non-availabilityof number series.Expected quarterly performance summary(INR Million)CMP Rating Sales EBITDA Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQBharti Airtel 265 Neutral 195,659 13.3 1.1 59,536 2.4 1.8 6,563 -36.1 -13.9Idea Cellular 85 Buy 54,458 17.9 -1.1 13,775 16.1 -4.0 2,036 92.5 -13.1Reliance Comm 65 Neutral 52,462 4.1 -1.4 15,916 -0.8 -3.5 1,281 -60.3 -33.1Tulip Telecom 46 Sell 7,328 4.2 2.3 1,949 -4.1 1.6 545 -37.4 -0.4Sector Aggregate 309,908 12.2 0.3 91,177 3.5 -0.1 10,424 -32.4 -16.1Shobhit Khare (Shobhit.Khare@MotilalOswal.com)October 2012C–174

September 2012 Results PreviewSector: Telecom2G auction the key event to watch for: The regulatory environment continues to beuncertain. 2G spectrum auction scheduled in November 2012 would be crucial indetermining spectrum pricing, going forward. While industry consolidation/exit ofnew entrants could lead to an improvement in the operating environment, potentialparticipation of Reliance Industries in the 2G auction could disrupt the marketrecovery.Valuation and view: During FY12-14, we expect 7/19/5% EBITDA CAGR for BHARTI/IDEA/RCOM, led by 9/15/6% traffic CAGR in the India wireless business. Reiterate Buyon IDEA (trades at an EV of 5.3x FY14E EBITDA), and Neutral on BHARTI (trades at an EVof 5.8x FY14E EBITDA) and RCOM (trades at an EV of 6.4x FY14E EBITDA).Wireless subscriber net additions (m)Industry subscriberbase declined inJuly/August 20121416121212141515171819201921171618Feb-09Mar-09Apr-09May-09Jun-09Jul-09Aug-09Sep-09Oct-09Nov-09Dec-09Jan-10Feb-10Mar-10Apr-10May-10Jun-10Jul-10Aug-10Sep-10Oct-10Nov-10Dec-10Jan-11Feb-11Mar-11Apr-11May-11Jun-11Jul-11Aug-11Sep-11Oct-11Nov-11Dec-11Jan-12Feb-12Mar-12Apr-12May-12Jun-12Jul-12Aug-12171817192323192020-211513117788391078285-6Operator wise monthly subscriber additions (m)Negative additionsfor operators duringAugust 2012QoQ wireless traffic growth (%)We expect wireless trafficfor majors to decline by~1% QoQ in 2QFY13Source: TRAI/MOSLOctober 2012C–175

September 2012 Results PreviewSector: TelecomWe expect RPM to remain largely flat QoQ (INR)0.46Bharti Id ea Vodafone -In dia RCOMWe expect RPM to remainlargely flat QoQ0.440.420.400.380.430.411QFY112QFY113QFY114QFY111QFY122QFY123QFY124QFY121QFY132QFY13ENet Debt/EBITDA (FY12, x) Net Debt/Equity (FY12, x)6.01. 2Leverage remainsreasonable forBharti/Idea but alarmingfor RCom3.52.72.60.90.9RComVodafoneIndiaBhartiIdeaRCom Ide a BhartiSource: Company/MOSLAggregate traffic growth and RPM trend for wireless majors10Qo Q traffic growth (%) QoQ RPM Growth (%)Traffic to decline onseasonality; RPM tostabilize-41-140756342-2 20-1-1-2 -2 -11QFY112QFY113QFY114QFY111QFY122QFY123QFY124QFY121QFY132QF Y13ESource: TRAIOctober 2012C–176

September 2012 Results PreviewSector: Telecom2QFY13: Summary ExpectationsWireless KPIs1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13E YoY (%) QoQ (%)EOP Wireless Subs (m)Bharti (India) 137 143 152 162 169 173 176 181 187 186 8 -0.8Idea* 69 74 82 90 95 100 106 113 117 116 16 -1.1RCOM 111 117 126 136 143 147 150 153 155 135 -8 -12.6Vodafone - India 109 116 124 135 142 145 148 150 154 154 6 -0.1AV. Wireless Subs (m)Bharti (India) 132 140 148 157 166 171 174 178 184 187 9 1.2Idea* 66 72 78 86 92 98 103 110 115 116 19 1.4RCOM 107 114 121 131 139 145 149 152 154 145 0 -5.8Vodafone - India 105 112 120 129 138 143 146 149 152 154 7 1.0ARPU (INR/month)Bharti (India) 215 202 198 194 190 183 187 189 185 181 -1 -2.2Idea* 182 167 168 161 160 155 159 160 156 152 -2 -2.4RCOM 130 122 111 107 103 101 100 99 98 104 2 5.9Vodafone - India 191 177 176 171 169 168 173 179 180 175 4 -3.0MOU/SubBharti (India) 480 454 449 449 445 423 419 431 433 424 0 -2.0Idea* 415 394 401 397 391 364 369 379 379 371 2 -2.1RCOM 295 276 251 241 233 227 224 227 228 242 7 6.4Vodafone India (reported) 328 311 308 307 308 297 303 318 324 316 6 -2.5Vodafone India (adj) 437 415 410 410 411 396 405 424 433 422 6 -2.5Revenue per min (INR)Bharti (India) 0.45 0.44 0.44 0.43 0.43 0.43 0.45 0.44 0.43 0.43 -1 -0.2Idea* 0.44 0.42 0.42 0.41 0.41 0.43 0.43 0.42 0.41 0.41 -4 -0.2RCOM 0.44 0.44 0.44 0.44 0.44 0.45 0.45 0.44 0.43 0.43 -4 -0.5Vodafone India (reported) 0.58 0.57 0.57 0.56 0.55 0.57 0.57 0.56 0.55 0.55 -2 -0.5Vodafone India (adj) 0.44 0.43 0.43 0.42 0.41 0.42 0.43 0.42 0.42 0.41 -2 -0.5Wireless traffic (B min)Bharti (India) 190 191 199 212 221 217 219 231 239 237 9 -0.8Idea* 82 85 94 102 109 106 114 124 132 130 22 -1.0RCOM 94 94 91 94 98 99 100 103 105 105 6 0.2Vodafone India (reported) 103 105 111 119 128 128 133 142 148 146 14 -1.5Vodafone India (adj) 138 140 147 159 170 170 178 190 197 194 14 -1.5Source: Company/MOSLRelative Performance-3m (%) Relative Performance-1Yr (%)115Sensex IndexMOSL Telecom Index120Sens ex Ind exMOSL Tel ecom I nd ex105105959085757560Jun-12Jul-12Aug-12Sep-12Sep-11Dec-11Ma r-12Jun-12Sep-12October 2012C–177

September 2012 Results PreviewSector: TelecomQuarterly Financials1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13E YoY (%) QoQ (%)Revenue (INR b)Bharti (ex Africa)* 112.7 113.3 117.2 121.2 126.3 126.8 131.6 134.2 137.2 136.4 8 -0.5Bharti (consolidated)* 122.3 152.2 157.6 162.7 169.7 172.7 184.8 187.3 193.5 195.7 13 1.1Idea** 36.5 36.6 39.6 42.0 45.2 46.2 50.3 53.7 55.0 54.5 18 -1.1RCOM# 51.1 51.2 50.0 53.3 53.1 50.4 50.5 53.1 53.2 52.5 4 -1.4EBITDA (INR B)Bharti (ex Africa)* 42.4 42.2 43.7* 44.3 46.0 45.7 45.2 47.4 43.6 43.7 -4 0.2Bharti (consolidated)* 44.1 51.2 53.2* 54.5 57.1 58.2 59.6 62.3 58.5 59.5 2 1.8Idea** 8.9 8.8 9.5 10.0 12.0 11.9 13.4 15.1 14.4 13.8 16 -4.0RCOM# 16.3 16.6 16.7 15.9 16.0 16.1 16.1 16.3 16.5 15.9 -1 -3.5EBITDA Margin (%)Bharti (ex Africa) 37.6 37.3 37.3* 36.6 36.4 36.1 34.4 35.3 31.8 32.0 -405bp 24bpBharti (consolidated) 36.1 33.7 33.8* 33.5 33.6 33.7 32.2 33.3 30.2 30.4 -324bp 20bpIdea** 24.3 24.0 24.0 23.9 26.6 25.7 26.7 28.1 26.1 25.3 -39bp -79bpRCOM# 31.9 32.4 33.3 29.9 30.2 31.8 31.9 30.7 31.0 30.3 -151bp -68bpPAT (INR B)Bharti (ex Africa) 19.0 20.4 18.3 18.2 15.2 14.5 12.7 13.5 14.3 11.1 -23 -22.4Bharti (consolidated) 16.8 16.6 13.0 14.0 12.2 10.3 10.1 10.1 7.6 6.6 -36 -13.9Idea** 2.0 1.8 2.4 2.0 1.8 1.1 2.0 3.4 2.3 2.0 92 -13.1RCOM 3.0 4.9 5.3 1.8 2.2 3.2 2.4 2.0 1.9 1.3 -60 -33.1EPS (INR)Bharti 4.4 4.4 3.4 3.7 3.2 2.7 2.7 2.7 2.0 1.7 -36 -13.9Idea 0.6 0.5 0.7 0.8 0.5 0.3 0.6 0.7 0.7 0.6 92 -13.1RCOM 1.5 2.4 2.5 0.9 1.1 1.6 1.2 1.0 0.9 0.6 -60 -33.1Capex (INR b)Bharti (ex Africa) 17.4 29.3 29.3 31.1 24.7 20.6 7.8 11.0 29.3 25.0 21 -14.7Idea 3.6 3.0 9.5 14.6 10.4 11.0 9.0 8.4 4.1 8.8 -20 114.0RCOM 7.9 9.3 19.1 6.6 3.6 3.5 3.6 4.3 3.7 3.7 7 1.2* Before re-branding expenses in 3QFY11; # Adj for change in accounting for IRU sales in 4QFY11; ** Idea 4QFY10 includes 1 monthconsolidation with Spice; full merger from 1QFY11; Adj for one-off revenue of ~Rs340m and costs reversal of ~Rs380m in 4QFY11Comparative valuationCMP (INR) Rating EPS (INR) P/E (x) EV/EBITDA (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14ETelecommunicationBharti Airtel 265 Neutral 11.2 7.6 10.5 23.6 34.9 25.2 7.0 6.9 5.8 8.1 5.3 7.0Idea Cellular 85 Buy 2.2 3.1 5.8 39.0 27.2 14.7 8.1 6.8 5.2 5.7 7.7 12.8Reliance Comm 65 Neutral 4.8 3.6 5.9 13.5 17.8 11.0 7.6 7.2 6.4 2.9 2.3 3.6Tulip Telecom 46 Sell 19.1 12.2 11.2 2.4 3.8 4.2 4.0 4.7 4.7 22.9 11.3 9.5Sector Aggregate 22.7 29.5 19.6 7.2 6.9 5.8 6.5 4.9 6.9October 2012C–178

BSE SensexS&P CNX18,763 5,703BloombergBHARTI INEquity Shares (m) 3,793.952 Week Range (INR) 412/2391,6,12 Rel Perf (%) 0/-31/-44Mcap (INR b) 1,004.8Mcap (USD b) 19.1CMP: INR265September 2012 Results PreviewSector: TelecomBharti AirtelBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR b) (INR b) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 595 60 15.9 -32.6 - - 12.6 8.7 - -3/12A 715 43 11.2 -29.6 23.6 1.9 8.1 6.2 2.3 7.03/13E 796 29 7.6 -32.4 34.9 1.8 5.3 4.5 2.1 6.93/14E 870 40 10.5 38.4 25.2 1.7 7.0 5.1 1.8 5.8• We expect consolidated revenue to grow 13.3% YoY and 1.1% QoQ to INR195.7b, largely driven by Africa. Indiaand South Asia revenue would grow 8% YoY but decline 0.5% QoQ to INR136.5b. Africa business revenue islikely to grow 3% QoQ to USD1.1b.• Consolidated EBITDA margin is likely to expand 20bp QoQ to 30.4%. EBITDA margin in the Africa business as wellas India and South Asia would remain flat QoQ at 26% and 32%, respectively.• We expect India and SA mobile revenue to grow 8% YoY but decline 1% QoQ to INR106b, led by 0.8% trafficdecline and 0.2% RPM decline. Mobile EBITDA margin is likely to be 30.6%, up 30bp QoQ, led by lower SGA costs.• Africa business performance is likely to improve, boosted by favorable currency movement resulting in 3%/5%revenue/EBITDA growth on a QoQ basis. We estimate an ARPU of USD6.4 and subscriber base of 59m.• Consolidated net profit is likely to decline 36% YoY and 14% QoQ to INR6.6b. PAT for India and South Asia woulddecline 22-23% YoY/QoQ. We have not assumed any forex gain/loss for BHARTI in our 2QFY13 estimates.• The stock trades at an EV of 6.9x FY13E and 5.8x FY14E EBITDA. Maintain Neutral.• Key things to watch: QoQ mobile traffic in India (we expect 0.8% decline), forex loss (we have not modeled anyforex loss/gain), Africa business financials (we expect 3%/5% revenue/EBITDA growth in USD terms).Quarterly Performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QERevenue 169,749 172,698 184,767 187,294 193,501 195,659 200,269 206,559 714,507 795,989QoQ Growth (%) 4.4 1.7 7.0 1.4 3.3 1.1 2.4 3.1EBITDA 57,058 58,151 59,584 62,329 58,487 59,536 61,512 64,092 237,122 243,626QoQ Growth (%) 4.7 1.9 2.5 4.6 -6.2 1.8 3.3 4.2Margin (%) 33.6 33.7 32.2 33.3 30.2 30.4 30.7 31.0 33.2 30.6Net Finance Costs 8,551 11,186 7,877 10,572 8,211 9,561 9,929 10,458 38,185 38,159Depreciation & Amortization 31,314 31,839 35,845 34,683 37,571 38,335 39,168 40,260 133,680 155,334Profit before Tax 17,195 15,126 15,807 17,056 12,629 11,592 12,366 13,324 65,184 49,911Income Tax Expense / (Income) 5,141 4,900 5,585 6,976 4,878 4,985 5,273 5,629 22,602 20,765Profit after Tax 12,054 10,226 10,222 10,080 7,751 6,607 7,093 7,696 42,582 29,146Reported Net Profit / (Loss) 12,152 10,270 10,113 10,059 7,622 6,563 7,016 7,589 42,595 28,791YoY Growth (%) -27.7 -38.2 -22.4 -28.2 -37.3 -36.1 -30.6 -24.6 -29.6 -32.4India - Mobile ARPU (INR/month) 190 183 187 189 185 181 188 195 188 189QoQ Growth (%) -1.6 -4.0 2.2 1.1 -2.2 -2.2 4.3 3.5India - Mobile MOU/sub/month 445 423 419 431 433 424 437 447 431 438QoQ Growth (%) -0.7 -5.0 -1.0 2.8 0.4 -2.0 3.0 2.2India - Mobile Traffic (B Min) 221 217 219 231 239 237 245 252 889 973QoQ Growth (%) 4.6 -1.9 0.9 5.4 3.7 -0.8 3.0 3.0India - Mobile RPM (INR/min) 0.43 0.43 0.45 0.44 0.43 0.43 0.43 0.44 0.44 0.43QoQ Growth (%) -0.9 1.0 3.2 -1.7 -2.6 -0.2 1.3 1.3Africa - Subscribers (m) 46 48 51 53 56 59 61 64 53 64Africa - ARPU (USD/month) 7.2 7.3 7.1 6.8 6.5 6.4 6.3 6.2 7.1 6.3Africa - EBITDA margin (%) 25.2 26.2 26.7 27.8 25.8 26.2 26.5 26.8 26.5 26.3E: MOSL EstimatesOctober 2012C–179

BSE SensexS&P CNX18,763 5,703BloombergIDEA INEquity Shares (m) 3,308.852 Week Range (INR) 103/711,6,12 Rel Perf (%) 8/-22/-27Mcap (INR b) 282.4Mcap (USD b) 5.4CMP: INR85September 2012 Results PreviewSector: TelecomIdea CellularBuyYear Net sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 155,032 8,986 2.7 -11.6 - - 7.6 5.2 - -3/12A 195,412 7,231 2.2 -19.6 39.0 2.2 5.7 5.4 2.1 8.13/13E 224,887 10,390 3.1 43.5 27.2 2.0 7.7 6.1 1.8 6.83/14E 255,652 19,228 5.8 85.0 14.7 1.8 12.8 9.2 1.5 5.2• Consolidated revenue is likely to grow 18% YoY but decline 1% QoQ to INR54.5b.• We expect IDEA to report 0.9% QoQ decline in mobile traffic. RPM would decline 0.2% QoQ.• ARPU is likely to decline 2.4% QoQ to INR152 (v/s 2.5% decline in 1QFY13).• EBITDA margin would decline 80bp QoQ to 25.3%. We estimate EBITDA loss in new circles at INR1.7b, flat QoQ.• Net profit would grow 92% YoY but decline 13% QoQ to INR2b. The QoQ decline is largely due to negativeoperating leverage.• The stock trades at an EV of 6.8x FY13E and 5.3x FY14E EBITDA. Maintain Buy.• Key things to watch for: QoQ RPM trend (we expect 0.2% decline), mobile traffic (we expect 0.9% QoQ decline),EBITDA loss in new circles (we expect INR1.7b).Quarterly Performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q# 1Q 2QE 3QE 4QEGross Revenue 45,207 46,199 50,308 53,697 55,037 54,458 56,567 58,823 195,411 224,886YoY Growth (%) 23.7 26.3 27.2 27.8 21.7 17.9 12.4 9.5 26.0 15.1QoQ Growth (%) 7.6 2.2 8.9 6.7 2.5 -1.1 3.9 4.0EBITDA 12,040 11,866 13,446 15,071 14,355 13,775 14,913 15,942 50,924 58,986YoY Growth (%) 35.5 35.0 41.8 50.2 19.2 16.1 10.9 5.8 34.3 15.8QoQ Growth (%) 20.0 -1.4 13.3 12.1 -4.8 -4.0 8.3 6.9Margin (%) 26.6 25.7 26.7 28.1 26.1 25.3 26.4 27.1 26.1 26.2Net Finance Costs 2,463 2,939 2,880 2,275 2,670 2,358 2,320 2,307 10,557 9,655Depreciation & Amortization 7,026 7,369 7,575 7,844 8,324 8,509 8,712 8,929 29,814 34,474Profit before Tax 2,551 1,559 2,991 4,952 3,361 2,909 3,882 4,706 10,553 14,857Income Tax Exp. / (Income) 778 501 981 1,523 1,019 873 1,164 1,412 3,322 4,468Adj Net Profit / (Loss) 1,773 1,058 2,010 3,429 2,342 2,036 2,717 3,294 7,231 10,390YoY Growth (%) -12.0 -41.1 -17.3 69.4 32.1 92.5 35.2 -3.9 -19.5 43.7Margin (%) 3.9 2.3 4.0 6.4 4.3 3.7 4.8 5.6 3.7 4.6Mobile ARPU (INR/month) 160 155 159 160 156 152 158 162 158 158QoQ Growth (%) -0.6 -3.1 2.6 0.6 -2.5 -2.4 3.9 2.7Mobile MOU/sub/month 391 364 369 379 379 371 382 388 372 383QoQ Growth (%) -1.5 -6.9 1.4 2.7 0.0 -2.0 2.9 1.6Mobile Traffic (B Min) 109 106 114 124 131 130 134 138 453 533QoQ Growth (%) 6.5 -2.2 7.3 9.1 5.3 -0.9 3.0 3.0Mobile RPM (INR) 0.41 0.43 0.43 0.42 0.41 0.41 0.41 0.42 0.42 0.41QoQ Growth (%) 0.9 4.1 1.2 -2.0 -2.5 -0.4 0.9 1.0E: MOSL Estimates; # Adjusted for INR1.5b one-off provision for licence and WPC chargesOctober 2012C–180

BSE SensexS&P CNX18,763 5,703BloombergRCOM INEquity Shares (m) 2,063.052 Week Range (INR) 110/471,6,12 Rel Perf (%) 21/-33/-31Mcap (INR b) 133.6Mcap (USD b) 2.5CMP: INR65September 2012 Results PreviewSector: TelecomReliance CommunicationNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 205,627 14,936 7.2 -69.4 - - 3.9 2.9 - -3/12A 203,424 9,884 4.8 -33.8 13.5 0.4 2.9 2.7 2.4 7.63/13E 213,915 7,518 3.6 -23.9 17.8 0.4 2.3 2.9 2.2 7.23/14E 226,430 12,101 5.9 61.0 11.0 0.4 3.6 3.4 2.0 6.4• We expect revenue to decline 1.4% QoQ to INR52.5b.• Wireless ARPU is likely to grow 6% QoQ to INR104, led by ~20m subscriber disconnections in July 2012.• We expect RPM to decline 0.5% QoQ to INR0.43. RCOM's RPM has remained largely flat over the last severalquarters.• Wireless traffic is likely to grow 7% YoY and remain flat QoQ.• Consolidated EBITDA would grow 3% YoY to INR16.5b and margins would expand 30bp QoQ to 31%.• We expect RCOM to report proforma PAT of INR1.9b.• The stock trades at an EV of 7.2x FY13E and 6.4x FY14E EBITDA. Neutral.• Key things to watch for: Margin trajectory in wireless business (we expect 150bp QoQ decline), RPM trend (weexpect 0.5% decline).Quarterly Performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEGross Revenue 49,401 50,402 50,521 53,100 53,192 52,462 53,237 53,136 203,424 213,915YoY Growth (%) -3.3 -1.5 1.0 -0.4 7.7 4.1 5.4 0.1 -1.1 5.2QoQ Growth (%) -7.3 2.0 0.2 5.1 0.2 -1.4 1.5 -0.2EBITDA 16,021 16,051 16,111 16,322 16,502 15,916 16,550 16,912 64,506 65,880YoY Growth (%) -1.8 -3.3 -3.4 2.5 3.0 -0.8 2.7 3.6 -1.5 2.1QoQ Growth (%) 0.6 0.2 0.4 1.3 1.1 -3.5 4.0 2.2Margin (%) 32.4 31.8 31.9 30.7 31.0 30.3 31.1 31.8 31.7 30.8Net Finance Costs 4,050 2,274 3,782 5,795 5,534 5,316 5,278 5,067 15,901 21,036Depreciation & Amortization 9,760 10,540 9,780 9,703 9,093 9,293 9,396 9,472 39,783 37,254Profit before Tax 2,211 3,237 2,549 824 1,875 1,307 1,876 2,373 8,822 7,590Income Tax Expense / (Income) -24 14 141 -1,193 -39 26 38 47 -1,062 72Adjusted Net Profit / (Loss) 2,235 3,223 2,408 2,017 1,914 1,281 1,839 2,325 9,884 7,518YoY Growth (%) -25.4 -34.3 -54.2 13.6 -14.4 -60.3 -23.6 15.3 -33.8 -23.9Margin (%) 4.5 6.4 4.8 3.8 3.6 2.4 3.5 4.4 4.9 3.5Extraordinary Exp/Minority Interest 661 702 546 -1,299 290 229 229 229 610 976Reported Net Profit / (Loss) 1,574 2,521 1,862 3,316 1,624 1,052 1,610 2,096 9,274 6,542Wireless ARPU (INR/month) 103 101 100 99 98 104 114 116 102 106QoQ Growth (%) -3.4 -1.9 -1.6 -0.6 -1.0 5.9 9.7 1.9Wireless MOU/sub/month 233 227 224 227 228 242 262 263 231 244QoQ Growth (%) -3.3 -2.6 -1.3 1.3 0.4 6.4 8.1 0.5Wireless Traffic (B Min) 98 99 100 103 105 105 107 109 399 426QoQ Growth (%) 3.2 1.4 1.0 3.4 1.8 0.2 1.4 1.6Wireless RPM (INR) 0.44 0.45 0.45 0.44 0.43 0.43 0.43 0.44 0.44 0.43QoQ Growth (%) -0.1 0.7 -0.3 -2.0 -1.3 -0.5 1.4 1.4E: MOSL EstimatesOctober 2012C–181

BSE SensexS&P CNX18,763 5,703BloombergTTSL INEquity Shares (m) 145.052 Week Range (INR) 163/421,6,12 Rel Perf (%) -56/-58/-85Mcap (INR b) 6.7Mcap (USD b) 0.1CMP: INR46September 2012 Results PreviewSector: TelecomTulip TelecomNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 23,511 3,064 18.9 32.7 - - 28.6 14.0 - -3/12A 27,050 3,096 19.1 1.0 2.4 0.5 22.9 12.0 1.1 4.03/13E 29,586 1,771 12.2 -35.9 3.8 0.4 11.3 8.1 1.2 4.73/14E 34,330 1,620 11.2 -8.6 4.1 0.4 9.5 7.4 1.2 4.7• We expect consolidated revenue to grow 4% YoY to INR7.3b• EBITDA margin is likely to remain flat QoQ at ~27%. EBITDA would grow 2% QoQ to INR1.95b.• We expect reported PAT to decline 37% YoY to INR545m.• The stock trades at an EV of 4.7x FY13/FY14E EBITDA. Neutral.• Key things to watch for: Net finance cost (we expect 3% QoQ increase to INR571m), EBITDA margin trend (weexpect margins to remain stable QoQ).Quarterly Performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEGross Revenue 6,539 7,029 6,866 6,617 7,165 7,328 7,515 7,577 27,051 29,586YoY Growth (%) 24.5 20.1 14.0 3.7 9.6 4.2 9.5 14.5 15.1 9.4QoQ Growth (%) 2.5 7.5 -2.3 -3.6 8.3 2.3 2.5 0.8Total Operating Expenses 4,691 4,998 4,875 4,925 5,246 5,379 5,592 5,674 19,490 21,892EBITDA 1,848 2,032 1,991 1,691 1,919 1,949 1,923 1,903 7,561 7,694YoY Growth (%) 30.3 24.4 16.0 -9.4 3.9 -4.1 -3.4 12.5 14.0 1.8QoQ Growth (%) -1.0 10.0 -2.0 -15.0 13.5 1.6 -1.4 -1.0Margin (%) 28.3 28.9 29.0 25.6 26.8 26.6 25.6 25.1 28.0 26.0Net Finance Costs 319 345 427 537 556 571 748 734 1,629 2,600Non-Operating Income -11 -26 10 68 0 8 8 10 41 26Depreciation & Amortization 495 502 526 604 628 665 703 762 2,127 2,758Profit before Tax 1,023 1,159 1,048 617 736 721 480 417 3,847 2,362Income Tax Expense / (Income) 251 288 276 -42 189 177 120 103 772 590Tax rate (%) 25 25 25 25 26 25 25 25 20 25Adjusted Net Profit / (Loss) 772 871 773 660 547 545 360 314 3,075 1,771YoY Growth (%) 20.3 11.6 -5.5 -20.2 -29.1 -37.4 -53.4 -52.4 0.3 -42.4QoQ Growth (%) -6.7 12.8 -11.3 -14.6 -17.1 -0.4 -33.8 -12.8Margin (%) 11.8 12.4 11.3 10.0 7.6 7.4 4.8 4.1 11.4 6.0Exceptional items 0 0 0 0 616 0 0 0 0 616Reported PAT 772 871 773 660 1,163 545 360 314 3,075 2,382E: MOSL EstimatesOctober 2012C–182

September 2012 Results PreviewSector: UtilitiesUtilitiesCOMPANY NAMECESCCoal IndiaJSW EnergyNHPCNTPCPower GridPTC IndiaReliance InfrastructureTata Po werWe expect utilities companies under our coverage (excluding Coal India) to reportaggregate revenue growth of 9% YoY and PAT de-growth of 2% YoY for 2QFY13. PATgrowth would be muted for IPPs. However, CPSUs would witness robust PAT growth,led by 26% YoY PAT growth for NTPC (higher capacity addition) and 24% YoY PAT growthfor Power Grid (better capitalization).July-August 2012 generation growth muted; PLFs of private coal-based plants mostimpacted: In July-August 2012, All India generation grew 2% YoY v/s 1QFY13/FY12generation growth of 6%/8%. Lower generation growth despite capacity addition(6.9GW in YTD FY13) is led by de-growth in generation for gas-based (24% YoY) andhydro plants (14% YoY). Coal-based plants reported generation growth of 12%;however, PLF was muted. PLFs of private sector plants were most impacted in YTDFY13, down 10ppt YoY to 60%. Over the last 12 months, India has commissioned 22.6GWof projects (ex renewable energy). Capacity addition should remain strong, as CEAhas targeted to add 18GW of projects in FY13, while 6.9GW of projects are alreadycommissioned till August 2012.Power demand strong at 10% YoY; deficit up: Power demand has been strong in YTDFY13. Demand for the months of July-August 2012 grew 10% YoY. Uptick in demand hasled to uptick in the deficit for India. YTD FY13 base deficit stood at 8.5% v/s 5.9% a yearago. Also, a relatively volatile monsoon season led to 239bp increase in peak deficit inAugust 2012 to 11% - in double digits for the first time since March 2012.Imported coal prices remain weak, ST prices also firm: Globally, imported coal priceshave weakened. However, INR depreciation has partially taken away the benefit. InINR terms, during 2QFY13 the RB Index declined 5-6% QoQ (Coal Index down 8% QoQto USD88/ton; INR depreciated 2% QoQ to INR55.2/USD). However, the recent INRappreciation could significantly improve fuel cost savings in 3QFY13. Average spotrate at IEX for 2QFY13 stood at INR3.5/unit (down 1% QoQ and up 22% YoY). ST prices atExpected quarterly performance summary(INR Million)CMP Rating Sales EBITDA Net Profit(INR) Sep.12 Var. Var. Sep.12 Var. Var. Sep.12 Var. Var.28.09.12 % YoY % QoQ % YoY % QoQ % YoY % QoQAdani Power 53 Neutral 11,649 8.6 -20.4 2,320 -55.3 88.3 -2,872 PL LossCESC 331 Buy 12,980 4.6 -8.6 2,882 10.8 -0.6 1,297 13.8 3.8Coal India 359 Buy 147,128 11.9 -10.8 27,321 10.3 -43.3 27,919 25.0 -37.7JSW Energy 61 Buy 20,198 102.7 -7.8 5,438 360.2 -6.8 1,100 LP -43.6NHPC 19 Neutral 16,515 -11.1 16.2 11,540 -13.1 27.7 8,533 9.8 32.3NTPC 168 Buy 155,840 1.3 -2.4 31,290 -3.4 -13.8 18,604 25.7 -22.1Power Grid Corp. 120 Buy 31,672 39.9 9.7 27,572 45.3 11.9 9,392 23.6 3.6PTC India 71 Buy 29,853 25.0 50.2 536 20.8 71.4 423 19.0 84.9Reliance Infrastructure 539 Buy 37,700 -4.6 9.4 4,901 -30.9 6.6 2,551 -48.0 -22.0Tata Power 107 Neutral 70,935 13.5 -2.2 13,048 -3.4 -7.7 3,097 -30.0 1.2Sector Aggregate 534,468 10.1 -2.0 126,847 6.2 -13.8 70,044 7.0 -22.6Sector Aggregate Ex Coal India 387,341 9.4 1.8 99,527 5.1 0.5 42,125 -2.3 -7.9Nalin Bhatt (NalinBhatt@MotilalOswal.com)/Satyam Agarwal (AgarwalS@MotilalOswal.com)Vishal Periwal (Vishal.Periwal@MotilalOswal.com)October 2012C–183

September 2012 Results PreviewSector: UtilitiesIEX touched a high of INR6/unit in the middle of July 2012, but have fallen sharplysince then. The ST forward curve has been strong; in the last three months, contactshave been executed at over INR4/unit.Valuation and view: The Power sector has begun to witness several initiatives by theauthorities to address concerns on SEBs, fuel supply pacts and PPAs. However, itwould take a while for clarity to emerge on several issues. In this environment, wecontinue to prefer CPSUs, which are relatively better positioned on these fronts. Ourtop picks are NTPC and JSW Energy.Generation and PLFs of various plantsCapacity Aug-12 Aug-11 Generation Chg(MW)* Generation PLF (%) Generation PLF (%) Jul-Aug-12 Jul-Aug-11 (%)Adani Power- Mundra Phase 1 4,620.0 1,414.1 41.1 1,251.7 85.0 3,117.8 2,181.9 42.9GVK- JP 1 & 2 455.0 143.1 43.0 266.1 80.0 290.8 466.5 -37.7- Gautami 464.0 92.8 27.4 268.5 79.3 200.6 512.1 -60.8GMR- Barge Mounted 220.0 38.1 23.7 125.5 78.1 90.2 361.5 NA- Chennai 200.0 46.7 32.0 45.8 31.4 84.1 112.6 -25.3- Vemagiri 370.0 70.4 26.1 198.8 73.6 292.8 465.3 -37.1JPL- Chattisgarh 1,000.0 707.3 95.1 662.5 89.0 1,343.8 1,412.4 -4.9Rel Infra- Dahanu 500.0 385.1 103.5 351.3 94.4 773.5 728.3 6.2- Samalkot (AP) 220.0 58.8 36.6 136.0 84.7 133.0 231.6 -42.5- Goa 48.0 23.3 66.4 19.6 55.9 38.3 19.6 95.2- Kochi 174.0 0.0 0.0 0.0 0.0 0.0 0.0 NARel Power- Rosa 1,200.0 649.2 72.7 303.4 68.0 1,102.8 727.4 51.6Tata Power- Trombay 1,580.0 817.3 65.0 692.0 56.3 1,668.6 1,377.0 21.2- TISCO (Jamshedpur) 441.3 265.0 94.3 226.5 84.6 549.9 429.9 27.9- Mundra UMPP 800.0 394.5 33.1 0.0 0.0 561.5 0.0 NATorrent Power- Existing 500.0 254.2 85.4 293.0 82.9 551.0 596.7 -7.7- Sugen 1,147.5 428.8 51.2 732.7 87.5 825.9 1,410.7 -41.5JSW Energy- Rajwest Unit-I 540.0 295.1 73.5 0.0 0.0 474.6 0.0 NA-Karnataka 2,060.0 1,401.6 91.5 873.8 133.5 2,710.8 762.4 255.6CESC 1,285.0 814.6 85.2 790.6 83.0 1,640.9 1,613.9 1.7Lanco Infratech- Kondapali 716.0 202.9 38.8 230.7 44.1 443.7 634.4 -30.1- Amarkantak (LANCO) 600.0 293.5 65.7 332.5 74.5 692.9 581.5 19.2- UPCL 1,200.0 331.9 31.2 282.5 64.5 707.5 531.5 33.1KSK- Wardha 540.0 227.0 56.5 208.7 70.6 552.2 442.0 24.9Sterlite- Jharsuguda 2,400.0 749.6 42.0 494.5 37.6 1,517.2 1,099.8 37.9*Monitored capacity by CEASource: CEAOctober 2012C–184

September 2012 Results PreviewSector: UtilitiesJuly-August 2012: All-India generation grew 2% YoY PLFs of coal-based plants: Private sector most impacted (%)75706560All India Genera tion (BUs ) Gr (YoY, %)14 1411 107 8 8 74 69 9582824 5 82 216128410090807060Centre Sector Sta te Sector Private Sector5562677266757175707372707471737371777579767573050Nov-10Feb-11Ma y-11Aug-11Nov-11Feb-12Ma y-12Aug-12Oct-10Dec-10Feb-11Apr-11Jun-11Aug-11Oct-11Dec-11Feb-12Apr-12Jun-12Aug-12Power demand: Strong; up 10% YoY in YTD FY13 Base deficit moving up (%)90FY 12 FY13 Gr (%)16%16.5FY13 FY11 FY1285807570656079 84 85 86 8375 78 74 77 75 75 77 77 81 81 78 8312%8%4%0%14.011.59.06.54.08.27.58.69.19.2AprilMa yJuneJulyAugSeptOctNovDecJanFebMa rST prices flattish (INR/unit)Forward ST prices at over INR4/unit4.204.264.224.221QF Y102QF Y103QF Y104QF Y101QF Y112QF Y113QF Y114QF Y111QF Y122QF Y123QF Y124QF Y121QF Y132QF Y139-Sep-1224-Sep-129-Oct-1224-Oct-128-Nov-1223-Nov-128-Dec-12AprMa yJunJulAugSepOctNov7.85.33.54.15.33.12.33.63.12.94.63.43.63.6DecJanFebMarRB Index* softening (USD/ton) INR depreciation negated some of the impact (INR/USD)16012080Avg RB Index (USD/ton) YoY QoQ60%30%0%58.554.049.545.0QoQ (%) YoY (%) INR/USD555450 5046 46 45 45 4546554025104091 88 104 121 121 117 107 105 96 881QFY112QFY113QFY114QFY111QFY122QFY123QFY124QFY121QFY132QFY13-30%40.536.01QFY112QFY113QFY114QFY111QFY122QFY123QFY124QFY121QFY132QFY13-5-20* 6000Kcal, FoB South Africa, 2QFY12 price till 17 August Source: CEA, IEX, CERC, Bloomberg, MOSLOctober 2012C–185

September 2012 Results PreviewSector: UtilitiesRelative Performance-3m (%) Relative Performance-1Yr (%)110Sensex IndexMOSL Utilities Index120Se nse x IndexMOS L Utilities Inde x107110104100101909880Jun-12Jul-12Aug-12Sep-12Sep-11Dec-11Ma r-12Jun-12Sep-12Comparative valuationCMP (INR) Rating EPS (INR) P/E (x) EV/EBITDA (x) RoE (%)28.09.12 FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14EUtilitiesAdani Power 53 Neutral -0.4 1.5 2.6 -124.7 36.2 20.3 28.6 13.8 10.0 -1.5 5.3 9.2CESC 331 Buy 44.1 47.5 53.0 7.5 7.0 6.2 5.5 5.2 4.9 12.1 11.7 11.7Coal India 359 Buy 25.4 28.8 30.9 14.1 12.5 11.6 10.3 8.1 7.1 31.9 28.5 25.0JSW Energy 61 Buy 2.0 3.7 6.3 30.1 16.5 9.7 12.4 8.0 6.1 5.8 10.3 15.9NHPC 19 Neutral 2.0 2.0 2.1 9.4 9.6 9.3 7.0 7.9 7.7 8.6 7.9 7.9NTPC 168 Buy 10.1 11.5 13.5 16.6 14.6 12.4 11.6 11.3 9.3 11.8 12.5 13.7Power Grid Corp. 120 Buy 7.2 8.6 10.3 16.8 14.0 11.6 12.4 10.1 9.4 14.8 16.1 17.4PTC India 71 Buy 6.9 7.7 9.5 10.2 9.2 7.4 14.0 7.3 6.5 5.4 6.4 7.6Reliance Infra. 539 Buy 74.8 43.5 48.0 7.2 12.4 11.2 2.0 3.0 2.4 11.4 6.3 6.6Tata Power 107 Neutral 7.4 5.7 4.0 14.4 18.7 27.0 17.9 17.2 17.6 9.8 8.6 6.5Sector Aggregate 14.6 13.3 12.0 11.0 9.6 8.4 16.3 16.1 16.2* Coal India RoE adjusted for OB reservesOctober 2012C–186

BSE SensexS&P CNX18,763 5,703BloombergCESC INEquity Shares (m) 125.652 Week Range (INR) 339/1861,6,12 Rel Perf (%) 1/12/6Mcap (INR b) 41.6Mcap (USD b) 0.8CMP: INR331September 2012 Results PreviewSector: UtilitiesCESCBuyYear Net Sales PAT EPS* EPS* P/E* P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 40,942 4,670 38.9 - - 11.3 10.2 - -03/12A 46,050 5,543 44.1 13.5 7.5 0.9 12.1 10.6 1.3 5.403/13E 52,527 5,970 47.5 7.7 7.0 0.8 11.7 10.4 1.1 5.103/14E 58,139 6,662 53.0 11.6 6.2 0.7 11.7 10.2 1.0 4.8* Excl Spencers; fully diluted• We expect CESC to report revenue of INR13b (up 5% YoY) and PAT of INR1.3b (up 14% YoY) for 2QFY13. For theperiod April-May 2012, CESC's 1,225MW generation projects operated at 92% PLF v/s 90% in April-May 2011,while generation was 1.6BU, up 2% YoY.• After several rounds of discussions, the Cabinet has approved 51% FDI in multi-brand retail with a rider that thestates will have the final say in accepting the proposals. FDI in retail has opened up a window of opportunity forSpencer's to raise long-term funds for its growth. However, state nod is the key to success; 53% of Spencer'sarea is in states that are opposing the FDI policy.• Restructuring led to improvement in Spencer's gross margin and overall performance in 1QFY13. Average salesat Spencer's grew 14% YoY in 1QFY13 to INR1,151/sf/month and store-level EBITDA improved to INR42/sf/month v/s INR26/sf/month in 1QFY12. We understand that store EBITDA has improved further to INR50/sf/month on the back of same store sales (SSS) growth of 15%. CESC targets EBITDA breakeven in 3QFY14.• CESC has spent INR8.3b (equity) towards 1.2GW of projects as at June 2012. The management expects theChandrapur project to commission in the next 12 months. The Haldia project is likely to be operational by FY15.• We expect CESC to post standalone PAT (ex Spencer's) of INR6b in FY13 (up 8%) and INR6.7b in FY14 (up 12%).The stock trades at 7x FY13E and 6.2x FY14E reported EPS. Maintain Buy.Operational Details1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13E 3QFY13E 4QFY13E FY12 FY13EGeneration 2,395 2,356 2,197 1,997 2,430 2,425 2,220 2,041 8,945 9,116Sales 2,256 2,324 2,005 1,811 2,467 2,392 2,026 1,678 8,396 8,556Realization (INR/unit) 5.2 5.3 5.1 7.6 5.8 5.4 6.5 7.6 5.5 6.1Overall PLF (Derived) (%) 89.3 87.8 81.9 74.4 90.6 90.4 82.8 76.1 83.3 92.5Quarterly Performance (Standalone Numbers - excl Spencers Retail)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 11,830 12,410 10,320 13,790 14,200 12,980 13,125 12,782 45,930 52,527Change (%) 7.9 12.3 9.9 57.6 20.0 4.6 27.2 -7.3 12.2 14.4EBITDA 2,671 2,600 2,130 4,320 2,900 2,882 3,473 3,011 11,570 12,426Change (%) 4.3 -18.2 -15.8 75.6 8.6 10.8 63.1 -30.3 7.8 7.4As of % Sales 22.6 21.0 20.6 31.3 20.4 22.2 26.5 23.6 25.2 23.7Depreciation 710 720 750 720 770 785 800 816 2,900 3,171Interest 700 750 660 650 780 740 730 732 2,760 2,982Other Income 130 290 200 380 210 275 310 399 1,000 1,194PBT 1,391 1,420 920 3,330 1,560 1,632 2,253 1,862 6,910 7,467Tax 280 280 180 670 310 335 462 391 1,410 1,497Effective Tax Rate (%) 20.1 19.7 19.6 20.1 19.9 20.5 20.5 21.0 20.4 20.0Reported PAT 1,111 1,140 740 2,660 1,250 1,297 1,791 1,471 5,500 5,970Adjusted PAT 1,111 1,140 740 2,510 1,250 1,297 1,791 1,471 5,500 5,970Change (%) 1.0 -15.6 -32.7 124.1 12.5 13.8 142.1 -41.4 17.8 8.5E: MOSL EstimatesOctober 2012C–187

BSE SensexS&P CNX18,763 5,703BloombergCOAL INEquity Shares (m) 6,316.452 Week Range (INR) 386/2941,6,12 Rel Perf (%) -6/-1/-13Mcap (INR b) 2,270.4Mcap (USD b) 43.1CMP: INR359September 2012 Results PreviewSector: UtilitiesCoal IndiaBuyYear Net Sales* PAT* # EPS# EPS P/E P/BV RoE$ RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDAFY11A 502,336 109,309 17.3 11.2 - - 26.4 54.8 - -FY12A 624,154 160,725 25.4 47.0 14.1 5.6 31.9 57.3 2.7 10.3FY13E 693,038 181,666 28.8 13.0 12.5 4.4 28.5 56.0 2.4 8.1FY14E 746,196 194,891 30.9 7.3 11.6 3.6 25.0 48.2 2.1 7.1*Consolidated; # Adjusted; $ RoE is adj. for OB reserves accounts, as appplicable under IFRS• We expect Coal India (COAL) to report revenue of INR147b (up 12% YoY) and PAT of INR28b (up 25% YoY).• We estimate production at 90m tons (up 12% YoY) and dispatches at 104m tons (up 12% YoY). During 2QFY13 (till9 September) COAL's production was 69m tons (up 9% YoY) and dispatches were 79m tons (up 6% YoY).• E-auction price has been one of the key drivers of earnings growth for COAL. However, we saw a marginal dip ine-auction realization in 1QFY13. We gather that premium over notified prices has further weakened in 2QFY13.We build in e-auction realization of INR2,300/ton in 2QFY13 v/s an average of INR2599/ton in FY12 and INR2,562/ton in 1QFY13. Softening in global coal prices and appreciating INR could put pressure on realizations of marketlinkedvolumes (e-auction/washed) for COAL.• The board has approved new FSA (fuel supply agreement) norms, with supply of 65% coal from its ownproduction and 15% from imports. It has approved a revised penalty structure, with base penalty of 1.5%(trigger level of 65-80%) and peak penalty of 40% (supply below 50%).• We expect COAL to report consolidated PAT of INR182b for FY13 (up 13%) and INR195b for FY14 (up 7%). Thestock trades at 12.5x FY13E and 11.6x FY14E reported EPS. Maintain Buy.Operational Details1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13E 3QFY13E 4QFY13E FY12 FY13EVolume Assumptions (m tons)Production 96.3 80.3 114.6 144.6 102.5 90.0 121.0 154.5 435.8 468.0Sales/Offtake 106.3 93.2 110.3 122.9 113.0 104.0 119.0 132.0 433.1 468.0Blended Realization (INR/ton)- Regulated 1,188 1,225 1,174 1,339 1,261 1,260 1,260 1,349 1,235 1,285- E-auction 2,246 2,435 2,852 2,852 2,562 2,300 2,750 2,802 2,599 2,617Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 144,991 131,481 153,493 194,190 165,006 147,128 172,505 208,400 624,154 693,038Change (%) 26.8 18.2 20.9 29.7 13.8 11.9 12.4 7.3 24.3 11.0EBITDA 48,197 24,773 45,421 37,856 48,146 27,321 49,319 75,073 156,388 203,049Change (%) 55.5 39.8 34.5 -27.2 -0.1 10.3 8.6 98.3 16.6 29.8As of % Sales 33.2 18.8 29.6 19.5 29.2 18.6 28.6 36.0 25.1 29.3Depreciation 4,308 5,734 5,257 4,103 5,356 5,500 5,600 5,744 19,402 22,200Interest 55 83 76 326 126 150 160 181 540 617Other Income 15,589 17,942 18,559 23,280 20,714 18,500 19,500 20,576 75,369 79,290EO Income/(Expense) 132 165 52 458 -103 0 0 0 734 0PBT 59,555 37,064 58,699 57,164 63,275 40,171 63,059 89,725 212,549 259,522Tax 18,115 11,132 18,322 17,221 18,582 12,252 19,391 27,632 64,790 77,857Effective Tax Rate (%) 30.4 30.0 31.2 30.4 29.4 30.5 30.8 30.8 30.5 30.0Reported PAT 41,439 25,931 40,378 39,943 44,693 27,919 43,668 62,093 147,759 181,666Adjusted PAT* 41,308 22,341 36,901 60,493 44,796 27,919 43,668 62,093 160,725 181,666Change (%) 62.8 46.8 39.7 43.6 8.4 25.0 18.3 2.6 47.1 13.0E: MOSL EstimatesOctober 2012C–188

BSE SensexS&P CNX18,763 5,703BloombergJSW INEquity Shares (m) 1,640.152 Week Range (INR) 77/361,6,12 Rel Perf (%) 30/-4/-2Mcap (INR b) 99.7Mcap (USD b) 1.9CMP: INR61September 2012 Results PreviewSector: UtilitiesJSW EnergyBuyYear Net Sales * PAT* EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 42,944 8,418 5.1 12.5 11.8 1.8 14.8 9.7 - -3/12A 61,189 3,314 2.0 -60.6 30.1 1.7 5.8 6.4 3.0 12.73/13E 90,980 6,056 3.7 82.7 16.5 1.7 10.3 10.7 2.3 8.23/14E 102,038 10,269 6.3 69.6 9.7 1.5 15.9 14.0 1.9 6.2* Consolidated• We expect JSWEL to report consolidated revenue of INR20.2b (up 103% YoY) and PAT of INR1.1b (v/s loss ofINR221m in 2QFY12) for 2QFY13.• JSWEL generated 3.2BU (up 74% YoY) during July-August 2012. Average PLF for the 2,060MW Karnataka/Ratnagiriproject stood at 90% (v/s 71% a year ago) and at 59% (v/s 74% in 1QFY13) for the 540MW Rajwest project. In2QFY13, we expect JSWEL to sell 4.5BU (up 75% YoY). 55% of its sales would be on merchant tariffs.• JSWEL's gross margin had improved to INR2.1/unit in 1QFY13. Consumption of high cost inventory had restrictedmargin expansion in 1Q. The management expects gross margin expansion from 2QFY13.• 540MW of capacity at Rajwest is in operations and JSWEL has synchronized an additional 3 units (405MW). Theentire project would be ready for commissioning by 2QFY13.• We expect JSWEL to report consolidated PAT of INR6.2b for FY13 (up 88%) and INR10.5b for FY14 (up 69%). Thestock trades at 16.5x FY13E and 9.7x FY14E reported EPS. Maintain Buy.Operational Details1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13E 3QFY13E 4QFY13E FY12 FY13ESales (MUs) 2,422 2,593 3,965 4,617 4,731 4,481 5,149 5,806 13,594 20,167- Long Term 672 646 1,441 2,157 2,233 2,062 2,714 3,273 4,902 10,282- Merchant 1,750 1,947 2,524 2,460 2,498 2,419 2,435 2,533 8,692 9,885ST as a % of total 72.3 75.1 63.7 53.3 52.8 54.0 47.3 43.6 63.9 49.0Realization (INR/unit) 4.51 3.15 3.99 4.18 4.56 4.51 4.49 4.43 4.37 4.51Quarterly Performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QETotal Operating Income 12,724 9,965 17,687 20,812 21,915 20,198 23,142 25,724 61,187 90,980Change (%) 36.5 17.8 64.3 44.6 72.2 102.7 30.8 23.6 42.5 48.7EBITDA 3,932 1,182 3,495 5,869 5,834 5,438 6,556 7,342 14,477 25,169Change (%) -13.1 -63.6 -1.2 35.5 48.4 360.2 87.6 25.1 -7.4 73.9Depreciation 1,048 1,098 1,379 1,509 1,697 1,721 1,977 2,349 5,033 7,744Interest 1,338 1,510 1,995 2,329 2,426 2,450 2,650 3,227 7,172 10,753Other Income 220 708 288 259 764 425 440 428 1,466 2,057Extraordinary items 0 868 1,375 -621 2,325 0 0 0 1,613 2,325PBT 1,766 -1,586 -965 2,910 150 1,692 2,369 2,193 2,125 6,404Tax 441 -481 -148 607 160 592 829 769 419 2,350Effective Tax Rate (%) 25.0 30.3 15.3 20.9 106.4 35.0 35.0 35.0 19.7 36.7Reported PAT 1,326 -1,105 -817 2,303 -10 1,100 1,540 1,425 1,706 4,055Exceptional Income/ (Expense) 0 868 1,375 -621 1,915 0 0 0 1,613 1,915Reported PAT (Post MI) 1,363 -1,089 -827 2,303 34 1,100 1,540 1,467 1,700 4,141Adjusted PAT 1,363 -221 549 1,683 1,949 1,100 1,540 1,467 3,313 6,056Change (%) -54.4 -114.3 -60.2 -18.3 43.0 n.a. 180.6 -12.8 -60.6 82.8E: MOSL EstimatesOctober 2012C–189

BSE SensexS&P CNX18,763 5,703BloombergNHPC INEquity Shares (m) 12,300.752 Week Range (INR) 25/151,6,12 Rel Perf (%) 2/-10/-32Mcap (INR b) 238.0Mcap (USD b) 4.5CMP: INR19September 2012 Results PreviewSector: UtilitiesNHPCNeutralYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 51,436 18,169 1.6 17.4 - - 7.0 8.6 - -03/12A 69,203 23,652 2.0 28.4 9.4 0.8 8.6 10.3 4.9 7.003/13E 60,489 23,187 2.0 -1.7 9.6 0.8 7.9 7.6 4.9 7.903/14E 67,177 24,071 2.1 3.8 9.3 0.8 7.9 7.9 4.8 7.7* Pre Exceptional Earnings, Consolidated• We expect NHPC to report revenue of INR16.5b (down 11% YoY) and PAT of INR8.5b (up 10% YoY) for 2QFY13. InJuly-August 2012, NHPC's generation was 5.2BU (up 10% YoY).• In FY13, NHPC is targeting to add 1.1GW of projects. It has commissioned Chamera-III 231MW in YTD FY13.• Chutak (44MW) and Nimo Bazgo (45MW) projects are ready for commissioning but CoD is partly impacted dueto transmission line delays. Local agitation has impacted the commissioning of Uri-II (240MW). The Kishangangaproject (330MW) is caught in the controversy between India and Pakistan.• The Supreme Court has asked the Ministry of Power (MoP), the Ministry of Environment and Forests (MoEF),and NHPC to file an affidavit on the ongoing Lower Subansiri Hydel Electric Project (LSHEP), which is caught incontroversy after an NGO, Assam Public Works (APW), prayed before the apex court to take note of the impactof the LSHEP on low lying areas.• As at the end of 1QFY13, NHPC's outstanding debtors stood at INR21b and debtors above 60 days stood lower atINR9.1b (v/s INR12b+ as at the end of FY12).• We expect NHPC to report consolidated PAT of INR23.2b for FY13 (down 2%) and INR24.1b for FY14 (up 4%). Thestock trades at 9.6x FY13E and 9.3x FY14E reported EPS. Maintain Neutral.Operational Details1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13E 3QFY13E 4QFY13E FY12 FY13EGeneration (MUs) 6,284 6,939 860 1,423 6,148 7,618 1,313 3,673 18,683 18,752Increase/ (Decrease) (%) 11.0 -2.6 -72.0 -46.1 -2.2 9.8 52.7 158.1 1.0 0.4Installed Capacity (MW) 5,287 5,287 5,287 5,287 5,287 5,518 5,518 5,979 5,287 5,979- Owned 3,767 3,767 3,767 3,767 3,767 3,998 3,998 4,459 3,767 4,459- JV's 1,520 1,520 1,520 1,520 1,520 1,520 1,520 1,520 1,520 1,520Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 14,708 18,585 8,820 14,437 14,218 16,515 10,170 9,426 56,550 50,329Change (%) 44.2 45.1 17.5 23.0 -3.3 -11.1 15.3 -34.7 33.8 -11.0EBITDA 9,565 13,283 3,788 9,942 9,040 11,540 5,095 3,816 36,579 29,491Change (%) 17.4 25.4 -17.7 94.6 -5.5 -13.1 34.5 -61.6 28.6 -19.4As of % Sales 65.0 71.5 43.0 68.9 63.6 69.9 50.1 40.5 64.7 58.6Depreciation 2,258 2,234 2,237 2,199 2,218 2,350 2,550 2,702 8,927 9,819Interest 865 883 876 799 798 830 875 1,096 3,422 3,599Other Income 3,275 3,042 2,032 2,255 2,451 2,650 2,400 2,931 10,604 10,432EO Income/(Expense) 0 -352 0 689 0 0 0 0 337 0PBT 9,717 12,856 2,707 9,889 8,475 11,010 4,070 2,949 35,169 26,504Tax 1,807 3,191 586 1,868 1,777 2,477 916 671 7,452 5,841Effective Tax Rate (%) 18.6 24.8 21.6 18.9 21.0 22.5 22.5 22.7 21.2 22.0Reported PAT 7,910 9,665 2,122 8,021 6,698 8,533 3,154 2,278 27,717 20,664Adjusted PAT 6,050 7,769 2,976 2,109 6,450 8,533 3,154 2,279 18,884 20,664Change (%) 18.4 13.3 63.9 -18.3 6.6 9.8 6.0 8.1 15.1 9.4E: MOSL EstimatesOctober 2012C–190

BSE SensexS&P CNX18,763 5,703BloombergNTPC INEquity Shares (m) 8,245.552 Week Range (INR) 190/1391,6,12 Rel Perf (%) -9/-6/-14Mcap (INR b) 1,384.0Mcap (USD b) 26.3CMP: INR168September 2012 Results PreviewSector: UtilitiesNTPCBuyYear Net Sales PAT * EPS* EPS P/E P/BV RoE RoCE EV/ EV/End* (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 548,740 79,580 9.7 -5.9 - - 12.2 12.2 - -03/12A 611,449 79,720 9.7 0.2 17.4 1.9 11.8 11.8 2.8 11.703/13E 711,487 93,776 11.4 17.6 14.8 1.8 12.5 12.5 2.5 11.303/14E 790,502 111,540 13.5 18.9 12.4 1.6 13.7 13.7 2.4 9.3* Pre Exceptional consolidated Earnings; We have factored in RoE gross-up based on MATwef FY11 onwards• We expect NTPC to report revenue of INR156b (up 2% YoY) and PAT of INR18.6b (up 26% YoY) for 2QFY13. PATgrowth would largely be on the back of base effect, as September 2011 operations were impacted due to coalshortage/wet coal and due to strike at Coal India.• Generation for the period July-August 2012 was 36.5BU (up 2% YoY) while 1QFY13 generation was up 8% YoY.This is largely due to maintenance shutdown taken for a large part of its coal capacity. Coal-based generationwas up 3% YoY in July-August 2012 while gas-based generation was down 1% YoY. NTPC's coal plant PLF for July-August 2012 was 77% v/s 82% in July-August 2011.• YTD FY13, NTPC has added capacity of 2.1GW (FY13 target of 4.1GW) and has commercialized 2.3GW. In July-August 2012, it commercialized 660MW Sipat U-III. We expect accelerated capacity addition andcommercialization in 2HFY13.• Under the 12th Plan, NTPC's capacity addition target is 14GW and it has 16.6GW capacity under construction.Additional 2.6GW (Meja/Solapur) is targeted for addition during the 12th Plan period on best effort basis.• We expect NTPC to report PAT of INR94b for FY13 (up 13%) and INR112b for FY14 (up 18%). The stock trades at14.8x FY13E and 12.4x FY14E reported EPS. Maintain Buy.Operational Details1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13E 3QFY13E 4QFY13E FY12 FY13EInstalled Capacity (MW) 34,854 34,854 36,014 37,014 39,174 39,174 40,674 41,174 37,014 41,174Addition (MW) 660 - 1,160 1,000 2,160 - 1,500 500 2,820 4,160PLF (%)- Coal based projects 86.9 78.4 83.5 91.1 86.5 80.0 89.0 95.3 85.0 85.0- Gas based projects 62.6 60.8 71.1 66.8 64.5 65.0 65.0 64.5 65.2 65.0Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 141,715 153,775 153,333 162,639 159,600 155,840 181,322 214,725 611,462 711,487Change (%) 9.5 4.2 13.6 4.8 12.6 1.3 18.3 32.0 7.8 16.4EBITDA 28,662 32,387 28,564 41,127 36,306 31,290 38,372 45,978 131,437 151,947Change (%) 2.2 -2.2 -22.1 12.9 26.7 -3.4 34.3 11.8 -2.1 15.6As of % Sales 20.2 21.1 18.6 25.3 22.7 20.1 21.2 21.4 21.5 21.4Depreciation 6,411 6,583 7,560 7,363 7,602 8,500 9,200 10,620 27,917 35,922Interest 3,744 3,312 4,496 4,870 4,994 5,150 5,400 6,066 17,116 21,610Other Income 9,964 10,093 9,121 7,679 8,849 7,500 7,550 7,713 36,858 31,612PBT 28,472 32,586 25,629 36,574 32,559 25,140 31,322 37,005 123,262 126,026Tax 7,714 8,346 4,324 10,640 7,573 6,536 8,144 9,648 31,024 31,151Effective Tax Rate (%) 27.1 25.6 16.9 29.1 23.3 26.0 26.0 26.1 25.2 24.7Reported PAT 20,758 24,240 21,304 25,934 24,987 18,604 23,179 27,357 92,238 94,875Adjusted PAT 19,015 14,797 20,692 22,958 23,888 18,604 23,179 27,357 79,720 93,776Change (%) 13.0 -8.4 -1.1 -10.6 25.6 25.7 12.0 19.2 0.2 17.6E: MOSL Estimates; Adj profit based on the calculations provided by the managementOctober 2012C–191

BSE SensexS&P CNX18,763 5,703BloombergPWGR INEquity Shares (m) 4,629.752 Week Range (INR) 124/951,6,12 Rel Perf (%) -7/4/10Mcap (INR b) 557.2Mcap (USD b) 10.6CMP: INR120September 2012 Results PreviewSector: UtilitiesPower Grid CorporationBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR M) (INR) Gr (%) (X) (X) (%) (%) Sales EBITDA3/11A 83,887 25,411 5.5 0.3 - - 13.6 9.3 - -3/12A 100,353 33,199 7.2 30.6 16.8 2.4 14.8 9.2 10.4 12.43/13E 133,383 39,908 8.6 20.2 14.0 2.1 16.1 9.7 8.7 10.13/14E 158,493 47,902 10.3 20.0 11.6 1.9 17.4 9.5 8.1 9.4• We expect Power Grid Corporation of India (PWGR) to report revenue of INR32b (up 40% YoY) and PAT ofINR9.3b (up 24% YoY) for 2QFY13. PWGR capitalized ~INR9b in July 2012 and is likely to capitalize INR35b in2QFY13. The board has accorded investment approval for projects worth INR72b (v/s INR97b YoY) in YTD FY13.• Over the last few months, PWGR's order awards have picked up. It has awarded orders worth INR74b(v/s INR21.2b YoY) in YTDFY13, against project awards of INR232b in FY12 and INR161b in FY11.• For FY13, we expect PWGR to capitalize INR170b, up 21%. In FY12, fixed asset capitalization stood at INR141bv/s INR68b in FY11. For FY13, PWGR has approved capex plans of INR200b v/s INR177b in FY12.• Despite the issues relating to fuel and SEB financials raising doubts on capacity addition in the country, PWGRis upbeat on its capitalization target. Under the 12th Plan, it is focusing on capitalization of corridors rather thantransmission lines dedicated to generation projects.• We expect PWGR to report PAT of INR40b in FY13 (up 20%) and INR47.9b in FY14 (up 20%). The stock trades at 14xFY13E and 12x FY14E reported EPS. Maintain Buy.Operational Details1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13E 3QFY13E 4QFY13E FY12 FY13ECapitalization (INR m) 8,020 32,550 22,280 78,150 41,000 35,000 45,000 49,000 141,000 170,000Regulated Equity (INR m) 137,918 147,683 154,367 177,812 190,112 200,612 214,112 228,812 177,812 228,812Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 22,025 22,644 24,666 31,019 28,883 31,672 34,010 38,820 100,353 133,383Change (%) 10.2 6.5 20.2 40.3 31.1 39.9 37.9 25.1 19.6 32.9EBITDA 18,455 18,978 21,027 26,038 24,646 27,572 29,560 32,597 83,824 114,375Change (%) 9.8 6.3 21.7 40.2 33.6 45.3 40.6 25.2 18.9 36.4As of % Sales 83.8 83.8 85.2 83.9 85.3 87.1 86.9 84.0 83.5 85.7Depreciation 5,790 5,966 6,792 7,177 7,565 8,100 9,000 9,505 25,725 34,170Interest 4,446 5,556 4,735 5,413 6,461 6,800 7,300 7,822 19,432 28,023Other Income 1,432 1,942 1,096 3,069 920 650 700 718 7,497 2,989Extraordinary Inc / (Exp) 13 -21 31 164 0 0 0 0 187 0PBT 9,638 9,419 10,565 16,354 11,540 13,322 13,960 15,989 45,976 55,170Tax 2,586 2,331 2,472 6,037 2,836 3,930 4,118 4,738 13,427 15,622Effective Tax Rate (%) 26.8 24.8 23.4 36.9 24.6 29.5 29.5 29.6 29.2 28.3Reported PAT 7,053 7,087 8,092 10,317 8,705 9,392 9,842 11,251 32,550 39,548Adjusted PAT (Pre Exceptional) 7,022 7,601 7,743 10,832 9,065 9,392 9,842 11,251 33,199 39,908Change (%) 18.9 27.1 28.1 44.7 29.1 23.6 27.1 3.9 30.7 20.2E: MOSL EstimatesOctober 2012C–192

BSE SensexS&P CNX18,763 5,703BloombergPTCIN INEquity Shares (m) 294.552 Week Range (INR) 76/381,6,12 Rel Perf (%) 19/11/-11Mcap (INR b) 20.8Mcap (USD b) 0.4CMP: INR71September 2012 Results PreviewSector: UtilitiesPTC IndiaBuyYear Net Sales PAT* EPS* EPS* P/E* P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 90,632 1,660 5.6 50.0 - - 6.5 9.2 - -03/12A 76,502 2,041 6.9 22.9 10.2 0.9 5.4 8.6 0.2 11.803/13E 99,995 2,266 7.7 11.0 9.2 0.9 6.4 6.0 0.2 14.803/14E 128,054 2,816 9.5 24.3 7.4 0.9 7.6 5.9 0.1 12.6* Consolidated• We expect PTC India (PTCIN) to report revenue of INR30b (up 25% YoY) and PAT of INR423m (up 19% YoY) for2QFY13.• Over July-August 2012, PTCIN's volumes stood at ~6.3BU (up 4% YoY). In 2QFY13, we expect PTCIN's tradedvolumes to be 9.4BU (up 8.6% YoY). Volume growth should pick up in 2HFY13, with the commissioning of sizableprojects (including tolling projects) on LT basis. In FY13, we expect PTCIN to trade 28BU (up 15%).• We expect average trading margin (adjusted for surcharge and rebates) of INR0.039/unit in 2QFY03 (v/s INR0.058/unit in 2QFY12). The muted margin growth would be primarily led by increasing competitive intensity in India'spower trading market. PTCIN's market share (excluding cross border and intra-state) in ST volumes for July 2012increased 2% YoY to 35%.• In 1QFY13, PTCIN received INR1b from Tamil Nadu (TN) and another tranche of INR750m from TN in July/August2012. Thus, the outstandings from TN are lower at INR4.5b v/s INR7b earlier. The managment expects to receivethe balance dues from TN by 3QFY13. We understand that PTCIN has also begun to realize small sums from UPand expect increased payments once the tariff hike is approved for UP.• We expect PTCIN to report consolidated PAT of INR2.2b for FY13 (11%) and INR2.8b for FY14 (up 24%). The stocktrades at 9.2x FY13E and 7.4x FY14E reported EPS. Maintain Buy.Operational Details1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13E 3QFY13E 4QFY13E FY12 FY13EPower Traded (MUs) 6,726 8,655 4,564 4,380 6,566 9,400 5,500 6,531 24,325 27,997Adj Margins (Ps/Unit) 4.91 4.16 3.78 4.68 3.98 3.97 3.48 4.30 4.39 3.81Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 24,874 23,890 13,300 14,436 19,869 29,853 20,881 29,392 76,502 99,995Change (%) -9.8 -3.3 -24.3 -30.6 -20.1 25.0 57.0 103.6 -15.6EBITDA 476 444 210 323 313 536 400 590 1,453 1,838Change (%) 77.1 16.5 -48.5 -5.9 -34.4 20.8 90.6 82.8 3.7 26.5As of % Sales 1.9 1.9 1.6 2.2 1.6 1.8 1.9 2.0 1.9 1.8Depreciation 11 11 11 11 10 11 11 14 45 45Interest 14 79 103 64 1 0 0 1 260 2Other Income 174 140 43 150 26 80 85 90 505 281PBT 626 493 138 394 304 605 474 666 1,656 2,095Tax 173 138 43 98 98 181 142 200 452 622Effective Tax Rate (%) 27.7 27.9 31.0 25.0 32.3 30.0 30.0 30.0 27.3 29.7Reported PAT 453 356 95 302 206 423 332 466 1,204 1,474Adjusted PAT 453 356 95 299 229 423 332 466 1,201 1,450Change (%) 59.4 -0.5 -74.9 -10.5 -49.4 19.0 248.5 56.0 -11.1E: MOSL Estimates; % Change for FY13E not comparable given inclusion of tolling profits from 1QFY13 onwardsOctober 2012C–193

BSE SensexS&P CNX18,763 5,703BloombergRELI INEquity Shares (m) 267.552 Week Range (INR) 680/3281,6,12 Rel Perf (%) 9/-15/17Mcap (INR b) 144.1Mcap (USD b) 2.7CMP: INR539September 2012 Results PreviewSector: UtilitiesReliance InfrastructureBuyYear Net Sales PAT EPS* EPS P/E* P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) RATIO (X) (%) (%) Sales EBITDA3/11A 95,289 10,809 40.4 1.0 - - 6.8 7.4 - -3/12A 178,503 20,002 74.8 85.0 7.2 0.8 11.4 13.3 0.3 2.03/13E 163,041 11,638 43.5 -41.8 12.4 0.7 6.3 8.6 0.4 2.93/14E 151,643 12,845 48.0 10.4 11.2 0.7 6.6 8.0 0.3 2.2* Consolidated, Fully Diluted• We expect Reliance Infrastructure (RELI) to report revenue of INR37.7b (down 16% YoY) and PAT of INR2.5b(down 37% YoY) for 2QFY13.• Towards its EPC segment, RELI is likely to post revenue of INR18.5b (v/s INR24b in 2QFY12) and EBITDA margin of8% (v/s 23% in 2QFY12) for 2QFY13. The company's EPC order book stands at INR156b (book-to-bill ratio of 1.3x).For FY13, RELI is targeting EPC revenue of INR90b-100b and margins of 8-10%.• The company has exited the INR51b Worli-Haji Ali Sealink project, citing changes in terms of contract by MSRDC.It has received BG of INR1b from MSRDC however it had spent INR1.5b in preliminary activites towards theproject.• Post tariff hike in Mumbai business, RELI has not seen RAB (regulatory asset base) addition in the last threequarters in its Mumbai distribution business. Similarly, for its Delhi distribution business, the accretion to RABis NIL on an ongoing basis post tariff hike and 8% surcharge. Fuel cost is also allowed to be passed through on aquarterly basis. The Delhi business has RAB of INR130b, of which DERC has approved RAB of INR90b. RABaddition of INR40b over 2011-12 is likely to be approved once the petition for 2013-14 is filed.• We expect RELI to report standalone PAT of INR11.6b for FY13 (down 42%) and INR12.8b for FY14 (up 10%). Thestock trades at 12.4x FY13E and 11.2x FY14E reported EPS. Maintain Buy.Operational Details1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13E 3QFY13E 4QFY13E FY12 FY13EEPC Revenues (INR m) 18,849 24,309 29,801 43,823 17,749 18,500 21,000 29,251 116,781 86,500EPC EBITDA (INR m) 3,824 5,579 5,020 4,982 3,031 1,480 1,890 2,702 19,405 9,103Margin (%) 20.3 23.0 16.8 11.4 17.1 8.0 9.0 9.2 16.6 10.5Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 36,607 39,505 44,777 57,316 34,473 37,700 40,655 50,213 178,205 163,041Change (%) 64.3 62.0 69.8 148.1 -12.7 -15.8 -29.1 -49.1 85.3 -8.5EBITDA 6,961 7,096 6,518 6,173 4,598 4,901 5,285 5,447 26,748 20,231Change (%) 174.7 70.5 144.1 156.1 -35.2 -24.8 -14.4 -47.2 127.1 -24.4As of % Sales 19.0 18.0 14.6 10.8 13.3 13.0 13.0 10.8 15.0 12.4Depreciation 689 638 615 736 1,130 1,100 1,100 1,121 2,678 4,452Interest 570 833 1,231 1,832 1,902 1,925 1,900 1,852 4,466 7,579Other Income 1,093 1,126 1,468 1,685 2,586 1,350 1,375 1,202 5,372 6,514PBT 6,795 6,752 6,140 5,290 4,152 3,226 3,660 3,676 24,977 14,714Tax (incl contingencies) 2,490 1,794 1,982 -1,292 882 675 765 755 4,975 3,077Effective Tax Rate (%) 36.6 26.6 32.3 -24.4 21.2 20.9 20.9 20.5 19.9 20.9Reported PAT 4,305 4,957 4,158 6,581 3,270 2,551 2,895 2,921 20,002 11,638PAT (Pre Exceptionals) 2,874 4,903 4,057 6,478 3,270 2,551 2,895 2,921 19,621 11,638Change (%) 16.7 122.4 118.6 56.6 -33.3 -37.1 -55.3 -71.9 84.1 -40.7E: MOSL Estimates; Quarterly nos. are on standalone basisOctober 2012C–194

BSE SensexS&P CNX18,763 5,703BloombergTPWR INEquity Shares (m) 2,373.352 Week Range (INR) 122/811,6,12 Rel Perf (%) 2/3/-8Mcap (INR b) 253.8Mcap (USD b) 4.8CMP: INR107September 2012 Results PreviewSector: UtilitiesTata PowerNeutralYear Net Sales PAT* EPS* EPS* P/E* P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 69,180 17,516 7.4 18.4 - - 7.5 6.2 - -03/12A 84,958 17,628 7.4 0.6 14.4 2.2 9.8 6.2 3.8 17.903/13E 93,003 13,490 5.7 -23.5 18.8 2.1 8.5 5.3 3.4 17.203/14E 97,488 9,357 3.9 -30.6 27.1 2.0 6.4 5.2 3.3 17.6* Consolidated incl share of profit from KPC and Arutmin mines, Pre Exceptionals, FullyDiluted• We expect Tata Power (TPWR) to report standalone revenue of INR22b (up 9% YoY) and PAT of INR2.2b (down39% YoY) for 2QFY13. Consolidated PAT for the quarter is likely to be INR3.1b (down 31% YoY).• Generation from TPWR's 2,021MW (Mumbai region) capacity in July-August 2012 was 2.2BU, up 23% YoY. MundraUMPP generation for the period was 561MU and PLF was muted at 30% v/s 87% in 1QFY13.• TPWR has synchronized the 2nd unit of Mundra UMPP and we expect FY14 to be the first full year of operations.Losses from Mundra UMPP will limit consolidated earnings growth.• TPWR has filed a petition with India's CERC, asking for a tariff hike of ~INR0.67/unit for its Mundra project. CERChas heard TPWR petition and has asked buyers of electricity from the 4,000MW Mundra project to submit theirresponse by the first week of October.• Owing to falling imported coal prices, PT Berau Coal Energy, a subsidiary of Bumi Plc has lowered its productionforecast to 20m-22m tons from 23m tons. However, KPC/Arutmin has kept production target intact.• We expect TPWR to report consolidated PAT of INR13.5b for FY13 (down 24%) and INR9.4b for FY14 (down 31%).The stock trades at 18.8x FY13E and 27.1x FY14E reported EPS. Maintain Neutral.Quarterly Performance (Standalone)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEUnits Generated 3,889 3,772 3,970 3,599 4,259 3,850 4,100 3,783 15,230 15,992Total Operating Income 19,212 19,481 22,519 23,747 22,841 21,170 23,925 25,067 84,958 93,003Change (%) 2.9 19.1 36.3 34.7 18.9 8.7 6.2 5.6 22.8 9.5EBITDA 4,279 4,189 4,751 4,443 3,759 4,745 4,725 5,059 17,662 18,288Change (%) -5.1 19.3 43.2 7.8 -12.1 13.3 -0.6 13.9 14.3 3.5As of % Sales 22.3 21.5 21.1 18.7 16.5 22.4 19.7 20.2 20.8 19.7Depreciation 1,331 1,353 1,512 1,508 1,548 1,550 1,575 1,554 5,704 6,227Interest 1,124 1,165 1,280 1,388 1,386 1,400 1,475 1,528 4,957 5,789Other Income 2,476 3,323 4,105 -69 3,456 1,250 1,325 1,333 9,835 7,364PBT 4,299 4,995 6,065 1,478 4,281 3,045 3,000 3,310 16,837 13,636Tax 1,484 1,865 1,483 308 1,158 822 810 891 5,140 3,682Effective Tax Rate (%) 34.5 37.3 24.5 20.9 27.1 27.0 27.0 26.9 30.5 27.0Reported PAT 2,816 3,130 4,582 1,170 3,123 2,223 2,190 2,419 11,696 9,954Adjusted PAT 2,940 3,658 1,844 2,295 3,721 2,223 2,190 2,419 10,736 10,553Change (%) 33.9 68.3 23.9 43.1 26.6 -39.2 18.8 5.4 38.7 -1.7Consolidated Adjusted PAT 4,158 4,425 5,523 3,522 3,059 3,097 3,521 3,839 17,628 13,490Change (%) -1.0 12.8 34.9 -36.3 -26.4 -30.0 -36.3 9.0 -0.7 -23.5E: MOSL EstimatesOctober 2012C–195

BSE SensexS&P CNX18,763 5,703BloombergCSTRL INEquity Shares (m) 494.652 Week Range (INR) 318/1931,6,12 Rel Perf (%) -2/11/14Mcap (INR b) 154.0Mcap (USD b) 2.9CMP: INR311September 2012 Results PreviewSector: ConsumerCastrol IndiaBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) YoY (%) (X) (X) (%) (%) Sales EBITDA12/10A 28,020 4,914 9.9 27.6 - - 79.4 112.6 - -12/11A 30,821 4,853 9.8 -1.2 31.7 25.5 93.7 133.6 4.8 22.512/12E 33,290 4,715 9.5 -2.8 32.6 23.9 83.8 109.4 4.4 22.512/13E 35,811 5,768 11.7 22.3 26.7 21.5 75.6 101.0 4.1 18.0• We expect Castrol (CSTRL) to report volume growth of ~5.8% YoY and value growth of ~15.3% YoY for 3QCY12,primarily driven by a low base (3QCY11 volumes had declined 8.7% YoY) and recent price hikes. CSTRL had takenprice increases of 4-5% across key categories in June 2012 and 2-3% in 3QCY12, the impact of which would bevisible in 3QCY12.• Nonetheless, one-time marketing initiatives like discount of INR20/Kl for two-wheeler lubes during part of3QCY12 are likely to partially negate the benefits of the price hikes.• Almost 80% of CSTRL's demand in volume terms is from the replacement market. The OEM market accounts foronly ~20%. Since profitability in the OEM segment is very low, the share of OEM market in operating profit iseven lower. Hence, we believe CSTRL is unlikely to be much impacted by the current growth slowdown inautomotive segments such as HCVs and two-wheelers.• EBITDA is likely to grow 14% YoY to INR1.5b while EBITDA margin is likely to shrink 20bp YoY to 19.2% on the backof higher raw material cost. We expect net profit to grow 11.2% YoY to INR1.1b.• The stock trades at 32.6x CY12E and 26.7x CY13E EPS. We remain bullish on CSTRL's long-term prospects, given itspricing power, unique positioning in the lubricants industry and strong fundamentals. Buy.Quarterly Performance(INR Million)Y/E December CY11 CY12 CY11 CY12E1Q 2Q 3Q 4Q 1Q 2Q 3QE 4QEVolumes (MT) 56 54 46 52 53 57 49 55 208 213% YoY 2.4 -10.1 -8.7 -3.7 -5.9 4.8 5.8 -2.9 -7.3 6.6Net Sales 7,507 7,900 6,716 7,694 7,817 8,513 7,746 9,214 29,817 33,290YoY Change (%) 14.8 6.2 4.8 10.6 4.1 7.8 15.3 19.8 9.0 11.6Net Raw Material 3,965 4,378 3,948 4,654 4,590 4,974 4,521 4,993 16,945 19,078Employee Expenses 259 297 318 285 265 339 325 320 1,159 1,248Other Operating Expenses 1,489 1,269 1,147 1,225 1,394 1,506 1,409 2,096 5,130 6,405Total Expenditure 5,713 5,944 5,413 6,164 6,249 6,819 6,255 7,408 23,234 26,731EBITDA 1,794 1,956 1,303 1,530 1,568 1,694 1,491 1,806 6,583 6,558Margins (%) 23.9 24.8 19.4 19.9 20.1 19.9 19.2 19.6 22.1 19.7Depreciation 63 63 62 63 60 60 67 70 251 257Interest 4 2 9 4 7 3 5 5 19 19Other Income 303 226 170 147 335 162 166 167 846 830PBT 2,030 2,117 1,402 1,610 1,836 1,793 1,585 1,898 7,159 7,112Tax 664 692 451 542 607 584 527 678 2,349 2,397Rate (%) 32.7 32.7 32.2 33.7 33.1 32.6 33.3 35.7 32.8 33.7PAT 1,366 1,425 951 1,068 1,229 1,209 1,058 1,219 4,810 4,715YoY Change (%) 16.6 -5.2 -18.6 0.8 -10.0 -15.2 11.2 14.2 -1.9 -2.0Margins (%) 18.2 18.0 14.2 13.9 15.7 14.2 13.7 13.2 16.1 14.2E: MOSL EstimatesSiddharth Bothra (Siddharth.Bothra@MotilalOswal.com)October 2012C–196

September 2012 Results PreviewBSE SensexS&P CNX18,763 5,703BloombergMCX INEquity Shares (m) 51.052 Week Range (INR) 1,426/8381,6,12 Rel Perf (%) 11/-6/-Mcap (INR b) 65.5Mcap (USD b) 1.2Multi Commodity Exchange of IndiaCMP: INR1,284BuyYear Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA3/11A 3,689 1,728 33.9 (21.6) - - 22.4 16.7 - -3/12A 5,262 3,618 56.1 65.6 22.9 6.6 31.0 24.8 10.1 15.93/13E 5,172 3,542 56.1 - 22.9 5.8 26.9 25.8 10.1 16.23/14E 6,152 3,392 66.5 18.5 19.3 5.0 27.8 26.9 8.3 12.9• We expect revenue to grow 4.3% QoQ (but decline 17.7% YoY) to INR1.28b.• Total value of trades at the exchange increased 6.2% QoQ, but declined 19% YoY, on a huge base of 2QFY12,when trading in gold and silver had surged.• Our EBIT estimate stands at INR740m, implying an EBIT margin of 57.7%, +170bp QoQ, on leverage effect ofquarterly volume increase. Our EBIT estimate implies a decline of 26% YoY.• Our PAT estimate is INR712m, up 10% QoQ but down 21% YoY.• Key things to watch: Terminal additions; market share; transaction yield.• The stock trades at 22.9x FY13E and 19.3x FY14E EPS. Maintain Buy.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QESales 1,169 1,558 1,296 1,239 1,230 1,283 1,326 1,352 5,262 5,172Q-o-Q Gr. (%) 10.4 33.3 -16.8 -4.4 -0.7 4.3 3.4 2.0 42.6 -1.7Staff Costs 69 67 65 79 78 79 80 82 280 340Admin and other expenses 382 421 411 420 396 393 405 413 1,635 1,607Depreciation 64 71 70 67 67 71 71 71 272 286EBIT 654 999 750 672 689 740 769 787 3,075 2,940Margins (%) 55.9 64.1 57.9 54.3 56.0 57.7 58.0 58.2 58.4 56.8Other Income 215 224 280 308 233 256 272 280 1,027 1,044PBT 869 1,223 1,030 981 921 996 1,040 1,067 4,102 3,984Tax 248 327 342 181 274 284 297 304 1,098 1,121Rate (%) 28.6 26.7 33.2 18.4 29.7 28.5 28.5 28.5 26.8 28.1Net Income after exceptional item 620 896 688 800 647 712 744 763 2,862 2,863Q-o-Q Gr. (%) 12.9 44.5 -23.2 16.3 -19.1 10.0 4.5 2.6 62.8 -EPS (INR) 12.2 17.5 13.5 12.9 12.7 14.0 14.6 15.0 56.1 56.1E: MOSL EstimatesAshish Chopra (Ashish.Chopra@MotilalOswal.com)October 2012C–197

BSE SensexS&P CNX18,763 5,703BloombergSINT INEquity Shares (m) 271.052 Week Range (INR) 148/501,6,12 Rel Perf (%) 14/-29/-66Mcap (INR b) 18.1Mcap (USD b) 0.3CMP: INR67September 2012 Results PreviewSector: DiversifiedSintex IndustriesBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) YoY (%) (X) (X) (%) (%) Sales EBITDA03/11A 44,837 4,553 16.8 57.2 - - 20.9 14.8 - -03/12A 44,535 3,535 13.0 -22.4 5.1 0.7 14.0 11.3 0.9 5.403/13E 46,347 3,537 13.0 0.1 5.1 0.6 12.7 10.9 0.8 5.003/14E 51,778 4,151 15.3 17.4 4.4 0.5 13.3 12.7 0.7 4.0• Expect YoY de-growth: We expect Sintex Industries' 2QFY13 revenue to de-grow 7% YoY to INR10.7b, EBITDA tode-grow 11% to INR1.7b and Adjusted PAT to de-grow 24% to INR751m.• Expect marginal uptick in monolithic; overseas composite to post another weak quarter: We expect the degrowthto be driven by slowdown in Monolithic segment (18% YoY revenue de-growth, +7%QoQ) and overseascomposites (20% YoY revenue de-growth). In monolithic, Sintex is witnessing slow improvement in approvalprocess and expects full clarity on the stalled sites by 3QFY13. Overseas, automobile and electrical verticals areyet to show any sign of improvement, but the management expects uptick in electrical segment by 3QFY13.• Prefab, Textiles to remain stable: Most other verticals are likely to remain stable: (1) Prefab 18% revenuegrowth with margin of 20%, and (2) Stable margin in Textiles (21%) and Tanks (10%). Domestic composites isexpected to de-grow 14% YoY as Bright was impacted by strikes at Maruti during 2QFY13.• Clarity on funding of FCCB redemption key: Sintex has to redeem FCCBs worth USD285m in Mar-13. Of this,USD110m is unutilized; Sintex plans to fund the balance with a mix of ECBs and internal accruals. Clarity on thisis a key factor to watch out for.• The stock trades at FY13E P/E of 4.4x and EV/EBITDA of 5x. Sintex's current valuation reflects both (1) growthmoderation, and (2) other concerns (FCCB repayment, potential conflict of interest in power venture, etc). Wevalue Sintex at INR91 per share based on FY13E P/E of 7x, which is a 33% discount to its LPA P/E.Quarterly Performance(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QEOperating Income 11,120 11,571 11,608 10,236 10,806 10,710 11,980 12,891 44,535 46,347YoY Growth (%) 22.1 25.4 -2.1 -30.1 -2.8 -7.4 3.2 25.9 -0.7 4.1EBITDA 1,892 2,044 1,631 1,600 1,776 1,669 1,921 2,104 7,177 7,474EBITDA Margin (%) 17.0 17.7 14.1 15.6 16.4 15.6 16.0 16.3 16.1 16.1YoY Growth (%) 22.1 19.1 -17.1 -45.2 -3.4 -11.8 14.1 4.4 -12.0 4.1Depreciation 439 437 467 335 483 435 452 404 1,678 1,774Interest 350 416 354 238 354 365 365 377 1,358 1,461Other Income 168 67 154 115 42 81 67 79 505 270Extraordinary items -9 -596 135 4 -289 -8 -180 -189 -466 -666Profit before Tax 1,271 662 1,099 1,147 692 942 991 1,214 4,179 3,842Tax Provisions 338 275 283 263 241 207 227 266 1,160 941Tax / PBT 26 22 29 23 35 22 23 19 25.0 20.9PAT before MI & Income from Assoc 933 387 816 884 451 735 764 948 3,019 2,901Min. Int. and Profit from Associate 0 0 -6 28 17 8 8 8 0 30Consolidated PAT 946 389 824 913 468 742 772 956 3,068 2,871Adj. Consolidated PAT 946 985 689 909 757 751 952 1,145 3,535 3,537YoY Growth (%) 20.0 -61.1 -27.8 -45.3 -20.0 -23.8 38.2 26.0 -22.4 0.1E: MOSL EstimatesSandipan Pal (Sandipan.Pal@MotilalOswal.com)October 2012C–198

BSE SensexS&P CNX18,763 5,703BloombergUNTP INEquity Shares (m) 461.852 Week Range (INR) 169/1051,6,12 Rel Perf (%) 7/-8/-19Mcap (INR b) 60.6Mcap (USD b) 1.2CMP: INR131September 2012 Results PreviewSector: AgrochemicalsUnited PhosphorusBuyYear Net Sales PAT EPS EPS P/E P/BV RoE RoCE EV/ EV/End (INR m) (INR m) (INR) Gr. (%) (X) (X) (%) (%) Sales EBITDA03/11A 58,045 5,701 12.3 3.8 - - 17.0 17.0 - -03/12A 76,547 5,890 12.8 3.3 10.3 1.5 14.9 17.3 1.0 6.303/13E 87,801 6,885 14.9 16.9 8.8 1.3 15.5 17.0 0.8 5.203/14E 98,629 9,003 19.5 30.8 6.7 1.1 17.8 18.2 0.7 4.1• Expect United Phosphorus (UNTP) to report 15% YoY growth in consolidated revenue to INR20.4b, with domesticrevenue growing 6% and international revenue 30%. (Performance is strictly not comparable YoY due toconsolidation of Sipcam and DVA Agro.)• EBITDA margin is expected to decline by 100bp YoY to 17.3% due to higher RM costs and fixed cost, translatinginto EBITDA growth of 8% to INR3.5b.• We are factoring in MTM forex gain of INR110m (v/s forex loss of INR1.1b in 2QFY12), boosting 120% YoY growthin PAT to INR1.57b.• UNTP has guided for FY13 revenue growth of 15%, EBITDA margin of 18-20% and tax rate of 15-20%.• The company has announced buyback of up to 19.2m shares at a price up to INR150 i.e. cash outgo of up to~INR2.9b.• We believe current valuations of 8.8x FY13E EPS of INR14.9 and 6.7x FY14E EPS of INR19.5 factor in short-termheadwinds. Maintain Buy with target price of INR195 (10x FY14E EPS).Quarterly Performance (Consolidated)(INR Million)Y/E March FY12 FY13 FY12 FY13E1Q 2Q 3Q 4Q 1Q 2QE 3QE 4QENet Revenues 18,542 17,757 19,080 21,269 22,142 20,360 21,613 23,686 76,547 87,801YoY Change (%) 26.3 41.3 56.1 15.9 19.4 14.7 13.3 11.4 32.9 14.7Total Expenditure 15,173 14,502 15,798 17,402 18,278 16,839 17,813 19,296 62,873 72,225EBITDA 3,370 3,255 3,282 3,867 3,864 3,521 3,800 4,390 13,674 15,576Margins (%) 18.2 18.3 17.2 18.2 17.5 17.3 17.6 18.5 17.9 17.7Depreciation 628 719 785 792 734 850 900 1,040 2,924 3,524Interest 714 1,918 826 688 1,109 890 1,000 1,131 4,146 4,131Other Income 305 196 305 173 354 190 300 202 979 1,046PBT before EO Expense 2,332 814 1,977 2,560 2,375 1,971 2,200 2,421 7,582 8,968Extra-Ord Expense 0 144 11 242 0 0 0 0 396 0PBT after EO Expense 2,332 670 1,966 2,319 2,375 1,971 2,200 2,421 7,187 8,968Tax 466 151 626 37 703 453 660 156 1,280 1,973Rate (%) 20.0 22.5 31.8 1.6 29.6 23.0 30.0 6.5 17.8 22.0Reported PAT 1,866 519 1,340 2,282 1,672 1,518 1,540 2,265 5,907 6,995Income from Associate Co -23 51 -216 -263 357 50 -190 -327 -398 -135Adjusted PAT 1,843 713 1,135 2,256 2,029 1,568 1,350 1,938 5,834 6,860YoY Change (%) 29.5 -37.8 35.2 -3.4 10.1 119.9 19.0 -14.1 0.0 17.6Margins (%) 9.9 4.0 5.9 10.6 9.2 7.7 6.2 8.2 7.6 7.8E: MOSL EstimatesJinesh K Gandhi (Jinesh@MotilalOswal.com)October 2012C–199

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