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DOLAT CAPITAL

I n d i a R e s e a r c h

August 27, 2012

Long, Long, Longer Tunnel!!!

Dolat Research+9122 4096 9700research@dolatcapital.com

E a r n i n g

R e v i e w Q 1 F Y 2 0 1 3

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DOLAT CAPITALIndia Research

August 27, 2012

INDEX

SR. No. Sectors Page No.

1 Strategy 3

2 Agrochemical 11

3 Auto 13

4 Consumer 15

5 Financials 17

6 IT Services 21

8 Metals & Mining 25

9 Oil & Gas 27

9 Pharma 29

10 Plastics / Tiles 33

11 Valuation Matrix 37

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DOLAT CAPITALIndia Research

August 27, 2012

Long, Long, Longer Tunnel!!!

z The indices continued with their rudderless moves through the earnings season,not different from what we wrote in our earnings note dated July 3, 2012. However,stocks / sectors did witness wider movements verses the broad market,corroborating our view that the current market cycle is biased in favor of stockpicking (read bottoms up strategy) than macro allocations.

z Given the environment, and the way we believe the next few months will shapeup, we find little justification to move away from this stock focused strategy.Unless of course a slush of liquidity (read QE3) engulfs global markets, includingIndia. Hence the preference to look at sustainable earnings, visibility of nondilutive growth and cash flow generation.(refer table I, Page no.7)

z The much awaited diesel price hike is proving as elusive as ever. However withthe crude prices rallying sharply (+30%) over last month, and the currency yetclose to bottoms, it is back to the worst case for fiscal numbers. The silverlining (literally!!) has been the improvement in the monsoon spread with theshortfall now in mid teens. The cultivation area has also witnessed a quantum

jump to give respite.

z Our sector stance remains positive on Pharma, Banks (private sector), Auto (4wheelers), IT Services. In the negative sector stance, we include metals & miningwhile consumer space is neutral.

z Our preferred large cap picks have remained the same, except for an addition inOFSS. In the mid cap space, we are adding Kajaria Ceramics as one of thepreferred names.

z Our negative stance continues on Maruti.

Earning Review Q1FY2013

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DOLAT CAPITALIndia Research

August 27, 2012

Source: Bloomberg

Source: Bloomberg

Source: Bloomberg

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DOLAT CAPITALIndia Research

August 27, 2012

Source: CSO

Source: CSO

Source: RBI

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DOLAT CAPITALIndia Research

August 27, 2012

Source: EA Industry

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DOLAT CAPITALIndia Research

August 27, 2012

KEY FILTERS

Companies CAGR Sales CAGR PAT OCF > FCF ROE > D/E ROA > P/ABV NNPA