Dollar Vs Indian Rupee

1990: 1 dollar = Rs 18.11

1991: 1 dollar = Rs 25.79

1992: 1 dollar = Rs 28.95

1993: 1 dollar = Rs 31.44

1994: 1 dollar = Rs 31.39

1995: 1 dollar = Rs 34.92

1996: 1 dollar = Rs 35.83

1997: 1 dollar = Rs 39.15

1998: 1 dollar = Rs 42.58

1999: 1 dollar = Rs 43.45

2000: 1 dollar = Rs 46.88

2001: 1 dollar = Rs 47.93

2002: 1 dollar = Rs 48.23

2003: 1 dollar = Rs 45.66

2004: 1 dollar = Rs 44.00

2005: 1 dollar = Rs 46.11

2006: 1 dollar = Rs 44.49

2007: 1 dollar = Rs 39.33

2008: 1 dollar = Rs 49.82

2009: 1 dollar = Rs 46.29 

2010: 1 dollar = Rs 45.09

2011: 1 dollar = Rs 51.10

2012: 1 dollar = Rs 54.47

Tata Steel

Buy rating on Tata Steel is reiterated with a target price of Rs.489 over one year.

The main concern on Tata Steel has been the extent of weakness in Europe. But the current 

perception is that even in the midst of current weakness, Corus should deliver USD 20-30 EBITDA / 

ton versus the earlier estimate of USD 28 EBITDA / ton.

Margins should improve further in 2HFY13 with the Pt Talbot rebuild and easing in China.

With upward re-pricing of contracts in 1QFY13, Corus ASP (average sales price) have improved USD 

20-25/ ton qoq. With the decline in coking coal prices, Corus should comfortably deliver USD 20-30 

EBITDA / ton in 1QFY13.

Comments from other European steel makers also suggest a clear upturn in 2Q12 margins versus 

1Q12 levels.

The stock has been trading close to its trough valuation. It is expected that the stock would reverse its 

year to date de-rating driven by 2H12 policy easing in China and Europe.

With the stock price implying almost no FY13 EBITDA margin for Corus, the risk-reward ratio is 

favorable.

Jamshedpur/ Benga ramp up and Pt Talbot rebuild are near term triggers for the stock.

Maintain ‘reduce’ rating on Infosys – TP Rs.2500

1. Company’s 4QFY12 USD revenue declined 1.9% qoq, as against guidance of 0-0- 0.02% increase.

2. EBIT missed market estimates buy EPS was in line with expectations due to higher other income.

3. The guidance for FY13 of USD revenue growth of 8-10% and EPS estimate of Rs.159 – Rs.161 looks 

poor.

4. Estimates and rating on the scrip are under review due to weak outlook.

5. Guidance for FY13 is with the anticipation of 0-1% qoq revenue growth in 1Q and 4-5% qoq revenue 

growth in 2Q –Q4.

6. Poor EPS outlook for FY13 does not factor in any wage hike and it is due to worries regarding poor 

demand, which is an industry- wise worry.

7. Retain ‘reduce’ rating on the stock with the earlier target price of Rs.2500 over one year.

Hold Cairn India TP.342 rs.

• Hike in cess from Rs.2500 to Rs.4500/ton seemed to have badly hit the upside in the stock price.

• Delays in production approvals and the resultant restriction in production growth has also affected 

stock price movement.

• Target price on the scrip has been revised to Rs.342 from Rs.327 on expectation of higher crude oil 

price and exchange rate benefit (Rs.50 /Dollar) and also considering negative impact of cess hike.

• It seems that most of the positive catalysts are priced in at the current price and the potential upside 

lies with the reserve upgrade. But, this is unlikely in the near term.

• The stock has solid fundamentals but it looks better to wait for a better entry point. 

Axis Bank

Buy rating on Axis Bank is maintained with a higher target price of Rs.1186 over one year, as against 

the earlier target   price of Rs.1127.

The TP is hiked on upward revision of its earnings estimates on stable NIM and higher other income.

Earnings estimates for  FY12 have been hiked by 3.7% and by 4.6%, by 4.1% for FY13 & FY14 

respectively.

For 3QFY12, net profit at Rs.1100 crore increased 23.7% yoy. Net interest income at 2140 crore 

increased 23.5% yoy with stable net interest margin at 3.75%.

Slippages remained more or less stable at 1.7% and this seems to be a positive. Stressed assets were 

reported at Rs. 8-8.5billion. It would be a positive if this level could be maintained from going up.

The bank has added 34% of its current branch network during the last two years. Its benefits are 

expected to accrue and will key earnings driver in the near term.

The bank had achieved higher priority sector requirements of around 45% in FY11 against 40% by the 

RBI norms. So the bank need not expand lending in this segment. This coupled with retail loan growth, 

the bank would maintain its profit margins.

‘Buy’ Hero Motocorp – TP Rs.2050

• Company’s 3QFY12 revenue increase at 17% yoy and EBITDA at 31% yoy are in line with market expectations.
• EBITDA margin at 15.8% up 170 bps yoy and 10 bps down qoq has also been line with market estimates.
• Company could offset higher raw material cost by lower other operating expenses.
• Depreciation increase of 7% is due to weakness in rupee against JPY.
• Domestic motorcycle volume increased 11% yoy against industry growth rate of 9%,  translating in to market share gain of 125 bps yoy.
• Company showed healthy improvement in all operating parameters yoy. Sequentially, the margins are slightly down due to seasonality and change in product mix.
• 4QFY12 volume growth is expected to be similar to that of 3Q. 
• Honda’s entry in to 100 cc bikes has been a significant overhang on the stock. However, the brand equity and distribution edge enjoyed by the company would help limit market share loss.
• Market share gain in 125 cc bikes and scooter segment will limit the market share loss in the two wheeler segment.

Buy Tips

Bajaj Corp       

Cluster: Ugly Duckling

Recommendation: Buy

Price target: Rs155

Current market price: Rs109

Strong presence in the fast-growing light hair oil category: Bajaj Corp Ltd (BCL), part of the Shishir Bajaj group, is the third largest player in the hair oil segment and has emerged as the dominant player in the premium light hair oil (LHO) category with its Almond Drops hair oil. Driven by a rise in the disposable income and aspirations of consumers the LHO market has seen a strong growth of 25.5% CAGR in the past four years. With its strong positioning, product differentiation and distribution strength, BCL has grown at a relatively much higher rate and increased its market share in the LHO category from 38% to over 50% in the same period.

Enhancing its product portfolio: Leveraging on its strong presence in the LHO segment and the distribution strength of over 2 million retail outlets, BCL is looking at enhancing its product portfolio through brand extension and introduction of new products. In line with this strategy the company has recently launched Kailash Parbat Cooling Oil (KPCO) in the cooling hair oil category. The initial response has been quite encouraging with KPCO achieving a volume market share of 1% within the first quarter of its launch. 

Strong growth momentum to sustain: Despite the hike in the average selling price in response to the rising input cost, BCL was able to report a strong volume growth of 19.9% in Q1FY2012. The company would be able to sustain a healthy double-digit volume growth in its flagship brand, Almond Drops, while the newly introduced KPCO would bring in the incremental growth in volumes. Consequently, we have factored in a 17% compounded annual growth in volume over the next two years. 

Attractive valuations: With leadership in the LHO category, BCL is well poised to achieve a good growth in a scenario in which people are climbing up the value chain and consumption in rural India is on the rise. We expect BCL's top line and bottom line to grow at CAGR of 24% and 18% respectively over FY2011-13. It has around Rs400 crore as cash & cash equivalents which provides an opportunity to carry out both organic and inorganic growth activities. The stock is currently trading at 13.7x its FY2012E EPS of Rs8.0 and 11.2x its FY2013E EPS of Rs9.7. Considering the company's good cash generation ability and the better visibility of its earnings over the next two to three years, we believe the stock is trading at a stark discount to some of its FMCG peers. Hence, we initiate coverage on the stock with a Buy recommendation. Our price target stands at Rs155

-Sharekhan

Tip of the day

Geojit BNP Paribas

Retain ‘buy’ on Idea – TP hiked to Rs.110

Buy call on Idea Cellular has been maintained with a target price of Rs.110 over one year, as against the earlier target of Rs.85. The stock is currently quoted in the range of Rs.95.

Retain ‘buy’ rating on Kalpataru Power – TP Rs.181

Kalpataru Power has reported standalone sales of Rs.580 crore for 1QFY12. Sales is 7.2% higher yoy and 34% down qoq. Sales figure is lower than market estimates also. Shortfall in sales is due to delays in execution of transmission projects in Maharashtra on early arrival monsoons and delay in

infrastructure projects due to delay in approval from clients’ end.

Tips

Hold

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Ranbaxy

ITC

Cipla

Hindustan Unilever Ltd.

Colgate-Palmolive (India) Ltd.

Buy

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Tata Steel

DLF

Apollo Hospitals

eClerx Services Ltd

Fortis Healthcare (India) Ltd.

Buying TIPS

TCS

TCS is recommended to buy with a target price of Rs.1300 over one year. The stock is currently traded in the range of Rs.1080.

It seems that 4QFY11 would be slightly weak due to seasonal factors (4Q is generally weak) and the revenue growth for the quarter would be 3- 4% qoq, as against the market expectation of 5-6% revenue growth. However, FY12 appears to be a strong year and the revenue growth is expected at 25% with stable EBIT margin of 27-28% range.

United Phosphorus Ltd

Hold it for one year. Target price :230.

Reliance Industries Ltd, GAIL and Andhra power producers have signed agreements involving swapping of gas to ensure additional gas supply for generating 600 Mw power in the state. Thursday’s agreement would enable supply of another 2.594 million standard cubic metres of gas per day to power units in Andhra. The resulting power production of almost 600 Mw is important for farmers of the state, said a petroleum ministry statement. The agreement was signed in the presence of the minister, S Jaipal Reddy, who is a Congress MP from the state.