KotakSecurities Credentials

KotakSecuritiesLtd.anaffiliateofKotakMahindraBank,isthestockbroking Kotak Securities Ltd an affiliate of Kotak Mahindra Bank is the stock broking anddistributionarmoftheKotakMahindragroup InnovatorsintheIndustry:Wehavebeenthefirstinprovidingmanyproducts andserviceswhichhavenowbecomeindustrystandards. and services which have now become industry standards LeadingdistributorsofInitialPublicOffers associatedwiththemost successfulissuesoftheyear KotakSecuritiesCorestrengthsareitsexpertiseinequityresearchandawide K kS ii C h i i i i h d id retaildistributionnetwork Reliability:Ouraccoladesareatestimonytoourservicesandhighstandards.

AssetClasses
Investmentoptionsyouhave Investment options you have Equity Structuredproducts Bonds Fixeddeposits Insurance I Commodities CurrencyDerivatives

WhyEquities?
Bestassetclasstoparticipateineconomicgrowth Best asset class to participate in economic growth Themostdynamicassetclass Hasoutperformedallassetclassesinthelongrun Equitiescarryhigherrewardstocompensatefortherisk

Indiaisfastemergingonthegloballandscape
AUS$1.7TrneconomywithmarketcapitalizationofUS$1.4Trn A US$ 1 7Trn economy with market capitalization of US$1 4Trn 195companieswithUS$1Bninmarketcapitalization FIIholdingsinIndianequitiesatUS$238Bn India:Theworldslargestdemocracy Amongstthefastestgrowingeconomiesintheworld Unitydespitediversity Domesticsavingsrateat35%ofGDP

Source:NHAI,Bloomberg,CIAWorldfactBook,KotakInstitutionalEquities,TRAI

Indiaisfastemergingonthegloballandscape
InvestmenttoGDPat36% Investment to GDP at 36% 175000MWinstalledpowercapacity Totalroadnetworkof3.3Mn Total road network of 3 3 Mn Kms Nationalhighwaysof70,934Kms Fastgrowingmobilephonemarketwith834millionsubscribers(May2011) Fast growing mobile phone market with 834 million subscribers (May 2011) Carssalesin2011 2.44Mn 2wheelersalesin201113.35Mn 2 wheeler sales in 2011 13 35Mn

Economy

10

12

Country-wise GDP growth; data for CY (%)

India is world's second fastest growing economy after China

-2 0 2010E 2011E 2 4 6 8 China India Taiwan Indonesia Vietnam Singapore Brazil Thailand Hong Kong SAR Malaysia Korea Mexico Russia P Philippines Argentina Canada Uni ited States Australia New Zealand w So outh Africa Japan Czech Republic h France United Kingdom d Germany Italy Hungary Spain
Source:CSO,IMFJan2011,KotakInstitutionalEquities

IndianEconomy:Amongthefastestgrowingintheworld

USD/INRlikelytostayinanarrowrange
INR movement in a narrow range USD/INR movement
52 50 48 46 44 42 40 38 Oct-08 Oct-09 Oct-10 Jan-08 Jan-09 Jan-10 Apr-08 Apr-09 Apr-10 Jan-11 Jul-08 Jul-09 Jul-10 Apr-11 USD/INR

USD/INR movement dependent on global news flows, capital flows and oil prices Likely in a range of 44.00-47.00 in the base scenario
Source:Bloomberg,KotakMahindraBank

InflationlikelytoremainstickyinH1FY12E
InflationisexpectedtoremainaboveRBIscomfortzoneforagreaterpartofFY2012E WPIinflation(yoy change),200712E(%)
12 10 8 7.9 6 4 2 0 (2) Apr r-07 Jul l-07 Oct t-07 Jan n-08 Apr r-08 Jul l-08 Oct t-08 Jan n-09 Apr r-09 Jul l-09 Oct t-09 Jan n-10 Apr r-10 Jul l-10 Oct t-10 Jan n-11 Apr r-11 Jul l-11 Oct t-11 Jan n-12 Inflation (without fuel price hikes) Inflation (with fuel price hikes) 9.06 8.8

Note:WithhikesassumesRs3/lt hikeindiesel,Rs2/lt hikeinkeroseneandRs50/cylinderhikeinLPGeachin November2011 Source:Bloomberg,KotakInstitutionalEquitiesestimates WPIinflationatanelevatedlevelof9.68%atendFY11 AverageWPIinflationinFY2011at9.4%;mightremainaround8.59.5%inFY2012Egiventhefuelpricehikes InflationtostartmoderatingpostDecember2011withassumptionsofanormalmonsoon

Markets

India:Healthygrowthintradedvolumes Critical forlargeglobalinvestors

Averagedailyvaluetradedincashmarket (BSE+NSE)(US$bn)
8.0 7.0 6.0 5.0 4.0 3.0 2.0 20 1.0 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11

Averagedailyvaluetradedinthederivatives segment(US$bn)
35.0 30.0 25.0 20.0 15.0 10.0 5.0 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Jun-11

Source:BSE,NSEandSEBI

India:Healthygrowthintradedvolumes Critical forlargeglobalinvestors

AVDTofForeignInstitutionalInvestors(US$bn)
3.0 2.5 2.0 1.5 1.0 0.5 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11

AVDTofMutualFunds(US$bn)
0.7 0.6 0.5 0.4 0.3 0.2 0.1 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11

Source:BSE,NSEandSEBI

ValuationsseeksupportfromFY12earningsand embeddedvalue
ValuationsummaryofBSE30sectors,June28,2011,Marchfiscalyearends,201012E
Automobiles Banking Mkt-cap. (US$ mn) 48,763 108,244 EPS growth (%) 2011 2012E 2013E 90.4 (0.5) 12.2 10.1 40.7 23.1 2011 11.9 23.3 PER (X) 2012E 2013E 11.9 10.6 16.6 13.5 EV/EBITDA (X) 2011 2012E 2013E 8.1 7.9 6.9 Price/BV (X) 2011 2012E 4.1 3.3 3.0 2.6 Div Yield (%) 2011 2012E 2.5 2.0 1.2 1.4 RoE (%) 2011 2012E 34.4 27.8 12.8 15.9

BSE-30 Index BSE-30 ex-Energy BSE-30 ex-Energy, Com. BSE-30 ex-Technology

618,370 506,573 461,033 508,830

18.9 19.7 13.7 19.0

23.1 19.1 19.3 23.7

12.5 16.6 17.2 11.8

17.2 19.0 20.5 16.3

14.0 16.0 17.2 13.2

12.4 13.7 14.7 11.8

9.7 11.7 12.8 8.8

8.1 9.9 10.9 7.4

7.2 8.6 9.3 6.6

2.7 3.2 3.5 2.4

2.4 2.8 3.1 2.1

1.5 1.4 1.5 1.5

1.6 1.4 1.5 1.6

15.8 16.8 17.1 14.9

17.0 17.4 17.8 16.1

Note:Theforecastsgivenabovearenotreliableindicatorsoffutureperformance Source:Companyreports,KotakInstitutionalEquitiesestimates.BSESensexat18,326

ValuationsJustwithinthehistoricaltradingrange
1yearrollingforwardP/E,M3adjustedvaluationtradingatfullvaluations 1yearrollingforwardP/E,P/B,RoE,EV/EBIBTDA,M3growthrateadjustedvaluations 1year rolling forward P/E P/B RoE EV/EBIBTDA M3 growth rate adjusted valuations

Source:BSE,RBI,KotakInstitutionalEquities.Pastperformanceisnotanindicatoroffutureperformanceorreturns

Indianmarkets:performanceovertime
PerformanceofIndianmarketsovertime Returns(%)overvarioustimeframes Returns (%) over various time frames
CAGR return (%) Index Nifty BSE Auto Index Bank Index BSE Oil Index BSE Technology Index BSE Mid cap Index BSE Small cap index Bloomberg Code NIFTY INDEX BSEAUTO INDEX BANKEX INDEX BSEOIL INDEX BSETECK INDEX BSEMDCAP INDEX BSESMCAP INDEX Current Index 5688 9063 12994 9067 3745 7022 8446 1 YR 8.40% 10.84% 20.74% -13.59% 13.88% -2.32% -7.97% 3yr 12.18% 37.20% 30.18% 0.67% 6.57% 9.56% 8.61% 5yr 13.09% 14.31% 24.38% 11.85% 8.63% 10.16% 10.02% 7 yr 25.80% 32.40% 32.73% 25.02% 26.89% 26.50% 28.91%

Source:Bloomberg Past performance is not an indicator of future performance or returns

India:Valuationcomparisonwithregionalmarkets Premium,areflectionofsustainedgrowth
ValuationsofIndianmarketsarereasonablebasedonPEGratio Valuationsummaryofregionalmarkets,June27,2011,Calendaryearends,200912E
EarningsGrowth(%) Earnings Growth (%) P/E(x) P/E (x) PEGRatio(x) PEG Ratio (x) Index 2010E 2011E 2012E 2010E 2011E 2012E 2010E 2011E MSCIBrazil 27.5 8.7 9.1 10.4 9.5 8.7 0.71 0.65 MSCIChina 34.1 15.8 15.5 12.8 11.1 9.6 0.72 0.62 MSCIHongKong 33.9 21.9 4.5 16.6 13.6 14.2 1.10 0.90 MSCIIndia MSCI India 23.8 23 8 16.4 16 4 17.6 17 6 17.3 17 3 14.8 14 8 12.6 12 6 0.84 0 84 0.72 0 72 MSCIKorea 41.3 22.2 12.1 12.3 10.0 8.9 0.72 0.59 MSCIMalaysiaEM 27.1 14.2 14.0 17.7 15.9 13.9 1.39 1.25 MSCIMexico 9.7 43.9 15.4 21.2 14.7 12.8 1.27 0.88 MSCIRussia 43.7 20.3 5.3 7.1 5.9 5.6 0.43 0.36 MSCITaiwan MSCI Taiwan 87.4 87 4 7.2 72 18.6 18 6 14.9 14 9 13.8 13 8 11.4 11 4 0.79 0 79 0.74 0 74 MSCIThailand 31.4 17.7 14.5 13.2 11.2 9.8 0.85 0.72 MSCIEMAsia 40.8 16.3 15.1 13.8 11.9 10.3 0.78 0.67
Source:IBESAggregate,MSCI Pastperformanceisnotanindicatoroffutureperformanceorreturns

Brazil China HongKong India Korea Malaysis Mexico Russia Taiwan Thailand EMAsia

Uncertainties
Inflation/InterestRates Inflation/Interest Rates Crudeoil FIIflows Indianpoliticalenvironment Globalenvironment

Keythemes&Differentiators Key themes & Differentiators

India:Keythemes
I. I II. Consumption:Demographics,ruralIndia,services keydrivers Consumption: Demographics rural India services key drivers Infrastructure:Amultiyearthemebutchallengesexist

III. Financials:Underpenetration+Soundbankingsystem IV. Outsourcing:LeveragingonIndiaslargeintellectualcapacity

Transformationalinitiatives Earlydaysbutcanhaveamaterialimpact
Fuelpricederegulation Fertilizers:NutrientBasedSubsidy (NBS) April1,2010 Reform Initiatives DirectTaxCode(DTC) GoodsandServiceTax(GST) UniqueIdentificationSystem q y

Pastperformanceisnotanindicatoroffutureperformanceorreturns

LearnedInvestorstodaywant
APortfoliocomprisingofselectideastomaximizeabsolutereturns A Portfolio comprising of select ideas to maximize absolute returns Abilitytotakefocusedbetsbothinstocksandsectors Researchdriventhematicandbottomupideas. Measurementandanalysisoftheriskinvolved Understandingandparticipationindecisionmaking Tailormadeapproach T il d h Abilitytohedgetheirrisk

PrivateClientGroup
Advantage Investmentwithmediumtolongtermperspectivebasedoninvestorsrequirement Consultativeapproachtoinvestment Researchdriventhematicandbottomupideas. Research driven thematic and bottom up ideas AccesstoKotakSecuritiesPCGResearch Personalizedservice Openendedarchitecture Open ended architecture Easyaccesstoreports. MakingmostofIdlecash:Investingidlecashinliquidfundsbasedonyourinstructions

Aseamlessintegrationof4resources
InvestmentManager Investment Manager

Research

PrivateClient Group

EquityDesk Equity Desk

Operations
Demat A/c BrokingA/c MFA/c BankA/c

AccesstoKotakSecuritiesResearch
FundamentalResearch
ExperiencedResearch p Analystswithproventrack record 10ResearchAnalystswith AverageResearch Average Research experienceofover5years Richdomainexperience withintheteamcutting acrosssectors across sectors 15sectorswithviewson morethan170stocks. y Blendofinvestmentstyles (Growth/Value)

TechnicalResearch
Researchteamwitha trackrecordofcloseto tenyears. Trackinganddelivering detailedanalysison detailed analysis on MicroandMacrotrendof themarket. Correlatingdatabetween domesticand domestic and internationalmarkets.

InstitutionalResearch
Coverage:30 g analysts,tracking23 sectors,covering166 stocks Companiesunder Companies under coveragebymarketcap slab: >US$10bn: >US$5bn: >US$1bn <US$500mn: 26 52 127 17

US$500mn 1bn: 22

OneMonthPortfolioJune2011 O M th P tf li J 2011

AsonJune2011 A J 2011

OneMonthPortfolioJuly2011 O M th P tf li J l 2011

AsonJuly2011 A J l 2011

OneMonthPortfolioAugust2011 O M th P tf li A t 2011

AsonAugust2011

MutualFundRecommendations

MFrecommendationsarebyKMBLresearchteam

ProductOfferings
EquityLongOnlyStrategy
EquityInvestmentGroup PortfolioManagementSchemes StructuredOpportunities Niftylinked EquityMutualfunds

DebtOptions
DebtPapers&FMPs StructureOptions Structure Options

LongShortStrategy L Sh t St t
Hedgingstrategies DerivativeStrategies Derivative Strategies

CurrencyandCommodities C dC diti
CurrencyDerivatives GoldETF&Funds Gold ETF & Funds

RiskDisclosure
Investments in securities are subject to market risk and there is no assurance or guarantee of the objectives of the Investment being achieved. Past performance does not indicate the future performance. The material is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Neither Kotak Securities, nor any person connected with it, accepts any liability arising from the use of this document. Recipients of this material should rely on their own investigations and take their own professional advice. Opinions expressed are our current opinions as of the date appearing on this material only. Prospective investors and others are cautioned that any forward looking statements are not predictions and may be subject to change without notice notice. Registeredoffice:KotakSecuritiesLtd.Bakhtawar,1stfloor,229,Nariman Point,Mumbai400021.CorrespondenceAddress: InfinityITPark,Bldg.No21,Opp FilmCityRoad,AKVaidyaMarg,MaladEast,Mumbai400097.Telno:66056825.SEBIReg No: NSEINB/INF/INE230808130,BSEINB010808153/INF011133230/INE011207251,OTCINB200808136,MCXSXINE260808130, AMFINo:ARN0164. MutualFundInvestmentsaresubjecttomarketrisks,pleasereadtheofferdocumentcarefullypriortoinvesting.KotakSecurities LimitedisadistributorofMutualFunds.

The material in this document is a general commentary based on the analysis and opinions of the fund management team of the Kotak group p p g y y , and is not intended as a recommendation or for the purpose of soliciting any action in relation to any investments, or to be otherwise relied upon for any purpose. In the preparation of this presentation we have used information that is publicly available, including information developed in-house. Some of the material used in the document may have been obtained from third parties. Information gathered & material used in this presentation is believed to be from reliable sources. However, we do not warrant the accuracy, reasonableness and/or completeness of any information. No liability is owed to any persons with respect to the information contained in this presentation. For data reference to any third party in this material no such party will assume any liability for the same same. Distribution of this presentation is strictly restricted by applicable laws and regulatory requirements of all countries in which it is made available and is intended only for the use of persons to whom it may legally be made available under local qualification criteria, such as certain types of investment professionals, accredited investors, wholesale investors and financial institutions. This document is not intended to be accessed by retail investors. Investments in India focused funds cannot be made available to investors who do not meet the eligibility criteria applicable to their country. Protections afforded by local legal and regulatory systems may have limited applicability to investments in India. Investments in India are subject to a number of risks including, but not limited to, risk of losing some or all of the capital invested, high market volatility, variable market liquidity, geopolitical risks (including political instability), exchange rate fluctuations, changes in tax regime and restrictions on investment activities of foreign investors. Past investment performance should not be viewed as a guide to, or indicator of, future performance and the value of investments and the income derived from them can go down as well as up. Investments in India should be considered only as part of a diversified overall portfolio of assets. You should consult your professional adviser if you are in doubt about the strict restrictions applicable to the use of this presentation and associated risks in investing in India. No liability is owed to any persons in respect of the material in this document. Kotak Mahindra (UK) Limited is authorised and regulated by the Financial Services Authority in the United Kingdom, by the Dubai Financial Services Authority and by the Monetary Authority of Singapore. Kotak Mahindra Inc is a member of FINRA.