India Strategy: What to buy in 2009 - by Manishi Raychaudhuri

--------- India Strategy: What to buy in 2009 - by Manishi Raychaudhuri

We are out with our first Strategy product after Manishi Raychaudhuri started as the new Head of Research
The key themes that will play out in the next calender year are:
1) deepening global credit crisis and demand deceleration. Action: avoid exporters and commodities
2) strong central bank monetary easing. Action: play rate sensitive
3) resilience of middle-income segment. Action: play low-end consumption stories

When will we see recovery in the economy? Q3 or Q4 of 2009 driven by RBI's monetary loosening policy, commodities cool off and slowing inflation
While the Sensex will be range-bound, opportunity for stock-picking exists; Its a picker's market: Our bottom up EPS estimates assume growth of 8-9%, which is the lowest on the Street. 2009 will be a picker's market with consumption plays like Hero Honda and Bharti outperforming the market.

Top Buys: BHEL, Bharti, Hero Honda, ICICI Bank
Top Sells: Unitech, TCS, Reliance Power, SAIL


Market colour: RCom may bid for $1b Iran telecom license. Lupin's MP plant under US FDA scanner. Maharashtra state plans to increase stamp duty by upto 15% to come in effect from 1st Jan. Unitech to sell Delhi office to HDFC for INR5b. Market to open gap up by global cues, lower inflation and street expectation of a rate cut.
FIIs: Net sellers of $149m, DIIs: Ney buyers at $43m.

India Strategy: What to buy in 2009 - by Manishi Raychaudhuri

We are out with our first Strategy product after Manishi Raychaudhuri started as the new Head of Research
The key themes that will play out in the next calender year are:
1) deepening global credit crisis and demand deceleration. Action: avoid exporters and commodities
2) strong central bank monetary easing. Action: play rate sensitive
3) resilience of middle-income segment. Action: play low-end consumption stories

When will we see recovery in the economy? Q3 or Q4 of 2009 driven by RBI's monetary loosening policy, commodities cool off and slowing inflation
While the Sensex will be range-bound, opportunity for stock-picking exists; Its a picker's market: Our bottom up EPS estimates assume growth of 8-9%, which is the lowest on the Street. 2009 will be a picker's market with consumption plays like Hero Honda and Bharti outperforming the market.

Top Buys: BHEL, Bharti, Hero Honda, ICICI Bank
Top Sells: Unitech, TCS, Reliance Power, SAIL