1

Market Outlook India Research

September 9, 2010

Please refer to important disclosures at the end of this report Sebi Registration No: INB 010996539

Dealer’s Diary The benchmark indices opened negative following weak trading cues from the Asian indices and overnight US markets. While the markets continued trading weak in the morning session, they recouped losses amidst volatility to trade in positive zone by the beginning of the afternoon session. The indices touched intra-day highs mid-session before a sharp sell-off took the markets past the previous close in the red. However, markets once again recovered in the final session and managed to close flat for the day. The auto, FMCG and capital goods stocks fell, while IT and real estate counters reversed earlier losses. The Sensex and Nifty closed with marginal gains of 0.1% each. The BSE mid- and small-cap indices gained 0.3% and 0.6%, respectively. Among the front-liners, ACC, Bharti Airtel, SBI, HUL and Sterlite Industries gained 2–3%, while Reliance Infra, ITC, ICICI Bank, HDFC Bank and Maruti Suzuki lost 1-2%. Among the mid-caps, Britannia Inds, Zuari Inds, Monsanto India, Gammo Infra and Core Projects gained 6-4%, while Prakash Inds, Motherson Sumi, Prism Cement and Madras Cements lost 4 -13%. Markets Today The trend deciding level for the day is 18643 / 5600 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 18745 – 18823 / 5633 – 5658 levels. However, if NIFTY trades below 18643 / 5600 levels for the first half-an-hour of trade then it may correct up to 18565 – 18462 / 5575 - 5543 levels.

Indices S2 S1 R1 R2

SENSEX 18,462 18,565 18,745 18,823 NIFTY 5,543 5,575 5,633 5,658

News Analysis

Sun Pharma receives favourable judgement in Taro saga SpiceJet to go international Prakash Industries – Update

Refer detailed news analysis on the following page.

Net Inflows (September 07, 2010) Rs cr Purch Sales Net MTD YTD

FII 2,650 2,449 201 2,940 62,322

MFs 753 366 387 633 (15,482)

FII Derivatives (September 08, 2010)

Rs cr Purch Sales Net Open

Interest

Index Futures 1,066 1,653 (587) 18,183

Stock Futures 1,052 1,110 (58) 37,540

Gainers / Losers

Gainers Losers

Company Price (Rs)

chg (%)

Company Price (Rs)

chg (%)

IDBI Bank 134 5.3 Madras Cement 115 (3.7)

Max India 164 5.3 IOC 413 (2.7)

Bajaj Holding 852 4.0 India Cement 113 (2.6)

Anant Raj 141 3.8 Reliance Capital 775 (2.5)

Oil India 1,548 3.7 Financial Tech 1,371 (2.3)

Domestic Indices Chg (%) (Pts) (Close)

BSE Sensex 0.1% 21.6 18,667

Nifty 0.1% 3.9 5,608

MID CAP 0.3% 27.2 7,996

SMALL CAP 0.6% 59.4 10,216

BSE HC 0.4% 21.8 5,688

BSE PSU 0.2% 24.4 9,979

BANKEX 0.1% 17.7 12,706

AUTO -0.2% (17.5) 9,079

METAL 0.4% 58.7 16,066

OIL & GAS -0.2% (20.3) 10,203

BSE IT 0.6% 31.9 5,650

Global Indices Chg (%) (Pts) (Close)

Dow Jones 0.4% 46.3 10,387

NASDAQ 0.9% 20.0 2,229

FTSE 0.4% 21.9 5,430

Nikkei -2.2% (201.4) 9,025

Hang Seng -1.5% (312.9) 21,089

Straits Times -0.8% (24.7) 3,011

Shanghai Com -0.1% (3.1) 2,695

Indian ADRs Chg (%) (Pts) (Close)

Infosys 1.3% 0.8 $61.6

Wipro 0.9% 0.1 $13.1

Satyam 0.0% - $5.3

ICICI Bank 2.3% 1.0 $44.4

HDFC Bank 1.0% 1.6 $165.1

Advances / Declines BSE NSE

Advances 1,632 1,022

Declines 1,380 795

Unchanged 92 42

Volumes (Rs cr)

BSE 6,160

NSE 14,112

September 9, 2010 2

Market Outlook | India Research

Sun Pharma receives favourable judgement in Taro saga Sun Pharma has received favourable judgement from Israel Supreme Court which upheld Tel-Aviv district court ruling dismissing the appeal by Taro Pharmaceutical Industries Ltd. (Taro), holding that the Israeli special tender offer (STO) rules do not apply to the tender offer by Sun Pharma to purchase all outstanding shares of Taro for US $7.75 per share in cash. The three-judge bench of the Supreme Court said there were no legal or moral grounds which require Sun to comply with the STO rules. The Court declared that its ruling in favour of Sun Pharma was dictated by concerns of fairness, good faith and commercial stability and affirmed the District Court's finding that Taro and its directors had acted in bad faith. The Court also awarded Sun expenses. Thus the open tender offer is now scheduled to expire on September 14, 2010. Further Sun will provide a subsequent offering period of not less than ten business days nor more than 20 business days following the expiration date. We view this development as positive as Sun Pharma is inching closer to complete Taro acquisition, though the future course of action by Taro promoters (holds 11.5% stake with 41% voting rights) is still uncertain. Sun Pharma has so far acquired 36.6% stake in Taro at a total cost of US$ 105 mn. We expect Sun to now convert remaining 3.7mn warrants thereby increasing its stake to 42.2%. On the valuation front, we have valued Taro at Rs85 (1x Mcap/Sales given the uncertainty over Taro’s financials) per share. The stock is trading at 24.5x FY2011E and 20.7x FY2012E core earnings. We recommend Neutral on the stock with a Fair Value of Rs1,781 (Rs1,696 per share for core business and Rs85 for Taro). SpiceJet to go international SpiceJet is expected to start its international operations with flight to Kathmandu and Colombo from October 7 and 9, 2010 respectively. The company shall operate six flights to Kathmandu and daily flights to Colombo. The company is expected to generate around 10-12% of the total revenues from international operations with the one-way fares for the two sectors being pegged at a minimum of Rs3,160 for Delhi-Kathmandu and Rs1,331 for Chennai-Colombo. We have a Neutral recommendation on SpiceJet. Prakash Industries – Update Media reports have indicated that Prakash Industries is engaged in illegal coal mining activities. In response, the management has challenged the veracity of the allegations and issued a notice to the stock exchanges stating that coal mine is used for its sponge iron facility and midlings are used by its 75MW captive power plant. To meet its additional requirement of coal for expanded sponge iron capacity, the company buys coal through e-auction route. Further, the company has also stated that extraction of coal, its quality, grade and usage are being verified every year by Office of coal controller, Government of India and State mining department. We maintain a Buy rating on the stock and would view the correction as an opportunity, for long term investors.

September 9, 2010 3

Market Outlook | India Research Economic and Political News

Will snatch back undeveloped coal blocks, issuing notices: Govt

M&A activity slows down in August to US $4.2bn

India protests Ohio offshoring ban

India's basmati rice exports to jump 9% in 2010-11 season

Corporate News

Indosolar fixes IPO price band at Rs29-32

Hindustan Copper to form JV with Hutti Gold Mines for reviving copper mining activities

BHEL to form JV with Kerala govt to acquire a unit of Kerala Electrical & Allied Engg Co.

Tata Steel raises Rs700cr from selling shares of Tata Motors & Tata Power to Tata Inds Source: Economic Times, Business Standard, Business Line, Financial Express, Mint

September 9, 2010 4

Market Outlook | India Research Research Team Tel: 022-4040 3800 E-mail: research@angeltrade.com Website: www.angeltrade.com

DISCLAIMER

This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment.

Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within.

Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals.

The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly.

Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past.

Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information.

Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Angel Broking Ltd: BSE Sebi Regn No : INB 010996539 / CDSL Regn No: IN - DP - CDSL - 234 - 2004 / PMS Regn Code: PM/INP000001546

Angel Capital & Debt Market Ltd: INB 231279838 / NSE FNO: INF 231279838 / NSE Member code -12798 Angel Commodities Broking (P) Ltd: MCX Member ID: 12685 / FMC Regn No: MCX / TCM / CORP / 0037 NCDEX : Member ID 00220 / FMC Regn No: NCDEX / TCM / CORP / 0302

Address: Acme Plaza, ‘A’ Wing, 3rd Floor, M.V. Road, Opp. Sangam Cinema, Andheri (E), Mumbai - 400 059. Tel : (022) 3952 4568 / 4040 3800