Equity Research - India

Daily

11 December 2009

Indices %Change Maruti Suzuki India (Rs1,590) Arun Agarwal

arun@karvy.com
Indices 10-Dec-09 1mth 3mth 6mth Underperformer - Target Price: Rs1,358
Sensex 17,189 6.4 7.3 13.8
Nifty 5,135 5.2 6.7 12.8
Volkswagen - Suzuki deal beneficial but from a long term perspective
CNX Midcap 7,364 5.2 18.5 30.3
Banking 10,231 5.6 18.9 27.2 Volkswagen AG (VW) and Suzuki Motors Corp. (Suzuki) have announced
Capital Goods 13,790 6.2 4.4 5.9 a strategic tie-up wherein VW would buy 19.9% stake in Suzuki for a
Healthcare 4,964 9.8 26.7 37.1 consideration of ~$2.5bn and Suzuki in return would invest half of that
IT 4,900 10.0 13.1 45.9
proceeds to buy stake in VW. The broad objective of the deal is to benefit
NASDAQ 2,191 1.8 7.8 17.8
from each others expertise and jointly work on environment friendly
Dow Jones 10,406 1.6 9.6 19.1
vehicles.
Daily

For VW, the tie-up takes them a step closer to their long term objective
Net Inflows of becoming the largest auto player in the world. Furthermore the deal
Rs bn 9-Dec-09 8-Dec-09 MTD YTD is important for VW's point of view in relation to their entry into the
FII 9.5 0.2 62.1 794.0 Indian market. VW already have presence in China but is relatively new
Mutual Fund -4.6 -2.3 -11.2 -46.6 in the Indian market. On the other hand, Suzuki has been present in the
FII - F&O 17.6 -8.2 17.6 210.1 Indian market for the past 25 years and we thereby expect VW would
like to leverage on the expertise which Maruti Suzuki has achieved over
Turnover the years. VW recently launched the Beetle and Touareg models in India
800 756 734 and is expected to launch Polo (in the compact segment) during 2010
613
580 for which VW could with the help of this alliance source critical
600
components from Maruti Suzuki's (MSIL) vendors.
(Rsbn)

400 257
149149 196 From MSIL’s perspective, we look this deal as a positive but from a
139
200 67 83
46
longer time outlook. In the near term the only positive for MSIL in our
0
10-Dec-09 9-Dec-09 10-Sep-09 10-Jun-09
view is better opportunities for MSIL's product in the European market
where VW is the largest car maker. From the longer term standpoint,
BSE NSE F&O
MSIL could benefit from VW expertise in the premium car segment.
MSIL has yet to prove its capabilities in the premium segment and the
Commodity & Currency% Change aforementioned deal could prove to be good platform for MSIL to make
10-Dec-09 1mth 3mth 6mth its presence felt in the premium car segment and the same would help
Crude (US$/barrel) 70.6 (11.7) 3.6 0.4 the company de-risk its product portfolio which is highly tilted towards
Gold (US$/Oz) 1,134.7 4.1 13.7 18.8 the compact car segment. However on valuation grounds, we believe
US$ 46.7 (0.2) (4.4) (1.8) that the stock is running ahead of its FY11E estimates and we therefore
Euro 68.7 (1.3) (1.5) 3.9 rate the stock as Underperformer with the price target of Rs1,358.

Maruti Suzuki (Consolidated) Y/E March (Rs Mn) FY07 FY08 FY09 FY10E FY11E
Debt
Reuters/Bloomberg code MRTI.BO/MSIL IN Revenues 147,884 181,041 206,638 280,593 308,465
% 10-Dec-09 1mth 3mth 6mth Market cap. (Rsbn) 459 EBITDA 19,316 22,485 13,716 27,354 29,967
RBI Repo 4.8 4.8 4.8 4.8 Market cap. (US$mn) 9,879 Reported Net Profit 15,883 17,899 12,274 22,462 24,471
Shares outstanding (mn) 289 EPS (Rs) 55 62 42.5 77.7 84.7
10 yr G-Sec yld 7.5 7.6 7.1 6.6 52-week High/Low (Rs) 1,737/476 CEPS (Rs) 64.5 81.8 67.3 107.7 120.7
Spread 1 & 10 yr G-Sec 4.1 4.4 3.4 2.7 EPS growth (%) 30.3 12.7 (31.4) 83 8.9
EBITDA Margin (%) 13.1 12.4 6.6 9.7 9.7
US 10 yr treasury 3.5 3.4 3.4 3.9
PER (x) 28.9 25.7 37.4 20.5 18.8
Surplus liquidity (Rs bn) (985) (994) (1,317) (1,160) EV/EBITDA (x) 21.7 18.5 30.5 15.1 13.2
Major shareholders(%) Price/Sales (x) 3.1 2.5 2.2 1.6 1.5
Promoter/Majority 54.2 Price/BV (x) 6.6 5.3 4.8 3.9 3.3
FIIs 20.7 DividendYield (%) 0.3 0.3 0.2 0.2 0.2
Banks/FI's/MFs 18.6 RoCE (%) 33.7 27.4 17.5 26.5 24
Others and Public 6.5 RoE (%) 25.3 20.7 13.5 21.1 19
Source: Company & KSBL Research
BULK DEALS ON NSE - 10 December 2009
Symbol Scrip Name Client Name Buy/Sell Quantity Traded Price
CENTENKA Century Enka Ltd SHARAD SHAH. BUY 196566 242.33
CERA Cera Sanitaryware Limited EAST SAIL BUY 105760 174.97
FIEMIND Fiem Industries Limited MANSUKH SECURITIES & FINANCE LIMITED BUY 60172 119
FIEMIND Fiem Industries Limited NARESH KUMAR HUF BUY 137161 120.9
FOURSOFT Four Soft Limited JMP SECURITIES PVT LTD BUY 250790 33.73
KALINDEE Kalindee Rail Nirman (Eng MBL & COMPANY LTD. BUY 74755 172.17
KERNEX Kernex Microsystems (Indi DINESH MUNJAL BUY 80441 134.93
KERNEX Kernex Microsystems (Indi HARBUX SINGH SIDHU BUY 71737 134.53
KERNEX Kernex Microsystems (Indi YES INVESTMENTSVISHAL KISHORE BHATIA BUY 89317 131.95
KLGSYSTEL KLG Systel Ltd. SETU SECURITIES LTD BUY 70955 218.05
THINKSOFT Thinksoft Global Ser Ltd RAJENDRAKUMAR RATANCHAND OSWAL HUF BUY 95100 265
THINKSOFT Thinksoft Global Ser Ltd REGENT FINANCE CORPORATION PVT. LTD. BUY 130492 264.48
VAKRANSOFT Vakrangee Softwares Limit SETU SECURITIES LTD BUY 156797 70.08
ASIANELEC Asian Electronics Ltd SHAH INVESTMENTS FINANCIAL DEV & CON PRIVATE LIMITSELL 405000 43.77
CERA Cera Sanitaryware Limited ALDEN GLOBAL MAURITIUS LTD SELL 103216 174.97
FIEMIND Fiem Industries Limited MANSUKH SECURITIES & FINANCE LIMITED SELL 60172 119.85
FIEMIND Fiem Industries Limited NARESH KUMAR HUF SELL 142457 119.36
FOURSOFT Four Soft Limited JMP SECURITIES PVT LTD SELL 150000 33.75
KALINDEE Kalindee Rail Nirman (Eng MBL & COMPANY LTD. SELL 74755 172.78
KERNEX Kernex Microsystems (Indi DINESH MUNJAL SELL 80441 135.53
KERNEX Kernex Microsystems (Indi HARBUX SINGH SIDHU SELL 74237 135.09
KERNEX Kernex Microsystems (Indi YES INVESTMENTSVISHAL KISHORE BHATIA SELL 89317 135.37
KLGSYSTEL KLG Systel Ltd. SETU SECURITIES LTD SELL 62495 218.18
SABTN Sri Adhikari Brothers Tel WALLFORT FINANCIAL SERVICES LTD SELL 50000 38.58
THINKSOFT Thinksoft Global Ser Ltd RAJENDRAKUMAR RATANCHAND OSWAL HUF SELL 95100 265.41
THINKSOFT Thinksoft Global Ser Ltd REGENT FINANCE CORPORATION PVT. LTD. SELL 130492 265
VAKRANSOFT Vakrangee Softwares Limit SETU SECURITIES LTD SELL 103252 70.04

Source: NSE

2
BULK DEALS ON BSE - 10 December 2009
Symbol Scrip Name Client Name Buy/Sell Quantity Traded Price
517041 Ador Welding OPG SECURITIES P LTD B 124590 214.14
517041 Ador Welding OPG SECURITIES P LTD S 124590 214.35
503940 Asian Elect JMP SECURITIES PVT LTD B 213825 44.08
503940 Asian Elect SHAH INVESTMENTS FINANCIAL DEV & CON PRIVATE LIMIT S 444479 43.72
530355 Asian Oilfield ENERGIA CONSULTANCY PVT. LTD S 59883 61.17
530355 Asian Oilfield RAMESH D SHAH FAMILY TRUST S 60000 60.27
507526 Associated Alco PRASANN KUMAR KEDIA B 110200 40.75
507526 Associated Alco SPRINGBOK PROPERTIES P LTD S 110200 40.75
522005 Austin Engr AUM SECURITIES PVT. LTD B 27500 89.84
522005 Austin Engr BRUBECK RESOURCES PRIVATE LIMITED B 25000 91.6
522005 Austin Engr AUM SECURITIES PVT. LTD S 25000 91.6
505506 Axon Infotech ABSOLUTE LEASING & FINANCE PVT LTD B 5391 13.47
500045 Bellary Steels JMP SECURITIES PVT LTD B 1154336 3.32
500045 Bellary Steels JMP SECURITIES PVT LTD S 1784167 3.33
532413 Cerebra Integ JAYSHREE RAJESH SHAH B 160000 10.5
532413 Cerebra Integ SMARTLINK NETWORK SYSTEMS LTD. S 160000 10.5
530871 Chembond Chem S & N VENTURES LIMITED B 24100 175
530871 Chembond Chem ROSHAN HOMI MODI S 24100 175
519475 Chordia Food ACHAL KUMAR DAGA S 17307 52.04
511672 Clarus Finance KAMAL GADALAY B 22375 13.1
532760 Deep Inds ARCADIA SHARE & STOCK BROKERS PVT. LTD B 113577 125.33
532760 Deep Inds HITESH SHASHIKANT JHAVERI B 136370 126.8
532760 Deep Inds ARCADIA SHARE & STOCK BROKERS PVT. LTD S 107573 126.24
532760 Deep Inds HITESH SHASHIKANT JHAVERI S 127632 126.55
532768 FIEM Inds NARESH KUMAR HUF S 92486 119.98
532022 Filatex Fash SAGAR TEX CREATION PRIVATE LIMITED B 50000 15.27
532022 Filatex Fash TODI SECURITIES PVT LTD S 50000 15.3
532521 Four Soft JMP SECURITIES PVT LTD B 382296 33.44
531739 Gennex Lab ROOPA SHRENIK SHAH B 182000 20.8
531739 Gennex Lab DILIPCHAND RATANDAS BAGRI S 182000 20.8
533048 GI ENGINERG KADAM HOLDING LTD S 62156 18.47
531439 Goldstone Tech HEMANT MADHUSUDAN SHETH B 100000 38.66
531439 Goldstone Tech KISHORBHAI BALUBHAI CHAUHAN S 320000 38.73
526307 Hind Inds DHEERAJ LOHIA B 93456 20.13
526307 Hind Inds IFCI LTD S 100000 20.08
524342 Indo Borax LITTY THOMAS B 30000 91.06
524342 Indo Borax ASHOK KUMAR S 22000 86.3
523844 Invicta Meditek RAMACHANDRANV B 151995 3.86
523844 Invicta Meditek CHEMBRA ECONOMIC CONSULTANCY SERVICES LIMITED B 120000 3.86
523844 Invicta Meditek UDBHAV HOLDINGS PVT LTD B 125000 3.86
523844 Invicta Meditek N JAYAKUMAR NATARAJAN B 100000 3.86
523844 Invicta Meditek SUJITH KUMAR S 503093 3.86
522259 Kalindi Rail MBL & Co. LTD. B 59191 172.58
522259 Kalindi Rail MBL & Co. LTD. S 59191 172.16
532686 Kernex Micro OPG SECURITIES P LTD B 85638 135.83
532686 Kernex Micro OPG SECURITIES P LTD S 85638 136.12
531269 KLG Systel HITESH SHASHIKANT JHAVERI B 75002 218.09
531269 KLG Systel HITESH SHASHIKANT JHAVERI S 75007 218.1
532850 MIC Electronics JMP SECURITIES PVT LTD B 664529 46.56
523886 Micro Inks RAJASTHAN GLOBAL SEC LTD B 124615 629.55
531453 Mohit Inds ARCADIA SHARE & STOCK BROKERS PVT. LTD B 26500 23.83
521030 Nakoda Textile VISHU ENTERPRISE S 80754 73.83
519560 Neha Intl REDDYVINOD GADDAM S 125000 33.15
531996 Odyssey Corp AASHNA S AGARWAL B 59010 19.25
531996 Odyssey Corp SHARDA CREATIONS PRIVATE LIMITED S 80000 19.25
531496 Omkar Overseas PINABEN PRAKASHKUMAR SHETH B 25000 37.3
531496 Omkar Overseas BHANUPRIYABEN D LODHA B 25000 37.3
524628 Parker Agro SHARDA DEVPARKASH YADAVA B 25000 18.17
511702 Parsharti Inv KRUPA SANJAY SONI B 34202 37.81
511702 Parsharti Inv SANJAY JETHALAL SONI B 19147 37.15
511702 Parsharti Inv SANJAY JETHALAL SONI S 28713 37.53
531769 PFL Infotech AMIT ASHOK THAWANI B 38000 16.07
531769 PFL Infotech INDRASEN SHAH B 25000 16.07
531769 PFL Infotech NEHUL MAHESH SANGHAVI B 25000 16.07
531769 PFL Infotech VANDANA SANJAYKUMAR KOTECHA B 35000 16.07
531769 PFL Infotech HEBE FINANCIAL SERVICES PRIVATE LTD. B 22500 16.07
531769 PFL Infotech KAUSHALANILSHAH B 25000 16.07
531769 PFL Infotech KIRAN DALMIA B 30000 16.06
531769 PFL Infotech ROOPLATAMANAKCHANDJAIN S 235154 16.07
531769 PFL Infotech P KUMAR S 218000 16.07
503873 Priyadarshini Spn ABHI CAPITAL SERVICES LIMITED B 54699 18.11
531273 Radhe Dev RAVIVASANTBHAI PAWAR B 1745246 8.78
531273 Radhe Dev RAVIVASANTBHAI PAWAR S 1954577 8.76
502587 Rama Pulp MAHIPAT IWDARMAL MEHTA B 67086 28.82
526640 Royale Manor NISHA SUMAN JAIN B 118895 20.84

3
Symbol Scrip Name Client Name Buy/Sell Quantity Traded Price
513295 Ruchi Strips ROHINI FOREX PRIVATE LIMITED S 154869 9.78
531431 Shakti Pumps NOVEL APARTMENTS PVT LTD S 40973 110.69
531431 Shakti Pumps A T INVOFIN INDIA PVT LTD S 38907 115.04
526137 Shetron ELPRO INTERNATIONAL LIMITED B 279644 29.45
526137 Shetron INDIA MAX INVESTMENT FUND LTD S 279644 29.45
512289 Shirpur Gold C S ORBIT INVESTMENTS LTD S 79500 158.85
532323 Shiva Cement VISHWAS SECURITIES LTD. B 687035 10.5
532323 Shiva Cement VISHWAS SECURITIES LTD. S 875868 10.38
530433 Shiva Fert PARESH RAMJIBHA CHAUHAN B 36715 54.97
530433 Shiva Fert PARESH RAMJIBHA CHAUHAN S 56715 54.83
530943 Sri Adhikari Bro WALLFORT FINANCIAL SERVICES LTD S 51361 38.04
513414 Sujana Metal PISUPATI SURESH B 500000 25.8
513414 Sujana Metal SWAIN FINANCE TRADING PVT. LTD. S 500000 25.78
532358 Teledata Info CITIGROUP GLOBAL MARKETS MAURITIUS PRIVATE LIMITED S 1695968 6.02
519228 Temptation Food GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD S 149128 36.09
519228 Temptation Food COPTHALL MAURITIUS INVESTMENT LIMITED S 555257 36.11
590020 Tera Software RUCHIR INFOTECH PVT LTD B 60000 42.5
590020 Tera Software VIVOG COMMERCIAL LTD S 60000 42.5
533121 THINKSOFT REGENT FINANCE CORPORATION PVT. LTD. B 85116 264.77
533121 THINKSOFT REGENT FINANCE CORPORATION PVT. LTD. S 85116 265.09
532856 Time Techno KOTAK MAHINDRA (UK) LIMITED A/C INDIA EQUITIES FUND Ltd B 3463854 45.45
532856 Time Techno ZEPHYR PEACOCK INDIA I S 3473000 45.45
500231 Umang Dairies SHASHIDHAR GORLA B 130000 36.39
532765 Usher Agro NARESH KUMAR HUF B 150846 45.9
532765 Usher Agro WALL STREET PVT LTD B 125000 44.75
532765 Usher Agro Naman Securities & Finance Pvt. Ltd. B 229107 44.43
532765 Usher Agro NARESH KUMAR HUF S 150846 45.5
532765 Usher Agro Naman Securities & Finance Pvt. Ltd. S 212605 44.45
511431 Vakrangee Soft BP FINTRADE PRIVATE LIMITED B 127503 69.5
511431 Vakrangee Soft BP FINTRADE PRIVATE LIMITED S 162151 69.44
531249 Well Pack Papers BHAKTI ARVIND RAMBHIA B 25300 325.74
522029 Windsor Mach HITESH SHASHIKANT JHAVERI B 181136 26.5
522029 Windsor Mach HITESH SHASHIKANT JHAVERI S 132928 26.42
522029 Windsor Mach SAINATH HERBAL CARE MARKETING P.LTD S 163483 26.33

Source: BSE

4
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Hemindra Hazari Head of Research hemindra.hazari@karvy.com

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Stock Ratings Absolute Returns Stock Ratings Absolute Returns

Buy : > 25% Market Performer : 0 - 15%
Out Performer : 16 - 25% Under Performer : < 0% - (25%)
Sell : > (25%)

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