>Equity Weekly Watch (ANAGRAM)

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Equity Weekly Watch (ANAGRAM)

>BHEL(Angel Broking)

Bharat Heavy Electricals Ltd (BHEL), one of the largest Engineering and Manufacturing
Enterprise in India, dominates the Power Generation Equipment market of the country with
about 64% share of the Total Installed Capacity. The company is in the midst of a rapid
capacity expansion plan. It has already ramped up its capacity from 6,000 MW p.a. to
10,000 MW p.a. in December 2007 and is further scaling it up to 20,000 MW p.a. by
FY2012. However, going forward the company faces diverse set of challenges both from the
weak economic environment as well as the structural changes in the Sector, which could
limit further upside on the stock. At the price of Rs1,405, the stock is commanding
valuations of 15.2x FY2010E EPS and 9.4x FY2010E EBITDA. Given the overall
concerns, we Initiate Coverage on the stock with a Neutral View.

Read full report here BHEL(Angel Broking)

>IT Sector update(MOTILAL OSWAL)

Downgrading estimates to factor ~13% cross currency movement in 3Q
Cross currency woes — worsening: Adverse impact of cross currency, has continued
into 3Q as well. We expect the impact of this phenomenon to hit 3Q US$ revenues if the
exchange rate for the GBP and Euro do not reverse in the latter half of 3Q.
While average depreciation of the GBP and Euro against the US$ was ~4% during
2QFY09, the depreciation has been sharper at ~13% in 3Q (until date). With nearly 50%
of working days already concluded in 3Q, we note that IT companies would not have
anticipated such sharp currency movements when they provided guidance in mid-October.
We believe this sharp cross currency movement will put pressure on 3QFY09 US$
revenue guidance of Infosys and Satyam, unless a sharp reversal occurs in the remaining
part of the quarter. The substantial volatility in key currencies across the globe versus
the US$ would mean IT companies effectively have to contend with an additional challenge
— cross currency — besides the existing ones such as global slowdown, hedging, pricing
pressure, outsourcing backlash, MNC competition etc. Infosys had guided for 3Q revenue
growth of 0.3% (upper end) QoQ at an assumption of 1.86USD/GBP and 1.36USD/
EUR. At the current rates, we believe 3QFY09 US$ revenues will be negatively impacted
by ~3%.

Read full report here IT Sector update(MOTILAL OSWAL)