INVESTMENT STRATEGY

The Sensex having corrected close to 9% in the recent past (closing price from June 11th to
June 22 nd) shows that much of the negative news is already factored in.
Some of the key factors that investors must look at this point of time are:

The World Bank on Monday (22nd June 09) predicted that India's growth forecast for
2009 is 5.1% from earlier projection of 4%. It has projected an 8% growth for India in
2010, which will make it the fastest growing economy in the world in 2010, overtaking
China.

The U.S Fed Chief, Bernanke has predicted that the US recession will end later this
year. Some analysts say the economy will start growing in the July-September quarter
on the back of tax cuts and increased government spending. Further, U.S fed meet is
ending on 24th June 09. The interest rates are expected to be unchanged. But the
policymaker’s assessment of the economic situation will give a better direction to the
US stock market and the global markets as well.

There have been signs of some improvements in U.S: home sales have firmed:
construction activity has picked up – although from record-low levels; consumer
spending has stabilized following a massive cutback at the end of last year; layoffs are
slowing and some credit stresses have eased.

Further, the Indian Government is looking for disinvestments of the public sector units.
The amount raised through disinvestments would help the government to reduce the
fiscal deficit and also increase its infrastructure spending.

Also, the Union Budget on 6th July 09 is expected to be a pro reform budget with its
focus on infrastructure.

Considering the above factors, it is prudent to build a portfolio at lower levels.
We have listed below few stocks, which can be seen for Medium-term
investment perspective.

Scrip: ABB Ltd
Industry: Electric Equipment
CMP: Rs.737.40
52-W Range: Rs.944.40-343.35
Trailing PE: 30.2x
Target: Rs.780
Rationale: The company’s stand alone net sales increased by 15.3% (YoY) to
RS.6837.03 crores for CY08 and net profit increased by 11.30% (YoY) to Rs.547.41
crores. The company has bagged 425 crores order from power grid Corporation of
India and has also received an order worth Rs 550 million to provide the electrical
infrastructure for modernization of Kolkata airport.

Scrip: LIC Housing Finance Ltd
Industry: Finance- Housing
CMP: Rs. 647.70
52-W Range: Rs. 621-150.10
Trailing PE: 9.5x
Target: Rs.700
Rationale: The Company’s stand alone net sales increased by 31.8% (YoY) to
RS.754.43 crores for Q4FY09 and net profit increased by 33.40% (YoY) to Rs.157.56
crores. The company is targeting loan disbursement of up to Rs 13,000 crore in the
current financial year. The disbursements for the last fiscal stood at Rs 8,764 crores.
It has seen a 100% growth in loan approvals and sanctions so far this fiscal, and a
40% rise in the number of loan applications.

Scrip: CORPORATION BANK
Industry: Banking
CMP : Rs. 337
52-W Range: Rs.345-155
Trailing PE: 5.4x
Target: Rs. 370
Rationale: The Company has posted 39% increase in its standalone Net sales to
Rs.1706.39 crs for 4Q FY09 and 26.7% growth in its Net profit to Rs.260.49 crs
(YoY). The branch network of the Bank as on 31st Mar 2009 stood at 1054 as against
981 branches YoY. Further the Bank has plans to open 700 branches in the next five
years, which will increase its top line in the long run.

Scrip: BARTRONICS
Industry: Trading
CMP : Rs. 151.35
52-W Range: Rs. 202 - 47.40
Trailing PE: 5.6x
Target: Rs. 170
Rationale: For the full year FY09 the Company has reported 115% increase in its
topline to Rs.583.29 crs and 58% growth in its bottomline to Rs.75.11 crs (YoY) on
consolidated basis. The company had recently bagged a build-operate-transfer order
from the Municipal Corporation of Delhi for setting up 2,000 G2C kiosks. The
company is expecting Rs 5,000 crore through this project over the next nine years.
Further For FY10, the Company has guided for revenues at Rs 1000 crore with Net
Profit margins at about 15-18% i.e. Rs 150-180 crore.

Scrip REC LTD
Industry: Finance
CMP : Rs. 159.05
52-W Range: Rs.165-53
Trailing PE: 10.6x
Target: Rs.180
Rationale: REC reported 38% rise in its standalone net sales to Rs.1337 Crores and
65% jump in its net profit to Rs.388.04 crores for Q4 FY09.The Company is planning
to raise around Rs. 3000 crore by selling 20% equity stake either to QIP or through
follow on public issue for funding power projects.

Scrip BALRAMPUR CHINI
Industry: Sugar - integrated
CMP : Rs. 104
52-W Range: Rs. 110.45-29.30
Trailing PE: 17.13x
Target: Rs.115
Rationale: The company has recorded 15% growth in its standalone net sales to
Rs.355.06 crores for quarter ended Mar 09 on the back of higher sugar realization
though sales volumes were lower. The net profit of the company increased
marginally by 0.8% to Rs.66.19 crores(YoY). With sugar production is estimated to
be lower, we expect sugar prices to remain firm in the coming days, which in turn will
boost the revenues of the company.

Scrip: YES BANK
Industry: Banking
CMP: Rs.139.90
52-W Range: Rs.149-40.60
Trailing PE: 13.67x
Target: Rs.155
Rationale: The company’s interest income for the Q4FY09 is increased by 46.40%
(YoY) to RS.566.31 crores and net profit is increased by 24.20% (YoY) to Rs.80.11
crores. It has plans to enter into retail brokerage business, which would widen its feebased
income and mobilise low-cost deposits. Further it is it will raise USD 400 million
by means of equity through a follow-on public offer and debt.

Scrip: CANARA BANK
Industry: Banking
CMP: Rs. 255
52-W Range: Rs.298-136.45
Trailing PE: 5.21x
Target: Rs.293
Rationale: The company’s interest income for the Q4FY09 is increased by 22.90%
(YoY) to RS.4653.88 crores and net profit increased by 54.90% (YoY) to Rs.718.81
crores. Canara Bank is expecting a 21-22 % growth in advances this fiscal as against
29% in FY09 and hopes to maintain net interest margin of 2.8 % in 2009-10. Further
it is willing to acquire a bank in India to increase its size and presence.

Scrip: POLARIS SOFTWARE
Industry: Software
CMP: Rs.105.50
52-W Range: Rs.115.40-25.20
Trailing PE: 6.17x
Target: Rs.120
Rationale: The Company’s stand alone net sales increased by 18% (YoY) to
RS.337.25 crores for Q4FY09 and net profit increased by 156% (YoY) to Rs.48.81
crores. It is setting up a centre of excellence for insurance near Chennai with an
investment of around Rs 100 crore. The centre would help the company strengthen
the insurance business, which contributed Rs 95 crore to the turnover last year. The
company has set a target of Rs 250 crore over the next three years from this
segment.

Scrip: PUNJAB NATIONAL BANK
Industry: Banking
CMP: Rs.625
52W Range:Rs.425-286
Trailing PE: 6.6x
Target: Rs.670
Rationale: The Company’s interest income for the Q4FY09 is increased by 35.10%
(YoY) to RS.5242.57 crores and net profit is increased by 59.20% (YoY) to Rs.865.57
crores. It is collaborating with the US-based $1.3-billion MoneyGram International to
increase its business through remittance services. This will be offered from the bank’s
4,600 branches in the country and through partners such as UAE Exchange and
Financial Services and Thomas Cook India.


Strategy to be followed:
 Buy on every decline and sell on every rally.
 However, given the current high volatility of the markets, investors are
advised to take a long-term investment perspective.
 Investors are advised to book profit even when the stock reaches 60-70% of
the target
 Diversify your portfolio as it reduces the risk