In This Issue Global Market Economic Pulse Thought ... - Motilal Oswal

May 2013In This Issue• Market Outlook for the month• Equity Market Outlook• Derivatives & Commodities Market Outlook• Large Cap and Mid Cap Investment Ideas• Model Advisory Portfolios• Recommended Funds• Trading PlatformGlobal MarketIndex 31-Apr-13 MoM (%) YoY (%)Sensex 19,504 3.5 12.6Nifty 5,930 4.3 13.0FTSE 100 6,430 0.3 12.1Dow 14,840 1.8 12.3Nasdaq 3,329 1.9 9.3Hang Sang 22,737 2.0 7.8Economic PulseKey Indicators Current Month Change (%)IIP (Jan) 0.6% -75.00WPI (Jan) 5.96% -12.87Key Highlights for the Month Strong fall in crude and gold prices eases the macro worries, while Dow Jonesbreached all time high. RBI cuts repo rate by another 25bps to 7.25%. Trade deficit eases further to $10Bn for March- should help lower CAD from recordhighs. Q4FY13 results in full swing- will this mark the bottoming out of growth.Dear Investor,April was an eventful month with the Dow Jones Indexreaching all time highs, while key commodities- Gold(below $1450) and Brent crude corrected sharply.Nifty moved up sharply though the course of the month,up 4.4%, led by interest rate sensitives. Bank Nifty gained10.6% in April, led by Private sector banks. FMCG and Pharma sectoral indicescontinued to be strong reaching new all-time highs.A weak investment cycle is a persistent worry, especially so as the country remainssupply constrained with high cost of capital. RBI lived up to expectations with a 25bps repo rate cut in its May policy meet, but sounded hawkish about future courseof monetary policy, disappointing the investors.Results for Q4FY13 are in full swing, with private sector banks continuing to surprisepositively with NIM expansion, strong growth as well as low NPAs coupled with goodtraction in CASA. Sensex earnings growth is expected to bottom out this quarter.10 Year Yield 7.73% -2.89USD/ INR 53.64 -1.54Crude ($) 102.4 -6.93Gold (10 gms) 26765 -9.04Thought for the monthGautam Sinha Roy - Vice PresidentWay ForwardAfter a strong run-up, Nifty could consolidate for a while before making further moves.The key factors driving Nifty's future course would be:• Macro variables (CAD, fiscal deficit and inflation driven by international commodityprices).• Lowering of interest rates to assist the investment cycle and corporate profitability.• Recovery in the US economy will augur well for Indian IT and Pharma sectors.ThreatContinued political uncertainty presents a risk of early elections. While this itself is wellappreciated now, the new government's constitution would be a cause for worry, withneither of the two national parties looking to be on a strong wicket so far.Commodity prices moving unfavorably will be negative for the macro.

On This PageEquity Market OutlookEquity Market OutlookTechnical OutlookMay 2013• Nifty for the month of April closed with a gain of 248 points. After confirming theelliott wave pattern support around 5500, the index respected the wave counts andmoved higher for start of the wave 5. The study was indicating a first possible target inthe band of 5970-6000 which has been achieved and post a consolidation / pullback,the index can be headed higher towards the target of 6300 which is coinciding withmultiple studies like - Channels, Trend lines, Supply zone and Elliott wave setup.• The point and figure chart has been one of the most indicative study on the mediumterm scale. Nifty failed to confirm a catapult sell and tested the 45 degree trend linewhich was important around the area of 5500. The chart suggests that the trailingtrend line can act as an important support for this up-trend.• Short term setup of Nifty indicates that the up-trend could be now over-heated and atemporary cool off can be on its way in the form of either a price pullback (support5820) or a time correction.• Sector rotation model is indicating most of the major sectors as neutral whichindicates that the market is getting more mature and switch within sectors may notprovide alpha for some more weeks to come. Pharma & FMCG have matured in rallyand minor outperformance can be expected. Infra can be a pick for long momentum.Markets & Our RecommendationsMOSL's Recommendations• Long positions could be made above 6060for a potential of 6300 & a stop below 5950• Sell positions could be made below 5940for a potential of 5800 & a stop above 6040.Nifty Support for the Index is placed at 5820 / 5750 Resistance can be faced at 6050 / 6300CNX BANK The sector's relative strength tested an all time high Support for the index is placed at 11,800 PSU Banks can catch - up post outperformance from Private BanksBank Nifty saw a MoM gain of 10.6% which is highest compared to other sectorsRe-confirmation of the ratio to a new high can be taken as a pre-empt indication for bullsThe index is expected to move up for a target of 13,300 after a temporary consolidationSectoral HighlightsSector Our Views Top Pick Recommendation #Infra Positive Idea Buy above 130Pharma Positive Divislab Buy above 1080Services Neutral HDFC Buy above 855Metal Negative Hindalco Sell below 100#Technical view for 1 month perspectiveLite-Desktop : 24*7 Online Acess | Transfer Funds Online from 46+ banks | Leverage & Margin Multiple benefit | Integrated Research2

Derivatives Market Outlook OutlookMay 2013On This PageDerivatives Market Outlook, Commodities Market OutlookMarkets & Our Recommendations3 The month of May starts with positive set of cues as the participation carries on thebullish positions with proper hedges in place. We saw fresh short hedges getting builtinto Nifty futures in last week of April, while the market continued its uptrend.3 On the stock futures the rollovers remained fairly low led by short covering in many of thesectors especially Banking.3 In last expiry we had following sector wise observations3 Auto: Short Covering in the sector, except for Maruti which saw fresh longs. PSU Financials:Smalller Banks saw longs, larger ones saw short covering. Pvt. Financials: Mix of Longsand Short Covering. Engineering: Short covering in the entire sector. Infra: Short coveringin Relinfra, JP Associates. Longs in GMR & IVRCL. IT: Fresh Shorts in the sector exceptFintech which saw short covering. Metal: Shorts continue to roll into May.Power: Majority of stocks saw short covering.3 The view remains cautiously bullish. Even on options front while the OIPCR is just abovethe average signaling moderately bullish bias, the IVIX near its lower bounds indicatesover optimism.Strategy of the Month• Strategy : Nifty Bear Ratio Spread (Hedging)MOSL's RecommendationsINDEX: NIFTY LOT SIZE: 50StrategyFollow-upBreak EvenPoint: Nifty Bear Ratio Spread(Hedging): Trade with underlying exitpoint of 5600.Pay off Profile On ExpiryMaximumProfitPremiumOutflow5975 & 5625 8750 1250• Trade : Buy 6000 PE; Sell 2 Lots 5800 PE• View : As one rides the bullish bias a bear ratio on Nifty would at least create partialhedge, in case of a pull back. The ratio does garner lower profit but let's onestay in the trade due to lower outflow.Commodities Market OutlookCrude OilThe downward revision of GDP estimates by IMF caused jitters in energy prices sending Nymex crude oil lower by ~4.5% in April 2013. Theshrinking of demand and growth slowdown, as sighted by IEA and OPEC remained instrumental in pushing Brent under $100. Though someheadline economic indicators registered positive growth, majority of them continue to sound death knell for crude prices.3 The crude oil fundamental have been bearish since beginning of the year. The reduced dependency of US over imported oil is the primary culpritand has lead to oil imports hitting 15 year low. Meanwhile, the US domestic oil production registered the highest growth in last 22 years at7.15 mn barrels per week.3 The Hydraulic Fracturing or "frackling" enabled US to access resources which were considered uneconomical earlier. The total reserve of usableshale oil is estimated to be at 1.5 to 2.2 tn barrels. There are at present 600 production ready Shale oil extraction sites in US.3 With low cost Iraqi Oil finding its way to global market, it is only expected to undercut OPEC's domination in the global crude business. Iraqiproduction is expected to reach 4.53 mn barrels a day, while the total world consumption of crude oil has shrunk to 90.2 mn barrels a day.3 According US EIA, the crude oil storage reached a level that was last seen in 1920, the current stock piles stand at 323.8 mn barrels inunderground storage.3 The only supply shock in system comes from Syrian, as air strikes aggravates. On average 14 oil tankers pass through the strait on daily basis or21% of daily global crude oil consumption. The Nigerian blockade in northern Buzzard territory are expected to provide support to crude oil.The lack of risk appetite in traders and fundamentally bearish indicators are unlikely to let the pressure on oil prices recede. In case of expansionof demand the oil supply from newer sources is expected to plug the gap, thus keeping markets over supplied. Bounce towards `5150-90 shouldbe used as selling opportunity to target at `4875, there is a mild possibility of reversal above `5310 and therefore stop loss is recommendedat this handle.My Motilal Oswal : Personalized Website Experience | Single SignOn | Uniform Report Formats | Integrated view of BackOffice3

On This PageLarge Cap Investment Ideas, Mid Cap Investment IdeasMay 2013Must ActLarge Cap Investment IdeasBharti AirtelCMP*: `318Target: `390BUYMarket & Our Recommendation3 Bharti Airtel India’s Largest Telecom company with market leading presence in South Asiaand many parts of Africa.3 Bharti Airtel 4QFY13: Competitive intensity declining; EBITDA in-line as improved Indiaperformance offset by Africa; high forex loss/tax drag PAT.3 Maintain Buy with a revised target price of `390 (`400 earlier) based on 8x FY15E EV/EBITDA for India & South Asia (ex-tower business), 6x FY15E EV/EBITDA for Africa business,15% discount to market value for stake in Bharti Infratel, and `188bn (`49/share) for potentialspectrum liability.L&TCMP*: `1,512Target: `1,870BUY3 L&T is India's largest engineering and construction company.3 L&T is well placed to capitalize on long-term infrastructure demand. L&T's order backlogis worth `1,585bn implying BTB ratio of 2.8x TTM. We believe L&T is the best play oncapex with its strong execution skills, diversified portfolio and strong balance sheet.3 L&T's operational performance continues to be encouraging in a challenging environment.Revenue growth outlook contineus to be in double digits.3 We maintain Buy with a revised SOTP-based target price of `1,870 (18% upside). Wevalue L&T standalone at 14x FY15E earnings and subsidiaries at `377/share.Mid Cap Investment Ideas3 Finolex cables supplies Low-tension electrical cables to the construction, automobiles,pumps, motors and Consumer goods segments through 23000 dealers.3 Finolex cables is one of the "SuperBrands" in the electrical cables industry3 Panchayat connection program and BSNL's defence network a `5000 cr opportunity3 From FY06 to-date, Finolex lost ~`300 cr on forex hedges. This will be NIL from FY14E3 The company investments have a market value of ~`440 cr is ~60% of market-cap.3 Expect strong growth of 23% CAGR in earnings and ROE improvement to 16%.3 We have a Buy rating with a target price of `65.Finolex CablesCMP*: `51Target: `65BUY3 Indian Jewellery market likely to growth at 14% CAGR with the organized sectorexpected to increase by over 30% upto FY14.3 TBZ is a 148 year old brand in premium and wedding jewellery.3 TBZ is expanding its retail presence to 57 stores spread across 43 cities by FY2015 from19 stores currently.3 We expect profit CAGR of 40-45% over FY12-FY1 6E on the back of huge expansion inretail presence.TBZCMP*:Target:`212`330BUY3 Recommend BUY with a target of `330 (19xFY14E EPS and 12xFY14E EV/EBIDTA).Data as on 30th April 2013My Motilal Oswal : Personalized Website Experience | Single SignOn | Uniform Report Formats | Integrated view of BackOffice4

On This PageMOSt Value, MOSt Velocity, MOSt Mid-CapMay 2013Build a PortfolioMOSt Value - Model Advisory Portfolio for InvestorsScrip CMP Wtg.SBI 2264 10.0Infosys 2235 10.0Maruti 1670 10.0ITC 328 10.0ICICI Bank 1164 10.0Dabur 148 7.5NMDC 126 5.0Tech Mahindra 953 5.0Lupin 702 5.0LIC Housing 243 5.0Hindalco 97 5.0Dr Reddy 2028 5.0Container Corporation 1124 5.0Cash 7.5Total 100Sectoral AllocationFor WhomInvestment DurationRisk ProfileWhat’s InDabur--Long TermInvestorsFor few monthsto a yearDefensiveInvestorsWhat’s OutMOSt Velocity 10 - Model Advisory Portfolio for Positional TradersScrip CMP Wtg. Sectoral Allocation For WhomICICI Bank 1164 10.0ONGC 326 7.5HDFC 848 7.5Investment DurationMedium TermInvestorsFew monthshorizonOil India 550 7.5Bank Of Baroda 698 7.5Dabur 148 7.5Dr Reddy 2028 5.0Tech Mahindra 953 5.0Cash 42.5Total 100Risk ProfileWhat’s InBank Of BarodaModerateInvestorsWhat’s OutLupinIdeaInfosysMarutiSBISRTRANSFINMOSt Mid Cap- Model Portfolio for Aggressive InvestorsScrip CMP Wtg.Bajaj Finance 1226 12.5Engineers India 173 12.1FDC 90 11.2Finolex cables 51 10.3TBZ 211 10.1Gruh Finance 192 9.8Unichem Labs 169 9.7GMDC 157 9.2Bajaj Corp 245 8.6Muthoot 132 6.7Total 100Sectoral AllocationFor WhomInvestment DurationRisk ProfileWhat’s InFinolex cablesTBZLong TermInvestorsFor few monthsto a yearAggressiveInvestorsWhat’s OutBata IndiaMcleod RusselData as on 30th April 2013My Motilal Oswal : Personalized Website Experience | Single SignOn | Uniform Report Formats | Integrated view of BackOffice5

On This PageMOSt PMS, MOSt Mutual - Model PortfolioMOSt PMSValue Strategy• Value Strategy: - The Strategy aims to benefit from the Long term compounding effect oninvestments done in good businesses, run by great business managers for superior wealthcreation.• Value Strategy has the investment style of buying Undervalued stock & Sell overvalued stocks,irrespective of Index Movements.• Money multiplied by 10 times in just 10+ years. `1Cr invested in Value PMS in March 2003is worth `10.57Crs vs. 5.86 Crs in CNX Nifty• Since Inception Value Strategy has delivered 26.27 % annualized returns vs. 19.12 % ofCNX Nifty, delivering an annualized alpha of 7.15 %.MOSt PMSNTDOP StrategyMay 2013All the above figures are of a model client. Returns shown above are calculated on NAV method "Returns shown above are post fees & expenses• NTDOP Strategy: The strategy aims to deliver superior returns by investing in focused themeswhich are part of the Next Trillion Dollar GDP growth opportunity. It aims to predominantlyinvest in Small & Mid Cap stocks with a focus on Identifying Emerging Stocks/Sectors.• The strategy aims to capitalize on the themes of Consumerism, Banking & Financial Services& Infrastructure in the Indian Economy.• Since Inception NTDOP Strategy has delivered 9.45% annualized returns vs. -1.90 % of CNXMidcap, delivering an annualized alpha of 11.36 %.• In last 1 Year, NTDOP Strategy has delivered 15.58 % returns vs. 4.65 % of CNX Midcap,generating an alpha of 10.93 %.All the above figures are of a model client. Returns shown above are calculated on NAV method "Returns shown above are post fees & expensesManaged FundsTop Holdings in Value StrategyScrips % HoldingsHDFC Bank Ltd 13.37Bosch Ltd 10.97Nestle India Ltd 10.40State Bank of India 9.43HDFC Ltd 8.83Sector Allocation % HoldingsBanking & Finance 31.63Auto & Auto Ancillaries 21.64Pharmaceuticals 11.34FMCG 10.40Infotech 10.30Data as on 30th April 2013.Top Holdings in NTDOP StrategyScrips % HoldingsPage Industries Ltd. 13.41Eicher Motors Ltd. 8.45Bosch Ltd. 8.20GlaxoSmithkline Consumer Ltd. 8.10J & K Bank 7.87Sector Allocation % HoldingsFMCG 25.19Banking & Finance 23.87Auto & Auto Ancillaries 16.66Engineering & Electricals 8.34Diversified 7.91Data as on 30th April 2013.MOSt Mutual - Model PortfolioAGGRESSIVE - High Risk Return %DEFENSIVE - Low RiskReturn %Scheme Name Type 1yr 3yrs Wtg%Scheme Name Type 1yr 3yrs Wtg%ICICI Pru Focused BlueChip Eq Fund E 13.94 8.59 20%UTI Opportunities Fund E 11.28 8.61 10%UTI Opportunities Fund E 11.28 8.61 20%Franklin India Bluechip Fund E 12.59 6.20 10%Franklin India Bluechip Fund E 12.59 6.20 10%Reliance Equity Opportunities Fund E 13.93 9.49 10%Reliance Equity Opportunities Fund E 13.93 9.49 10%HDFC Short-term Plan D 10.13 8.10 15%ICICI Pru Dynamic Plan E 9.24 5.52 10%IDFC Dynamic Bond Fund D 14.02 10.03 20%IDFC Dynamic Bond Fund D 14.02 10.03 15%SBI Dynamic Bond D 12.94 10.22 15%SBI Dynamic Bond D 12.94 10.22 15%IDFC SSIF-MT Fund D 10.52 8.71 20%Total 100%Total 100%G: Growth , E: Equity, D: Debt, F: Fund Data as on 30th April 2013.My Motilal Oswal : Personalized Website Experience | Single SignOn | Uniform Report Formats | Integrated view of BackOffice6

On This PageInvestment SolutionsMay 2013Lite-WebGame ChangerDon’t miss a trade even when you are on the go with Motilal Oswal's Lite-Web Trading platform. You can now tradeseamlessly at any location on your laptop or your ipad!Features of Lite-Web• Complete freedom to trade anytime, anywhere• Trade in Equities, F&O and commodities through Lite-Web• No download required• Multi-browser Compatibility (Internet Explorer 9+, Mozilla Firefox 13+, Google Chrome 19+,Safari 5+, Opera 12+. )• Trade smoothly and seamlessly as positions are synced across platforms (Desktop/Mobile/Web)• Access Lite-Web with your existing Lite-Desktop /Mobile Username and Password• Compatible with Ipad• *1 second refresh rateMy Motilal Oswal : Personalized Website Experience | Single SignOn | Uniform Report Formats | Integrated view of BackOffice7

For further details : Call your Relationship ManagerorContact us: +91 (022) 3089 6680 SMS: MOSL INFO to 575753 Email : info@motilaloswal.comMotilal Oswal Securities Ltd. (MOSL) Member of NSE and BSEReg. Office: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai 400 064. Tel: 022 3080 1000. Registration Nos.: NSE (Cash) : INB231041238 ; NSE (F&O) : INF231041238 ;BSE (Cash) : INB011041257 ; BSE(F&O) : INF011041257 ; CDSL : IN-DP-CDSL-09-99 ; NSDL : IN-DP-NSDL-152-2000 ; AMFI :ARN 17397 ; MOSL is a distributor of Mutual Funds and IPOs.*PMS : INP000000670; *PMS &Mutual funds are offered through Motilal Oswal Asset Management Company (MOAMC) which is group company of MOFSL. Motilal Oswal Commodities Brokers Pvt. Ltd. (MOCBPL) member of MCX, NCDEX and NSEL. FMCUnique membership code: MCX: MCX/TCM/CORP/0725, NCDEX: NCDEX/TCM/CORP/0033 & NSEL: 13730. Commodities is offered through MOCBPL which is a group company of MOFSL.Disclaimer: This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you.This research report does not constitute an offer, invitation or inducement to invest in securities or other investments and Motilal Oswal Securities Limited(hereinafter referred as MOSL) is not soliciting any action based upon it. This report is not for public distribution and has been furnished to you solely for yourinformation and should not be reproduced or redistributed to any other person in any form.Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this informationspecifically agrees to exempt MOSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not tohold the MOSL or any of its affiliates or employees responsible for any such misuse and further agree to hold the MOSL or any of its affiliates or employeesfree and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays.The information contained herein is from publicly available data or other sources believed to be reliable. While we would endeavour to update the informationherein on reasonable basis, MOSL and/or its affiliates are under no obligation to update the information. Also there may be regulatory, compliance, orother reasons that may prevent MOSL and/or its affiliates from doing so. MOSL or any of its affiliates or employees shall not be in any way responsible andliable for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. MOSL or any of its affiliatesor employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including withoutlimitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement. The recipients of this report should rely on theirown investigations.Either MOSL and/or its affiliates and/or employees may have interests/ positions financial or otherwise, make market, act as principal or engage in transactionsof securities of companies as referred to in this report.MOSL and/or its affiliates may from time to time solicit or perform investment banking or other services for any company mentioned in this document.