>OIL INDIA LIMITED (KOTAK SECURITIES)

East side story. We expect Oil India Limited to likely create significant value from its current large oil and gas reserves and solid exploration abilities. We initiate coverage with a BUY rating and 12-month target price of Rs 1,350 based on 10X FY2011E EPS. Our positive view stems from OIL's production profile, attractive valuations and strong financials.

• Attracitive valuations- Buy rating with 12-month target price of Rs 1,350
• Upside potential - favorable subsidy-sharing, natural gas price increase and new discoveries
• Strong cash flow generation, net income driven by volume growth, higher crude price
• Key risks-unfavorable subsidy-sharing scheme, lower than expected crude price, regulations

To see full report: OIL

>NIRLON LIMITED - KNOWLEDGE PARK (AASPL)

• Prime Location in Mumbai
• New Construction to add lease rentals revenue
• Old structure continue to generate decent cash flows
• Company to become Debt free within four years starting from FY10
• Valuation- "Beyond the Vagaries of Real estate cycle.

To see full report: NIRLON LIMITED

>INDIAN IT SERVICES 2QFY10 PREVIEW (MORGAN STANLEY)

Sep09 Results Preview: In-line results may not be good enough

Quick Comment: We believe inline results may not be good enough to sustain the current stock valuations. Given the rising market expectations and the continued uncertainty on the ground (as indicated by Accenture’s results and new bookings) India IT companies may find the market expectations a bit stretched in our view.

We expect reasonable 2Q10 but muted guidance for 3Q10: For the quarter, we expect reported revenues to be in the 3%-3.5% qoq range for the large vendors including the impact of higher number of working days and cross-currency benefits for the quarter. However, revenue guidance for Q3 could be in the flat to 1% qoq growth range in our view.

Margin outlook is key: The margin outlook for top 3 companies is likely to converge this quarter onwards. So far, TCS and Wipro have indicated flat margins whereas Infosys has guided for -150bps margin decline. We believe the yearend result could be somewhere mid-way for the large companies.

Infosys guidance: Though Infosys could have a 2-2.5% benefit due to higher working days and cross-currency in Q2, Q3 has lower working days. We believe Q3 guidance and FY10e EPS revisions would be key focus areas for the results. We believe Infosys could revise its FY11e EPS guidance to ~Rs100-101.

In our view, stocks are already pricing in FY11e EPS expectations but any EPS cuts for Infosys could tamper rising expectations post Q2. With USD depreciating against key currencies, we would now recommend investors to position their portfolios for an appreciating rupee as well. Wipro would likely be a key beneficiary of an appreciating rupee environment in our view.

To see full report: INDIAN IT SERVICES

>CHEMICALS & PETROCHEMICALS (CYGNUS)

INDUSTRY AT A GLANCE

MARKETING
■ Air Products Announces Price Increase for Liquid and Bulk Industrial Gas Products: USA

OPERATIONS
■ Dow to close units at Texas plants: USA

HUMAN RESOURCE
■ Monsanto Doubles Job Cuts: USA

REGULATIONS AND GOVT INITIATIVES
■ Detergent manufacturers imposing safeguard duty on soda ash import: India
■ Fertilizer ministry seeks additional gas for revival of seven fertilizer units: India
■ AMAI asks for immediate action to check surge in caustic soda import: India
■ No plan to set up chemical industries in Public sector: DCPC: India

EXPORTS AND IMPORTS
■ India may explore exporting chemicals to Kyrgyz Republic at competitive prices: DCPC: India

RESEARCH AND DEVELOPMENT
■ Alstom and Dow Dedicate New Pilot Plant to Capture CO2: USA
■ New Dow Impact Modifier for Rigid Vinyl Material Greatly Boosts Impact: USA

MERGERS AND ACQUISITIONS
■ California Products acquires Progress Paint brands: USA
■ RIL gets HC`s nod for merger with RPL: India

OTHERS
■ H. B. Fuller settles lawsuit for US$18.8 million: USA
■ GACL seeks environmental clearance for its caustic soda de-bottlenecking project: India
■ No plan to eliminate import of chemicals: DCPC: India
■ Gujarat PCPIR to be supervised by a GIDC subsidiary: India
■ BASF sells its polystyrene business in Brazil: India
■ Ajanta Pharma proposes to produce 32 drugs in new unit: India
■ CRISIL assigns 'BB-' rating to Wanksons Chemicals' bank facilities: India
■ ICRA assigns LA rating to the bank line of Huntsman Advanced Materials: India
■ Punj Lloyd bags Rs5.50bn contract from MRPL: India

To see full report: CHEMICALS & PETROCHEMICALS