nd

22 July, 2009
India
Fairwealth Special Report
We conducted a research on the past performance of MidCap Index, Small Cap Index and
BSE Sensex, since 2005. Base on this data and performance of selected stocks
th th
between 4 June 2009, and 13 July 2009 we have selected a group of 13 stocks that
are likely to outperform Indices in a short term.

Special Report-Stocks for next 3

weeks.
Name CMP First Secon Recommendation
Targ d
et Target
Balaji Telefilms 45 55 67 Buy at CMP.
Alok Inds
Buy at CMP Targt 24-30,sl
19.50 25 28
16.90.
Rajesh Exports 39.5 45 54 Buy at CMP for long term
Gati 47 54 66 Buy at CMP target 125-150
Ballarpur Inds 19.25 25 28 Buy at cmp /stop loss 269.
SpiceJet 18.5 24 26 Target 46-50
PVR 102 130 160 Buy at cmp Target 54.
Gitanjali Gems 98 120 140 Buy above 21
Man Inds. 44 55 60 Buy above 186
ICSA (India) 170 210 250 Stop Loss 230
Rel. Comm. 263 310 350 Buy at CMP, SL below 95.
Everest Kanto 185 202 230 Buy at CMP ,Target 56.
CESC
Buy at CMP Target 26,sl
284 340 380
below 16.
Note: RCOM- Large Cap
Sovid Gupta +911243024840
Equity Analyst: Fairwealth Securities
Private. Ltd.

This study is based on shares that have shown maximum correction and have a stable to
Email: sovid.gupta@fairwealth.in
positive outlook from our perspective.

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 Index Return from 2005 till date

Index Period Return

BSE Sensex Apr'05-July'19 136%

BSE Mid Cap Apr'05-July'09 70%

BSE Small
Apr'05-July'09 52%
Cap

We can see that between 2005 to January 2008, all indices had almost equal return,
however while BSE Sensex dropped by only 25% from January 2008 to July 2009,
BSE Mid Cap and BSE Small cap are down by 47% and 57% respectively.

Index Period Return

th
15 May'09- Indian Markets have witnessed two major events recently that have led to sharp reaction
BSE Sensex th 27.0% in Indian Equity markets. Lets discuss the two events in detail.
04 June'09
th
BSE Mid 15 May'09-
th 44.0% 1. Election: Indian elections were a huge event that has ensured 5 years of stable
Cap 04 June'09 government. This has led to huge inflow of FII money in Indian Equities since
BSE Small th
15 May'09- Election.
th 52.2%
Cap 04 June'09 th th
We can see in the table that between 15 May and 5 June all three indices
performed brilliantly. Post this there was mild correction in Sensex and
comparatively huge correction in Small Cap and Mid Cap indices. Our study is
based out of this correction explained later.

2. Budget: While the budget might be viewed differently by different people, and
was relatively dull according to us majorly due to huge expectations. What is
important is that largest group of Investors have been buying in huge quantities,
as they find India as the safest haven for next five years.

Based on this fact we remain bullish on Indian Equities, until FII’s are putting
money in Indian Equities.

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 Our current research is based on recent correction that was witnessed after post budget rally up
to pre budget reaction.

After budget rally which saw Sensex, Midcap and Smallcap rising between 27-50
percent in matter of 1 month months. Post that rally, there was a large correction in all
indices led by BSE small cap.

Please see below table for details

Index Return from 2005 till date

Index Period Return

th
4 June'09-
BSE Sensex th -8.33%
13 July'09
th
BSE Mid 4 June'09-
th -16%
Cap 13 July'09
th
BSE Small 4 June'09-
th -23%
Cap 13 July'09

We have selected a few Companies based on their price performance and

our estimates of their strong fundamental valuation.

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Investment Rational

Based on our study we expect Mid caps and Small caps to outperform BSE Sensex over next 2 months. We have selected
shares which have shown maximum corrected and have potential to give decent returns in short to medium terms.

We expect following share to re test their highs made in January and hence recommended to book partial profits at those
levels.

All these companies are safe to invest from (long term) Valuations point of view as well.

Co_Name Close Close %age Market CMP (22nd First Target Second
Price Price drop Capitalization July 2009) Target
(4th (13th
June July
2009) 2009)
1 Balaji Telefilms 74.1 41.0 -44.7 192 45 55 67
2 Alok Inds 28.1 15.9 -43.6 1065 19.50 25 28
3 Rajesh Exports 54.9 32.5 -40.8 1945 39.3 45 54
4 Gati 68.0 40.3 -40.7 613 47 54 66
5 Ballarpur Inds 28.5 17.0 -40.4 1863 19.25 25 28
6 SpiceJet 25.9 16.4 -36.8 981 18.45 24 26
7 PVR 135.3 87.8 -35.1 437 102 130 160
8 Gitanjali Gems 142.5 92.7 -35.0 1883 98 120 140
9 Man Inds. 57.4 37.9 -33.9 650 44 55 60
10 ICSA (India) 207.2 142.2 -31.4 1740 170 210 250
11 Rel. Comm. 342.2 237.1 -30.7 104914 263 310 350
12 Everest Kanto 229.2 158.9 -30.7 1212 185 202 230
13 CESC 356.1 264.0 -25.9 2625.61 284 340 380

Note: We already have coverage on PVR, Alok Industries and ICSA under Fundamental research with a buy.

Note: To be updated

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Disclaimer

This publication has been prepared solely for information purpose and does not constitute a solicitation to any person to buy or sell a security. While
the information contained therein has been obtained from sources believed to be reliable; investors are advised to satisfy themselves before making
any investments. Fairwealth Securities Pvt Ltd does not bear any responsibility for the authentication of the information contained in
the reports and consequently, is not liable for any decisions taken based on the same. Further, Fairwealth Research Reports only provide information
updates and analysis. All opinion for buying and selling are available to investors when they are registered clients of Fairwealth Investment Advisory
Services. As a matter of practice, Fairwealth refrains from publishing any individual names with its reports. As per SEBI requirements it is stated that,
Fairwealth Sec Pvt Ltd., and/or individuals thereof may have positions in securities referred herein and may make purchases or sale while this report is
in circulation.

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