MOSt Market OutlookDate: Tuesday, March 12, 2013

World Markets Market Outlook Positive

Hangseng

SGX Nifty 5968.5 18.5 Expect market to open on a positive note on account of global cues. US Dow climbed 0.3%, closing at

a record high for the fifth consecutive trading day. S&P 500 gained 0.3% and is less than 10 points

away from its all-time closing high. Stocks have been supported by better-than-expected economic

data. Asian markets are trading up by half percent. IIP and CPI number will be key data announced

today. RBI credit policy will be announced on 19th March. Both CPI and WPI (14th march) data will be

important factors to drive the RBI rate decision.

Dow 14447.29 50.22

Nasdaq 3252.874 8.507

FTSE 6503.63 20.05

Nikkei 12391.84 42.79

23193.75 102.93

London Metal Exchange(LME) Rates

B.Crude$ 110.21$ -0.01

Copper 1,909.25$ -14.00

14.75

Zinc 1,937.50$ -17.50

Aluminium 7,725.25$

Research Updates:

We expect L&T to continue momentum on account of attractive valuation, strong Q3 result and order

book. L&T is our top pick among the capital goods space.

Govt. has failed in its second attempt of spectrum sale, due to high reserve price and limited spectrum

put up for sale. None Of the operators had applied for participation in 1800MHz and 900MHz band

spectrum auction. Idea and Bharti our top pick among the telecom space.

INDIA ECONOMICS: Feb-13 trade deficit at 8-month low on falling non-oil imports; real INR

Nifty Trend

Trend Reversal

Short Term Intermediate Term

10 DMA* 20 DMA*

5802 5850

INDIA ECONOMICS: Feb-13 trade deficit at 8-month low on falling non-oil imports; real INR

appreciates; provides policy space to RBI to cut rates - - During Feb-13, exports grew at a higher rate

than imports after a gap of seven months. The value of exports at USD26b was the highest in any

month of FY13 so far; this level of exports was first achieved as far back as in Dec-10 and was much

less than the highest exports of USD30b in Mar-11. Feb-13 trade deficit at USD15b was at eight

month low and fell significantly from the second highest level of USD20b just a month back.

HAVELLS India: Proposed special resolution to hike FII limit / enter into new business segments- -

HAVL has proposed the following resolutions for the shareholders approval: i) Increase in FII limit

from 24% to 40%, with the cap of single FII at 10% ii) Entry into several new segments like

UP UP

from 24% to 40%, with the cap of single FII at 10% ii) Entry into several new segments like

kitchenware, stabilizers, UPS, inverters, batteries, dispensers, water purifiers, utensils, consumer

durables, FMCG products, lifestyle products, etc. - Management had increased the dividend payout to

25% in FY12 from ~12% in FY11 and we believe that given the robust free cash generation, payout

ratios can further increase. Maintain Buy

Buy

MOSt Velocity (Reiterate Buy) (Medium Term with few months horizon)

Tech Mahindra Company description

Tech Mahindra (TECHM) is part of the USD12.5b Mahindra Group. It is one of India’s largest software

exporters and serves telecom service providers, equipment manufacturers, software vendors and

systems integrators. It has offices in over 13 countries, employs over 50,000 people, and its key

clients include British Telecom (BT) and AT&T.

Key investment arguments

Current Market Price 1,108

Maximum Buy Price 1,110

Portfolio Allocation 5.0%

Tech Mahindra

is part of the USD12.5b Mahindra Group. It is

one of India’s largest software

exporters and serves telecom service

providers, equipment manufacturers, software

Key investment arguments

Deal pipeline is healthier than that in the past couple of quarters and the environment has steadied in

comparison to the gloomy outlook in the recent past. Deal activity is strong in verticals like healthcare,

while manufacturing is steady. BFSI is seeing deals around risk, governance and compliance.

Satyam's acquisition will help Tech Mahindra to diversify its client base and industry focus. Large deals

like those of Bharti and a gradual revival in the telecom vertical will help volume growth. Deals have

kept growth coming (outside the BT account) despite challenged IT budgets in the telecom vertical.

Valuation and view

Motilal Oswal Securities Ltd., Motilal Oswal Tower, Level 6, Sayani Road, Prabhadevi, Mumbai 400 025

providers, equipment manufacturers, software

vendors and

systems integrators.

Valuation and view

We value TECHM at a 25% discount to our target multiple for HCLT due to: [1] relatively

smallerscale, [2] skew of revenues towards telecom vertical and [3] increasing proportion of BPO

revenues. Our target price for TECHM is INR1,225, which discounts FY15E EPS by 10.5x

Motilal Oswal Securities Ltd., Motilal Oswal Tower, Level 6, Sayani Road, Prabhadevi, Mumbai 400 025

MOSt Market OutlookDate: Tuesday, March 12, 2013

Nifty Technical View

:

:

:

Nifty Technical View

Nifty The Nifty’s uptrend remains in fine fettle. The next headwind should emerge at

5970 followed by 6000. Over the immediate term, a consolidation could be in the

offing due to the sharp run up observed in the last few days from the level of

5650. Support on the downside should emerge at 5850 followed by 5800.Support 1 5850

Support 2 5800

Resistance 1 5970:

:

:

Resistance 2 6000

Reversal Level 6000

Resistance 1 5970

:

:

: 12250

Support 1 12050

Support 2 11750

BANK NIFTY

Resistance 1

Bank Nifty has also seen a smart rally from the level of 11400 indicating that the

current advance could have more steam left. The next resistance for the index

should emerge at 12500. Support on the downside should come at 12000

followed by 11400. :

:

: 12500

12250

Resistance 2 12500

Reversal Level

Resistance 1 followed by 11400.

Motilal Oswal Securities Ltd., Motilal Oswal Tower, Level 6, Sayani Road, Prabhadevi, Mumbai 400 025Motilal Oswal Securities Ltd., Motilal Oswal Tower, Level 6, Sayani Road, Prabhadevi, Mumbai 400 025

MOSt Market Outlook

Date:

Stock Name Value Chg

Current Level 5945 +82 pts

Premum/Disc. 9 -14 pts

NSE OI (# Shrs) 18.9mn +0.2mn

SGX OI (# Shrs) 24.9mn -

Tuesday, March 12, 2013

Nifty Future Internals

Nifty Options OI Ch. ( # Shrs in Lacs)

FII Trades in F&O (Rs Bn.)

OIPCR (Extremes) India VIX (Extremes)

Nifty Option Internals

Sector OI

Nifty

No Change in futures OI, neither on NSE nor on SGX despite of the movement, which is surprising.

In options Puts saw relatively larger additions than Calls. While on Calls we saw Credit spreads with

writing on 6000 Call & Longs in 6100 CE, on the put side there were bear spreads observed with

5900 Put being bought and 5700 being sold into.

Stocks

Fresh Longs were seen in Realty and Private Banks but with lower intensity, Transportation saw

fresh shorts.

Among specific stocks fresh longs were seen in IGL, Union Bank, HDFC, while Asian Paints & DLF

saw continuing longs. Adani Ports & Apollo Tyre saw shorts.

On the unwinding front HDIL saw notable unwinding of longs, while Andhra Bank and OBC witnessed

short covering.

Bias

Uptick in the implied volatility from lower extremes and soaring OIPCR advocates caution especially

near the congestion zone of 6000, which is perceived to be a big hurdle.

Heaviest Call (OI) Heaviest Put (OI)

1.17 ( Up 1.13; Dn 0.72) 14.3 (Up 17.8; Dn 12.5) 6000 (9.2mn Shrs) 5700 (12.9mn Shrs)

Long

20.0

25.0

30.0

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Call OI Ch Put Oi Ch.

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IDX Fut IDX Opt STK Fut Stk Opt

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Call OI Ch Put Oi Ch.