text: Magnum Magnum Connect Issue No. IX May 2009 Monthly Magazine Index Cover Story Cement ............................................................. 2 Equity Company Research........................................... 5 Dear Friends, Stock Update..................................................... 7 Another good month for the market has passed, we would like Corporate News................................................. 8 Market Snapshot...............................................10 to see the markets swaying in the same direction for some more time, but the turbulent phase cannot be avoided just by doing Economy your part. Lots of things depend upon the external factors that are Quick Review of Economy................................12 beyond our control and one such factor, which we are currently Economy News.................................................16 facing, is the ongoing general elections in the country. We are Statistics half-way through the mega event and still everything seems Scorecard : Banking......................................... 18 blurred with no clear conviction or clear consensus of any single Dividend Yield..................................................20 party or group appearing on the forefront to form the government. Sales............................................................... 21 Our today's requirement is a stable government that can lead us High PE ........................................................... 22 to the path of growth amid this slowdown and guide the nation Low PE ............................................................ 23 to stability. Price Trend...................................................... 24 Friends, in the passing month India's central bank – Reserve Mutual Fund Bank of India – announced its annual review of monetary policy Sectoral Mutual Fund Analysis......................... 25 where the bank cut the repo and reverse repo rates by 25 basis MF Scorecard................................................... 26 points each, as a means to give signal to the markets that the Study apex bank will continue the aggressive stand. However, the apex Currency Futures...............................................31 bank left the cash reserve ratio (CRR) unchanged at 5%. While FII Trends ..........................................................33 the banks considered it as meager, it has further given strength Insurance to the interest sensitive sectors like reality and auto .Though the Systematics Investment Plan............................ 35 rate cuts were more or less in line with market expectations, ICICI Lombard - Car Insurance ........................ 36 the most striking points that came from the policy was that the Subscription :- apex bank has pegged the GDP forecast for the FY10 at about 6%. This estimate though was on the optimistic side but has Cover Price: Rs 30/- represented the fact that the current slowdown has seriously Annual Subscription (12 issues) : India Rs 300/- affected developing nations like, India, too. Overseas (Airmail) US$ 150 The results season is on, though the trends so far has been (Cheque/D.D. drawn on Mumbai in favour of mixed with no any major setbacks barring few and further announcements will show how good or bad the final quarter was Magnum Wealth Management Pvt. Ltd. and the just-concluded fiscal for different companies. In this month, Regd. Office : all the election formalities will get completed and the picture will Mr. Piyush K. Upadhyay (Correspondent) get clear as to who will form the government at the Centre. A Magnum Connect fractured mandate and a fragile government will definitely mar D-13, Empire Mahal, the sentiments of the market and can give a serious setback in 806, Dr. B. A. Road, coming months, on the same side if the mandate comes for a Khodadad Circle, Dadar T.T., stable government, it will boost the sentiments. Mumbai – 400 014. For General Enquiries Contact : VIJAY B. SHAH +91-22-2415 8686 (Director) E-mail : email@example.com Magnum Group Website : www.magnum.co.in Printed at : HariOM Printers, Mumbai. This document has been prepared by M/s Magnum Wealth Management Pvt Ltd and is being distributed in India by M/s. Magnum Wealth Management Pvt Ltd a registered broker dealer. The information in the document has been compiled by the research department. Due care has been taken in preparing the above document. However, this document is not, and should not be construed, as an offer to sell or solicitation to buy any securities. Any act of buying, selling or otherwise dealing in any securities referred to in this document shall be at investor's sole risk and responsibility. This document may not be reproduced, distributed or published, in whole or in part, without prior permission from the Company M/s. Magnum Wealth Management Pvt Ltd Subject only to Mumbai jurisdiction May e m D e c2009 b e r 1 Cover Story - Cement Magnum Cement: India's construction story commodity, competition is also localized because the cost of transportation of cement to distant markets often results 1. Introduction: The Indian cement industry with a total in the product being uncompetitive in those markets. capacity of about 211.8 million tonne (MT) at the beginning of fiscal 2010 is the second largest market after China. Al- 3.2 Energy Intensive: The cement industry is highly though consolidation has taken place in the Indian cement energy intensive and power costs form the most critical industry with the top five players controlling almost 50% cost component in cement manufacturing, contributing of the capacity, the balance capacity still remains pretty about 35% to total cost of production. This also results in fragmented. emphasis on technology and hence importance of scale economies. As a result, the market structure of cement The industry had been on a roll for 4-5 years till second half has developed into typical oligopoly with small number of of FY09. Driven by a booming housing sector, global de- large firms in direct competition with each other along with mand and increased activity in infrastructure development large number of small companies playing role of atomistic such as state and national highways, the cement industry producers*. outpaced itself, ramping up production capacity, attracting the top cement companies of the world, and sparking off a 3.3 Seasonal Demand: Another distinguishing charac- spate of mergers and acquisitions to spur growth. teristic of the Indian cement industry is its cyclical nature, as the market and consumption is closely linked to climatic 2. A brief history of Indian cement industry: The and agricultural cycles. In India, cement production nor- attempt to produce cement in India dates back to 1889 mally peaks in the month of March while it is at its lowest in when a Calcutta firm attempted to produce cement from the month of August and September (monsoon months). argillaceous (kankar). But the first organized effort on The cyclical nature of the industry has also helped the mass scale to manufacture Portland cement commenced cause of consolidation in the industry as the large players in Madras (now Chennai) in 1904, by South India Indus- are able to easily withstand the cyclic downturn in demand tries. However, the effort did not succeed. It was in 1914 due to their economies of scale, operational efficiencies, that the first cement manufacturing unit in India was set up centrally controlled distribution systems and geographical and commissioned by India Cement Company at Porban- diversification etc. dar in Gujarat, with an installed capacity of 10,000 tonnes. Subsequently two plants; one at Katni (Madhya Pradesh) 4. Growth of the industry in liberalised period: and another at Lakheri (Rajasthan) were set up. The cement industry has been on a high growth path ever since liberalisation of the economy took place in early The industry grew rapidly in the pre-independence era 1990s. In recent years, the infrastructure development de- with supply often off-stripping demand resulting in a price rive of the government has also helped the industry pick war. However, in the early years of independence, huge up rapid pace. growth in infrastructure construction resulted in demand rising sharply and soon the supply side bottlenecks ap- Year Installed Capacity Production Per Capital peared. To ensure a smooth supply of cement and to (Million Tonnes) (MT) Consumption bring in more regional balance, government controls were 1991-92 66.56 53.61 63 implemented through 1969 to 1982. Though this period 1995-96 97.25 69.57 72 witnessed increase in supply, significant disequilibrium in various aspects of industry forced the government to first 1999-00 119.1 100.45 97 partially (1982) and then fully (1989) deregulate the indus- 2003-04 157.48 123.5 110 try. Since then the industry has been growing rapidly in a 2007-08 198 168 150 competitive atmosphere. Table 1: Growth of Cement Industry in Post-liberalisation Era 3. Characteristic of Indian cement industry: The Indian cement industry is characterised by its regional and Fig 1 : Capacity and Production of Cement seasonal nature due to vast geography of the country and 250 high energy intensity. (millions of tonne) 3.1 Regional nature: The viability of the location plays 200 a major role in the economics of cement manufacturing. 150 As such, a major defining feature of the Indian cement Installed capacity industry is the location of limestone reserves in select 100 Production parts of country, which has resulted in it's evolution in the form of clusters. The proximity to coal deposits constitutes 50 another important factor in determining the location. As a 0 result, the cement industry has strong regional character- 1991-92 1995-96 1999-00 2003-04 2007-08 istics. Further, since cement is a high bulk and low value * Small or atomistic producers are typically characterized by their lack in influencing either the industry supply or price and take these variables as given. May e m D e c2009 b e r 2 Cover Story - Cement Magnum All the performance metrics have shown tremendous Production of cement in the full fiscal 2008-09 stood at growth over the period. Installed capacity increased from 181.42 MT, showing a growth of nearly 8% compared with 63.9 MT to 193.8 MT by 2007-08, showing a CAGR of 168.31 MT of production in the previous fiscal. Despatches 7.3%. Production over the same period increase from during FY09 stood at 181.01 MT, a growth of 8% against 48.76 MT to 168.3 MT, showing a CAGR of 8.1%. Per the figure of 167.68 MT in the previous fiscal. capita consumption as a result increased from 56 kg to 5.2 Regional distribution: Looking at the regional 150 kg, showing a CAGR of 6.3%. breakdown of growth witnessed in cement production, one Figure 1 makes the things further clear. It reflects the con- finds that highest growth was observed in the northern re- sistency that the Indian cement industry has shown in the gion at 13%, followed by southern and eastern region at post liberalised era in terms of growth in both installed ca- 10% and 9% respectively. However, the western region pacity as well as production. constituted by Gujarat and Maharashtra, which contributes maximum cement production to the country, witnessed a Current Scenario decline in production by 1% over FY09. Atmosphere in cement industry was very bullish till the first half of FY09. Riding on the real estate boom and infra- Fig : 3 Region Wise Growth in Production structural investment, the industry showed sharp growth 14 in the proceeding 4-5 years. However, as the global finan- 12 (% change Y-o-Y) cial crisis and resulting downturn took the centre stage in 10 affairs of economy, cement industry witnessed consider- 8 able slowdown. Apprehensions of demand supply going 6 forward too have come into light as the GDP growth slows 4 down to a six year low. December quarter witnessed con- 2 siderable slump in demand as well as prices. 0 Nevertheless, in wake of the stimulus packages launched -2 Northern Southern Eastern Central Western by the government and increased public expenditure to boost the slowing economy in the first few months of 2009, 5.3 Capacity addition: A number of new cement plants the industry has turned around the slowdown blues spec- were commissioned in the fiscal 2009, resulting in sub- tacularly. Demand for cement has been bullish throughout stantial capacity addition. Most of these projects were the March quarter, which helped the industry keep prices started in FY07 and FY08 when the real estate was boom- firm and margins high. In the following paragraphs we will ing and outlook of cement looked extremely bullish. How- trace the developments in the cement industry in the most ever, things changed somewhat with the onset of slow- recent period. down in the economy and particularly in the real estate 5.1 Demand rides on stimulus packages: Cement sector. Nevertheless, cement companies added a capac- demand and production had slowed down towards the ity of 13.51 MT, constituted by 9.85 MT from new plants end of calendar year 2008. However, riding on the stimu- and 3.66 MT from expansion of existing plants, taking total lus packages launched by the government and intensified capacity at the end of FY09 to 211.8 MT from 198.3 MT at public investment in infrastructural sector, cement demand the end of previous fiscal. recovered in early months of 2009. As a result, production 5.4 Exports: Despite the ongoing slump in the global during March 2009 stood at 18.10 MT, registering a growth economy and resulting downsizing impact of Indian ex- of 10.43% as compared to 16.39 MT in the same month ports in general, cement exports have been buoyant. Dur- last year. Cement despatches, too, showed buoyancy and ing the month of March 2009, cement export stood at 0.35 posted a growth of 10.35% at 18.12 MT against 16.42 MT MT, recording a growth of 9.38% as compared with 0.32 last year. MT of exports in the same month last year. Fig 2 : Cement Production ( 2008-09) Fig: 3 Cement Exports ( 2008-09) 200 4 3.5 (millions of tonne) (million of tonne) 150 3 2.5 100 2 1.5 50 1 0.5 0 0 FY08 FY09 March--08 March--09 FY08 FY09 March--08 March--09 May e m D e c2009 b e r 3 Cover Story - Cement Magnum Total exports during the fiscal 2009 however have shown during 2007-08. de-growth of 12.3%. India exported a total of 3.20 MT of However, the upturn witnessed in the March quarter is rid- cement in FY09 compared with 3.65 MT of cement export- ing primarily in stimulus packages provided by the govern- ed in the previous fiscal. The decline primarily shows the ment and intensifying of public construction works in wake impact of subdued exports in the first half of fiscal when of the general elections. While the new government, which commodity prices were soaring in India, local demand was will take the office in June 2009 is expected to continue surging. with measures to boost the economy, investment in the 5.5 Capacity utilisation shoots up in March: Buoy- construction sector will come down from its exceptionally ant cement demand during last few months, riding on intense levels witnessed in January-March quarter. higher demand from the infrastructure sector has pushed As a result, the medium term prospects of cement do not up capacity utilisation from poor levels witnessed towards look very strong at present. Demand supply mismatch, end of calendar year 2008. which was expected to hit the sector in early 2009, has only been delayed and as the demand softens in third Capacity utilisation quarter of current calendar, there may be significant over 105 capacity, resulting in falling of capacity utilisation and 100 hence margins. 95 The net effect of such demand-supply gap, however, will depend on nature and quantum of stimulus launched by the (%) 90 next government. Nevertheless, we expect the consump- tion growth in FY10 to slowdown by about 100-150 basis 85 points compared with average of previous few years. 80 FY08 FY09 March--08 March--09 Talking of long term prospects with a time horizon of say more than couple of years, the cement industry possess- Further, increase in demand in March resulted in excep- es excellent potential of returning to the high growth path tional rise in capacity utilisation to 103% from 92% in the witnessed over 4-5 years till FY09. Potential in growth of month of February. Capacity utilisation in the full fiscal; cement consumption is well reflected in the fact that even however, has been lower at 88% compared with 94% in after recording around CAGR of 10% for last five years, the previous fiscal, reflecting the impact of slowdown in per capita consumption of about 150 kg in India remains cement industry during last quarter of 2008. much below the world average of over 260 kg and more than 450 kg in China. Outlook: Further, as the global economy recovers and India moves After facing slowdown in last quarter of 2008, the cement back to growth rates of 8-9%, infrastructure investment industry has been performing very well in the first quarter too will grow at a rate in excess of 7-8%, thus providing of 2009. While demand from the real estate sector contin- ample scope of growth for the cement industry for many, ues to remain poor due to the ongoing severe downturn many years to come. We may conclude the study by ob- in the property market, increased investment in infrastruc- serving that the cement industry has been one of the fast- ture sector by the government has boosted the demand est growing sectors in the liberalised history of India. Even for cement from this segment. though some doubts have been cast on the near term performance of the industry due the ongoing slowdown As a result, there has been robust growth in both produc- in global economy and its resulting downsizing impact on tion and dispatches in the January-March quarter. Cement Indian economy, long run prospects of cement remains prices, which were facing a lot of downside pressure to- extremely healthy. wards the end of 2008, have also stabilised in 2009, due to buoyant demand. The country has witnessed cement dispatch growth of 9.98% at 18.06 million tonne (MT) during March this year, as against 16.42 MT during the corresponding month last year, according to Cement Manufacturers' Associa- tion (CMA).The report says the total cement production in the country during March 2009 was 18.04 MT, up 10.06% over the figure of 16.39 MT reported during March 2008. The annual cement dispatch for fiscal 2008-09 posted a growth of 7.91% at 180.95 MT, compared to 167.68 MT May e m D e c2009 b e r 4 Company Research Magnum UltraTech Cement Sell six grinding units and three terminals – two in India and UltraTech Cement was incorporated on August 24, 2000 as one in Sri Lanka. L&T Cement. Now, a $28 billion Aditya Birla Group company, Management it is the country's largest exporter of cement clinker. The The management of the company is led by Kumar Aditya Birla Group that operates in 25 countries across Mangalam Birla-Chairman, K C Birla is the Executive the world is the 11th largest cement producer globally, the President & CFO, while other directors include Rajashree seventh largest in Asia and the second largest in India. Birla, R C Bhargava, G M Dave, Y M Deosthalee, N J UltraTech Cement has an annual capacity of 18.2 million Jhaveri and few others. S Misra is the Managing Director tonnes. It manufactures and markets ordinary portland of the company. cement, portland blast furnace slag cement and portland pozzalana cement. It also manufactures ready mix Business Overview concrete (RMC). The company has five integrated plants, UltraTech Cement is the country's largest exporter of cement clinker. The export markets span countries around Stock Data (as on 29/04/09) the Indian Ocean, Africa, Europe and the Middle East. Current Mkt Price (Rs.) 567.60 Individually it is the second biggest cement producer of the country, while together with Grasim it is the largest cement 52 week High (Rs.) 785 producer in India. 52 week low (Rs.) 250 The company's products include ordinary portland cement, portland pozzolana cement and portland blast furnace slag Mkt Cap (Rs. Cr.) 7065.81 cement Return in last one Month (%) 6.93 The company ensures a flawless operation in every stage, right from selecting raw materials to batching and mixing, Share Holding Pattern(as on Dec31,08) % transportation, placing of concrete till testing of concrete, putting together the right ingredients for perfect world class Total Promoter 54.78 cement. Institutions 11.19 The composite plants of the company are located at Non Institutions 33.88 Tadipatri (Andhra Pradesh), Hirmi (Chhattisgarh), Jafrabad (Gujarat), Kovaya (Gujarat) and Awarpur (Maharashtra). Depository Receipt 0.15 The grinding units of the company are located at Magdalla (Gujarat), Ginigera (Karnataka), Ratnagiri (Maharashtra), Key Ratios Jharsuguda (Orissa), Arakkonam (Tamil Nadu) and P/E 7.23 Durgapur (West Bengal) Price/Book(x) 3.60 Investment Rationale The transport of concrete from its place of mixing to the Dividend Yield (%) 0.88 delivery point is very critical, as there is possibility of the ROCE(%) 35.67 concrete drying out and losing its workability and plasticity. The company has got an edge on this point as the ROE(%) 37.37 UltraTech Concrete transports concrete from its ready mix Performance in the last year 800.00 700.00 600.00 500.00 Price 400.00 300.00 200.00 100.00 0.00 30-May-08 30-Apr-08 30-Oct-08 30-Mar-09 30-Aug-08 30-Nov-08 28-Feb-09 30-Jul-08 30-Jun-08 30-Sep-08 30-Dec-08 30-Jan-09 Date May e m D e c2009 b e r 5 Company Research Magnum (Rs. Cr.) Particulars March Qtr-09 March Qtr-08 Growth % FY08 FY07 Growth% Net Sales 1875.01 1601.66 17.07 6436.96 5508.78 16.85 Total Income 1888.86 1628.69 15.97 6486.64 5609.07 15.64 Other Income 13.85 27.03 -48.76 49.68 100.72 -50.68 PBT 437.18 431.19 1.39 1361.46 1507.01 -9.66 PAT 309.46 282.88 9.40 977.02 1007.61 -3.04 OPM 29.96 27.56 -- 28.12 33.03 -- NPM 16.50 14.56 -- 15.18 18.29 -- EPS 24.86 45.40 -- 78.48 80.91 -- Standalone concrete plants to the site through transit mixers. Further, The Indian cement industry comprises of 134 large cement the concrete is pumped to the actual point of concreting plants with an installed capacity of 173.08 million tonnes using high efficiency concrete pumps, Placing the concrete and more than 350 operating mini-cement plants across is expedited scientifically by specialised delivery trucks. the country. Qualified and experienced engineers monitor the entire Cement demand has a direct correlation with the GDP operation. growth and had registered a growth of nearly 9% between UltraTech Concrete is equipped with computerised FY06-FY08 driven primarily by strong demand from batching and mixing plants to strictly monitor the quality construction, infrastructure and real estate projects. of the concrete. It uses a computerised recipe for the raw mix design and quantities of raw materials are weighed Latest developments automatically as per the design mix. Defending champions of IPL, Rajasthan Royals has signed There has been a good appreciation in the cement a sponsorship deal with Ultratech Cement. dispatch figures for March keeping with growth trend seen Buoyed by improved demand, the Aditya Birla Group in February, January, December and November. Industry companies, Grasim Industries and UltraTech Cement, observers expect the trend to continue in this quarter. have recently raised prices by Rs 5-7 per bag. Latest result analysis The Aditya Birla Group's cement production for the period F The company has posted a decline of 3.01% in its April-February 2009 has moved up by 5.23% at 290.09 consolidated net profit for the financial year ended lakh mt as against 275.67 lakh mt during April-February March 31 at Rs 979.62 crore as compared to Rs 2008. Dispatches grew by 5.25% at 289.71 lakh mt 1,010.05 crore in the previous financial year. in April-February 2009 vis-a-vis 275.24 lakh mt in the corresponding period last year. F Net sales of the company during the year increased by 17.69% to Rs 6618.32 crore from Rs 5623.38 crore Recommendation Factors last year. In its outlook, the company has said that a slow down in F The earning per share stood at Rs 78.57 against Rs economic growth will aggravate the inevitable surplus in 81.14 last year. production capacity. The expected commissioning of an F The company reported a rise in its net profit after two additional 50 million tonnes in FY10 and a further 15 million consecutive quarters of decline. tonnes in the following year is likely to result in a reduction F The net profit for the March quarter moved up by in capacity utilisation with adverse impact on margins. 9.39% to Rs 309.46 crore compared with Rs 282.88 Additionally, the likely release of around 100 million crore in same quarter last year. tonnes capacity in a phased manner over the next two F Net sales during the three-month period improved by years coincides with slower economic growth. This will put 17.06% to Rs 1,875.01 crore from Rs 1,601.66 crore pressure on sales realisation and margins in FY10. in last year. Volume increase to come up from commissioning of new F The company reported a 230 basis points fall in capacities Cement prices currently ruling firm but likely to operating margins at 29.2% in the fourth quarter. witness decline from Q1FY10. F High input costs offset the company's estimated 8.1% rise in cement realisations to Rs 4,166 per tonne in At current market price of Rs 569 (as on April 22, 2009), the fourth quarter of FY09. the stock is trading at a P/E of 7.3x and EV/EBITDA of 4.8x. We recommend a SELL on the stock as by the end of INDUSTRY SCENARIO 2009-10 cement prices could start trending down as more India is the world's second largest producer of cement after capacity is commissioned and as new and smaller players China with industry capacity of over 200 million tonnes. look to establish themselves May e m D e c2009 b e r 6 Stock Update Magnum ACC : Buy Shree Cements: Buy 11.07% 21.18% Promoter Promoter 10.13% 46.21% Inst . Inst. Non Instt. 13.39% Non Instt 65.41% 32.61% Public F ACC has posted Q4 pre-exceptional net profit at F Shree Cements has reported Q4 FY09 net profit of Rs4.08 bn owing to lower expenditure and lower Rs 235.6 crore from Rs 41 crore year-on-year. The power and fuel cost. Revenue for the quarter company's net sales spiked to Rs 806.2 crore as surged 14.4% to Rs20.5bn, mainly driven by 6.1% against Rs 662.5 crore YoY. Realization per bag is Rs 1 lower than last year's overall realization. Volume improvement in cement volumes (5.73mnt) and 7.9% growth is 28%. So, the realization is not per tonne, increase in realizations to Rs3,587 per ton. It had a but the overall turnover is also higher by 28%. The pre-exceptional EBIDTA for the quarter has spiked cement prices have increased across the board and up 33.4% year-on-Year (y-o-y) basis to Rs6.28bn, the rise has been undertaken on bagged cement. while EBIDTA margins increased by 433 bps y-o-y to F Excise duty relief has been given on the bulk cement 30.5%,mainly on account of lower other expense. and but the price increase is on the pack cement and F It has witnessed a reduction in power & fuel cost by in the pack cement no excise benefit has come. The price increase has been there on the retail sector. 13.7% on quarter-on-quarter (Q-o-Q) basis on drop in This maybe because of multiple things but the sector international coal prices. ACC capacity expansion at where the prices have not really increased, is the bulk Bargarh for 1.18 mtpa together with a 30 MW captive cement, which is hardly 10% of the total production of power plant is expected to be completed by mid the company. CY2009. F Due to the higher spending by the government in F ACC remained firmed to keep its total cost per ton infrastructure projects, north India has successively of cement to Rs2491, which is a meager 1.5% y-o-y posted a higher volume growth rate in the last quarter, compared to other regions and Shree Cement is increase thus clearly reflecting significant cost savings expected to be the main beneficiary, as it has a strong during the quarter. Further, the company continued to presence in north India and also due to its relatively benefit on account of strong dispatch numbers and early expansion. On the back of strong demand, Shree higher realizations on account of increase in cement Cement has raised cement prices by Rs4 to Rs6 per prices on a pan India basis. bag in the past couple of months (February-March). F Trading at a PE multiple of 10.1, the stock has an F At the current market price of Rs776, the stock trades upside potential of 12% upsurges in near term, at 5.3 multiple and 8.8 multiple its FY2009 and FY2010 translating to the level of Rs 695-700. It is expected earnings estimate respectively, an enterprise value (EV)/earnings before interest, depreciation, tax and that ACC revenue to grow by a CAGR of 9.7% due amortisation (EBIDTA) of 3.2x FY2010 and EV/tonne to high fixed cost and low EBITDA per tonne, ACC's of $63 on expanded capacities of 10.1 million tonne. earnings are highly sensitive to cement prices. It has The stock has appreciated by over 45% since our last been observed that for every 1% decline in cement update on January 30, 2009. We maintain our Buy call prices, the EPS of the company reduces by 7.4%. on the stock with a revised 12-month price target of Rs825 (EV/tonne of $70 on expanded capacity). Last Traded Price (as on 29/04/09) Rs. 653.00 Last Traded Price (as on 29/04/09) Rs. 776.00 Price target Rs 695 Price target Rs 815 Market cap. in Rs cr. 12082.21 Market cap. in Rs cr. 2702.85 52 Week H/L 790/369 52 Week H/L 1045/330 Free Float 53.79% Free Float 53.79 BSE code 500410 BSE code 500387 May e m D e c2009 b e r 7 Corporate News Magnum GMR Group to exit non-core businesses coal blocks in India. The potential partners include Adani Power, KSK Power, Monnet Ispat and Sophia Power. The GMR Group, which has a strong presence in the infrastructure sector and has completed upgrading of NMDC had recently invited expression of interest's (EoI) to domestic and international airports, is looking at exiting develop the coal blocks jointly in the country. However, the non-core business. The group has taken the decision in company has not yet decided to take in multiple or single the wake of an overall cash crunch that has impacted infra partners for the proposed joint venture. This depends on projects in the country. the allotment of fresh coal blocks. The group has already hived off its ferro alloys business to RIL begins gas production at KG-D6 block Dubai-based Cronimet Mercon Invest for a consideration The Mukesh Ambani-led Reliance Industries (RIL) is of around Rs 22 crore last year. It is currently in the reported to have started gas production at its Krishna- process of offloading 30% stake in its sugar business to Godavari basin field creating a landmark in the history of multinational Bunge, and plans to exit the sugar business oil and gas production in the country. in due time. The gas generated from the KG-D6 block is expected to The GMR Group has interests in agri business, ferro boost the power supply from electricity generators starved alloys, IPL, infrastructure and SEZ. of fuel and produce cheaper urea for agriculture. Sahara takes Jet to court over non-payment BHEL plans JV with foreign firm for Rs 1,200 cr of dues Bharat Heavy Electricals (BHEL) is planning to invest The Sahara Group, promoter of Air Sahara, which was around Rs 1,200 crore to form a joint venture with acquired by Jet Airways in 2007, has taken the latter to an international firm for manufacturing transmission court over default of dues worth Rs 1,450 crore that was equipment by June 2009. part of the buyout deal. The company is currently in talks with a French equipment As per the deal, Jet was to pay Rs 900 crore to Sahara maker Areva and a Japan based Toshiba for forming a upfront, while Rs 137.5 crore was to be paid in yearly transmission joint venture by June 2009. The joint venture instalments over four years. Jet has reportedly defaulted on will manufacture transmission equipments having a the annual instalments. Jet's payout to Sahara in a single capacity of 765 kilo volt (KV) and 1,200 KV. year's default could be in the range of Rs 550 crore. L&T to exit from infrastructure projects with Larsen & Toubro bags orders worth Rs 1100 minority stake crore in Q4 Larsen & Toubro (L&T) is planning to exit from those Turnkey engineering major Larsen & Toubro (L&T) has infrastructure projects in which it holds minority stake bagged a slew of large-value orders aggregating Rs 1100 (less than 50%). However, the company might bid in a crore in the electrical construction sector in the fourth consortium and take less than a 50% stake to diversify the quarter of 2008-09. risk in large and complex projects like urban metro. The orders have come from leading public sector organizations like Power Grid Corporation of India (PGCIL) Bajaj Auto gets patent for its ExhausTEC and the Rail Vikas Nigam and involve setting up high end technology transmission lines and substations as well as a project for Bajaj Auto has finally received a patent for its 'ExhausTEC' the Indian Railways. invention vide Patent No 231498 dated March 5, 2009 RCom gets TDSAT nod for use of dual from the Indian Patent Office. technology The Pune-based company was involved in a controversy The Telecom Disputes Settlement and Appellate Tribunal with TVS Motors as the two companies had clashed on (TDSAT), while hearing a petition filed by the Cellular issues related to technology infringement in 2007 when Operators Association of India (COAI) that challenged the TVS developed the 125cc Flame using a technology government's decision to allow Reliance Communications similar to that of Bajaj. to use dual technology (GSM and CDMA) for mobile Videocon to mop up Rs 200 cr though services, cleared the latter's use of dual technology. preferential issue Criticising the COAI, the tribunal stated that GSM operators Videocon Industries has chalked out a plan to mop up Rs were not eligible for spectrum beyond 6.2 MHz. TDSAT also 200 crore through a preferential issue. The company's flayed the Telecom Regulatory Authority of India (TRAI) for has approved the issue of 1,17,65,000 crore warrants to mooting subscriber-linked criteria for allocating additional Bennett, Coleman & Company (BCCL), which would be spectrum, which it claimed was not transparent. converted into equal number of equity shares, at a price NMDC identifies potential partners for new of Rs 170 a piece. coal blocks Upon conversion, BCCL's holding in Videocon would National Mineral Development Corporation (NMDC) has rise to 6.13%. As on December 31, 2008 the former held identified four prospective partners for developing new 1.01% in Videocon, as per BSE data. May e m D e c2009 b e r 8 Corporate News Magnum Shareholders, creditors approve RIL-RPL airline has now sought a second extension of 10 days to merger settle the dues. The Mukesh Ambani-led Reliance Industries (RIL) has The airline owes around Rs 1,000 crore to oil marketing announced that the shareholders and the creditors of the companies like Hindustan Petroleum Corp (HPCL) and company have approved the Scheme of Amalgamation of Bharat Petroleum Corp (BPCL) along with IOC. It has to Reliance Petroleum (RPL) with RIL. settle dues amounting Rs 90 crore to IOC. Equity shareholders and secured and unsecured creditors L&T expects a 25-35% growth in order inflows of RIL took part in the meeting held on Saturday, April 4, for FY 2009-10 2009 and voted on the proposal. As per the media release Larsen & Toubro (L&T) has come up with a strong order by the company, 98.86% of the shareholders present in inflow outlook for 2009-10. The company recorded a person/proxies, representing 99.9998% of the total value healthy growth in order inflows during the fiscal 2008- of the equity shares held by them, voted in favour of the 09 and has bagged a number of prestigious orders, both Scheme of Amalgamation. domestic and international, from diverse sectors totalling Govt to finance Tata Motors' Myanmar foray approximately Rs 52,000 crore as compared to Rs 42,000 The government, which had signed an agreement with crore in the previous year. Myanmar offering the neighbouring country a $20 million Wockhardt will finally sell minority stake in line of credit, will finance Tata Motors' plan of setting up a Wockhardt Hospitals facility to assemble Tata Heavy Trucks in that country. The Wockhardt Group has finally decided to sell its The auto major is in the process of garnering a proper minority stake in Wockhardt Hospitals, the hospital chain understanding of the project scope. The proposed plant of the group, to reduce its debt burden of around Rs 3,700 will have an initial capacity of 1,500 trucks per year, with a crore. provision for increasing the capacity as demand picks up. SBI to provide Rs 10,000 crore loan to Govt appoints former AAI chief Ramalingam Vodafone-Essar for 3G services as Maytas Infra chairman State Bank of India (SBI) has decided to provide a loan The ministry of corporate affairs, on April 9, announced the of Rs 10,000 crore to Vodafone-Essar for financing the appointment of K Ramalingam as the chairman of Maytas company's foray into third generation (3G) telecom Infra, the company owned by the family of B Ramalinga services, expansion of its broadband operations and Raju – the founder of the fraud-ridden Satyam Computer various other business purposes. Services. Ramalingam is the former chief of the Airports Authority of India (AAI). It will be a five-year loan carrying an interest rate of 13.25% for the first 2 years. Subsequently, the rate will be The Centre has also appointed Anil K Agarwal on the re-adjusted on the basis of the average prime lending rate board of Maytas Infra. of four public sector banks. Last month the Company Law Board had appointed noted Tech Mahindra completes the fund raising tax lawyer O P Vaish and past president of Institute of process for Satyam acquisition Chartered Accountants of India Ved Jain on the board of Maytas Infra. The new owner of scandal hit IT Company Satyam, Venturbay Consultants, a subsidiary of Tech Mahindra Infosys Technologies reports 28.5% rise in has informed that it has deposited Rs 2,910 crore in the consolidated profit escrow account. IT services major Infosys Technologies, in its consolidated Venturbay is set to acquire total 51% stake in Satyam. It results for the year ended March 31, 2009, has posted has raised the funds through non convertible debentures, a net profit after tax & minority interest rise of 28.52% commercial papers and borrowing from non-banking to Rs 5,988 crore for the year ended March 31, 2009 as financial companies as well as partial funding from a special compared to Rs 4,659 crore in previous fiscal. purpose vehicle and Rs 700 crore is raised internally. Total income of the group has increased by 27.42% to Rs Tech Mahindra had agreed to buy Satyam for Rs 58 per 22,166 crore from Rs 17,396 crore in the previous year. share on April 13, 2009. Infosys Technologies has also given a guidance for fiscal GAIL among the 12 shortlisted for Nigeria 2010, the revenues of the company is expected to grow gas field by 1.7% to 5.7%; to decline by 6.7% to 3.1% in US dollar terms. GAIL India has been shortlisted as prospective investors in Nigeria's vast gas field. Besides GAIL, 11 foreign Kingfisher again misses deadline to payback companies have also been short listed. dues to IOC; seeks 10 days extension The list of potential investors includes Russia's Gazprom Kingfisher Airlines has missed deadlines of March 31 Oil and Gas, Germany's E.ON Ruhrgas AG, UK based BG and April 10 to payback the dues to state-run Indian Oil Group and Centrica Energy, Spain's Gas Natural SDG SA Corporation (IOC) for jet fuel supplied by the refiner. The and Union Fenosa and GAIL India. May e m D e c2009 b e r 9 Market Snapshot Magnum Indian equities markets ended on a positive note for the Domestic markets also took negative connotations amid second consecutive month on the back of on the back rising uncertainties and gauged inflation figures adversely of supportive global cues and continued buying interest as heavy selling was witnessed in metal, realty, capital shown by foreign institutional investors. This sudden ar- goods and power counters. Selling pressure was evident rival of foreign funds was perhaps a key reason for the from dumping shares in hurry as the benchmark indices strong rally witnessed by the local markets in the month. along with midcaps and smallcaps counters have taken a One thing evident was that there has been a considerable backseat and tweaked in tandem. decrease of risk aversion, which was seen since last year. The 30-share Bombay Stock Exchange's (BSE) Sensex A fair amount of risk taking appetite was observed across gained 1,694.75 points or 17.46% to 11,403.25, while all sections of investors. the broader S&P CNX Nifty added 453 points or 15% to Indian markets also took heart as the world leaders reaching 3473.95 in the month of April 2009. a $1.1-trillion deal to embark upon the global economic crisis Similarly, the BSE Mid-cap index surged 557.63 points or at the G-20 summit added to optimism that the worst might 18.86% to 3,513.86 and the BSE Small-cap index rose be over for the world economy. Stock specific action was ob- 694.27 points or 21.38% to 3,940.90. served in the markets on account of announcement of profit numbers for the quarter and year ended March 2009. All sectoral indices on the BSE ended on a positive note in the month. Realty up 36.49%, Bankex up 26.59%, Capital Though the benchmarks finally finished the month with Goods (CG) up 22.31%, Metal up 18.82% and TECk up positive gains, volatility did exist in the markets as inves- 17.12% were the main gainers. tors were seen booking profits after a rally in the past couple of weeks. Interestingly, there has been a sort of Top gainers on the Sensex during the during the period be- disconnect between the rally in the equities markets seen tween March 31, 2009 and April 29, 2009 were Jaiprakash since past eight weeks and the continuing barrage of pes- Associates 76.82%, ICICI Bank up 41.37%, Tata Motors simistic economic forecasts. Stock markets across the up 40.66%, DLF up 39.47% and Rel Infra up 38.36%. globe have seen an upmove, while the economic data Jaiprakash Associates has announced its result for the shows that most economies continue to contract. Retail quarter and year ended March 31, 2009. The unaudited investors were seen cautious before making moves as result for the quarter shows a net profit surge of 83% to they were aware that a sudden plunge in markets could Rs 385.32 crore against Rs 210.41 crore on Year on Year be seen if the outcome of the general elections turns out (YoY) basis. The total income stood at Rs 2,194.57 crore to be something unexpected. against Rs 1,345.28 crore showing a jump of 63% on YoY Sensing a great opportunity from strong global cues, trad- basis. ing on the local bourses have extended their gains fur- ICICI Bank responded positively to the Reserve Bank of ther and substantiated by heavy buying in interest rate India's (RBI) measure of reducing the benchmark repo and sensitive sectors like realty and banking in the mid of the reverse repo rates by 25 basis points (bps). The bank has month. slashed its prime lending rate (PLR) by 50 bps to 16.25% Sensex movement during April 2009 effective April 22, 2009 and has also decided to reduce the 12000 deposit rates across various maturities by 25 to 50 bps, 11500 which will be applicable from April 24, 2009. 11000 On the other hand, Hindustan Unilever, down 2.03%, was 10500 the sole loser on the Sensex during the said period. 10000 For the third time with in two months, state-run oil market- 9500 ing companies (OMCs) on Wednesday raised prices of jet 9000 fuel, or ATF, this time by about 6.7%, in line with rising 13-Apr-09 15-Apr-09 16-Apr-09 17-Apr-09 20-Apr-09 21-Apr-09 22-Apr-09 23-Apr-09 24-Apr-09 27-Apr-09 28-Apr-09 29-Apr-09 1-Apr-09 2-Apr-09 6-Apr-09 8-Apr-09 9-Apr-09 international rates. Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum hiked ATF prices by 10% on April 1 after a mar- ginal Rs 158 per kl increase two weeks earlier. ATF in Del- Stocks in limelight on BSE Mid-cap index in April hi will now cost Rs 31,926 per kilo litre (kl) from April 16, as Change (%) against Rs 29,925.97 per kl earlier. In Mumbai, ATF rates Jai Corp 115.99 rose to Rs 32,855 per kl from Rs 30,784.81 per kl. Anant Raj Inds 105.98 The earnings and growth of the pharmaceutical sector is BF Utilities 93.18 likely to take a hit in the last quarter of the just-concluded fiscal, as compared to the previous three quarters and is HDIL 87.24 expected to be an underperformer during the fourth quar- Puravankara Projects 74.38 ter of FY09. May e m D e c2009 b e r 10 Market Snapshot Magnum After the Reserve Bank of India (RBI) gave permission to However, the good news was immediately followed by domestic companies to buy back foreign currency con- more bad news, raising serious doubts about any chances vertible bonds (FCCBs) in December 2008, a dozen com- of an early recover. panies reacted in hurry to redeem such bonds worth $340 Adding to the woes of the policymakers, the country's In- million at deep discounts to the conversion price in the dex of Industrial Production (IIP) has again slipped in the melted markets, giving them a room for windfall gains. negative zone to touch -1.2% vs 9.5% on a year-on-year On one hand, buying back FCCBs companies pay off a (Y-o-Y) basis. February consumer durable goods also loan at a discount, on the other hand they also earn a witnessed a negative growth at 3% as against 11.7% on substantial windfall gain. To top it up, the deferment of Y-o-Y basis. The capital goods index, however, showed AS11 mandate has relieved them from carrying the mark- signs of strength posting a growth of 10.40% vs 10.70% to-market (MTM) losses for the redeemed FCCBs. on Y-o-Y basis, which is looking sustainable as the indus- Buying back FCCBs helps the domestic companies bring- try has a robust order book. ing down the liabilities on the company's books as well India's banking regulator Reserve Bank of India (RBI) has as MTM losses provided for against the FCCBs. Hence, lowered its growth forecast for the current fiscal to 5.7%, companies redeeming FCCBs are likely to gain from the down from 6% forecast of expansion that the bank had practice and it will help them posting better results in the made three months ago. fourth quarter of the fiscal. The RBI announced annual review of its monetary policy As mentioned earlier, key reason of markets moving up on April 21, 2009. The review came in back drop of sharp at surprising speed in the month is that foreign institu- slowdown in economic activity in India, in line with the tional investors (FIIs) have been coming back in droves. global economy suffering from severe slowdown. The month saw of April saw a strong buying activity from The bank cut the repo and reverse repo rates by 25 basis FIIs, wherein the gross purchase of equities stood at Rs points (bps) each, primarily as a means to give signal to 38,871.55 crore against gross sales Rs 33,311.43 crore. the markets that the apex bank will continue the aggres- As a result the FIIs emerged as net buyers of equities sive stance it has taken since September last year to pro- worth Rs 5,560.12 crore in the month. tect growth and stimulating the slowing Indian economy. The world economy showed some mixed signals over last New repo and reverse repo rates will be 4.75% and 3.25% one month. There were good developments in US and respectively. The bank however left the cash reserve ratio China, suggesting the economy may be bottoming-out. (CRR) unchanged at 5%. Close as on March 31 Close as on April 29 Change (points) Change (%) Sensex 9,708.50 11,403.25 1,694.75 17.46 Nifty 3020.95 3473.95 453.00 15.00 Mid-cap 2,956.23 3,513.86 557.63 18.86 Small-cap 3,246.63 3,940.90 694.27 21.38 Indices Close as on March 31 Close as on April 29 Change (points) Change (%) FMCG 2,036.24 2,095.00 58.76 2.89 CD 1,625.45 1,757.58 132.13 8.13 HC 2,830.11 3,067.98 237.87 8.40 PSU 5,230.17 5,863.56 633.39 12.11 Auto 3,061.67 3,498.24 436.57 14.26 Power 1,847.10 2,112.76 265.66 14.38 Oil & Gas 7,053.04 8,132.62 1,079.58 15.31 IT 2,285.68 2,663.35 377.67 16.52 TECk 1,846.83 2,163.00 316.17 17.12 Metal 5,795.07 6,885.81 1,090.74 18.82 CG 6,466.03 7,908.75 1,442.72 22.31 Bankex 4,490.97 5,685.22 1,194.25 26.59 Realty 1,560.83 2,130.41 569.58 36.49 May e m D e c2009 b e r 11 Quick Review of Economy Magnum Monetary Policy the CRR unchanged at 5%. The bank rate was also left unchanged at 6%. India's central bank Reserve Bank of India (RBI) announced the annual review of its monetary policy on April 21. The Repo Rate since 2001 review came in the backdrop of a sharp slowdown in 10 9 economic activity in India, in line with the global economy 8 suffering from a severe slowdown. The Indian economy 7 (%) 6 has slowed down to a six-year low with the quarterly 5 4 expansion coming down to 5.3% for three months ending 3 December 2008. In this wake, RBI was under a lot of 2 1 pressure to take some further stimulus measures in its 0 30-04-2001 28-03-2002 19-03-2003 31-03-2004 26-10-2005 24-01-2006 25-07-2006 30-10-2006 31-01-2007 30-03-2007 24-06-2008 29-07-2008 20-10-2008 21-04-2009 8/12/2008 9/3/2001 7/6/2001 7/3/2003 8/6/2006 2/1/2009 4/3/2009 12/11/2002 11/6/2008 3/11/2008 annual review, even if these come as a token of general stance. Before reviewing the monetary policy, it will be good to recall the conduct of monetary policy by the RBI since September 2008, when the US sub-prime problem officially turned into a global financial crisis impacting the Reverse Repo Rate since 2001 world as well as the Indian economy. 8 The fall of Lehmann Brothers resulted in freezing of global 7 6 financial markets in the month of September last year. 5 While Indian banks were not affected by the problem of (%) 4 toxic assets, the global deleveraging and resulting outflow 3 2 of capital and frozen international markets resulted in 1 acute cash crunch in Indian markets, too, forcing the RBI 0 10/30/2002 10/27/2004 10/26/2005 2/20/2001 4/27/2001 5/28/2001 6/27/2002 8/25/2003 4/29/2005 1/24/2006 7/25/2006 12/8/2008 to loosen its monetary policy. 3/2/2001 3/5/2002 3/3/2003 6/8/2006 1/2/2009 3/4/2009 Since September till the eve of annual review, the RBI had already cut the repo, the rate at which it infuses the short- term liquidity into markets and reverse repo, the rate at The special repo facility that the RBI introduced in which it absorbs the excess liquidity from markets, by 400 September last year to provide financing to banks for and 250 basis points (bps) respectively. The bank had also meeting monetary needs of mutual funds arising out of cut the cash reserve ratio (CRR) by 400 basis points from excessive redemption pressure has been extended to 9% of net demand and time liabilities (NDTL) of banks March 31, 2010. The bank will conduct this repo on a to 5%. Together with CRR cut, increase in export credit weekly basis. refinance, special refinance Facility for banks and NBFCs etc, RBI had infused a total liquidity of Rs. 4,22,793 crore. The apex bank also extended a special refinance facility As such, at the time release of monetary policy annual that was introduced on November 1, 2008 to provide review the bank had already taken significant measures to funding to scheduled commercial banks up to 1% net keep the liquidity situation comfortable. demand and time liabilities (NDTL) as on October 24, 2008, to March 31, 2010. Annual Review for 2009-10 The RBI has also extended the relaxation on all-in-cost The main thrust of the RBI's policy was to ensure a policy ceilings for external commercial borrowings (ECB) up to regime that will enable credit expansion while preserving December 31, 2009. credit quality so as to support the return of the economy In view of the ongoing current global turmoil in the financial to a high growth path as well as preserve the price and markets, the RBI has decided to continue, for the time financial stability of the system in wake of challenges being, with the current policy and procedures governing being posed by the global financial crisis and its impact on the presence of foreign banks in India. As per the 'roadmap the Indian economy. As such, the following are the main for presence of foreign banks in India' which the apex bank features of the annual review announced by the RBI on has been following since beginning of FY065, the RBI was April 21. expected to review and expand the presence of foreign Major Policy Measures: The RBI cut the repo and banks by allowing them to own controlling stakes in private reverse repo rates by 25 bps each, primarily as a means to Indian banks and enter into merger and acquisition with give a signal to the markets that the apex bank will continue the latter. However, the review has been proposed and will the aggressive stance it has taken since September last be taken up after due consultation with all stakeholders year to protect growth and stimulating the slowing the once there is greater clarity regarding the stability of the Indian economy. New repo and reverse repo rates stand global financial system and a shared understanding on the at 4.75% and 3.25% respectively. The bank, however, left regulatory and supervisory architecture around the world. May e m D e c2009 b e r 12 Quick Review of Economy Magnum Monetary Projections: The RBI strongly mentioned half of FY10. its commitment to keep ample liquidity in the system in Union Finance: RBI expects the consolidated fiscal order the help the cause of growth. The bank observed deficit of centre and state governments to reach the 9% that the liquidity overhang emanating from the surge in mark, out of which 3% may be the contribution of states capital inflows witnessed during FY08 had substantially while the fiscal deficit of the Centre is expected around moderated in FY09. Further, the upside risks to inflation 6%. After including the off-budget and special securities had declined substantially. As such, the bank placed issued by the central government outside the market money supply (M3) growth target for FY10 at 17.0%. borrowing programme, the total fiscal deficit may reach Growth in non-food credit consistent with the monetary about 10.8% of GDP. expansion has been targeted at 20%. The bank also projected the deposits of scheduled commercial banks to Assessment witness growth of 18% over FY10. Overall the credit policy was much in line with the market Growth Projection: Regarding the growth prospects expectations. While the RBI avoided big ticket changes in of the Indian economy, the RBI observed that the fiscal policy stance in order to keep greater space with itself to and monetary stimulus measures initiated during 2008- manoeuvre the monetary policy once full budget for FY10 09, coupled with lower commodity prices, could cushion was out after the elections, it nevertheless did provided the downturn in the growth momentum during 2009-10 the signal markets were looking for through the 25 bps cut by stabilising domestic economic activity to some extent. in both the policy rates. Nevertheless, it also added that any upturn in the growth Further, RBI avoided placing any cap on deposits by momentum was unlikely in view of the projected contraction commercial banks through the reverse repo window, in global demand during 2009. a measure that was in talks among many quarters as The bank in this wake placed its projection of GDP growth means to check the yield on government securities. Such at 6% for the current fiscal. It may be mentioned that the a measure could have proved overly distortionary and median forecast in the survey of professional forecasts therefore it was probably in best interest that the RBI did conducted by the RBI stood at 5.7% with respect to growth not consider it. in FY10. Another important detail in the policy was regarding the Government borrowing programme: RBI said in the market borrowing programme of the government. The annual policy review that one of the major challenges facing policy clearly specified that out of the total government it was managing government borrowing. It mentioned that borrowings in the first half of current fiscal, Rs 205,000 total borrowing need of the government during first half of crore and Rs 120,000 crore was going to be through Open FY10 was currently placed at Rs 2,07,364 crore. Market Operation (OMO) and Market Stabilisation Scheme (MSS) respectively, which leaves just Rs 85,000 crore However, the bank also signalled that ultimate supply to be raised incrementally through securities. While the of new securities into the market will be much less than announcement was aimed at calming the bond markets, the borrowing figure and also what was being expected it also reflected the commitment of RBI to keep the bond by markets in recent months. The bank mentioned that rates in check. after adjusting for MSS (market stabilisation scheme) unwinding and the Reserve Bank's support by way of Another important issue in the annual review is with open market operations, net supply of fresh securities was regard to targeted (RBI however calls these indicators and expected to be of the order of Rs 85,364 crore. Although not targets) monetary and credit expansions. The targets the fresh supply of securities would be higher than the first have been set at 17% and 20%, respectively, for growth half of the last year, it would be of a much lower order as in M3 and credit for FY10 against actual growth of 18.7% compared with the first half of 2007-08. and 17.3% in FY09. Inflation: With regard to inflation, the bank observed Over past few years, there has been a wide deviation that the headline inflation measured by wholesale price between targeted rates and the actual growth rates. index will remain negative during early part of the fiscal. For instance, target for of money supply expansion was However, RBI clearly said that the negative WPI inflation at 14%, 15% and 17-17.5% for FY06, FY07 and FY08, should not be interpreted as deflation and it had only respectively. However, riding on the bullish economy, the statistical significance, not to be reflected in demand actual growth was above 20% in each of these years. contraction in any way. RBI also observed that the sharp Similarly, the growth for bank credit was anticipated around decline in WPI inflation had not been commensurately 20% in FY06 and FY07, whereas actual growth in credit matched by a similar decline in inflation expectations, was around 30% in both the fiscals. thus suggesting that RBI will have to continue to anchor The target growth was revised upwards to 25% in FY09, inflationary expectation in the, particularly in the second bank credit grew merely 17%, suggesting the cautious May e m D e c2009 b e r 13 Quick Review of Economy Magnum behaviour of banks in view of slowing global economy. Reserve Bank of India (RBI) has said that slowdown was As such, it appears that monetary expansion has been deepening in the Indian economy as the main indicators of overshooting or undershooting the RBI's expectations growth showed significant moderation in a report prepared depending on direction of trade cycle movement. As such, by the banking regulator. 'Macroeconomic outlook of the now that the economy is moving downwards, one may Indian Economy', based on various business expectations expect that the anticipated growth in money supply as well surveys, continues to exhibit the persistence of less as credit delivery may fall short of targets or indicators set than normal sentiments', said the bank in its quarterly in the annual review. Macroeconomic and Monetary Developments report. Finally, the bank has kept the economic growth projections The professional forecasters' survey conducted by the and money supply and credit growth targets within bank in December 2008 suggested further moderation reasonable reach. The bank has substantially lowered in economic activity in 2008-09. 'As reported by the its growth target from 7% in previous review to 6% in the respondents, the downside risks to growth seem to have present one. This step indicates that the bank is keeping amplified due to the projected global economic recession, its feet on the ground and will approach the growth in a deterioration in global financial markets and slowdown realistic way, which is a positive indication as far as RBI's in domestic demand. The knock-on impact of the global efforts to push the growth are concerned. downturn is visible as the main drivers of the growth On the whole we may observe that although the annual process in the Indian economy have moderated during the review might sound at some places a bit more bearish third quarter of 2008-09' said the bank. than expected, it nevertheless clearly outlines the fact that the bank will continue the aggressive stance to promote The business expectations survey conducted by the growth, a signal which the various players in economy central bank showed that the optimism for the quarters desperately wanted. January-March 2009 and April-June 2009 based on major business sentiment indicators such as overall business Impact situation, overall financial situation, production, order The major question facing the Indian economy at this books, capacity utilisation, employment, exports, imports stage is will and to what extent the policy rate cuts will and profit margin significantly declined as compared to a lead to decline in banks' retail rates. In this respect, the 25 year ago. bps rate cuts are not going to do much in terms of cutting India's growth trajectory has been hit hard by the ongoing the cost of funding for banks. Nevertheless, the RBI has economic slowdown and the capital outflows, sharp by now cut the repo and reverse repo by 425 bps and decline in exports and worsening sentiments have started 275 bps respectively and some substantial correction in telling on the actual economic expansion. Quarterly growth the retail rates is due. What the rate cuts in policy review slowed down to lowest in more than five years in the three signify is that the RBI will uphold the aggressive policy months ending December 2008 and most economists stance it has been following to help the cause of growth. see the growth going further down for at least two more With regard top the retail rates being offered by commercial quarters before recovering. banks, most likely there will be a reduction going forward, although this may not be immediate. Banks have been India's banking regulator Reserve Bank of India (RBI) said parking a record daily average of Rs 1 lakh crore with that there was more space with the monetary authority to the central bank through the reverse repo window, which further cut the policy rates even as it slashed key policy fetch a return of 3.5% after the rate cut. While the decline rates by 25 basis points (bps) in its annual review of of 25 bps in this rate is not large enough, it does give a monetary policy. signal to banks that his channel may not remain profitable RBI Governor Duvvuri Subbarao said in an interview that in medium term and therefore may force them to enhance there was more room for rate adjustments. "The room for credit delivery in markets. adjustment has come down but that should not be read as The main reason why the rate cuts by the RBI have not a signal that there is no scope for further rate adjustment,' transformed into the proportionate reduction in retail rate he said. cuts by banks is that the financing costs of banks continue However, he also added that this did not mean the RBI to remain relatively high. The fact is that banks have got will necessarily cut rates in the near term. Earlier the apex locked into high cost medium-term deposits around the bank cut its key lending rate for the sixth time in seven time of Lehman crisis and the average cost of deposits months on Tuesday and urged commercial banks to follow would go down as and when these high cost deposits run suit to promote the growth in a slowing economy that has off. This is a process which will take place slowly and as the taken a much bigger hit than was expected from the going average cost of deposits comes down, there will certainly global downturn. be more fall in prime lending rates (PLR) of banks May e m D e c2009 b e r 14 Quick Review of Economy Magnum The RBI cut its repo rate, the rate at which it infuses to October 31, 2009'. However the announcement may fall short term liquidity into banks, to 4.75% from 5% and its short of exporters expectations who have been asking for reverse repo rate, at which it absorbs surplus cash from credit at 7% without linking with the prime lending rate. the banking system, to 3.25% from 3.50%. Majority of India's export revenue comes from the US, India's monetary authority Reserve Bank of India (RBI) said Europe and the Middle East and exporters have been hit that short term prospects of growth of the Indian economy by a fall in demand in all these countries. For the first time were expected to be mixed as it had taken a more than in five years, India's exports fell by 12.1% in October 2008 anticipated hit from the ongoing global economic crisis. and have been unable to recover since. "India has sustained a greater than expected impact The Reserve Bank of India has also announced to extend from the global economic crisis and has 'mixed' growth the concessional interest rate scheme for a further six prospects for now,' said D Subbarao, Governor of the months giving respite to exporters hit by shrinking global central bank. He also added that GDP growth was slowing demand. The announcement came in wake of the deadline down, reflecting deceleration in production, negative as the upper limit of interest on pre-shipment rupee export export growth, shrinking corporate margins and slowing credit of up to 270 days and post-shipment credit of up to credit delivery growth. 180 days at BPLR minus 2.5% was due to terminate in Earlier the bank had lowered its projection of GDP growth the next few days. at 6% for the current fiscal, in its annual review of monetary In a memo to scheduled commercial banks the RBI said, policy announced on April 21. While the RBI strongly 'It has been decided to extend the validity of the scheme mentioned its commitment to keep ample liquidity in the to October 31, 2009'. However the announcement may fall system in order the help the cause of growth, it accepted short of exporters expectations who have been asking for that there were signals of sharp slowdown in economy. credit at 7% without linking with the prime lending rate. The median forecast for growth in FY10 in the survey Majority of India's export revenue comes from the US, of professional forecasts conducted by the RBI stood at Europe and the Middle East and exporters have been hit 5.7%, lowest in six years. by a fall in demand in all these countries. For the first time Mounting non-performing assets (NPAs) of the banks in five years, India's exports fell by 12.1% in October 2008 have led them to restructure loans worth Rs 80,000 crore and have been unable to recover since. in the last fiscal. these things have been taken from Monthly Eco Review Tight liquidity conditions in the wake of the global financial dated 20 April-- crisis has prompted the Reserve Bank to give regulatory The outlook of the Indian economy continues to remain concession on restructuring to provide a breather to the uncertain. India is getting increasingly coupled with the corporate India. global economic downturn, through both the real as well Analysts believe that around 3% of the outstanding loans as financial channels. However, the global scenario itself (Rs 80,000 crore) are to be restructured in the forth is uncertain and highly unpredictable at the moment. While quarter of the last fiscal. It is believed that at over 3% of some strength in expected in the near term to come from the outstanding credit, the incidence of restructuring is stimulus package being launched by the US government expected to be higher for PSU banks, as against 2% for as well as some other developed countries, there remains private banks. doubts on how the governments will behave regarding Inflation for the week ended April 18 stood up at 0.57% foreign trade with some protectionism being already from 0.26%. Manufacturing index was up 0.3% and fuel visible. index spiked up 0.1% (WoW), while primary articles index Further, any meaningful recovery in Indian economy, rose 1.7% (WoW). global economy will have to improve too. International The Reserve Bank of India has also announced to extend Monetary Fund has already said that the year 2009 would the concessional interest rate scheme for a further six be very difficult and recovery may be expected in 2010 if months giving respite to exporters hit by shrinking global the global leaders pursue a coherent set of stimulus related demand. The announcement came in wake of the deadline policies while at the same time avoiding the protectionist as the upper limit of interest on pre-shipment rupee export tendencies. credit of up to 270 days and post-shipment credit of up to Overall, we feel that outlook of Indian economy and the 180 days at BPLR minus 2.5% was due to terminate in developing world in general has shown some improvement the next few days. over the last one month. However, it is too early to reach In a memo to scheduled commercial banks the RBI said, any conclusion and one will have to wait for at least couple 'It has been decided to extend the validity of the scheme of quarters for some robust results to be discovered. May e m D e c2009 b e r 15 Economy News Magnum RBI hints at regulating NBFC holding cos ARCs are mulling such a deal with the banks and the new On instance of the report compiled by the tax authorities, system should be in place in a couple of months. The new it has been found that many of NBFCs have transferred norm will automate the transfer of ownership and all the surplus funds earned earlier to their holding companies, rights associated with such transfer to ARCs. The change which are currently regulated under the Companies Act, will be reflected in books of RoCs automatically too. in the form of loans or dividends, the Reserve Bank of India seeks G-7 anti-money laundering India (RBI) has decided in principle to bring under its ambit membership NBFC holding companies floated by business groups and India has urged the G-7 nations for membership of the companies. Financial Action Task Force (FATF), an inter-governmental The move was prompted by the fact that the NBFCs had body developing policies to combat money laundering and been frequently complaining of an acute shortage of funds terror financing. despite receiving liquidity support from the government in At the Paris summit of G-7 in 1989, FATF, having 34 consultation with RBI. members today, was created for the purpose of developing Govt defers AS 11 till FY 11 and promotion of national and international policies to Conceding to the suggestions of the National Advisory combat money laundering and terrorist financing. Committee on Accounting Standard (NACAS), the Corporate India mops up $14 bn via debt government has decided to defer the accounting standard instruments in 2008-09 11 (AS-11) mandate deals with foreign exchange losses. According to a latest data released from economic think The government is expected to come up with a notification tank Center for Monitoring Indian Economy (CMIE), India that will give relief to India Inc on AS 11 stipulating to Inc has raised nearly $14 billion via debt instruments recognize foreign exchange losses in the profit and loss from the domestic primary market, mostly non-convertible accounts every year. AS 11 suggests for mark-to-market debentures (NCDs) in the current fiscal 2008-09. provisioning in profit and loss account for foreign exchange Debt papers issuance in the domestic primary market rose related gains and losses. 46.7% to $13.95 billion in the last fiscal, as compared to S&P, Fin Min discuss outlook downgrade issue $9.51 billion in the previous fiscal. Global rating agency Standard & Poor's and officials Civil aviation ministry asks carriers to cut from the ministry of finance have held talks to discuss the capacity grounds for the rating agency downgrading India's outlook Domestic air carriers have been directed by the civil from stable to negative. aviation ministry not to compete unfairly with each other Late last month, S&P had downgraded its outlook on India's and align schedules of their flights for better returns, as long-term sovereign credit rating to negative from stable. the domestic aviation industry is grappling with capacity It claimed that worsening government finances could woes and mounting losses. increase the overseas borrowing costs for companies and weaken the Indian rupee. The civil aviation ministry has directed air-carriers to do away with the excess capacity on both foreign and domestic Govt directs cement cos to roll back price hike sectors and also reduce transit time to save on operational Cement companies have come under the wrath of costs in the wake of losses incurred by different players in government for charging higher prices despite asking the industry including Indian Airlines and Jet Airways. for stimulus package. The government has also warned Highway developers now securitize toll these companies it will not allow stimulus package to the industry unless it reduces the price of the commodity. projects to raise funds As cash-starved highway developers are finding it difficult Recently, cement companies increased the price by up to to fund their ambitious plans, they have got a new lease of Rs 7 per 50 kg bag. The department of industrial policy life by keeping their completed toll road projects as security and promotion (DIPP), in a strongly worded message told with banks and financial institutions to raise money to fund the Cement Manufacturers' Association (CMA) that their decision of price increase was uncalled for. new projects. ARCs to benefit from new NPA transfer Many highway developers are resorting to securitize their norms road projects developed under build-operate-transfer (BOT) model in order to benefit the lender by the cash Asset reconstruction companies (ARC) – companies flow through toll collections. that deal in buying non-performing assets (NPAs) from banks and turning them into earning assets – may get an Auto ancillary to shift production mix to automated route through which the transfer of ownership aerospace, defence sector of distressed assets that these buy from banks will be The Indian auto ancillary industry, facing idle capacity recognized by registrar of companies (RoC). concerns in the wake of the worldwide economic slump, is May e m D e c2009 b e r 16 Economy News Magnum now lured by the opportunities in making products for the ADB projects Asian equity markets recovery emerging aerospace and defence sectors. in HY 09 Companies including Bharat Forge, Amtek Auto, Tata According to the Asian Development Bank (ADB) report, Automobile, Lumax Auto, Mahindra Systech, the JBM Asian equity markets are likely to recover in the second group and Sundram Fasteners, having more than half half of 2009 on the back of aggressive central bank of the total revenue generated by the auto component policies including fiscal and monetary stimulus packages industry, have now been shifting the production portfolio. by various governments. Iron ore exports surge by 17% in February Stimulus policies resorted by government is expected to Buoyant demand from China has led India's iron ore strengthen the current rally and contribute to better equity exports rising by 17% in the month of February. Total iron performance in the second half of the calendar year. Citing ore exports of India touched 12.6 million tonne in February the rally witnessed in recent weeks, the report says the 2009 compared with 10.8 million tonne in the same month rally is mainly due to rising hopes of an early revival for last year. the global economy. Major reason for the increase has been revival of demand RBI introduces Basel-1 norms for RRBs from Chinese steel producers. Chinese government's RBI, in a move to bring regional rural banks (RRBs) at massive stimulus package has boosted the demand of par with international conformity of Basel-I framework, has steel in China resulting in higher demand for Indian iron announced introducing capital to risk-weighted assets ratio ore too. norms (CRAR) for RRBs, after consultation with National Govt sets up committee for revival of jute Bank for Agriculture and Rural Development (NABARD). industry The move has come in the wake of recommendation Concerned over the prospects of the ailing jute industry, the made by Rakesh Mohan Committee for Financial Sector government has set up a high-level committee comprising Assessment (CFSA). Unlike commercial banks which are members from finance and labour ministries, labour unions exposed to systematic risks in the economy, RRBs are and the The Indian Jute Mills Association (IJMA). relatively distant from such risks given their small size The newly established committee is expected to examine of operation. However, the CFSA report has emphasize issues related with costing, statutory obligations and woes over their asset quality and their sub standard debt agreement, and training in the jute industry, under three recovery mechanism. different sub-committees. Disbursal under stimulus package worth Rs RBI pegs GDP forecast for FY10 at 6% 9K cr to MSMEs sector The Reserve Bank of India (RBI) has cut the repo and Banks have sanctioned nearly Rs 8,500-9,000 crore to reverse repo rate by 25 basis points each. The repo rate micro, small and medium enterprises (MSMEs) in the last has been cut to 4.75 % from the existing 5 % while the few months as a part of the stimulus packages announced reverse repo has been cut to 3.25 % from the existing by the government. The MSME sector contributes nearly 3.5%, on the same time the CRR rate has been left 45% to the country's total industrial production. untouched at 5%. On recommendation of SIDBI, banks are expected to Though the rate cuts were more or less on the lines of the double the amount released to the MSME sector. The market expectations, the most striking points that came government had announced various stimulus packages from the policy is that the apex bank has pegged the GDP to the industry, mainly to the export units, MSMEs and forecast for the FY10 at about 6%. commercial vehicles to combat the impacts of the global RBI to extend greater credit to exporters economic slowdown. The Reserve Bank of India announced on Tuesday that Core sector posts highest growth in March it would extend the concessional interest rate scheme since Sept. for a further six months giving respite to exporters hit by India has witnessed production growth in the six core shrinking global demand. The announcement came in infrastructure industries during the month of March at wake of the deadline as the upper limit of interest on pre- 2.9%, which is the highest since September last year. The shipment rupee export credit of up to 270 days and post- March figures indicate some amount of recovery in the shipment credit of up to 180 days at BPLR minus 2.5% Indian economy. was due to terminate in the next few days. The figures of March are expected to cushion the fall in In a memo to scheduled commercial banks the RBI said, Index of Industrial Production (IIP), as it constitutes 27% 'It has been decided to extend the validity of the scheme of the index. IIP shrank by 1.2% in February 2009, the to October 31, 2009'. However the announcement may fall most in the last two decades. During the period of April- short of exporters expectations who have been asking for March 2008-09, the sector witnessed a growth of 2.7%, as credit at 7% without linking with the prime lending rate. against 5.9% in the year-ago period. May e m D e c2009 b e r 17 Scorecard : Cement Magnum Company Year Equity Promoter BV RONW Sales Sales OPM NP Rs. NP Var DIV CPS NOM FV Name End Rs. Mn. Stk % Rs. (%) Rs. Mn. Var (%) (%) Mn. (%) (%) (Rs.) ACC 200812 12 1876.80 10 46.21 262.55 26.71 74741.53 6.66 27.05 12127.84 -15.70 200 80.29 Ambuja Cement 200812 12 3045.20 2 46.46 37.23 27.17 62817.10 10.11 31.10 14022.70 -20.74 110 10.92 Andhra Cements 200903 18 1258.53 10 72.99 0.95 ---- 3711.20 -16.14 16.39 630.10 -14.81 ---- 4.84 Anjani Portland 200803 12 183.90 10 61.44 23.03 45.54 1030.68 15.90 31.76 163.11 30.47 15 10.57 Barak Valley 200803 12 221.60 10 60.49 32.91 18.47 703.14 ---- 28.57 110.03 ---- 20 7.08 Binani Cement 200903 12 2031.01 10 64.91 20.56 48.92 14973.20 53.00 20.46 1086.60 -38.19 25 9.30 Binani Inds 200903 12 295.96 10 51.28 54.59 9.42 470.60 ---- 60.75 211.10 41.39 30 7.24 Birla Corp 200803 12 770.05 10 62.90 129.41 47.61 17247.80 10.08 35.58 3935.70 20.64 40 56.49 Burnpur Cement 200803 12 430.04 10 47.29 12.70 4.07 270.34 ---- 16.38 14.18 ---- ---- 0.49 Chettinad Cement 200803 12 295.00 10 85.03 133.05 49.95 9301.80 28.25 37.30 1637.70 42.77 100 83.13 Dalmia Cement 200803 12 161.69 2 56.19 132.94 39.68 14806.70 50.10 42.78 3471.50 51.64 200 53.56 Deccan Cements 200803 12 70.04 10 54.63 198.22 41.33 2092.15 21.85 38.00 479.66 68.75 30 76.78 Everest Industries 200803 12 148.00 10 50.09 95.50 10.38 2851.40 -6.13 11.35 143.20 22.81 40 16.19 Heidelberg Cem.(I) 200812 12 1580.10 10 68.55 20.53 35.43 8044.99 35.31 16.54 1255.26 28.54 ---- 6.48 Hyderabad Inds. 200803 12 74.63 10 42.19 195.08 9.99 4827.10 9.78 8.36 140.80 -18.38 50 33.77 India Cements 200803 12 2818.67 10 28.02 91.26 32.48 35544.70 73.41 31.81 6856.80 52.54 20 28.81 J K Cement 200803 12 699.27 10 63.80 108.72 41.63 14583.00 18.24 29.05 2652.00 48.49 50 43.80 JK Lakshmi Cem. 200803 12 611.80 10 45.66 103.74 43.70 11076.60 31.27 30.42 2236.70 25.58 25 46.13 Kakatiya Cem. Sugar 200903 12 77.74 10 48.32 135.30 17.28 1702.93 3.51 23.07 213.12 36.35 24 37.86 Katwa Udyog 200803 12 51.24 10 58.81 12.08 15.47 157.56 91.03 15.19 9.59 161.31 10 2.73 KCP 200803 12 128.92 10 46.26 147.28 40.01 4035.60 37.12 27.53 635.30 31.56 100 55.67 Mangalam Cement 200903 12 282.47 10 27.07 76.72 63.27 5661.36 11.03 28.62 971.64 -14.43 50 43.32 NCL Industries 200803 12 325.04 10 43.26 30.48 34.42 1927.30 20.28 36.35 295.69 10.21 25 11.98 OCL India 200803 12 113.80 2 69.77 97.20 25.32 8928.20 10.46 24.62 1138.00 58.58 125 24.62 Prism Cement 200903 9 2982.50 10 61.74 22.18 15.04 6298.60 ---- 28.55 962.30 ---- 15 4.04 Rain Commodities 200812 9 321.10 10 42.89 99.86 12.32 11121.60 140.70 17.29 850.60 -0.56 28 15.18 Ramco Inds. 200803 12 43.33 10 50.54 567.57 10.82 3444.30 17.51 24.57 254.80 4.77 150 123.88 Sagar Cement 200803 12 133.37 10 44.16 78.55 34.91 2231.43 98.35 25.81 309.56 11.89 25 23.39 Sanghi Industries 200803 12 2199.80 10 51.01 26.92 19.77 8465.10 ---- 33.95 1063.90 ---- ---- 8.49 Saurashtra Cement 200812 18 511.91 10 64.42 0.10 ---- 7286.51 ---- 7.56 -481.53 ---- ---- -4.17 Shree Cement 200803 12 348.37 10 65.41 193.13 46.19 21091.18 54.18 44.36 2992.56 69.07 80 223.33 Shree Digvijay Cem 200803 12 1413.74 10 73.63 2.04 ---- 2540.80 -0.46 -2.62 -140.20 -126.24 ---- -0.54 Ultratech Cement 200903 12 1244.90 10 54.78 216.58 45.18 64369.60 16.85 28.12 9770.20 -3.04 50 104.43 Vinay Cements 200803 12 189.00 10 0.00 39.97 5.03 406.98 -16.77 17.07 29.42 -71.19 ---- ---- Visaka Inds. 200803 12 158.81 10 37.70 100.28 4.87 4331.31 14.22 10.29 76.73 -67.67 30 14.69 Scorecard Legends : NOM - Number of Months for which P& L a/c is prepared by the companies, Equity Rs.Mn - Latest Paid Up Capital of the Company, FV-Latest Face values of equity Shares, Promoter Stk % - Its promoter holding in the equity capital of the company as per latest shareholding pattern, BV Rs. - Book Value Per Share is calculated as (Equity + reserves ) / No of Equity shares, RONW - Return on Net Worth is calculated as {(Net profit - preference capital)/ Shareholder's Fund }*100.Share- holders funds includes Equity Paid Up + Reserves excluding revaluation reserves - Misc Expenditures Not written off, Sales Rs. Mn - Sales , Turnover & Income from operations,Sales Var% - Percentage Change in Sales over previous period Sales, OPM% - Operating Profit after interest expended as a % of Interest income & income from operation, NP Rs. Mn - Net Profit as reported after Tax, NP Var% - Percentage Change in Net profit over previous period Net profits, Div% - Total % of Dividend Declared during latest Financial year. May e m D e c2009 b e r 18 Scorecard : Cement Magnum Latest Quarter TTM Market Data EPS Sales Sales OPM NP EPS NP Price Mkt. Cap % NP Ended H52W L52W PE Rs. Rs. Mn. Var (%) Rs. Mn. Var(%) Rs. Var (%) 29/04/09 (Rs. Mn.) 64.62 20817.00 15.92 33.54 4047.64 13.21 200903 67.13 -14.04 653.00 783.00 369.00 9.73 122555.04 9.21 18626.60 12.56 30.37 3340.50 2.41 200903 9.26 -6.70 80.75 115.25 43.00 8.72 122949.95 4.75 1112.20 35.53 13.18 142.00 -17.97 200903 4.76 -5.51 18.75 32.86 11.50 3.94 2359.75 8.87 299.20 29.65 25.29 35.45 -30.57 200812 9.55 -0.51 26.40 37.75 15.00 2.76 485.49 4.97 195.72 7.28 24.40 19.80 16.13 200812 4.83 100.00 17.86 42.10 10.00 3.70 395.78 5.35 4980.80 48.24 19.37 200.70 -68.70 200903 5.35 -99.34 37.10 82.00 24.95 6.93 7535.06 7.13 56.60 ---- 48.41 11.20 -131.11 200903 7.13 29.28 46.90 146.90 25.80 6.58 1388.07 51.11 4562.40 5.40 26.51 813.80 -23.52 200812 41.49 -27.78 199.75 227.00 71.00 4.81 15381.81 0.33 35.93 ---- ---- -7.17 ---- 200812 0.00 ---- 10.26 23.70 7.15 ---- 441.22 55.51 2596.70 9.27 8.65 163.90 -60.46 200812 44.24 -18.19 479.95 525.00 360.15 10.85 14158.53 42.89 4099.40 12.83 23.75 237.10 -78.93 200812 22.78 -83.86 88.60 305.00 67.20 3.89 7162.87 68.49 538.27 9.16 29.95 91.56 -19.82 200812 56.46 -13.83 167.00 292.00 109.25 2.96 1169.63 9.68 1281.60 85.63 9.85 -34.10 -149.14 200812 1.64 -587.60 64.65 124.50 43.50 39.54 956.82 5.54 3205.59 135.70 14.98 543.53 192.42 200812 5.54 22.20 25.00 39.75 11.01 4.51 3950.25 18.87 1300.20 16.52 12.68 66.00 -447.37 200812 52.80 65.74 180.60 207.90 89.00 3.42 1347.75 24.28 8776.60 2.71 22.12 619.10 -51.27 200812 17.38 -37.08 115.05 178.10 68.50 6.62 32428.84 37.93 3633.51 -6.81 19.47 286.72 -64.25 200812 20.36 -87.40 58.95 159.00 34.80 2.90 4122.21 36.56 2977.30 5.45 26.39 560.40 -8.28 200812 30.93 -39.45 62.00 120.50 30.25 2.00 3793.13 27.41 422.32 -21.21 27.37 70.30 -7.67 200903 27.43 26.79 77.65 108.00 46.10 2.83 603.64 1.87 39.53 5.22 40.93 0.54 -41.94 200812 0.00 ---- 11.01 24.80 8.21 ---- 56.42 49.28 795.80 -24.97 35.57 148.30 -23.20 200812 39.71 -40.87 181.30 485.40 111.25 4.57 2337.34 34.66 1696.28 35.90 33.70 385.74 13.07 200903 34.66 -16.86 79.50 141.95 38.15 2.29 2245.61 8.74 825.60 62.99 27.70 87.18 35.08 200812 9.45 27.06 30.50 51.00 19.00 3.23 991.37 20.00 3099.90 36.95 23.59 322.00 4.61 200812 21.90 18.35 69.75 145.00 33.00 3.18 3968.78 3.23 252.30 -88.97 ---- -107.90 -116.77 200903 3.23 -155.33 26.90 43.90 13.50 8.34 8022.93 12.01 2666.80 38.45 24.18 331.20 8.77 200903 12.39 -65.85 91.00 255.00 52.25 7.35 2922.01 58.80 824.40 6.69 22.27 29.90 -18.75 200812 74.82 16.29 464.15 883.00 326.00 6.20 2011.23 20.63 798.58 30.82 22.52 53.65 -39.65 200812 10.39 -98.27 160.25 421.45 85.10 15.43 2137.30 4.84 1879.50 -6.50 30.45 178.80 -14.61 200812 3.02 -103.24 24.00 78.00 17.05 7.96 5279.52 -9.41 3544.19 220.05 ---- -323.42 -7161.57 200812 -9.41 135.39 20.35 39.15 9.27 ---- 1041.74 85.90 8116.41 24.85 42.81 2356.37 473.67 200903 165.91 48.22 775.85 1040.00 330.00 4.68 27028.44 -0.99 692.50 14.33 13.40 48.20 -50.82 200812 -2.67 211.98 8.56 23.50 4.23 ---- 1210.16 78.48 18750.10 17.07 29.96 3094.60 9.40 200903 78.48 -3.13 590.00 785.00 250.00 7.52 73449.10 ---- 70.40 -2.68 5.70 -5.80 -240.78 200812 ---- -543.27 40.05 47.00 22.00 ---- 756.94 4.83 1212.68 19.64 15.25 62.53 1062.27 200812 19.95 68.77 52.85 84.45 31.70 2.65 839.31 CPS Rs. - Cash Profit per Shares, EPS Rs. - Earning Per Shares is calculated as Net Profit / Number of Equity Shares, Sales Rs. Mn - Sales ,Turnover & Income from operations for Latest Quarter, Sales Var% - Percentage Change in Sales for Latest Quarter over previous Corresponding Quarter Sales, OPM% - Operating Profit after interest expended as a % of Interest income & income from operation for Latest Quarter,NP Rs. Mn - Net Profit as reported after Tax for Latest Quarter,NP Var% - Percent- age Change in Net profit for Latest Quarter over Previous quarter Net profits, Ended - Trailing Twelve months Ended On, TTMEPS - Earning Per Shares is calculated as TTM Net Profit / Number of Equity Shares,TTMNP Var% - Percentage Change in TTM Net profit over Corresponding previous TTM Net profits, H52 - High Price during last 52 Week,L52 - Low Price during last 52 Week,PE - Market Price / TTM Earning Per Shares,Market cap Rs.Mn - Market Capitalisation is calculated as Latest price multiplied by No of Equity Shares outstanding. May e m D e c2009 b e r 19 Dividend Yield Magnum Price TTM 52-Wk 52-Wk Year Yield EPS Company Name (Rs.) FV PE Year NP EPS PE High Low End (%) (Rs.) (29/04) End Rs. ml (Rs.) (Rs.) (Rs.) Prajay Engineers Syndicate 200803 17.30 14.45 25.91 10 0.67 200812 54.18 1.36 12.68 275.00 12.50 Varun Shipping Company 200803 45.95 10.88 15.05 10 3.05 200812 843.36 5.62 8.17 88.40 38.25 Shipping Corpn. Of India 200803 82.15 10.35 28.83 10 3.16 200812 9886.00 23.35 3.52 200.60 67.00 Gujarat N R E Coke Ltd. 200803 25.30 9.88 5.13 10 4.93 200812 2746.10 5.82 4.35 117.57 16.80 I V R Prime Urban Dev. 200803 41.60 9.62 27.40 10 1.52 200812 553.20 8.62 4.82 245.00 24.05 Graphite India 200803 31.40 9.55 8.85 2 3.55 200812 1445.90 9.57 3.28 80.75 20.55 N I I T Technologies 200803 69.50 9.35 24.38 10 2.85 200812 1203.70 20.50 3.39 161.45 42.50 Alok Industries 200803 13.49 8.90 10.61 10 1.27 200812 1786.70 2.95 4.57 64.40 11.33 Bank Of Maharashtra 200803 23.35 8.57 7.63 10 3.06 200812 2938.30 6.83 3.42 55.30 18.90 H C L Infosystems 200806 93.70 8.54 17.81 2 5.26 200903 2577.60 15.06 6.22 210.60 64.05 J K Cement 200803 58.95 8.48 37.92 10 1.55 200812 1423.68 20.36 2.90 159.00 34.80 Ganesh Housing Corpn. 200803 53.90 8.35 32.48 10 1.66 200812 488.92 14.97 3.60 365.00 30.00 HEG 200803 120.00 8.33 33.02 10 3.63 200812 303.90 7.17 16.74 320.00 94.00 Balaji Telefilms 200803 44.20 7.92 13.48 2 3.28 200812 648.01 9.94 4.45 221.70 24.80 Orbit Corporation 200803 71.95 7.64 45.94 10 1.57 200812 935.11 25.78 2.79 569.70 38.05 Vijaya Bank 200803 26.20 7.63 8.33 10 3.14 200812 1780.30 4.11 6.38 57.25 19.85 Lakshmi Machine Works 200803 595.85 7.55 195.89 10 3.04 200812 1589.09 128.47 4.64 1773.00 415.10 Great Eastern Shipping Co. 200803 205.25 7.31 89.11 10 2.30 200812 14341.10 94.17 2.18 537.20 138.60 Andhra Bank 200803 55.45 7.21 11.87 10 4.67 200812 5760.91 11.88 4.67 87.80 34.80 Tamil Nadu Newsprint & Pap. 200803 63.35 7.10 16.30 10 3.89 200812 1135.50 16.41 3.86 110.85 51.30 Mastek 200806 141.65 7.06 34.77 5 4.07 200903 1035.20 38.48 3.68 418.80 97.00 Ashok Leyland 200803 21.40 7.01 3.53 1 5.91 200812 3259.91 2.45 8.73 44.05 12.45 Binani Cement 200803 37.10 6.74 8.66 10 4.29 200903 1086.60 5.35 6.93 82.00 24.95 Tata Steel 200803 238.05 6.72 64.15 10 3.89 200812 52964.00 72.50 3.28 925.00 146.35 Greaves Cotton 200806 90.15 6.66 22.56 10 4.43 200903 692.00 14.17 6.36 260.95 50.10 Kolte Patil Developers 200803 26.30 6.65 17.08 10 1.54 200812 1087.99 14.44 1.82 136.50 18.50 Sobha Developers 200803 98.85 6.58 31.32 10 3.16 200812 1772.00 24.31 4.07 649.90 67.45 Kalyani Steels 200803 61.90 6.46 18.15 10 3.41 200812 349.02 8.00 7.74 314.00 36.10 Guj. Nar. Vall. Fertilizers Co. 200803 67.25 6.32 23.99 10 2.80 200812 2607.30 16.78 4.01 177.20 48.00 Parsvnath Developers 200803 48.30 6.21 22.13 10 2.18 200812 2083.71 11.28 4.28 245.00 30.55 Tata Motors 200803 242.35 6.19 52.63 10 4.60 200812 9480.80 21.08 11.50 734.00 122.00 Megasoft 200712 19.45 6.17 5.51 10 3.53 200903 103.50 2.34 8.32 98.30 9.00 Electrosteel Castings 200803 20.50 6.10 1.85 1 5.12 200812 742.69 2.59 7.93 60.55 13.03 Karnataka Bank 200803 82.10 6.09 19.92 10 4.12 200812 2443.40 20.10 4.09 218.00 55.15 Prithvi Information Solution 200803 50.20 5.98 46.27 10 1.09 200812 270.02 14.94 3.36 183.95 30.00 Vakrangee Softwares 200803 33.95 5.89 23.34 10 1.45 200812 520.22 24.31 1.40 290.75 19.00 SRF 200803 85.00 5.88 20.44 10 4.16 200812 1431.30 23.65 3.59 152.45 62.15 Great Offshore 200803 273.85 5.84 53.31 10 5.14 200812 1526.40 41.10 6.66 774.50 200.00 Allahabad Bank 200803 52.50 5.71 21.82 10 2.41 200812 6740.20 15.09 3.48 94.90 36.85 Tata Investment Corpn. 200803 263.90 5.68 53.93 10 4.89 200812 1803.98 52.35 5.04 609.00 182.15 May e m D e c2009 b e r 20 High PE Magnum Company Name Year End Price (29/04) Rs. EPS FV PE Fortis Healthcare Ltd. 200803 68.05 0.12 10 575.57 IRB Infrastructure Developers Ltd 200803 95.40 0.18 10 535.87 B F Utilities Ltd. 200809 589.30 1.23 5 479.75 G M R Infrastructure Ltd. 200803 112.85 0.34 2 327.70 Reliance Power Ltd 200803 123.30 0.42 10 294.34 U T V Software Communications Ltd. 200803 300.70 1.80 10 166.90 K S K Energy Ventures Ltd. 200703 165.40 1.11 10 149.28 New Delhi Television Ltd. 200803 101.55 0.68 4 148.48 Reliance Natural Resources Ltd. 200803 56.65 0.42 5 134.87 Gammon Infrastructure Projects Ltd 200803 63.70 0.48 10 129.75 Jindal South West Holdings Ltd. 200803 373.05 3.01 10 124.09 Religare Enterprises Ltd 200803 318.40 3.08 10 103.31 Future Capital Holdings Ltd 200803 126.05 1.41 10 89.66 Bombay Dyeing & Manufacturing. Co. Ltd. 200803 173.95 4.07 10 87.89 Mundra Port & Special Economic Zone Ltd 200803 386.00 5.33 10 76.66 Bajaj Finserv Ltd 200803 217.10 3.04 5 71.47 Edelweiss Capital Ltd 200803 274.35 3.84 5 71.44 Nirlon Ltd. 200803 25.95 0.28 10 67.86 Advanta India Ltd. 200712 515.55 7.79 10 66.15 Strides Arcolab Ltd. 200812 96.65 1.53 10 63.09 Educomp Solutions Ltd. 200803 2474.25 40.62 10 60.91 Max India Ltd. 200803 141.10 2.79 2 50.54 Reliance Industrial Infrastructure Ltd. 200803 725.60 14.43 10 50.28 Hindustan Copper Ltd. 200803 161.00 3.21 5 50.18 Tata Communications Ltd 200803 547.75 10.68 10 49.45 Asahi India Glass Ltd. 200803 41.45 0.85 1 49.10 Ispat Industries Ltd. 200803 13.21 0.28 10 46.37 Entertainment Network (India) Ltd. 200803 150.75 3.40 10 44.36 G V K Power & Infrastructure Ltd. 200803 27.95 0.65 1 43.25 Hindustan Oil Exploration Company Ltd. 200803 79.45 1.85 10 43.02 Nagarjuna Fertilizers & Chemicals Ltd. 200803 22.35 0.53 10 42.53 I L & F S Investsmart Ltd. 200803 92.75 2.23 10 41.57 Onmobile Global Ltd 200803 322.00 8.29 10 38.86 United Breweries Ltd. 200803 110.45 2.89 1 38.20 Shree Renuka Sugars Ltd. 200809 97.90 2.70 1 36.24 B O C India Ltd. 200703 142.10 9.09 10 34.34 Arshiya International Ltd. 200803 75.50 2.17 2 33.89 Adani Enterprises Ltd. 200803 420.30 12.66 1 33.20 P T C India Ltd. 200803 70.95 2.14 10 33.12 Television Eighteen India Ltd. 200803 83.75 2.55 5 32.84 Everest Kanto Cylinder Ltd. 200803 151.55 4.67 2 32.44 EPS Earning Per Shares is calculated as Net Profit / Number of Equity Shares (Rs) FV Latest Face values of equity Shares (Rs) PE Market Price / Trailing Twelve Months Earning Per Shares May e m D e c2009 b e r 21 Low PE Magnum Company Name Year End Price (29/04) Rs. EPS FV PE Aftek Ltd. 200803 9.22 8.66 2 1.06 Prithvi Information Solutions Ltd. 200803 50.20 46.27 10 1.09 Amtek India Ltd. 200806 34.05 30.93 2 1.10 Alok Industries Ltd. 200803 13.49 10.61 10 1.27 I F C I Ltd. 200803 25.15 13.36 10 1.33 Sujana Towers Ltd. 200809 16.15 11.13 5 1.45 Vakrangee Softwares Ltd. 200803 33.95 23.34 10 1.45 I V R Prime Urban Developers Ltd. 200803 41.60 27.40 10 1.52 Chennai Petroleum Corporation. Ltd. 200803 114.85 75.41 10 1.52 Kolte Patil Developers Ltd 200803 26.30 17.08 10 1.54 J K Lakshmi Cement Ltd. 200803 62.00 36.56 10 1.55 J K Cement Ltd. 200803 58.95 37.92 10 1.55 Orbit Corporation Ltd. 200803 71.95 45.94 10 1.57 Ashapura Minechem Ltd. 200803 27.50 17.19 2 1.60 Ganesh Housing Corpn. Ltd. 200803 53.90 32.48 10 1.66 Ajmera Realty & Infra India Ltd 200803 36.35 20.76 10 1.75 Kei Industries Ltd. 200803 12.54 7.16 2 1.75 Kesoram Industries Ltd. 200803 154.15 83.80 10 1.84 K L G Systel Ltd. 200803 90.20 44.75 10 2.02 Vishal Retail Ltd. 200803 37.10 18.14 10 2.04 Dalmia Cement (Bharat) Ltd. 200803 88.60 42.94 2 2.06 Bharati Shipyard Ltd. 200803 81.20 38.97 10 2.08 Marg Ltd. 200803 55.15 26.34 10 2.09 Indage Vintners Ltd 200803 57.70 27.36 10 2.11 Ansal Properties & Infrastructure Ltd. 200803 30.80 14.24 5 2.16 Parsvnath Developers Ltd. 200803 48.30 22.13 10 2.18 Housing Development & Infrastructure Ltd. 200803 146.80 65.83 10 2.23 Great Eastern Shipping Company Ltd. 200803 205.25 89.11 10 2.30 Hindalco Industries Ltd. 200803 53.85 23.31 1 2.31 Man Industries (India) Ltd. 200803 31.80 13.36 5 2.38 Omaxe Ltd. 200803 54.75 22.98 10 2.38 Mascon Global Ltd. 200803 3.49 1.46 10 2.39 Allahabad Bank Ltd 200803 52.50 21.82 10 2.41 Gujarat Alkalies & Chemicals Ltd. 200803 74.65 30.51 10 2.45 Unity Infraprojects Ltd. 200803 110.40 44.92 10 2.46 Oriental Bank Of Commerce Ltd 200803 131.25 33.57 10 2.47 Videocon Industries Ltd. 200809 109.10 37.23 10 2.55 Maytas Infra Ltd. 200803 37.25 16.93 10 2.55 Asian Electronics Ltd. 200803 22.60 -51.57 5 2.73 Gujarat Fluorochemicals Ltd. 200803 76.90 27.68 1 2.78 Gujarat Narmada Valley Fertilizers Co.Ltd. 200803 67.25 23.99 10 2.80 EPS Earning Per Shares is calculated as Net Profit / Number of Equity Shares (Rs) FV Latest Face values of equity Shares (Rs) PE Market Price / Trailing Twelve Months Earning Per Shares May e m D e c2009 b e r 22 Sales Magnum Rs. in million 200903 Qtr 200803Qtr Change In % Change 200903 Net 200803 Net Change In % Change in Company Name Net Sales Net Sales Sales in Sales Profits Profits Net Profits Net Profits Jindal Drilling 3336.40 1022.70 2313.70 226.23 151.50 54.90 96.60 175.96 Seamec 1001.20 348.50 652.70 187.29 619.50 -170.28 789.78 -463.81 Raj Television 194.94 86.44 108.50 125.52 -30.76 -3.42 -27.34 799.42 Deep Industries 108.75 61.01 47.74 78.25 12.22 15.26 -3.04 -19.92 Granules India 868.62 494.67 373.95 75.60 11.44 20.17 -8.73 -43.28 Areva T & D 8450.00 5029.00 3421.00 68.03 514.00 541.00 -27.00 -4.99 Jaiprakash Assoc 21516.70 12960.00 8556.70 66.02 3853.20 2100.00 1753.20 83.49 Siemens Healthcare Diagno 406.26 248.99 157.27 63.16 -21.15 22.73 -43.88 -193.05 A K Capital 433.77 271.28 162.49 59.90 138.71 70.63 68.08 96.39 Mphasis 7681.60 4841.90 2839.70 58.65 1873.70 569.00 1304.70 229.30 Alstom Projects 8092.30 5109.00 2983.30 58.39 261.90 15.00 246.90 1646.00 United Breweries Hdg 1030.90 656.60 374.30 57.01 126.80 138.50 -11.70 -8.45 Bartronics India 1145.28 732.75 412.53 56.30 21.45 164.21 -142.76 -86.94 Strides Arcolab 1860.21 1196.88 663.33 55.42 214.81 -160.48 375.29 -233.86 Shaw Wallace 639.90 412.00 227.90 55.32 35.60 203.90 -168.30 -82.54 Nagarjuna Agrichem 1436.80 925.80 511.00 55.20 110.90 25.90 85.00 328.19 Bajaj Hind Sugar 959.00 626.20 332.80 53.15 488.40 68.20 420.20 616.13 Gruh Finance 955.90 624.90 331.00 52.97 224.90 204.00 20.90 10.25 Era Infra Engg 9525.81 6250.65 3275.16 52.40 1076.26 367.64 708.62 192.75 Facor Alloys 1022.46 672.18 350.28 52.11 -34.37 259.64 -294.01 -113.24 Petronet LNG 26548.80 17526.50 9022.28 51.48 2043.53 1200.38 843.15 70.24 Axis Bank 30392.20 20154.30 10237.90 50.80 5814.50 3614.00 2200.50 60.89 J Kumar Infraproject 1496.72 992.78 503.94 50.76 119.81 106.08 13.73 12.94 Jhagadia Copper 630.70 421.50 209.20 49.63 -782.00 -559.80 -222.20 39.69 Binani Cement 4980.80 3360.00 1620.80 48.24 200.70 641.30 -440.60 -68.70 Coromandel Fertilisers 8568.60 5844.30 2724.30 46.61 -124.70 33.60 -158.30 -471.13 Oil Country Tubular 1529.49 1049.15 480.34 45.78 119.86 -52.37 172.23 -328.87 Yes Bank 5663.10 3884.80 1778.30 45.78 801.10 645.00 156.10 24.20 IDBI 32622.10 22497.40 10124.70 45.00 3136.70 2449.90 686.80 28.03 HDFC Bank 42508.30 29561.80 12946.50 43.79 6308.80 4711.10 1597.70 33.91 Idea Cellular 28324.60 19724.00 8600.60 43.60 3042.80 2782.00 260.80 9.37 Mah Seamless 5495.60 3843.10 1652.50 43.00 646.30 540.50 105.80 19.57 Upper Ganges Sugar 972.29 688.48 283.81 41.22 90.99 145.17 -54.18 -37.32 AMD Industries 318.73 226.61 92.12 40.65 -4.57 -2.60 -1.97 75.77 Rain Commodities 2666.80 1926.20 740.60 38.45 331.20 304.50 26.70 8.77 Bharati Shipyard 2842.72 2064.05 778.67 37.73 353.77 326.51 27.26 8.35 Indian Bank Ltd 18563.70 13599.90 4963.76 36.50 3940.74 2416.70 1524.04 63.06 Corporation Bank Ltd 17063.80 12535.20 4528.65 36.13 2604.91 2056.00 548.91 26.70 Mangalam Cement 1696.28 1248.18 448.10 35.90 385.74 341.16 44.58 13.07 Supreme Industries 4421.58 3262.01 1159.57 35.55 285.59 82.60 202.99 245.75 Andhra Cements 1112.20 820.60 291.60 35.54 142.00 173.10 -31.10 -17.97 Aban Offshore 2652.71 1963.87 688.84 35.08 468.43 345.49 122.94 35.58 Maruti Suzuki India 64329.00 47629.10 16699.90 35.06 2431.30 2976.80 -545.50 -18.33 Andhra Sugars 1456.37 1080.11 376.26 34.84 94.57 122.66 -28.09 -22.90 Pochiraju Industries 155.81 115.93 39.88 34.40 41.91 31.43 10.48 33.34 LIC Housing Finance 7904.75 5895.90 2008.85 34.07 1575.58 1181.00 394.58 33.41 Zandu Pharm 383.49 288.01 95.48 33.15 79.72 11.40 68.32 599.30 Power Finance Corp 18169.40 13651.80 4517.53 33.09 3905.84 2954.00 951.84 32.22 Glaxo.Cons.Healthcare 5393.70 4106.00 1287.70 31.36 838.90 566.00 272.90 48.22 Sterling Biotech 3512.06 2690.36 821.70 30.54 477.28 550.89 -73.61 -13.36 May e m D e c2009 b e r 23 Price Trends Magnum Date Price Rs. 18000 16000 29-Apr-09 14543.35 14000 28-Mar-09 15125.00 12000 28-Feb-09 15400.00 10000 29-Dec-08 13700.00 8000 28-Nov-08 13075.00 6000 29-Oct-08 12150.50 Gold 4000 29-Sep-08 13136.50 2000 28-Aug-08 11938.20 0 29-Jul-08 12795.00 29-Nov-08 29-Jun-08 29-Jan-09 29-Jul-08 28-Feb-09 29-Mar-09 29-Apr-08 29-Apr-09 29-Aug-08 29-Sep-08 29-Dec-08 29-May-08 29-Oct-08 25-Jun-08 12274.15 28-May-08 12392.85 29-Apr-08 11617.00 Date Price Rs. 30000 29-Apr-09 21100.00 25000 30-Mar-09 21978.00 28-Feb-09 21500.00 20000 29-Dec-08 17915.75 15000 28-Nov-08 17314.45 27-Oct-08 16444.85 10000 Silver 29-Sep-08 20687.00 5000 28-Aug-08 20793.35 0 29-Jul-08 24685.00 25-Jun-08 23823.35 29-Nov-08 29-Jun-08 29-Jan-09 29-Jul-08 28-Feb-09 29-Mar-09 29-Apr-08 29-Apr-09 29-Aug-08 29-Sep-08 29-Dec-08 29-May-08 29-Oct-08 28-May-08 23967.85 29-Apr-08 22575.00 Date Price Rs. 60 29-Apr-09 49.97 50 30-Mar-09 51.18 27-Feb-09 51.33 40 29-Dec-08 48.51 30 28-Nov-08 49.58 29-Oct-08 49.61 Currency 20 29-Sep-08 47.67 10 29-Aug-08 43.93 29-Jul-08 42.49 0 29-Nov-08 29-Jun-08 29-Jan-09 29-Jul-08 28-Feb-09 29-Mar-09 29-Apr-08 29-Apr-09 29-Aug-08 29-Sep-08 29-Dec-08 29-May-08 29-Oct-08 29-Jun-08 42.80 29-May-08 42.55 29-Apr-08 40.41 Date Price $ 160 29-Apr-09 50.72 140 30-Mar-09 48.95 120 27-Feb-09 43.60 100 29-Dec-08 37.93 28-Nov-08 53.93 80 29-Oct-08 67.66 Crude 60 29-Sep-08 99.00 40 29-Aug-08 116.10 20 29-Jul-08 121.76 0 30-Jun-08 141.06 29-Nov-08 29-Jun-08 29-Jan-09 29-Jul-08 28-Feb-09 29-Mar-09 29-Apr-08 29-Apr-09 29-Aug-08 29-Sep-08 29-Dec-08 29-May-08 29-Oct-08 29-May-08 126.62 29-Apr-08 115.63 May e m D e c2009 b e r 24 Sectoral Mutual Fund Analysis Magnum ICICI Prudential Infra (G) ing of 0.50%, IOC with holding of 0.07% were the latest to ICICI Prudential Infrastructure (Growth) scheme is a ICI- be included in the schemes portfolio. On the other hand CI Prudential Mutual Fund Asset Management managed HDFC with holding of 0.25%, Kotak Mahindra bank with open-ended Equity – Infrastructure scheme. holding of 0.59%,ONGC with holding of 2.34% and Axis bank with holding of 1.69% made their way out from the The fund was launched on September 12, 2005 and its cur- scheme. rent net asset as on March 31, 2009 is Rs 2689.67 crore. The fund has given a return of 19.66% since inception The benchmark index of the fund is S&P CNX Nifty and and a negative return of 31.34% in last one year, while the the custodian of the fund is the Hongkong and Shanghai category average in the same period has been -13.69% Banking Corporation. and -40.61 respectively. The current net asset value (NAV) of the fund as on April 29, 2009 is Rs 20.05; while the 52 week high NAV was Rs 29.49 on May 5, 2008 and the 52 week low NAV for the scheme was Rs 14.11 on October 27, 2008. The minimum investment to the fund is Rs 5,000 and additional investments can be made in the multiples of Rs 500. The investment objective of the fund is to invest in equity/ equity related securities of the companies belonging to in- frastructure development and the balance in debt securi- ties and money market instruments including call money. The fund charges an entry load of 2.25% for investment Market cap-wise Allocation Style below Rs 5 crore, and Exit load of 1% for investment less Average Mkt Cap (Rs Cr) 24064.26 than Rs 5 crores if redeemed within 6 months from the Market Capitalization % of Portfolio date of allotment. Large 49.71 The portfolio of the fund comprises 62.081% in domestic Mid 4.29 equities, 27.24% in futures and remaining 10.679 % is of Small 8.07 cash and cash equivalents. Note: Large-Cap = 5000 Crs. and above, Mid-Cap = 2000 Crs. The top five holdings of the fund are: to 5000 Crs. and Small-Cap = less than 2000 Crs. Bharti HDFC ICICI Outlook Company RIL SBI Airtel Bank Bank ICICI Prudential Infrastructure (Growth) is one of the best % Holding 9.64 8.49 6.51 4.36 3.09 performing fund in its category .The fund is being managed On the sectoral basis the fund has the maximum contribu- by Sankaran Naren and Mrinal Singh. The fund is an open- tion from Capital Goods sector followed by ferrous metals ended equity fund focused on capturing the opportunity and Telcom services while Cement sector holds 3.28% in presented by the long term growth potential of the Indian the fund. Infrastructure sector. It invests across infrastructure sectors such as Cement, Power, Telecom, Oil and Gas, As far as market capitalization-wise companies are con- Construction, Banking etc and seeks to optimise the risk cerned, the scheme's portfolio consists of 49.714 % from adjusted return by a mix of top-down macro and bottom- Large-cap, 4.29% from Mid-cap and 8.07% from Small- up micro research to pick up stocks providing long term cap companies. potential. It is a multi-sector fund and therefore has a much Crompton Greaves with holding of 1.47%, ACC with hold- lesser concentration risk than a typical sector fund Duration 1 Week 1 Mth 3 Mth 6 Mth 1 Year 3 Year 5 Year Since Inc. Scheme Return % 2.98 13.02 21.59 32.52 -31.34 7.45 NA 19.66 Category Avg % 1.70 13.02 16.96 18.23 -40.61 -4.16 11.17 -13.69 Performance in the last one year 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 14-Nov-08 28-Nov-08 13-Jun-08 27-Jun-08 9-Jan-09 11-Jul-08 25-Jul-08 23-Jan-09 8-Aug-08 5-Sep-08 2-May-08 16-May-08 30-May-08 22-Aug-08 19-Sep-08 3-Oct-08 17-Oct-08 31-Oct-08 12-Dec-08 26-Dec-08 6-Mar-09 3-Apr-09 6-Feb-09 20-Feb-09 20-Mar-09 17-Apr-09 May e m D e c2009 b e r 25 MF Scorecard Magnum Returns as on 28th April, 2009 NAV Absolute % CAGR % Inception Scheme Name AUM 1M 3M 6M 1Y 3Y 5Y Since (Rs.) Date (Rs. cr) Inception Equity - Diversified Birla Sun Life India Opp(G) 27.06 21-Jan-95 25 15.94 22.11 8.72 -45.98 -18.80 -0.33 7.25 Birla SL Special Situations(G) 6.01 15-Jan-08 361 14.88 18.60 20.78 -36.82 - - -30.07 DSPBR Opportunities(G) 45.78 10-Apr-00 675 11.50 18.47 21.09 -33.07 -2.72 13.48 14.11 Fidelity Equity(G) 18.27 19-Apr-05 1711 10.71 18.14 19.83 -29.84 -0.02 - 8.30 ICICI Pru Dynamic(G) 56.80 18-Oct-02 1046 13.50 18.02 23.67 -28.18 2.20 16.79 21.27 Kotak Opportunities(G) 25.31 25-Aug-04 603 11.56 16.29 20.17 -39.15 -0.47 - 13.09 Magnum Comma(G) 14.21 25-Jul-05 397 9.48 21.14 22.71 -37.73 -2.15 - 2.46 Magnum Multicap(G) 11.02 16-Sep-05 443 11.76 20.04 17.36 -37.06 -8.59 - -2.52 Reliance Equity Oppor-Ret(G) 15.14 7-Mar-05 1054 11.23 18.63 17.24 -36.53 -6.18 - 4.45 Reliance Natural Resources(G) 6.90 30-Jan-08 3246 9.92 18.49 25.39 -32.44 - - -25.11 Equity - ELSS Birla Sun Life Tax Relief '96(D) 41.86 29-Mar-96 436 -11.59 -8.74 -40.73 -58.87 -6.53 7.89 28.76 DSPBR Tax Saver(G) 8.91 26-Dec-06 378 12.38 17.71 17.23 -36.05 - - -9.64 Fidelity Tax Advantage(G) 11.08 31-Jan-06 675 10.61 18.15 19.72 -29.65 - - -2.43 Franklin India Taxshield(G) 112.25 10-Apr-99 406 13.20 19.73 18.45 -29.87 -4.20 12.45 22.18 HDFC Long Term Adv(G) 68.30 27-Dec-00 498 14.77 17.24 13.04 -33.80 -9.94 12.38 21.12 Principal Personal Tax saver(G) 54.89 1-Jan-96 296 14.14 21.90 18.78 -42.05 -6.49 7.98 19.99 Reliance Tax Saver (ELSS)(G) 10.99 23-Aug-05 1339 12.67 16.74 16.82 -28.51 -6.86 - -1.73 Sundaram Taxsaver (D) 26.27 22-Nov-99 621 12.96 14.58 14.07 27.34 -0.37 24.76 19.23 Equity - Large-cap Birla Sun Life Equity(G) 145.45 27-Aug-98 671 13.66 18.85 16.71 -36.84 -3.44 15.90 22.84 Birla Sun Life Frontline Equity(G) 47.72 30-Aug-02 394 12.60 18.82 23.63 -28.71 3.72 14.62 18.37 DSPBR Equity(D) 32.51 15-Apr-97 868 10.97 14.39 15.97 -30.61 1.83 21.93 22.02 DSPBR Top 100 Equity(G) 58.18 21-Feb-03 1090 9.70 15.90 19.48 -25.31 6.76 17.09 25.34 JM Large Cap(G) 13.14 9-Jun-04 5 19.00 18.80 2.92 -32.39 -10.39 - 2.00 Kotak 30(G) 61.70 21-Dec-98 639 9.73 14.55 16.67 -33.48 1.58 16.65 26.47 Magnum Equity(D) 16.94 30-Nov-90 218 -9.27 -5.04 -37.61 -50.00 -0.39 13.82 10.09 Reliance Equity-Ret(G) 10.25 7-Mar-06 1678 8.03 15.95 12.30 -27.78 0.00 0.00 -3.69 Reliance Vision-Ret(G) 150.80 7-Oct-95 2399 10.01 17.74 17.92 -31.96 -1.84 13.28 18.21 Sundaram BNPP Growth(G) 52.04 15-Feb-97 93 13.52 14.67 8.49 -41.85 -4.29 11.24 14.88 Equity - Mid-cap Birla Sun Life Midcap(G) 51.07 1-Oct-02 298 17.51 18.49 16.36 -39.92 -5.88 13.72 19.73 ICICI Pru Emerging S.T.A.R.(G) 15.48 25-Sep-04 234 13.41 16.92 12.01 -53.03 -15.95 - 4.46 Kotak Mldcap(G) 12.00 28-Jan-05 75 12.63 12.94 13.80 -46.24 -12.63 - 1.28 Reliance Growth-Ret(G) 242.88 7-Oct-95 3240 16.30 21.58 16.57 -34.15 -0.90 20.65 21.93 Reliance Reg Sav-Equity(G) 15.43 10-Jun-05 648 13.23 22.88 19.93 -34.98 5.79 - 3.89 Sundaram BNPP S.M.I.L.E(G) 15.92 21-Jan-05 115 19.37 21.41 21.01 -37.95 -5.74 - 4.96 Sundaram BNPP Slct Midcap(G) 66.19 19-Jul-02 855 17.61 19.49 11.21 -39.69 -4.33 17.61 23.45 Equity - Auto JM Auto Sector(G) 14.13 9-Jun-04 5 16.80 36.06 31.48 -28.52 -17.88 - 0.41 May e m D e c2009 b e r 26 MF Scorecard Magnum Returns as on 28th April, 2009 NAV Absolute % CAGR % Inception Scheme Name AUM 1M 3M 6M 1Y 3Y 5Y Since (Rs.) Date (Rs. cr) Inception Equity - Small-cap DSPBR Micro-Cap(G) 5.61 25-May-07 126 20.28 12.67 -0.37 -49.44 - - -20.38 HSBC Small Cap(G) 5.67 3-Mar-08 35 18.90 13.90 6.41 -46.83 - - -29.10 ICICI Pru CCP-Gift 28.71 6-Aug-01 74 15.95 15.72 8.30 -43.56 -9.25 4.84 10.60 Sundaram BNPP Slct Small Cap(G) 5.59 24-Jan-07 145 16.49 15.31 4.89 -47.80 - - -21.47 Equity - Banks & Fin Srvs JM Fin Services Sector(G) 6.32 20-Nov-06 26 5.98 -11.32 -12.74 -56.82 - - -9.46 Reliance Banking(G) 43.71 21-May-03 602 16.42 17.83 20.96 -24.22 4.37 16.71 19.96 Equity - Contriarian JM Contra(G) 3.60 14-Aug-07 224 10.40 11.85 -4.61 -68.26 - - -32.45 Kotak Contra(G) 12.25 1-Jul-05 61 11.51 16.60 18.97 -29.78 -5.69 - 0.25 Tata Contra(G) 8.92 25-Oct-05 71 13.62 20.64 24.52 -37.82 -11.95 - -6.50 UTI-Contra(G) 8.65 22-Mar-06 173 10.05 15.49 21.83 -22.28 - - -7.66 Equity - Dividend Yield Birla Sun Life Divi Yield Plus(G) 39.51 7-Feb-03 177 10.64 11.17 18.86 -21.42 -3.26 9.89 19.60 Principal Dividend Yield(G) 12.14 27-Sep-04 68 9.96 11.99 11.68 -36.37 -11.84 - 1.04 Tata Dividend Yield(G) 15.76 27-Oct-04 78 12.99 18.63 20.73 -32.88 -5.55 - 4.47 UTl-Dividend Yield(G) 16.78 3-May-05 932 9.03 14.62 19.52 -21.26 1.77 - 7.34 Equity - Energy / Power Reliance Diver Power Sector(G) 46.77 15-Apr-04 3440 14.54 20.90 23.50 -30.58 16.07 - 24.69 Sundaram BNPP Energy Oppor(G) 5.19 11-Dec-07 1153 11.61 16.50 10.78 -39.51 - - -34.13 Equity - FMCG Franklin FMCG(G) 33.79 31-Mar-99 21 9.78 10.57 16.60 -14.96 -0.56 14.76 10.83 ICICI Pru FMCG(G) 33.16 5-Mar-99 44 6.73 6.45 11.73 -33.32 -2.37 20.56 10.89 Magnum FMCG 13.67 3-Jul-99 6 9.62 14.20 19.39 -14.83 -5.07 10.30 4.71 Equity - Global Fortis China-India(G) 6.00 1-Oct-07 82 8.28 19.26 28.32 -32.35 - - -21.42 Birla Sun Life Intl. Equity-A(G) 7.25 16-Oct-07 134 0.39 3.40 5.05 -27.19 - - -12.36 Birla Sun Life Intl. Equity-B(G) 5.96 16-Oct-07 387 9.10 14.17 11.28 -32.97 - - -20.43 DSPBR Natural Res-Reg(G) 7.91 31-Mar-08 182 11.12 22.01 26.44 -23.90 - - -20.91 Fidelity International Oppor(G) 7.22 30-Apr-07 548 12.73 18.66 15.46 -33.99 - - -16.48 Franklin Asian Equity(G) 7.66 18-Dec-07 346 5.88 18.56 26.60 -21.15 - - -20.99 Mirae Assel GIbl Comdty Stock(G) 7.52 23-Jul-08 45 6.66 24.24 29.39 -28.22 - - -24.69 Templeton India Equity Income(G) 10.48 20-Apr-06 754 11.17 24.67 27.61 -34.40 - - -5.31 Equity - Pharma & HC Franklin Pharma(G) 24.69 31-Mar-99 36 14.36 15.45 15.39 -15.13 -7.37 5.14 7.01 Reliance Pharma(G) 20.05 26-May-04 88 9.28 13.21 15.82 -17.00 -2.21 - 9.67 May e m D e c2009 b e r 27 MF Scorecard Magnum Returns as on 28th April, 2009 NAV Absolute % CAGR % Inception Scheme Name AUM 1M 3M 6M 1Y 3Y 5Y Since (Rs.) Date (Rs. cr) Inception Equity - Infrastructure Birla Sun Life Infrastructure(G) 9.44 18-Feb-06 258 14.98 20.87 21.96 -37.89 - - -6.69 DSPBR India T.I.G.E.R-Reg(G) 28.78 20-May-04 2322 12.17 22.02 26.59 -35.20 -0.21 - 14.67 ICICI Pru Infrastructure(G) 20.05 10-Aug-05 2690 13.02 21.59 32.52 -31.34 7.88 - 9.19 Sund BNPP CAPEX Oppor(G) 12.56 5-Sep-05 307 13.91 16.36 -1.57 -47.38 -4.08 - 1.12 Equity - Media Reliance Media & Ent(G) 15.46 27-Sep-04 99 12.56 12.20 12.98 -47.01 -5.91 - 5.20 Equity - MNC Birla Sun Life MNC(G) 95.80 22-Apr-94 99 12.32 19.09 21.76 -23.43 -8.12 8.80 20.77 Kotak MNC 20.92 24-Mar-00 21 9.36 14.60 19.72 -26.08 -9.47 10.16 8.73 Equity - Quant Religare AGILE(G) 4.71 23-Nov-07 165 5.61 11.61 19.85 -39.69 - - -26.01 Reliance Quant Plus-Ret(G) 7.78 18-Apr-08 38 11.70 20.79 26.59 -25.55 - - -21.64 Equity - Service Inds ICICI Pru Services Inds(G) 9.75 18-Nov-05 256 15.93 18.61 15.38 -45.50 -8.92 - -4.58 Principal Services Inds(G) 8.84 31-Jan-06 94 13.04 19.30 23.46 -35.00 - - -8.27 Tata Service Inds(G) 12.31 10-Mar-05 78 13.75 19.64 11.73 -43.01 -13.79 - -0.30 Equity - TECk Birla Sun Life New Millennium(G) 11.12 15-Jan-00 36 19.44 19.44 6.31 -43.15 -12.57 5.51 -1.04 DSPBR Technology.com(G) 16.07 10-Apr-00 53 17.73 17.68 5.92 -43.68 -5.51 10.59 2.90 Franklin Infotech(G) 28.38 22-Aug-98 70 15.30 20.72 3.05 -32.80 -16.78 1.96 13.08 ICICI Pru Technology(G) 7.27 28-Jan-00 46 19.57 18.60 10.65 -47.81 -16.93 1.57 -5.19 JM Telecom Sector(G) 6.54 20-Nov-06 3 19.83 23.44 10.38 -44.96 - - -15.11 Kotak Tech 4.88 24-Mar-00 13 12.89 16.73 11.42 -41.09 -19.60 -2.13 -8.71 Magnum IT 10.00 3-Jul-99 26 25.47 27.55 -5.30 -51.15 -20.91 1.28 0.14 Equity - Sensex Linked Index Franklin India Index-Sensex(G) 32.12 27-Aug-01 27 13.27 23.02 25.28 -34.05 -2.91 7.86 10.49 HDFC Index-Sensex Plus(G) 130.09 10-Jul-02 30 13.53 20.26 20.17 -28.90 -0.03 11.34 33.83 HDFC Index-Sensex(G) 96.72 10-Jul-02 39 13.26 22.01 22.13 -35.91 -5.55 6.16 28.56 UTI-SUNDER 364.60 11-Jul-03 7 11.52 22.75 28.67 -31.56 -1.18 9.16 16.34 FOF - Debt Birla Sun Life AA-Cons(G) 16.44 23-Jan-04 5 3.47 4.40 6.88 2.20 8.04 - 7.83 FOF - Overseas ICICI Pru Indo Asia Eq(G) 5.99 21-Sep-07 363 12.17 19.09 26.91 -37.47 - - -21.27 Sundaram BNPP Global Adv(G) 7.38 31-Jul-07 135 5.28 23.48 28.84 -31.12 - - -14.81 May e m D e c2009 b e r 28 MF Scorecard Magnum Returns as on 28th April, 2009 NAV Absolute % CAGR % Inception Scheme Name AUM 1M 3M 6M 1Y 3Y 5Y Since (Rs.) Date (Rs. cr) Inception Equity - Nifty Linked Index Birla Sun Life Index(G) 34.82 17-Sep-02 26 11.50 23.42 28.61 -33.61 -3.40 6.78 13.05 Magnum Index(G) 29.70 16-Jan-02 15 11.75 23.27 27.36 -34.64 -4.13 6.07 10.90 Nifty BeES 351.02 18-Dec-01 118 11.67 22.94 28.95 -32.31 -2.49 7.83 12.37 Reliance Banking ETF 518.08 30-May-08 9 16.62 17.70 19.94 - - - -35.76 Arbitrage Funds ICtCI Pru Eq & Deriv-lnc-Ret(G) 12.14 7-Dec-06 250 0.50 1.00 3.06 6.58 - - 6.18 SBI Arbitrage Opportunities(G) 12.20 13-Oct-06 348 0.47 0.80 2.96 6.89 - - 4.85 UTI-SPrEAD(G) 12.82 22-Jun-06 259 0.86 2.19 5.00 9.74 - - 5.86 Balanced - Equity Oriented Kotak Balance 17.41 25-Nov-99 55 10.26 12.73 14.03 -24.84 0.64 15.01 11.88 Sundaram BNPP Balanced(G) 28.72 25-May-00 28 8.67 13.07 12.26 -27.59 -3.36 7.56 9.42 Balanced - Debt-Oriented HDFC Children's Gift - Savings 17.00 2-Feb-01 51 4.54 5.84 9.87 1.66 2.85 6.26 8.50 ICICI Pru CCP-Study 21.65 6-Aug-01 25 6.07 4.30 6.51 -2.95 6.21 8.27 8.51 FOF - Equity Birla Sun Life AA-Aggr(G) 19.92 23-Jan-04 6 11.65 14.15 15.07 -16.16 2.43 - 9.47 FT India Dyn PE Ratio FOFs(G) 27.05 31-Oct-03 38 12.43 19.48 21.24 -11.78 4.75 12.77 11.77 ICICI Pru Advisor-Very Aggr(G) 21.24 28-Nov-03 6 10.56 17.79 22.32 -28.16 -1.96 10.35 8.17 Kotak Equity FOF(G) 21.28 19-Jul-04 33 12.16 19.22 20.07 -31.55 -4.19 - 9.46 Commodities - Gold Gold BeES 1438.85 23-Feb-07 303 -4.17 4.27 19.86 24.79 - - 11.33 Kotak GOLD ETF 1442.24 4-Jul-07 56 -4.15 4.25 19.82 24.73 - - 11.42 DSPBR World Gold-Reg(G) 11.65 23-Aug-07 1796 -7.78 12.10 66.15 -12.30 - - 0.68 Reliance Gold ETF 1401.73 1-Nov-07 190 -4.16 4.11 19.40 22.86 - - 10.42 UTI-Gold ETF 1439.90 16-Mar-07 187 -4.17 4.28 19.68 24.62 - - 11.35 Floating Rate - Long Term Birla Sun Life FRF-LT(G) 14.73 4-Jun-03 242 0.81 1.93 4.09 8.88 8.04 6.89 5.38 Sundaram BNPP Flexible-FIP-Reg(G) 13.15 24-Dec-04 3 0.71 1.77 3.61 7.66 7.09 - 4.35 Floating Rate - Short Term Birla Sun Life FRF-ST(G) 14.50 4-Jun-03 69 0.50 1.63 3.48 8.41 7.74 6.70 5.20 ICICI Pru FRF-Option A(G) 13.69 28-Mar-04 1940 0.49 1.42 3.55 8.14 7.80 - 5.11 LICMF FRF-STP(G) 14.39 29-Mar-04 839 0.45 1.75 4.23 9.45 8.71 - 5.92 Magnum FRF-STP(G) 13.59 14-Jul-04 15 0.63 1.65 6.46 9.09 7.33 - 4.94 Gilt - Short Term Birla Sun Life Gilt Plus-Liquid(G) 20.29 11-Oct-99 12 0.56 1.09 2.65 4.23 5.85 5.39 6.53 May e m D e c2009 b e r 29 MF Scorecard Magnum Returns as on 28th April, 2009 NAV Absolute % CAGR % Inception Scheme Name AUM 1M 3M 6M 1Y 3Y 5Y Since (Rs.) Date (Rs. cr) Inception Gilt - Long Term Birla Sun Life Gilt Plus-PF(G) 24.13 11-Oct-99 76 4.10 -2.65 7.85 8.25 8.25 5.60 8.74 ICICI Pru Gilt-lnvest(G) 31.65 9-Aug-99 806 6.16 0.35 12.66 30.54 15.17 9.88 11.17 Liquid Funds Birla Sun Life Cash Mgr-Ret(G) 21.62 14-May-98 615 0.48 1.61 3.72 8.28 7.68 6.56 6.49 Birla Sun Life Cash Plus-Ret(G) 23.66 13-Jun-97 7856 0.44 1.43 3.38 8.01 7.75 6.58 6.73 Kotak Liquid(G) 17.25 6-Oct-00 2115 0.43 1.43 3.48 7.98 7.30 6.21 5.45 LICMF Liquid(G) 16.15 13-Mar-02 11023 0.52 1.73 4.09 9.04 8.23 7.06 5.93 Magnum InstaCash-Cash(G) 19.73 19-May-99 2837 0.47 1.54 3.69 8.22 7.68 6.58 6.22 Reliance Liquid-Cash(G) 14.69 4-Dec-01 53 0.14 0.63 2.02 5.98 6.22 5.50 4.29 UTI-Money Mkt(G) 24.74 23-Apr-97 1515 0.52 1.67 3.93 8.68 7.79 6.65 7.07 Liquid Plus Birla Sun Life Savings-Ret(G) 16.44 26-Nov-01 14578 0.55 1.61 3.84 8.54 7.91 6.72 5.47 DSPBR Money Mgr-Reg(G) 1228.17 18-Jul-06 1445 0.67 1.85 4.35 8.56 - - 4.76 ICICI Pru Flexible Income(G) 16.38 21-Sep-02 9261 0.60 1.70 4.04 8.94 8.07 6.22 6.12 Principal Ultra ST-Reg(G) 11.34 6-Nov-07 130 0.60 1.70 4.04 8.85 - - 3.66 Long & Medium Term Income Reliance Reg Savings-Debt(G) 12.00 10-Jun-05 2 4.15 3.64 4.54 7.72 4.41 - 3.02 UTI-Invest Bond-I(G) 10.46 31-Dec-07 1 -0.08 0.22 0.39 1.76 - - 2.18 Monthly Income Plans Birla Sun Life MIP II-Savings 5(G) 15.30 30-Apr-04 32 3.36 1.68 7.79 18.46 11.63 - 7.14 Birla Sun Life MIP II-Wealth 25(G) 14.61 30-Apr-04 57 8.41 9.23 18.98 1.61 3.05 - 4.92 Birla Sun Life MIP(G) 22.66 10-Nov-00 83 6.21 7.27 16.85 7.76 6.36 6.55 7.74 Birla Sun Life Monthly Income(G) 30.27 14-Jul-99 119 6.21 7.20 15.89 7.82 7.90 7.42 9.95 DBS Chola MIP(G) 16.92 1-Aug-98 18 1.40 1.72 5.13 -1.28 10.17 8.76 5.18 DSPBR Savings Plus-Agg(G) 15.75 20-May-04 60 2.04 3.99 7.92 3.88 7.47 - 7.12 ICICI Pru Income Multiplier(G) 15.85 5-Mar-04 180 9.03 10.13 19.49 1.25 4.34 - 6.17 Magnum Income Plus-Savings(G) 10.53 22-Oct-03 2 -0.16 0.15 0.82 -0.64 0.40 0.82 0.71 UTI-MIS(G) 16.39 11-Oct-02 121 3.37 5.17 11.23 5.57 6.97 6.48 5.70 Short Term Income Plans Birla Sun Life ST-Ret(G) 15.99 19-Apr-02 5599 0.56 1.56 3.72 8.32 8.59 6.95 5.82 DSPBR ST(G) 15.22 4-Sep-02 37 0.69 1.68 4.05 8.40 7.39 6.33 5.15 Sund BNPP Slct Dbt-STAP(G) 14.97 30-Aug-02 0 0.16 0.59 1.69 5.47 7.32 6.22 5.09 Real Estate Securities ICICI Pru Real Estate Sec-Ret(G) 9.09 14-Dec-07 340 2.08 3.25 5.60 -5.75 - - -4.18 May e m D e c2009 b e r 30 Currency Futures Magnum 'Future' is Bright for Currency Trading on other currencies as well, the exchanges may also be allowed to decide the timing of the trading session and The Indian economy is integrating at a faster pace with products which they desire to start. the rest of the world. Indian Financial Markets have also been growing significantly; the equity markets have shown Currently there are three exchanges which offer currency a growth of almost 35-40% in past one and a half month. futures trading; the National Stock Exchange (NSE), the And the currency futures market is no exception to the Bombay Stock Exchange (BSE) and the Multi Commodity story, the average daily turnover in the segment has in- Exchange (MCX-SX) and a new exchange will go live in creased from $60 million to $700-800 million and show- July, 2009 which is being floated by MMTC. ing the signs of crossing the magical figure of $1 billion As we can see in the above mentioned chart 1, since in consonance with the increasing interest of the traders January 1, 2009 to till date currency market has shown a in currency future transactions. Liberalization has helped reasonable move upward as well as downward leaving an the Indian forex markets in various ways; the extensive enough room for traders and investors to take their call. fluctuations of exchange rates have attracted a great deal The dollar-rupee rates increased from sub 48.73 levels of interest from policymakers and investors. to the highs of 52.06 on March 5, 2009 the period dur- The SEBI has made a welcome move in the month of ing which the stock market was under pressure as shown March, 2009 by increasing the daily forex futures limits by in Chart 2 when the CNX Nifty-50 came down from sub 100% to $10 million for traders and $50 million for brokers 3,033 levels to 2,573 indicating a more selling by Foreign this is going to help in the long way to the currency futures Institutional Investors (FIIs) which total to Rs 6,681.90 market. The initiative will help in addressing the concerns crore worth of FII selling during January, 2009 to Febru- of entities which are engaged in bulky forex transactions ary, 2009; because of which demand for dollar increased and will increase the liquidity in this segment. Apart from resulting in a sharp up move in dollar as indicated in the this the policy makers are going to take a final call to al- Chart 1. Since March first week CNX Nifty-50 has shown low Foreign Institutional Investors (FIIs) and Non Resident a sharp up move during which the index has increased al- Indians (NRIs) in the currency futures market in coming most 35% resulting in depreciation in dollar from the high three to four months, the move will provide the much of 52.06 to around 49.50 levels. In the past four months needed depth to the market. the dollar and the equities are showing an inverse relation- Currently, only dollar-rupee contracts are available for trad- ship with each other which can be concluded by looking at ing because there is hardly any demand for contracts on both the charts together. other currencies however a SEBI-RBI led technical com- Difference between Base Currency and Terms mittee has already given its nod to introduce the contracts Currency Chart 1= Dollar-Rupee Exchange Rates: Since January, 2009 In foreign exchange markets, the base currency is the first currency in a currency pair and the second currency is $ v/s Rs. called as the terms currency. Exchange rates are quoted 52.5 52 in per unit of the base currency. E.g. the expression Dollar 51.5 – Rupee, tells you that the Dollar is being quoted in terms 51 of the Rupee. The Dollar is the base currency and the Ru- 50.5 pee is the terms currency. 50 49.5 Exchange rates are constantly changing, which means that 49 the value of one currency in terms of the other is constantly 48.5 in flux. Changes in rates are expressed as strengthening 48 or weakening of one currency vis-à-vis the second curren- 1-Jan-09 8-Jan-09 15-Jan-09 22-Jan-09 29-Jan-09 5-Feb-09 5-Mar-09 12-Feb-09 19-Feb-09 26-Feb-09 12-Mar-09 19-Mar-09 2-Apr-09 9-Apr-09 26-Mar-09 16-Apr-09 cy. Changes are also expressed as Appreciation or depre- ciation of one currency in terms of the second currency. Whenever the base currency buys more of the terms cur- Chart 2= CNX Nifty-50: Since January, 2009 rency, the base currency has strengthened / appreciated and the terms currency has weakened / depreciated. E.g. CNX Nifty-50 If Dollar – Rupee moved from 50.00 to 50.50. The Dollar 3,500.00 3,400.00 has appreciated and the Rupee has depreciated. 3,300.00 Clearing & Settlement of Currency Future 3,200.00 3,100.00 Trades 3,000.00 The clearing and settlement of all trades executed on the 2,900.00 Currency Derivatives Segment of the National Stock Ex- 2,800.00 2,700.00 change (NSE) is done through National Securities Clear- 2,600.00 ing Corporation (NSCCL). It also acts as legal counterpar- 2,500.00 ty to all trades on the Currency Derivatives segment and 1-Jan-09 8-Jan-09 15-Jan-09 22-Jan-09 29-Jan-09 guarantees their financial settlement. The NSCCL takes 5-Feb-09 12-Feb-09 5-Mar-09 19-Feb-09 26-Feb-09 12-Mar-09 19-Mar-09 2-Apr-09 9-Apr-09 26-Mar-09 16-Apr-09 help of clearing members and clearing banks for clearing and settlement of trades. May e m D e c2009 b e r 31 Currency Futures Magnum Clearing Members is debited/ credited to the relevant CM's clearing bank ac- count on trading plus two (T+2) working day following the In the Currency Derivatives segment, trading member- Contract expiry Day. cum-clearing member, clear and settle their own trades as well as trades of other trading members (TMs). Be- Settlement Prices for Futures sides, there is a special category of members, called pro- Daily settlement price on a trading day is the closing price fessional clearing members (PCM) who clear and settle of the respective futures contracts on such day. The clos- trades executed by TMs. The members clearing their own ing price for a futures contract is currently calculated as trades and trades of others, and the PCMs are required to the last half an hour weighted average price of the con- bring in additional security deposits in respect of every TM tract in the Currency Derivatives Segment of NSE. The whose trades they undertake to clear and settle. final settlement price is the RBI reference rate on the last Clearing Banks trading day of the futures contract. All open positions shall be marked to market on the final settlement price. Such Funds settlement takes place through clearing banks. marked to market profit / loss shall be paid to / received For the purpose of settlement all clearing members are from clearing members. required to open a separate bank account with NSCCL designated clearing bank for Currency Derivatives seg- The main difference between currency futures and equity ment. The Clearing and Settlement process comprises of futures is the final settlement price. For equity futures the the following three main activities: final settlement price is the spot price of its underlying at 1) Clearing the time of expiry whereas for currency futures the final settlement price is the RBI's reference rate which is con- 2) Settlement sidered as a spot rate for the currency. 3) Risk Management Reasons for Traders to Trade in Currency Futures Clearing Mechanism The clearing mechanism essentially involves working out • Decent Intra DayaVolatility: The past of around 43 paisa have witnessed intraday volatility six to eight months open positions and obligations of clearing (trading-cum- and 52 paisa in the currency futures segment of NSE clearing/professional clearing) members. This position is and MCX, which leaves an handsome opportunity for considered for exposure and daily margin purposes. the traders to make most out of it. All futures contracts are cash settled, i.e. through ex- change of cash in Indian Rupees. The settlement amount • Low Margins: by almost 50% whichtrades oninNSE have been slashed The margins on the results margin of for a CM is netted across all their TMs/clients, with respect 3 to 3.5% of contract value for currency futures against to their obligations on mark to mark (MTM) settlement. the average margin of 10 to 15% on index or stock fu- tures. Settlement Mechanism Currency futures contracts have two types of settlements, • Low Brokeragebasis points depending on volumes and tween 3 to 10 Rates: The brokerage rates vary be- the mark to market (MTM) settlement which happens on holding period. a continuous basis at the end of each day, and the final settlement which happens on the last trading day of the futures contract. • Soundseen earlierand clearing andMechanism: process have Clearing the Settlement settlement As we followed by NSE is very sound and it is similar to one Mark to Market settlement (MTM Settlement): which is followed for index and stock futures settle- All futures contracts for each member are marked-to- ment. market (MTM) to the daily settlement price of the relevant futures contract at the end of each day. The profits/losses • Increasing Volumes: The volumes haveofbeen currency ing consistently since the introduction the increas- are computed as the difference between: futures trading on the exchanges in August. With SEBI's 1. The trade price and the day's settlement price for con- move to increase the daily forex futures limits by 100% tracts executed during the day but not squared up. for traders and brokers will provide more liquidity and 2. The previous day's settlement price and the current make trading more feasible in days to come. day's settlement price for brought forward contracts. Conclusion 3. The buy price and the sell price for contracts executed When there are two markets in existence for the same during the day and squared up. commodity and if there is no integration between both of After completion of daily settlement computation, all the them then it creates an arbitrage opportunity for the arbi- open positions are reset to the daily settlement price. Such tragers which brings about convergence in both the mar- positions become the open positions for the next day. kets, as there can not be two different prices for the same commodity with the same features, the same opportunity Final Settlement for Futures lies in currency forward and currency futures market which On the last trading day of the futures contracts, after the leaves a tremendous opportunity for the volumes in the close of trading hours, NSCCL marks all positions of a currency futures market to rise exponentially in coming CM to the final settlement price and the resulting profit/ days which will create more and more trading and hedg- loss is settled in cash. Final settlement loss/profit amount ing opportunities for the market participants. May e m D e c2009 b e r 32 FII Trends Magnum TECHNICAL ANALYSIS: identify the fundamental shocks that accounted for these significant market moves is difficult to reconcile with the The Voodooism of Stock Markets view that such shocks account for most of the variation in Markets move in a zigzag manner: rallying, leveling off, stock returns. and surging again, only to be hit by a wave of profit-tak- B) Prices follow in trends ing before settling into a trading range, awaiting the next reason to advance or retreat. This activity carries on in Technical analysts believe that prices follow certain trends. the general direction of the trend, easily seen on a price Technicians say that markets trend up, down, or sideways. chart. This basic definition of price trends is the one put forward by Dow Theory. Technical analysis, as opposed to the fundamental school of thought, finds its roots in the behavioral pattern of price Each time the stock rises, sellers would enter the mar- following trends which claims to forecast the future move- ket and sell the stock; hence the zig-zag movement in the ment in prices. Technical analysis ignores and rubbishes price. The series of lower highs and lower lows is a tell tale the intrinsic/fundamental value of a stock as propounded sign of a stock in a down trend. In other words, each time the stock edged lower, it fell below its previous relative low by fundamental analysis. Technical analysis is frequently price. Each time the stock moved higher, it could not reach contrasted with fundamental analysis, the study of eco- the level of its previous relative high price. nomic factors that influence prices in financial markets. Technical analysis holds that prices already reflect all such C) History repeats itself influences before investors are aware of them, hence the Technicians believe that investors collectively repeat the study of price action alone. behavior of the investors that preceded them. To a techni- Technically, the trend should be considered up as long as cian, the emotions in the market may be irrational, but they the market unfolds with a series of higher lows and higher exist. Because investor behavior repeats itself so often, highs. Similarly, the trend is considered down if the price technicians believe that recognizable (and predictable) action is a series of lower lows, with lower highs before price patterns will develop on a chart. each new low. A market is considered not to be in a trend Technical analysis is not limited to charting, but it always if the price movement manifests itself in a series of fits considers price trends. For example, many technicians and starts or if it fails to sustain levels beyond the previous monitor surveys of investor sentiment. These surveys extreme points, often reversing and forming the range. gauge the attitude of market participants, specifically Technical analysts (popularly called technicians) seek to whether they are bearish or bullish. Technicians use these identify price patterns and trends in financial markets and surveys to help determine whether a trend will continue or attempt to exploit those patterns. As technicians use vari- if a reversal could develop; they are most likely to antici- ous methods and tools, the study of price charts is of ut- pate a change when the surveys report extreme investor most importance. sentiment. Technical analysis is based on certain tenets under which Support and resistance are the key junctures where the there are many approaches to study the price pattern in forces of supply and demand meet. In the financial mar- order to make a valuable judgement for the future. kets, prices are driven by excessive supply (down) and Assumptions demand (up). Supply is synonymous with bearish, bears and selling. Demand is synonymous with bullish, bulls and Technicians opine that a market price of the stock reflects buying. As demand increases, prices advance and as sup- all relevant information, so their analysis looks more at in- ply increases, prices decline. When supply and demand ternals than at externals such as news events. Price ac- are equal, prices move sideways as bulls and bears slug tion also tends to repeat itself because investors collec- it out for control. tively tend toward patterned behavior – hence technicians' focus on identifiable trends and conditions. Support Support is the price level at which demand is thought to be A) The action of the markets discounts everything strong enough to prevent the price from declining further. As all relevant information is already reflected by prices, The logic dictates that as the price declines towards sup- pure technical analysts believe it is redundant to do funda- port and gets cheaper, buyers become more inclined to mental analysis and hold that news events do not signifi- buy and sellers become less inclined to sell. By the time cantly influence price, and cite supporting research. the price reaches the support level, it is believed that de- On most of the sizable return days the information that mand will overcome supply and prevent the price from fall- the press cites as the cause of the market move is not ing below support. particularly important. Press reports on adjacent days also Support levels are usually below the current price, but it is fail to reveal any convincing accounts of why future prof- not uncommon for a security to trade at or near support. its or discount rates might have changed. Our inability to Technical analysis is not an exact science and it is some- May e m D e c2009 b e r 33 FII Trends Magnum times difficult to set exact support levels. In addition, price comes the support of the new price pattern. movements can be volatile and dip below support briefly. Fibonacci Ratio Sometimes it does not seem logical to consider a support level broken if the price closes 1/8 below the established Reverend mathematician Leonardo Fibonacci, through support level. For this reason, some traders and investors the process of solving a mathematical riddle, discovered a establish support zones. unique mathematical sequence or series wherein the ratio of any two consecutive numbers approximates 1.618 or its Resistance inverse, 0.618. The Fibonacci sequence is the sum of any Resistance is the price level at which selling is thought to two adjacent numbers that forms the next number in the be strong enough to prevent the price from rising further. series. The first 14 terms in the sequence are 1, 1, 2, 3, 5, The logic dictates that as the price advances towards re- 8, 13, 21, 34, 55, 89, 144, 233, 377. The ratios of each two sistance, sellers become more inclined to sell and buyers consecutive numbers from the series are 1, 0.50, 0.666, become less inclined to buy. By the time the price reaches 0.60, 0.625, 0.615, 0.619, 0.618, 0.618..., and between al- the resistance level, it is believed that supply will over- ternate numbers, the ratio is 2.618 and its inverse, 0.382. come demand and prevent the price from rising above The Fibonacci ratio is also referred to as the Golden Ratio resistance. or the Golden Mean. Resistance does not always hold and a break above resis- As far as applications of the Fibonacci number is con- tance signals that the bulls have won out over the bears. cerned in the technical analysis, the golden ratio is trans- A break above resistance shows a new willingness to buy lated into three different percentages- 38.2%, 50% and and/or a lack of incentive to sell. Resistance breaks and 61.8%. Apart from applying the golden ratio for retrace- new highs indicate buyers have increased their expecta- ments, arcs and fans, it is also used in determining the tions and are willing to buy at even higher prices. In addi- time zones. tion, sellers could not be coerced into selling until prices Time zones are typically a series of vertical lines that are rose above resistance or above the previous high. Once constructed by dividing a chart into segments with vertical resistance is broken, another resistance level will have to lines spaced in increments in accordance with the Fibo- be established at a higher level. nacci sequence (1,1,2,3,5,8,13,21,34, etc.). Time zones Support & Resistance levels of Nifty represent the sensitive areas from where major price movements can be expected. In the chart of Nifty during the period January to April, the support and resistance levels have been shown. Starting In the given chart of Nifty spanning January to April, three from the lowest level, the support level is hovering around time zones have been drawn following Fibonacci se- 2550 in March. The next support level is visible at the level quence. As the time zone has divided the chart into three tad lower from 2700. parts, major price changes can be traced from the pattern At the level of nearly 2950, a resistance level is estab- of the breakup of the chart. lished, which precedes the 3100 level as the new support The first part is conclusive of fresh low ahead days to level. Every resistance becomes the next support level if come. Time zone, however, is not the facilitator of an up- the market improves, just as 3100 was a resistance, it be- tick or downtick, rather, it gives a direction of the price pat- comes the new support level when Nifty advances further tern. In the second part of the time zone, it ends up with a to the level 3300, which is a resistance level. Again, when new incentive for a price transformation after taking a dip Nifty breakouts towards 3500 level, previous resistance in the middle. Later, in the third part, it touches new highs level of 3300 becomes the support level for the range in conformity with a directional move as propounded by bound market in the bracket 3300-3500. the Fibonacci sequence. After the resistance level tastes a breakout, a new resis- However, the results of Fibonacci ratio must be applied in tance level is formed and the former resistance level be- conjunction with other tools to make meaningful insights. May e m D e c2009 b e r 34 (SIP) - Insurance Magnum Systematic Investment Plan (SIP) the units after a year of buying, he does not have to pay capital gains tax but if he sells before a year, capital gains The formula for getting your dreams come true – tax of 10% is applicable. start early & invest regularly SIP is a process of compounding and the power of com- A systematic investment plan (SIP) is a method of in- pounding underlines the essence of making money work, vesting a fixed sum, on a regular basis, in a mutual fund if only invested at an early age. The longer one delays in scheme – almost similar to regular saving schemes like a investing, the greater the financial burden to meet desired recurring deposit. In simple words it's a drop of water to goals. Saving a small sum of money regularly at an early create an ocean. age makes money work with greater power of compound- One time lump sum investment means that you just hand ing with significant impact on wealth accumulation. over the cheque and you get your fund units depending on Advantages of SIP the value of the units on that particular day. The investments we make are ultimately for some objec- But in the periodic investments, or SIP, one has to commit tives such as to buy a house, children's education, mar- to invest a regular sum at a regular interval of time. For riage etc; and many of them require a huge one-time in- example if one puts Rs 1,000 monthly in a fund, then at vestment. SIP offers a disciplined way to invest a portion of the end of a year, he would have invested Rs 12,000. Let one's income at regular intervals without trying to second- us suppose that the NAV on the day of investment in the guess the market, protecting the investor from extreme first month is Rs 20; one will get 50 units. The next month, fluctuations in the market and providing an opportunity to the NAV is Rs 25 then same fund will add 40 units similarly build the corpus over a longer period of time. if the NAV goes down the following month to Rs 18 then it will accumulate 55.56 units. Qualified and experienced professionals who have the expertise of investment techniques, backed by dedicated So, after three months, there will be total of 145.56 units. investment research team, manage mutual fund invest- On an average, one would have paid around Rs 21 per ments. One can purchase a scheme's units at a lesser unit. This is because, when the NAV is high, one get fewer cost as most asset management companies (AMCs) units while when the NAV falls, one get more units. charge less 'entry load', while some scheme do not even The SIP investment is meant for common investors who charge anything for SIP investments, as compared to nor- lack market knowledge, expertise of investing and do not mal purchases in the scheme. have the big pool of money. It is an ultimate solution for The power of compounding underlines the essence of different worries, instead of timing the market. Investing making money work if only invested at an early age. The month after month will ensure that one is invested at the longer one delays in investing, the greater the financial high and the low, and make the best out of an opportunity burden to meet desired goals. Saving a small sum of that could be tough to predict in advance, comparatively money regularly at an early age makes money work with lower risk and a possibility of much, much higher return greater power of compounding with significant impact on then recurring deposits like saving schemes. wealth accumulation. It offers a disciplined way to invest a portion of one's in- SIP gives an advantage that even with small amounts one come at regular intervals without trying to second-guess can enjoy the benefits of diversification as diversification the market, protecting the investor from extreme fluctua- reduces the overall impact on the returns from a portfolio. tions in the market. SIP is disciplined investing, irrespective of the state of the The method of SIP is very simple – one have to identify market making the market timing totally irrelevant. the funds he want to invest in and the amount required to The Systematic Investment Plan (SIP) is a simple and achieve his financial goals, and after payment through the time honored investment strategy for accumulation of agency on a regular interval, the units gets allotted to the wealth in a disciplined manner over a long-term period. fund based on the NAV on the date of each transaction, It makes the volatility in the market work in favour of the which reflects to the fund account. investor. Since a fixed amount is invested, more units are One thing will have to be kept in mind is that liquid funds, purchased when a scheme's NAV is low and fewer units cash funds and floating rate debt funds do not offer an SIP. when the NAV is high. As a result, over a period of time These are funds that invest in very short-term fixed-return these market fluctuations are generally averaged. Thus investments. Floating rate debt funds invest in fixed return the average cost of investment is often reduced. investments where the interest rate moves in tandem with The method aims at a better future for its investors as a interest rates in the economy. SIP investor gets good rate of returns compared to a one As far as the tax implications are concerned if one sells time investor May e m D e c2009 b e r 35 (ICICI Lombard) - Insurance Magnum ICICI Lombard - Car Insurance premium of Rs 1500) The number of road accidents in India is estimated to be Towing charges can be claimed up to Rs 1,500. Cashless three times vis-a-vis developed countries. The number of claim settlement is available at 'All India Cashless Garage accidents for 1000 vehicles in India is as high as 35 while List' all across India. the figure ranges from 4 to 10 in developed countries. Apart from this, there are lots of bonuses and discounts Comprehensive insurance cover type of insurance includes available with the policy like all the risks covered in the Motor Vehicles Act plus loss or No Claim Bonus (NCB): If one do not make a claim during damage caused to the vehicle due to different vagaries like the policy period, a NCB is offered on renewals, this accident, fire, explosion, self-ignition, lightning, burglary, discount can go as high as 50%, and it can be transferred house-breaking, theft riots & strikes, earthquakes, etc. in full when one shift his motor insurance policy to another Comprehensive insurance serves as an add-on to the company. mandatory third-party cover and protects the vehicle Voluntary Excess Discount: A further discount on the owner from financial losses, caused by damage or theft premium is available if one opts for a Voluntary Excess in ICICI Lombard has launched a comprehensive package addition to the Compulsory Excess. (Compulsory Excess policy for four-wheelers in India, covering Third Party is the amount of loss, which the insured has to bear in Liability (TPL) for bodily injury and/or death, personal each and every claim.) accident cover for owner-driver and loss or damage to the Additional discounts: Apart from above, one can also avail vehicle insured (Own Damage or OD). This policy gives an of additional discounts if on is a member of a recognized unique advantage so that now you can insure your vehicle Automobile Association in India. against acts of terrorism, even when you're away. There are certain Policy Exclusions that includes Policy Coverage • Normal wear, tear and general aging of the vehicle The policy provides coverage against loss or damage to the vehicle or its accessories due to natural and man- • Depreciation or any consequential loss made calamities. • Mechanical/ electrical breakdown Natural calamities include fire, explosion, self-ignition or • Wear and tear of consumables like tyres and tubes lightning, earthquake, flood, typhoon, hurricane, storm, • Vehicle being used other than in accordance with tempest, inundation, cyclone, hailstorm, frost, landslide limitations as to use and rockslide. • Damage to/ by a person driving the vehicle without a The man made calamities cover burglary, theft, riot, strike, valid license malicious act, accident by external means, terrorist activity, any damage in transit by road, rail, inland waterway, lift, • Damage to/ by a person driving the vehicle under the influence of drugs or liquor elevator or air. The policy gives an advantage to customise the insurance • Loss/ damage due to war, mutiny or nuclear risk with additional covers for electrical and/ or non-electrical Motor Claim Procedure items fitted to the vehicle, which can be insured separately. In case of motor insurance claim, one can avail cashless For example: fog lights, music system, seat covers, etc. facility for the repair of the car in any of the company's All Above all, the policy is governed by the Indian Motor Tariff Act. India Cashless Garage List. However, if the car is serviced in a garage outside the purview of its network, one can Key Benefits claim reimbursement for the same. The policy not only covers the vehicle, but also provides In case of an accident, it is advised to note the number of a compulsory personal accident cover of Rs 2 lakh for the other vehicle involved in the accident, if any. Jot down individual owners of the vehicle while driving. One can the names and contact details of witnesses, if any. File also opt for a personal accident cover for passengers. an FIR at the nearest police station in case of property A digitally signed policy is issued immediately through damage, bodily injury, theft and major damages. online facility and it also has an online payment option Register the claim to the insurance company's office and through ICICI Bank, HDFC Bank and Citibank EMI through after registering the claim, the customer service manager credit card is available without any extra charge. will contact the policyholder within 24 hours of registering (EMI option is available subject to minimum annual the claim. May e m D e c2009 b e r 36