Special Report1

22

nd

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

Balaji Telefilms

First Targ et

Secon d Target

45

55

67

19.50

25

28

39.5

45

54

47

54

66

19.25

25

28

SpiceJet

18.5

24

26

PVR

102

130

160

Gitanjali Gems

98

120

140

Man Inds.

44

55

60

ICSA (India)

170

210

250

Rel. Comm.

263

310

350

Everest Kanto

185

202

230

CESC

284

340

380

Alok Inds Rajesh Exports Gati Ballarpur Inds

Recommendation

Buy at CMP. Buy at CMP Targt 24-30,sl 16.90. Buy at CMP for long term Buy at CMP target 125-150 Buy at cmp /stop loss 269. Target 46-50 Buy at cmp Target 54. Buy above 21 Buy above 186 Stop Loss 230 Buy at CMP, SL below 95. Buy at CMP ,Target 56. Buy at CMP Target 26,sl below 16.

Note: RCOM- Large Cap

Sovid Gupta

+911243024840 Equity Analyst: Fairwealth Securities Private. Ltd. Email: [email protected]

Fairwealth Securities

This study is based on shares that have shown maximum correction and have a stable to positive outlook from our perspective.

Page 1

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 Cap

Apr'05-July'09

52%

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

BSE Mid Cap

15 May'09th 04 June'09 th 15 May'09th 04 June'09

BSE Small Cap

15 May'09th 04 June'09

BSE Sensex

27.0% 44.0%

Indian Markets have witnessed two major events recently that have led to sharp reaction in Indian Equity markets. Lets discuss the two events in detail. 1.

th

52.2%

Election: Indian elections were a huge event that has ensured 5 years of stable government. This has led to huge inflow of FII money in Indian Equities since Election. 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.

Fairwealth Securities

Page 2

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

BSE Mid Cap

4 June'09th 13 July'09 th 4 June'09th 13 July'09

BSE Small Cap

4 June'09th 13 July'09

BSE Sensex

-8.33% -16%

th

-23%

We have selected a few Companies based on their price performance and our estimates of their strong fundamental valuation.

Fairwealth Securities

Page 3

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

1 2 3 4 5 6 7 8 9 10 11 12

Close Price (4th June 2009)

Close %age Price drop (13th July 2009)

Market Capitalization

CMP (22nd July 2009)

First Target

Second Target

Balaji Telefilms

74.1

41.0

-44.7

192

45

55

67

Alok Inds

28.1

15.9

-43.6

1065

Rajesh Exports

54.9

32.5

-40.8

1945 613

19.50 39.3 47 19.25 18.45 102 98 44 170 263 185 284

25 45 54 25 24 130 120 55 210 310 202 340

28 54 66 28 26 160 140 60 250 350 230 380

Gati

68.0

40.3

-40.7

Ballarpur Inds

28.5

17.0

-40.4

1863

SpiceJet

25.9

16.4

-36.8

981

135.3

87.8

-35.1

437

142.5

92.7

-35.0

1883

57.4

37.9

-33.9

650

ICSA (India)

207.2

142.2

-31.4

1740

Rel. Comm.

342.2

237.1

-30.7

104914

229.2

158.9

-30.7

1212

356.1

264.0

-25.9

2625.61

PVR Gitanjali Gems Man Inds.

Everest Kanto

13 CESC

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

Note: To be updated

Fairwealth Securities

Page 4

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.

Fairwealth Securities

Page 5